The mind-boggling complexities of commercial payer contracts coupled with ever-changing Medicare reimbursement policies make negotiating contracts to attain appropriate reimbursement an uphill battle for ASCs.
During an April 15 webinar sponsored by Pacira Pharmaceuticals, ECG Management Consultants Principal Naya Kehayes and Boston Out-Patient Surgical Suites Administrator Gregory P. DeConciliis explained what ASCs need to know about payer contract negotiations and shared three key strategies for success.
1. Be familiar with Medicare reimbursement and ASC rule changes. Four major CMS rule changes have significant implications for how centers should approach payers in 2019. First, the threshold for defining a procedure as device-intensive dropped from 40 percent to 30 percent, expanding the types of procedures that could qualify for additional reimbursement.
CMS will also now use the hospital market basket to determine ASC payment updates rather than the consumer price index-urban, a decision that "puts ASCs on the same playing field as hospitals," Ms. Kehayes said. She also noted that unfortunately there continues to be a rescalar that negatively impacts ASC rates, but this is a move in the right direction. A third important rule change is that a significant number of cardiac catheterization lab codes were added to the ASC list because of a modification to the definition of "surgery," again affording ASCs more opportunities to expand their services.
Lastly, Medicare began separately reimbursing for EXPAREL® (bupivacaine liposome injectable suspension), a non-opioid postsurgical pain management local analgesic for Medicare patients in Medicare-certified ASCs as of Jan. 1. Using HCPCS code C9290, Medicare provides reimbursement at $1.22/milligram ($324.52 for 266-milligram or 20-milliliter dose, $162.26 for 133-milligram or 10-milliliter dose). This particular change is notable, Ms. Kehayes said, because Medicare has historically been reluctant to expand drug coverage.
When CMS began covering EXPAREL, the change drove a number of joint procedures to Boston Out-Patient Surgical Suites, according to Mr. DeConciliis. The approval also enabled providers to offer a non-opioid postsurgical pain management alternative, which was especially important for Mr. DeConciliis, who said his patient population in Massachusetts struggles with opioid abuse. In 2017, the state had 1,913 drug overdose deaths involving opioids, as reported by the National Institute on Drug Abuse.
"I get excited [about] going to the payers because oftentimes, you go to them with a nice story to tell, like, 'I can provide this drug as an add-on to not only to shift cases [to lower-cost ASCs], but also ... I can now reduce that patient's need for opioids,'" Mr. DeConciliis said.
2. Understand the complexities of reimbursement methodologies. Mr. DeConciliis thought commercial payers would follow CMS' decision to approve non-opioid pain management solutions such as EXPAREL, just as they often follow suit when it comes to Medicare's payment cuts. But negotiations weren't as easy as he expected. Commercial contracts can be tricky because they apply Medicare policy to differing degrees, according to Ms. Kehayes.
Many payers have adopted unique proprietary payment methodologies that are modified versions of established payment systems like Medicare. Sometimes, ASCs will see a commercial contract that's based on a percentage of Medicare, Ms. Kehayes said. However, that doesn't necessarily mean the contract is based on current 2019 Medicare rules and rates — the payer could be following a different year. This can have a material impact on reimbursement if they use prior years, which may be favorable or unfavorable.
ASCs should also know that some commercial payers have adopted modified versions of the Medicare Grouper methodology, which is CMS' older prospective payment system for ASCs that is based upon assigning a reimbursement rate to a "grouper." There were initially nine groupers that were later enhanced, but effectively, each grouper contains a list of eligible CPT codes. Insurers may add or remove certain codes from the grouper, Ms. Kehayes said, so centers should obtain a copy of the payer's mappings and approved codes for clarity.
"Contracts can make your head spin with all the details," Mr. DeConciliis said. "If you don't have a management company ... the best thing to do is develop some kind of a tickler file [or] Excel spreadsheet that lists all of your contracts, when they expire and a timeline [of] when you should be going to the payer for reviewing those contracts. That should be at least annually where you're looking at this file and determining when you have to go to [payers] — and you don't miss those dates."
3. Consider various approaches to demonstrating value. Before coming to the table for contract negotiations, ASCs should regularly analyze their case mix to have supporting data on hand, Mr. DeConciliis said. It's also important to do research on introducing new devices, procedures or drugs such as EXPAREL. For instance, ASCs can ask their local EXPAREL representatives to provide data on the drug's efficacy and applications.
Along with substantial data collection, Boston Out-Patient Surgical Suites' efforts to demonstrate value include inviting commercial payers to tour its facility. The ASC's medical director, nurse leaders and other clinical personnel sit down with payer representatives to explain why they're asking for an increase in reimbursement and how shifting procedures is a great opportunity for both parties, Mr. DeConciliis said.
One of the most effective strategies for obtaining appropriate reimbursement, according to Ms. Kehayes, is demonstrating to commercial payers the payment gaps between hospital outpatient departments (HOPDs) and ASCs. That data validates the value of the ASC in negotiations, she said.
"Quite often, doing a comparison of Medicare reimbursement in the ASC [versus] HOPD can be very valuable because 100 percent of Medicare [HOPD payment] may be enough to do the case in the ASC setting," Ms. Kehayes said, this may not be true for all cases and all ASCs. It all depends upon the total reimbursement of the case, and the cost of surgery at the center, especially since Medicare does not pay for implants and in many cases does not pay for add-on codes. "It is unlikely the hospital will have a contract at 100 percent of Medicare, and sometimes, showing the comparison to HOPD Medicare can create value and intelligence that helps the payer understand the opportunity of your center and the value that you bring."