1. Check private payors’ methodology. “There are some private payors who haven’t kept up with Medicare changes,” Mr. Ashby says. A lot of them are still using Medicare groupers for ASCs, even though Medicare has been phasing them out. CMS’ move to a revised payment system allows for some substantial increases over groupers.
2. Renegotiate rates with payors. Private payors may be willing to move away from groupers or to raise rates simply because they have not been updated for some time. “As a general rule, private payors pay 20-30 percent above Medicare,” Mr. Ashby says. However, ASCs don’t have to worry about renegotiating rates if the contract is based on a percent of Medicare, because rates should rise automatically.
3. Be prepared for lengthy negotiations. Renegotiating rates with payors can take a full year to complete. “There is a lot back and forth,” Mr. Ashby says. “You send a rate proposal and then they send a counter-proposal.” However, these negotiations only involve an amendment to the contract rather than involve changing the basic terms of the contract. You should open negotiations every few years, but some plans refuse to do it annually.
4. Give per-diems enough work to be happy. If ASC volume falls, the hours some per-diem employees work will also fall. Many of them expect to work a certain minimum number of hours and if they don’t achieve that, they might seek work at a competing facility. Since workers have different minimum numbers of hours in mind, you should get an idea of what the minimum is for each of them. “Some are happy with only a few hours, while others would get a little grumpy about the same level,” Mr. Ashby says.
5. Follow each surgeon’s cost per case. Using physician preference cards and OR schedules, you can calculate the cost per case for each physician and present the data to your surgeons. “It’s an intensive process but an effective way to help make physicians cost-conscious,” Mr. Ashby says. Physicians will respond to peer-to-peer comparisons. The ASC needs an effective tool to combat the vendor representatives’ efforts to convince surgeons to order high-cost items.
Learn more about Audubon Surgery Center.
Read more best practices to improve profitability:
– 10 ASC Best Practices From 10 ASC Physicians
– 4 Core Things ASCs Should Benchmark
– Case Study: 6 Successful Ways Washington State ASC Increased Profits
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.