Larry Trenk, the president of the N.J. Association of ASCs (NJAASC), discusses five major issues that will affect the future of N.J. ASCs.
1. Insurance companies want to cap out-of-network reimbursement rates. Historically, out-of-network ASCs in New Jersey have benefitted from very lucrative reimbursement levels. Out-of-network ASCs receive on average three times the reimbursement for being OON than in-network, and unsurprisingly, payors have responded to the high payments by filing lawsuits against OON providers, threatening in-network physicians who refer to OON facilities with termination of network provider agreements and attempting to require OON facilities to provide additional disclosure statements to patients who schedule services there.
The latest attempt to decrease out-of-network reimbursement comes in the form of caps on out-of-network reimbursement. "Blue Cross has been in the process of tying network reimbursement to a ceiling, and insurance companies are unveiling plans that tie OON network reimbursement of surgery centers to Medicare," Mr. Trenk says. "The ASC Association feels an urgent need to take a very aggressive stance." He says the association is engaging a lobbyist to work on its behalf to fight off the "perfect storm" of insurance companies against ASCs.
He says if the insurance companies are successful in curtailing or controlling the OON insurance level, the power will shift dramatically from ASCs to payors. If insurance companies gain extreme leverage over OON ASCs, Mr. Trenk predicts in-network ASCs will also be adversely impacted. "If the most they're going to pay you is a certain percentage of Medicare if you're OON, who's to say they're not going to pay the same thing for in-network?" he says.
Despite the battles occurring on a political level, he says ASCs must act in their individual best interests. "I can't in good conscience as president say you shouldn't negotiate a rate if it is in your best interest to," he says. "If individual centers need to negotiate an in-network contract that provides an individual level of stability, you have to make decisions that benefit your center." But while individual ASCs may be forced to contract in-network to avoid decreasing rates, he says the NJAASC should still fight to ensure that the balance of power doesn't unfairly shift [to the payors].
2. Codey Law amendment placing moratorium on new ASC development will slow ASC growth. A Codey Law amendment, which was issued in March 2009 and includes revisions to the N.J. anti-self-referral statute, also placed a moratorium on the issuance of new licenses to ASCs by the New Jersey Department of Health and Senior Services. Some exceptions include changes of ownership of an existing center, relocation of an ASC to within 20 miles or, with DHSS approval, entities owned in whole or in part by a New Jersey hospital or medical school.
But for most ASCs, the moratorium means no new development. "The moratorium and reimbursement issues are going to have a major impact on the future development of ASCs," Mr. Trenk says. "You may see some centers purchased by outside companies or a hospital that will present them with better leverage in terms of managed care contracts."
3. State introduction of bill to require regular reporting of infection control. Despite recent publicity over infection control issues in N.J. ASCs, Mr. Trenk says state ASCs should have no problem meeting future infection control reporting requirements. "The infection control issue came out of a study several years ago, and I think some of that data is a little bit skewed," he says. "There are always outliers no matter what market you're in, and we've been very progressive and attentive to infection control standards." N.J. ASCs are required to have an infection control consultant for licensure, and every ASC must be accredited — a process that also involves meeting stringent infection control standards.
Mr. Trenk says though the NJAASC has not yet seen the details on infection control reporting, he thinks New Jersey is "ahead of the game." While ASCs may not have been reporting their infection control data to the state, they have still been tracking data for personal benchmarking purposes, he says.
4. Competition over physicians may result in more hospital/ASC partnerships. The competition over physicians in New Jersey is fierce, Mr. Trenk says. The shortage of physicians relative to the number of ASCs and hospitals means facilities struggle to attract physicians and their lucrative referrals. Many hospitals have lost physicians to ASCs because of higher reimbursements, less demanding hours and an attractive investment opportunity. Because physicians are so instrumental in driving patient volume, an ASC or hospital that can't hold on to quality physicians is more likely to experience lower patient volumes and financial difficulties.
Mr. Trenk predicts ownership models may change over the next few years, though he's not sure exactly what form those changes will take. "This may make hospitals partner with more centers," he says. "If more centers are going in-network, those in-network patients that are going to the hospital might choose to go the surgery center. Hospitals will suffer as a result of that, so hospitals may choose to build relationships with centers."
5. NJAASC would like to expand membership by 50 percent over the next year. In order to push back against moves by insurance companies to cap out-of-network reimbursement rates, Mr. Trenk says the NJAASC has to make an effort to improve the reputation of ASCs in New Jersey. That means both educating the public on the benefits of ASC care and involving more N.J. ASCs in the state association. Currently membership sits at around 30 percent of all ASCs, a number Mr. Trenk would like to increase to 50 percent over the next year through an intensive and extensive membership drive.
He says the ASC association can play a major role in changing policies that negatively affect ASCs by inviting political figures to different centers and holding open houses to demonstrate the value of the ASC to the healthcare industry and to the communities they serve. That value can be best demonstrated if every ASC is committed to proving its commitment to patient safety, efficiency and financial savings. "We owe it to our membership to be visible and involved in what's going on, and we certainly need to make sure we are entrenched in any prospective regulatory guideline initiatives," Mr. Trenk says.
Learn more about the NJAASC.
1. Insurance companies want to cap out-of-network reimbursement rates. Historically, out-of-network ASCs in New Jersey have benefitted from very lucrative reimbursement levels. Out-of-network ASCs receive on average three times the reimbursement for being OON than in-network, and unsurprisingly, payors have responded to the high payments by filing lawsuits against OON providers, threatening in-network physicians who refer to OON facilities with termination of network provider agreements and attempting to require OON facilities to provide additional disclosure statements to patients who schedule services there.
The latest attempt to decrease out-of-network reimbursement comes in the form of caps on out-of-network reimbursement. "Blue Cross has been in the process of tying network reimbursement to a ceiling, and insurance companies are unveiling plans that tie OON network reimbursement of surgery centers to Medicare," Mr. Trenk says. "The ASC Association feels an urgent need to take a very aggressive stance." He says the association is engaging a lobbyist to work on its behalf to fight off the "perfect storm" of insurance companies against ASCs.
He says if the insurance companies are successful in curtailing or controlling the OON insurance level, the power will shift dramatically from ASCs to payors. If insurance companies gain extreme leverage over OON ASCs, Mr. Trenk predicts in-network ASCs will also be adversely impacted. "If the most they're going to pay you is a certain percentage of Medicare if you're OON, who's to say they're not going to pay the same thing for in-network?" he says.
Despite the battles occurring on a political level, he says ASCs must act in their individual best interests. "I can't in good conscience as president say you shouldn't negotiate a rate if it is in your best interest to," he says. "If individual centers need to negotiate an in-network contract that provides an individual level of stability, you have to make decisions that benefit your center." But while individual ASCs may be forced to contract in-network to avoid decreasing rates, he says the NJAASC should still fight to ensure that the balance of power doesn't unfairly shift [to the payors].
2. Codey Law amendment placing moratorium on new ASC development will slow ASC growth. A Codey Law amendment, which was issued in March 2009 and includes revisions to the N.J. anti-self-referral statute, also placed a moratorium on the issuance of new licenses to ASCs by the New Jersey Department of Health and Senior Services. Some exceptions include changes of ownership of an existing center, relocation of an ASC to within 20 miles or, with DHSS approval, entities owned in whole or in part by a New Jersey hospital or medical school.
But for most ASCs, the moratorium means no new development. "The moratorium and reimbursement issues are going to have a major impact on the future development of ASCs," Mr. Trenk says. "You may see some centers purchased by outside companies or a hospital that will present them with better leverage in terms of managed care contracts."
3. State introduction of bill to require regular reporting of infection control. Despite recent publicity over infection control issues in N.J. ASCs, Mr. Trenk says state ASCs should have no problem meeting future infection control reporting requirements. "The infection control issue came out of a study several years ago, and I think some of that data is a little bit skewed," he says. "There are always outliers no matter what market you're in, and we've been very progressive and attentive to infection control standards." N.J. ASCs are required to have an infection control consultant for licensure, and every ASC must be accredited — a process that also involves meeting stringent infection control standards.
Mr. Trenk says though the NJAASC has not yet seen the details on infection control reporting, he thinks New Jersey is "ahead of the game." While ASCs may not have been reporting their infection control data to the state, they have still been tracking data for personal benchmarking purposes, he says.
4. Competition over physicians may result in more hospital/ASC partnerships. The competition over physicians in New Jersey is fierce, Mr. Trenk says. The shortage of physicians relative to the number of ASCs and hospitals means facilities struggle to attract physicians and their lucrative referrals. Many hospitals have lost physicians to ASCs because of higher reimbursements, less demanding hours and an attractive investment opportunity. Because physicians are so instrumental in driving patient volume, an ASC or hospital that can't hold on to quality physicians is more likely to experience lower patient volumes and financial difficulties.
Mr. Trenk predicts ownership models may change over the next few years, though he's not sure exactly what form those changes will take. "This may make hospitals partner with more centers," he says. "If more centers are going in-network, those in-network patients that are going to the hospital might choose to go the surgery center. Hospitals will suffer as a result of that, so hospitals may choose to build relationships with centers."
5. NJAASC would like to expand membership by 50 percent over the next year. In order to push back against moves by insurance companies to cap out-of-network reimbursement rates, Mr. Trenk says the NJAASC has to make an effort to improve the reputation of ASCs in New Jersey. That means both educating the public on the benefits of ASC care and involving more N.J. ASCs in the state association. Currently membership sits at around 30 percent of all ASCs, a number Mr. Trenk would like to increase to 50 percent over the next year through an intensive and extensive membership drive.
He says the ASC association can play a major role in changing policies that negatively affect ASCs by inviting political figures to different centers and holding open houses to demonstrate the value of the ASC to the healthcare industry and to the communities they serve. That value can be best demonstrated if every ASC is committed to proving its commitment to patient safety, efficiency and financial savings. "We owe it to our membership to be visible and involved in what's going on, and we certainly need to make sure we are entrenched in any prospective regulatory guideline initiatives," Mr. Trenk says.
Learn more about the NJAASC.