Becker's ASC Review

15 ASC Turnarounds in the last couple of years, and there is pressure on providing staff salary increases. Therefore, if a facil- ity's costs are increasing, but revenue plateaus, the profitability will eventually decline." That's when top-line revenue enhancement be- comes critical. The biggest factors that impact an ambulatory surgery center's top line revenue are: 1. The number of cases and type of cases per- formed; 2. Specialties at the center and cases brought for those specialties; 3. The amount the facility is paid for cases performed. "It's important for a facility to do it's efficiency homework in terms of first case lateness, block utilization and turnover times, which all relate to efficiency," says Mr. Martin. "If a facility can do more cases in a day, then it can increase the top line revenue." Late first case starts often delay the entire day caus- ing staff to work overtime to finish the surgical day. That adds labor costs as well as drives up operating room costs when ORs are not being used. "You can also evaluate block utilization to increase blocks for high utilizers or allow them preferred advantages and similarly decrease blocks for low utilizers, thereby increasing overall facility utiliza- tion," says Mr. Martin. "Turnover times are also important because if there is less time between cases, there is more time for cases. Sometimes that takes additional staffing, and oftentimes the benefit of more cases is worth the cost." Key thoughts for adding specialties ASCs today are growing with higher-acuity cases like total joints and spine, and adding 23-hour stays when possible. Multispecialty ASCs have different challenges than single-specialty centers when making changes, but the key questions are largely the same: • How much will it cost to add this specialty/ procedure? • Will the center need new equipment or renovations? • How many cases will realistically be done? • What is the payer mix for the new cases? • Are there other physicians in the commu- nity you could bring in if you had the new specialty/procedure? "The facility needs to do a financial analysis of the new specialties and add them if appropriate," says Mr. Martin. "Hold a meeting with physicians to figure out what cases they are doing at other facil- ities or hospitals and see what opportunities there are for you to bring those cases into your facility." Growth challenges ASCs have an advantage over other healthcare set- tings because they are high quality and low cost, but the ASC might not be an option for patients in the future if it's unprofitable. "ASCs are similar to many other businesses in that they have a lifecycle," says Mr. Martin. "They start up, grow, plateau and then decline. The challenge ASCs have is when they plateau, to identify new opportunities, products and service lines to start them on an additional growth phase." Other challenges for keeping ASCs profitable in- clude: • Significant payer mix shifts to higher Med- icaid proportions • Bundled payments with insurance compa- nies • Accountable care organizations "The higher Medicaid payer mix is causing pres- sure to negotiate better rates with insurance pay- ers," says Mr. Martin. "There is some opportunity to bundle payments for anesthesia, physician fees and the ASC fee, but our caution here is to not set the price too low in order to gain volume. We are also working with ACOs to drive additional volume to our facilities." n OIG Kickback Alert Focuses on Physician Compensation Arrangements By Ayla Ellison H HS' Office of the Inspector General issued a fraud alert address- ing physician compensation arrangements on Tuesday that outlined the consequences physicians could face for accepting kickbacks disguised as medical directorships. The fraud alert warned that physicians must be careful when enter- ing into compensation arrangements, including medical directorships. "Although many compensation arrangements are legitimate, a com- pensation arrangement may violate the Anti-Kickback Statute if even one purpose of the arrangement is to compensate a physician for his or her past or future referrals of federal healthcare program business," the OIG stated. To drive its point home, the OIG outlined recent settlements reached with 12 physicians who entered into questionable medical directorship and office staff arrangements. The OIG highlighted the reasons the arrange- ments violated the Anti-Kickback Statute, including that the payments took into account the physicians' volume or value of referrals and did not reflect fair market value for the services to be performed. The fraud alert should put physicians on notice, as the OIG determined the physicians were "an integral part of the scheme and subject to liability under the Civil Monetary Penalties Law." Those who commit fraud in- volving federal healthcare programs, including physicians, are subject to possible criminal, civil and administrative sanctions. n How to Grow Top-Line Revenue in ASCs (continued from cover) Reed Martin

• Cover