Becker's ASC Review

Coding & Billing 34 Doing the Deal: Understanding the Key Differences Between ASC and Hospital RCM By Lewis Custer, Senior Vice President of Operations, and Scott Allen, Vice President of Managed Care Contracts, National Medical Billing Services I n 1970, Drs. Wallace Reed and John Ford opened the nation's first ambulatory surgery center in Phoenix — the culmination of years of clamoring by providers, public officials and patients for a lower-cost, high- quality alternative to expensive hospital stays for same-day procedures. e concept was a success virtually from the outset. Today, there are approximately 5,500 ASCs across the United States, and these out- patient facilities increasingly play host to an ever-sophisticated array of surgical procedures made possible by clinical advances in anesthe- sia and medical technology. e business of ASCs also has changed dramatically in the more than four decades since Drs. Reed and Ford opened the first ASC. Once overwhelmingly dominated by independent physician operators and a few large management companies, the industry is now the darling of its former chief adversary — hospitals — which are highly motivated in the post-Affordable Care Act landscape to cut costs and improve quality for surgery that does not require an overnight stay. Sound familiar? To achieve these goals, hospital-physician joint venture ASC partnerships are becom- ing a predominant growth strategy among hospitals, creating a win-win for both the physicians as well as the hospitals. Existing physician owners benefit by gaining more referrals from the hospital and oen improve reimbursement rates due to this newfound affiliation. Health systems gain the opportu- nity to participate in the growing ASC market while still providing sufficient incentives to their physician partners, ultimately leading to increased profitability, physician morale, patient satisfaction and clinical outcomes. Recent public policy changes also are expected to be a major near-term driver of the hospital- physician joint venture model. A provision in the 2015 budget deal signed by President Barack Obama in November removed a significant incentive for hospitals to acquire off-campus ASCs and convert them into hos- pital outpatient departments. Specifically, the provision states that an ASC acquired outright by a hospital must remain an ASC from a reimbursement perspective unless the ASC is located within 250 yards of the hospital's main buildings. is is important since ASCs today are reimbursed at approximately 60 percent of the rate of hospital outpatient departments. Facilities acquired before Nov. 2, 2015, are exempt from the new reimbursement rules, which become effective Jan. 1, 2017. Given that the primary benefit of converting ASCs to HOPDs is disappearing, many hospitals and health systems will pursue a hospital-physician joint venture ASC strategy with the thousands of still-independent domestic ASCs that constitute over 60 percent of the U.S. surgery C M Y CM MY CY CMY K Beckers Ad Half Horizontal 0416.pdf 1 4/6/2016 2:02:30 PM

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