Becker's ASC Review

53 Coding, Billing & Collections "We are seeing things like vascular, spine and car- diology," says Joseph Zasa, managing partner of ASD Management. "Things like pacemakers have been a cost drain on payers and the smart ones understand that ASCs are an option." ASCs may still need to approach payers and fight the uphill battle of carve outs, but the argument of cost and quality no longer falls on deaf ears. Every healthcare provider, small or large, has felt the effects of the PPACA. "The way payer and ASC relationships are changing is not necessarily a function of the ACA, but quality and integration has an effect," says John Newman, senior vice presi- dent and general counsel of Constitution Surgery Centers. The PPACA aims to make broad changes in healthcare delivery, which forces providers and payers to reassess their role in the overall system. "The whole focus on quality coupled with ef- ficiency dictates that a lot of surgeries be per- formed in an ASC," says Mr. Newman. Driven in part by healthcare reform, as well as natural industry maturation, consolidation has been on everyone's mind. "If history is any indi- cator, the one thing we have seen over the last 15 to 20 years is consolidation on all sides, amongst payers, ASCs and hospitals," says Andrea Wood- ell, director of managed care with Regent Surgical Health. "I would expect consolidation to continue in the same manner, rewarding larger hospital systems and payers with the greatest market share. A recent example of payer consolidation is Cigna Health's acquisition of QualCare Inc." Consolidation by its very nature leads to fewer players in the market, and therefore a shift in the payer-provider dynamic. Smart hospitals are look- ing to the outpatient setting to engage physicians and augment revenue. For ASCs that join a larger system or partner with a hospital will likely realize a change in payer interaction. Joint venture ASCs may have higher rates for managed care contracts if their hospital partner has leverage with the payer. Accountable care organizations continue to pro- liferate across the country, with mixed success, but the model has yet to give any indication of falling by the wayside. Payers, health systems and hospitals are actively interested in participating. "As payers are selecting ACOs, there is an oppor- tunity to partner with ASCs. The question is: How do you bring the ASC to the table to talk with that ACO and payer?" says Jennifer Helbock, MHA, Senior Director of Strategy and Payer Engage- ment with Surgical Care Affiliates (SCA). When ACOs and payers discuss ways to better manage the total cost of care while looking for op- portunities to provide high quality, ASCs quickly become the solution. Members, employers, ACOs and payers all benefit from such a scenario as more surgical procedures shift to the ASC setting with lower out-of-pocket costs to members, she says. It is a matter of maneuvering high quality and efficient ASCs into the right market position to participate with the health systems, payers and ACOs. This could happen through joint ventures, payer, physician and health system partnerships, or contractual relationships. Progressive and in- novative ASCs absolutely can push to join the ACO conversation and payers under pressure to reduce healthcare costs will respond favorably. SCA has experienced success with joint ventures with medical groups such as Monarch HealthCare (Optum) and DaVita Healthcare Partners. Medicare is on track to leave behind much of fee-for-service reimbursement for alternative payment models. Bundled payments are not yet the norm, but hold a great deal of promise. ASCs have already begun to form bundles with payers, often for orthopedic procedures like total joint replacement or laparoscopic procedures. Bundled payments incentivize quality and contain costs creating a predictable price point. "We see an opportunity to participate in the new in- novative payment models and increase participation in the payer's high-performing narrow networks and new product offerings," says Ms. Helbock. ASCs are still small players in the market. The transition from accepting payer-defined terms and fighting for adequate reimbursement to true partnership will be gradual, but there is signifi- cant opportunity for the ASC leaders willing to shoulder risk and push for a different dynamic. "There will be greater depth to these relation- ships. In the past this was a purely contractual relationship, but is quickly becoming more stra- tegic," says Ms. Helbock. n Reshaping Adversarial Relationships: Payers Now Coming to ASCs (continued from cover)

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