Increasing cost and challenge of running ASCs: 10 contributing factors

If it seems like with every passing year, it becomes more expensive and difficult to develop and operate an ambulatory surgery center (ASC), there's a reason why: it is.

Here are 10 factors that have contributed to the increasing challenge of running an ASC today.

1. Pay for reporting. To receive full Medicare reimbursement now requires ASCs to do more than just provide great care and outcomes. The Ambulatory Surgical Center Quality Reporting (ASCQR) Program is a pay-for-reporting, quality data program for the Centers for Medicare & Medicaid Services (CMS). Under this program, ASCs report quality of care data for standardized measures to receive the full update to their ASC annual payment rate. Failure to report lowers the payment rate from CMS. This penalty began with calendar year 2014 payments.

In order to report data, quality codes became required on Medicare claims. This brought about a change to the billing process. The use of quality data codes on an ASC's claims indicate that a facility is participating in the quality reporting program.

There are currently 11 measures which Medicare-certified facilities must report to CMS in order to avoid future Medicare payment reductions. For 2018, CMS is proposing to add three measures and remove three measures from the ASCQR program.

2. CDC requirements. In 2009, the Centers for Disease Control and Prevention included ASCs in its National Health Safety Network (NHSN) reporting. This requires ASCs to enroll and report on surgical site infections for certain outpatient procedures as well as tracking and reporting healthcare personnel immunizations such as flu vaccines.

3. State reporting. While rules that govern ASCs vary by state, most now require annual reporting, which may include information on patient demographics and outcomes.

4. Ever-changing CMS and accreditation regulations and standards. CMS regulations undergo regular changes, as do the standards of ASC accreditors (e.g., AAAHC, The Joint Commission, AAAASF). CMS and accreditation surveyors continue to closely scrutinize ASC operations and performance. Areas that have come under greater scrutiny in the past few years include infection prevention, medication management and the Life Safety Code.

ASCs are expected to adapt their policies and procedures to help ensure operations are in compliance with new rules and standards.

5. Growing patient responsibility. The growing number of high-deductible health plans has shifted more of the responsibility for the payment of healthcare services onto patients. This is affecting ASCs in a few ways. Patients are increasingly delaying elective surgeries; some patients are choosing to wait until closer to the end of a calendar year to undergo a procedure while others are postponing surgical services for longer periods of time. When procedures are performed, ASCs must employ strong processes to collect what patients owe. When money is not collected on the front end, the likelihood of collecting the balance declines, with collection efforts costing ASCs money.

6. Reduced implant coverage. A majority of payors now offer limited reimbursement on implants and other high-cost items that were once covered. This has reduced the profitability of many procedures, and left little room for error concerning use of supplies, staffing and OR time. A small mistake can turn a profitable procedure into a break-even or money-losing case.

7. Sequestration reduction. In 2011, as part of the Budget Control Act, CMS implemented an annual 2 percent sequestration reduction for Medicare providers. It is still in place today, with current laws maintaining it through fiscal 2025.

8. Perioperative nurse shortage. There is a significant shortage of perioperative registered nurses, brought on by an aging OR nurse population that is retiring or nearing retirement and a lack of perioperative training provided during higher education. This has created recruitment challenges and helped drive up salaries for perioperative nurses due to their high-demand skill set.

9. Technology turnover. The development of new technologies and rapid advances in existing technologies are forcing ASCs to spend more money on equipment. They are not only under pressure to purchase new equipment as a means to deliver cutting-edge care and remain competitive with other providers in their market, but ASC must replace old technology that becomes obsolete at a much faster pace than in the past.

10. Political uncertainty. With efforts to repeal and replace the Affordable Care Act stalled for the moment, there is tremendous uncertainty about how Capitol Hill will tackle the challenges facing healthcare. This uncertainty is creating angst amongst providers and causing insurance rates to rise, placing an even greater financial burden on consumers and providers.

But one thing is certain: Regardless of the direction healthcare takes, and the challenges they face, ASCs remain well-positioned to survive and thrive as lower-cost, high-quality solutions and will remain a focus for future policy.

Tyla Blom ( is senior consultant, operations, for Avanza Healthcare Strategies, which provides healthcare organizations with strategic guidance, with a focus on outpatient services and population health management. She has more than 25 years of clinical and operational experience.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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