Six ASC leaders joined Becker’s to discuss how these reimbursement declines could affect ASC sustainability.
Question: If reimbursement rates fail to keep pace with rising practice costs, do you think ASCs can sustain themselves long term? If so, how?
Editor’s note: These responses were edited lightly for clarity and length.
Christine Blackburn, BSN, RN. Administrator of South Kansas City Surgicenter (Overland Park, Kan.): If reimbursement rates fail to keep pace with rising practice costs, it will be challenging for ASCs to sustain themselves in the long term without strategic adjustments. However, ASCs can potentially navigate this challenge through several avenues:
- Efficiency improvements: ASCs have historically been more cost-effective than hospital settings due to their streamlined operations and focus on outpatient procedures. By continuing to improve efficiency, optimizing workflows and leveraging technology, ASCs can mitigate rising costs and maintain profitability even with stagnant reimbursement rates.
- Diversification of services: Expanding the range of services offered can help ASCs tap into new revenue streams. By adding high-demand procedures or specialized care options, they can attract more patients and offset lower reimbursement rates.
- Negotiation and advocacy: ASCs must continue to advocate for fair reimbursement through industry associations and actively negotiate rates with payers. Building strong relationships with insurance companies can help secure better reimbursement agreements and prevent rates from falling behind inflation.
- Cost control measures: Rigorous cost management will be key. ASCs should focus on reducing overhead, optimizing staffing and leveraging group purchasing for medical supplies. Maintaining a lean operation will help reduce the impact of rising costs.
- Patient volume growth: With the shift toward outpatient care, ASCs can continue to grow their patient volume by offering competitive pricing and superior care. Increased volume can help offset lower reimbursement per procedure.
Taryn Bradtmueller, BSN, RN. Regional Director of ASCs at EyeCare Partners (Ballwin, Mo.):
To sustain growth in an environment where business costs are rising, ASCs must look closely at every aspect of operations and cost-savings potential, opportunities to streamline workflows, and ways to improve technology while maintaining the utmost commitment to patient care and quality. I believe ASC leaders should stay informed about new opportunities and be open to exploring different specialties. Building relationships within your community and effectively marketing your ASC to potential surgeons can help you stay at the forefront of surgeon groups’ minds.
Strong revenue cycle management support is also crucial for negotiating contracts with insurance providers and collaborating with ASC leaders to ensure presurgical checklists and surgical documentation are completed to minimize denials.
Surgery centers of all sizes and specialties can benefit from group purchasing organizations and standardized service agreements that offer lower costs for increased product usage and/or rebates. Procurement teams and materials managers are essential to help negotiate these contracts.
Monitoring OR usage closely is vital to ensure full block schedules. Adjusting block schedules to meet demand can decrease labor costs and anesthesia stipends, as well as increase revenue. Leaders should collaborate closely with office leaders and surgery schedulers to minimize cancellations, use wait lists to fill gaps in schedules and ensure appropriate surgical timing.
Most importantly, ASCs can adopt a “bottoms-up” planning approach in their annual strategy, where ideas for cost savings, staff retention and revenue generation are derived from front-line staff and leaders. Involving all levels of team members in the strategic planning process generates new ideas and fosters a culture of collaboration.
Sean Hayes. President of the American Pain Consortium (Carmel, Ind.): The rising costs of supplies, rent and staffing are all significant factors currently affecting ASCs, with inflation taking a toll. Unfortunately, reimbursement rates are failing to keep pace with these increasing expenses, which creates a challenging financial environment. However, ASCs are often better positioned to manage these pressures compared to hospitals or office-based procedure rooms due to their efficiency, lower costs and higher safety standards. The key for ASCs to remain sustainable is focusing on value and optimizing their financial position by targeting reimbursement for a more limited range of specialties and procedures. By narrowing the scope of services and focusing on high-demand, higher-reimbursement procedures, ASCs can better align with financial realities. Ultimately, ASCs must recognize that physicians are the true customers — they are the ones selecting the venue for their patients. By continuing to meet the needs of physicians and offering them a more efficient, cost-effective environment, ASCs can remain a preferred choice for both doctors and patients.
Robert Nelson, PA-C. Former Executive Director of Island Eye Surgicenter (Westbury, N.Y.): Concern about reimbursement rates is front of mind for every ASC administrator. We all work hard to negotiate good contract rates with the payers. But ASC survivability relies not only on how much we collect for the services we provide, but importantly also on controlling facility costs. Especially the cost of physician preference items like implants, instruments, pharmaceuticals, diagnostic equipment, etc.
Most ASCs belong to one of the large GPOs, where they can save significantly. But there are also specialty specific GPOs available that most ASC administrators don’t avail themselves of, often because we believe that we are great negotiators. That may be the case. But negotiating supply costs for several hundred or several thousand cases for your center cannot compare to the significant negotiating power of the specialty GPOs that may represent a hundred thousand plus (or more) cases represented by their member facilities. The GPO clearly has the advantage, and those ASCs that are members can lower those supply costs significantly. Additionally, contract negotiations with multiple surgical supply companies can take an inordinate amount of time and effort. The GPO takes that burden off of your plate by having excellent pricing available. Many specialty GPO members achieve savings of 12% to 18% over their prior contract pricing. So, ask which specialty GPOs are available for the specialties represented in your ASC.
Wendy Paolucci. Business Administrator of Palms Wellington Surgical Center (Royal Palm Beach, Fla.): As reimbursement rates continue to drop, rising costs, such as anesthesia stipends, become a challenge. In order for ASCs to survive, several alternative models such as care team model (CRNA supervision by anesthesiologists), or using independent CRNA groups may reduce costs compared to anesthesiologist-only models. Streamlining scheduling, reducing turnover and negotiating supply costs can help lower the anesthesia stipend. Without making adjustments, it becomes difficult to achieve long-term stability.
Peter Staats, MD. Pain Physician at National Spine & Pain Centers (Shrewsbury, N.J.): Shifting reimbursement will be a catalyst for further ASC development. While physician fees remain under attack, one bright spot is the preservation of reimbursement in the ASC market. Since so many ASCs are partially physician-owned, having this option will maintain access to care for many practices.