Amid a changing payer environment and an ongoing demand to reduce the cost of care, ambulatory surgery centers (ASCs) have an opportunity to expand business by adding new case types. But to succeed, you have to do your homework and establish reimbursement before performing any new cases in your ASC.
Following these 10 steps before moving cases to the ASC will increase your chance of achieving financial success.
1. Collect the following data:
- Surgical volume by physician
- Site of service from which volume will migrate (e.g., hospital)
- Implant cost
- Total case cost by surgeon
- Capital costs that may be required to add the cases (e.g., equipment and instruments)
- High-cost service and maintenance agreements that may be required for new equipment, such as robotic
2. Determine whether a case will require an overnight stay in order to move the case volume.
3. Review implant-intensive cases to determine the highest cost the ASC will be at risk for if the payer does not pay for implants.
4. Review commercial payer contract rates, with consideration of multiple-procedure reimbursement and implants, as well as government reimbursement rates. Assess whether the reimbursement is appropriate for performing the case.
5. Identify contract renewal dates for each payer, and incorporate rates for the new cases into negotiations when possible.
6. If a contract is not yet up for renegotiation, contact payers to determine whether they are willing to negotiate rates for new cases.
7. Collect hospital EOBs, along with benchmarking data via available claims databases whenever possible. Compare local hospital case rates to the ASC rate offer, and identify savings for payer discussions.
8. Determine target rates for the new cases to ensure case costs and capital requirements are covered.
9. Prepare a business case to present to each payer, incorporating the rate proposal, savings opportunity with the migration of cases, and benefits to patients. If your ASC is in a hospital joint venture, and the hospital is in control of contract negotiations, the hospital can demonstrate the savings opportunity to the payer by showing the ASC rate offer compared to the hospital rate and the reduction in reimbursement. This is extremely effective in proving the opportunity for the payer and patient to realize savings in the ASC.
10. Negotiate new contract rates before performing new cases—this is critical to success. Do not perform cases with commercial payers with inadequate reimbursement rates, as this will hinder the ASC’s ability to negotiate appropriate rates for new services.
Published March 30, 2022