From ASCs' cost-savings potential to patient outcomes, 13 leaders joined Becker's to discuss the gaps in communication between ASCs and payers.
Question: What's missing in ASC conversations with payers?
Editor's note: These responses were edited lightly for clarity and length.
Shakeel Ahmed, MD. Gastroenterologist and CEO of Atlas Surgical Group (St. Louis): It can come as a surprise to learn that most ASCs do not center their conversations with payers around value-based care and outcome-driven data. ASCs will have to they are more cost-effective, provide the same quality of care as traditional hospital settings and benefit patient outcomes with strong data. Focusing on the advantages of ASCs (decreased infection rates, more rapid recovery and patient satisfaction) only strengthens their position. Conversations should go further to address cutting-edge payment models like bundled or shared savings, designed to better align payer incentives. It seems obvious, but it is critical to articulate how ASCs have been proven to save money long term, in a very high-volume way. Developing a partnership where both sides are committed to the common mission of quality care at moderate cost is likely to improve negotiations and result in more favorable reimbursement terms.
Greg DeConciilis. Administrator of Boston Out-Patient Surgical Suites: At least in our market, there is no threat to go out of network, and therefore no leverage. Payers do not seem to appreciate the cost-savings we provide to their bottom line, and don’t even include cost-of-living increases, at the very minimum. They need to realize that incentivizing surgeons to utilize ASCs should be an effective exercise, and that patients are more aware of their costs of care. Therefore, incentivizing patients to utilize ASCs, through waiver of co-payment, could see more utilization of ASCs across their network.
Jim Freund. Managing Partner for Physician Transaction Advisors. There needs to be a way to curb the rising cost of healthcare and ASCs serve as an effective platform for doing just this. We need to continue to reinforce the message that ASCs deliver exceptional outcomes, quality, a better patient experience at a lower total cost of care in a preferable setting for physicians. We must be able to work transparently with payers, in providing clinical results and be prepared to transition to a model that focuses on value-based care versus fee-for-service. In the interim ensuring that we get reimbursed the same for all procedures, regardless of setting, should be an objective.
Allison Griffin. Administrator of Urological Associates of Savannah (Ga.): Payers must recognize both the high-quality, low-cost advantages that ASCs offer and the growing patient demand for many of the other conveniences that ASC settings provide:
1. Ease and flexibility of scheduling
2. Ease of entry and exit to facilities (no complex parking or long walks to large hospital structures that are difficult to navigate)
3. Patients are more likely to undergo procedures in ASCs, which can lead to earlier detection and intervention, resulting in significant cost savings for payers
4. Patients appreciate the personalized care found in smaller settings with staff they recognize and trust
5. Lower ASC staff turnover results in improved provider productivity as they work with the same team day in and day out. As specialty provider shortages across the country escalate, utilizing providers efficiently will become essential so that wait times are reasonable.
Tracie Hark. Administrator of Northeast Missouri Ambulatory Surgery Center (Hannibal): Conversations with payers are tough. I have had multiple conversations explaining the necessary role that ASCs play in the healthcare industry and it seems to go unheard when they propose reimbursement rates. If payers would compare the outcomes and cost savings that ASCs provide and compare us to more expensive providers, it seems they would want to reward ASCs with slight pay increases that we ask for in order for more cases to move out of the higher cost places of service. Unfortunately, we hear all too often that our rates are the most expensive around which seems to be their go-to phrase when they do not want to raise our rates. If ASCs could get the payers to do a full-scale comparison with other providers in the area, I would like to think they would be more open to adjusting reimbursement rates.
Tracy Helmer. Administrator of Tri-City Surgical Centers (Mesa, Ariz.): Open dialogue with payers is always a problem. It is difficult to get to the right person sometimes, but don’t give up. Ask your payers who might join the conversation and help bring our savings ideas to your plan. Factual data, in concise graphical displays, is the quickest way to show the benefits of contracting with your ASC. Think of it as your elevator speech. You have limited time to catch their eye with an effective cost-saving idea. Help them be the cutting edge of that migration of cases into more well-suited environments that reduce hospital-based risk.
Lara Kelly. CEO of Gastroenterology of the Rockies (Louisville, Colo.): In conversations with payers, ASCs often encounter gaps that can hinder effective negotiation and collaboration. Addressing these gaps can lead to more productive discussions and better outcomes. Key areas that may be missing include:
- Data-driven insights: Providing detailed data on patient outcomes, cost efficiencies, and procedural volumes can help demonstrate the value and effectiveness of ASC services. This data supports stronger arguments for fair reimbursement rates and value-based agreements.
- Cost transparency: Openly discussing the true costs of procedures and operations helps build trust and clarity with payers. It can also highlight areas where payers might be underestimating costs or misunderstanding the financial pressures faced by ASCs.
- Patient-centered metrics: Emphasizing metrics related to patient satisfaction, recovery times and quality of care can strengthen the case for higher reimbursement rates. Payers are increasingly focused on value-based care and positive patient outcomes.
- Flexible contracting models: Proposing innovative contracting models, such as bundled payments or shared savings arrangements, can align incentives between ASCs and payers. These models can address the financial challenges both parties face and encourage collaborative solutions.
- Long-term value: Highlighting the long-term benefits of ASCs, such as reduced hospital readmissions and lower overall healthcare costs, can shift the focus from short-term expenses to long-term value and cost savings.By addressing these missing elements in payer conversations, ASC leaders can foster more effective partnerships and achieve better financial outcomes for their centers.
Helen Lowenwirth. Administrator of East Side Endoscopy (New York City): [What is missing in the conversation is] discussions and analysis of all costs, not just the supplies used during a procedure. Maintaining facilities and compliance is a huge part of what we do and why ASCs are better than hospitals. Compensation for all professions (registered nurses, technicians and administrative staff) has increased significantly post-COVID-19. Maintaining a safe environment with emergency supplies, backup systems [and] complying with life safety codes and staff education needs to be part of the conversation.
Kim Mikes. CEO of the Hoag Orthopedic Institute (Irvine, Calif.): Patient outcomes is a drum that all orthopedic ASCs should be beating religiously. The profound health, mobility and wellness benefits of orthopedic care, be it spine surgery or joint replacement, should be emphasized, educated and displayed. At Hoag Orthopedic Institute, the physician leadership of our enterprise has always been forthright, and has proactively shared and f published its clinical outcomes. Transparency of these outcomes with the payer community is a hallmark education, marketing and discussion tool across every aspect of our model of orthopedic and spine care. If you are willing to spend the time to collect and measure patient data and clinical outcomes – and get everyone in your organization to participate and realize its vital importance – it strengthens your position in discussions with payers. Put the patient outcomes first and good things follow.
Matthew Ornelas. Administrator of Baylor Scott and White Surgicare – Fort Worth (Texas): How do facilities compete with rising costs for implants and new technology, while also maintaining a positive cash flow? Why wouldn’t you want these procedures done in an ASC if it will ultimately save the patient and payer money? Why do anesthesia groups now require a stipend in order to pay for their services? When will anesthesia pay rates catch up to the market value?
Matthew Solis. Administrator of Physicians Surgical Care Center (Winter Park, Fla.): I feel what’s missing is the payers acknowledgement of rising costs in ASCs. I realize that payers are wanting to move more and more cases to the ASCs, but if we cannot be reimbursed properly the ASC will no longer be an alternative to the more expensive hospital costs they will face.
Randy Reynolds. Senior Vice President of HealthCrest Surgical Partners (Oklahoma City): Insurance companies need to be reminded that low-cost providers have been impacted by higher costs for labor, supplies, implants and various services. New facilities are also getting hit with higher construction costs and interest rates. Medicare reimbursements have provided some relief with cost-of-living increases and additional rate increases for certain procedures. Insurance companies need to follow suit and provide some relief to providers who perform outpatient surgical services for their patients. This is not a time in the history of healthcare to be penny smart and pound foolish. Keeping outpatient procedures out of the hospital is a win-win for all parties involved. Paying a reasonable rate for services performed helps to ensure that remains a viable option.
Bill Rhoades. COO of Harrisburg (Pa.) Endoscopy & Surgery Center: Payers need to understand that ASCs are following the same rules as a hospital outpatient department. This means that we have the same type of overhead and should be reimbursed at the same rates. An ASC is always thought of as not having the same value as the HOPD, but that is entirely not true. The ASC does not get the negotiation assistance from a large health network, like a HOPD does, which provides leverage to request higher reimbursements.
Charleen Tacket. Administrator of Vital Heart & Vein (Houston): One thing that comes to mind is the patient satisfaction of being treated in an ASC. I think the overall cost reductions and quality are in the conversation, but I often think the patient perspective may be missed in these conversations.