There are more outpatient surgeries annually in the United States today than ever before, and the race is on among the nation’s 5,500-plus ambulatory surgery centers to capture as much patient volume as possible.
During the past 25 years, same-day surgical volume has surged and now makes up 58 percent of all procedures performed today — a jump of almost 10 percentage points from just a generation ago. According to Agency for Healthcare Research and Quality research, there are about 17 million total surgeries in the United States annually, with only 42 percent now occurring in an inpatient setting.
And with the U.S. healthcare system in the coming years continuing its transition away from a fee-for-service payment model and toward one based on value, the migration of surgical cases to an outpatient setting is only expected to grow: By 2020, a full 60 percent of all surgeries are expected to be performed same day, according to 2017 Health Industry Distributors Association research.
Advances in technology, anesthesia and minimally invasive techniques will only further accelerate this outpatient transition. Is your ASC well-positioned to compete for patient volume amid all of these changes? Here are three areas to consider when putting together your strategy:
Payer agreements can provide a critical source of volume for outpatient surgical facilities, as patients are more likely to find an ASC when it has a contract with their insurance carrier. The out-of-pocket costs are stated upfront and are almost always lower than those incurred at an out-of-network facility.
But pursuing new payer contracts is not recommended for the uninitiated. Negotiating these agreements properly requires a background in financial analysis so that all related costs and carve-outs can be determined. It’s also important that whomever you pick to negotiate contracts on your ASC’s behalf is knowledgeable in common payer tactics that can delay payments and disrupt cash flow.
Reimbursements for identical procedures can vary dramatically — even within the same market for a single commercial payer. An Ambulatory Surgery Center Association (ASCA) study found that the price range for cataract surgery in Charleston, W.Va., was between $2,700 and $8,700.
Obviously, a big reason for this dramatic price variation was where the procedure was performed — whether it was at an ASC or a hospital outpatient department. But it wasn’t the only reason. While the professional fees associated with these cataract procedures were relatively constant, more than one-third of the 35 facilities ASCA analyzed were above or below the average — and undoubtedly due to contract negotiations.
Today, more and more ASCs are making multi-million-dollar investments in robotics and other advanced clinical technology to improve outcomes and better serve patients. But, unfortunately, these opportunities often are never fully realized, because centers do not support these investments with the right marketing efforts.
When it comes to marketing, you get what you pay for — or, rather, what you don’t pay for. Marketing your facility’s new cutting-edge technology can help fill your waiting room with patients and help recoup your investment more quickly than without. ASCs should also emphasize the convenience of outpatient surgery, as well as enhanced safety protocols and lower infection rates, when compared to a traditional hospital setting.
ASCs often want to know exactly how much they should spend on marketing. The answer? It depends. A recent Deloitte survey of chief marketing officers found that healthcare companies typically spend 9percent of company revenue on marketing. The CMOs interviewed for the survey also indicated that they expect their marketing budgets to increase by an average of 13 percent in 2018.
Surgical device and case pricing should play a leading role in any patient acquisition strategy. For example, determining whether there’s a vendor option for implants can prevent centers from having to pay out-of-pocket when there are cost overruns.
It’s important to have a case cost review process in place to determine if the patient should be responsible for any non-payable implants/procedures and to relay the out of pocket responsibility to the patient prior to the procedure.
For workers’ compensation and out-of-network carriers, centers can contact the adjuster and/or rep and try to pre-negotiate reimbursement for the implants. For additional information, review 5 tips to Improve ASC Implant Payments.
When negotiating a contract, show payers theoverall value ofany premium services and technology along with their associated costs so that the center can be reasonably reimbursed. It’s beneficial to provide cost examples (implant invoices), as well as the expected volume of the procedures to be performed for the carve-outs you are requesting. Implant reimbursements should also exceed the invoice price to cover costs like taxes as well as shipping and handling, which can soar in high-volume centers.
Start the payer negotiation process as early as possible, as it can take time. Typically, it takes about four to five rounds with a payer to finalize any agreement, so be prepared for what inevitably will be a long, drawn-out process. And always remember: Never accept the initial offer.