Are payers finally coming around to total joints and spine in ASCs?

The payer relationship is still critically important for ambulatory surgery centers to survive. While some are providing transparent prices online or working with corporate partners to drive large employers and medical tourists to their low-cost facilities, the majority of ASCs are still using a payer strategy.

"For ASCs to remain successful in this challenging healthcare environment, it is critical that they develop strong relationships with payers," says President and CEO of Avanza Healthcare Strategies Joan Dentler. "As payers look to further reduce their costs, surgery centers are becoming an even more attractive facility to provide care to members. To not only remain in the payer's network but also receive appropriate reimbursement and coverage for 'new' procedures, such as spine and total joints, ASCs must closely track their financial outcomes data and be prepared to present this information during contract negotiations as supporting evidence for a fair and comprehensive contract."

Everyone in healthcare is looking for ways to lower costs, including payers. They're under pressure to provide service delivery at lower costs, which makes the ASC extremely attractive. Payers are notifying hospitals around the country that routine outpatient procedures approved for the ASC will no longer be reimbursed if they're performed in the hospital's operating room unless there is a medical reason the patient needs higher acuity care.

"This pressure is creating a strong incentive for many hospitals to build ASCs with or without their physicians," says Ms. Dentler. Additionally, payers have provided healthcare services through their own ASCs and outpatient centers for several years. Examples include Kaiser Permanente and Geisinger, and Highmark announced plans to build 10 outpatient surgery centers in western Pennsylvania and 2012. Could this be a new trend?

"While the model of a payer owning an ASC may present several challenges, including potential legal issues, it is a partnership model we can expect to see more of going forward," says Ms. Dentler. Additional partnership options include:

  • Direct-to-employer relationships
  • Risk-sharing agreements
  • Bundled payments
  • Preferred provider agreements


"Under one such [risk-sharing] model, an ASC may be paid a flat fee to become the preferred outpatient surgery provider for a group of payer members for a specific period of time, such as a year," says Ms. Dentler. "The ASC provides services as usual, but does not request reimbursement from the payer for services rendered. The surgery center's profits would be the difference between the flat fee and total cost to provide the services during the year."

Larger physician groups are more likely to become involved in risk-sharing arrangements for their ASC. Hospital-owned ASCs have also experienced some success with risk-sharing models, as an alternative to performing procedures in the hospital operating room. The flat fee in a bundled payment model includes the surgeon, anesthesia and facility fees as well as associated ancillary services provided during a defined period of time.

"There are several different types of bundled payment arrangement models, but they all serve to align payers and providers," says Ms. Dentler. "On a broad scale, we can anticipate payers have taken on a more active role in owning ASCs."

Over the next several years, these relationships will evolve further as payers become more accessible and transparent for patients in some regards, just as healthcare providers are becoming more transparent due to pressure from patients.

"Patients are taking an increased interest and involvement in their healthcare," says Ms. Dentler. "This is the result of patients gaining the ability to conduct more extensive research into their healthcare options as well as patients bearing more of the burden of their healthcare costs in the form of higher premiums, deductibles and copays."

Patients already know their healthcare providers have a good reputation and can deliver positive outcomes, and now they are more interested in the costs before undergoing care. As patients learn more about their insurance companies, they'll be able to make more educated decisions on their services.

"Payers will be called on by patients to provide information on outcomes and more concrete data on pricing — what insurance covers and does not," says Ms. Dentler. "With more insurance companies entering many marketplaces, patients will have a greater ability to change their insurance provider if the insurer fails to meet their needs."

But will patients change their insurance company over time? Currently, most data shows patients stick with their insurer even when switching could save them a considerable amount of money. They also become attached to their providers and may not want to switch insurers if their physicians aren't in the new network. However, this trend could be changing.

"More and more patients — particularly younger patients who move around a great deal — do not have the same loyalty to a single physician," says Ms. Dentler. "As a result, payers will need to work harder to keep their members. Those payers that are accessible and offer resources that provide education and increase transparency are more likely to retain members than payers who do not take the changing needs of their members seriously."

 

© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Featured Webinars

Featured Whitepapers