What do ACOs Really Mean for ASCs? Q&A With Ken Arvin, Esq. of Sheridan Healthcare

Ken Arvin, Esq., Vice President Ambulatory Services for Sheridan Healthcare, discusses the impact of accountable care organizations on ambulatory surgery centers and what administrators can do to prepare.


Q: How is ACO development impacting ambulatory surgery centers?

KA: At this point, very little. Few ASCs in the United States are participating in ACOs. ASCs currently participating in ACOs are located in major geographic urban areas with large health systems. ACOs are not yet having a major impact on most ASCs except ASCs associated with these very large healthcare systems. However, it is important to understand what the future holds as ACOs continue to mature and begin to effect ASCs more and more.

Q: What should ASC administrators know about ACOs as they begin to form around the country?

KA: I think at a minimum you have to understand:

•    What an ACO is;
•    Who will participate;
•    How will ACO development impact the ASC's relationships with its physician/hospital partners in the community;

An ASC on its own will normally not be looking at forming its own ACO. An ASC as a standalone entity will usually not be leading an ACO discussion. That discussion will most likely be led by the hospital or health system, or physician members associated with an ASC. I think the administrator has to be very in-touch with the ASC's hospital/physician leadership and understand their needs because those needs will have a direct impact on how the ASC participates in an ACO.

Q: When is it beneficial for ASC leaders to become part of the ACO discussion in their community? How can they ensure a seat at the table?

KA:
Many ASCs may not have a seat at the table. If you are an ASC and your physician/hospital partners do not want to participate with the ASC in the ACO, then it will be more difficult to become part of the discussion. We are in the infancy stages of ACO development, so you have to be aware of their development, but you also have to approach their development understanding the potential impact to their own ASC's needs.

Q: What is the potential negative impact ACOs could have on ASCs in different marketplaces? Is there any way to mitigate that risk?


KA:
If you are an independent ASC in a very large multi-hospital system community or an ASC in a small town dominated by one or two hospitals, the ACO development could potentially create a situation where an independent ASC is struggling to receive competitive reimbursement rates from third party payor contracts. Another negative impact ASCs may experience as ACOs expand is if a significant amount of an ASC's physician leadership joins an ACO with a hospital system that is a competitor with the ASC.

One way to minimize these situations is by strengthening the relationships between the ASC and its hospital/physician partners. The stronger an ASC's hospital/physician partners are as a group, the better the ASC.

Q: What advice do you have for ASC administrators facing ACOs in their market?


KA:
It depends on the situation. If you are a hospital-based ASC or a joint venture ASC, the administrator needs to learn as much as possible about the ACO. Open dialogue and communication with your hospital partners or physician. You have to be abreast of everything going on with your business. Administrators should understand the laws being implemented and what their physician partners plan for the future.

If you are not involved with a hospital system, determine whether your physician partners are pursuing an ACO strategy and if not, determine what strategy would best serve the ASC.

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