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44 Executive Briefing: Building a Surgery Center Strategy ASD Management develops and manages ambulatory surgery centers for physician groups and hospital/physician partnerships. Focus on managing the business and operations, maximizes ASC performance, revenue and profits. Experts at turnarounds, joint ventures and strategies for growth. Since 1986. ASDManagement.com CT and/or MRI, we encourage the medical management firm to contract with our orthopedic group for all those services as well. This enables case managers to coordinate with a single provider group, and enhances accountability for a better and timelier pa- tient outcome. Implant reimbursement In the last several years, a contentious issue in managed care contracting has been implants and carve-outs for costly proce- dures. These are two different topics, both relative to payer ne- gotiations. "Carve-outs" are defined as procedures categorized in one payment level by Medicare and/or a payer level of reimburse- ment, but due to cost concern, a provider wishes to carve out that procedure and increase its reimbursement. This is commonly done in an ASC specialized with well-known physicians in a mar- ket where the inflated procedure costs at local hospitals greatly increases "the spend" by payers or employers. Many payers will negotiate these carve-outs on a limited basis. Implant reimbursement has become sensitive in contract negotia- tions because implants are an unpredictable cost to the payer. Frequently used in orthopedic, neurosurgery and hand surgery, implant costs will continue to increase until some implants come off trademark. Generic or off-trademark companies have made inroads competing with well-known manufacturers, reducing the cost of certain implants. But implants will continue to be expen- sive, and managing their costs is a major concern for ASC admin- istrators and managers. On the reimbursement side, payers are using third parties with consolidated purchasing power so they can make a profit by buying implants in bulk and receive reimbursement by insur- ance companies. Many national payers are now contracting with these firms, as it makes the implant cost more predictable for their budgets. From a payer contracting perspective, it is now common for pay- ers to negotiate a minimum threshold based on the implant cost. For ASCs, this threshold can range from $250 to $5,000. Once the cost threshold is achieved, the payer will reimburse the cost of the implant based on the invoice. The provider absorbs some of the implant cost. Continuing change ahead As the Patient Protection and Affordable Care Act matures and most likely becomes modified by Congress — as was Medicare when it first was established — there will be continued modifica- tions to ambulatory care and surgery reimbursement. Manage- ment companies, physician executives and administrators will have to pay constant attention to proposed changes in reimburse- ment from both the government and commercial payers. Frequent reimbursement changes and potential reductions require ASC managers to be resourceful and creative in an effort to maintain fair reimbursement for their ASC. ASCs continue to be the most cost-effective, high-quality outpa- tient delivery system. Patients, employers and payers have come to appreciate the ASC contribution to a healthcare system that is, and will continue to be, under considerable strain. n Robert J. Zasa, MSHHA, FACMPE is a Co-founder and Managing Partner of ASD Management. rzasa@asdmanagement.com Randy Todorovich, BSRN, CASC is Senior Vice President Managed Care of ASD Management. randyt@asdmanagement.com Learn more at ASDManagement.com Management companies, physician executives and administrators will have to pay constant attention to proposed changes in reimbursement from both the government and commercial payers. Frequent reimbursement changes and potential reductions require ASC managers to be resourceful and creative in an effort to maintain fair reimbursement for their ASC.