Becker's ASC Review

38 Gastroenterology C an endoscopy centers remain successful in the current healthcare environment? Five gastroenterologists share their thoughts on the biggest challenges and opportunities for increasing GI-driven center profitability. Question: What are a few of the biggest challenges standing in the way of endoscopy center profitability? Brett Bernstein, MD, Director of Endoscopy, Mount Sinai Beth Israel, Medical Director of Eastside Endoscopy (New York): Challenges include rising variable costs in the setting of an environment where consumerism has led to a reduction in volumes related to increasing deductibles and copayments for procedures. In addition, negotiations related to technical charges have resulted in minimal or no increases in fees. R. Bruce Cameron, MD, FACG, American College of Gas- troenterology Board of Trustees, Clinical Professor, Case Western Reserve School of Medicine, Endoscopy Director, Bainbridge Endoscopy Center (Chagrin Falls, Ohio): Con- trolling overhead and increasing reimbursement rates are obviously the keys to profitability. Employee costs with salary and wages, payroll taxes and employee benefits make up the single largest cost center in the ASC. Medical supplies, including disposables, is the next largest cost center. Falling reimbursement rates led by Medicare's current rate of 56 percent of hospital outpatient departments continue to be the largest challenge on the income side of the ledger. Maxwell Chait, MD, FACP, FACG, FASGE, AGAF, Columbi- aDoctors Medical Group (New York): Gastroenterology and single-specialty GI ASCs will be impacted by CMS's restruc- turing of the ASC payment system. Despite the anticipated cuts for GI procedures, it is possible to maintain or increase profitability. One needs to look at all payers, and not just Medicare, in determining what will be the real impact on the ASC. The center must take steps to compensate for the Medicare cuts and to help increase the profitability of the ASC. There are several important factors that help profitability. David Greenwald, MD, FACG, American College of Gastro- enterology, Board of Trustees, Einstein/Montefiore Gastro- enterology Fellowship Program, Director (New York): Prob- ably the biggest challenge standing in the way of endoscopy center profitability is decreases in the reimbursement for en- doscopic procedures. At a time when the value of endoscopic procedures continues to be validated, as was shown with a notable decrease in mortality related to use of colonoscopy and removal of colorectal polyps, reimbursement for endoscopic procedures continues to fall. David A. Johnson, MD, MACG, FASGE, Gastrointestinal and Liver Specialists of Tidewater, Chief of Gastroenterol- ogy, Eastern Virginia Medical School (Norfolk, Va.): The Patient Protection and Affordable Care Act has provided us with a chaotic reality mandating changes in medical practice subject to technological, demographic, economic and politi- cal influences. Endoscopy centers and physician practices alike will be chal- lenged to provide services with increased emphasis on quality and value. Additionally there will be changes in payment models, likely away from the present "fee-for-service," moving towards bundled payments and shared sav- ings contracts. In an era of declining reimbursements, a major challenge for endoscopy center profitability will be to fully understand and contain the costs for providing services. This will be essential when evaluating contract- ing alignments with accountable care organizations, integrated physician practices, hospitals and payers. GI practices and endoscopy centers are uniquely dependent on providing en- doscopic services — in particular colonoscopy. Therefore, we are uniquely vulnerable to disruptive technologies, such as stool DNA testing, capsule colonoscopy or serum-based testing for CRC. Any shift in utilization of en- doscopy therefore poses a major potential challenge to fiscal stability of the endoscopy center. Finally, the ongoing threat of further reductions in Medicare fees is an ever present concern. Recognizably, the draconian cuts of more than 25 percent over the last several years has threatened the viability of endoscopy centers, most of which operate at or below cost for providing services. Q: Do you think standalone endoscopy centers have sustain- able future or will these centers need to consider joint venture partnerships? DG: It is unclear how endoscopy centers will look in the near future. It would appear that more joint venture partnerships are in the offing, although some standalone endoscopy centers are likely also to be viable. Local conditions will dictate these circumstances, but the key thing is for physicians in endos- copy centers to be flexible and continue to review all available options on a regular basis. BB: The rapid evolution of integrated healthcare systems and population management will make it difficult for standalone endoscopy centers to thrive. A hospital partner can offer many advantages including potential benefits, such as being clinically integrated. BC: Efficient standalone centers are currently sustainable, but I fear that if Medicare reimbursement rates continue to fall sustainability may become an open question. Joint venture partnerships with hospitals can be of benefit if your center is able to adopt the hospital contracts with third party payers and accept the higher reimbursement rate. This higher contracted facility fee schedule is not dependant on being dubbed a remote HOPD (which is even more lucrative) but is inherent in hospital insurance contracts. Without that increased financial reward, partnership with a hospital is often merely cum- bersome and without sufficient benefits. DJ: Clearly in the next decade we will see continued disappearance of our medical practices as we know them. As integrated healthcare systems emerge, there clearly will be even more pressure for providing high quality endoscopy services at the lowest costs. This clearly means an increasing demand for out of hospital services. Joint ventures may be necessary in some circumstances and participation in integrated networks. Careful and comprehensive analy- sis of such ventures is essential. Additionally, exit strategies should be devel- oped to best protect the practice against the "shifting sands" of the future. Controlling Costs, Physician Recruitment & More: 5 Gastroenterologists on Injecting Life Into Endoscopy Center Profitability By Carrie Pallardy

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