4 Specialties & Procedures to Consider Adding to Surgery Centers in 2013

Surgery centers should be looking to increase case volume and add lucrative procedures in 2013, and the time is ripe to consider several new specialties and cases — especially in the areas of orthopedics and spine. Here, three surgery center experts discuss four procedures that will move into the outpatient setting within the next year, as well as ideas for effective implementation.

1. Total joint replacement. Goran Dragolovic, senior vice president of operations for Surgical Care Affiliates, says his company has noticed increased interest and activity around total joint replacements in surgery centers. "There are now even indications that CMS is thinking about reimbursing for total joint replacement in the ASC setting," he says. "I'm referring to the daily briefing going back to Oct. 1, 2012. That is a strong signal or indicator of the directionality of this trend."

Along with CMS, he says more commercial payors are looking to negotiate contracts for total joint replacements in ASCs, as they recognize the opportunity for cost savings. He says the driver is a greater control over patient selection and recovery. "Initially, the chief medical officers of the payors were concerned that this type of procedure couldn't be done with adequate post-operative pain control in the ASC setting," he says. "Then publications were made about protocols on post-operative pain treatment, and ASCs have been very selective in taking the right candidates."

He says many surgery centers that already perform orthopedics should be able to bring in total joint cases from their existing partners. These centers should also be able to implement total joints without significant capital outlay. "The main issues will be implant issues that have to be addressed with the vendor," Mr. Dragolovic says.

2. Spine. Dan Connolly, vice president of payor contracting for Pinnacle III, notes commercial payors are increasingly adding commonly performed spine procedures to their grouper payment methodologies. "On one hand, this is good news," says Mr. Connolly. "It demonstrates that commercial insurers are progressively recognizing the efficacy of performing these procedures in the ASC setting — even though the procedures are not on the CMS ASC-approved procedure list. On the other hand, if reimbursement under your contract's grouper assignment is inadequate, the center will want to negotiate carve-outs for these procedures.

In his experience, reimbursement for spine cases can be lucrative even when under a grouper payment methodology. "Pinnacle III has added or is in the process of adding spine procedures to a number of the facilities we manage or consult with throughout the country. In the process, Pinnacle III is seeing some larger commercial payors grouping the more common spine procedures into their highest payment category," he says. "In some contracts, the reimbursement we previously negotiated for the highest grouper payment category was ample enough that a carve-out for the new procedures did not need to be negotiated."

However, Mr. Connolly adds, "With some payors, ASCs will need to negotiate carve-outs for the most commonly performed spine procedures. In addition, if looking at performing fusion and artificial disk replacement cases, you should expect to have to negotiate carve-outs for the primary and add-on procedures. Likewise, given the fact that some spine cases are implant intensive, if the center has not previously been successful in negotiating separate payment for implants, then a carve-out for implants is a must."

In some instances, a payor will only be willing to add spine cases to the center's commercial contract if an all-inclusive rate for each case type is negotiated. "If your ASC is required to negotiate all-inclusive rates, be sure your data accounts for all variable (staff, supply, and implant) costs prior to going to the negotiation table," advises Mr. Connolly. "This includes a solid understanding of the size, number, and frequency of use for each implant type and any extraordinary supplies associated with each case type." And there is the rub, says Mr. Connolly: "As many ASCs add these cases to their existing mix, they aren't properly equipped to negotiate prosperous at-risk arrangements." To combat this, Mr. Connolly recommends that the center  consider hiring a seasoned negotiator who has successfully negotiated at-risk arrangements and who will recognize and be better equipped to understand all the moving parts.

Alternately, facilities would be wise to refrain from performing at-risk cases initially and focus on those cases falling under fee-for-service arrangements. Workers' compensation cases are generally a great place to start, as workers' compensation in most states still reimburses on a fee-for-service basis for both surgical procedures and implants. That way, the ASC can assemble the necessary utilization data before attempting to negotiate all-inclusive case rates."

Mr. Connolly says while adding spine cases will require a capital outlay for your center, the added investment should not be overly painful for centers already performing orthopedics. "If you're currently performing orthopedic cases, chances are your center already has a good portion of the instrumentation and equipment necessary to undertake spine procedures," he notes. "However, if starting from scratch, you will want to complete a comprehensive feasibility analysis to demonstrate the costs and benefits associated with offering spine services. In addition, the spine surgeon(s) looking at bringing spine cases to the center should have 'skin in the game,' thereby maximizing the chance that the center will see a return on its investment due to the new surgeon(s) delivering the projected case volume." 

3. Robotics. Mr. Dragolovic says while it's still in the preliminary planning stages, robotic surgery may see a movement to the outpatient setting. Historically, robotic surgery has been performed almost exclusively in the hospital setting. "It's purely because of economics," Mr. Dragolovic says. "The cost of equipment and the disposables associated with robotic surgery make it cost-prohibitive." Facilities implementing robotic surgery must also be mindful of space; the equipment is generally large, meaning a small OR may not be appropriate for the investment.

Mr. Dragolovic believes robotic surgery may move into ASCs in certain markets where significant volume opportunities can be captured. Essentially, a surgery center would need a payor willing to offer a level of reimbursement that would create a feasible return on investment for the capital outlay. "If a piece of equipment costs more than a million dollars, you have to have adequate reimbursement at a significant volume," he says. He says this is possible because the reimbursement would still be less than the reimbursement at the local hospital, thereby providing meaningful savings to the payor.

4. Unicompartmental knees or hips. Joe Zasa, co-founder of ASD Management, says surgery centers could consider adding unicompartmental knees, hips and shoulders to an existing orthopedic program. He says it's important to implement these procedures in conjunction with recovery centers. "It's important that you don't transfer the patient to the hospital, so you work with recovery care centers and rehab centers that handle the patient after discharge," he says.

He adds that attaining the right pricing is crucial for unicompartmental knees, shoulders and hips. The procedures are Medicare-approved, but third parties pay so much for the procedures that pricing strategy and research are crucial. "Negotiate with payors and understand what they're paying at the hospital," he says. "They may be paying $30,000 to the hospital, and you can beat that price." He says while you should ideally build a program around these procedures with several dedicated physicians, reimbursement should be high enough to allow you to start with several cases a month.

Related Articles on ASC Turnarounds:
30 Statistics on Pain Management in Surgery Centers
8 Inexpensive Ways for ASCs to Boost Patient Volume
9 Ways to Increase Profit in Low-Reimbursement Specialties

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