5 Best Specialties for ASCs Now

1. Orthopedics. Rising ASC reimbursement for orthopedic surgery is transforming a sometimes break-even field into a money-making one, says William G. Southwick, president and CEO of HealthMark Partners in Nashville. For example, shoulder surgery used to be so underfunded it needed to be supplemented by income from other procedures, he says. Now, under Medicare's ambulatory payment classification system, reimbursement for orthopedic ASCs is expected to increase 100 percent.

Orthopedics, along with otolaryngology and general surgery, is on Mr. Southwick's list of specialties with enhanced value for ASCs. "These specialties are good for Medicare patients and are saving the healthcare system significant dollars," he says.


Jerry Ippolito, director of perioperative services business development at Southeast Anesthesiology, Charlotte, N.C., also puts orthopedics at or near the top of his list. "Orthopedics is a big winner under APCs," he says. "It has some lucrative cases, such as knee arthroscopies and it is not isolated to one payor population." For example, while total joint procedures focus on Medicare patients, "some of the most severe joint injuries happen to younger people who are on private insurance," Mr. Ippolito says.

2. Spine. Naya Kehayes, CEO of Eveia Health Consulting & Management in Issaquah, Wash., sees a great deal of promise for this specialty. "Spine is probably the newest, biggest most costly surgery done in the hospital that can be done outpatient," she says, but she cautions that ASCs should contact payors before deciding to add any specialty. "The biggest mistake an ASC can make is to buy all the equipment and then talk to the insurer," she says. Ms. Kehayes also sees great potential for ASCs that add cochlear implants, vaginal hysterectomies and some of the larger urology cases to their list of procedures..

Robert S. Bray Jr., MD, a neurosurgeon who runs a spine ASC in California, believes that "the future of spine surgery is in the ASC. "Spine will literally be a game-changer for ASCs in the next 10 years." He warns that ORs have to be larger than at the average ASC to accommodate spine surgery equipment and ORs have to be "ultra clean," so they cannot be shared with specialties like gastroenterology. And it takes a while to convince insurers that spine can be performed safely in an outpatient setting, he says.

3. Bariatrics. Along with spine and retina, bariatrics is on Mr. Southwick's list of specialties with growing value for ASCs because they have been slowly moving out of the hospital setting. Laparoscopic gastric band procedures, or lap-bands, are the only bariatic procedures that are typically performed in an ASC, he says. In contrast, he says gastric bypass surgery requires two or three days of hospitalization and costs a great deal more.

Mr. Southwick notes that the recession has dampened demand for lap-bands, which cost $10,000-$15,000 and are often paid by the patient out of pocket. But popularity is expected to rebound, because an estimated 5-7 percent of the population is eligible for bariatric surgery.

However, "keep in mind that bariatrics needs the whole array of services [for the ASC] to be a bariatric center of excellence," warns Ms. Kehayes. These include patient support services and features such as patient-lifting equipment, wide doorways, floor-supported toilets and sensitivity training for the staff.

4. Retina. Many ophthalmology ASCs limited to cataract surgery are adding retina surgery, which is usually handled by a separate subspecialty of some 1,300 ophthalmologists. These procedures are longer and more complicated and, until recently, were almost always done in the hospital.

While retina is now safe to do in ASCs, ophthalmology surgeons were discouraged from moving out of the hospital by low reimbursements that didn't cover costs in the ASC. However, under the new Medicare APC system, retina payments will rise 100 percent, according to Leo T. Neu III, MD, a retina surgeon who runs an ASC in Springfield, Mo. He says the average payment for a standard pars plana vitrectomy, the most common retina procedure, will rise 145 percent by 2011, to $1,540.

On the professional fee side, Dr. Neu adds that declining reimbursement for some retinal procedures will lure retinal surgeons out of the hospital and into the ASC. For example, Dr. Neu reports that the Medicare professional fee for a vitrectomy with epiretinal membrane peeling fell by 24 percent in 2008.

5. Pain management. Along with gastroenterology and ophthalmology, pain management is on Mr. Southwick's list of specialties with continued value for ASCs. "These specialties continue to be successful in ASCs, if expenses are managed carefully, even as reimbursements for them are cut," he says. While most of the cutting has been due to Medicare APCs, "private payors are beginning to reflect those cuts," he says.

Even though reimbursement to ASCs for pain management will fall 2 percent under APCs, volume is rising. A study conducted last year by KNG Health Consulting found that pain management was one of the few ASC-based specialties where most of the new procedures in centers were not simply moving out of the hospital. While 77-95 percent of new volume in orthopedics, ophthalmology and other specialties came from hospitals, the figure for pain cases was 15 percent. The new volume represents "significant changes in insurance coverage and advancement in the pain management clinical treatments [that] have evolved in the past seven years," the study said.

Contact Leigh Page at leigh@beckersasc.com.

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