Becker's ASC Review

35 HEALTHCARE NEWS 35 What's driving physician revenue By Patsy Newitt H igher patient demand drove increases in physician produc- tivity and revenue in the first quarter of 2022, according to Kaufman Hall's "Physician Flash Report" published May 2. The report analyzed 100,000 physicians and advanced practitioners in 100 specialties. Four more notes: 1. A rise in patient volume led to increases in physician productivity in the 2022 first quarter compared to the first quarter of 2021. 2. Physician productivity increases outpaced revenue and compen- sation gains. 3. The median physician investment rose from the fourth quarter 2021 to the first quarter of 2022. Some of the increase could be at- tributed to bonuses and incentive payments that are paid annually in the first quarter, according to the report. 4. Rising operational costs pushed physician investment overall to its highest level since the first quarter of 2020. n What physicians should know about buy-in agreements By Riz Hatton B uy-in agreements determine a physician's compensation, ownership stake, management responsibilities and more. Here's what physicians should know, according to a May 4 Medical Economics article. The more practices acquired by hospitals and healthcare systems, the less value the remaining ones have, Patrick Formato, a health- care attorney in Lake Success, N.Y., told Medical Economics. Mr. Formato said this means buy-ins are less expensive than they used to be. Once a practice is acquired, the employment and buy-in agreements become voided and replaced by employ- ment agreements with the new owners, Mr. Formato told Medical Economics. Daniel Bernick, an attorney with the Health Care Group, a Penn- sylvania firm, told Medical Economics that there are three ways to determine a practice's value: 1. Base the practice's value on the recent sales of similar practices nearby. 2. Examine the practice's profitability. 3. Assess a practice's assets, including equipment, real estate and more. n Hospitals seek 15% pay bump from insurers — what should ASCs ask for? By Laura Dyrda H ospitals across the U.S. are seeing labor and supply costs rise with inflation and are clashing with insurers about raising contracted rates, according to e Wall Street Journal. Surgery centers are in the same situation. Supply costs are going up with inflation and staff members are commanding higher salaries. Some ASC admin- istrators are having a tough time staying competitive with nurse and staff salaries offered at local hospitals and now are competing with retailers such as Target and Walmart as well, which raised wages nationwide. The average nurses pay was up 9 percent in March from June 2021, according to a report from Premier, a healthcare consulting company, that was cited by the Journal. e Journal reported some hospitals are opening contract negotiations early and asking insurers to raise reimbursement rates to 15 percent, more than the 4 percent to 6 percent hospitals typically ask for during new contract negotiations. e price increases, coupled with dissatisfaction with late payments, has led some health systems to end in-network status. As surgery center contracts come due, what rates should owners and operators seek? It depends on how competitive the market is and how much expenses have increased. Surgery center admin- istrators equipped with granular data about increasing costs and the Medicare fee schedule for CPT codes in their ZIP code as a percent of reimbursement will be in a better position. Surgery center owners and opera- tors can also compare their rates with local hospitals, which are required to post their charges online, and project costs given current trends. ASCs can also leverage their position as high-quality, low-cost providers and ask for increases to keep cases out of the hospital, where insurers pay more. Insurers may also be willing to work with ASCs on value- based contracts. But will insurers agree to higher rates with ASCs? e big companies are not meeting health system de- mands to raise rates, arguing hospitals can absorb the higher costs and increased rates would mean higher premiums for members. Despite inflation and the advantages of surgery centers as high-quality, low-cost sites of care, rate increases will not be easily won. Sur- gery centers armed with data and an understanding of their position in the local market likely will have the best chance of success. n

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