Independent ASCs have spent the past several years watching payer friction intensify. Tian Xia, DO, an anesthesiologist and interventional pain physician who owns three surgery centers and 11 clinics in the Chicago area, has built his response around the courtroom.
“You cannot trust prior authorizations. Prior authorization has become a joke. What happens with the prior authorization: the [payers] turn around, they go, ‘Well, prior authorization [does not] guarantee payment.’ Are you kidding me?” Dr. Xia said during a panel at Becker’s 32nd Annual Business and Operations of ASCs in Chicago Oct. 29.
The frustration is widespread. In 2024, the American Medical Association said it would support a federal ban on insurers denying payment for preapproved, medically necessary care, as retrospective payment denials grew. A year later, ASC leaders described payers implementing AI tools “to deny claims faster or flag them for review.”
“Then another thing is, including Medicare, they will actually come back in two years and say, ‘Well, we paid you wrong. You need a refund,'” Dr. Xia said.
Rather than absorb those losses, Dr. Xia staffed up.
“So, what I have done is I ended up creating an entire case management team. I basically created a social service and we do nothing but accumulate data. And, fortunately, for the past 12 months, we’re using AI for this. So we’re getting data and we’re getting everything prepared to file an appeal,” he said.
The appeals are only one layer of his strategy.
“Another thing is I have an attorney on retention. My response to the insurance company is I’m going to take [it] to court every single time you do this to me. I see you in court and now the insurance company knows that I’m crazy,” he said.
His approach extends to the private contractors that process claims for traditional Medicare.
“Medicare is not an insurance company. Medicare is a congressional program. The Medicare [administrative contractors] will talk to you. They are actually not government entities. They have a contract with the government. They are administering Medicare on the government’s behalf. They’re not God. Sue them,” Dr. Xia said.
Disputes over traditional Medicare claims follow a five-level appeals process under CMS, beginning with a redetermination by a Medicare administrative contractor and ending with judicial review in federal district court.
Implants are a separate pressure point, particularly in orthopedics and pain management. Implants and surgical supplies can sometimes exceed the total reimbursement for a procedure, and ASC leaders have noted that while hospitals are often paid for the cost of implants, ASCs are often paid a single rate.
“Before we allow the procedure to be performed, we ask orthopedic surgeons, what’s implant cost. My team is very active on this. If the implant cost is too close to comfort, we tell the surgeon, we can’t do it, we can’t do the case,” Dr. Xia said.
The case that changed his approach involved a shoulder procedure.
“There was one surgeon who had an extensive shoulder case, put in 10 anchors for rotator cuff repair. Forget about making money on the case. We lost something like $10,000 on this case. We just can’t do this. So everything I have done happened because of the case,” he said.
Dr. Xia took that experience to his commercial payers.
“I was able to accumulate enough data and go to them. I tell them, you have to give me carve out. You don’t give me a carve out, I’m out. I can’t do it now. Fortunately, I can do enough work on [personal injury] to handle without that. But then what ended up happening is they ended up giving me a carve out. But that didn’t happen until I tried and threatened to sue them because the implant cost,” he said
Dr. Xia has since pushed the fight beyond his own centers.
“What I ended up realizing is at the end of the day, the only way to fight back is to become an insurance company,” he said.
Fellow panelist Christopher Dainiak, MD, founder of Bedford (N.H.) Gastroenterology, said independents need guidance through a payment system that is opaque.
“I hope most people understand that the healthcare system that we have, [and the] reimbursement system that we have nowadays … it’s meant to be confusing to everybody. So nobody really knows what’s going on,” he said.
“I couldn’t have predicted everything that’s happened, but the confusion is intentional. We need people to help us through that,” Dr. Dainiak said.
Large health systems have increasingly taken their payer disputes to court. Seven hospitals affiliated with Nashville, Tenn.-based HCA Healthcare sued Anthem Blue Cross and Blue Shield Georgia Oct. 5, weeks after HCA-affiliated hospitals in Texas filed a similar suit against Independence Blue Cross.
Philadelphia-based Jefferson Health has sued both Aetna and Independence Blue Cross this year, and the California Hospital Association sued Anthem Blue Cross in May on behalf of more than 400 member hospitals.
Independent providers have more limited resources, but some are testing the same route. Two Colorado-based medical providers sued Anthem Blue Cross and Blue Shield in Denver District Court, alleging the insurer owes a combined $2.1 million across 147 unpaid or underpaid independent dispute resolution determinations.
Asked for one piece of advice for independent ASC leaders who want to still be independent and thriving five years from now, Dr. Xia returned to the courtroom.
“Large healthcare systems have legal help. So for those of you who are small, like myself,and don’t have legal help, I would recommend you retain someone and take insurance. Come to court a couple times. That record is very important. I cannot stress more on that,” he said.
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.
