ASC/OBS Industry Awareness
ASC Data Potpourri for $1,000 Please
We have some readers who love data points, so here we go on ASC industry stats. Have you ever wondered how many orthopaedic ASCs there are per capita in each state? Wonder no more. Interestingly, ASCs’ median commercial payer mix as a percentage of collections overall is 58% commercial. VMG Health’s annual, “Multi-Specialty ASC Benchmarking Study” is full of ASC stats. One hundred of them are included here – things like the average revenue per case per specialty (podiatry’s is higher than plastics’). It may come as a surprise to you what US region boasts the highest median ASC net operating revenue. Hint: It is not the Northeast.
New OBS and ASC Development
Office-based surgery centers (OBSs) (or in some states the designation is office-based labs – OBLs) are growing in popularity for minimally invasive surgeries. Contego’s clients include both ASCs and OBSs and have for years. OBSs/OBLs are popular with physicians for the same reasons independent ASCs are popular – autonomy, ease of use, and the ability to earn more revenue. They are very convenient for patients, which is a huge selling feature. It also appears that five states, in particular, are increasingly in position for an orthopaedic ASC boom due to their current paucity of centers, changing regulations, and solid economic growth. Conversely, ASC state saturation, large rural state territory, and state certificate of need laws can all add to challenges in developing new centers.
Healthcare Industry/Trends
Healthcare Activity from the White House
It is widely anticipated that the Biden Administration will renew the COVID Public Health Emergency for another 90 days before the April 16 deadline. Well worth watching for providers are the new federal actions to lessen the burden of medical debt and increase consumer protection. Included in these actions is a planned HHS scrutiny of healthcare providers on billing and collection practices. HHS states no concomitant analysis for insurance payers. The administration is also proposing changes to the ACA that for the very first time would extend family subsidies to employees families on employer-based healthcare plans, which may have the effects of reducing employee plan cost, reducing employee family benefits, and reducing the number of commercial insurance patients.
Price Transparency a Work in Progress
Only 14% of hospitals are currently complying with federal price transparency rules and so CMS took action to move that rate forward in the form of 342 price transparency noncompliance notices. Of course, compliance with regulations like these is nearly universally challenging, expensive, and fraught with difficulties often not appreciated sufficiently by regulators. A healthcare tech company has launched an online price transparency tool that complies with requirements that enables patients to compare hospital prices.
Healthcare Digital Transformation Watch
HiTs’ High Future Ceiling
We all witnessed the acceleration of technological advancements throughout the pandemic. Telehealth made great strides, but it is not the only part of healthcare tech seeing a surge in adoption. Remote patient monitoring, data sharing, transparency, predictive analytics via machine learning, and artificial intelligence are all ascendant. Artificial intelligence is on an international growth tear, in large part due to the huge and increasing volume of data in the healthcare industry. Blockchain, though known more for cryptocurrency, can provide protection of personal health data and is also recognized as a top strategic healthcare technology trend with myriad unrealized potential.
Healthcare M&A, Valuation, Revenue Cycle
Q1 Hits Lowest Healthcare M&A since Measure Started in 2016
Q1 set a record low for transaction activity for the six+ years that healthcare mergers and acquisitions have been numbered and measured, with only twelve transactions, most of those being on the smaller side. With elective procedures back on the table, healthcare stocks looked sure to boom, but surgeries have still not returned to their pre-COVID numbers. PE firm, Health Velocity Capital, invested in Raleigh, NC based ASC management company, Compass Surgical Partners, which will fund further data analytics, physician support services, and hospital partnerships. After some early 2022 bumps in the road, UHC and Change Healthcare agreed to adjust their merger closing date to December 31. Optum keeps buying, becoming the second large payer to make a move into Medicare home health.
Legal
Update on the False Claims Act and Health Care
From the office of Jon Sistare, JD, Attorney at Law
In a significant departure from the general downward trend in False Claims Act (FCA) civil fraud recoveries over last year, Fiscal Year (FY) 2021 drastically increased compared to those in FY 2020. The $5.6 billion in recoveries reported by the United States Department of Justice (DOJ) in its 1 February 2022 press release is more than double the $2.2 billion recovered in FY 2020, and is the second largest total recovery ever recorded. Yet again, the health care industry was far and away the primary driver of civil fraud enforcement activity, accounting for 90% of total recoveries—over $5 billion. Notably, health care civil fraud recoveries in FY 2021 were the highest ever in a single year by a large margin, representing nearly $2 billion more than the previous high reported in FY 2012 (and over $3 billion more than FY 2020).
The substantial increase in civil fraud recoveries in FY 2021 is due, in large part, to the highly publicized $2.8 billion settlement with Purdue Pharma in connection with the opioid manufacturer’s marketing and sales practices. However, even setting aside the latter recovery, by virtually any measure, FY 2021 was marked by heavy heath care-related FCA activity. The government did not discriminate in its enforcement across the health care industry, as it targeted insurers, health care systems, medical suppliers, pain clinics, clinical laboratories, substance abuse centers, pharmaceutical companies, psychiatric facilities, home health agencies, and hospitals (among others) with its enforcement efforts. The DOJ has, again, expressed its intent to pursue health care fraud diligently, touting its “vigorous pursuit of health care fraud” as instrumental in “restoring funds to federal programs such as Medicare, Medicaid, and TRICARE” and “preventing billions more in losses by deterring others who might try to cheat the system for their own gain,” as well as “protecting patients from medically unnecessary or potentially harmful actions.”
Looking ahead to FY 2022, the legal firm K&L Gates LLP perceives three areas to be particularly worthy of attention. First, Congress appears primed to consider legislation that would significantly amend the FCA to make it more difficult for defendants to assert materiality defenses. Second, FCA actions predicated on the use of Electronic Health Record systems (EHRs) against vendors and providers are likely to increase substantially. Third, industry participants should expect the DOJ to accelerate its pursuit of fraud in the Medicare Advantage arena against both insurers and providers.
Word to the wise; be vigilant with billing practices for all claims whether to commercial or government plans. Ensure that you are compliant with generally accepted billing practices. If in doubt, get assistance or advice before billing a questionable item. Both commercial and government claims payment systems are set to detect fraud. Do not fall victim to it.
At a Glance
Pandemic Shifts Away from Hospital Inpatient Care
More Treatment in ASCs, OBSs, and in Homes
Seniors Report Fears Related to Care Access and Elective Surgery
But Overwhelmingly Report High Surgery Satisfaction
Many Healthcare Workers Attest to Feeling Overwhelmed
Study Shows 1 in 3 Clinicians Considering Leaving Role
Virginia DME Company Donates Medical Supplies to Ukraine
One of Several US Organizations Seeking to Help
Surgery Patients Give High Marks to Hybrid Care Hotel
Jacksonville, FL Hospital Provides Hotel Option
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