Surgical Care Affiliates plans to add 20 ASCs with value-based growth strategy — 5 insights

Surgical Care Affiliates plans to add 20 ASCs to its portfolio this year, and value-based care is a key part of its growth strategy, SCA Chief Financial Officer Caitlin Zulla told CFO.

Five insights:

1. Deerfield, Ill.-based Surgical Care Affiliates has joint-venture partnerships with 215 ASCs, and about 60 percent of those have at least one value-based contract in place. SCA is currently focused on negotiating value-based contracts with insurance companies and Medicare, rather than large companies that self-fund their medical claims.

2. Each highly customized contract tops out at five years, maximum. Payers get back a portion of reimbursement if the ASCs don't meet cost and quality targets.

3. To maximize revenue on each case, SCA calculates the expected reimbursement and thoroughly evaluates the risk.

"Our revenue recognition process is complex to begin with, from [the financial planning and analysis] standpoint — we have to forecast what the procedures are going to be, who the payers will be and what bad debt there could be," Ms. Zulla said.

4. About 20 percent of SCA's net revenue comes from patients, who are assuming greater financial responsibility for their care.

5. SCA is part of UnitedHealth Group's health services business, Optum, which accounts for about one-third of UnitedHealth's revenue. However, UnitedHealthcare isn't always SCA's go-to insurer; SCA seeks the best risk-adjusted rates in each market.

More articles on turnarounds:
Yale New Haven's musculoskeletal ASC receives award
5 ASC trends to watch this year
Advanced practice nurses feel Florida's cold shoulder — 4 insights

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