5 Goals for Surgery Centers in 2013

2013 will bring inevitable changes to the surgery center industry: the introduction of mandatory quality reporting in late 2012, planned cuts to governmental physician payments at the beginning of the year, and most likely the increase of joint ventures, mergers and acquisitions. Joe Zasa, managing partner with ASD Management, discusses five goals surgery centers can aspire to over the next year.

1. Complete quality reporting requirements. Mandatory quality reporting for ambulatory surgery centers began on Oct. 1, requiring all Medicare-certified ASCs to start reporting quality data G-codes or face future Medicare payment reductions. As of Oct. 1, ASCs must report data on the following five quality measures: patient burn, patient fall, wrong side/site/patient/procedure/implant, hospital admission/transfer and prophylactic IV antibiotic timing.

Starting in 2013, surgery centers will be required to report an additional two measures: safe surgery checklist use in 2012 and 2012 volume of certain procedures. This means surgery centers must start collecting quality data immediately if they are not already. Because 2013 requires surgery centers to report data based on activities conducted in 2012, surgery centers should make sure they are using safe surgery checklists and have some kind of system to capture surgical volume data.

ASCs that do not successfully report data to the Medicare program by the specified 2012 deadlines will see their payments reduced by 2 percent in 2014. Mr. Zasa says this potential payment reduction — and the importance of proving quality care in the outpatient setting — means a focus quality reporting is absolutely necessary for ASCs in the coming year. "We [at ASD Management] have been preparing for this for two and a half years, so it's going smoothly for us," he says. "But we're hearing that not all ASCs are seeing it go so well."

2. Prepare for ICD-10. ICD-10 will kick off on Oct. 1, 2014, according to a recent change by the Department of Health and Human Services. Starting on that data, anyone filing a claim with an insurer or government health program must use a new diagnostic coding system that increase the number of codes from 14,000 (under ICD-9-CM) to 68,000 (under ICD-10-CM). Under ICD-10, HHS believes providers will be able to document procedures with greater specificity, improving insights into the landscape of healthcare and making diagnoses clearer for payors. At the same time, the implementation of ICD-10 will likely not be easy.

Mr. Zasa says surgery centers should be preparing for the transition to ICD-10 now, even though it's not due for another two years. A transition to ICD-10 will require training for physicians, coders and business office personnel, probable upgrades to surgery center software and discussions with payors about any changes that will occur under the new system.

"You have to be budgeting for your people to attend seminars and classes," Mr. Zasa says. He also recommends setting aside money in case of payment delays, while payors adjust to the new system. "I think payors are going to struggle due to the voluminous nature of the change for them," he says. "It may be a real challenge."

3. Assess equipment needs and future capital expenditures. As 2013 nears, surgery centers should be looking at their equipment needs for the next year, Mr. Zasa says. These considerations are essential to accurately budget for the next 12 months. For example, if your multi-specialty surgery center plans to add ophthalmology over the next year, do you have the money to invest in new equipment for your center? The femtosecond laser, used to automate the principle steps of cataract surgery traditionally performed by hand, costs around $400,000.

Some specialties, such as spine, have equipment that requires a good amount of space in a surgery center, meaning you may need to make modifications to your physical plant prior to implementation.

Even if you're not considering the addition of a new specialty, you should assess the state of your current equipment to determine what you may need to replace in the next year. "Stuff wears out, and it's not atypical for a center to have to purchase a $100,000-$125,000 piece of equipment every year," Mr. Zasa says. "You're going to have capital expenditures coming down the pike, and you need to be prepared for that."

4. Invest in a third-party inventory management system. Mr. Zasa says surgery centers can cut costs significantly by focusing their attention on medical supplies, drugs and implants. He recommends investing in a third-party inventory management system that will help the ASC cut down on inventory on-hand and make sure the ASC is achieving the best pricing possible.

The system should also ensure that the surgery center is paying the prices listed in its vendor contracts. "These systems will pay for themselves, just by not keeping excess inventory on hand," he says. He adds that surgery center personnel should be trained in how to use the system to make sure the investment does not go to waste.

5. Market through the development of new ASC programs. In 2013, think about how to bring business to your existing physicians, Mr. Zasa says. Maybe that means developing new programs at the surgery center to help them build their business — adding a subspecialty, for example, or creating a physical therapy program.

He says the surgery center can also open on the weekends and provide seminars for physicians and patients. This exposes the surgery center to the community and lets the physician attract potential customers through education. "What can we do to help bring them business?" he says. "I think it's constantly finding new programs that will help build their patient base."

Learn more about ASD Management.

Related Articles on ASC Turnarounds:
5 Steps for Surgery Center Leaders to Reverse Unhappy Surgeons
SUV Hits Nevada Surgical Center in Carson City

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