Becker's ASC Review

9 21st Annual Ambulatory Surgery Center Conference - call (800) 417-2035 ASC Net Revenue Trends Jeffrey Simmons, chief development officer of Regent Sur- gical Health: The biggest challenge facing ASCs today is de- teriorating net revenue per case. Lower reimbursement rates, higher deductibles and larger co-pays all work toward cre- ating the issues. Insurance companies seem to be trying to maintain historical margins and are passing along the higher costs associated with premiums with less attractive benefits, which consumers choose to save money. State of Out-of-Network ASCs John Bartos, JD, CEO of CollectRx: Despite some who seem to believe the contrary, there continues to be excellent op- portunities with many insurance companies for higher reim- bursements on out-of-network bills. In addition, the num- ber of patients who are out-of-network will increase as the Patient Protection and Affordable Care Act becomes fully implemented and the number of insured patients and nar- row or restrictive networks continue to grow. Most Important Legal Issue for ASCs Michael Schaff, JD, MBA, LLM, chair of corporate and healthcare departments at Wilentz, Golxman & Spritzer: With the influx of venture capital into the ASC market, there has been an increased focus on the financial aspects of the business of the center, rather than patient care. This creates additional regulatory risk on the center and may cause friction between those with privileges at the center — including the physician owners — and those in it just for financial gain. This emphasizes the need for a strong compliance plan and the in- dependence of the compliance officer. Maintaining ASC Case Volume Jeffrey Peo, chief development officer at Ambulatory Surgi- cal Centers of America: One of the biggest challenges fac- ing many ambulatory surgical centers today is maintaining case volume. There are a number of factors influencing the reduction in volume, which is tied to a reduction in revenue and profit. With the increase in employment of primary care practices by hospitals, many surgeons are feeling that they can't take the cases to the location of their choice without putting their refer- ral network at risk. Patients are also putting off surgery because their deduct- ibles are significantly higher than they have been in the past. This reduction in volume is putting significant financial pressure on many centers across the country. Top Priority for ASC Leaders Gregory P. DeConciliis, PA-C, CASC, Administrator of Boston Out-Patient Surgical Suites: The number one prior- ity continues to be maintaining volume. With market consol- idation and harsh tactics by large provider groups to penalize PCPs who send patients to physician-utilizers of ASCs, it's only getting tougher. [We] want to maintain full rooms and profitability. n ASC Industry Insight: 5 Experts on Top Challenges, Trends & Priorities By Ellie Rizzo have the appropriate equipment for total joint procedures," says Ms. McMa- han. "If you have to purchase equipment, it will be paid for in a reasonable amount of time because these cases have higher reimbursements." However, there are several things ASC owners and operators must consider when adding a new specialty; it isn't as easy as inviting the surgeons to bring their higher-acuity cases in the next week. It's important to have the right equipment, staff training and payer contracts in place for the new cases. Additionally, it may take some time to gauge whether investing re- sources into adding the new specialty or procedures would positively im- pact the center. "Most of these cases are currently being done at the hospital, so you want to make sure surgeons are supported and the center meets their expectations when they bring their patients to the ASC," says Ms. McMahan. "Make sure your expenses will realize a return-on-investment and that your physicians are onboard for bringing new cases. There are some cases that have been done in the ASC for a few years now, but surgeons didn't realize they could take them to the outpatient center." Prepare for longer postoperative stays — since these are high-acuity cases, patients will likely need a few extra hours to recover before they leave, es- pecially with the first few cases in the center. In some cases, expanding to include overnight, 23-hour stays or partnering with a convalescence center is beneficial. Payer contracting When the surgeons are well-educated about the potential opportunities at the outpatient center, your next challenge is educating payers about the value of contracting with ASCs on these cases. "The fist challenge is getting the payer's attention so they add you to their priority list," says Daniel J. Connoly, vice president of payer contracting at Pinnacle III. "Most payers right now are spread thin on contracting and the last thing they want to do is add to their work days. Send them as much in- formation as possible about the cost-benefits of talking to you and amending your contracts to bring new procedures." Appropriate information to gather for the payers includes: • Clinical outcomes • Infection/complication rates • Efficiency information • Charges compared to local hospitals • CPT-DRG bridge "Most payers have little or no knowledge on how to contract for these higher- acuity services at ASCs, so we're building a bridge on reimbursement by tak- ing the hospital DRG and doing the crosswalk to CPT from a data perspec- tive," says Mr. Connolly. "When I first began contracting for these services, I was reluctant to give payers too much information, but now I'm going in the other direction. With all this information, they can have their economics and 5 Most Attractive ASC Specialties Through 2020 (continued from cover)

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