As CEO of Ambulatory Surgery Centers of America, Luke Lambert helps to lead his company in developing and managing surgery centers. It makes sense, then, that he has an acute sense of why some surgery centers underperform financially. In a 2010 interview with Becker's ASC Review, he discussed trends in the ASC industry and gave advice on how ASCs should approach payors to renegotiate rates — a topic that is troubling many administrators as reimbursement rates continue to fall.
He recommended that ASCs go into the conversation prepared, armed with research on comparative pricing. "Prepare for a dollars and cents discussion," he said. "It is important to know what you are willing to accept in terms of reimbursement." He said entering into a bad contract could be more detrimental than continuing to operate out of network, so ASCs shouldn't assume that every in-network contract is beneficial.
"The best bargaining chip to bring to the table is a possible change of surgical venue to bring down cost," he added. "If you or your center's owners control where the cases are done, then providing [the payor] with a list of cases that can be moved to your center from some other high-cost venue can be a powerful lever in your negotiations."
Demonstrate the savings for the payor, he said, and you will be more likely to get higher reimbursements.
He said ASCs can also consider partnering with hospitals to gain more negotiating clout in reimbursement discussions. Hospitals pursue the relationship hoping to retain outpatient business. "Hospitals have become much more interested in owning surgery centers," he said. "Many of our centers have been approached by their local hospitals in the past year asking whether the centers are open to accepting them as investors."
If an ASC is considering a joint venture with a hospital, Mr. Lambert said administrators should look closely at the contract to make sure governance structures, profit distribution and strategic plans are aligned with their interests.
Mr. Lambert joined ASCOA in 1997, beginning as CFO and eventually becoming CEO in 2002. He has a broad background in finance, strategy and operations and has worked in international sell side equity research, venture exploration and reengineering business processes. He received his MBA from the Columbia Graduate School of Business and was among the first to earn the CASC designation in 2002.
Read more on notable surgery center leaders:
-ASC Leader to Know: Michael Weaver of Symbion
-ASC Leader to Know: Linda Peterson of Executive Solutions for Healthcare
He recommended that ASCs go into the conversation prepared, armed with research on comparative pricing. "Prepare for a dollars and cents discussion," he said. "It is important to know what you are willing to accept in terms of reimbursement." He said entering into a bad contract could be more detrimental than continuing to operate out of network, so ASCs shouldn't assume that every in-network contract is beneficial.
"The best bargaining chip to bring to the table is a possible change of surgical venue to bring down cost," he added. "If you or your center's owners control where the cases are done, then providing [the payor] with a list of cases that can be moved to your center from some other high-cost venue can be a powerful lever in your negotiations."
Demonstrate the savings for the payor, he said, and you will be more likely to get higher reimbursements.
He said ASCs can also consider partnering with hospitals to gain more negotiating clout in reimbursement discussions. Hospitals pursue the relationship hoping to retain outpatient business. "Hospitals have become much more interested in owning surgery centers," he said. "Many of our centers have been approached by their local hospitals in the past year asking whether the centers are open to accepting them as investors."
If an ASC is considering a joint venture with a hospital, Mr. Lambert said administrators should look closely at the contract to make sure governance structures, profit distribution and strategic plans are aligned with their interests.
Mr. Lambert joined ASCOA in 1997, beginning as CFO and eventually becoming CEO in 2002. He has a broad background in finance, strategy and operations and has worked in international sell side equity research, venture exploration and reengineering business processes. He received his MBA from the Columbia Graduate School of Business and was among the first to earn the CASC designation in 2002.
Read more on notable surgery center leaders:
-ASC Leader to Know: Michael Weaver of Symbion
-ASC Leader to Know: Linda Peterson of Executive Solutions for Healthcare