The fight between ASCs and payers used to come down to rates. From authorization delays that strand patients in need of surgery to anesthesia reimbursement that treats fixed coverage like a variable cost, ASC leaders say the pressure now runs deeper than annual contract negotiations.
Editor’s note: Responses have been lightly edited for clarity and length.
Question: What payer behavior is costing your ASC the most right now, and what are you doing about it?
Ray Brown. CEO of Lake Lucien Surgery Center (Maitland, Fla.): The payer behavior costing our ASC the most right now is not being transparent in contract negotiations. We are developing contracts with full risk care organizations on cash pay models in response.
Brian Fornataro. Administrator of Mountain Surgery Center (West Orange, N.J.): The biggest challenge is the constant delay and denial. Delay tactics are being weaponized by insurance companies, and it’s making the billing process very frustrating. Having to make very needy patients hold off on very necessary surgery is very frustrating to not only us as a provider, but disheartening to the patient who is just looking for someone to help them. Seems more and more insurance is becoming a game of “How can we deny patients proper care, today?”
Megan Friedman, DO. Chair and Medical Director at Pacific Coast Anesthesia Consultants (Los Angeles): The biggest challenge is that payers continue to reimburse anesthesia as though it is a variable cost tied to individual cases, while ASCs must staff anesthesia as a fixed coverage infrastructure. As more complex cases move outpatient and workforce shortages persist, that gap continues to widen. Our response has been to focus on operational discipline: efficient scheduling, predictable block utilization and close partnership between ASC and anesthesia leadership to ensure resources are deployed where they create the most value for patients and the center.
Patrick Magallanes. President and CEO of Steindler Orthopedics (North Liberty, Iowa):
One of the biggest challenges for our ASC is that payer reimbursement is not keeping pace with rising operating costs. While our ASC continues to deliver high-quality orthopedic care at a significantly lower total cost than hospitals, many payers are pressuring ASC fee schedules by limiting annual increases to levels below inflation and imposing increasingly complex quality and reporting requirements without corresponding reimbursement increases. As a result, our ASC’s margins are being compressed by escalating labor, benefits, implant and supply costs, while hospital outpatient departments continue to benefit from substantially higher reimbursement levels.
Our response has been to take a data-driven approach to payer negotiations. We are actively demonstrating the value we provide through superior quality outcomes, high patient satisfaction and lower overall costs of care. By leveraging objective performance and cost data, we have had some success making the case for reimbursement rates that appropriately reflect the quality, efficiency and value our ASC delivers to patients, employers and health plans.
Raghu Reddy. Chief Administrative Officer of MiOrtho Surgery Center (Southfield, Mich.): The payer behavior costing our ASC the most right now is not one single issue. It is the combination of no rate increases, inconsistent authorization behavior, delayed payments and claim denials that do not always align with clinical or economic reality. We are tightening our case-level financial review before scheduling, and we continue to focus on payer negotiations and expense reduction to boost our bottom line.
Leiv Takle Jr., MD. CEO and Owner of Takle Eye Group (Griffin, Ga.): The biggest challenge is payers expecting ASCs to absorb inflation indefinitely. Reimbursement has not kept pace with rising staffing costs, implant costs, drug costs and compliance burdens. At some point, that model becomes unsustainable.
We are addressing this by renegotiating contracts, scrutinizing every service line for profitability and ensuring payers understand that ASCs remain the most cost-effective site of service for many procedures. Fair reimbursement is essential if independent ASCs are going to continue expanding access and lowering healthcare costs.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
