12 Important Questions to Ask Before Changing Anesthesia Care

As ambulatory surgery centers look for ways to maintain and grow their bottom line, more centers are changing their anesthesia care services to access more revenue. On the surface, the financial reward for modifying anesthesia services can be very compelling; however if ASCs do not do their homework, there could be some unintended long-term implications.


The decision to change anesthesia care, or any ancillary service, is one that should not be taken lightly, says Mark Casner, CEO of aisthesis (formerly Safe Sedation), a provider of anesthesia service solutions to ambulatory, hospital, and office-based surgery practices nationwide. Small adjustments to anesthesia services can significantly influence an ASC's operations and relationships with patients.


Providing anesthesia in-house, rather than contracting anesthesia care services, is a trend that many ASCs have considered adopting. "I think a lot of groups hear they can set up their own anesthesia company and reap huge profits, and they take this information as gospel," says Mr. Casner. "We find many didn't stop to ask some of the critical questions that need to be asked. This isn't necessarily difficult to do, but you have to [answer these questions] before you launch" such a company.


Mr. Casner and John Kutsch, CFO of aisthesis, identify 12 critical questions surgery centers need to ask themselves before changing their anesthesia.


1. How will this change impact our patients? Changes to anesthesia care services can deter patients from visiting a center initially or returning for a second procedure, particularly if anesthesia becomes an out-of-network service.


"We find greater awareness in the patient population when it comes to deductibles, co-pays and the consequence of being in- or out-of-network," says Mr. Kutsch. More often, patients are asking about network coverage prior to scheduling their procedures, demonstrating that they understand the prohibitive expense of having out-of network medical procedures. These inquiries also suggest patients may be reluctant to receive treatment in a facility if the anesthesia care is not within their network.


2. Do we have the financial resources available to support a change in care? When planning new anesthesia services, ASCs should secure resources to pay for the anesthesia providers. Centers creating their own anesthesia group may need to pay their providers for a period of time before they receive any reimbursement for service, regardless of whether the group includes anesthesiologists, CRNAs or a combination of the clinicians. This assumes that payor contracts have been secured for the new entity.


"Typically it is going to be 90 days or longer before ASCs see some meaningful reimbursement, but in the meantime [centers] have to pay these providers," Mr. Casner says. "Several months of increased payroll can be expensive and cause cash flow issues." Cash flow issues can be compounded if a center has not considered the possibility that payment for services may go directly to patients, rather than the surgery center. Reimbursement for services could end up in the hands of a patient before an ASC if the center does not participate with the patient's insurance provider.


3. How will the dominant insurance carriers respond? Connecting with the larger insurance companies in your market is an important precursor to developing a pro-forma for new anesthesia services, says Mr. Casner. "The insurance providers will help you understand whether they will allow you to do so, and the ins and outs of not participating."


Offering out-of-network anesthesia care can deliver higher reimbursement rates; however, billing and collecting for service may be more difficult. Mr. Casner suggests that centers ask whether non-par services require additional documentation and if claims for these services could be delayed.


4. Do we have and will we maintain sufficient volume to justify the investment? "How variable is the volume of your center? Project out one, two, three years from now," says Mr. Kutsch. "If you're going to go for the maximum profit now, and bring in a captive group, how does that tie your hands in the future if that volume changes dramatically?"


5. Have we considered the regulatory issues? It is critical to identify any legal issues that may impact your anesthesia care plans, such as Stark and self-referral laws, especially for centers bringing anesthesia in-house.


"It does require a bit of legal due diligence," Mr. Casner says. "Might you need to form a separate professional corporation?" State regulations need to be explored when there is common ownership between the center and the ancillary provider.


6. How will this impact our patient volume? As Mr. Kutsch explained in response to question one, ASCs must determine the potential impact new anesthesia services will have on patients and their willingness to have higher out-of-pocket expenses.


Mr. Kutsch recommends that centers consider the following questions: "Have we potentially reduced the number of patients that choose to come back, or have we pushed them to other centers or providers, because of the collections processes we had to follow to chase that higher margin?"


7. How might fluctuations in patient volume change the profitability of our practice? Understanding the influence patient volume can have on an ASC's overall profitability is very important. "If volume were to change in a practice for any reason — competition, economic reasons, decreased quality, etc., — will we start losing money because of our new anesthesia arrangement?" says Mr. Casner. "Should we consider a plan that allows us to only pay for the anesthesia care service we use or need?"


8. How might this impact our administrative resources? Offering anesthesia services requires administrative resources, whether those resources are coming from an ASC's existing administrative staff or an outside party.


If a center brings anesthesia in-house, many administrative personnel could be affected, including the business office, human resources and the quality/accreditation team. "Centers need to consider the steps that are necessary to ensure the staff they employ can handle the expanded workload, says Mr. Kutsch. "Ask yourself: Do we have the right practice management and billing software to effectively capture the anesthesia encounter and rapidly release claims?" he says. "Do we have the staff to effectively collect for anesthesia?"


9. How well do we know who we want to partner with? ASCs should put extensive time and effort into learning about the anesthesia providers they are considering as partners.


"What is their track record?" Mr. Casner says. "You should talk with their references. You're going to want to check out if these guys really know what they're doing. Bigger does not necessarily mean better, but experience does count for something."


10. Do we have a plan for addressing vacation and sick time for anesthesia providers? When an ASC hires anesthesiologists, these providers will expect a certain amount of vacation and sick time just like any physician or staff member. The surgery center will want to have a plan for how to address providers taking time off.


"Do you have a provision for filling in for those people when they're on vacation?" asks Mr. Casner. "You either need to have more providers or you have to get locums coverage, and has the pro-forma included this cost in addition to recruitment and turnover? You have to go understand the cost of activity that up until now has been invisible and handled by the traditional anesthesia firm that serviced the center."


11. Have we considered the impact of global billing? ASCs should consider what might happen in a few years if the government decides to go with global billing for ASCs much as it has with DRGs in hospitals. "There are some insurers now already doing that," Mr. Casner says. "How then will you allocate those dollars? Whereas before you might be making a profit [with anesthesia], now that might become a cost issue."


12. Do we think this model is sustainable for a long period of time? "If you set up a model where you believe you can operate in a non-par environment and keep up additional margins, can that the model be sustainable over a long enough period of time to justify the expense of setting up another practice?" Mr. Kutsch says. "We advise our clients to look long-term and think through all of the issues that can impact the center."

Learn more about aisthesis.

Related Articles on aisthesis and Anesthesia:

Aisthesis Named Sponsor of 18th Annual Ambulatory Surgery Centers Conference

American Society of Anesthesiologists Meets With Secretary Kathleen Sebelius on Drug Shortages

Antibiotics Most Likely Cause of Allergic Reactions During Anesthesia

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