Becker's ASC Review

8 ASC MANAGEMENT CMS ups inpatient rates 4.3% for 2023; what should ASCs expect? By Laura Dyrda C MS plans to boost acute care hospital pay 4.3 percent next year, as long as the hospitals comply with quality data reporting. The rate hike for inpatient pay is the highest market basket update in 25 years, which CMS attributed to "higher than expected growth in compensation prices for hospital workers." The final rule is a shift from earlier this year, when CMS pitched a rate cut. Can ASCs expect a similar boost? CMS proposed increasing ASC pay rates next year by 2.7 percent in July, which does not keep up with the current 9.1 percent inflation rate. Like hospitals, ASCs have had to boost staff wages to stay competitive and reported an increase in supply costs this year. CMS will issue the final rule in November." It is unknown how CMS is leaning, but the agency's policy updates during the Biden administration have not necessarily favored ASCs. Last year, CMS removed procedures from the ASC payable list that had been transitioned there during the Trump administration, and then this year it pitched adding one only more procedure to the ASC payable list. Bill Prentice, CEO of the Ambulatory Surgery Center Association, said the agency provided clinical data to CMS showing that more procedures were safe and effective in the ASC setting. "This proposed rule misses an opportunity to lower costs and improve access to care to beneficiaries by not adding many viable procedures that ASCs are safely performing on commercial patients," he said in a July 15 press release. n How to get back to the ASC heydays By Patsy Newitt F or Greg Horner, MD, managing partner at Pleasanton, Calif.- based HealthPoint Ambulatory Surgery Co., 2008 was the heyday of the ASC industry despite the country's economic downturn. "e industry was fairly nascent then, and we were full of ideas as our company was born," Dr. Horner told Becker's. "We benefited from great exits as the large chains, fueled by cheap money, were buying everything in sight." But the "inefficiencies that were accepted from the heydays gave rise to structural problems," such as declining staff productivity, anesthesia provision and supply costs, he said. ASCs nationwide are facing debilitating staffing shortages, anesthesia provider shortages and rising supply costs. And these obstacles are pricey. Supply costs make up a median 28 percent of an ASC's revenue, according to a report from healthcare consulting firm Avanza. Employee salaries and wages make up about 21.3 percent of ASCs' net revenue, according to a VMG Health report. ese issues have all been exacerbated by the COVID-19 pandemic which prompted the "great resignation" and a labor shortage and supply chain obstacles that are making it even harder for ASCs to stay afloat. e obstacles have been particularly evident in underserved communities, Dr. Horner added. "I find it disappointing that the promise of higher quality and lower cost, the ASC industry's mantra, has largely failed to improve care in the communities that need it most," he said. But Dr. Horner said that ASCs can have "another great era" if they pivot their focus to technology and underserved communities. And he isn't alone in predicting that ASCs need to focus on technology to survive. "Technology is key as we move toward an outcome-based payment structure from the traditional fee-for-service," Jeffrey Flynn, administrator and COO of Gramercy Surgery Center in New York City, told Becker's. "Many payers are approaching us about bundles and outcome data." More than one-third of the 157 ASCs in New York do not have EHRs, according to Mr. Flynn, who is also the vice president of the New York State Association of Ambulatory Surgery Centers. He sees the lack of digital transformation among member centers as concerning. Investing in technology can allow ASCs to keep up with the rapidly changing healthcare industry. "It is my hope that the ASC industry, the payers and we in the investment community help those who need it the most share in the next heydays of quality and efficiency from ASCs," Dr. Horner said . n "I find it disappointing that the promise of higher quality and lower cost … has largely failed to improve care in the communities that need it most." – Dr. Greg Horner, HealthPoint Ambulatory Surgery Co.

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