Becker's ASC Review

3 ASC MANAGEMENT 5 ASC profitability killers By Patsy Newitt A lthough the ASC industry is largely fragmented, independence is becoming increasingly difficult as practice costs soar and healthcare consolidates. During a June 22 panel at the 21st Annual Spine, Orthopedic & Pain Management-Driven ASC + e Future of Spine Conference in Chicago, leaders joined Becker's to discuss the the threats and obstacles facing independent ASCs "You should stay independent until the selling price is right or the purchase price is correct," Dr. Sev Hrywnak, MD, a podiatrist in Chicago, said during the panel discussion. Here are five factors affecting the future of independent ASCs, from leaders at the panel: 1. Sticking with outdated staffing strategies. Recruiting and retaining staff is a huge issue for ASCs as they oen can't compete with hospital salaries. Jene' Becerra, director of nursing at Crown Point Surgical Suites, said that her teams' biggest issue is staffing. "It's hard to find staff that have been trained in surgery," she said. "ey don't really talk about that in nursing schools, so circulators especially are very hard to find. at's why we're sharing staff with other centers… It's hard to find those circulators or techs that are experienced already, and for them coming into an ASC, it is better to have that experience because we want to stay efficient and we don't want to have to take a couple months or three months to train someone into that role." 2. Allowing surgeons to have idle block time. Because independent ASCs are operating on a smaller scale, it's critical for centers to remain efficient in order to maintain profitability. "Certainly block time utilization [is necessary for cost containment], or to try to make sure you have a spine day or a pain day or elements that people are more proficient to handle," Curtis Mayse, CEO of Steamboat Springs, Colo.-based Steamboat Orthopaedic and Spine Institute, said during the panel. "You don't want idle time relative to those aspects, and you certainly want folks that are flexible that can move between roles to some extent to be able to make that sense, but it's challenging to make that happen." 3. Selecting the wrong implant vendor and allowing reps to upsell in the OR. ASCs are also facing skyrocketing implant costs, meaning contracting with the right vendors and securing lucrative contracts is critical. "On the implant side we're seeing double digit increased costs," Mr. Mayes said. "We're certainly getting the surgeon to choose the right implant or vendor and trying to consolidate that, but the costs are significantly going much higher and quicker than any reimbursement or payer are keeping up." 4. Performing unprofitable cases where costs exceed reimbursement. Procedures are increasingly moving to the ASC setting, but leaders have to think critically about efficient and cost-effective ways to add these service lines. "We're trying to bring as much volume as we could relative to that, but on the spine side, it's very interesting relative to which of those cases were bought," Mr. Mays said. "As we looked at three level fusions or three level disc replacements, we had to understand the separate pricing because reimbursement didn't always match that … ere's elements to make sure we understand the margin, not just bringing cases but other things that actually pay us a profit margin there." CMS floats 2.8% physician pay cut By Patsy Newitt CMS has proposed a 2.8% conversion factor reduction to its physician fee schedule for 2025. The decrease includes requirements that adjustments be budget neutral, the expiration of a 2.93% bump in 2024 and an adjustment related to the work relative value unit portion, according to a July 10 news release from CMS. These inclusions set the proposed physician fee schedule conversion factor for 2025 at $32.36, down 3.34% from $33.29 in 2024. "Medicare physician reimbursement is on a dire trajectory and these ongoing cuts continue to undermine the ability of medical practices to keep their doors open and function effectively. — the need for comprehensive reform is paramount," Medical Group Management Association Senior Vice President of Government Affairs Anders Gilberg said in a statement. According to research from the American Medical Association, Medicare physician payment declined 29% from 2001 to 2024 without accounting for the most recent cut. "Physician practices cannot continue to absorb rising costs while their payment rates dwindle," American Medical Association President Bruce Scott, MD, said in a statement. "The death by a thousand cuts continues. Rural physicians and those treating underserved populations see this CMS warning as another reminder of the painful challenges they face in keeping their practices open and providing care. It's crucial that we ensure both continue." On July 10, CMS also shared a proposed Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System rule that would update payments by 2.6%. n

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