Reimbursement issues
Here is what some experts are reporting about the most and least profitable procedures, plus information about how out-of-network arrangements can boost an ASC’s bottom line.
1. Spine. As more spine procedures are performed in ASCs, it is easier for ASCs to gauge their level of profitability.
“Pretty much all spine procedures performed in an ASC should be profitable. However, our most profitable procedure is probably ACDF [anterior cervical discectomy and fusion],” says ASC neurosurgeon Wes Faunce, MD, of Southwest Florida Neurosurgical and Rehab Associates in Cape Coral and Fort Myers, Fla.
Chris Bishop, a VP of development for Norwell, Mass.-based ASCOA, agrees that spinal ACDF is profitable and is increasingly being reimbursed by payors: “While Medicare has not approved reimbursement of ACDF performed in an ASC yet, commercial payors are adding these procedures very quickly due to the cost effective nature of the ASC setting.”
However, without adequate carve-outs in payor contracts, ACDF would be too costly to perform.
“With implant costs running from $3,000 to $8,000 per case, these procedures would not be financially viable without the implants being reimbursed,” says Mr. Bishop.
Jay Rom, MBA, CPA, the president of Blue Chip Surgical Center Partners in Cincinnati, agrees, “If you are able to negotiate payor contracts that reimburse for implants, these procedures are ideal for a surgery
center environment.”
Oftentimes, even though the ASC can perform the surgery less expensively, an ASC will have to turn away a patient because of the high implant cost.
“There are procedures where the hospital gets the implant reimbursement and the surgery center does not,” says Mr. Rom. “Even though the patient and payor will pay more in the hospital setting, the ASC cannot afford to provide the service.”
Other profitable ASC spinal procedures include laminectomies, discectomies and laminotomies, say the experts.
Overall, the less-profitable spinal procedures include X-Stop, an alternative to lumbar laminectomy for spinal stenosis, and balloon kyphoplasty, used to treat progressive vertebral compression fractures.
“While both of these procedures were added to the ASC setting list, and they are being reimbursed by commercial payors, Medicare has been slow to include them on its list of reimbursable procedures and now that it has, has not provided enough reimbursement for either procedure,” explains Dr. Faunce.
While it is important to have adequate reimbursements for your spinal surgeries, sometimes it may be worth it to not turn cases away due to low reimbursement or profit margin and look at the bigger
reimbursement picture.
“It can be difficult initially to get payors to reimburse spine procedures in an ASC,” says Gabrielle White, RN, CASC, the administrator of Orthopedic Surgery Center of Orange County. “But by performing low reimbursable spinal surgeries, along with your better reimbursed procedures, and gathering more data from these procedures such as cost, length of stay, quality of care, patient satisfaction and recovery, you may be able to encourage a payor to reimburse for the procedures.”
Further, she says, the more data you have available to you, the more successful you will be in negotiating.
2. Orthopedic. Almost all non-Medicare orthopedic procedures provided within a well-managed ASC can be profitable, says Mr. Bishop. But again, profits are contingent on adequate carve-outs for extremely expensive implants.
“With many orthopedic procedures, the ability to make money — or not lose money — is dependent upon the ability to get reimbursed entirely for implant costs,” says Mr. Rom.
“For example, joint replacements are incredibly expensive and would not be profitable unless the entire cost of the implant is reimbursed,” Ms. White says. “This means managing expenses is also critical.”