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5 Medicare Trends for Surgery Centers to Watch

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Robin CarneyRobin Carney, a health lawyer for Florida Health Law Center, and Joe Macies, CEO of AmkaiSolutions, discuss five trends in Medicare reimbursement ambulatory surgery centers should prepare for in the future.Joe Macies

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1. Quality program reporting requirements for ASCs. As of October 2012, ambulatory surgery centers are required to participate in a quality reporting program for Medicare if they accept Medicare patients. Non-compliance will see a 2 percent reduction in reimbursement rates in the future. To maximize reimbursement from Medicare, make sure you are capturing all eight quality measures and any additional measures added in the future.

"ASCs should consider appointing a point person who will be responsible for ensuring that the ASC will be able to comply with the new reporting requirements," says Ms. Carney. "If they fail to implement and report these quality reporting measures, they will see their rates cut in 2014.  Surgery centers are better off now than in 2008, but they still receive less reimbursement than hospitals and we are still seeing a migration from inpatient procedures to ASCs."

The designated leader for quality reporting in each center should attend training to become familiar with the codes that need to be documented. If the codes aren't documented and the center is selected for an audit, they will lose money.

"There may be some financial considerations involved for the ASC to invest in an individual's training," says Ms. Carney. "If you outsource billing, you should speak to your IT vendors, billing companies or both to ensure that they will be able to add the quality data codes to claims."

2. Value-based purchasing programs. While surgery centers aren't required to meet the standards of value-based purchasing yet, it's something that could come down the pipe in the near future. Hospitals are already implementing value-based programs, and Congress has discussed requiring these programs in ASCs as well.

"There are pros and cons to value based purchasing for ASCs," says Ms. Carney. "The ASC could support their argument for bringing more cases into their setting if their data is good, or they will be punished if their data is bad."

Value-based purchasing relies on rewarding providers with high patient satisfaction, clinical outcomes and quality with higher reimbursement; those that don't meet these standards will receive a lower rate.

"CMS doesn't have the authority to reduce payments yet based on quality reports, but it is a recommendation for a report to Congress," says Ms. Carney. "For now, it appears the commissions belief is that value based purchasing programs for ASCs should include a relatively small set of measures that primarily focus on clinical outcomes, with some process, structural and patient experience measures."

3. Punishment for provider complications.
It will be important going forward to make sure patients don't acquire additional injuries or conditions during their time at the surgery center. This means minimizing complications like wrong-site surgery and maximizing infection control.

"If someone comes in with a wound on their leg and leaves with another issue, that's evidence that something was missed and that's a hit against you," says Ms. Carney. "There is a potential for an adjustment downward in payment going forward. You want to make sure you are capturing as much Medicare payment as possible."

Look at a small set of measures, such as primary clinical outcomes, processes, structure and patient experience measures, to make sure you are efficient and effective. Implementing an electronic medical record could make reporting and workflow easier.

"You have to be extremely efficient and effective," says Mr. Macies. "If the CMS continues on the path they are on, you are going to be penalized if you are not using EMR to report quality. Maintain efficiency and get an EMR in place so you don't experience those penalties. An EMR will also help you with patient safety by warning you of such events as patient fall risks, allergies, drug to drug  interactions and fire risk"

4. More ASC utilization in the future.
Medicare, as well as commercial payors and providers participating in accountable care organizations, will be directing patients to the high quality, low cost provider in their community, which is often the surgery center.

"Medicare wants to utilize ASCs because they are so much more cost effective," says Ms. Carney. "ASC growth has slowed down substantially over the past few years, along with ASC reimbursement rates and the economy as a whole. When people are comfortable, we will see an upswing again. We can still get financing and resources for new ASCs, and they need to be prepared for Medicare patients."

Become attractive to Medicare and other providers, as well as cash-pay patients who are looking for a high quality surgical setting. These cases can help your center become more financially secure.

"Prepare for value based purchasing and quality reporting," says Ms. Carney. "You want to have the Rock Star ASC people wanting to come to your center and you will get reimbursed financially depending on what regulations come out."

5. Treating Medicare patients is viable for ASCs in the future. While Medicare has historically low reimbursements, rates are increasing in some areas. The rates are tied to CPI, but under the Patient Protection and Affordable Care Act, you reduce CPI growth by productivity growth.

"For Medicare, provided you are doing quality reporting, I would say it's a viable option for ASCs in the future," says Ms. Carney. "Do what you have to do to capture the maximized Medicare dollar. That's the way you are going to lose or gain revenue."

As more people become Medicare-eligible, a large portion of an ASC's patient base will be covered by Medicare. It may not be possible to do without those patients, so focus on maximizing potential reimbursement.

"The margins for Medicare and Medicaid patients in ASCs are pretty thin these days, and have  always been less than hospitals," says Mr. Macies. "The challenge that most ASCs have is with the aging population, with around 10,000 people becoming Medicare eligible every day. It's a growing population and it's difficult to conceive how you can run your business without treating Medicare patients."  

Maximizing reimbursement through high quality care delivery and maximizing efficiency in your operations through systems like an EMR will make treating Medicare patients viable and profitable.

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