Becker's ASC Review

11 ORTHOPEDICS MSOs becoming attractive option for physician- owned orthopedic groups By Alan Condon A ligning with musculoskeletal man- agement services organizations is becoming a more attractive strategic option for some orthopedic practices as economic, payer and administrative hurdles continue to challenge physician-owned groups to maintain independence. e list of tasks medical practice managers must address — coding, billing, compli- ance, payroll, revenue cycle management, etc. — requires a significant amount of time. Ensuring a practice is getting the best pricing for supplies, implants and services as well as tending to day-to-day issues can prove overwhelming, which is where MSOs aim to help out. MSOs are designed to alleviate the increasing administrative burdens independent practic- es face and are typically owned by hospitals, groups of physicians, hospital-physician joint ventures or, increasingly, private equity inves- tors and commercial payers. Arguably the most significant benefit to orthopedic groups joining larger networks — as healthcare continues its push from fee for service toward value-based care — is the ability to share cost and outcomes data with like-minded practices, essential in contract negotiations with insurers. In addition, MSOs seek to ensure best pricing on supplies, implants and services. MSOs aggregate volume and as such, they acquire economies of scale that allow them to secure preferred pricing from insurers and vendors. Consolidation is occurring at an accelerated rate during the COVID-19 pandemic, with independent practices selling to hospitals and corporate entities. However, many physi- cians are increasingly attracted to MSOs that allow them to "maintain their brand identity, clinical autonomy and a level of income that they're accustomed to," according to Graham Young, vice president of mergers and acquisi- tion at U.S. Orthopaedic Partners, an MSO formed in the Southeast in October 2020. USOP acquired Birmingham, Ala.-based Andrews Sports Medicine & Orthopaedic Center in December and penned letters of intent with two more practices, Mr. Young told Becker's. The MSO has six affiliate practices that operate 22 locations across Mississippi and Alabama, and it aims to double in size by the end of 2022. The platform is also targeting expansion into the Midwest. Meanwhile, in Ohio, Cincinnati-based MSO OrthoAlliance kicked off 2022 by adding New Albany-based JIS Orthopedics, expand- ing its network to more than 70 physicians and 1,100 employees. OrthoAlliance, jointly owned by private equity firm Revelstoke Capital Partners and Sharonville, Ohio-based Beacon Orthopae- dics & Sports Medicine, has more than 25 affiliate offices across Ohio, Kentucky and Indiana, with growth plans for the Midwest and Southeast. In the South, the newest MSO to enter the U.S. market is private equity-backed No- vum Orthopedic Partners in Dallas, which was formed after closing partnerships with three physician-owned orthopedic practices in December. Georgia's largest orthopedic group, Atlanta-based Resur- gens Orthopaedics, also secured private equity investment to build a company that seeks to affiliate with "like-minded, en- trepreneurial orthopedic practices around the country," CEO Alex Bateman said in December. e expansion of these musculoskeletal- specific MSOs, and the births of new ones, is a strong indicator many independent physi- cian groups are considering such partner- ships over affiliations with hospitals, health systems or other corporate entities, where brand identity and clinical autonomy is oen sacrificed. n Spinal fusions at HOPDs increase after Medicare approval for ASCs By Laura Dyrda O utpatient cervical and lumbar fusions jumped at hospital-outpatient departments after CMS approved the procedures for ASCs while the procedure rate had little or no growth in surgery centers. Optum teamed with Advisory Board to examine how CMS approval of proce- dures in ASCs shifted where surgeons performed procedures. The research- ers found that procedures typically shifted outpatient slowly, and HOPD use increased at a higher rate than ASCs. The report found that cervical fusions were up 26 percent in HOPDs and 1 percent in ASCs, according to Optum's deidentified Clinformatics Data Mart Database. CMS data also showed that cervical fusions for Medicare benefi- ciaries were up 13 percent in HOPDs and 1 percent in ASCs between 2014 and 2019. Both Optum and CMS reported no change in lumbar fusion rates at ASCs. CMS reported that lumbar fusions were up 6 percent at HOPDs over the study period, and Optum reported a 3 percent increase of lumbar fusions at HOPDs. The researchers also examined sacroiliac joint fusions but found a slightly different outcome. SI joint fusions were up 18 percent for Medicare ben- eficiaries at ASCs and 13 percent at HOPDs. Optum, on the other hand, reported that SI joint fusions jumped 12 percent at HOPDs and 5 percent at ASCs. n

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