BUSINESS CONSULT
TESSA KERBY
Senior Consultant, ECG Management Consultants
MICHAEL MCCLAIN, MS, PA
The Increasingly Compelling Case
for an Ambulatory Surgery Center
Strategy in Cardiovascular Care
A
s patient care continues its transition to
the outpatient setting, ambulatory surgery centers (ASCs) have quickly grown
in popularity as a high-quality, cost-effective alternative to hospital-based outpatient (HOPD) care.
In turn, the number and types of services offered
in the ASC setting have significantly expanded. A
once narrow scope of procedures has given way to
a diverse range of services by numerous specialties, including cardiology. Additionally, specialties
that have not traditionally considered or adapted
to the ASC setting are taking notice. For example,
gynecology, spine, and total joint replacement
cases have migrated away from hospital setting
and are now routinely performed in ASCs.
The use of ASCs is not foreign to cardiologists
and cardiovascular service lines. Traditionally,
cardiac services in the ASC setting have been
mainly diagnostic in nature. However, cardiology
is currently one of the specialties with providers actively identifying and expanding the type
and scope of procedures they can perform in the
ambulatory environment. Recently, some interventional procedures have been included among
ASC-appropriate services, such as: pacemaker
placements, pacer wire/batter changes, PCATH
(cardiac and vascular), cath with stent placements, and low-risk ablation cases.
In addition to being safe in an ASC setting,
many of these prop erly screened, lower-risk cases
can be performed with significant cost savings. In
our experience we’ve observed decreasing patient
and payor payments by 30% or more. For certain
cases with payments that exceed $100,000 in
charges, the business opportunity for cardiologists and the savings it represents is understandably attractive to payors and employer groups.
From a logistical perspective, shifting cases from
hospital operating rooms to ASCs frees up scarce
OR space to better accommodate higher-acuity
cases and mitigates disruptions when procedures take longer than expected to complete. As
a result, developing a new ASC as a venue for
cardiac services may represent a viable long-term
strategy for physicians hoping to retain profits in
light of decreasing reimbursement, and for payors aiming to reduce unnecessary costs.
Despite the financial and practical benefits, bar-
TABLE. Advantages and Disadvantages for an ASC
Advantages
Disadvantages
Higher reimbursement. An ASC provides the opportunity to perform procedures that are accompanied by
reimbursement structures that can rival those currently
offered in the hospital setting.
Conversion costs. ASCs must be constructed to
meet specific building codes and standards. Converting an existing space or building a new space to
these standards can be costly.
Diversified revenue stream. Owning an ASC space
can help diversify a revenue stream by allowing complementary practices, such as interventional radiology
or vascular surgeons, to practice in concert with other
cardiac services.
Payor negotiations. Complex negotiations, driven by
varied payment systems, the medical community, and
medical directors. Each market can vary in terms of
acceptance of the ASC concept and comfort with the
clinical aspects of care.
Recruiting. An ASC can be attractive to potential physician candidates, as it can support physician interests
in practicing more broadly and performing a greater
variety of procedures than a traditional medical office
space allows.
Time. The time needed to construct an ASC and the
time to negotiate with a payor are important considerations. Similar negotiations in other hospital-based specialties moving to the ASC model indicate the process
can take 18-24 months.
Stability. Market stability can be achieved by building
an ASC as a ‘center’ of specialty care, elevating the
status in the community and position in contracting
negotiations.
Future uncertainty. Evolving payment methodologies
by payors requires constant oversight of payment
policy changes that could dramatically affect future
reimbursement.
38 CardioSource WorldNews
riers remain for groups seeking to create an ASC.
Most notably, reimbursement and credentialing
can be challenging barriers to overcome. Medicare,
which frequently serves as a benchmark for commercial reimbursement rates, does not reimburse
for many of the most common interventional
cardiac and vascular procedures in the ASC setting,
therefore leaving payors and providers without
a baseline point to start reimbursement negotiations. The second hurdle is credentialing. ASCs are
required to meet specific facility requirements, and
many payors, including Medicare, will not reimburse for ASC procedures unless the facility is fully
credited as such. Additionally, conforming to the
specific requirements defined in government ASC
standards can be both costly and time consuming.
Clearly there are pros and cons for CV provider
groups contemplating an ASC strategy. In an attempt to help simplify the argument for or against
such a strategy, the TABLE shows the major advantages and disadvantages.
A final variable to consider is the local hospital
relationship with physicians and market position.
Many hospitals support the ASC strategy, if it
can help them free-up crowded OR schedules for
the higher acuity, higher margin cases. Physician
groups with local hospital support are likely to have
an easier time establishing an ASC in the community. Other hospitals, particularly single-hospital
communities with less local competition, may elect
to react to ASCs by negotiating with the payor
to obtain increases on other services to compensate for their losses. Regardless, it is important to
understand the hospital-physician dynamics before
committing to an ASC strategy.
While significant challenges exist to establishing and operating an ASC, the benefits related to
flexibility, diversified revenue, stability, and attractiveness to new recruits increasingly outweigh the
disadvantages of this strategy. As payment methodologies continue to evolve, so too must strategies
and settings for delivering care, and ASC strategies
are becoming increasingly compelling.
For more information, contact Tessa at
[email protected]. n
January 2016