In a July 28 webinar titled "ASC – PPO Out of Network Payments Are Not Dead," Kelly Webb, CEO of ASC Billing Specialist, discussed how an out-of-network reimbursement strategy can still work for surgery centers, despite payors pressuring providers to go in-network.
The state of ASC reimbursement
Mr. Webb began the webinar by pointing out the key differences between the business revenue of an ASC and a hospital. Unlike a hospital, he said, an ASC does not depend on revenue from the ICU, cardiac unit, emergency room, overnight stays or pharmacy, relying instead on profits from low-risk surgical and diagnostic procedures for patients who do not require hospitalization.
The surgery center industry is increasingly important for the provision of low-risk surgical and diagnostic procedures, as illustrated by statistics from the last ten years. Between 2003 and 2008, ASCs experienced a growth rate of 5.1 percent and physicians and/or investors opened 331 new facilities every year. The use of surgery centers is growing, as patients seek more affordable, efficient options for surgery.
Mr. Webb said the growth in surgery centers is paired with a growth in the popularity of PPO insurance plans among patients. "Insurance companies continue to see growth," he said. "People don't ask to be signed up for an HMO unless it's forced on them by an employer." He said that as Americans seek a more active role in their healthcare, they are demanding more choice and greater flexibility in accessing provider services.
Of all Americans with health insurance, Mr. Webb said 64 percent are enrolled in PPOs, illustrating patients' desire to have control over their healthcare delivery. The cost of PPOs is also shown to be lower than the cost of HMOs, totaling around $8,781 per employee compared to $8,892 per employee, according to the American Association of Preferred Provider Organizations.
Determining whether to go out-of-network
This growth in consumer-directed insurance makes out-of-network reimbursement a viable business strategy, Mr. Webb said. In determining whether to go out-of-network or negotiate contracts, he said it's important to analyze the ASC's payor mix and determine where the money comes from. "Analyze the mix of insurance in your area so you can make intelligent decisions," he says. "How many doctors are there in your market? Which specialties are provided? What is your level of Medicare saturation?"
He said the healthcare industry is rife with rumors about the demise of out-of-network, to the extent that some surgery center leaders have asked him whether billing out-of-network is still legal. Yes, he reassured: Out-of-network is perfectly legal and can prove very profitable for a surgery center in the right market. He said the key is to analyze payor benefits and payment plans in the market and determine whether negotiating a contract with a payor would be more or less profitable than going out-of-network.
He said it's also critical to know how much money it costs to run your surgery center, as these numbers will inform how much you need to make on each procedure. "Before you ever approach a new business line at your center, you want to know where you're starting and how you're going to get paid," Mr. Webb said. He said if your surgery center has a profitable contract with a major payor in the market, staying in-network with that payor may be a smart business strategy.
Access the webinar presentation (pdf) here.
The state of ASC reimbursement
Mr. Webb began the webinar by pointing out the key differences between the business revenue of an ASC and a hospital. Unlike a hospital, he said, an ASC does not depend on revenue from the ICU, cardiac unit, emergency room, overnight stays or pharmacy, relying instead on profits from low-risk surgical and diagnostic procedures for patients who do not require hospitalization.
The surgery center industry is increasingly important for the provision of low-risk surgical and diagnostic procedures, as illustrated by statistics from the last ten years. Between 2003 and 2008, ASCs experienced a growth rate of 5.1 percent and physicians and/or investors opened 331 new facilities every year. The use of surgery centers is growing, as patients seek more affordable, efficient options for surgery.
Mr. Webb said the growth in surgery centers is paired with a growth in the popularity of PPO insurance plans among patients. "Insurance companies continue to see growth," he said. "People don't ask to be signed up for an HMO unless it's forced on them by an employer." He said that as Americans seek a more active role in their healthcare, they are demanding more choice and greater flexibility in accessing provider services.
Of all Americans with health insurance, Mr. Webb said 64 percent are enrolled in PPOs, illustrating patients' desire to have control over their healthcare delivery. The cost of PPOs is also shown to be lower than the cost of HMOs, totaling around $8,781 per employee compared to $8,892 per employee, according to the American Association of Preferred Provider Organizations.
Determining whether to go out-of-network
This growth in consumer-directed insurance makes out-of-network reimbursement a viable business strategy, Mr. Webb said. In determining whether to go out-of-network or negotiate contracts, he said it's important to analyze the ASC's payor mix and determine where the money comes from. "Analyze the mix of insurance in your area so you can make intelligent decisions," he says. "How many doctors are there in your market? Which specialties are provided? What is your level of Medicare saturation?"
He said the healthcare industry is rife with rumors about the demise of out-of-network, to the extent that some surgery center leaders have asked him whether billing out-of-network is still legal. Yes, he reassured: Out-of-network is perfectly legal and can prove very profitable for a surgery center in the right market. He said the key is to analyze payor benefits and payment plans in the market and determine whether negotiating a contract with a payor would be more or less profitable than going out-of-network.
He said it's also critical to know how much money it costs to run your surgery center, as these numbers will inform how much you need to make on each procedure. "Before you ever approach a new business line at your center, you want to know where you're starting and how you're going to get paid," Mr. Webb said. He said if your surgery center has a profitable contract with a major payor in the market, staying in-network with that payor may be a smart business strategy.
Access the webinar presentation (pdf) here.