Becker's ASC Review

11 ASC MANAGEMENT What surgery centers, physicians stand to lose when the national emergency ends By Patsy Newitt P resident Joe Biden said Feb. 18 he will extend the national emergency, first declared March 13, 2020, as a result of the COVID-19 pandemic beyond April 14. The designation frees the government of some legal red tape and allows it to spend additional funds. Here are three areas in which ASCs and physicians stand to lose when the designation ends: Stark Law waivers HHS issued blanket waivers of physician self-referral laws March 30, 2020, that remain in effect for the duration of the public health emergency. These Stark Law blanket waivers temporarily remove sanctions from arrangements "solely related" to COVID-19 purposes, such as shifting care to alternative settings due to capacity restraints. The waivers exempt 18 types of remuneration and referrals and impose a good faith standard. Interstate telemedicine Many states modified requirements for telehealth during the national emergency, in many cases allowing for cover- age of out-of-state physicians. Twenty-one states currently have waivers, according to data from the Federation of State Medical Boards, and 19 states have long-term or permanent interstate medicine. ASC to hospital CMS conversion During the public health emergency, Medicare-certified ASCs can be enrolled as hospitals, giving ASCs hospital billing privileges. To enroll in Medicare as a hospital, ASCs must meet the hospital conditions of participation for nursing, pharmaceutical, infection control and respira- tory services, as well as any other conditions not waived under Section 1136 waivers. ASCs that want to continue participating in CMS as a hospital after the public health emergency will need to submit form CMS-855A and undergo related surveying. n Inflation hits ASCs, physicians hard By Laura Dyrda T he cost of essential goods jumped 7 percent last year, outpacing the re- imbursement increases to healthcare providers across the board. ASCs will need to have candid conversations with commercial insurers about how infla- tion is affecting their business in the next year. ese conversations may be uncom- fortable, but payer executives have begun realizing the value of surgery centers and aim to move more patients into ASCs. e Consumer Price Index reported gas prices were up nearly 50 percent year over year in December, while energy costs jumped 29 percent, and food prices were up 6.3 percent. New vehicle prices increased 11.8 percent, and household furnishings and operations were up 7.4 percent. By comparison, physician services costs increased 4.3 percent last year, and hospital services costs were up 3.3 percent. Inflation also took a bite out of physician pay last year, as the average physician was only paid 1.5 percent more than in 2020. CMS raised ASC payment rates by 2 percent for 2022, and surgery centers are seeing their supply and labor expenses soar as shortages in both sectors intensify. e labor market, in particular, will likely remain competitive this year, and with employees having to pay more for gas, food and other essentials, a 2 percent pay rate increase won't cover the difference. "Although the 2 percent effective inflation rate update is appreciated, it falls far short of two important realities: First, it falls short of the latest inflation projections, which began to manifest in the first quarter and devel- oped fully in the second quarter — time enough for CMS to have taken them into consideration; second, the tight healthcare worker labor market, combined with COV- ID-related attrition and vaccine mandate- related early retirements are forcing us to make significant adjustments to our wage scales, a cost that we will have to absorb until industry pressure forces payers to make concomitant adjustments," said Alfonso del Granado, administrator of Covenant High Plains Surgery Center in Lubbock, Texas. ere are independent ASCs across the U.S. struggling to make ends meet as costs in- crease and pay flattens. e opportunity for out-of-network contracts has dissipated for most surgery centers, and it could become more challenging to negotiate with payers as price transparency legislation goes into effect and more surgery centers post global prices online. If ASCs aren't able to get pay bumps to cover increasing costs, they are more likely to sell to a hospital, take on private equity investments or join a chain. e less com- petitive healthcare landscape oen boosts prices while lowering quality and patient satisfaction. n

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