1. Ensure your predicted case volume is accurate. Adding spine to a surgery center should always start with an assessment as to whether the specialty is feasible, Ms. Baber says. Though spine does not require a high volume like specialties such as gastroenterology and ophthalmology, a steady stream of cases is necessary to justify the significant start-up costs. Ms. Baber says it’s important to make sure that surgeons are giving you an accurate estimation of their future case volume.
For example, anterior cervical discectomy and fusions are appropriate for the ASC setting and can turn a substantial profit with only a few cases a week. “The return on investment is great for those types of surgeries,” Ms. Baber says. The issue is making sure surgeons know how many cases they can actually bring to the ASC. “The surgeon may say they have 200 ACDFs that could be outpatient every year, but it’s not really accurate because of patient age, comorbidities, other medical factors and payors,” she says.
“When you pick your physician partners, you have to make sure you’ve educated them about the type of patients that can have their procedures performed in the ASC,” she says. She says if the physician has a computerized EMR system, it should be relatively simple to extract data to determine the number of ASC-appropriate spine cases the surgeon performs annually; the physician’s assistants and nurses can also be helpful in determining this.
2. Standardize implants by choosing one vendor. Not every physician will want to use the same type of implants, but Ms. Baber recommends standardizing to a single vendor to ensure discounts for your supplies. For example, she encountered a center that used a vendor that provided approximately 12 different implant sets for ACDFs. The surgery center selected two or three of those 12 implants and negotiated with the vendor to lower the cost.
“You’ll get a better cost from the vendor if you pick two or three of their implants, because they’ve garnered your entire business,” she says. “This will also help you work with payors, because you can demonstrate that you were able to reduce the cost of implants.”
She warns surgery centers that some vendors may be accustomed to working with hospitals, which accept a higher price on implants because they charge patients more for surgery. “One particular vendor did not understand that the surgery center can’t pay three times the retail value and then pass that cost on to the patient,” she says. “ASCs are about providing high quality care at a lower cost.”
3. Plan for initial start-up costs. It isn’t cheap to implement spine. “There’s a lot of high cost in the initial start-up,” Ms. Baber says. Most surgery centers will have to spend a few hundred thousand dollars on the C-arm, microscopes, special tables and instruments — with the possible exception of surgery centers that already perform pain and have some of the equipment. Your surgery center should be prepared to make this investment by negotiating payor contracts profitable enough to provide a strong return on investment over time.
4. Carve-out implants or attain a rich reimbursement rate that covers the cost. Prior to five years ago, Ms. Baber says most surgery centers performed spine on an out-of-network basis. Medicare does not reimburse for the specialty, and there were no ASC groupers that applied for spine, making it an unlisted code. “Either they paid it as an unlisted code, or you negotiated out-of-network,” she says. Nowadays, newer spine centers understand howt payors reimburse the hospitals for spine surgery cases and can negotiate commercial contracts based on those rates. “It’s about being upfront — telling them what you’re doing and showing them the cost for services and implants,” she says. “If you know your market, you should know what the hospitals are charging versus what they’re actually getting paid.”
She says most payors are willing to provide robust reimbursement for spine because they understand they’re saving money compared to sending cases to the hospital. She says it’s important to know a payor’s general attitude towards carving out implants — an essential aspect to profiting from a spine contract. “It may be up to a year of negotiating,” she says. “They need to understand that you’re here to stay.” If the payor absolutely refuses to carve-out implants, the surgery center may be able to negotiate a payment that covers the implants without a carve-out. If reimbursement cannot cover implant expenses, those patients will have to go to the hospital.
Ms. Baber says it can help to revisit hesitant payors after the first year of performing spine and present data on how much money the payor would have saved by sending cases to the ASC. “Sometimes it takes that second year to have them say, ‘Dr. X has brought 50 cases to the hospital that could have been performed at the surgery center,'” she says.
5. Educate staff on cost-cutting initiatives. Because spine supplies are so expensive, staff members must be educated about the cost incurred when someone opens a supply that isn’t going to be used. “Your staff needs to understand all the costs so that they don’t open something up until the physician asks for it,” Ms. Baber says. “Once everybody is part of the team, people take ownership in the center and help to increase efficiencies and profitability.”
She says education doesn’t stop with staff members: Physicians and patients need to be educated about spine in the surgery center as well. Physicians should be educated as to which patients are appropriate for the ASC setting, and patients should be educated on what to expect from an outpatient spine procedure. For example, some patients may approach the ASC like a hospital, assuming that they will stay for a lengthy period as an inpatient.” They have to be taught from the beginning that this is an outpatient procedure,” Ms. Baber says. “Rather than think like they’re sick, they need to know they’ll be out of the ASC two hours after surgery.”
Learn more about Meridian Surgical Partners.
Related Articles on Spine in the ASC Setting:
Key Issues for Orthopedics, Spine & Pain Management in ASCs
5 Factors for Spine Surgeons to Negotiate Better Payor Contracts
7 Spine Surgeons on Big Concerns Keeping Them Up at Night
