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The payer landscape for ASCs — Key trends from Proliance Orthopedic Associates' Michael McClain

Michael McClain, executive director of Proliance Orthopedic Associates in Renton, Wash., discusses the big payment and reimbursement challenges for ASCs and key trends he anticipates for the future.

Mr. McClain will share his expertise as a speaker at the Becker's ASC 26th Annual Meeting: The Business and Operations of ASCs, Oct. 24-26, 2019 in Chicago. To learn more and register, click here. For more information about exhibitor and sponsor opportunities, contact Maura Jodoin at 

Question: What changes have you seen in payer coverage at your ASCs over the past few years? Are you anticipating any other changes for 2019?

Michael McClain: In Washington, we are seeing increasing pressure from payers to provide more bundled payment options, and requests to create partial bundles or agree to additional case rate options in ASC and clinic space. Many payers have a general willingness to expand services and reimbursement for total joints cases and spine cases, but reimbursement rates for non-surgical specialty care is being communicated as 'rate neutral' at best, and many payers are asking for decreased professional or global ASC rates in exchange for expended procedure coverage, to stay 'revenue neutral.'

We are also seeing smaller/independent payer groups struggling to compete with the larger payers, and increased pressure to consider narrow networks as well as hospital-aligned networks through ACO participation and/or bundled payment program participation.

Q: How are your centers dealing with the trend of higher deductibles and increased patient responsibility?

MM: Transparency with patients continues to help defer some of the angst, and ASCs still represent a value option for patients compared to hospital costs, however more patients are looking for longer term payment plans or options. While we have seen an overall increase in surgical referrals, we are also seeing more Medicare Advantage and Medicaid expansion programs that represent lower overall reimbursement, which when combined with longer payment plan requests from patients with HSAs and high-deductible plans, means accounts receivable is taking longer to recover. Patients are also asking lots more questions about what they can defer and ways to save money or stage procedures to offset the expense.

Q: As payers consolidate, and make acquisitions of healthcare providers, where do you see ASCs having the biggest opportunity to succeed?

MM: I continue to feel that the value proposition of high-quality, specialized care in a lower cost facility keeps ASCs at the table. The challenge is that more and more attention is being paid to the ASC space by both large healthcare organizations (hospitals and managed care organizations) which means increasing competition for truly freestanding ASCs. So, continuing to make the value proposition is key, and continuing to be open to new and creative endeavors with organizations that provide complimentary services will be key.

Q: Are your centers engaged in any alternative payment models and how do you expect APMs to evolve in the future?

MM: Proliance Orthopedic Associates, and our parent company Proliance Surgeons Inc., is heavily involved in the evolving alternate payment landscape as we work with multiple groups on developing models of bundled payment, shared savings and enhanced data reporting with our commercial and governmental payer partners. The challenge for all ASCs though is to be able to coordinate and report meaningful data beyond the day-of-surgery care, to truly outline the value ASCs represent.

Many larger health systems and multispecialty physician practices have historically been the only groups with the ability to aggregate data at the episode of care level (30, 60, 90-plus days postoperative), and it is that data which is of most interest to many payers. However, larger physician groups, like Proliance, are generally in a much better position to control postsurgical patient behavior — can offer extended office hours and call coverage, provide orthopedic urgent care access after hours, direct and track physical therapy and rehab, all with the goal of providing services that help maintain low hospital readmission rates — than many smaller freestanding ASCs.

So, the importance of obtaining data, be it anesthesia or surgical post-surgical complication information, as well as having some sort of strategic alliances to help capture and report that data, in my mind, will be key for ASCs as APMs expand. Big data is here to stay.

More articles on surgery centers:
3 key factors driving joint surgery to the outpatient setting
5 things to know about GI for ASCs
90 benchmarks to know on payer mix in ASCs


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