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New ASC revenue sources via new reimbursement trends

There have been significant changes in the national ASC market. Over the last five years, it has been common for independent, physician-owned ASCs to be formed or reorganized with new physician investors. Additionally, older physicians who established centers in the 1980s retired, or existing partners’ practices were purchased by hospitals or other healthcare organizations. There has been a movement for hospitals and insurance companies to purchase many of these ASCs.

This content is sponsored by ASD Management

There are now over 5,500 ASCs nationwide, almost all in communities where the most active providers are affiliated with a freestanding or hospital based ASC. Due to these factors, growth of same store volume and revenue increase has slowed in many markets since recruiting new providers has been considerably harder.

Those in the ASC business have always looked to add cases to existing centers or reorganize ASCs with new service niches. These niches have been centered on new procedures being done by existing and new providers resulting from advances in technology, added procedures by Medicare and commercial carriers, recruiting dissatisfied providers from other ASCs and reimbursement trends with individual markets. This last factor has been fueled by a number of ASCs being bought by hospitals, so they can take advantage of the higher reimbursement offered to HOPD ASCs.

Fortunately, Medicare approved several new procedures allowing new specialties to use and get reimbursed in ASCs. As of January 2017, there has been a shift in Medicare reimbursement to include more invasive nephrology, cardiology and vascular cases, better reimbursed in an ASC than what has been traditionally reimbursed for an office-based procedure room or lab (OBL). Providers in these specialties have traditionally not been recruited by ASC owners, yet today they offer a new source of patients and same store growth for ASCs, and a new set of providers to target. Clearly, the reimburse ment change in January provides new opportunities for added growth to existing or new ASCs.

Based on the multitude of positive benefits associated with ASCs and the growth of OBLs, there is a logical transition and normal migration toward outpatient endovascular care. Following CMS approval for arterial endovascular interventions performed in outpatient centers in 2005, there has been explosive growth of OBLs and Vascular Access Centers (VACs) throughout the U.S. It’s estimated that over 700 OBLs are operating with approximately 25 new centers opening each month.

Several specialties can practice in the OBL and VAC setting the most common being interventional cardiology, vascular surgery, radiology and interventional nephrology. Procedure mix varies greatly, but most cases performed are interventions for peripheral artery disease, interventional radiology and dialysis work.

However, OBLs and VACs are limited in their scope of services. With very few federal and state regulations, they can be opened quickly and inexpensively as an extension of practice, and cases can be performed in a physician office with little or no modification to the facility. But, because they are not Medicare certified surgery centers, they can’t perform complex cases requiring certain levels of anesthesia, and this limits their scope of practice. The next logical step is the new hybrid CardioVascular Access Center that combines an OBL and ASC in one facility. This new hybrid can accommodate a more diverse range of services and additional specialties like orthopedic, general surgery, ophthalmology and pain management.

Growth toward outpatient care has also been accelerated by significant advances in minimally invasive vascular procedures and devices that enhance efficiency and safety of vascular procedures performed in the OBL and VAC. Almost all peripheral diagnostic and interventional procedures (from peripheral atherectomy to stenting and dialysis work like fistulagrams, thrombectomy and angioplasty) are performed in this setting.

New cuts in reimbursement are leading many nephrology practices to consider the financial, operational and legal viability of converting their VAC into an ASC. Dialysis vascular access services performed in OBLs and VACs experienced a dramatic overall reduction in reimbursement in 2017. This is due to CMS policy that requires services billed together more than 75 percent of the time to be bundled. As a result, the following new interventional CPT code bundles were developed, and are highlighted below showing approximate differences in reimbursement for certain services performed in an OBL or VAC as compared to the same services performed in an ASC setting.

A CardioVascular Access Center (CAC) can be set up as a brand-new surgery center in the same building as the OBL or VAC, or contiguous with the office (depending on state regulations and the configuration of the current facility). These services can also be added to existing ASCs as long as the providers of these services can be owners in the ASC. For a separate CAC, it is a requirement by Medicare to get certified, licensed and accredited as an ASC (and in some states to obtain a certificate of need [CON]). It is also necessary to remain an accredited OBL to access both reimbursement structures, which makes this model so attractive. Cases can be scheduled to best maximize reimbursement by operating as an OBL on certain days and an ASC on other days, again pending the state regulations of the ASC location.

Several presentations at the 2017 Outpatient Endovascular and Interventional Society meeting revealed that approximately 25 percent of OBLs fail, and almost half are struggling. This is primarily due to inadequate planning on the front end with a lack of understanding about the business and market dynamics, case volume implications, and the proper reimbursement mix for the center to make the venture profitable. Add to this
the dynamics of CMS changing reimbursement, and the trend toward multispecialty surgery centers and/or separate Cardio-Vascular Access Centers will continue its explosive growth.

Planning and implementing new services. Based on our 35 years of experience in ambulatory surgery center development/management, and understanding the trends in healthcare, we believe adding invasive cardiovascular procedures offers a growth opportunity for ASCs. They can be lucrative to an ASC if planned correctly and implemented by a tested ASC team. The proper approach to adding these services is to evaluate the potential success of selected cardiovascular procedures (includes invasive nephrology, fistula, cardiology and peripheral artery disease procedures). The approach includes evaluating local providers with an existing OBL that may be converted, or identifying providers in the selected specialties that are not already involved in an ASC. Also, an ASC must analyze the case mix, Medicare and private payer reimbursement for its specific zip codes as well as the local competition. An analysis of these data points can assist in forming the business plan, which will highlight the advantages of this model.

This evaluation enables physicians to properly analyze the financial impact of implementing cardiovascular access service into the ASC, or establishing a new CardioVascular Access Center which both maximizes the reimbursement and allows the possibility of adding other specialties to further stabilize and/or grow the business. A pre-development approach is essential prior to the opening of a new or converted center to ensure financial viability.

The cardiovascular services provided in an ASC with an office-based procedure room available offers a better experience to patients and physicians, lower costs to payers, and offers physician entrepreneurs freedom to operate and provide excellent patient care. Converting to this model widens the scope of practice and offers the ability to operate a specialized center for delivering innovative first class healthcare. With proper planning, a pre-development strategy and solid business plan, the CardioVascular Access Center is the next wave of delivering high quality endovascular, cardiology and dialysis vascular access therapy to patients.

Robert Zasa, MSHHA, FACMPE, is co-founder of ASD Management, a successful company that develops and manages ambulatory surgery centers for physician groups and hospital/physician joint ventures. Managing a stable team of ASC experts with depth and experience dating back to 1986, Bob has managed ASCs in over 25 states building his first ASC in 1977 at the Ochsner Clinic in New Orleans where he was an administrator for 7 years. Since that time, Mr. Zasa has developed two national ASC companies, taking his first company public when he was only 33 years old and his second with venture capital 10 years later. He and Joseph Zasa, JD, are Managing Partners in ASD Management.

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4 strategies for ASCs to succeed in a competitive marketplace from Dr. David Shapiro

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