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5 Tips to Negotiate More Beneficial ASC Payor Contracts for Ophthalmology

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Stephen Rothenberg on ASCsStephen Rothenberg, JD, a consultant with Numerof & Associates, Inc., discusses how ambulatory surgery center leaders can negotiate more beneficial payor contracts for ophthalmology procedures and the outlook for eye surgery as a specialty in the future.

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1. Know what you can and can't accept.
Look at your ASC's situation and know what rate is the absolute bottom you'll be able to accept for ophthalmology procedures; don't accept a contract for rates any lower. Ask for higher rates, but don't bottom out.

"If you are under-reimbursed for a procedure you perform often, you won't be able to make it up in volume and you’ll need to negotiate a higher rate," says Mr. Rothenberg. "It will help during negotiations to have data showing low complication rates and good outcomes for those procedures. Tell the insurance companies that they may be paying more, but they'll pay less in the long run, since they won't have to pay for future complications or readmissions."

2. Understand what the other party needs.
Consider the negotiations from the payor's perspective, particularly when going into contract renegotiations. Know what the payor needs and consider any issues that arose over the past year before going into negotiations.

"Figure out which payors are most important to your ASC by looking at the frequency of procedure and reimbursement rates and determine whether there are issues you need to discuss during renegotiations," says Mr. Rothenberg. "It could be there is a residual issue from the year before. Know what the issues are and what is most important to you and what you're willing to give a little on. Draw a line in the stand and be upfront about what you need."

3. Present economic value to the payor.
If your center can provide better quality care at a lower cost than other providers in the area, you can use those numbers as leverage during contract negotiations. Insurance companies are looking for economic value and many times ambulatory surgery centers are able to provide it.

"It helps the payor if you are able to control total costs," says Mr. Rothenberg. "Knowing the economic and clinical value you bring to the payor is important because you may be able to negotiate higher rates. Show the payor you help control their expenses overall, and remind them that they may be paying more for a procedure with low complication rates compared to others in the market."

4. Use what leverage you have.
Ophthalmology is a cautiously optimistic field because several market factors now converging will create higher demand for each individual provider. With an aging population that will demand more eye care, along with fewer competing physicians, ASCs with ophthalmology should be able to dominate the market.

"In the big picture, I see the number of eye care providers decreasing so they will potentially be in higher demand over time, unless there is a big influx over the coming years," says Mr. Rothenberg. "The aging population will need eye care, so ophthalmologists have reason to be optimistic about their business. However, that doesn't mean they can ignore being cost effective and having good outcomes."

5. Ophthalmology practices are less likely to be acquired by hospitals developing new payment models.
Most minor ophthalmology procedures left hospitals long ago, and most hospitals aren't anxious to bring these low acuity cases back. As a result, ASCs and office-based procedure facilities may be able to capture more in the future.

"For providers who can demonstrate economic value for eye procedures, the trends in this area are favorable," says Mr. Rothenberg. "It's not a practice area that hospital systems and accountable care organizations are interested in acquiring. It's not a big revenue generator for hospitals, so ASCs don't have to compete with them. They should be cautiously optimistic going forward."

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