Rob Schwartz, executive director of the Colorado Ambulatory Surgery Center Association, discusses Colorado Medicaid's plan to save money by shifting Medicaid patients to ambulatory surgery centers.
Q: A lot of states are trying to cut Medicaid spending to help balance their budgets. How can ASCs help?
Rob Schwartz: The goal for states needs to be making Medicaid dollars do more for less. As the ASC industry has been saying for years, surgery centers are the low-cost, high-quality alternative to hospitals. Medicaid patients tend to go to hospitals for many procedures that could be done in outpatient facilities. If they used ASCs instead of hospitals, states could cut Medicaid funding without cutting services.
Q: What is Colorado Medicaid doing in this regard?
RS: Starting later this month, Colorado Medicaid plans to offer ASCs higher reimbursements for 11 selected procedures. The exact amount has not been announced yet and this is part of phase one of a program, which could be expanded to cover more outpatient procedures. Physicians will be asked to send patients to surgery centers for these specified procedures, but they will not be required to do so.
Q: What are the procedures that will be initially covered?
RS: The four procedures that can be discussed at this point are treatment for metacarpal fracture, repair (primary, open or percutaneous) of ruptured Achilles tendon, arthroscopy rotator cuff repair and arthroscopy knee surgery with menisectomy.
Q: What sort of savings would the state realize from this?
RS: We calculate that if Medicaid patients went to ASCs for a set of 50 outpatient procedures, the state would save millions of dollars. It is hard to put an exact number on it because there are so many variables. In addition to lower reimbursement rates, the state could also realize savings from fewer readmissions due to infections.
Q: How was this program created?
RS: About two years ago, the Colorado Ambulatory Surgery Center Association began having talks with the Colorado Department of Health Care Policy and Financing, which runs the Medicaid program. The department took the lead on this and has made it a high priority.
Q: Did this require any legislation?
RS: No legislation was involved. It was totally a regulatory change. It involved shifting budget dollars mainly to pay for the higher reimbursements. But legislators are interested in this program. The house majority leader, for example, is about to tour an ASC and then get briefed by the association. ASCs are getting a higher profile in the legislature.
Q: How will Medicaid patients be directed to ASCs?
RS: The state Medicaid office will send out a bulletin to providers alerting them of the opportunity to send Medicaid patients to ASCs. However, redirecting appropriate Medicaid patients to surgery centers is going to take a while. It will require new referral patterns.
Q: How are hospitals responding to the program?
RS: Colorado hospitals were not opposed to the plan. Two hospital representatives sit on CASCA's board, including a representative from HCA, which owns several surgery centers in the state. In addition to physician-led ASCs, hospital-led ASCs and HOPDs will be eligible for the program.
Q: What do ASC administrators and physicians think of this?
RS: We have been preparing them for this. CASCA has sent out notices to members over the past year, explaining what we are doing. For valid reasons, many ASC administrators and physicians were skeptical. Medicaid payments have not been great. But now they have heard more about the state's plans, they are intrigued.
Q: How many ASCs do you think are going to participate?
RS: I try not to predict. A potential sticking point is the reimbursement rate. ASCs are going to ask themselves, "Can we do this and be financially viable?" ASCs would have to measure appropriateness of patients.
The larger issue is the state's fiscal health. Everybody is going to have to sacrifice a little and collaborate. If not, we're going to see an implosion. Then there would be a lot of pain for taxpayers and for Medicaid patients. For this work, it's going to require a partnership among all the players.
Q: What is the next step?
RS: The state will be evaluating what kinds of patients are using this channel, how many physicians and ASCs are involved and how much money is being saved. If the program is successful, it will broadened to include other procedures, perhaps starting next year.
Q: Do you know of other states that are doing this?
RS: The Washington Ambulatory Surgery Center Association, where I am also executive director, has been exploring this approach with senior leadership in the Washington State Health Department, which oversees the state Medicaid program. They recognize that this would produce serious savings for the state. They are working on a preliminary list of procedures to include. Hospitals are not as collaborative as in Colorado because WASCA does not have as close a relationship with hospitals in the state.
My impression is that this is not happening in other states yet. We have not talked about our plans with other ASC associations, because we did want to upset the apple cart with Colorado Medicaid. But I have kept my ear to the ground and I have not heard of anything like this in other states.
Learn more about the Colorado Ambulatory Surgery Center Association.
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