Becker's ASC Review

18 Thought Leadership The ASC/OBL cardiology model — 2 industry experts answer 5 Qs By Angie Stewart C hanging federal and state rules are driving a rapid migration of cardiology procedures to the outpatient setting, according to ECG Management Consultants Principal Naya Kehayes and Associate Principal Sean Hartzell. Both ECG leaders spoke to Becker's ASC Review about this shi in the healthcare landscape and how ASCs can seize this new revenue op- portunity. Note: Responses have been edited for length and clarity. Question: How have CMS' rules changed regarding what procedures can be performed in ASCs? Naya Kehayes: Between 2009-20, CMS approved a multitude of cardi- ology procedures for addition to the ASC procedure list. It started with implantable device procedures, including pacemakers and defibrilla- tors. en, in 2019, CMS changed the definition of surgery in the ASC rules to include "surgery-like" procedures. at expanded the ASC list to include cardiac catheterization and interventional procedures. ose procedures traditionally aren't considered "surgery," so that's why they weren't on the allowed ASC list in the past, but they were allowed in the hospital outpatient department setting and some also allowed in the office-based lab (OBL) setting. So, that was a significant change, which then created multiple options for outpatient site of service for these procedures. Q: How do state rules affect implementation of CMS rule changes? Sean Hartzell: States oen mandate what types of procedures can be performed in an OBL versus an ASC, and basically everything else is done in a hospital. e state rules supersede what CMS has approved. Some states are more progressive than others as it relates to cardiology in an outpatient or ASC/OBL setting. Places like Alabama are more progressive — with less statutes as it relates to cardiology — whereas places like New York state have more regulations. New York says any cardiac catheterization or percutaneous coronary intervention must be done in a hospital. Overall, any organizations that want to move any sort of cardiology procedure into an ASC or OBL really need to under- stand what their state allows outside the four walls of the hospital. Q: Can the procedures that are viable in ASCs and HOPDs also be performed in the OBL? NK: In the OBL, typically you're not providing services that require general anesthesia; they're not invasive procedures, and typically are diagnostic procedures. ese procedures are oen specifically those designated as codes with site-of-service differentials in the Medicare physician fee schedule, meaning the physician is reimbursed for a tech- nical component in addition to the reimbursement for the professional services. at's usually an indicator of when a procedure can be done in the OBL, which is also known as the place of service (POS) 11. Q: Are commercial payers aligned with CMS in terms of driving cardiology procedures to ASCs? SH: Commercial payers are oen out in front of CMS. ey are always looking for the ability to reduce overall spend for their members by making sure procedures are performed at the appropriate type of facil- ity. inking about some of the recent procedures that CMS approved in an ASC such as total joints and spine procedures, commercial orga- nizations like Blue Cross Blue Shield and UnitedHealthcare had already approved those procedures for performance in ASCs. With respect to cardiology, however, because the new codes added to the ASC list in 2019 and 2020 were not "surgery" CPT codes, these were not com- monly found on commercial payer lists. However, for codes that have a site-of-service adjustment for POS 11, OBLs, these typically were also on the approved commercial payer lists. Q: What is a hybrid ASC/OBL, and how would it look in the cardiology realm? NK: e ASC/OBL is licensed and operated as an ASC on a couple designated days in a week and then will operate as an OBL on the other days of the week. e facility cannot operate as an OBL and an ASC at the same time because the CMS ASC rules prohibit this in addition to the fact that ASC cases that require general anesthesia have to be completely compliant with ASC rules. Q: How should OBLs that want to develop a hybrid ASC start the process? NK: Assess your state rules, evaluate which cardiology case types you can't do in your OBL that are ASC-eligible, and review space and capital requirements. Develop a pro forma. e payer mix is oen dominated by Medicare, and these rates are non-negotiable. If you're converting an OBL to a hybrid ASC and have expensive implantables, it's important that you understand the cost structure. Additionally, if adding the ASC component were to change organizational and governance structure, [determine] how you are thinking about equity allocation if there are multiple partners, which may include physicians, a management company and/or a hospital. SH: It's important for the OBL to understand the configuration of its average daily book of business and compare that to what the orga- nization would generate from a day as an ASC. is is basically an opportunity analysis on a daily basis between and OBL and an ASC. ese new procedures that can be performed within an ASC can provide an uptick in revenue, but if there's not enough volume for those types of cases and you're taking a day of capacity out of a well-running machine, there's an opportunity cost inherent with that decision. n

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