The payer trends impeding ASCs today

ASC owners and administrators are finding it more difficult to obtain payment from insurers as companies change coverage policies. But the current strain could push insurers and ASCs to find common ground on caring for the entire episode of care more efficiently and cost-effectively.

Three big challenges facing ASCs today include more prior authorizations, denials and emerging financial models for care delivery.

More prior authorizations, more problems

Insurers across the U.S. are changing their policies to require prior authorizations for more procedures than in the past, which means more paperwork for the physicians and ASCs.

"One of the biggest issues we're seeing today with payers is added administrative work related to prior authorizations,," said Tina Piotrowski, CEO of Traverse City, Mich.-based Copper Ridge Surgery Center, who also sees a potential for a fluctuating payer mix attributed to "the Great Resignation," or more people across the country quitting their jobs and moving to health plans from the exchanges or Medicaid, which have low reimbursement rates.

Prior authorization requirements delay procedures since surgeons have to get approval from the insurance company before moving forward.

"These delays add cost to an already expensive system and delay necessary care, eroding the physician-patient relationship," said Adam Bruggeman, MD, of San Antonio-based Texas Spine Care Center. "The administrative burden related to delayed payment through increased requests for records does not currently have a solution, and we continue to work with payers to collaborate and ensure that this process is only used in cases where it is necessary."

Texas passed groundbreaking legislation this year related to prior authorizations after studies showed the process was wasteful and the authorizations were granted in 99 percent of the cases.

The policies also hinder needed care and treatment.

"Payers are trying to catch up with new cancer screening and surveillance guidelines," said Rajat Chander, MD, a gastroenterologist from Cary, N.C. "They sometimes require precertification for upper endoscopies or anesthesia."

Denials, denials, denials

Payers are tightening their policies to approve fewer patients for surgery and denying patients who previously would have been clear-cut surgical candidates. Surgeons worry denials delay needed procedures and worsen the patient's condition.

"I see payers as opportunistic," said Joe O'Brien, MD, a spine surgeon with OrthoBethesda in Maryland, and medical director of minimally invasive orthopedic spine surgery at Virginia Hospital Center in Arlington, Va. "They will deny care when they can, they will deny payment when they can, and they will provide poor contracts when they can. I'd love to see a future model where the payers were true partners with the patients and doctors."

Anesthesiologists are also seeing increased roadblocks to receiving pay. Mark Jamieson, MD, a partner at Los Gatos, Calif.-based G2 Anesthesia, said insurance companies his group contracts with have denied payments over easily fixable clerical mistakes. In one case, his team didn't check a box delineating physician care from nurse anesthetist care, and in the other the payer cited 'nonlegible' names on the anesthesia records.

"These are examples of nonpayment and delayed payment for contracted physicians," said Dr. Jamieson. "There are thousands more stories on noncontracted physicians and payment denials."

Emerging financial models

Traditional payer contracts operate as fee-for-service, but those contracts have become unsustainable in some cases as insurers are only willing to make small pay increases, if they increase rates at all.

"A careful review of reimbursement shows that fee-for-service is a steady march to the bottom without a foreseeable end," said Dr. Bruggeman.

Bundled payments aren't much better for ASCs. While some surgery centers have successfully crafted bundled payment contracts with payers, many lack the data management infrastructure to negotiate toe-to-toe with insurers. The standardization of best practices and outcomes is easy for some procedures, like total joint replacements, but harder for spine surgery since there are so many factors dictating favorable outcomes.

"[Bundled payment model] paradigms, as they currently exist, are hampered by dependence on diagnoses-related groups that currently are not adjusted for procedure-specific and geographic variation or individual conditions," said Kern Singh, MD, a spine surgeon at Midwest Orthopaedics at Rush in Chicago. "The future of these payment models will likely incorporate input from surgeon experts to stratify bundled reimbursements by patient comorbidity burden, complexity of care, geographical variation and elective vs. nonelective conditions."

Dr. Singh sees a trend toward specialization that will allow for greater standardization of outcomes and efficiency while also decreasing costs. Dr. Bruggeman has a similar perspective, taking bundled payments to the next step of managing population health from nonoperative treatment through postoperative care.

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