The ASC payer landscape in 2021: 6 administrator insights

Six ASC administrators from California to New Jersey discuss the payer landscape in their area and what they expect in the next year.

Note: Responses are lightly edited for clarity.

Lynn Winter, RN, BSN. Administrator of Advanced Surgical Care of St. Louis (Florissant, Mo.): The payer landscape for our ASC is very poor. The payers continue to provide low allowable [charges] along with high deductibles. Often the entire allowable goes to the patients' deductible, and since the patients often are not in a position to pay the day of surgery, the number of patient responsibility aging claims continues to grow. Patients must pay their premiums to the payer, and in turn the payer applies the allowed charges to the patients' responsibility. For the payer it is, more times than not, a win-win. For the insured it is costly, and for the ASC it means low to zero reimbursement.

I do not see this getting any better in the future unless the payers are held accountable for their actions.

Kris Sabo, RN. Executive Director of Pend Oreille Surgery Center (Ponderay, Idaho): I anticipate that the payer landscape will continue to improve into 2021 and beyond. Contributing factors include COVID; removal of procedures from the CMS inpatient-only list; and the insurance company's motivation to send beneficiaries to a high quality, cost-effective site of care. Additionally, patients are contributing to the push to ASCs by stating loud and clear that they want options for their care. Patients willing to pay reduced cash rates and third-party administrators negotiating directly with preferred providers are catching the attention of commercial payers. I believe that we will have an easier time defending our worth to payers. This will ultimately lead to more realistic reimbursement because of all of the factors mentioned.

Dennis Simmons. CEO of Wayne (N.J.) Surgical Center: I think we are facing a unique opportunity during this pandemic with the payers to really show our stuff. Our Wayne, N.J.-based center was one of the only ASCs open in New Jersey after the governor closed down elective surgeries [earlier this year due to the pandemic]. We put a plan together to perform "essential surgeries," and we stayed open. We safely helped a large number of patients during that time.

We were also able to negotiate a small increase with one of the major payers during this time, as many patients were afraid to go to the hospitals. I still think this is the case, so we have a great opportunity to work with the payers on moving more surgeries to an outpatient setting. It's more cost effective, and the patients really like the same-day service.

Meredith Warf. Administrator of Mississippi Sports Medicine & Orthopedic Center (Jackson): We have been performing outpatient total joint arthroplasty several years in the ASC, so fortunately most commercial payers have been able to carve those procedures out of the contracts. We have seen a glimpse into what we believe the future holds as some payers now require a precertification to perform certain procedures in the hospital setting. The convenience and cost savings afforded by the ASC is highlighted now more than ever as total knee arthroplasty moved into the ASC space, saving CMS billions of dollars with one procedure alone, and we expect the same result with total hip arthroplasty in 2021.

We believe the future is bright for ASC contracting. As the ASC migration has only accelerated post-pandemic, payers seem ready to discuss strategies to make the ASC an excellent option for procedures such as lumbar fusions and cardiology. CMS publishing the goal of eliminating the inpatient-only list in a few short years has opened the door for many payers to consider the significant savings afforded in the ASC with better outcomes. Moreover, advancements in technology and data insight will help to redefine quality of care.

We believe the risk-sharing with bundled care will expand to include arthroscopy among other subspecialties, incentivizing multidisciplinary plans of care and patient communication throughout recovery.

Marie Yarborough, CASC. Administrator of Skyway Surgery Center (Chico, Calif.): I feel that the payer landscape is improving for ASCs. We have big insurance companies finally realizing the ASC's cost effectiveness, lower infection rate and better quality outcomes, thus passing new policies to cover procedures in surgery centers. We have CMS working toward creating policies that will improve our reimbursements and are advocating cases away from the hospitals. We have hospitals succumbing to our presence in the market. I feel the more this is being driven, the more valuable our services will become.

Becky Ziegler-Otis. Administrator of Ambulatory Surgical Center of Stevens Point (Wis.): Our payer landscape has demonstrated a shift with an increase in government payers. We have been performing outpatient joint replacements since 2010, and the surgeons have been gradually transitioning their patient population to the surgical center. With the local hospitals limiting elective surgery as a result of the COVID-19 pandemic, we have seen an increase in joint replacement cases which may have been more apt to have been done in the hospital environment previously.

We are also seeing more patient financial responsibility, which is not typical for the fourth quarter of the year. Usually patients have met their deductibles throughout the year; however the COVID-19 pandemic has forced many patients to put off care until the last quarter of the year and [they are] being forced to meet their deductibles. We have also seen a slight decrease in workers compensation cases, which could be attributed to the unemployment, again a result of the COVID pandemic.

I would anticipate the government payer shift to continue into 2021. Patients will need to have procedures performed, and word-of-mouth on the quality and cost-effective care provided by the surgical center will spread within the community, further pushing the transformation.

More articles on surgery centers:
10 recent ASC leadership moves
Virginia ASC takes infection prevention to new level — 3 insights
Surgery Partners goes all-in on cardiology — 5 quotes on its quarterly performance 

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