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6 Things ASCs Need to Know About Orthopedic and Spine Managed Care Contracting

Adding spine and orthopedics to an ambulatory surgery center is not a cake walk, as there are several points to know regarding their background and how they should be treated in managed care contracting negotiations.

At the 10th Annual Orthopedic, Spine and Pain Management-Driven ASC Conference in Chicago on June 15, 2012, Naya Kehayes, managing principal and CEO, and Matt Kilton, principal and COO, of Eveia Health Consulting and Management, explained the background of spine and orthopedics cases and how ASCs can bolster their contracting with those two specialties.

1. The proper framework. Mr. Kilton said there are six main steps ASCs must follow to get from point A to point B on adding spine and orthopedic cases and getting appropriate reimbursement for them: cost analysis, collecting data, comparisons of hospital cost versus ASC cost to the payor, presenting the data to the payor, demonstrating cost savings to payors and negotiations.

“These are very high-cost, implant-intensive services,” Mr. Kilton said. “The culmination of all that, the hook, is the cost savings for the payor. That will get the payor interested in the conversation, but you have to demonstrate that by knowing your costs and what the market will pay."

2. Orthopedic savings. Mr. Kilton said there are several orthopedic cases that will save a payor money if performed in an ASC, and ASCs must take advantage of this situation when contracting. Some of the cases include ACLs/PCLs, rotator cuff repairs, and hand and wrist reconstructions, among others.

3. Spine is a different beast. Anterior cervical discectomies, spinal fusions, kyphoplasty and other spine cases are commonly performed in ASCs now, but there are some pitfalls. For example, spine cases can be lengthy (some up to an hour, which is a long time for an ASC’s schedule), and some spine cases result in longer recovery times.

“Spine is also capital-intensive,” Mr. Kilton said. “Spine tables can cost more than $100,000, and spine microscopes could cost $50,000 to $150,000. Spine cases require different nursing skill set, too.” Knowing that spine cases are more involved and costly has to factor into the managed care contracting strategy.

4. Spine surgeries and their unique reimbursement. Because many spine codes are not approved for freestanding ASCs by Medicare or commercial payors, payment may not always be easy. Ms. Kehayes said across all of Eveia’s clients, they have more than 123 different code combinations. “That gives you some kind of breadth to the nuances that surround spine surgery,” she said.

5. Finalize managed care contracts before committing to surgeons. Ms. Kehayes said this point is one of the biggest obstacles for ASCs looking to add spine cases. Having the spine surgeons, but no framework, for formal reimbursement could lead to undesirable consequences. “Be proactive. Talk to payors and restructure contracts before you finalize commitments to surgeons,” Ms. Kehayes said. “Spending money to do spine surgery and then not getting paid becomes a major capital outlay and concern.”

6. Demonstration, demonstration, demonstration. ASCs looking to add spine cases most likely know they can pull it off. However, spine surgery is still viewed with a skeptical eye by many managed care and commercial payors, and the onus is on surgery centers to show why payors can benefit from contracting with them. “ACDFs, ALIFs and PLIFs can cost the payor $25,000 to $100,000 or more in the hospital setting,” Ms. Kehayes said. “Payor medical directors are not always familiar with ASC-based spine surgery, and ASCs can present significant savings to the payor. But you have to be able to demonstrate that.”

More Articles on the 10th Annual Orthopedic, Spine and Pain Management Conference:

4 Points on ASCs and the Importance of Implants

4 Thoughts on the Current Pain Management Environment

6 Best Practices for Successful Orthopedic and Spine-Driven Hospitals

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