New York BCBS policy change drives surgery to ASCs

Empire BlueCross BlueShield in New York updated its coverage policy this year to drive more surgical procedures to ASCs.

The policy was published Oct. 1 and went into effect Jan. 1. Empire commercial plan members now need a medical necessity review to have certain procedures performed in the outpatient hospital setting instead of an ASC.

"Empire BlueCross BlueShield is committed to being a valued healthcare partner in identifying ways to achieve better outcomes, lower costs and deliver access to a better healthcare experience for consumers," the payer wrote in the Oct. 1 announcement of its policy change.

The site of care review applies to a 33-page list of procedures, including gastroenterology, orthopedics, ophthalmology, auditory and nervous system procedures. There are 111 musculoskeletal procedures on the list, in addition to common procedures such as cataract surgery and colonoscopy.

Only procedures performed in the hospital outpatient setting are subject to the review; ASCs are not. The overall cost of care is typically lower for surgery centers than in hospital outpatient departments, and the move could be a boon for New York ASCs.

"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," said 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. "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."

The policy change could have other implications for the ASC landscape in New York as well. Hospitals are not supportive of the policy, which would require hospital-based physicians to direct patients elsewhere if surgery in the hospital outpatient setting isn't preapproved.

"I believe EBCBS's policy will be overwhelmingly good for the freestanding ASCs in New York as the hospitals — and those surgeons who utilize the hospital's outpatient departments — will begin to decant their outpatient volume and drive those cases to local ASCs," said Austin Cheng, CEO of Gramercy Surgery Center in New York City. "It seems this policy will likely drive a frenzy of transactional activity or, at the very least, increased affiliations between the hospital systems and ASCs, as these large health systems will recognize the need to align their outpatient strategy with the payers' strategy."

Helen Lowenwirth, CASC, administrator of East Side Endoscopy in New York City, thinks Empire is the first of many insurance carriers to enact policies driving cases to ASCs because hospital outpatient rates are so high.

"Not only will this direct more patients to ASCs, which are proven to provide high quality healthcare to patients with an excellent record of safety and positive outcomes, but will also result in lower cost to patients and the overall healthcare system given ASC reimbursements are on average 48 percent lower than HOPD rates," she said. "ASCs are well-positioned to meet the demand of these redirected cases, and if history is any indication, will exceed patient satisfaction for care received in alternate settings."

This could make New York an attractive market for new surgery center development. New York has traditionally been a tough market to break into for ASC chains and physician groups.

"I hope that this would provide a greater number of opportunities for ASCs in New York than previously afforded but it likely all depends on the response from the hospital systems to this policy," said Mr. Cheng. "Either way, I believe we are about to witness a clash of titans in the healthcare space in New York."


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