Here are five tips for surgery centers to contain spine implant costs.
1. Negotiate good global rates instead of carving out spine implants. While some centers carve out these costs, it's much more favorable if you can negotiate good global rates, says Beth A. Johnson is vice president of clinical systems for Blue Chip Surgical Center Partners. With carve outs, normally there is a requirement to send the insurance company implant invoices, which slows down payment. If you know your costs and have them up to date before negotiating global rates, you can benefit from this type of reimbursement. It's often more favorable financially to have all your cost data and then negotiate rates that cover your costs.
2. Consider commodity implants. Prices of commodity implants are typically less than 50 percent of the average market cost of premium implants. The commodity implant can be used for a variety of cases, such as one-level lumbar fusion, basic rotator cuff repair or a basic suture anchor. For example, the commodity implant for a one-level lumbar fusion costs $2,500-$3,000, compared with $14,000-$15,000 for full invoice price for the premium version for a savings of $12,000 on one case. Even with typical hospital and provider discounts, the surgeon can still save $5,000-$7,000 per case. "A spine surgeon who uses commodity implants for most of his surgeries could realize a half million dollars in savings a year," says Richard A. Kube, MD, CEO of Prairie Spine & Pain Institute in Peoria, Ill.
3. Enlist surgeons to reduce implant costs. Involve the surgeons in your efforts to reduce implant costs. Make them aware of the cost associated with each device and vendor and compare the costs. "Your surgeons work closely with company reps, so it is easier for them to ask for lower prices for implants," says Lynn S. Feldman, RN, MBA, administrative manager of Eastwind Surgical, a spine center in Westerville, Ohio. "They have more leverage with the companies than an administrator could have." Many surgeons simply don't want to talk about prices, but those who do are invaluable in keeping costs down.
4. Gain physician consensus on implant standardization. Even though physician investors at an ASC have a financial incentive to standardize their use of costly implants, gaining consensus to stock just one type of manufacturers' implants can still be challenging. "In a hospital environment, physicians are accustomed to requesting a new supply item and receiving it. It has to be different in the ASC setting; ASCs don't have the financial margins to perform procedures in which expenses exceed the reimbursement," says Ms. Johnson. "We communicate to the physician partners early on the importance of standardization."
During the consensus building process, it is important to let physicians evaluate any implants they are not familiar with. This may mean having numerous sales representatives spending time with their product in your facility, says Ms. Johnson.
"If [physicians] have never used a plate, they'll want to try it before making a purchasing commitment to a vendor," says Ms. Johnson. "During this process, and in the final agreement, ensure that all implants are brought in on consignment, and that the associated instrumentation are kept at the facility as a 'loaner' set. It is less efficient for all parties involved if a set of instrumentation must be secured each and every time a procedure is performed."
5. Understanding rules for implant billing to receive full reimbursement. Most arthrodesis procedures require the use of an implant, so it is important to note the CPT code for such procedures usually exclude the cost of the implant. Payors may require implants to be coded using separately identifiable HCPC level II codes. Note: Some payors may require a copy of implant invoices to be sent with the claim. ASCs should identify which payors require such invoices to help ensure payors do not delay claims processing due to the lack of complete information.
1. Negotiate good global rates instead of carving out spine implants. While some centers carve out these costs, it's much more favorable if you can negotiate good global rates, says Beth A. Johnson is vice president of clinical systems for Blue Chip Surgical Center Partners. With carve outs, normally there is a requirement to send the insurance company implant invoices, which slows down payment. If you know your costs and have them up to date before negotiating global rates, you can benefit from this type of reimbursement. It's often more favorable financially to have all your cost data and then negotiate rates that cover your costs.
2. Consider commodity implants. Prices of commodity implants are typically less than 50 percent of the average market cost of premium implants. The commodity implant can be used for a variety of cases, such as one-level lumbar fusion, basic rotator cuff repair or a basic suture anchor. For example, the commodity implant for a one-level lumbar fusion costs $2,500-$3,000, compared with $14,000-$15,000 for full invoice price for the premium version for a savings of $12,000 on one case. Even with typical hospital and provider discounts, the surgeon can still save $5,000-$7,000 per case. "A spine surgeon who uses commodity implants for most of his surgeries could realize a half million dollars in savings a year," says Richard A. Kube, MD, CEO of Prairie Spine & Pain Institute in Peoria, Ill.
3. Enlist surgeons to reduce implant costs. Involve the surgeons in your efforts to reduce implant costs. Make them aware of the cost associated with each device and vendor and compare the costs. "Your surgeons work closely with company reps, so it is easier for them to ask for lower prices for implants," says Lynn S. Feldman, RN, MBA, administrative manager of Eastwind Surgical, a spine center in Westerville, Ohio. "They have more leverage with the companies than an administrator could have." Many surgeons simply don't want to talk about prices, but those who do are invaluable in keeping costs down.
4. Gain physician consensus on implant standardization. Even though physician investors at an ASC have a financial incentive to standardize their use of costly implants, gaining consensus to stock just one type of manufacturers' implants can still be challenging. "In a hospital environment, physicians are accustomed to requesting a new supply item and receiving it. It has to be different in the ASC setting; ASCs don't have the financial margins to perform procedures in which expenses exceed the reimbursement," says Ms. Johnson. "We communicate to the physician partners early on the importance of standardization."
During the consensus building process, it is important to let physicians evaluate any implants they are not familiar with. This may mean having numerous sales representatives spending time with their product in your facility, says Ms. Johnson.
"If [physicians] have never used a plate, they'll want to try it before making a purchasing commitment to a vendor," says Ms. Johnson. "During this process, and in the final agreement, ensure that all implants are brought in on consignment, and that the associated instrumentation are kept at the facility as a 'loaner' set. It is less efficient for all parties involved if a set of instrumentation must be secured each and every time a procedure is performed."
5. Understanding rules for implant billing to receive full reimbursement. Most arthrodesis procedures require the use of an implant, so it is important to note the CPT code for such procedures usually exclude the cost of the implant. Payors may require implants to be coded using separately identifiable HCPC level II codes. Note: Some payors may require a copy of implant invoices to be sent with the claim. ASCs should identify which payors require such invoices to help ensure payors do not delay claims processing due to the lack of complete information.