ASC Physician-Owners Share 5 Top Concerns for 2010

1. Reimbursement cuts
Uncertainty about federal regulation and legislation that could lead to reimbursement reductions from government payors is the top concern of many surgeons, including Neal Lintecum, MD, an orthopedic hand surgeon who practices at Lawrence (Kan.) Surgery Center. Dr. Lintecum is concerned that these potential payment reductions would negatively impact the financial success of his ASC.

Plans for CMS to reduce the professional fees of specialists in favor of primary care physicians is troublesome to many ASC physician owners. Dr. Lintecum says such cuts would severely impact his practice. If such reductions become a reality, he says he will consider no longer accepting Medicare patients.

Robert Peets, DO, a board-certified ophthalmologist and board member of Samaritan North Surgery Center in Dayton, Ohio, agrees that reductions in Medicare professional fees would greatly hurt his practice. "I am as concerned as any physician about what happens if [Congress doesn't] fix the sustainable growth rate and cuts loom over our heads every year," he says. "If they don't fix things permanently, we could see up to a 25-30 percent reduction for ophthalmology, and no one can stand reductions like that. I can't take that kind of hit from Medicare."

Dr. Peets cautions against blaming CMS for the payments, however. "I'm hoping like everyone else to fix this flawed system. CMS is bound by rules that Congress makes, so it is Congress that needs to fix it. CMS can only maintain budget neutrally by cutting payments to physicians," he says.

Additionally, because many private payor contracts are based on Medicare fee schedules, ASCs and physicians could see decreased reimbursements across the board for procedures if Medicare payments are cut, says Steve Robinson, MD, FACS, a board-certified plastic surgeon and board member at Riverside Outpatient Surgery Center in Columbus, Ohio.

Carol Greco-Delaney, MD, an OB/GYN and board president at Riverside Outpatient Surgery Center in Columbus, Ohio, says that reimbursements are one of her largest concerns for her specialty. The transition of more outpatient surgeries to the office setting is also another large concern for the OB/GYN specialty, she says.

2. Managed care contract negotiations
With looming healthcare reform and a weak economy, payor contract negotiations will be critically important for ASCs, and many physician owners are concerned about these negotiations and their outcomes.

"We have a major contract coming up for renewal in 2010, and we are all bracing ourselves. Two years ago, we resigned a contract with a different payor, and our hospital-partner, which negotiates our contracts, agreed to a nearly 30 percent reduction in fees after first going out-of-network in order to keep the contract. If a similar situation happens again with another payor, it would seriously affect our bottom line. I'm not sure we would be profitable," says Dr. Peets.

Dr. Peets says that in order to prepare for the negotiations he has encouraged other physician-owners of the ASC to speak with hospital executives and convey to them the importance of a strong contract.

3. Dropping volumes

Physicians are also concerned about decreasing volumes due to the economy and whether or not volumes will stabilize or grow in 2010.

"[Plastics] has been hit harder than most specialties in the economy. With a decrease in the unemployment rate and reduced discretionary spending, we are seeing a decrease in cosmetic surgery," says Dr. Robinson. "However, we're seeing an increase in smaller types of procedures, such as Restalyne and Botox." Dr. Robinson says that these smaller procedures are primarily done in the physician's office, which means that ASCs are hurt more by patients putting off more invasive cosmetic procedures.

4. Regulations regarding physician-ownership
Current legislation includes plans to limit physician ownership of some medical facilities, such as physician-owned hospitals. Some physicians worry that these moves to limit physician-ownership will eventually extend to ASCs.

"There are hints that physician ownership and investment in ASCs could be curtailed. I worry that if the rules change, we would have to do something to the ownership status of our physicians," Dr. Robinson says.

5. Buy-outs, buy-ins

Bringing in new physician owners and buying out retiring physicians continues to be a concern for ASCs.

Dr. Greco-Delaney says that the age of the physician-owners at her ASC is a primary concern. "Most of our current investors are over 55. Soon they will be reducing their case volume and even consider retiring. I have asked multiple physicians about their exit strategies," she says. "Many are not hiring young physicians. I'm struggling with how to recruit new physicians to invest in our center. Furthermore, I find many of the older investors are reluctant to allow interested younger investors to buy shares."

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