Alfonso del Granado, administrator of Ashton Center for Day Surgery in Hoffman Estates, Ill., discusses trends in payer contracting and key opportunities to succeed in the future.
Mr. del Granado will participate on a panel about payer contracting at the Becker's ASC Review 24th Annual Business Meeting: The Business and Operations of ASCs from Oct. 26 to 28 in Chicago. Click here to learn more and register for the conference.
Q: What changes in payer contracting have you seen over the past five years? Is it becoming easier or harder to negotiate contracts with payers?
Alfonso del Granado: We've seen increasing sensitivity to total cost of care per episode, but contracting with payers still varies significantly so some are harder to work with than others. Some payers base contracts on a percentage of the amount billed. Others continue to base contracts on “grouper” categories that Medicare used many years ago and are pretty much obsolete. Other payers will just put a ceiling on the maximum amount they will pay per procedure, regardless of what type of procedure it is. The key to contact negotiations would be to “carve out” certain procedures that would be categorized in your top procedures performed. You would request that the payer define these separately in the contract at a negotiated price. Once you enter into a contract that you are profitably satisfied with you should request that the payer provide you with a long term agreement.
Q: How can ASCs optimize their contract negotiations? What are your one or two best tips to prepare?
ADG: First: Data, data, data. Be prepared to show how you provide value to payers, and Becker's (shameless plug) is an excellent resource. We do a significant amount of complex cases that are normally done either in HOPDs or inpatient, and we make it a point to highlight these and demonstrate cost savings. Additionally, we have very low complication, transfer and infection rates, which also help to lower costs.
Second: make sure you are sitting across from the person who cares about the total cost; if he or she is only interested in the ASC bucket, your value arguments may not be persuasive. Move up the ladder to someone whose bonus also depends on savings from the hospital side too.
Q: Have you considered value-based contracting options? Do you see value-based or risk-sharing contracts for ASCs on the horizon?
ADG: We are presently building models for value-based contracting but are not ready yet.