At the 21st Annual Becker's ASC Conference in Chicago on Oct. 24, 2014, Naya Kehayes, managing principal and CEO of Eveia Health Consulting and Management, and Conor Gallagher, Eveia's director of analytics and business operations, discussed the impact of provider consolidation on ASCs, and why paying close attention to provider-payer contracts is critical for ASCs considering consolidation.
According to Ms. Kehayes, the rate of hospital and health system mergers and acquisitions continues to grow across the United States, primarily because of reimbursement changes, the economic viability of hospitals, the availability of consolidation services and cost containment. As consolidation becomes more prevalent, ASCs should consider the following two tips for negotiation with payers.
1. Maintain clear communication. While partnering with or transferring ownership to a hospital might be beneficial for a particular ASC, consolidation can be threatening to payers. "It doesn't hurt for ASCs to communicate to payers that they are considering consolidation, because potentially this could cost the payer more money," said Ms. Kehayes.
Payers should be motivated to work with freestanding ASCs and physicians because consolidation usually incurs increased costs to payers and patients and reduces market competition and access. This is also something for ASCs to consider when deciding whether to remain independent or enter into a joint venture with a hospital, Ms. Kehayes said.
2. Be proactive, not reactive. Sometimes ASCs are unaware when payers make changes to ASC payment systems, Mr. Gallagher explained. Payment system changes could come in the form of implants being included rates or bundling of add-on codes versus separate payement.
"The first thing you need to do is read your contract thoroughly. Material components of the reimbursement logic can hinge on one word. Additionally, don't become complacent. Payers are constantly adjusting their payment system so you must be proactive and pay close attention to what's going on behind the scenes in your contract," Mr. Gallagher said.
Once the payment system changes have been identified, the ASC must then calculate the financial implications and be prepared to go back to the payer to negotiate.