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How ASCs Are Navigating the ACO Terrain & 8 Tips to Mitigate Risk

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Accountable care organizations and other types of narrow networks are forming across the United States, and ambulatory surgery centers will either be in or out.

Most ASCs today aren't affiliated with an ACO, but that could change if ACOs become stronger and more prevalent. Some surgery centers are forming relationships to have a seat at the table during negotiations — and potentially become a low-cost provider in the ACO — while others are maintaining their distance, hoping to retain their niche for specialty care in the community outside of the large hospitals and physician groups.

ACOs are either led by hospitals and health systems or large physician groups looking to eliminate waste and save on the cost of care. Physician-led ACOs are more likely to accept ASCs as a provider; hospital-led ACOs may still be territorial about where their cases go, even if the ASC has bigger cost-saving potential than the hospital outpatient department.

While ASCs are primed as a low-cost healthcare provider, whether it's smart to participate in ACOs remains market-dependent. ACOs require providers to share risk with payers, but patients don't share that risk. Currently, most ASCs are not structured for risk-sharing arrangements, although an increase in patient volume as a "preferred provider" in the ACO or narrow network could be beneficial in some instances.

ASCs interested in participating in ACOs often begin with one specialty to sample the program's success; if it makes sense, they can grow to additional specialties. Additionally, they can enter into an ACO with one payer and add others later. Form a relationship with referring physicians or specialists who are looking to save on their risk-sharing cases. Even if you are independent of the ACO, an opportunity exists to bring those patients in. ASC owners and operators can contact local payers and physician groups — especially general practitioners — to see whether they are currently or plan to engage in ACOs in their market.

ACO participation could help ASCs maintain or grow market share, but controlling risk could be a problem. The risk shouldn't fully expose ASCs, but armed with the right data ASC owners and operators can avoid signing on to perform cases that will ultimately cost the center. The most important ways to mitigate risk during these negotiations include:

•    Knowing cost data — how much does it cost to perform the procedure? If you know the global expense, you'll be able to negotiate reasonable rates
•    Pay close attention to variable costs — make sure the profit margin will more often than not cover these costs
•    Patient selection — clearly outline with the payer and other ACO partners appropriate patients for the ACO to avoid incurring extra costs
•    Keep the contract open — specialists can currently participate in more than one ACO; becoming exclusive with one ACO limits the potential for future growth
•    Know who else is involved — if there are other ASCs, there are mixed incentives; you don't want the ACO to pit other ASCs against you to push payment down too low
•    Target patient populations — if the ACO's target patient population is Medicare or another charity care group, it may not be beneficial for the surgery center that currently has low Medicare representation in the payer mix
•    Electronic communication — it's problematic if your center's electronic communication system can't communicate with other providers in the ACO; your center may be forced to purchase a new system or additional technical capabilities to communicate within the ACO
•    Patient education — does your center have appropriate patient education on outpatient expectations in place? Whether patients know what to expect can have an impact on their comfort, outcomes and overall cost of care

Slowly but surely more specialists are beginning to participate in ACOs; Medscape's Physician Compensation Report 2014 shows 18 percent of orthopedic surgeons are currently participating in ACOs — up 9 percent from last year — and another 10 percent plan to participate over the next 12 months. Other key specialties also show ACO participation growth: 17 percent of gastroenterologists are participating — up from 9 percent in 2011 — and 26 percent of ophthalmologists are participating.

According to a Becker's ASC Review article published earlier this year, as downward pressure on healthcare costs continue, insurance companies are interested in moving more cases to outpatient ASCs — including total joints and spine — and hospitals are looking for physicians and specialists to partner or joint venture with them on cost-savings for ACOs. ASCs have the opportunity over the next year to align for ACO contracting.

More Articles on Surgery Centers:

6 Recently Opened, Planned or Expanded ASCs

Spark ASC Staff Motivation & Culture: 3 Core Concepts

Eliminate Staffing Overlaps: 7 Strategies to Run a Lean ASC

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