Question: How are shifting reimbursement rates affecting ASCs’ financial stability and case mix?
Editor’s note: Responses have been edited lightly for clarity and length.
Sean Hayes. President of the American Pain Consortium (Carmel, Ind.): While shifting reimbursement rates have been more favorable in some instances, the bigger risk lies in the shift in payer policies. Payers may offer higher headline rates, but those gains can be offset by arbitrary reimbursement policies and administrative processes. Increased denials, complex billing requirements and extended payment cycles all add to the operational burden. ASCs often face rising administrative costs in efforts to manage these challenges, which erodes overall financial stability. However, ASCs with strong payer relationships, a demonstrated added value to the community and expertise will rise to the top, thriving through these challenges. These centers will be better positioned to navigate the complexities of reimbursement while others may struggle or fail due to the financial and operational pressures.
Sarah Malaniak. Administrator at Peakpoint Flatiron Surgery Center (New York City): The case mix at ASCs is significantly influenced by shifting reimbursement rates. As reimbursement rates decline, ASCs are strategically adjusting the types of procedures they offer to maintain financial viability. This often involves prioritizing higher-paying procedures, which can help offset the lower reimbursement rates for other services. For example, ASCs might focus more on orthopedic and cardiovascular procedures, which typically have higher reimbursement rates compared to other types of surgeries.
Additionally, the shift towards value-based care models is playing a crucial role in shaping the case mix. Value-based care emphasizes quality metrics and patient outcomes, which means ASCs must carefully select procedures that align with these goals. This can lead to a more selective case mix, where procedures that have better outcomes and higher patient satisfaction are prioritized.
Moreover, regulatory changes and updates from CMS are also impacting the case mix. For instance, CMS’ 2025 updates include changes in payment rates and covered procedures, which require ASCs to review and update their approved procedures at least annually. These updates often encourage ASCs to perform more procedures in outpatient settings, which are typically lower cost compared to inpatient settings.
Overall, the evolving reimbursement landscape is driving ASCs to continuously reassess and adjust their case mix to ensure they remain financially stable while delivering high-quality care. This dynamic environment necessitates a proactive approach, where ASC Administrators must stay informed about regulatory changes, reimbursement trends, and advancements in medical technology to optimize their case mix effectively.
Wendy Paolucci. Business Administrator of Palms Wellington Surgical Center (Royal Palm Beach, Fla.): Medicare reimbursement rates for ASCs have historically lagged behind hospital outpatient departments leading to financial strain. While typically there are modest increases, they do not align with inflation and rising operational costs.
Payers and CMS are increasingly linking reimbursement to quality outcomes, rather than fee for service, requiring ASCs to invest in data tracking and quality improvement programs. The ASC must often invest in additional software and consultants to implement these requirements. While payers encourage more cost-effective care, complex procedures such as total joint replacement are moving towards the ASCs. ASCs may prioritize these procedures which could lead to a more specialized case mix.
ASCs must adapt by negotiating favorable contracts, optimizing case selection and implementing cost saving strategies to maintain stability in a changing reimbursement environment.
