McGuireWoods hosted a webinar titled "Key Business and Legal Issues Facing Surgery Centers" on Aug. 14 moderated by Scott Becker, publisher of Becker's Healthcare and partner at McGuireWoods.
Webinar panelists included Luke Lambert, CEO of Ambulatory Surgical Centers of America; Joseph Zasa, managing partner of ASD Management; Melissa Szabad, partner at McGuireWoods; Timothy Fry, associate at McGuireWoods; and Michele Satterlund, partner at McGuireWoods Consulting.
Here are 10 key ASCs trends the panelists discussed.
1. Growth of new ASCs remains slow, but more procedures are moving into the outpatient setting. Surgeons can now safely perform high acuity cases such as total joints and spine surgery at freestanding ASCs, especially as hospitals begin to take on risk-bearing contracts with payers. Over the past few years, CMS has added spine codes to the ASC payable list and in July announced the agency would consider paying for total knee and hip replacements in the ASC.
"ASCs are going to have to show, in a mathematical way, how we can be a more effective deliverer of care from a cost and quality standpoint," said Mr. Zasa.
2. Many ASC physicians are nearing retirement and the dynamics at surgery centers are changing. Opportunities exist for buyers within surgery centers where physicians planning to retire in the next five years currently perform 30 to 40 percent of cases.
"I don't see big gains in the total ASC growth, but there is an ebb and flow as some centers are older and some are younger and growing," said Mr. Lambert. "Even in the private market, you can find opportunities for new centers or to acquire existing centers and bring new surgeons on board."
3. ASCs offer a value proposition to buyers beyond hospitals and corporate partners. Investment firm KKR announced plans in early August to acquire Covenant Surgical Partners, and other large transactions such as Optum's acquisition of Surgical Care Affiliates in January show how valuable ASC chains can be.
4. The ASC market can still be good for lenders, as long as lenders understand the market and lend smartly. Factors that affect the lender's risk include ASC ownership, who operates the center and in-network status. "If you are a lender, get up to speed in the industry and particulars of the client so you can assess the risk," said Mr. Lambert. "There are thousands of ASCs that would make excellent clients."
Lenders typically require a personal guarantee from physician owners before the transaction.
5. ENT and orthopedics remain great specialties for ASCs because they produce higher profit margins than other specialties. However, surgeons may have a bigger impact on whether a specialty is successful; a surgeon who performs cases efficiently with high quality will benefit the center in nearly any specialty.
6. Specialties that are falling out of favor at ASCs include cosmetic plastic surgery and dental procedures. Patients typically pay in full for cosmetic plastic surgery and negotiate the price with their physician, and not all insurance companies reimburse for dental procedures in an ASC. Multispecialty ASCs may also have difficulty integrating OB/GYN procedures into their block schedules and workflows.
7. Pain management can be successful in ASCs, especially procedures like spinal cord stimulators. However, pain physicians still have the option to perform may procedures in office . "A lot of those procedures can be done in the office more efficiently and rapidly benefit the pain management physician," said Ms. Szabad. "It might not be the best fit depending on the group mix. There are also reimbursement issues, depending on the type of contract the surgery centers have."
8. In addition to spine and orthopedics, ASC owners and operators are investigating whether cardiovascular procedures would make sense in their facilities.
9. Bundled payments are becoming more common among healthcare providers, including ASCs. Bundles for higher acuity cases especially peak interest. "We are seeing more and more interest in bundles," said Mr. Fry. The challenge will be whether the ASC, anesthesia provider and surgeon can come together in a single bundle.
10. Nationally, policy makers are looking at new ways to increase access to healthcare for rural and underserved markets; ASCs could be a part of the solution. Policy makers are more willing to reconsider the certificate of public need laws on a state-by-state basis. "The tenor out in the national framework is changing to recognize, as access is such a significant issue, that we have to give COPNs a second thought and think about how ASCs fit into all this," said Ms. Satterlund.
Whenever COPN rules are loosened or removed, there is a boom in the market with new ASC growth. Anesthesia providers also play a role to increase access in rural area. CRNA scopes of practice are evolving state-by-state, with many rural states allowing CRNAs to practice at the top of their licenses.
Each panelist gave their best piece of advice for ASCs going forward.
1. Surgeons should decide whether a case goes to the hospital or ASC or office. Make sure your surgeons are bringing all appropriate cases to the ASC and make it easy for them to do so, said Mr. Lambert.
2. Hire and promote strong leadership at the center. "Are your staff still interested in the facility? From a leadership standpoint, is the leadership doing what is really best for the center or are they doing what is best for the individual? Is there complacency in the center?" said Mr. Zasa. "The leadership should send a cohesive message throughout the facility and identify bumps in the road from a leadership standpoint."
3. Focus on compliance. "Make sure you're implementing and adhering to a compliance plan and creating a culture of compliance so people know you're welcome to that," said Ms. Szabad. "That will help head off a lot of crises ASCs often have to deal with.
4. Double-down on what your surgery center does well, especially with the uncertainty as to how the federal government will proceed with healthcare legislation. Regardless of what happens to the ACA, the government will continue to go after fraud and abuse. "It's the ASC's ability to be the lower cost vehicle that emphasizes to payers, patients and physicians the value proposition. We continue to see that as a place where ASCs could drive value," said Mr. Fry.
5. Stay involved in local and national advocacy efforts. "We don't know where everything will end up with Congress, but a lot of policies are being made at the state level. Stay involved with the regulatory boards," said Ms. Satterlund. "You never know when a policy will be put forward that could impact your well-being."