ASCs were in line for substantial growth before the COVID-19 pandemic, and while patient volumes dropped to as low as 20 percent in April, recovery has been swift and the growth opportunities emerging from the pandemic are significant.
Navigating the current pandemic-influenced landscape and positioning your ASC for success were the subjects of a June 25 webinar, hosted by Becker's ASC Review and sponsored by National Medical Billing Services.
The speakers were:
- Nader Samii, JD, MBA, CEO of National Medical Billing Services
- Matt Litzelfelner, senior vice president of finance for National Medical Billing Services
1. COVID-19 had a dramatic effect on surgery centers. On a national level, ASCs were growing at record levels through February, volumes were up and revenues increased as more procedures were allowed to be performed in surgery centers. Then COVID-19 hit. "In the course of a week [in mid-March], roughly 75 percent of our centers were shut down and the other 25 percent were drastically scaled back," said Mr. Samii Though volume disappeared for March, April and part of May, NMBS projected that volume for the centers it worked with would return to around 90 percent by June and 100 percent in July.
2. Strong financial management is essential for centers to succeed. "Cash is king," Mr. Litzelfelner said. "It's so important to understand your exact cash positioning today. … You want to explore opportunities to increase cash flow and stockpile that cash." The U.S. government presented some opportunities through the Coronavirus Aid, Relief and Economic Security Act through the Paycheck Protection Program, and CMS rolled out multiple initiatives to assist centers during the pandemic. But neither form of aid was enough to erase the pandemic's effect. For example, a center making around $500,000 in monthly revenue would've lost around $700,000 in revenue during the four months volumes were affected.
Centers should do more to improve their financial management. Administrators should reach out to vendors they have an established relationship with and work on deferring payments. If the vendor accepts the arrangement, administrators should also seek to establish payment plans to pay down the deferred payments.
3. While COVID-19 will be a blip on ASCs everywhere for 2020, the industry as a whole is stronger than ever. ASCs are in the middle of a win-win-win situation. Centers are a win for the patients, because they benefit from better outcomes at reduced costs; a win for the surgeon because of the control and the financial upside of ownership; and a win for the payer because they save money by not having to pay hospital outpatient department prices, Mr. Samii said.
While clinicians have always known the value of ASCs, the general public has just now begun to learn of the benefits, and "we're seeing a bigger [amount of] patient driver now than ever before," Mr. Samii said. In 2005, 32 percent of surgeries were done in ASCs; that has increased to nearly 60 percent in 2020, with no signs of stopping. Orthopedics, spine and cardiovascular procedures have all driven the growth and will continue to do so. While the industry is growing by 7 percent annually, orthopedics will grow by 31 percent, spine will grow by 200 percent and cardiology will grow by 230 percent through 2021.
4. When considering adding a specialty or growing an ASC, Mr. Samii recommended centers follow seven key steps:
1. Develop best practice clinical protocols
2. Establish a patient outreach program
3. Negotiate managed care contracts
4. Have strong front-end processes
5. Financial counseling/patient education
6. Effective revenue cycle processes
7. Use sophisticated analytics
"COVID-19 is really going to accelerate the growth of our marketplace," Mr. Samii said. "If you're in a strong financial position, you can invest in your business and go after and pursue some of these growth opportunities that exist in the market."
View the presentation here, and click here for more information on National Medical Billing Services.