Becker's ASC Review

8 ophthalmologists remain largely independent as they have not been as sought aer by hospitals as employees and are not as dependent on hospital networks for referrals. ird, the volume of cata- ract surgery continues to rise. e core cases per- formed by ophthalmology in ASCs can be charac- terized as medium reimbursement, which means higher volume. Gastroenterology and endoscopy also remain critical to ASCs. Medicare is the payer for ap- proximately 35 percent to 40 percent of GI pro- cedures and the reimbursement of screening colonoscopies. The growth of colon cancer and awareness has meant that gastroenterologists remain very busy. Further, gastroenterologists while pursued by hospitals have been able to remain fairly independent and thrive to date. Thus, it's also a specialty not dominated by hos- pital employment. GI procedures in ASCs are generally thought of as high volume, low to me- dium reimbursement. Pain management has been more challenging for ASCs. Here there has been great growth in pain management procedures, but also pressure from payers on the number of procedures performed and pressure from Medicare on utilization. While pain management physicians remain fairly inde- pendent, surgery centers have faced pressure as pain management reimbursement has led many pain physicians to move cases from ASCs to their offices. More complex procedures remain in ASCs. Pain management is generally thought of as high volume, low reimbursement. Orthopedics in ASCs remains critical. Of the big specialties, it has the highest average reimbursement coupled with fairly strong case numbers. Overall, or- thopedics cases are more dependent on commercial reimbursement than the other three big specialties. Orthopedic physicians are also very sought aer as hospital employees. However, mature and market- leading physicians and practices have been able to remain fairly independent and strong economically without joining hospitals as employees. e highest volumes for specific cases are for colonoscopies, cataracts and pain injections. Cataract removal is the most common service provided by ASCs, comprising 17 percent of all ASC Medicare procedures. 2. Spine. Spine continues to grow in ASCs. However, there continues to be problems relating to payers. In many places, surgery centers have trouble getting payers to pay for spine procedures. Medicare has moved to allow certain spine proce- dures to be performed in ASCs, which may help with payers. ASCs can offer huge cost savings per spine procedure. CMS finalized the addition of nine spine codes regarding the ASC-payable list that was imple- mented Jan. 1, 2015. Additionally, CPT codes 22551, 22554, 22612 were moved to codes APC 0425, resulting in a higher reimbursement. Kenny Hancock, President and Chief Develop- ment Officer at Meridian Surgical Partners, states, "We believe there will be more spine surgeons looking to develop ASCs in the future. We believe this is driven largely because of patient demand. It's where the consumer market is headed. Pa- tients are seeking high quality surgical care in a safe and lower cost environment. With the abun- dance of online resources related to spine surgical options such as videos, presentations, white pa- pers and other educational materials, patients can easily obtain information and are being directed toward minimally invasive surgical techniques and surgeons who provide that alternative." 3. Payer consolidation is daunting. Pres- ently, the five key commercial payers control ap- proximately 50 percent of all covered lives. e big five payors include BlueCross, United, Cigna, Aetna and Humana. e companies are consoli- dating, resulting in less payers. Less payers in a community translates into less market options for surgery centers. In essence, if there are only a few key payers in a community, an ASC must either contract with them or face challenges of being out-of-network with them. Aetna an- nounced its $36 billion merger with Humana in July. As the pool of payers continues to de- crease, this is of great concern for surgery centers. ASCs, unless primarily ophthalmology driven, rely very heavily on commercial reimbursement. us, the growing market power of payer gives ASCs more concern as they have less options to negotiate with. Further, ASC find that the payers that they do negotiate with have substantial mar- ket share and power. 4. Consumer paid healthcare. Over the last few years, there has been significant movement to high deductible plans and to health savings ac- counts. is can impact cases and collections. For example, as consumers are responsible for a greater portion of the cost, this may lead to price shopping in the long-term, which has advantages to ASCs. In the short-term, however, it can make parties delay surgeries that can be delayed. In 2015, approxi- mately 80 percent of the plans offered by employers are expected to be high deductible with deduct- ibles reaching $1,200 or higher. In many situations, annual deductibles are much higher. Many ASCs and other providers perceive that higher deductibles reduce case volumes. Perhaps as importantly, they make the ASCs very depen- dent on collecting from the beneficiary/patient. is can make payments harder to collect. Even a few percentage points lost in reimbursement can have a major impact on profits. 5. Hospital physician joint ventures. e growth in hospital employment and hospital con- solidation and payer control has tended to lead to more, not less physician hospital joint venture ASCs. For example, certain national companies are focused on hospital joint ventures as a go- to market strategy. e perception being that a hospital partner can make payer contracting easier and can help with physician relationships in a specific area. Hospitals in many markets have 14 Observations, Thoughts & Issues for ASCs 2015–2016 (continued from cover) Kenny Hancock Luke Lambert Naya Kehayes John Newman

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