6 Tactics for ASCs to Survive in a Single Dominant Payer Market

Andrea WoodellDirector of Managed Care at Regent Surgical Health Andrea Woodell discusses six tactics for ambulatory surgery center leaders to survive in a marketplace with one dominant payer.

Director of Managed Care at Regent Surgical Health Andrea Woodell discusses six tactics for ambulatory surgery center leaders to survive in a marketplace with one dominant payer.

1. Develop a strong relationship with the payer.
Surgery center leaders should develop an excellent relationship at multiple levels within the insurance company. If the ASC does not have a designated managed care director, the administrator should be the point of contact for provider relations, while the scheduler can develop a relationship with the payer's preauthorization department. The ASC's medical director should also connect with the payer's medical director to establish and reinforce the surgery centers clinical excellence.

"If they don't like you, they won't help you," says Ms. Woodell. "However, within all those relationships the surgery center should not lose site of the bigger picture, which is getting paid more. In addition ensure claims are adjudicated within payer guidelines to avoid costly recoupments creating ill will within the payer towards the center.

2. Bring quantifiable cost data to the negotiating table.
When entering into payer negotiations, provide objective documented cost information from your center. Go beyond the basics of providing invoices for implants. Have discussions regarding costs incurred to upgrade and maintain the physical plant. Including items such as new lights for operating rooms, HVac or a new laser to add additional specialties that are currently seen at the hospital.  

"If the dominant payer is not being equitable and covering costs, you can work with your local ASC association while respecting the confidentiality of the agreements," says Ms. Woodell. "You can still have general conversations if they are not allowing procedures to be done in the outpatient setting. Demonstrate how the ASCs are trying to broaden the scope of cases and relocate them to an outpatient setting.

3. Strive to be the best.
Become the best clinical provider and show payers you are also achieving the best outcomes, highest patient satisfaction, employer preference and compliant Medicare reporting. If you can work with a large employer to provide better care than others in the marketplace, make sure the insurance company knows this preference.

"A great way to garner the payer's attention is by having strategic employer groups advocate on your behalf," says Ms. Woodell. "The payer's customer is the company paying their premiums."

The employers want their employees traveling a shorter distance, receiving better outcomes, recovering more quickly and missing fewer days of work. The decreased risk of infection and strong patient satisfaction at the ASC will also bolster employer preference.

"Get employers to advocate on your behalf. Surgeons can develop those relationships," says Ms. Woodell. "It's not just the workers compensation recipient, but all employees needing healthcare."

4. Become the exclusive provider in your market.
If your group can lock up a specialty within a certain geographic area, including key physicians, and provide good outcomes, you have more leverage to negotiate better rates with the dominant payer.

"If you have proven outcomes for a unique specialty in the area, you can work with payers for a better rate," says Ms. Woodell. "But your facility must have the ability to objectively document better outcomes, quicker return to work and higher patient satisfaction. Just saying these things doesn't translate into improved reimbursement."

5. Find the right location. If you are developing a new surgery center, the ideal location would be somewhere without significant ASC penetration. If you are locating or acquiring an ASC  in a saturated market, don't expect to see significant rate increases.

"If you are able to achieve any type of geographic isolation, that should be used to your benefit in negotiations with the dominant payer," says Ms. Woodell. "I've seen single specialty groups in  competitive markets show they reduced subsequent office visits and achieved better outcomes successfully negotiate higher rates with notoriously difficult payers. This comes from having excellent clinicians and documentation."

However, also understand how you are contributing to the single-dominant payer issue in the market. If you are negotiating good rates with the dominant payer, you'll need to negotiate higher rates with other payers in the market, which can negatively influence the non-dominate payers' growth.

6. Choose your partners carefully.
It's especially important in markets with one dominant payer to choose physician and administrative leaders who can positively influence your organization. This is also true for hospital and management company partners.

"Their leadership will greatly influence your ability to work with dominant players," says Ms. Woodell. "If you're looking for a hospital partner, chose one that has market penetration or a smaller hospital system leveraging geographic exclusivity."

Physician leaders should be well-respected within the community with a reputation of clinical excellence high patient satisfaction

"Payers don't want to work with a group that is generating patient complaints," says Ms. Woodell. "You also want to work with physician leaders who can advocate on the surgery center's behalf. They need to calmly and persuasively articulate the ASC's needs at payer meetings."

More Articles on Surgery Centers:
What do ACOs Really Mean for ASCs? Q&A With Ken Arvin of Sheridan healthcare

25 Statistics on ASC Payor Mix

10 Surgery Centers With Charity Care Programs

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