August 14, 2020

ASC Industry Awareness

Surgery Centers are Still in Growth Mode

The same market and technological forces that propelled growth in the ASC/OBS market before 2020 are still in play, evidenced by 14 ASCs that either opened or announced in July. These new centers are quite diverse in terms of location, structure, and specialties, which is good news for surgery center growth. Twenty-one new ASCs costing over $10 million are in the works for the remainder of 2020, so both smaller and larger development efforts are ongoing. These are in addition to the 60 new surgery centers that opened in Q1 2020. Yes, the work has been difficult during the pandemic as patients are wary to follow through on their surgeries, but surgery centers, as a whole, have a lot of wind behind our sails.

ASCs and Office-Based Surgery Centers Offer Distinct Advantages

The pandemic is accelerating many trends that were already in motion. This is an undeniable reality in the migration of surgeries from inpatient to outpatient settings. For certain specialties, office-based surgery centers offer convenience, flexibility, and familiarity to patients, thereby reducing cost, time, and anxiety. Orthopaedic and spine surgeons see the trend of moving more patient to outpatient settings as a sensible development, for the many surgery types. They cite lower infections rates, decreased costs, and the need to offload pressure on hospitals during the pandemic. The spine ambulatory surgery market is poised for 200% growth  by the end of the decade.


Healthcare Industry Trends

CMS Proposals Push for Greater Use of Outpatient Centers

CMS has been rapidly moving procedures to outpatient payable lists for several years. This year will be no exception. CMS may be adding 11 procedures to the outpatient payable list for 2021. Additionally CMS may remove 266 orthopaedic procedures from the inpatient only list for 2021. The news keeps getting better! CMS could increase ASC reimbursements by 2.65% in 2021. While this does not fully address Medicare payment concerns, it is a step in a better direction. To top it off, CMS is proposing the elimination of the inpatient-only list in 2021, giving providers more decision-making freedom.

Large Healthcare Insurers Stockpile Profits for Future Outlays

The pandemic has created unique situations for all organizations in healthcare. In the early days, providers have often withstood the worst of it with either increasing workloads or orders to suspend elective surgeries. In both cases, large healthcare insurers have been dragging their feet in providing timely reimbursements, putting more downward pressure on provider efforts at the exact time of greatest need. The revenue reports from large healthcare insurers show demonstrable growth from Q1 2019 to Q2 2020. More to the point, five payers made over $1 billion in profits in Q2. Anthem doubled their profit in Q2 over Q1 due to reduced benefit use and United Health nearly doubled their profit for similar reasons. Healthcare insurers say that profits will turn to payouts as patients return to normal care.


Healthcare Digital Transformation Watch

The Future of Telehealth in Debate

Some are wondering if telehealth has already hit its high water mark in the United States. Adding weight to the question are the 40% of older Americans that are not ready for telehealth care due to disabilities or technological inexperience. However, significant activity is brewing on the side of telehealth. Congress is mulling over a new grant program to expand Veterans Administration telehealth. A bipartisan group of U.S. Representatives has just introduced a bill that would codify Medicare reimbursement for telehealth services. Moreover, on the state level, Connecticut is joining New Hampshire and Colorado in extending telehealth coverage … at least through early 2021.


Out-of-Network Watch

Action on Surprise Medical Bills

Congress has been debating federal action on surprise medical bills for over a year. There are now new calls from Health and Human Services for congressional action on surprise medical bills. At issue, though, is the mechanism. Will the federal government opt for rate setting (which insurers prefer), or for baseball style arbitration (which providers prefer), or will they opt for some hybrid of the two? The federal government has been reviewing states efforts, looking for models, and find plenty on both sides of the issue that are working to some degree. The state of Texas is exemplary here since far fewer Texans are reporting surprise medical bills since their state law went into effect at the beginning of 2020.



CMS to Boost ASC Payments and Increase Approved Procedures

   by Sean Laffey, Contego Legal Analyst, from the office Jon Sistare, JD, Contego Attorney

On Monday, August 3, the Centers for Medicare and Medicaid Services (CMS) proposed a 2.65% payment increase for ambulatory surgery centers amid the COVID-19 pandemic. For 2021, CMS wants to add 11 procedures to the ASC covered procedures list, including total hip arthroplasties. The proposed regulations would add approximately 270 surgery or surgery-like procedures to the list that an ASC can perform. Part of these changes stem from CMS’ acknowledgement that patients can potentially lower their out-of-pocket cost by using an ASC rather than a hospital. As for the future, CMS intends to eliminate the Inpatient Only (IPO) list over a three-year transitional period, starting with the removal of almost 300 musculoskeletal related services. Ultimately, this would serve to promote site neutrality between hospitals and ASCs and encourage patients to shift toward the lower cost setting.

Also proposed was a cut to the 340B drug program, which is a pricing program in which manufacturers participating in Medicare agree to provide outpatient drugs at significantly reduced prices. On July 31, 2020, a federal appeals court ruled that the Department of Health and Human Services has the authority to reduce payments for Medicare drugs to 340B participating hospitals, overruling a lower court’s decision to disallow the 28.5% cut. The DHS argued that the gap in the Part B payment allowed hospital providers to generate significant profits at the government’s expense. The American Hospital Association as well as the Association of American Medical Colleges have criticized the decision, stating that it would hurt patients and hospitals that serve large number of Medicare and uninsured patients. This proposed cut is expected to affect hospital providers and not ambulatory surgery centers, however.


At a Glance

Forty Percent of Americans Are Delaying Their Care
Concerns about Safety during the Pandemic Drive Hesitation

With the Advent of Telehealth, Virtual Etiquette Needs Grow
Virtual Meeting Etiquette Tips from the Pros

After 170 Years, Chicago Mercy Hospital to Close in 2021
Chicago’s First Chartered Hospital Cites Huge Monthly Losses

Problematic Time for Private Primary Care Practices
Reliant on Yo-yoing Patient Down-Up-Down Volumes

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