Cost containment, carve-outs & total joints in ASCs: Key concepts for payers in 2016

Dan Connolly 2Payers and health plan sponsors are pushing hard to contain costs. Negotiations with providers are becoming more difficult and low reimbursement coupled with the rising costs of doing business will continue to plague ASCs.

"As allowables are held in check and patient financial responsibility rises, the need to effectively and efficiently collect co-pays, co-insurance and deductibles is bound to equate to, if not eclipse, many critical success factors in ASCs," says Dan Connolly, vice president of payer relations and contracting at Pinnacle III. "This challenge will continue to fuel fundamental change on how the ASC's front office functions and will force ASCs to actively support and promote a cultural change like none other in the healthcare industry."

ASCs wield leverage in contract negotiations due to their integral role in moving services into less expensive, clinically appropriate settings. The lower cost is attractive to payers, employers and patients who also appreciate the traditionally lower infection rates, greater convenience, shorter wait times and easier scheduling ASCs offer.

"Many payers now have at least embraced and recognized that advances in technology and clinical acumen are driving factors in the movement of high-acuity cases from hospitals to ASCs," says Mr. Connolly. "For instance, moving spine and total joint replacement cases to ASCs is much easier now than it was only a few years ago."

Payers are much more willing to negotiate carve-outs for spine and total joint cases today as well, and more ASCs want to add these high-acuity cases to their contracts with commercial payers. Total joint and spine cases can increase the ASC's revenue, gain margin and potentially improve low-acuity procedure rates in some cases.

Important strategies for negotiating successful contracts with ASCs include:

1. Negotiating facility-only case rates to diminish delays in implant payment as much as possible.

2. Contracting with employers directly, utilizing discounts and rebate arrangements to drive increased volume.

3. Bundling payments whenever the ASC can fold reimbursement for multiple providers into one predictable rate.

Narrow networks unfavorably impact ASCs in some markets, but this could change in the future. "As the web of this cost containment strategy widens, especially with more employers self-insuring and wanting to leverage their book of business, ASCs would be well advised to ensure they have the dexterity needed to capitalize on this 'narrow' opportunity," says Mr. Connolly.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Webinars

Featured Whitepapers

Featured Podcast