Healthcare's changing reimbursement landscape creates many financial challenges for ambulatory surgery centers.
More providers are shifting to alternate payment models — and shared risk models — under value-based care, says Marilyn Denegre-Rumbin, director of payer and reimbursement strategy for Dublin, Ohio-based Cardinal Health. As a result, ASCs that fail to meet certain quality standards are vulnerable to financial penalties and lower reimbursement rates.
To keep pace with these changes and remain competitive in their market, ASCs should engage in several strategic initiatives to foster effective payer collaboration and obtain strong payer contracts.
Here, Ms. Denegre Rumbin shares some of these financial strategies with Becker's Hospital Review.
Editor's note: Responses have been lightly edited for length and clarity.
Question: What are some important considerations for ASCs regarding value-based payment models and contracting?
Marilyn Denegre-Rumbin: The shift to value-based reimbursement models creates a new paradigm in care delivery where an entire coordinated care community shares in the responsibility — and risk — of outcomes and costs. ASCs must understand how the Medicare Access and CHIP Reauthorization Act will stimulate new value-based payment models and transform traditional business models by putting significant revenue at stake.
With the growing complexity in managing care and cost, ASCs will be responsible for communicating their "value" through data collection and analysis. Building the outcomes-based financial models and data infrastructure to maximize value-based care reimbursement pathways will be fundamental to sustainable growth in the future.
ASCs should also customize a broad array of value-focused shared saving, shared risk and bundled payment models that will work for their individual situations and populations. An important strategy ASCs can use is value-based contracting, which involves reimbursement based on indicators of "value," such as patient outcomes, efficiency and quality. ASCs should also keep in mind that CMS will continue to pressure them to submit new cost data to the Medicare Payment Advisory Commission for the group to measure and apply new alternative payment models.
Q: What opportunities should ASCs leverage to increase reimbursement?
MDR: ASCs are taking on more high-acuity cases than ever before, with the most attractive ASC specialties through 2020 being orthopedics, general surgery/ear, nose and throat, urology, neurosurgery and ophthalmology. Payers rely on ASCs to help them provide quality care at a lower out-of-pocket cost for its members. If your ASC is equipped to take on larger acuity cases, this can put you in a strong position to obtain higher reimbursement. ASCs that come up with a care recommendation that manages both cost and outcomes can become quite an asset to insurers. But to do so, ASCs must understand their own drivers and costs. ASCs should also develop arrangements with physicians and associations — including ACOs — to leverage special case rate deals and secure market access to increase patient volume.
In addition, "carve out" agreements for medical devices can be a cost-effective mechanism for ASCs to achieve high reimbursement and manage costs. These "carve-out" agreements work especially well for implants, pharmacy, injectables and high-cost products or services. Payers are normally open to the consideration — including cost-based reimbursement, case rates and fee-for-service — though the industry is moving into more shared risk arrangements.
Q: How can ASCs leverage technology to be successful in value-based programs or contracts?
MDR: Technology is a critical piece of the value-based care equation, spanning several activities from telemedicine to data gathering and robust analytics. Hospitals are already collecting data from fragmented sources, including the EMR and paper records. Organizations that have data mining capabilities and the tools for predictive analytics will have more leverage in value-based programs or contracts. However, staffing a team of analysts can be a challenge for many ASCs with limited resources. I recommend an ASC first perform a needs assessment to determine what type of technology it needs, how the center would use it and what its budget would be. There are a number of data mining companies with a range of tools, resources and pricing to meet the needs and demands of the individual organization. Payer collaboration will also offer ASCs access to tools and resources.
Q: Payer support and engagement varies widely from market to market — even within the same national payer network. How can ASCs in laggard markets drive payer support and collaboration?
MDR: A review of commercial medical claims data found U.S. healthcare costs are reduced by more than $38 billion annually due to the availability of ASCs as an appropriate setting for outpatient procedures, according to a 2016 study from the Ambulatory Surgery Center Association. This cost reduction is driven by the fact that, in general, ASC prices are significantly lower than hospital outpatient department prices for the same procedure in all markets, regardless of payer. Policymakers, insurers, employers and beneficiaries all have a shared interest in reducing healthcare costs, and the $38 billion in annual savings highlights the role ASCs play, in controlling these costs.
To achieve payer support, ASCs should measure the quality, value, safety and efficiency of the care they provide, along with how it drives patient satisfaction. They must use data to prove to payers that the benefits of treating patients in an ASC outweigh those of other care delivery models. Lower complication rates, lower readmissions, better pain control, lower infection risk and faster recovery times are additional areas to leverage, especially for joint replacement.