As the U.S. enters the next stage of healthcare reform, ASCs are strategically positioned to capitalize on the transition toward value-based care and the low-cost healthcare movement.
In a Feb. 22 webinar hosted by Becker's Healthcare and sponsored by Cardinal Health, Cardinal Health's Director of Payer and Reimbursement Strategy Marilyn Denegre-Rumbin shared four major trends affecting the ASC reimbursement space in 2018: increased acquisition activity and competition from hospitals and hospital outpatient departments, regulatory changes, evolving technological and consumer demands, and private payers seeking alternative payment models.
Hospital impact
Surgery is shifting toward the outpatient space, and health systems have a growing interest in acquiring, partnering with or establishing their own ASCs to continue capturing surgical revenue.
From 2006 to 2013, inpatient Medicare surgical volume decreased 17 percent, while outpatient volume increased a whopping 33 percent, according to data from Regent Surgical Health.
Concerning individual specialties, the largest shifts from inpatient to outpatient have been with cardiac and vascular services. From 2006 to 2013, inpatient cases decreased 13 percent and 9 percent, respectively, while outpatient cases increased 12 percent and 18 percent, respectively. Orthopedics and neurosurgery continue to increase in both the inpatient and outpatient settings, with the majority of growth seen in the outpatient space, according to data from Regent Surgical Health.
As healthcare continues to transition from fee-for-payment to value-based care, ASCs will be key players. That being said, the surgery center space poses a challenging reimbursement dilemma. Because payers reimburse hospitals at a higher rate than they do surgery centers, case volume is essential to drive surgical center growth and financial security.
There are two ways ASCs can capitalize on the outpatient shift:
1. By partnering with independent surgeons or surgeons that split time between hospitals and ASCs to increase case volume
2. By offering ownership stakes to surgeons looking to partner with a health system or to develop their own center
Reimbursement
Ms. Denegre-Rumbin said ASCs are positioned to capitalize on outpatient growth because of changes in the payment reimbursement landscape. The Outpatient Prospective Payment System final rule for 2018, the Medicare Access and CHIP Reauthorization Act of 2015, and the Merit-based Incentive Payment System have all made their mark on the surgery center landscape and will continue to do so in 2018.
CMS laid the groundwork for the shift to value-based care through MACRA and MIPS. Although the policies only affect Medicare payments, commercial payers are strongly incentivized to follow in CMS' footsteps.
The OPPS final rule will reimburse ASCs at a 1.2 percent adjusted consumer price index rate in 2018. CMS estimates making $4.6 billion in total payments to ASCs in 2018, an increase of $130 million year over year. Ms. Denegre-Rumbin referred to the projection as "promising."
"Value-based payments transform traditional business models by putting significant revenue and risk at stake," Ms. Denegre-Rumbin said. "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."
Besides increasing outpatient surgery rates, the 2018 Quality Payment Program proposed final rule made a series of changes. The rule:
- Offers virtual group participation
- Increases the low-volume threshold to $90,000 in allowed Medicare Part B charges, or 200 patients
- Allows the use of the 2014 edition of Certified EHR Technology
- Adds bonus scoring points for caring for complex patients or exclusively using the 2015 edition of CEHRT
- Includes MIPS performance in quality scoring
- Includes an option to use facility-based scoring for facility-based physicians
- Creates flexibility for small practices through exemptions and bonus points
- Keeps MIPs scoring at its 2017 weights
- Removes total knee arthroplasty from the inpatient only list
CMS also created new opportunities for ASCs by reversing mandatory bundles for hip and knee, cardiology and oncology procedures.
Changing demands in the ASC space & private payers
Patients are driving change in the healthcare space as they're maximizing their purchasing power and creating a consumer-driven system. ASCs need to implement technology to drive consumers to their center over the competition.
On healthcare consumerism, Ms. Denegre-Rumbin said, "It's about supplying the information and decision support tools [patients] need, along with financial incentives, rewards and other benefits that encourage personal involvement in altering health and healthcare purchasing behaviors."
Consumer access to the internet through computers and mobile devices has also changed how prospective patients select providers for healthcare services; patients are "shopping" for surgery services and basing their decisions on cost, travel time, hospital affiliation and referral recommendations, according to Cardinal Health data.
ASCs need to provide high-quality and low-cost care to recruit patients. To do that, Ms. Denegre-Rumbin encouraged centers to:
- Ensure accountability for patient experience
- Orient services around patient preference
- Target marketing and service offerings to specific populations
Consumerism is changing more than just ambulatory business practices — private payers must meet consumer demands as well. Ms. Denegre-Rumbin said payers are now offering preference pricing, direct employer contracting, private bundles and procedure warranties to cater to patients.
Finally, private payers typically favor ASCs compared to hospitals because of lower reimbursement rates. ASCs can capitalize on private payers by using payer data to target employers. Ms. Denegre-Rumbin recommends centers craft exclusivity agreements to drive volume and revenue to their center. To do that, ASCs need to demonstrate higher quality outcomes than the competition.
To view a video of the webinar, click here. To view a copy of the slides, click here.