Note: Scott Becker, JD, CPA, partner with McGuireWoods, and Anna Timmerman, JD, associate with McGuire Woods, answered the following four questions on the future of ASCs and GI under healthcare reform for EndoEconomics, a journal published by Physicians Endoscopy.
Q: What are the latest changes through healthcare reform, and how do you see those changes affecting ASC development?
A: Healthcare reform remains fraught with a great deal of uncertainty. As healthcare reform implementation begins, it becomes much less likely that the law will be substantially repealed. One possible exception is the mandate to purchase personal health insurance, which may not survive a constitutional challenge. However, it is more likely that the Supreme Court would find that the mandate is constitutional.
We see the implementation of healthcare reform as having a tempering effect on the development of ASCs. It leads parties to be less certain of both the long-term economics of the ASC business and whether there will be independent physicians to invest in and drive ASCs. Note, however, the acquisition of gastroenterologists has moved much more slowly than in other specialties.
Q: What new trends in ASC development are you seeing?
A: The biggest trend we see is the return to smart, efficient, single-specialty ASC development. Over time, well-managed single-specialty centers have provided better returns on investment than multi-specialty centers. Of course, the significant risk with single-specialty centers is that if any part of the specialty's reimbursement or case line volume falls, it has a very negative effect on the surgery centers.
The second biggest trend we see is more and more efforts to turn around surgery centers. Finally, the last trend we see is increased acquisition of centers by hospitals, which convert the ASCs to hospital outpatient departments for billing purposes.
Q: How do you think the new Medicare waiver of deductibles and co-insurance for preventive services, which includes colonoscopies, will affect GI ASC volume?
A: We expect the new Medicare waiver of deductibles and co-insurance for preventive services to increase the demand for colonoscopies. As Medicare has made changes ov er the years to provide reimbursement for screening colonoscopies and to encourage early detection, colonoscopy volumes have substantially increased. We expect that this reduction or elimination of co-insurance and deductibles will again lead to an increase in GI ASC volume.
Q: ASCs are in the final year of a four-year phase-in of the new payment systems based on HOPD rates. How do you see the stability of the ASC payment mechanism?
A: From a federal perspective, we expect relative stability for the next few years. From a commercial standpoint, we are concerned that changes made on the Medicare side will continue to be adopted by commercial payors and have a negative impact on reimbursement.
Learn more about Physicians Endoscopy.
Read more advice on gastroenterology and endoscopy:
-5 Proven Strategies to Reduce Costs of Scopes
-5 Ways to Recruit and Retain GI Physicians Successfully to Your Surgery Center
-5 Strategies for Improving Profits at GI/Endoscopy-Driven ASCs
Q: What are the latest changes through healthcare reform, and how do you see those changes affecting ASC development?
A: Healthcare reform remains fraught with a great deal of uncertainty. As healthcare reform implementation begins, it becomes much less likely that the law will be substantially repealed. One possible exception is the mandate to purchase personal health insurance, which may not survive a constitutional challenge. However, it is more likely that the Supreme Court would find that the mandate is constitutional.
We see the implementation of healthcare reform as having a tempering effect on the development of ASCs. It leads parties to be less certain of both the long-term economics of the ASC business and whether there will be independent physicians to invest in and drive ASCs. Note, however, the acquisition of gastroenterologists has moved much more slowly than in other specialties.
Q: What new trends in ASC development are you seeing?
A: The biggest trend we see is the return to smart, efficient, single-specialty ASC development. Over time, well-managed single-specialty centers have provided better returns on investment than multi-specialty centers. Of course, the significant risk with single-specialty centers is that if any part of the specialty's reimbursement or case line volume falls, it has a very negative effect on the surgery centers.
The second biggest trend we see is more and more efforts to turn around surgery centers. Finally, the last trend we see is increased acquisition of centers by hospitals, which convert the ASCs to hospital outpatient departments for billing purposes.
Q: How do you think the new Medicare waiver of deductibles and co-insurance for preventive services, which includes colonoscopies, will affect GI ASC volume?
A: We expect the new Medicare waiver of deductibles and co-insurance for preventive services to increase the demand for colonoscopies. As Medicare has made changes ov er the years to provide reimbursement for screening colonoscopies and to encourage early detection, colonoscopy volumes have substantially increased. We expect that this reduction or elimination of co-insurance and deductibles will again lead to an increase in GI ASC volume.
Q: ASCs are in the final year of a four-year phase-in of the new payment systems based on HOPD rates. How do you see the stability of the ASC payment mechanism?
A: From a federal perspective, we expect relative stability for the next few years. From a commercial standpoint, we are concerned that changes made on the Medicare side will continue to be adopted by commercial payors and have a negative impact on reimbursement.
Learn more about Physicians Endoscopy.
Read more advice on gastroenterology and endoscopy:
-5 Proven Strategies to Reduce Costs of Scopes
-5 Ways to Recruit and Retain GI Physicians Successfully to Your Surgery Center
-5 Strategies for Improving Profits at GI/Endoscopy-Driven ASCs