Here are six observations for ambulatory surgery center owners and operators today.
1. HOPDs currently receive significantly higher reimbursement than ambulatory surgery centers for the same procedures. According to ASCA's CAmpaign for Advancing Surgical Care report "ASCs: A Positive Healthcare Trend" details payment trends for ASCs as compared with HOPDs. With the continued emphasis on high quality and low cost care, providers are looking for ways to become more efficient. The gap between ASC and HOPD rates could shrink as CMS and payers focus more on cost-savings.
"The best opinions out there right now say that this gap will be gone in a year or two," says Ambulatory Surgical Centers of America Co-Founder Brent Lambert, MD. "The HOPDs will have to get by on what payers are paying ASCs. Many of the hospitals we are working with are already factoring that into their long-term plan. They will lose money unless they can make their HOPDs more efficient and process a higher volume of cases."
2. Higher deductible health plans are more common today, which can be a special challenge for ASC revenue cycle management. Many ASCs will experience a prolonged "winter" period as patients take longer to meet their deductible before undergoing elective procedures. Centers are also looking for creative ways to optimize patient collections and offer assistance to those who cannot pay the entire amount at one time.
"As patients are forced to spend more of their healthcare dollar, you see a change in behavior as patient consumerism starts to take hold," says Chief Development Officer of United Surgical Partners International Brett Brodnax. "Recent studies have shown that initial reaction in that first year when a patient moves from a rich plan to a high deductible plan is to reduce their overall healthcare spend followed by a gradual evolution to value-based consciousness."
3. Price transparency in healthcare is becoming more popular. Medicare began releasing its hospital chargemaster data and some ASCs are now posting their cash-pay prices online. Others are developing bundled payment programs and creative pricing initiatives to promote transparency within the marketplace. For ASCs that are the lowest-cost provider, price transparency could be beneficial, and it could eliminate unwarranted pricing variation in the marketplace.
"As high value facilities, ASCs should benefit from transparency as it will help to increase awareness regarding the value proposition of ASCs," says Mr. Brodnax. "Our ability to demonstrate quality outcomes will help to enable independent assessments of our efficiency as value-based consciousness increases; this will help to position ASCs as an integral part of the healthcare delivery system."
4. Health insurance exchanges haven't had a huge impact on ASCs in most markets, but as time goes on they may present challenges for surgery centers. At the enrollment deadline on March 31, some predict around 7 million people signed up for insurance through the exchanges, with many in the low-reimbursing plans. Reed Martin, COO of Surgical Management Professionals, says some SMP centers are able to treat patients from the exchange at commercial HMO rates, but if this patient population grows bigger they may need to contract with those payers at lower rates.
"So far we have been able to provide for patients in the exchange at the existing HMO rates," he says. "Since we are already contracted with the payers, the patients in the exchange can access our facility at contracted rates. That doesn't happen across the board and we still need to contract directly with some exchanges, but it has made it easier for us."
5. Physicians starting a new facility in a certificate-of-need state often benefit from hospital partners that can help facilitate the CON. If the hospital partner can become an ally to push the ASC's business plan forward, they are more likely to succeed, according to Dr. Lambert. However, make sure you understand the hospital's motivation for entering into the partnership.
"The hospital has many reasons for partnering with the ASC, one of them may be a capacity problem," says Dr. Lambert. "They may want to decant some of the excess cases that don't pay well in the hospital into their partner ASC so they can derive revenue from it. But the hospital sometimes miscalculates and realizes that they're sending too many cases to the ASC and are in effect are cannibalizing cases from the hospital."
6. "Population health" is becoming a huge factor in healthcare reform implementation and new concepts such as accountable care organizations are sprouting up across the country. Many of these initiatives are hospital-driven, and unaffiliated ASCs may be left out.
"We don't know how the whole concept of population healthcare is going to play out," says Dr. Lambert. "Are hospitals going to use ACOs and ambulatory surgical centers to negotiate for large populations of care? We don't know, and because it's a big unknown we can be both positively and adversely affected."
More Articles on Surgery Centers:
6 Recently Opened, Planned or Expanded ASCs
Spark ASC Staff Motivation & Culture: 3 Core Concepts
Eliminate Staffing Overlaps: 7 Strategies to Run a Lean ASC
1. HOPDs currently receive significantly higher reimbursement than ambulatory surgery centers for the same procedures. According to ASCA's CAmpaign for Advancing Surgical Care report "ASCs: A Positive Healthcare Trend" details payment trends for ASCs as compared with HOPDs. With the continued emphasis on high quality and low cost care, providers are looking for ways to become more efficient. The gap between ASC and HOPD rates could shrink as CMS and payers focus more on cost-savings."The best opinions out there right now say that this gap will be gone in a year or two," says Ambulatory Surgical Centers of America Co-Founder Brent Lambert, MD. "The HOPDs will have to get by on what payers are paying ASCs. Many of the hospitals we are working with are already factoring that into their long-term plan. They will lose money unless they can make their HOPDs more efficient and process a higher volume of cases."
2. Higher deductible health plans are more common today, which can be a special challenge for ASC revenue cycle management. Many ASCs will experience a prolonged "winter" period as patients take longer to meet their deductible before undergoing elective procedures. Centers are also looking for creative ways to optimize patient collections and offer assistance to those who cannot pay the entire amount at one time.
"As patients are forced to spend more of their healthcare dollar, you see a change in behavior as patient consumerism starts to take hold," says Chief Development Officer of United Surgical Partners International Brett Brodnax. "Recent studies have shown that initial reaction in that first year when a patient moves from a rich plan to a high deductible plan is to reduce their overall healthcare spend followed by a gradual evolution to value-based consciousness."3. Price transparency in healthcare is becoming more popular. Medicare began releasing its hospital chargemaster data and some ASCs are now posting their cash-pay prices online. Others are developing bundled payment programs and creative pricing initiatives to promote transparency within the marketplace. For ASCs that are the lowest-cost provider, price transparency could be beneficial, and it could eliminate unwarranted pricing variation in the marketplace.
"As high value facilities, ASCs should benefit from transparency as it will help to increase awareness regarding the value proposition of ASCs," says Mr. Brodnax. "Our ability to demonstrate quality outcomes will help to enable independent assessments of our efficiency as value-based consciousness increases; this will help to position ASCs as an integral part of the healthcare delivery system."
4. Health insurance exchanges haven't had a huge impact on ASCs in most markets, but as time goes on they may present challenges for surgery centers. At the enrollment deadline on March 31, some predict around 7 million people signed up for insurance through the exchanges, with many in the low-reimbursing plans. Reed Martin, COO of Surgical Management Professionals, says some SMP centers are able to treat patients from the exchange at commercial HMO rates, but if this patient population grows bigger they may need to contract with those payers at lower rates."So far we have been able to provide for patients in the exchange at the existing HMO rates," he says. "Since we are already contracted with the payers, the patients in the exchange can access our facility at contracted rates. That doesn't happen across the board and we still need to contract directly with some exchanges, but it has made it easier for us."
5. Physicians starting a new facility in a certificate-of-need state often benefit from hospital partners that can help facilitate the CON. If the hospital partner can become an ally to push the ASC's business plan forward, they are more likely to succeed, according to Dr. Lambert. However, make sure you understand the hospital's motivation for entering into the partnership.
"The hospital has many reasons for partnering with the ASC, one of them may be a capacity problem," says Dr. Lambert. "They may want to decant some of the excess cases that don't pay well in the hospital into their partner ASC so they can derive revenue from it. But the hospital sometimes miscalculates and realizes that they're sending too many cases to the ASC and are in effect are cannibalizing cases from the hospital."
6. "Population health" is becoming a huge factor in healthcare reform implementation and new concepts such as accountable care organizations are sprouting up across the country. Many of these initiatives are hospital-driven, and unaffiliated ASCs may be left out.
"We don't know how the whole concept of population healthcare is going to play out," says Dr. Lambert. "Are hospitals going to use ACOs and ambulatory surgical centers to negotiate for large populations of care? We don't know, and because it's a big unknown we can be both positively and adversely affected."
More Articles on Surgery Centers:
6 Recently Opened, Planned or Expanded ASCs
Spark ASC Staff Motivation & Culture: 3 Core Concepts
Eliminate Staffing Overlaps: 7 Strategies to Run a Lean ASC