ASCs will see more payer-provider alignment and higher multiples as joint replacement procedures migrate to the outpatient setting, according to HealthCare Appraisers.
HealthCare Appraisers followed news from publicly-traded health systems, physician and healthcare service providers and ASC management companies to compile the FMVantage Point Quarterly Insights report.
Five insights from the third-quarter issue:
1. ASCs are forming creative payer partnerships such as bundled payment arrangements. For instance, Nashville, Tenn.-based Surgery Partners is looking to share ownership with payers in some facilities.
2. CMS eliminated the "25 percent rule," which would have reduced long-term care hospitals' Medicare reimbursement rates if more than one-quarter of their patients came from a single acute-care hospital. The policy change could spur increased joint venture and partnership activity.
3. Arrangements where multiple providers share responsibility for patient care, such as 90-day bundles, are expected to become more prevalent.
4. By taking on more complex, high-reimbursing procedures, ASCs could expand their margins and boost valuation multiples. Surgery Partners has five facilities performing total joint replacement procedures and expects that business line to "ramp up," CEO Wayne Scott DeVeydt said.
5. ASCs dedicated to orthopedics frequently achieve EBITDA margins above 40 percent.