How the increase in Medicaid patients is affecting independent ASCs

ASCs in some areas of the country are experiencing an increase in publicly insured patients, changing the way they are able to meet margins. 

Melissa Hermanson, DNP, RN, administrator of Vineland, N.J.-based Ambulatory Care Center, joined Becker's to discuss how this issue has affected her center. 

Editor's note: This response was edited lightly for brevity and clarity

Question: How is the increase of publicly insured patients affecting your ASC?

Dr. Melissa Hermanson: So one of the things that is challenging in our particular area of the country is that we are in a particularly economically depressed area where we have a lot of Medicaid patients. We do take Medicaid — we don't have the luxury of not taking Medicaid patients and it's not a part of our mission or vision either, for that matter. Medicaid is highly based on Medicare fee schedules, so for example, if something's not covered by Medicare, then it will be covered generally at a very low rate by Medicaid unless you negotiate a higher rate, and sometimes that can be really challenging. 

But some of the more frustrating things that we're seeing are things like the lack of implant coverage by Medicare. Something like 10,000 adults are turning 65 every day, so we're going to see for some amount of time going forward this pretty high population of elderly people who are probably significantly healthier than in the past — living longer, but mainly healthier and viable for an outpatient setting. But if your mother trips and falls off the curb tomorrow and has to have an ankle repair, we can't afford to do it here because they're not going to be willing to pay for the plates and screws and everything else that has to fix her foot. So, of course, that gets pushed to the hospital. But the reality is that nobody can do it for what Medicare's willing to reimburse at this point, because their increases have not kept up with the cost of living and inflation. 

Q: How is this affecting patients?

MH: First of all, ASCs have a good reputation in terms of great customer service; we have high quality with low infection rates. People want to come here in our community, and if they've been here before for something else, and are looking forward to coming here, and then they find out that for economic reasons, they're not able to come here. That's pretty frustrating. And it's kind of hard to explain that away in a way that patients can understand. If Medicare wants us to be able to treat every patient equally and use the same implants and procedures and things that anyone else would have, as a Medicare patient, they have to be able to pay for some part of it.

Q: What do you think needs to be changed to fix this issue?

MH: It used to be that you don't go lower than Medicare, and most outpatient centers didn't take Medicaid because it wasn't viable for them. We need an increase in reimbursements across the board, but the other part is really learning how to negotiate with vendors and identifying places where they could be helpful in reducing the cost for implants. 

If you have a significant number of commercial payers and you're able to say to the vendor, "Look, we brought you 40 cases this month, maybe you'd be willing to make a discount" or something. The vendors are the only ones that we don't really see losing out on the deal in this equation. The vendors really don't have to negotiate anything lower than what they already are — so if you have a good relationship with your vendors and they're amenable, then you're able to do some negotiating.

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