Medicaid currently accounts for one-third of all cases at Bidwell Surgery Center, a five-OR ambulatory surgery center in Middletown, Ohio. "There's absolutely no room for fat on the bone," says Chuck Brown, administrator of this multispecialty ASC, a joint venture with Atrium Medical Center in Middletown. Here Mr. Brown lists 12 ways a surgery center can survive on a Medicaid-heavy caseload.
1. Sell excess inventory to other centers. To help keep tight control over inventory, Mr. Brown sometimes sells unused devices to other centers at list price. These centers are managed by the same company as his center, Health Inventures.
2. Borrow from other centers. When it brought in a new ENT recently, Bidwell initially borrowed the physician's instrumentation from a Cincinnati surgery center. "We didn't want to buy it until we knew he would be here full-time and we had his exact specifications," Mr. Brown says. However, "we don't want to go too overboard because they will eventually say no," he adds.
3. Do favors for other centers. Doing a favor for another center, even if it is a direct competitor, makes it easier to ask for one later on. For example, Bidwell recently washed scopes for a nearby ASC whose processing equipment was down.
4. Work closely with vendors. "With the economy, vendors are more willing to bend a little," Mr. Brown says. For example, Bidwell accepted a vendor's offer of a free device for customers who use its products in at least three cases a month. When physician utilization fell off, the ASC renegotiated the deal to 30 cases over 10 months, and that was stretched to 12 months.
5. Shift surgery days to protect anesthesiologists. On one day a week, anesthesiologists were coming in for just one case. This was not economical for them and they began asking for a stipend to do this. The ASC could not afford paying a stipend, so it shifted cases that required an anesthesiologist to just three days a week. On the other days, the center schedules pain and GI cases that only need conscious sedation.
6. Aim for fast turnover. Fast turnover makes it possible to break even on Medicaid reimbursements for pain and GI procedures. The ASC needs to perform five pain cases an hour to keep costs in line with Medicaid. "Some physicians complain turnover is too good," Mr. Brown says. "They don't have enough time to go get a cup of coffee."
7. Push for high private rates. To offset low Medicare and Medicaid reimbursements, the ASC has been able to negotiate fairly generous rates with private payors. But this comes with a caveat: patients must share more of the cost. Coinsurance can be as high as 20 percent. "That level can be hard to collect," Mr. Brown says.
8. Spread out collections. Bidwell staff members have learned to spread out payments from patients with high coinsurance or high deductibles, which is another growing phenomenon. Since patients' propensity to pay plummets after surgery is completed, staff members ask for money at several points before surgery.
9. Offer a payment amnesty. Patients who still have not paid their full bill after surgery are put on a payment plan that typically requires a payment of $10 a month, which is often difficult to collect. At around the time when income tax rebate checks are due, the center offers an amnesty plan offering a 25 percent discount for patients who pay off their entire bill. This approach eliminates processing monthly checks, which is labor-intensive, as well as the 22 percent fee if the bill is sent to a collection agency.
10. Do lots of cross-training. The center does cross-train clinical staff across all clinical functions but also cross-trains them for some non-clinical work. For example, a GI tech works in the business office with medical records and the recovery nurse does physician credentialing. The business office manager and Mr. Brown also fill in at the reception desk.
11. Hire lots of per-diems. The clinical side has 10 per-diems and the business office has one, in addition of part-time staff, who work at least 25 hours a week, and a few full-time staff. Even full-timers may be asked not to come in if volume is low.
12. Steer high-cost cases to the hospital. Mr. Brown asks his surgeons to direct high-cost cases to then hospital. When cases cost more than their reimbursement, "we show the surgeons the numbers," Mr. Brown says. Sometimes they still want to use the ASC for the case because "it makes their day more efficient," he says. "To go over to the hospital for one case is not efficient." Thanks to other money-saving measures, Mr. Brown can afford to allow surgeons perform a small number of money-losing cases at the ASC.
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