Many ASCs are facing increasing obstacles in the payer landscape, but ASC administrators and executives are developing strategies like direct-to-employer contracting and attracting patients to bypass them.
In many markets, ASCs have to face competition from larger hospitals and health systems to secure payer contracts, and as costs rise, some centers are not seeing a correlating increase in reimbursements.
"Most of my time is spent on payer negotiations and payer issues. I spend more time negotiating with payers than I ever expected in this role," Jessica Rodriguez, administrator of OAM Surgery Center at MidTowne in Grand Rapids, Mich., told Becker's. "The payment landscape for ASCs is another big challenge that we face. Costs are going up exponentially, but we are not seeing a corresponding increase in reimbursement."
Payers consistently pay more to hospital outpatient departments than to ASCs for the same procedures. Private insurer payments to hospital outpatient departments were 2.6 times larger than payments to ASCs from 2018 to 2020, according to new research published by the Rand Corp., and Medicare payments were 2.1 times larger.
This discrepancy means payers are leaving money on the table. The potential savings of moving total joint replacements to ASCs, for example, is significant — with the cost of treatment being about 40 percent less in an ASC compared to treatment in a hospital setting, according to research from the Hospital for Special Surgery.
Other ASC leaders are noticing a shift in payer behavior, with insurers factoring in the use of ASCs over other sites of services.
"With the continued rising cost of patient care in the hospital setting, ASCs have become many insurance companies' preference for outpatient surgery," Dianna Reed, administrator of Sani Eye Surgery Center in Templeton, Calif., told Becker's.
Many payer policies in the last year have pointed to a growing interest in the migration of procedures from hospitals to the lower-cost ASC setting.
In June, UnitedHealth Group made a commitment to push more surgeries to ASCs. According to a company report, the group aims to have more than 55 percent of its members' outpatient surgeries and radiology services delivered at cost-efficient sites of care by 2030, which means directing many patients to ASCs.
Other ASCs and physician practices are opting for direct-to-employer contracting, a model that offers the ability to eliminate the payer from the care process.
"I believe direct-to-provider contracting between employers and physician practices should be getting more attention as the cost of healthcare continues to rise," Nicholas Grosso, MD, an orthopedic surgeon at the Centers for Advanced Orthopaedics in Bethesda, Md., told Becker's. "Employers are feeling this increase and have no choice but to pass costs down to employees."
ASCs are also harnessing the power of patient choice. Surgery centers are attractive to patients as a low-cost, high-quality alternative to hospitals, and in the consumer era of healthcare, ASCs could come out on top.
"As those paying for healthcare understand the increasing viability and breadth of ASC procedures, the existing shift toward outpatient care will continue," Joy Taylor, COO of Axion Spine & Neurosurgery in Alpharetta, Ga., told Becker's.
It's not just about payers, Ms. Taylor said. Patients want choices and often don't want a hospital experience when they can choose the convenience and customer service offered at an ASC.