Chris Markford, administrator of the Orthopaedic Surgery Center of Clearwater (Fla.), shared his thoughts on the top reimbursement trends in the ASC industry.
Responses have been lightly edited for style and clarity.
Question: What reimbursement trends are you noticing in your market?
Chris Markford: I’m seeing greater interest in bundled programs with the facility as the responsible party. I believe one reason such a model is being pushed on us is so that we move away from a payment model that includes implant reimbursement. The payers are recognizing the fact that coverage for implants only leads to higher surgical costs. Forcing the facility to seek out less expensive options ultimately leads to overall savings for the payer. Ideally, the surgeon’s share of the bundle would be impacted by implant choice since he or she would have skin in the game. Building out those bundled models and having your top 20 cases priced out would help any facility be prepared for the eventual request.
In my market, I am seeing a trend of facilities opening up and practicing an out-of-network model that treats payer and patient differently. Many of us have been expecting that model to go away, but it seems to be as strong as ever, with new facilities opening up every year. Such practices are damaging for our industry, and unfortunately, the few bad actors have stained our reputation as a low-cost alternative to the hospital system. Some of the payers have begun bringing lawsuits to facilities throughout the country, and they should be praised for stepping up and stopping those ASCs that play outside of the rules and cheat the system for financial gain at the expense of our communities.
Q: Are payers becoming more willing to negotiate with ASCs in your market? What change have you experienced, if any?
CM: They have, because they recognize the savings potential of moving cases traditionally consigned to the hospital into the ASC when those cases can safely be performed. With the increasing move of joints, spine and cardio cases to the ASC, payers are willing to negotiate to receive the savings found in keeping those cases out of the hospital for multiday recovery. The payers are also showing an openness to cover Exparel in an effort to improve outcomes and reduce opioid dependence. If an ASC is performing total joints and using Exparel, then it is in their interest to immediately reach out to their contract manager and request a carve-out for its usage.
Q: What would the ideal payer mix be for your center? How do you strike a good balance?
CM: The most ideal situation would be cash-only. The amount of time and frustration spent on coding, billing and collections could all be alleviated if the patient, or their employer, simply walked in with an agreed-upon payment for services. Such a model would save everyone time and money. Unfortunately, the ideal is not the reality for most of us, so we are left working with the unique patient population in which our ASC resides. For us in Florida, we tend to have a higher Medicare population, and that can impact our overall numbers, especially when the "snow birds" come South for the winter. We also have an environment that makes auto and personal injury cases very lucrative, so a facility in Florida could do well if they have the right system in place to track and collect on those cases. For our friends in Alabama, they won’t see much more than Blue Cross Blue Shield when it comes to commercial payers, and BCBS knows they have control of that market and can keep reimbursement low. These examples point to the fact that the payer mix is different for everyone, but the ideal for everyone would be to have more cases paid out by your best contracts.
Q: How has the payer landscape changed in the last three years, and what are you preparing for in the future?
CM: I believe we will see more and more employers cutting out the insurance company middleman and dealing directly with care providers through a third-party administrator that is equipped to handle a patient population. The No. 1 insurer in our country continues to be private employers, and they are waking up to the fact that the major insurance companies have been inefficient at controlling cost and directing care to low-cost places of care like our ASCs. Call me optimistic, but I believe we are in the midst of a perfect storm that is going to result in a positive change regarding the cost and payment of healthcare services in our country. The current model is not sustainable, and smart people are waking up to that reality.
I see employers throughout our country instituting payment models that are benefiting all the invested parties, except for the major insurance companies whose focus has been on their own profits and not the healthcare savings their customers are expecting. The current system propagated by the major insurance companies have only led to higher costs, higher premiums and a dissatisfied population. If we are not careful, we will see the next generation of leaders actually viewing a single-payer system as the most logical option. The alternative solution of being instituted by private businesses is already happening, and ASCs across the country are perfectly fitted to meet their growing need.
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