Three ASC leaders joined Becker's to discuss the Medicare policies that are impeding the growth of surgery centers.
Editor's note: This response was edited lightly for clarity and length.
Question: What Medicare policies, if any, are obstacles to ASC growth?
Sean Hartzell. Principal of ECG Management Consultants: Payment rates continue to be an obstacle. While there is some movement in terms of site-neutrality payments, the overall payment rate for medicare still lags commercial payers reducing the access to ASCs for certain patient
Michael McClain. Founder of LeftCoast Healthcare Advisors: The one that stands out to me is the lack of a cap on Part B copay in the ASC setting. In the hospital outpatient setting, Medicare caps the part B 20% copay at approximately $1,650 and reimburses hospitals for any costs above the 20% copay cap to make them whole.
ASCs have no such cap. With the migration of more costly and complex cases to the ASC setting, this cap actually provides a disincentive to patients to utilize an ASC as their out-of-pocket expense is actually higher in an ASC than in a hospital for any procedure where their 20% copay exceeds $1,650. Yet, Medicare ends up paying much more for the same procedure to be done in the hospital setting. Eliminating this cap on both sides (hospital and ASC) would help encourage the migration of cases to the most appropriate setting of care and would encourage further growth in our ASCs over time.
Richard Rosenfield, MD. Founder of Pearl Women's Center and Pearl SurgiCenter (Portland, Ore.): The continued abuse being demonstrated by non-physician hospital lobbyists to keep higher acuity cases in the hospital with "inpatient only" codes expanding is egregious and should be decided by expert surgeons over policy makers.
When surgeons can demonstrate high quality, reduced complications and cost savings, hospitals should stop trying to protect their profit margins by pretending such inpatient-only codes are about safety and admit it’s about money.
ASCs that are willing to work with groups that aggregate value-based opportunities in surgical care and exploit the opportunity for innovative payment methods such as all-inclusive risk protected bundles have a tremendous advantage at the moment. Companies such as Pearl Precision Surgery are getting out are getting out in front of this issue to work agnostically with surgeons and centers of excellence to embrace value based care and make a significant impact on the healthcare economic landscape. Hospitals have the opportunity to partner in these endeavors as well.
In order for ASCs and surgeons to earn more, we must create the finances to do so. Complication reduction, ER visit reduction, readmission reduction, medical error reduction, reduction of unnecessary surgery, movement of cases to ambulatory venues… these pathways lead to increased performance based revenue to those who deserve it.