ASCA 2025: How accounting becomes an ASC revenue generator

Editor's Note

Terry A. Bohlke, MSHA, CPA, CMA, CASC, emphasized that Rocky Mountain High Surgery center is a pseudonym “to protect the innocent,” but the numbers he presented at the 2025 Ambulatory Surgery Center Association (ASCA) Conference & Expo in Denver last week were real enough. Based on actual scenarios and experiences, they added up to significant revenue-generation opportunities for any ambulatory surgery center (ASC) willing to look a little deeper at the most fundamental accounting documents: the income statement and balance sheet.

Bohlke, who is vice president, ASCs, at Community Health Systems, opened the presentation with the imagined surgery center’s 2023 financials: 4,500 cases, nearly $7 million in net patient revenue, and a $680,000 EBITDA loss. Despite increasing to 5,500 cases in 2024, the center posted a deeper loss of $1.2 million.

The team began at the top line of the income statement: revenue. Benchmarking net revenue per case, they found their center averaged just $1,622 against a regional average of $2,874. A deeper payer analysis revealed two contracts reimbursing well below Medicare. In response, the center renegotiated the payer A and C contracts to include carve-outs for their most common procedures, which were mostly those added from the hospital.

As detailed by the sample case of Rocky Mountain High Surgery Center, other opportunities to be found in the income statement might include:

• Salaries, wages, and benefits. In this case, the team found expenditures had not decreased despite adding 1,000 cases. Something didn’t add up, Bohlke said, noting that this line item, when considered as a percentage of revenue, “should go down significantly” at higher volumes due to economies of scale. Again, the team began with benchmarking, which revealed their SWB as a percentage of net revenue far exceeded national medians. The presented solution was a mix of items from a list Bohlke presented of “50 ways to reduce wages, salaries, and benefits,” such as matching staff schedules to ebb and flow of patients in and out of the center, implementing a rotating early-dismissal policy, and implementing a productivity reporting system.
• Supply costs. These, too, were “unexplainably significantly higher than their benchmark,” Bohlke said. In response, a supply task force conducted focused, line-item reviews of the highest-spend items, consolidating where possible and leveraging vendor competition to secure better pricing.
• Anesthesia subsidies. On anesthesia, the facility cut subsidies in half by moving to a CRNA-heavy model with one supervising MD and consolidating OR schedules. “They were able to consolidate rooms, limit flip rooms...and still gained cases,” Bohlke said, noting the busiest surgeons added more cases so they could still flip rooms.

Bohlke went on to highlight opportunities to be found in an ASC’s balance sheet. Examples include:

• Accounts receivable (A/R), specifically liquidity ratios. The team discovered average billing delays of 6 days and more than 20% of accounts aged over 90 days. Staffing issues in the business office—exacerbated by the 1,000-case volume increase—were a key driver. A focused review of the revenue cycle resulted in several changes, including filling vacant billing and collections positions, and days in A/R dropped to 38. “Bill, baby, bill,” Bohlke urged. “Get those bills out.”
• Inventory mismanagement proved costly as well. The supply manager had overstocked to avoid shortages, receiving shipments three times per week. By activating the materials management system in their practice software, returning overstock, and automating reorders, the team cut inventory in half and reduced average inventory age to 30 days.
• Cash reserves were another pain point. The facility had only 4 days of cash on hand and had required a $600,000 cash call earlier in the year. “You need a minimum of 15 to 30 days cash on hand,” he stressed, emphasizing that reimbursement delays from payers or Medicare glitches could otherwise threaten operations. The team set a new cash policy and allowed their financial improvements—including cost controls and improved revenue cycle performance—to rebuild reserves. By year-end, cash on hand had stabilized between 30 and 35 days.

Bohlke’s list of opportunities to be found in basic financial statements did not end there. Among other items, he discussed facility rent, real estate expenses, and various other examples of using basic accounting as a proactive tool for problem solving. The cumulative impact was dramatic, with projections showing an expected $2.6 million EBITDA in 2025.