How ASCs can capitalize on a $15B opportunity driven by complex surgical procedures

Revenue in the ASC market is projected to hit $43 billion in 2021, up from $28 billion in 2015, according to a September report from Bain & Co. That growth represents a $15 billion financial opportunity for the nearly 6,000 surgery centers in the U.S. 

According to Nader Samii, CEO of National Medical Billing Services, centers that take on more profitable, higher acuity procedures will grab bigger pieces of that pie. During a Dec. 3 webinar sponsored by National Medical Billing Services and hosted by Becker's ASC Review, Mr. Samii was joined by Scott Allen, vice president of managed care contracting, in discussing how ASCs can strengthen their margins by incorporating new complex procedures in orthopedics, spine and cardiology.

In 2015, ASCs accounted for 44 percent of orthopedic procedures, 7 percent of spine procedures and 4 percent of cardiology procedures. By 2021, about 68 percent of orthopedic cases and roughly a third of cardiology and spine cases will be done in ASCs, according to data Mr. Samii shared. Those numbers are good news for surgery centers looking to increase their margins.

"These procedures pay dramatically higher on a cash-per-case basis," Mr. Samii said. "From an overall margin perspective, [they're] much more profitable, too, than a lot of the cases that have historically been in surgery centers that are lower reimbursing."

Over the past few years, an increasing number of total knee replacements have migrated to ASCs, spurred by commercial payers providing reimbursement for such cases. This movement is likely to increase dramatically due to Medicare's recent decision to add these cases to the ASC-payable list for 2020. And, for certain orthopedic procedures, ASCs could see estimated reimbursement of anywhere from $4,000 for tendon repair to $20,000 for a total wrist or elbow case.

As for the 145 centers offering minimally invasive spine surgery today — up from only a few dozen about four years ago — reimbursement could range from $4,000 to $20,000.

"You'll see certain spinal cases performing even better than that from a reimbursement perspective," Mr. Samii said. "These are real needle-movers."

Compared to orthopedics and spine, cardiology is newer to ASCs. Over the last few years, insertion and removal of pacemakers and defibrillators have moved to the ASC setting, and in 2019, CMS added 12 cardiac catheterization procedures to the ASC-payable list. In 2020, an additional six stenting and angioplasty procedures will be eligible for Medicare payment in ASCs.

While various business models like the hybrid ASC and office-based lab have emerged in this arena, what's consistent is the solid reimbursement, Mr. Samii said. A catheterization could get around $2,000 in estimated reimbursement, but other procedures have higher figures attached; for instance, estimated reimbursement for insertion of a permanent defibrillator is nearly $40,000.

However, Mr. Allen cautioned centers will only see the reimbursement they hope to get if their contracts are set up properly.

"The reimbursement looks to be there, but if you're an eye center that wants to bring in orthopedics tomorrow, the reality is that your contracts are probably not designed for that sort of reimbursement — so you might not receive that estimated outcome," said Mr. Allen.

He shared three ways ASCs can make sure their contracts are in good shape:

1. Get organized. When trying to capitalize on complex services, ASCs should begin with organizing their managed care contracts, according to Mr. Allen. Ensuring that complete contracts are on file, including anything that would be important when it comes to finalizing reimbursement, is half the battle. Once that's done, centers should analyze the contract language and what it dictates for every part of the revenue cycle process, as well as any clinical requirements so the payer wouldn't find any issues during an audit.

2. Be comprehensive. ASCs should accurately account for the full case, developing an understanding of how much the primary code and full case pays with implants, modifiers and code combinations. It's also crucial to identify the contract's multiple procedure logic, which determines how the payer will adjudicate multiple procedure codes in a single case. While the Medicare standard is 100-50-50, other payers may limit lines and reimbursement on those lines.

3. Provide solid information. Develop an informational packet for the payer that shows exactly what's not making sense currently in terms of reimbursement, but also what could happen with the right rate in place, Mr. Allen said. For example, if a center wants to hire a spine or cardio physician, including that physician's information and case data in negotiations is very powerful.

"Everyone's familiar with the leverage point of migrating to a lower-cost setting, but to have data to back that up and show how many cases can potentially migrate, and who those providers are, that's even better," he said.

At the end of the day, Mr. Allen said, these exhaustive preparations will be crucial for ASCs looking to capitalize on the $15 billion opportunity in front of them.

For a recording of the webinar, click here. To download the presentation slides, click here.

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