At the 10th Annual Orthopedic, Spine and Pain Management Review Conference in Chicago on June 15, Richard W. Wohns, MD, JD, MBA, of South Sound Neurosurgery gave a presentation titled “Comparing the Reimbursement of Spine Procedures: ASCs vs. Hospitals.” He touched on several important points when comparing clinical and financial data in hospitals versus ambulatory surgery centers.
“The Milliman guidelines are out there but the only way to counter them is to perform quality studies that show it’s more cost-effective to perform spine surgery in appropriately indicated patients than perform additional conservative care,” he said. “These types of studies are the only way to counter Milliman guidelines that are preventing payors from authorizing surgeries we think are important. It has to be done in the literature showing what we are doing really adds to quality of life for a lower cost.”
Highlight cost savings in payor contracts. When dealing with payors for new contracts, it’s important to highlight the benefits of performing spine surgery in an ASC. “Here are the driving factors and numbers that are the compelling arguments that you have to do with payors: charges are $119,529 for the hospital and $37,967 in the outpatient surgery center for the Puget Sound area,” said Dr. Wohns. “When I started negotiating, I would sit down with medical directors and teach them what it meant to them and their subscribers to perform cases in the ASC. Now they are coming to us to see if we can bring their patients to our center. The cost numbers is the most compelling argument you can make if you take a two-level ADF with insurance payors.”
Negotiate down implant prices. Many implants have become commodities, making it easier to negotiate down implant prices with device companies. However, this may take some sacrifice from the physicians. “After surgeons give up their connections with device companies, you can aggressively negotiate with them,” said Dr. Wohns. “If the surgeon can give up that relationship and realize that a cage is a cage and a pedicle is a pedicle, they are going to see a significant cost difference.”
Surgeons are performing increasingly more complex procedures in the surgery center, including artificial disc replacement, anterior lumbar interbody fusions and transforaminal lumbar interbody fusions through a minimally invasive procedure. Dr. Wohns also shared some of his comparative data:
For single level minimally invasive instrumented posterior lumbar fusion:
Total bill charges for inpatient: $75,663
Total bill charges for outpatient ASCs: $42,500
Average insurance payment for inpatient: $26,711
Average insurance payment for outpatient ASCs: $23,208
For single level minimally invasive TLIF:
Total billed charges for inpatient: $160,606
Total billed charges for outpatient ASCs: $45,499
Average insurance payment for inpatient: $59,251
Average insurance payment for outpatient ASCs: $25,000
“The Milliman guidelines are out there but the only way to counter them is to perform quality studies that show it’s more cost-effective to perform spine surgery in appropriately indicated patients than perform additional conservative care,” he said. “These types of studies are the only way to counter Milliman guidelines that are preventing payors from authorizing surgeries we think are important. It has to be done in the literature showing what we are doing really adds to quality of life for a lower cost.”
Highlight cost savings in payor contracts. When dealing with payors for new contracts, it’s important to highlight the benefits of performing spine surgery in an ASC. “Here are the driving factors and numbers that are the compelling arguments that you have to do with payors: charges are $119,529 for the hospital and $37,967 in the outpatient surgery center for the Puget Sound area,” said Dr. Wohns. “When I started negotiating, I would sit down with medical directors and teach them what it meant to them and their subscribers to perform cases in the ASC. Now they are coming to us to see if we can bring their patients to our center. The cost numbers is the most compelling argument you can make if you take a two-level ADF with insurance payors.”
Negotiate down implant prices. Many implants have become commodities, making it easier to negotiate down implant prices with device companies. However, this may take some sacrifice from the physicians. “After surgeons give up their connections with device companies, you can aggressively negotiate with them,” said Dr. Wohns. “If the surgeon can give up that relationship and realize that a cage is a cage and a pedicle is a pedicle, they are going to see a significant cost difference.”
Surgeons are performing increasingly more complex procedures in the surgery center, including artificial disc replacement, anterior lumbar interbody fusions and transforaminal lumbar interbody fusions through a minimally invasive procedure. Dr. Wohns also shared some of his comparative data:
For single level minimally invasive instrumented posterior lumbar fusion:
Total bill charges for inpatient: $75,663
Total bill charges for outpatient ASCs: $42,500
Average insurance payment for inpatient: $26,711
Average insurance payment for outpatient ASCs: $23,208
For single level minimally invasive TLIF:
Total billed charges for inpatient: $160,606
Total billed charges for outpatient ASCs: $45,499
Average insurance payment for inpatient: $59,251
Average insurance payment for outpatient ASCs: $25,000