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ACOs 101 for Ambulatory Surgery Center Administrators: Q&A With Stephen Rothenberg of Numerof & Associates, Inc.

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Stephen RothenbergAccountable care organizations are beginning to sprout up across the healthcare landscape in many communities, led by physicians, hospital and health system leaders. Many ambulatory surgery center administrators wonder where their ASCs will fit in.

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"It's worthwhile for any ASC leader to have a general understanding of what the goals of the accountable care organization are," says Stephen Rothenberg, JD, a consultant with Numerof & Associates, Inc. "In general, they are trying to lower the overall cost of care for the population they serve without sacrificing quality. Understanding their infrastructure matters, too. For example, if they are a CMS ACO, they have requirements for infrastructure and quality metrics. In today's market, understanding a bit about the fundamentals of ACOs is important."

Mr. Rothenberg discussed how ACOs could impact ambulatory surgery centers, and offers smart strategies for ASC leaders going forward.

Q: How are ACOs changing the marketplace?


Stephen Rothenberg: T
hat's a big question. In some areas, ACOs are driving the market consolidation we're seeing today. In addition, there’s been some consolidation across specialty physicians and group practices. They can change the landscape in a given marketplace, and ASCs will have to figure out how best compete in a market that includes one or more ACOs.  

Q: When should ASCs consider becoming involved in ACOs?


SR:
ASCs facing an ACO that has a dominant position in the market will have to figure out how they can work with them. A lot depends on the extent to which the hospital considers the ASC a competitor or a potential partner. That in turn depends on the ACO's access to alternative sources of that practice specialty, and of course, the level of demand in the market area.

For example, some ACOs may have an economic interest in directing patients to certain providers even if they don't necessarily provide the lowest cost or best outcome – if there's a competition mindset the risk is losing referrals and being shut out of the population. Some specialty areas, such as ophthalmology, may find it easier. ACOs, in large part, aren't seeing ophthalmology as a priority right now and don't want to spend their surgical room time on those procedures. There could be an opportunity, then, since the ACO is less likely to view an ophthalmology ASC as a competitor. If hospitals don't have a specialty in-house already, they are more likely to sit down with you and discuss how you can partner.

Q: What factors should ASC leaders consider before participating in the ACO? Could it have any negative consequences?


SR:
They need to find out what kind of ACO is in their market (a CMS ACO or a private ACO). They will need to understand what quality and cost commitments the ACO has made before exploring partnerships.

They will also need understand how the ACO and the ASC could be beneficial partners. Will partnering with the ACO ensure more referrals to your ASC? Will not partnering with the ACO put you at risk of losing market share? Conversely, what can you bring to the ACO? In many cases, the value proposition of the ASC is that it can be cost-effective and can demonstrate good clinical outcomes.

ASCs also have to consider whether they have the infrastructure to support ACO participation. For example, CMS ACOs have HIT requirements, and those requirements could potentially extend to the ASC. In some cases, you may not want to be part of the ACO, but you can enter into a preferred provider relationship. Look at the types of constraints the ACO would put on you and make sure you have the flexibility you need.

Q: Are there any special considerations for becoming part of a CMS ACO versus other ACOs?


SR:
If you are going to have a relationship with a CMS ACO, you need electronic medical record capability, even if you aren't officially a participant.

Data can be a consideration for ASCs in another way as well. To build the ASC’s value proposition, whether for a CMS ACO, a private ACO, or even to payors and patients, you need data to support it. Data will also be useful when you are at the point of saying you can give a fixed price.

Q: Do you see ACOs becoming a standard in the future?


SR:
It's hard to predict how the variety of ACO types will do and whether the administrative burden of CMS-sponsored ACOs will become an issue; that's one reason why ASCs that can demonstrate quality outcomes and cost-effectiveness may want to contract with them but not become a part of them.

I think it will be smart for ASCs to maintain independence and flexibility but still partner with the ACO to give them room to see how the market will shake out. Some specialists are still taking a cautious role in becoming a part of ACOs, which is understandable, but you will have to work with new types of arrangements at some point.

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