The idea of taking on new providers, new specialties, new surgical procedures, or new technology can be quite exciting for an ASC. However, the challenges they face may hinder their ability to move forward.
United Healthcare and other payors are recognizing the cost savings involved when patients use an ASC over HOPD. They are driving patients to the ASC by requiring authorization for outpatient hospital services which are determined safe to perform in the ASC. The question is, can the ASC afford to take the cases?
Common challenges an ASC may face include:
- Reimbursement
- Volume
- Procedure or Surgical Cost
- Appropriate Staffing
- Patient Safety
Operational considerations must be looked at prior to onboarding.
Reimbursement and Payor Mix:
It is important to understand the existing payor mix and variations among payors. In some cases, an ASC may be able to afford a surgery with one payor while another payors’ reimbursement lacks in covering the surgical expenses.
It will be important to collect all possible billing codes for a new surgery and determine expenses and reimbursement. Be aware of implant expenses and whether a payor reimburses implants or not. Payors who lack reimbursement to cover the surgery expenses will require contract negotiation prior to taking cases. This can take several months to accomplish.
An ASC may consider taking cases for payors who have a sufficient reimbursement, with this, it will be important to determine the anticipated case volume and payor mix of the referring physician especially when expensive equipment purchases are necessary.
Case Volume:
Once covering payors are determined, assessing the volume of expected cases will be key in understanding if the ASC can afford to consider taking on the new surgery. If new equipment is required to perform surgery, this can be very expensive. Generally, ASCs will finance or lease new equipment. Through a Cost Performa, an ASC will use anticipated reimbursement and volume to determine how long it might take to pay off equipment expenses.
Case Cost:
The need to purchase new equipment or supplies necessary to perform new surgery can make or break the acceptance of new surgery. If reimbursement and volume are not enough to cover, it may not be worthy for the ASC to engage. *It is also important to consider storage capabilities for new equipment and supplies.
Be sure to review surgical expenses, including equipment, supplies, implants, pharmacy, staff, OR time, and cost of supporting staff from the pre-op to discharge. Align these expenses with payor reimbursement rates and anticipated volume to determine an expected profit margin. This will help in making good decisions about whether the surgery will be profitable to the ASC. You might also use this valuable case costing information in support of contract increases with payors with insufficient reimbursement.
Staffing:
ASC’s looking to onboard new specialties, new surgery, and new technology will need to evaluate their staff and the capabilities of the staff.  Orthopaedic, Cardiology and Advanced Spine surgeries are all on the move to the ASC environment. Having skilled surgical staff available that can manage these complex cases will be necessary. If the existing staff is not competent to handle the new cases an ASC is considering, the ASC will need to consider hiring, the associated expense, and whether volume and reimbursement will support new staff.
Patient Safety:
Patient safety is of utmost importance. An ASC should consider all risks involved with performing new surgery and ensure the patient will have a safe surgical experience and safe discharge.
Taking on new surgery can be an exciting new challenge! Growth in the ASC environment is inevitable, make sure your ASC is ready to engage and geared up to tackle the challenges!
