7 Points on How Surgery Centers Should Handle ACOs

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Jeremy Hogue, CEO of Sovereign Healthcare, an ambulatory surgery center management company based in Mission Viejo, Calif., offers seven points on how ASCs should deal with accountable care organizations..

1. Be proactive. ASCs offer high quality at low cost, both of which directly address two chief needs of an ACO, but don't be sitting by the phone waiting for a call from an ACO. ACOs are distracted by many other issues and once they do get to picking up the phone, they may ignore your ASC. "Go to the ACO and start a conversation," Mr. Hogue says. Sovereign Healthcare, which runs six ASCs, has been reaching out to ACOs in its two markets, Southern California and the Phoenix area. "We're not just enquiring," Mr. Hogue says. "We're actually going in and presenting." Sovereign is telling ACO planners "how we can help them solve their problems," he says.

2. Understand how an ACO ticks. In California, both hospitals and large physician groups are planning ACOs. It's important to remember that while they are not insurers, they have to think like insurers in order to succeed. "You're no longer negotiating with big bad Blue Cross; you're negotiating maybe with a group of physicians down the road," Mr. Hogue says. "But the ACO still has to shift [insurance] risk." It has to think like an insurer and make sure costs do not exceed premiums. The ACO can take risk in a number of ways, such as Medicare shared savings, private payor capitation or bundled payments.


3. Hospital-run ACOs have an agenda. When a hospital runs an ACO, it wants to widen its network, which involves reaching out to an ASC's specialists but not necessarily to the ASC, because it also does not want to reduce utilization of its own services. "The hospital's aim is to bring more patients in its system so that it can cover its fixed costs, such as running its own surgery center, imaging center or lab," Mr. Hogue says.


4. Ally closely with your surgeon-partners. Since ACOs want badly to sign up independent physicians, it's important for the ASC to ally closely with its surgeon-partners and other surgeons who use the center. Representatives of the ASC should be part of all discussions its surgeons have with ACO officials. Stress to the ACO that the surgeons and the ASC are one package.

5. Avoid exclusive deals. The ACO may offer a generous arrangement to the ASC's physician-partners, but the fine print may read that the surgeon can only use the hospital's facilities, including its ORs. That would leave the ASC out in the cold.

6. Think strategically. "More than anything, navigating these waters requires to think far more strategically than the average ASC management company is used to," Mr. Hogue says. "You can't just sit back and say, 'I want to get the most patients and the highest reimbursement.' You have to think about the long term."


7. Beware of rate creep. ASCs negotiating with ACOs are in danger of "rate creep," a slow slide in reimbursements. Mr. Hogue points to past problems contracting with large physician groups in California that take risk, which basically have the same role that ACOs will have. In this scenario, the ACO offers the ASC extra volume in return for lower rates. The ASC accepts the lower payments for this group of patients because it is getting new volume. Then, however, insurers that cover the ASC's existing patients also sign up with an ACO to take advantage of the discount. Forced to provide discounts for its longstanding groups of patients, the ASC starts losing a lot of money.


Learn more about Sovereign Healthcare.

Related Articles on ASCs and ACOs.

ACOs: What to Expect and How to Prepare

Should Specialists Join ACOs?

4 Initial Thoughts on the Relationship Between Surgery Centers and ACOs


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