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6 Insights From ASC Leaders for 2014

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Six industry leaders answer questions on the position of the ASC in the healthcare industry.

Question: What is the most challenging issue facing ASCs today?

Thomas Mallon, Founder and CEO of Regent Surgical Health: The thing keeping me up at night most right now is wondering whether the very soft first quarter ASCs experienced will continue throughout the year. Did we see these results because we have a lot of patients absorbing high deductibles or is it the fundamental change in reimbursements? For many centers, it's been both. The economy only experienced 0.1 percent growth last quarter, and a lot of centers had one-time weather-related expenses that made an impact on ASC financials. Then patients are absorbing their new high deductible plans.

"I still think the keys to the kingdom in healthcare have been granted to the hospitals and good hospital systems are looking to lower the cost of care; they are getting ready to take risk by creating insurance products and taking capitation from insurance companies for specific populations. This bodes well for ASCs. For the first time, hospitals are talking about not only letting employed surgeons work in the ASC, but mandating surgeons work there because of the lower costs and increased efficiency.

Jeffrey Peo, CDO of ASCOA: One of the biggest challenges facing many ambulatory surgical centers today is maintaining case volume. There are a number of factors influencing the reduction in volume, which is tied to a reduction in revenue and profit. With the increase in employment of primary care practices by hospitals, many surgeons are feeling that they can't take the cases to the location of their choice without putting their referral network at risk. Patients are also putting off surgery because their deductibles are significantly higher than they have been in the past. This reduction in volume is putting significant financial pressure on many centers across the country.

Jeffrey Simmons, CDO of Regent Surgical Health: The biggest challenge facing ASCs today is deteriorating net revenue per case. Lower reimbursement rates, higher deductibles and larger co-pays all work toward creating the issues. Insurance companies seem to be trying to maintain historical margins and are passing along the higher costs associated with premiums with less attractive benefits, which consumers choose to save money.

Q: What is the state of out-of-network ASCs?

John Bartos, JD, CEO of CollectRx: Despite some who seem to believe to the contrary, there continues to be excellent opportunities with many insurance companies for higher reimbursements on out-of-network bills. In addition, the number of patients who are out-of-network will increase as the Patient Protection and Affordable Care Act becomes fully implemented and the number of insured patients and narrow or restrictive networks continue to grow.

Q: What is the most important legal issue facing ASCs today?

Michael Schaff, JD, MBA, LLM, Chair of Corporate and Healthcare Departments at Wilentz, Goldman & Spitzer: With the influx of venture capital into the ASC market, there has been an increased focus on the financial aspects of the business of the center, rather than patient care. This creates additional regulatory risk on the center and may cause friction between those with privileges at the center — including the physician owners — and those in it just for financial gain. This emphasizes the need for a strong compliance plan and the independence of the compliance officer.

Q: What should be the top priority for ASC leaders today?

Gregory P. DeConciliis, PA-C, CASC, Administrator of Boston Out-Patient Surgical Suites: The number one priority continues to be maintaining volume. With market consolidation and harsh tactics by large provider groups to penalize PCPs who send patients to physician-utilizers of ASCs, it's only getting tougher. [We] want to maintain full rooms and profitability.

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