17 observations on total joint and spine procedures at ASCs

ASC owners and operators across the country are considering whether to add or expand total joint and spine programs at their centers. Orthopedics has been a desirable specialty for several years, and minimally invasive techniques as well as advanced pain management allow patients to return home within 24 hours of surgery.

However, reimbursement and payer issues coupled with rising consolidation in the healthcare space have slowed growth in the field.

At the Becker's ASC Review 24th Annual Meeting: The Business and Operations of ASCs, held in Chicago Oct. 27, Medline hosted a roundtable discussion on total joint replacement and spine surgery in the ASC. Most of the 30-plus ASC owners and operators participating in the roundtable were cautiously optimistic or enthusiastic about the potential for outpatient total joint and spine procedures in the future.

Here are 17 key takeaways from their discussion.

Primary drivers for adding total joints

1. Physicians find the ASC a more efficient setting for total joint replacements, according to the CEO of an orthopedics-focused ASC in Michigan. In ASCs where surgeons currently perform total joint procedures, they're able to perform a more predictable and reproducible procedure at a higher volume per day than in the hospital.

2. Physicians are more satisfied in the ASC setting. They are familiar with the staff caring for the patients and know the center will provide a comfortable experience. If surgeons know their patients will be highly satisfied, they are more likely to perform cases in the ASC.

3. A Georgia-based ASC's administrator reported a bundled payment deal with Blue Cross Blue Shield that has brought in significant case volume. The center has performed 300 total joints already in 2017 and expects to hit 350 by the end of the year. The ASC compiled and provided data on quality and cost savings compared to the local hospital. The center's administrator sees the payer engaging in additional efforts to drive appropriate patients to the ASC in the coming years.

Other centers represented in the room are working on bundled payments, including the Michigan-based surgery center, which will implement a bundle with self-funded employers. However, the administrator noted difficulty working with these companies because they still want to funnel their insurance operations through third-party payers that do not have a system to adjudicate bundled payments by employer.

4. While the Georgia-based surgery center has had tremendous success bundling total joint replacements with Blue Cross Blue Shield, a Texas-based administrator expressed frustration over even scheduling an appointment with BCBS of Texas. Despite quality and cost savings data presented, the payer has refused to negotiate with his ASC, a small player in the market.

Roadblocks for adding total joints

5. Obtaining data from physicians can be tough. One administrator reported competitiveness and embarrassment among his surgeons; none wanted to make their data transparent to their partners. In centers with data transparency, key physician leaders led the charge to gather and report the data publicly.

6. In some markets, hospital-based total joint surgeons have difficulty conceptualizing total joint replacements in the ASC setting. Whereas sports medicine physicians have experience and confidence in the outpatient setting, total joint replacement surgeons are more familiar with the slower pace of procedures and recovery at the hospital; they would need to revise their workflow and expectations to perform total hip and knee replacements in the ASC.

7. There is a significant cost to launching a total joint replacement program at ASCs, and physician owners must approve the expenses. An administrator from a Nebraska-based ASC expects to launch a total joint program in the near future, and while the owners approved all expenses at owners meetings, they were still surprised by lower distribution checks. She expects the program to ramp up in six months and see a return on investment in around 12 months.

Observations on adding or expanding spine

8. Two surgery centers represented on the roundtable launched spine surgery programs five to six years ago, but were unable to make the programs successful. Specifically, implants were too expensive, and filtering patient selection to only the outpatient-appropriate cases meant volume was lower than anticipated. As a result, both centers discontinued their spine programs.

9. Payers are more receptive to negotiating spine surgery contracts with ASCs than they were two to three years ago, in part because Medicare developed spine codes for the ASC. However, the Medicare payments are too low to sustain the procedures in most centers, and if commercial payers set rates too low, these procedures could migrate back into the hospital setting.

10. Pain control is a challenge for spine cases in the ASC, especially for patients who have a high opioid tolerance. If patients are taken off of pain medication too quickly, they may need to be transferred to the hospital. Anesthesiologists can mitigate this risk by collaborating with physicians on patient selection.

11. The Michigan-based ASC's administrator reported spending four years developing their current contract for spine procedures, beginning with low-acuity cases and eventually adding spinal fusions. She sees payers wanting to drive spine cases to the ASC, but believes they'll attempt to lower reimbursement in the future.

12. Endoscopic spine surgery is possible in ASCs with appropriately selected patients. However, there are few U.S. physicians trained in the procedure, and the equipment expense could exceed reimbursement for low- and mid-volume centers.

13. Robotic technology is available for total joint and spine procedures, but the equipment is expensive. Younger surgeons train on robots during residency and want to bring them into the ASC setting, especially if the local hospital will not purchase the technology. Older surgeons who have spent 10 to 20 years successfully performing procedures freehand are less likely to find benefit in robotic technology, which could lead to a clash between owners.

There was one ASC administrator present whose physician owners wanted to market their center as a "high-tech" center; they already own robotic technology and are looking into purchasing an additional robot for orthopedic surgeries. The center, however, is entirely out-of-network.

Reimbursement outlook

14. CMS removed total joint replacements from the inpatient-only list in 2018, and while some physicians and administrators are excited about the move, others are skeptical. Payers typically set reimbursement as a percentage of Medicare, which could push commercial payer rates lower than they previously were, depending on where CMS sets the fee schedule. Medicare could also lump implants into one global fee for total joint replacements, which could limit an ASC's ability to negotiate implant carve-outs with commercial payers.

15. Certain procedures have migrated back into the hospital because reimbursement was too low. Several sports medicine procedures, depending on the market and payer, are migrating back to the hospital, and total joint replacements could experience a similar trend.

16. Insurance companies tightened their restrictions around approving total joint replacement cases. Surgeons are likely to receive denials for patients who would have been good surgical candidates in the past based on medical necessity guidelines, and while surgeons can appeal the decision, appeals are sent to peer reviews with non-orthopedic specialists. The Michigan-based ASC reported canceling cases because of last minute denials from the insurance company.

17. Total joint and spine systems remain a significant expense for spine cases in the ASC setting, and reimbursement doesn't always cover the high-end devices even with a carve out. At the centers where these procedures are performed successfully, ASC owners and operators shop around for the best contracts and require manufacturers to provide evidence-based literature on new devices.

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