Commercial payers driving cases to ASCs; orthopedics most primed for growth

A growing number of commercial insurers are revamping policies to push providers and patients out of the hospital and into ASCs, where procedures can be performed at a lower cost.

Prior to the COVID-19 pandemic, UnitedHealthcare adopted a policy that restricted sites of care for some nonurgent surgeries and was projected to save beneficiaries $500 million in 2020, according to The National Law Review. Since November 2019, the payer reimburses only for surgeries performed in hospital outpatient departments if the setting is medically necessary based on the acuity of the patient.

Anthem, which has 40 million members across 14 states, followed suit in an August 2020 clinical utilization management guideline that limited the use of HOPDs. According to Anthem, the use of outpatient hospital surgical facilities are medically necessary if the procedure is of a level of complexity that it cannot be safely performed in a less intensive setting or "the individual has clinical conditions which may compromise the safety of an office-based procedure," such as conditions that require enhanced anesthesia monitoring, medications or prolonged recovery, or where the patient is at an increased risk for complication because of severe comorbidity.

Last year, Empire BlueCross BlueShield in New York also updated its policy. As of Jan. 1, 2021, the insurer's commercial plan members need a medical necessity review to have certain procedures performed in an HOPD instead of an ASC. The policy relates to a range of specialties, including orthopedics, gastroenterology, ophthalmology and gynecology procedures.

"We feel that Empire BCBS's new site of service policy is a logical progression in the ongoing transition of surgical care toward the high-quality, lower cost setting of ambulatory surgery centers," Jon Van Valkenburg, president of the New York State Association of Ambulatory Surgery Centers and executive director of Upstate Orthopedics Ambulatory Surgery Center in East Syracuse, told Becker's ASC Review. "If health plans can direct patients to a clinically appropriate setting that saves money for patients and employers without any compromise of clinical outcomes, why wouldn't they? This decadeslong volume shift has recently accelerated, and we expect it to continue to fuel the growth of ASCs in New York and throughout the country."

In 2019, more than 1.2 million hip and knee replacements were performed in the U.S., a number expected to steadily increase over the next decade. About 90 percent of joint replacements for privately insured individuals in 2018 took place in hospitals.

As outlined in various studies, the potential savings of moving total joint replacements to surgery centers is significant, with the cost of treatment being about 40 percent less in an ASC compared with a hospital setting. On average, outpatient total joint replacements cost $11,677, with inpatient surgery costing $19,361, according to research from New York City-based Hospital for Special Surgery and Philadelphia-based Rothman Orthopaedic Institute.

With these savings top of mind in the move toward value-based care, UnitedHealth Group projected that migrating half of routine total joint replacements from hospitals to ASCs could yield $3 billion in annual savings — $2 billion for privately insured individuals and employers and $1 billion for Medicare beneficiaries and the federal government.

Currently, only 48 percent of common ASC procedures are performed at surgery centers as opposed to HOPDs. However, given the potential savings, ASCs are anticipated to perform 68 percent of orthopedic surgeries by the mid-2020s, according to the American Academy of Orthopaedic Surgeons.

New payer policies are expected to accelerate the move to the outpatient setting in the coming years, in addition to increased patient demand, minimally invasive surgeries and the effects of the pandemic. According to the AAOS, most of the outpatient growth over the next decade will be in orthopedic surgery, followed by ophthalmology, gastroenterology and pain management.

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