Becker's Spine Review

17 Practice Management L ower reimbursements coupled with in- creasing operating expenses are tightening margins for independent medical prac- tices. Physician owners are combating this trend in several ways, including adding ancillary services. Ancillary opportunities for spine practices include: • Physical therapy • Neuromonitoring • Ambulatory surgery centers • Durable medical equipment • Health supplements • Imaging "At Texas Back Institute, we want to stay indepen- dent and control the decisions we are making for our patients," says Michael Hisey, MD, of Texas Back Institute in Plano. "Having an extra ancillary income helps replace income lost from other sources." Regulatory issues Texas Back Institute has been involved with neu- romonitoring and physician-owned distributor- ships, which have strict regulations. Physicians can participate in these types of ventures, but Dr. Hisey advises paying close attention to the rules and working with an experienced lawyer. "Make sure the regulations allow you to do what you're doing," says Dr. Hisey. "People become worried because they think if physicians own ser- vices they'll use them more. We invest in ancillar- ies because we can provide a better continuum of care for our patients. We can provide better physi- cal therapy services and show our patients need fewer visits to complete their regimen, which means less cost to the insurer if we are using these services appropriately." There are also opportunities for practices to own imaging services as part of their office. "If you think of it as an extension of your office, you're more likely to stay in compliance," says Dr. Hisey. "For surgeons who are able to invest in imaging, that can be a significant opportunity in the practice. Reimbursement for imaging is going down, but if you are sending out enough business to keep it busy, it's worthwhile. Make sure you have enough business beforehand to offset costs without increasing utilization." Best opportunities in the future Independent physicians are struggling to avoid hospital employment, and ancillary investments can help offset rising costs. But not all of the tra- ditional avenues are still great options. "We have had physical therapy for years as part of our practice," says Dr. Hisey. "It's not a huge mon- ey maker, but it provides good service for our pa- tients and we feel it's good for them. We also have more profitable investments, including a hospital investment, to offset increasing overhead costs." Not all opportunities are possible in every loca- tion. For example, investing in an ASC may not be available to spine surgeons in every market, based on current saturation, contract availability and local hospital presence. In other markets, the regulatory environment could make it difficult to own imaging or physical therapy services. In those cases, partnerships may be better. "You have to look at different opportunities in terms of a realistic pro forma," says Dr. Hisey. "Some of these investments are based on economic models that aren't sustainable in every market." The best opportunities going forward are a mix of the old stalwarts and new trends: DME, orthotics, bone growth stimulators and supplements. "As medicine becomes more boutique, if you have a good supplement you could sell it out of your of- fice," says Dr. Hisey. "Other specialists are already starting to do that, and it could be something spine physicians adopt for their patients as well." n Do You Have an Independent Spine Practice? These Ancillaries Will Keep You There By Laura Dyrda Dr. Michael Hisey 2. Payer pushback on the efficiency of some spinal procedures is limiting growth. 3. e spine surgery market returned low, single-digit growth recently. 4. Many people feel pressure on access/volume from payers has eased for spine surgery, but this is only true for policies. It's also important to note practices have not become more onerous in recent months. 5. Per conversations with payers and hospital administrators, D1 found the payers haven't loosened policies or their focus on utilization. 6. Industry participants have been sanguine about the outlook for spine surgery as compared to recent years, but there is a "cloud lurking in the distance that could potentially bring darker days." 7. e increasing cost transparency, high deductible plays, hospital-em- ployed physicians, ACA, accountable care organizations and new reim- bursement pilots are giving rise to the potential for incentive disruption. 8. e disruptions in the market could have an impact on the physician preference market. Surgeons and supply chain participants will likely have to adjust how they deliver value. n 8 Trends in the Spine Surgery Payer, Reimbursement Market (continued from cover) SAVE THE DATE October 22 - 24, 2015 • Swissôtel - Chicago, Illinois learn more & register at https://www.regonline.com/22ndAnnualASC Becker's ASC 22nd Annual Meeting The Business and Operations of ASCs

• Cover