May 13, 2022

ASC/OBS Industry Awareness

Independent ASCs Overcoming Payer Trends

ASC investment is an excellent strategy for physician-owners to flourish professionally and financially while providing optimal patient care. Young physicians have now had opportunities to experience the challenges of hospital employment and increasingly desire to own. ASCs have advantages when it comes to attracting young physicians such as equity ownership, work schedule flexibility, and staff consistency. Of course, physician ASC owners and administrators acknowledge the difficult payment environment — with continually more prior authorizations, denials, and reduced reimbursement for services. Even so, independent surgeons are passionately committed to their centers. Standing ready to assist independent ASC owners to overcome these reductionist payer trends are reimbursement experts, like Contego.

It Was the Best of Times; It Was the Worst of Times

The French Revolution and the Reign of Terror, it is not. Our spring of hope and winter of despair depend upon perspective and capability. Ten administrative leaders portray the positive signs for ASCs; things like safety, affordability, timeliness, and cost savings. Surgery center owners note tailwinds for their ASCs/OBSs/OBLs in surgeon attitudes, favorable government views of physician ownership, and the excellent medical real estate market. However, they also note bad news headwinds in tight labor markets, challenged reimbursements, and a potential physician fee cut. Price transparency could cut either way for ASCs, since they are the high quality low cost-of-care provider, but insurers will now have access to pricing information from other commercial carriers as a negotiating tool.


Healthcare Industry/Trends

Tensions Rise as Healthcare Insurers Blur the Lines

Healthcare providers are increasingly at odds with healthcare insurers as these commercial carriers grow their revenue by adding to providers’ administrative burdens, by refusing to reimburse in a timely fashion, and through inappropriate outright denials. Cigna’s Q1 revenue equals a healthy 7.4% year over year increase. However, Tenet Healthcare and 19 of its hospitals are suing Cigna, citing low reimbursement rates and wrongful claims denials over the past year. At this late date, Anthem and UHC still claim pandemic issues are the cause of running billions of dollars behind in provider payments. Delays have become egregious and the AHA is pushing for resolution. Forty Florida medical practices led by Envision are suing UHC regarding underpayment, unjust enrichment, and tortious interference with business relationships. See the complaint here. Spine surgeons are calling on Aetna to pay up and stop denying artificial disc replacements as “experimental and investigational,” since they have been FDA approved since 2004. If insurers continue to overplay their hands, larger employers will drop their costs, lift employee insurance and their profits by creating employer-funded insurance plans, thereby averting the pain.


Healthcare Digital Transformation Watch

Funding Digital Health

Clearly, automation can make healthcare better, shorten hospital stays, and make healthcare jobs more manageable during a period of healthcare staffing shortages. However, like many new technologies, they require a significant outlay of money and time to get them up and rolling. Telehealth is a case in point. Without the time the pandemic provided and some cash to drive it forward, we would not be in the position we are today, where telehealth flexibilities are in place for most of the year. Digital health funding experienced a breakthrough year in 2021 and, as normal, is a little off in Q1 of 2022. Even so, Q1 consolidation activity remained elevated with 138 M&A deals. If measured quarter-to-quarter, digital health funding dropped 36%, with the greatest losses in digital therapeutics and mental health.


Healthcare M&A, Valuation, Revenue Cycle

Market Forces Drive More PE to ASCs

As payers funnel procedures to lower cost ASCs, private equity investment increases. Orthopaedics and gastroenterology are hot markets for private equity. Orlando-based revenue cycle management company, Billed Right, acquired Miami-based medical billing company, Ruffe Systems, Inc. Medtronic and GE Healthcare agreed to focus on outpatient care in their new partnership, which will provide medical devices and software to ASCs and OBLs. UHC’s Optum has clearance to acquire Atrius Health, Massachusetts’ largest independent physician organization, for $236M. Four big tech partnerships made moves in the past month for pharmacy drone delivery, more accessible health analytics, TV displays of EHRs, and pill bottle scans that remind patients when to take their medications.



Update on the No Surprise Act

   From the office of Jon Sistare, JD, Attorney at Law

An eagerly awaited final rule for resolving payment issues when patients receive emergency health care from out-of-network medical providers is coming soon.

The federal government issued an interim final rule in September 2021, telling arbitrators to pick the offer closest to a health plan’s median in-network rate for the services the patient received. Hospitals and doctors said the rule would hurt their finances, while health insurers and employers said it would tame inflation.

Healthcare providers and advocacy groups challenged the interim final rule, and a federal district court in Texas tossed out some parts of the rule in February. The federal judge said the government did not properly follow the No Surprises Act in its requirement around the median in-network rate.

The No Surprises Act took effect Jan. 1, limiting how much patients can be billed for emergency services from care providers who are not in their insurance network. The law also determined an arbitration process for situations where insurers and out-of-network providers cannot agree on an appropriate reimbursement amount.

The interim final rule was jointly issued by the Centers for Medicare & Medicaid Services, the Employee Benefits Security Administration, the Internal Revenue Service, and the Office of Personnel Management.

The final rule will take comments on the interim final rule, as well as the court’s ruling, into account and is anticipated to be issued this summer.


At a Glance

50% of Clinical Cost Due to These Five Condition Types
Cancer, Musculoskeletal, Cardiovascular, Gastro, Neurological

Proposed Federal Budget for 2023 Could Affect ASCs
3% Increase in Medical Part B Reflects Shift to Outpatient Services

Canadian Healthcare System under Duress
After Months in Pain, Patients Pay Thousands for Surgery in US and Beyond

2022 Nurse Salary Research Report Looks into Conditions of Employment
29% Consider Leaving the Profession

Empty Shopping Malls Find New Uses
Across the Country, 32 Malls Now House Health Care Services


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Contego Solutions, LLC