This letter highlights three developments which demonstrate how quickly the world of surgery centers is changing. The letter also provides information about the 16th Annual Improving Profitability and Business and Legal Issues Conference to be held Oct. 8-10, in Chicago. These are as follows:
1. Healthcare reform. Healthcare reform bills, in the House and in the Senate Help Committee, provide for a public option. The public option would decrease average premiums for a family from approximately $917 a month to $738 a month. This reduced premium is estimated to drive a great deal of beneficiaries out of commercial plans and into a public plan. The public plan as part of the House plan provides for Medicare rates plus 5 percent. The Lewin Group estimates that nearly 120 million people would move from commercial plans to this type of public plan. In terms of overall reimbursement, this would reduce aggregate hospital reimbursement by $30 billion and aggregate physician reimbursement by $11 billion.
This type of change would represent a huge negative revenue impact on ASCs. This may be similar to situations where states drastically reduced workers’ compensation payments which led to large overall revenue decreases to surgery centers.
You can read an article in this issue that discusses healthcare reform which starts on the cover of this issue.
2. Reversal of safe harbor decision. The 7th Circuit Court of Appeals recently reviewed a case involving a Dr. DeBartolo and Health South Corp. related to the Joliet Surgical Center. There, a physician had brought an action claiming that he had been wrongfully terminated from a surgery center for failure to comply with amended safe harbor requirements that were part of the surgery center operating agreement. The federal court determined that he had no cause of action under the federal statute and dismissed his claim. The 7th Circuit Court of Appeals, after an extensive review of safe harbor issues and a discussion of ASCs in some detail, decided the claims brought by Dr. DeBartolo were really state law claims and not federal law claims. Thus, it reversed the decision of the federal court which had held in favor of the surgery center. It further indicated that the case should be decided in the state court not federal court. Thus, Dr. DeBartolo is free again to bring his action but in state court.
3. Out of network. Payors are increasingly using several new methods and more aggressive actions of recoupment to drive down out-of-network reimbursement to surgery centers. They are redoubling their efforts by trying to recoup payments made for out-of-network visits and to stop payments made to out-of-network providers. In addition, they are reducing payments to such providers. This continues to evolve. There is an article on out-of-network issues which starts on the cover of this issue.
4. ASC Communications, Ambulatory Surgery Foundation, ASC Association and Becker’s ASC Review are hosting the 16th Annual ASC Conference on Improving Profitability and Business and Legal Issues (Oct. 8-10). The conference is held at the Westin Hotel on Michigan Avenue in Chicago. We have an outstanding lineup of speakers and expect an outstanding event. There are approximately 97 speakers and 72 sessions. The conference will talk at some length about healthcare reform and its impact on ASCs. It will also cover a great deal of practical guidance issues and give owners and administrators information that they can use immediately to improve their surgery centers. Should you desire to register for the conference, please call (703) 836-5904 or register online at http://www.ascassociation.org/chicagoOct2009.cfm. You are also free to take a discount of $100 off the price of the conference if you register by Sept. 1; just reference this letter.
Very truly yours,
Scott Becker