6 Ambulatory Surgery Center Reimbursement Trends for 2011

The following article is written by Caryl A. Serbin, RN, BSN, LHRM, executive vice president and chief strategy officer of SourceMedical.

 

Although most financial analysts are forecasting a continuing slow economic recovery in 2011, some healthcare prognosticators are predicting a less-than-optimistic 2011 for ambulatory surgery centers. They reference the overall changes in the healthcare environment such as decreasing reimbursement, increasing complexity in the reimbursement process, physician employment by hospitals, the changing face of single-specialty ASCs, an overall decrease in elective surgery case volume and the emergence of accountable care organizations.

 

While agreeing that the economy and healthcare industry are currently in turmoil, most of us who have been in this industry long-term agree that the ASC industry has had a long and successful run since its inception in the 1970s. These achievements were not accomplished by naysayers. Perhaps we should take the time to examine how some of the pessimistic predictions can be effectively turned around.

 

1. Increase in the number of single-specialty ASCs converting to multi-specialty ASCs. This activity is primarily being seen in areas where there is an over-abundance of surgery centers. Although this is probably an accurate prediction, it is not necessarily a negative trend. A perfect example of the shift to multi-specialty is illustrated by the reduction in the number of single-specialty GI centers nationwide. Because of the lower reimbursement from Medicare and other third-party payors, many of these centers are expanding to include other specialties. If these centers choose compatible specialties and physician partners, these expanded ASCs should be more efficient and profitable.

 

2. Because of economic reasons, it is predicted that more physicians are choosing the stability of hospital employment resulting in a loss of potential physician investors and case volumes. In our experience, this trend is not appreciably affecting the surgical specialties that use ASCs. This trend appears to primarily involve family practitioners and cardiologists. In our specific locale, a few years ago there was a big push by the local hospital organization to own physician practices. This trend only lasted a few years and apparently did not work well for either party and was reversed.

 

3. Insufficient surgical volume. The number of ASCs in the United States has increased annually, with the number of cases being performed in ASCs increasing exponentially since ASCs were allowed Medicare participation in 1982 (VMG Health's Multi-Specialty ASC Intellimarker 2010). According to VMG, 2010 was the first year that a decrease was noted; there was an approximate 4-5 percent decrease in average cases per center between 2009 and 2010. However, because of the greater variety and complexity of cases being covered in ASCs by Medicare and other payors, overall reimbursement did not decrease accordingly.

 

4. Decreasing reimbursement. The weakened economy and the sweeping reforms in how Medicare pays ASCs has resulted in decreased reimbursement in some specialties. However according to VMG Health's Multi-Specialty ASC Intellimarker 2010, there has been an overall average increase in net revenue of $42.50 per case. Looking forward to 2011, the ASC Association (www.ascassociation.org) advises that the ASC industry will see an increase in Medicare reimbursement of 0.2 percent (inflationary increase of 1.5 percent less 1.3 percent from a mandated productivity adjustment). As a general rule, private payors often attempt to follow governmental payors. While each state and even each market is different, in our client base, we have seen private payor's rates either remaining flat or increasing slightly. While there are specific payor decreases in some states such as out-of-network changes in New Jersey and workers' compensation changes in several states, we are not seeing an overall call for decreases from private payors.

 

5. Increasing complexity in obtaining reimbursement. As an ASC billing company, we are in a good position to evaluate the changes in billing requirements. Both government and private payors have increased in specific requirements and denying payments based on non-compliance with these requirements. To be properly and adequately paid, an ASC first needs optimized but compliant coding. This requires the ability to fully interpret the operative report and request additional information from the provider when necessary. It also requires knowledge of different payor's requirements to receive payment on implants and high-ticket supplies.

 

There is a growing trend for private payors to partner with implant suppliers and pay directly for the implant, allowing the ASC to avoid having to purchase the implant. Also, some private payors are following Medicare's inclusion of implant cost with the reimbursement for the procedure. The ability of your staff to interpret denials and payment errors quickly and accurately is extremely important in turning your accounts receivable into spendable dollars. Submitting clean claims using clearinghouses and direct billing sites has increased at least tenfold in complexity over the years. Collections are an art form in persistence and understanding the lingo of the insurance industry. All of these complexities have resulted in an increase in ASCs outsourcing coding and billing to experts.

 

6. Accountable care organizations and healthcare reform may leave ASCs out of the healthcare chain. "In the era of reform, physician alignment, and accountable care organizations, only time will reveal the specifics as to where ASCs will fall in the healthcare delivery system," says Vivek Taparia, Director of Business Development, Regent Surgical Health. "As long as we continue to offer improved access to care, superior outcomes and greater patient satisfaction, all at a lower cost, we are optimistic that the next four decades will offer as much excitement and opportunity for the industry as have the past four decades."

 

The main focus of ACOs appears to be reduction of overall healthcare expenditures, with a specific objective appearing to be lowering costs for long term and chronic patient care. Even though surgery does not appear to be a primary target, ASCs already provide quality surgical care at a lesser cost than hospitals. We have spoken to a number of hospital and ASC administrators who feel certain that ASCs will play an important role in ACOs and healthcare reform by demonstrating their quality patient care and cost-effective practices.

 

Overall, the outlook for the future of the ASC industry is positive. VMG reports that of all the surgery cases performed in the United States in 2008, approximately 65 percent were performed in the outpatient setting (combined hospital outpatient centers and ASCs). We have almost 6,000 ASCs nationwide, with over 80 percent of them Medicare-certified. As long as we continue to provide a more cost-effective approach to outpatient surgery while providing quality patient care and satisfaction, then ASCs will continue to be an important provider of healthcare services.

 

Learn more about SourceMedical.


Read more from SourceMedical:

 

- 20 Steps to Improve Surgery Center Insurance Collections

 

- SourceMedical Launches Revenue Cycle Solutions Business Unit, Announces Organizational Changes

 

- SourceMedical Announces Partnership With ExitCare for Patient Education Resources

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