Department of Public Health threatens survival of independent ASCs through proposed DON regulatory changes

The Massachusetts Department of Public Health has proposed regulatory changes that may result in eliminating independent ambulatory surgery centers over time. The proposal would change the state's determination of need regulation in which surgery centers would be mandated to apply for a DON and be affiliated with an acute care hospital to make basic center changes. As the regulation currently stands, a proposed project is defined as:

•    Any capital expenditure
•    Substantial change in service
•    An original license
•    Transfer of ownership
•    DON-required service
•    Equipment
•    Any combination of these listings

The comment period for the regulation is open until Oct. 7 and Greg DeConciliis, president of Massachusetts Association of Ambulatory Surgery Centers, says the association is hopeful the Department of Public Health will work with MAASC.

"Our hope in this process is to have hospitals and ASCs on a level playing field," Mr. DeConciliis says. "Based on the overwhelming support ASCs have had, we hope the Department of Public Health will be willing to reach some sort of compromise."

Currently, the Department of Public Health is conducting hearings on the DON, which may serve to the detriment of surgery centers if a compromise is not reached and it comes to fruition as it currently stands.

"The Massachusetts Association of Ambulatory Surgery Centers does applaud the proposal lifting restrictions that prohibit freestanding ASCs from forming and developing in Massachusetts," says Linda Rahm, member and former president of MAASC. "The issue we have is that centers will be restricted in growth unless they bring in a hospital partner."

As healthcare transitions to value-based care, ASCs may be the optimal vehicle to achieving healthcare's triple aim — bolstering patient satisfaction and outcomes while truncating costs. A Healthcare Bluebook and HealthSmart analysis found ASCs can reduce outpatient surgery's cost by more than $38 billion annually compared to hospital outpatient departments, and ASCs can reduce a patient's out-of-pocket costs by more than $5 billion each year through lower deductibles and coinsurance payments.

Despite the money surgery centers can save the healthcare system, hospitals often dominate the marketplace and claim ASCs offer duplicate services.

"The legislation [as it currently stands] is counterproductive and will continue to drive up costs," Ms. Rahm notes. "It continues to put the hospitals in a position of power of directing cases where they still want them to go. It does not address the need of lowering costs that ASCs can provide for payers or patients."

Luke Lambert, CEO of Ambulatory Surgery Centers of America, says, "I think it is important for the Department of Public Health to defend the public interest in preserving quality and cost-effective care rather than limiting competition for hospitals."

MAASC published a regulatory alert citing the many cost savings and other benefits ASCs offer, noting the state's Health Policy Commission and the Center for Health Information lacks evidence illustrating how ASCs and the healthcare system could benefit from having a hospital partner.

Rather, the analysis found, "There is mounting evidence that increases in market consolidation are not typically associated with increases in the quality of care, and may even be associated with decreased quality."

In the state, hospitals are facing more competition as urgent care facilities and retail clinics flood the industry. An HPC report, "Community Hospitals at a Crossroads," found within the last eight years, the number of urgent care centers has increased from 10 centers to 85 centers, with retail clinics also growing from three clinics to 56 clinics. However, the number of ASCs operating in the state has decreased over time due to the DON moratorium. Additionally, the decrease is also partly attributed to hospitals purchasing existing ASCs and converting them into HOPDs.

As various studies have illustrated, a compromise may best serve the community and the entire healthcare system. MAASC ends its regulatory alert stating, "ASCs are not the problem — they are part of the solution!"

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