A closer look at today's ASC landscape: Key observations from 4 industry experts

Today's healthcare environment is rife with opportunities for ASCs and hospitals — but these opportunities go hand-in-hand with a number of challenges and implications for the industry's future.

This was the key takeaway from an Oct. 15 roundtable at Part II of Becker's ASC Virtual Event – The Business and Operations of ASCs. The discussion was sponsored by ECG Management Consultants and moderated by Dan Cosentino, a manager with the firm. Four panelists from ECG shared their thoughts on the state of the ASC industry:

● Naya Kehayes, principal
● Sean Hartzell, associate principal
● Matt Kilton, associate principal
● Catherine Ruppe, RN, associate principal

Here are four observations shared during the panel:

1. State rules may limit opportunity. CMS adjusted the definition of "surgery" for the ASC-approved list in 2019, paving the way for “surgery-like" procedures including coronary interventions and cardiac catheterization to be performed in ASCs. Along with additional cardiology codes, total knee arthroplasty was included on the ASC-approved list in 2020. However, approval by CMS to allow new procedures in ASCs does not necessarily benefit surgery centers everywhere.

"As CMS continues to update and make changes to the rules, surgery centers need to look at their state rules and regulations," Ms. Ruppe said. "Even though more and more cardiology procedures have been added to the ASC procedure list, if your state does not allow for it, you won't be able to perform the procedure." Another example is CMS allows a patient to stay up to 23.59 hours in a surgery center, but not all states allow it.

2. Commercial payers take cues from CMS. "We've seen some interesting developments with commercial payers driving surgery migration," Mr. Cosentino said.

One development, according to Mr. Kilton, is that the majority of commercial payers have expanded their ASC-allowable lists, with CMS' policies serving as a guiding template.

"For years, CMS's list of approved ASC services has influenced payers," Mr. Kilton said. "It's common for payers to utilize the CMS methodology to suit their preferences with regard to payment policy. In other words, if CMS doesn't approve certain codes, commercial payers commonly find a way to allow the service if that means payers can save dollars. CMS pays the majority of secondary procedures at 50 percent of the contracted allowable, and a lot of commercial payers have attempted to move away from 50 percent for third, fourth or fifth procedures and reduce the percent allowable or cap payment after a certain number."

3. Payers are also buying into surgery centers. When payers have equity or ownership in a surgery center, they can directly funnel care into that surgery center — with an abundance of data to support doing so, according to Ms. Kehayes.

"Optum, a part of the UnitedHealth Group, owns SCA. Kaiser definitely has ownership in surgery centers, and there are other payers across the country that maintain ownership in surgery centers," she said. "You're going to see more payers taking equity in a lower cost delivery platform, because it creates alignment to reduce costs and influence further migration."

4. Hospitals are under pressure to partner with ASCs. As CMS and other payers encourage the migration of certain procedures to ASCs, it's not a matter of "if" hospitals lose volume to these settings, but "when," according to Mr. Hartzell. This inevitable procedure migration is forcing hospitals to rethink their ASC strategy.

"Hospitals need to plan to deliver certain surgical volumes in lower cost settings," Mr. Hartzell said. "As volumes migrate out of the hospital for some of those lower-acuity cases, it opens up hospital capacity to expand higher-acuity case volumes."

Click here to access a recording of the roundtable discussion.

More articles on surgery centers:
ASC leaders on top priorities during COVID-19 pandemic
How to stay competitive in an evolving market — 5 insights for ASC leaders
Getting ahead of outpatient trends: 5 best practices for migrating spine, total joints to your ASC

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