CEO Eric Evans said that Medicaid patients make up a relatively small portion of their patient base.
“The vast majority of our surgical volumes are elected and are referred from a physician office, rather than originating from an emergency brand. We see very few Medicaid patients that have virtually no uncompensated or charity care,” he said in the call.
Surgery Partners is the third-largest ASC operator in the U.S. that oversees more than 160 centers and 4,600 affiliated physicians. Mr. Evans said that its ASC business model and emphasis on surgical specialties means that it inherently sees fewer Medicaid patients than traditional acute care hospitals, which have a more varied patient mix and treat a wider range of conditions.
“Our surgical facilities in general are small and focus solely on delivering outstanding surgical care for a handful of service lines,” he said. “This distinction is important to appreciate as our portfolio has significantly less exposure to policy shifts such as changes to Medicaid programs at the federal or state level, or legislative considerations for Medicare site-neutral payment policies.”
He added that less than 5% of Surgery Partners’ revenue is from Medicaid and associated state-based programs.
“Overall, we do not consider state-based reimbursements, changes in there more changes in the Medicaid to be a material headwind or even a significant headwind for us,” he said.
However, the company is still paying close attention to federal policy shifts.
“To be very clear, we’re tracking everything that happens on a state basis as well as at the federal level,” Mr. Evans said. “This is not a headwind for us because of the nature of our business being primarily elective and primarily referred to from [a] physician office.”
Dallas-based Tenet Healthcare, parent company of ASC giant United Surgical Partners International, expressed a similar confidence in a Feb. 12 earnings call.
“We’ve taken the opportunity over the past few years to create resiliency in USPI by making sure that the ambulatory surgery centers as a part of USPI are on freestanding rates,” Tenet Executive Vice President and CFO Sun Park said during the earnings call. “The Medicaid exposure is de minimus in that business, and that’s very helpful from that perspective.”
