ASCs are adding service lines, expanding into higher-acuity procedures and taking on cases that once belonged to hospital outpatient departments, but many are still getting paid like it’s five years ago.
The culprit, according to ASC leaders, is a passive approach to payer contracting that leaves significant money on the table every time a new case walks through the door.
Vijay Bachani, president and chief growth officer of Roslyn Heights, N.Y.-based New York Bariatric Group, told Becker’s the biggest financial mistake he sees ASCs making is leaving their payer contracts untouched as their case mix evolves. When a center adds a new service line, such as orthopedics, spine or higher-acuity bariatrics, those procedures are often reimbursed under outdated carve-outs or default grouper rates that were never designed to reflect current economics.
“What ASCs should be doing instead is proactively reopening their agreements to negotiate procedure-specific carve-outs, benchmarked against what the payer would otherwise pay in the hospital setting,” he said. “If a case migrating from HOPD to ASC saves the payer thousands of dollars per episode, the ASC should be capturing a meaningful share of that delta rather than accepting the legacy rate.”
The same logic applies to any new technology or implant-intensive procedure where the standard contract rate was never built around the current cost structure, he added.
Elisa Auguste, administrator of East Setauket, N.Y.-based Precision Care Surgery Center and vice president of the New York State Association of ASCs, echoes the concern. She says one of the most common — and costly — oversights she sees is contracts that auto-renew without review, or rates that have sat unchanged for years without anyone flagging it.
“These are missed opportunities to renegotiate and improve financial performance,” she said. “Ultimately, financial sustainability and growth depend on a proactive approach. Don’t accept the status quo, continuously evaluate, challenge your costs, and negotiate wherever possible.”
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.