ASC leaders say the pressure facing independent centers isn’t limited to reimbursement cuts, and that payer tactics that restrict network access and redirect referrals are gradually shrinking surgical volume.
Andrew Lovewell, CEO of Columbia (Mo.) Orthopaedic Group, told Becker’s that the ASC industry may be underestimating how payer strategies — including narrow networks, site-of-service steering and vertical integration — are “quietly eroding” surgical volume at independent ASCs.
“Reimbursement pressure is a major problem, but the loss of access and referrals is of grave concern,” he said.
Mr. Lovewell pointed to vertically integrated platforms such as UnitedHealth Group’s Optum, which can “control the physician, facility, contract and management fees” and build narrow networks that “cut out and suffocate competitors in their markets.”
He said these dynamics reflect a broader shift of payers and payer-affiliated organizations are increasingly acquiring physician practices.
Payer-operated practices accounted for 4.2% of Medicare primary care services in 2023, up from 0.78% in 2016, according to a study published in Health Affairs Scholar. Optum controlled 2.71% of the national primary care market by service volume, making it the largest payer-affiliated provider in the space.
This week, Bloomberg reported that Humana is in talks to acquire Sarasota, Fla.-based MaxHealth, a primary care network owned by private equity firm Arsenal Capital Partners’ Best Value Healthcare.
The American Hospital Association has also flagged the pace and structure of insurer acquisitions. The group says commercial health insurers have acquired roughly 40% more physicians than hospitals over the past five years. The AHA also contends that insurers often target more profitable specialties, and cites growing evidence that some insurers “strategically structure provider acquisitions” in ways that allow them to more favorably manage medical loss ratio requirements.
Mr. Lovewell also said some payers are adopting policies that penalize facilities when a patient receives care from out-of-network clinicians practicing inside an in-network ASC, even when the ASC itself has a contracted, predetermined rate.
Elevance Health finalized a policy that took effect Jan. 1 under which facilities could face an administrative penalty equal to 10% of the allowed amount for any facility claim involving a nonparticipating provider not in-network with Anthem Blue Cross Blue Shield commercial plans in 11 states.
A joint letter from the American Society of Anesthesiologists, the American College of Emergency Physicians and the American College of Radiology asked Anthem to withdraw the policy. The groups argued it would effectively push facilities to pressure independent physician groups to join Anthem’s network. They warned that reorganizing or replacing physician groups could jeopardize continuity of care and patient access to essential services.
“This policy is deeply flawed and operationally unworkable,” their joint statement said. “It effectively shifts Anthem’s network adequacy obligations onto facilities, holding them financially liable for the contracting status of independent physician groups — an area over which they have no control or infrastructure to manage.”
In December, 14 House lawmakers called on federal officials to investigate the policy, arguing the approach is anti-competitive and undermines the No Surprises Act.
The lawmakers argued that Elevance’s approach circumvents the independent dispute resolution process established under the No Surprises Act, where providers are winning about 80% of cases that reach arbitration.
“Rather than respond to this clear evidence by adjusting reimbursement to meet medical practice costs, Anthem has instead chosen a concerning path,” the letter states. “Anthem’s new policy attempts to bypass reasonable contract negotiations and IDR and effectively coerce hospitals — many of which are operating on razor-thin margins — to pressure physician groups into accepting unsustainable in-network rates.”
