Healthcare reform will be a big issue for all healthcare providers next year, especially ambulatory surgery centers. Uncertainty surrounding legislation and implementation has already had a big impact on the ASC market and several new initiatives will present challenges in 2013. Here, industry professionals discuss what they expect to see next year and how surgery centers can successfully overcome these challenges.
1. Adding new patients to the coverage system. The Patient Protection and Affordable Care Act seeks to provide 30 million more people with health insurance coverage, either through a government payor or private payors within the health insurance exchange. This influx of patients could drive higher volume into the ASC, but these patients will likely have lower reimbursing plans.
"We need to share the cost of increased volumes over a wider group of people, but provider expenses have to increase," says Bob Gesing, AIA, principal at Trinity Health Group. "From a freestanding ASC perspective, the industry has been pretty good and progressive at creating lean and efficient models. They are ahead of the game, but there will be more pressure to continue to lean it up."
ASCs can focus more efforts on cross training their staff and planning for additional patients. "In most cases, providers will be looking for operational means to reduce inventory more and outsourcing supply management because there are significant costs associated with out of control inventory," says Mr. Gesing.
2. Declining reimbursement. Providers are already seeing lower reimbursement from Medicare and private payors, a trend that will likely continue over the next year. The additional people covered by the ACA will likely have comparable reimbursement rates to Medicare, which is almost always the lowest payor in the market.
"Organizations like hospitals or freestanding surgery centers are realizing they need to be prepared," says Mr. Gesing. "We see that many hospitals and healthcare organizations are doing a lot of studies to see what the organization would look like if everyone dropped to CMS rates or CMS rates minus 10 percent. They are looking at the drop in their bottom line and trying to figure out what they need to do to survive at that rate."
Preparing for the worse case scenario will allow organizations to recover from any situation successfully. "ASCs should decide whether they can stay independent or align themselves with other organization to gain economies of scale," says Mr. Gesing. "Do they need to figure out ways to trim more expenses or learn how to do more with less? Most of my clients say they've already been doing that for 10 years, but a renewed focus might be necessary."
Surgery centers can also examine their payor contracts and claims for additional revenue possibilities. "Analyze your fee schedule against your payor contracts and make appropriate adjustments to your fee schedule to assure that you are maximizing revenues," says Dawn Q. McLane, vice president, consulting, development and integration at Health Inventures.
3. Rising overhead costs. Surgery centers are seeing higher expenses as they switch to electronic medical records and implement other software programs to stay abreast of quality and cost reporting requirements. These expenses come on top of all other overhead costs, which continue to steadily rise as well.
"Cost containment will continue to be a major priority for ambulatory surgery centers this coming year as facilities remain under increasing pressure to do more with less staff and less time," says Stephen Punzak, MD, founder and CEO of Medical Web Technologies. "As such, technology will play a greater role in their day-to-day operations as administrators and key stakeholders look to replace antiquated manual processes with solutions that provide cost and time savings."
As an example, time consuming preoperative screenings that are usually conducted over the phone, which can be inconvenient for patients. These screenings can be transitioned to online platforms where patients fill in the information themselves.
"With more complete and accurate medical histories, costly day-of-surgery delays and cancellations are avoided," says Dr. Punzak. "Additionally, nurses will spend less time on administrative tasks and more time with patients."
Surgery centers can also renew a focus on benchmarking and traditional cost-cutting measures to deal with future issues. "Perform a case cost analysis for your top 20 procedures and benchmark internally — between physicians — and externally," says Ms. McLane. "Take steps necessary to move toward appropriate benchmarks to decrease your overall costs."
4. Pay for performance and patient satisfaction. Payors are already transitioning hospitals to a more pay for performance reimbursement model than fee for service, and ASCs could be next. They are rated on patient satisfaction as well as outcomes, which means enhancing the patient experience.
"I think we are going to see an uptick in pressure on ASCs to provide better amenities on the pre- and postoperative side," says Mr. Gesing. "Right now, a lot of pre- and postoperative areas are cubical-based and separated by a curtain. However, patients are accustomed to the hospital-based private rooms. They don't want to hear what is going on across the curtain and ASCs will feel pressure to build private rooms as well."
Patients are also shopping around more than ever before, using the internet to figure out which surgeons and facilities are the best places for surgery. They look online for cost and quality data as well as past patient reviews before making their decision.
"Consumers are doing evaluations of their procedures and where they are done online, so I won't be surprised if we see published rates of people at different venues in the future," says Mr. Gesing. "With an HSA, I'm constantly looking at that. I'm controlling my healthcare dollars and shopping around. You are going to see a lot more of that, especially on the internet."
5. CMS quality reporting. CMS began requiring ambulatory surgery centers to include quality information in their claims data to report certain events, such as burns or wrong site surgery. Surgery centers must include G-codes defining whether or not each adverse event happened. More measures will be added next year.
"ASCs have a difficult time because they are bearing much of the brunt of new CMS quality measure and different regulations," says Allison Errickson, CPC-H, director of coding compliance for ProVation Medical, part of Wolters Kluwer Health. "These measures have changed the workflow and that can be really difficult. There are some growing pains with figuring out how to get this workflow most efficiently on the bill the same day so they aren't impacting accounts receivable."
In the future CMS will also require surgery centers to report the quality data on its QualityNet website, not through submitted claims. Surgery centers that fail to include the quality codes will see a 2 percent decline in reimbursement for Medicare cases.
"They have to have someone enter that information and ASCs don't have a lot of extra people sitting around with free time," says Ms. Errickson. "But it's important to have someone who is watching these measures to make sure they are on top of what is coming. Also keep monitoring CMS websites so you know what to prepare for in the future."
Many surgery center administrators are looking to their electronic health record, documentation and coding or other software company to include these new reporting mechanisms in their platforms. If they are not already, these capabilities should be available in 2013.
6. Consolidation within the industry. Ambulatory surgery centers are battling hospitals for market share in their community, both of patients and physicians, for both high and low acuity cases. In some communities, hospitals are purchasing surgery centers from physicians while others are becoming joint ventures.
"There are more and more physicians and surgeons that want to be aligned with hospitals, and the contracted physician at the hospital enterprise is moving ahead at all venues," says Mr. Gesing. "Accountable care organizations are coming into play, and organizations coalesce as they look at total costs. It's hard to control costs and quality and be accountable if you don't control the entire system or have checks and balances. As ACOs start to occur, freestanding ASCs that compete in the past with hospitals will now need to partner with them because they need full integration to work."
When the two entities align, hospitals see surgery centers as outsourced partners within an integrated system which allows the system to perform surgical services in a less costly manner. Consider partnering at hospitals where ASC surgeons already perform cases or have a relationship with the hospital administration.
"ASCs that have effective and efficient models become a valued partner instead of a competitor in this and joint venture arrangements instead of competitors," says Mr. Gesing. "If I were an ASC administrator, I would position myself in marketing and reputation to show the value my center has in the community."
7. More procedures moving into the outpatient setting. Advancement in technology and surgical technique has allowed more specialties and procedures to move into the outpatient setting. Ambulatory surgery centers must decide whether purchasing new equipment and capturing market share for these cases will provide an adequate return on investment.
"There are things that used to be heavily invasive hospital surgeries that are now outpatient surgeries," says Mr. Gesing. "These big procedures are being replaced with other ways to do things that are less invasive and cost less money; that's the trend of our industry. For example, many orthopedic surgeons are looking at ways of doing more minimally invasive joint replacement procedures at surgery centers with 23-hour stays."
When surgery centers decide to bring in 23-hour stay procedures, they must include full private rooms, bathrooms, private space for families, internet access and televisions in their room. "Some surgery centers are doing these cases at the frustration of the hospitals because there is a greater pool of more profitable cases that can now be done in the ASC," says Mr. Gesing. "Patients place the most value on privacy."
Another procedure to watch over the next few years is interventional radiography. "I have had several clients looking at interventional radiography as an outpatient service to move into a simpler setting than the hospital," says Mr. Gesing. "I have a few surgery centers where we are looking at adding IR room into the cadre of others at the ASC — operating rooms, minor procedure rooms and IR rooms."
8. Infections, complications and transfers. It has always been important for ASCs to obtain a low infection, complication and transfer rate, and will be even more so in the hyper-competitive healthcare environment going forward. Surgery centers should perform quality studies and make sure the government body is actively involved in quality improvement initiatives.
"Assure you are performing all of the steps that you define in your infection control program [and] that it is an active and ongoing program that your governing body is actively involved," says Ms. McLane. "Assure you are compliant with regulatory requirements. Read the Medicare Conditions for Coverage Interpretive Guidelines again. Make assure you are compliant with al of these standards."
Falling out of compliance has implications for the surgery center's outcomes, accreditation and reimbursement levels going forward.
More Articles on Surgery Centers:
10 Key Issues for ASCs
6 Tips on Managing Business Office Staff in an Ambulatory Surgery Center
6 Tips to Overcome Payor concerns With Spine surgery in ASCs
1. Adding new patients to the coverage system. The Patient Protection and Affordable Care Act seeks to provide 30 million more people with health insurance coverage, either through a government payor or private payors within the health insurance exchange. This influx of patients could drive higher volume into the ASC, but these patients will likely have lower reimbursing plans.
"We need to share the cost of increased volumes over a wider group of people, but provider expenses have to increase," says Bob Gesing, AIA, principal at Trinity Health Group. "From a freestanding ASC perspective, the industry has been pretty good and progressive at creating lean and efficient models. They are ahead of the game, but there will be more pressure to continue to lean it up."ASCs can focus more efforts on cross training their staff and planning for additional patients. "In most cases, providers will be looking for operational means to reduce inventory more and outsourcing supply management because there are significant costs associated with out of control inventory," says Mr. Gesing.
2. Declining reimbursement. Providers are already seeing lower reimbursement from Medicare and private payors, a trend that will likely continue over the next year. The additional people covered by the ACA will likely have comparable reimbursement rates to Medicare, which is almost always the lowest payor in the market.
"Organizations like hospitals or freestanding surgery centers are realizing they need to be prepared," says Mr. Gesing. "We see that many hospitals and healthcare organizations are doing a lot of studies to see what the organization would look like if everyone dropped to CMS rates or CMS rates minus 10 percent. They are looking at the drop in their bottom line and trying to figure out what they need to do to survive at that rate."
Preparing for the worse case scenario will allow organizations to recover from any situation successfully. "ASCs should decide whether they can stay independent or align themselves with other organization to gain economies of scale," says Mr. Gesing. "Do they need to figure out ways to trim more expenses or learn how to do more with less? Most of my clients say they've already been doing that for 10 years, but a renewed focus might be necessary."
Surgery centers can also examine their payor contracts and claims for additional revenue possibilities. "Analyze your fee schedule against your payor contracts and make appropriate adjustments to your fee schedule to assure that you are maximizing revenues," says Dawn Q. McLane, vice president, consulting, development and integration at Health Inventures.
3. Rising overhead costs. Surgery centers are seeing higher expenses as they switch to electronic medical records and implement other software programs to stay abreast of quality and cost reporting requirements. These expenses come on top of all other overhead costs, which continue to steadily rise as well.
"Cost containment will continue to be a major priority for ambulatory surgery centers this coming year as facilities remain under increasing pressure to do more with less staff and less time," says Stephen Punzak, MD, founder and CEO of Medical Web Technologies. "As such, technology will play a greater role in their day-to-day operations as administrators and key stakeholders look to replace antiquated manual processes with solutions that provide cost and time savings."
As an example, time consuming preoperative screenings that are usually conducted over the phone, which can be inconvenient for patients. These screenings can be transitioned to online platforms where patients fill in the information themselves.
"With more complete and accurate medical histories, costly day-of-surgery delays and cancellations are avoided," says Dr. Punzak. "Additionally, nurses will spend less time on administrative tasks and more time with patients."
Surgery centers can also renew a focus on benchmarking and traditional cost-cutting measures to deal with future issues. "Perform a case cost analysis for your top 20 procedures and benchmark internally — between physicians — and externally," says Ms. McLane. "Take steps necessary to move toward appropriate benchmarks to decrease your overall costs."
4. Pay for performance and patient satisfaction. Payors are already transitioning hospitals to a more pay for performance reimbursement model than fee for service, and ASCs could be next. They are rated on patient satisfaction as well as outcomes, which means enhancing the patient experience.
"I think we are going to see an uptick in pressure on ASCs to provide better amenities on the pre- and postoperative side," says Mr. Gesing. "Right now, a lot of pre- and postoperative areas are cubical-based and separated by a curtain. However, patients are accustomed to the hospital-based private rooms. They don't want to hear what is going on across the curtain and ASCs will feel pressure to build private rooms as well."
Patients are also shopping around more than ever before, using the internet to figure out which surgeons and facilities are the best places for surgery. They look online for cost and quality data as well as past patient reviews before making their decision.
"Consumers are doing evaluations of their procedures and where they are done online, so I won't be surprised if we see published rates of people at different venues in the future," says Mr. Gesing. "With an HSA, I'm constantly looking at that. I'm controlling my healthcare dollars and shopping around. You are going to see a lot more of that, especially on the internet."
5. CMS quality reporting. CMS began requiring ambulatory surgery centers to include quality information in their claims data to report certain events, such as burns or wrong site surgery. Surgery centers must include G-codes defining whether or not each adverse event happened. More measures will be added next year.
"ASCs have a difficult time because they are bearing much of the brunt of new CMS quality measure and different regulations," says Allison Errickson, CPC-H, director of coding compliance for ProVation Medical, part of Wolters Kluwer Health. "These measures have changed the workflow and that can be really difficult. There are some growing pains with figuring out how to get this workflow most efficiently on the bill the same day so they aren't impacting accounts receivable."In the future CMS will also require surgery centers to report the quality data on its QualityNet website, not through submitted claims. Surgery centers that fail to include the quality codes will see a 2 percent decline in reimbursement for Medicare cases.
"They have to have someone enter that information and ASCs don't have a lot of extra people sitting around with free time," says Ms. Errickson. "But it's important to have someone who is watching these measures to make sure they are on top of what is coming. Also keep monitoring CMS websites so you know what to prepare for in the future."
Many surgery center administrators are looking to their electronic health record, documentation and coding or other software company to include these new reporting mechanisms in their platforms. If they are not already, these capabilities should be available in 2013.
6. Consolidation within the industry. Ambulatory surgery centers are battling hospitals for market share in their community, both of patients and physicians, for both high and low acuity cases. In some communities, hospitals are purchasing surgery centers from physicians while others are becoming joint ventures.
"There are more and more physicians and surgeons that want to be aligned with hospitals, and the contracted physician at the hospital enterprise is moving ahead at all venues," says Mr. Gesing. "Accountable care organizations are coming into play, and organizations coalesce as they look at total costs. It's hard to control costs and quality and be accountable if you don't control the entire system or have checks and balances. As ACOs start to occur, freestanding ASCs that compete in the past with hospitals will now need to partner with them because they need full integration to work."
When the two entities align, hospitals see surgery centers as outsourced partners within an integrated system which allows the system to perform surgical services in a less costly manner. Consider partnering at hospitals where ASC surgeons already perform cases or have a relationship with the hospital administration.
"ASCs that have effective and efficient models become a valued partner instead of a competitor in this and joint venture arrangements instead of competitors," says Mr. Gesing. "If I were an ASC administrator, I would position myself in marketing and reputation to show the value my center has in the community."
7. More procedures moving into the outpatient setting. Advancement in technology and surgical technique has allowed more specialties and procedures to move into the outpatient setting. Ambulatory surgery centers must decide whether purchasing new equipment and capturing market share for these cases will provide an adequate return on investment.
"There are things that used to be heavily invasive hospital surgeries that are now outpatient surgeries," says Mr. Gesing. "These big procedures are being replaced with other ways to do things that are less invasive and cost less money; that's the trend of our industry. For example, many orthopedic surgeons are looking at ways of doing more minimally invasive joint replacement procedures at surgery centers with 23-hour stays."
When surgery centers decide to bring in 23-hour stay procedures, they must include full private rooms, bathrooms, private space for families, internet access and televisions in their room. "Some surgery centers are doing these cases at the frustration of the hospitals because there is a greater pool of more profitable cases that can now be done in the ASC," says Mr. Gesing. "Patients place the most value on privacy."
Another procedure to watch over the next few years is interventional radiography. "I have had several clients looking at interventional radiography as an outpatient service to move into a simpler setting than the hospital," says Mr. Gesing. "I have a few surgery centers where we are looking at adding IR room into the cadre of others at the ASC — operating rooms, minor procedure rooms and IR rooms."
8. Infections, complications and transfers. It has always been important for ASCs to obtain a low infection, complication and transfer rate, and will be even more so in the hyper-competitive healthcare environment going forward. Surgery centers should perform quality studies and make sure the government body is actively involved in quality improvement initiatives.
"Assure you are performing all of the steps that you define in your infection control program [and] that it is an active and ongoing program that your governing body is actively involved," says Ms. McLane. "Assure you are compliant with regulatory requirements. Read the Medicare Conditions for Coverage Interpretive Guidelines again. Make assure you are compliant with al of these standards."
Falling out of compliance has implications for the surgery center's outcomes, accreditation and reimbursement levels going forward.
More Articles on Surgery Centers:
10 Key Issues for ASCs
6 Tips on Managing Business Office Staff in an Ambulatory Surgery Center
6 Tips to Overcome Payor concerns With Spine surgery in ASCs