Becker's ASC Review

18 ASC MANAGEMENT ASC finances in 2021: 6 observations By Laura Dyrda A SC owners and operators faced chal- lenges last year when elective sur- geries were limited across the U.S. Pandemic-related challenges persist, but many see 2021 as a brighter year because case volume is resuming, and payers are steering more cases to outpatient settings. Six observations on ASC finances: 1. ASCs are budgeting for higher overhead costs related to the pandemic. "I anticipate continued supply cost increases, particularly with personal protective equipment, as the disruption in the supply chain carries over to 2021," said Tina Piotrowski, BSN, RN, CASC, administrator of Copper Ridge Sur- gery Center in Traverse City, Mich. "In ad- dition, labor costs remain higher as centers staff for COVID protocols. Expanded cyber liability is also being analyzed due to more remote working for some positions and the increase in cyberattacks on healthcare." 2. State and federal policy decisions are driv- ing ASC industry growth and in some cases sending business to the ASC. CMS continues to expand its list of ASC-approved procedures, and in California there is pending legislation to update state rules allowing some CMS- approved cardiac procedures in the ASC. "Overall, policymakers are focused on addressing healthcare affordability and in- creasing access to care, so we expect increas- ing recognition of the important role ASCs play in the healthcare system," said Elizabeth LaBouyer, RN, executive director of the California Ambulatory Surgery Association. 3. Commercial payers are also changing their policies to drive more cases to the ASC. "I believe that private payers are starting to address this by providing reimbursement incentives to physicians to move their care to an ASC," said Julie Nelson, RN, BSN, execu- tive director of Elmhurst (Ill.) Outpatient Surgery Center. "Physicians have recently communicated that BCBS is implementing a 30 percent variance in reimbursement for specific procedures based on hospital versus ASC locations. Because patients are so reliant on their physician to determine location of care, I believe that physician reimbursement models will have more of an impact on loca- tion of care than price transparency." 4. Orthopedic, spine, bariatrics and cardiol- ogy vendors aren't always keeping up with the movement of traditionally hospital-based procedures to the ASC. "e price point for many of the implants associated with these procedures has not been adjusted by the ven- dors to account for the opportunity for these cases being done in the ASC setting with reduced reimbursement," said Mike Grant, administrator of Surgery Center of Amarillo (Texas). "Successful negotiation of appropri- ate price points for these implants will be key for our facility over the next 24 months." 5. ASCs will continue to make room in their budgets to purchase robotic technology this year as a tool for improved patient care and physician recruitment. Larry Parrish, administrator of Illinois Sports Medicine & Orthopedic Surgery Center in Morton Grove, said his centers evaluated robotic technology for total joints before the pandemic. "We do intend to acquire a surgical robot for these cases in the first or second quarter of 2021, but not all of our total joint replace- ment surgeons intend to use it," he said. "However, we do believe that having robotic technology will be an asset in recruiting new joint replacement surgeons who trained with this capability, which will enhance the growth of our already well-established program." 6. ASC owners are selling real estate and see- ing big returns. For example, Phoenix-based OrthoArizona sold its medical office building and ASC real estate in a $23.6 million deal to a private equity group in February. In Janu- ary, a medical services company purchased a 15,000-square-foot medical office building with an ASC in San Diego for $4.6 million. n Physician pay under Stark Law's final rule: 4 takeaways on fair market value By Laura Dyrda C MS and HHS made adjustments to the Stark Law and Anti-Kickback Statute Jan. 19, affecting calculations of fair market value for physician pay. Jen Johnson, managing director, chief commercial officer and head of com- pensation arrangements, and Anthony Domanico, director of compensation design and consulting at VMG Health, outlined how organizations should think about physician pay in a Feb. 24 article. Four takeaways: 1. CMS unveiled three definitions for fair market value in the new rule, fo- cused on general services, equipment rental and office space. 2. The final rule defines general market value of compensation as "compen- sation that would be paid at the time the parties enter into the service agree- ment as a result of bona fide bargaining between well-informed parties that are not otherwise in a position to generate business for each other." 3. Previously, the definition of general market value mandated physician pay be set prior to the transaction and not take into account the volume or value of refer- rals generated. In the new rule, CMS removed the "volume or value" standard. "Organizations must continue to demonstrate that compensation is not set in a way that accounts for the volume or value of referrals or other business generated, however CMS affirmed that is a separate test and is not related to the fair market value of an arrangement," according to the article. 4. The final rule also addresses physician pay under value-based payments, noting organizations should base payments for outcomes on objective and measurable data. It also suggests updating payments for cost savings and quality improvement annually. n

• Cover