By Scott Allen, Vice President, Managed Care Contracting, National Medical Billing Service
The outlook for the ambulatory surgery center (ASC) market continues to be positive. According to the 2018 Ambulatory Surgery Center Market Report by the Health Industry Distributors Association, the ASC market is on track to increase more than 15% through 2026. Additionally, every year, the Centers for Medicare and Medicaid Services (CMS) evaluates an extensive list that contains approximately 1,700 procedures that can only be performed on an inpatient basis. Due to improved medical technologies, some procedures are removed from that list which allows them to be done in outpatient settings. As a result, ASCs are beginning to support more complex cases including total joint replacement.
In fact, the number of hip and knee joint replacement procedures performed in an outpatient setting is expected to increase by 73% by 2026. This type of complex procedure can have a direct impact on the ASC industry’s unprecedented growth.
ASCs that perform total joint replacements, and simultaneously utilize reimbursement best practices, can reap significant financial rewards. In fact, the addition of one or two complex cases a month can greatly improve an ASC’s profitability/cash per case.
Here are a few key elements to consider when bringing on new procedures to your existing ASC.
Know your Contracts
Make sure you have complete contracts, amendments and crosswalks. Once complete, analyze your contracts to make sure you understand what the contract offers your ASC and how the new cases you want to bring on will reimburse in relation to overhead costs. If your current contracts are not designed for the type of cases you would like to bring on, reach out to the payer. When reviewing an existing contract or if presented with a new agreement, make sure you understand the payment model. If inclusions such as a 90-day global period or bundled payments are missed, adequate reimbursement may not be received.
It is critical to perform extensive data collection before adding new provider’s cases to your existing ASC. ASCs that have a clear understanding of their center’s data and benchmarks will be at a significant advantage when negotiating with payers. For example, knowing the cost per operating room time and how efficiently it is used can make or break the bottom line. The data collection and construction of pro forma prior to performing cases will help to fully understand the revenue impact. Know the key performance indicators (KPIs) you need to hit to make sure cases are profitable.
Prepare the Billing Team
Because coding for ASCs is different from physician and hospital requirements, there is a whole different set of regulations and bundling edits for these facilities. Focusing on the billing team is a key element when preparing for the addition of new procedures. An inexperienced coder that does not understand coding for complex procedures can expose your center to audits, takebacks and missed revenue. It is also important to make sure your payment posting and AR teams completely understand the managed care contract in relation to reimbursement for overhead costs such as implantable devices. Implantable devices for complex surgery start at $3000 and go up from there so an unprepared billing team can be costly.
The migration of complex cases to the outpatient setting is clear evidence that patients, employers and payers look to the ASC setting for successful outcomes and efficiency. When preparing for new cases, especially complex procedures such as total joint replacements, additional safety measures and clinical directives must be considered. For example, you could create a formal total joint program with clear policies on pre- and post-care and a plan to track outcomes. In addition, payers can also dictate clinical policy pre- and post-surgery protocol when it comes to complex surgery. Other key details include creating special physician preference cards with a unique focus on patient screening for appropriateness in an ASC and a facility plan for after care and discharge. These are crucial to ensuring quality care.
To continue to succeed in this market, ASCs will need to invest in offering new, more complex procedures. This process can be overwhelming, but it is well worth the effort. With proper preparation, new cases can make a positive impact on the bottom line.
This post was first published October 23, 2019 and was updated July 1, 2022.