January 13, 2023

ASC Industry Awareness

Strong ASC Expansion

In November and December 2022, ASC expansion and acquisition activity remained robust throughout the country across a wide variety of specialties and ownership models. Physician-owned Dutchess ASC broke ground on an inventive multispecialty center in a “live-work-dine-shop-play” town center in Poughkeepsie, NY. In Chesterton, IN, Northwest Health Lakeshore Surgicare added 4,600 square feet of space, including operating rooms and patient recovery spaces. As of the end of 2022, two Orangeburg, SC physicians are now able to build a private ASC there, after a local medical center dropped its litigation. Medical center doctors will be given surgical privileges as part of the agreement to build in 2023. Independent ASCs remain a significant driver of low costs, comprising seventy percent of US surgery centers.

ASC Trends Headed into 2023

ASC physician ownership continues to be strong as self-employed physicians make 18% more than employed physicians do, along with their equity ownership. Stagnant reimbursement rates continue as a hurdle unfortunately, though one that Contego Solutions is well situated to help ASCs, OBSs, and OBLs address. Some ASCs are seeing very little in the way of ongoing impacts of COVID-19, while others are still dealing with patient volume and supply chain issues. Increasingly high patient deductibles, particularly in the front half of the year, are a concerning trend voiced by some surgery center leaders. Recruiting and retaining staff is also a post-COVID challenge for ASCs continuing into 2023.


Healthcare Industry/Trends

Healthcare Financial Challenges Predicted to Persist in 2023

Health systems are preparing for a cautiously positive but turbulent 2023 financially since many experienced depressed margins, inflation, and staffing hardships in 2022. In one survey, 85% of health system leaders expect staffing challenges to loom large in 2023. A PWC report lists solving these clinical workforce shortages as one of six pivotal issues facing healthcare in 2023. Seventy percent of hospitals report difficulty with staffing while half of Americans still avoid seeking care due to safety, virus, and staffing concerns – all of which make returning to stronger financial margins more exacting.

Seven Thousand New York City Nurses Strike

On December 20, the New York State Nurses Association gave a ten-day notice to five New York City area hospitals that over 10,000 nurses were prepared to strike to improve staffing levels, health care benefits, and wages. The affected hospitals got busy making contingency plans, including moving NICU babies, transferring patients, and canceling elective surgeries. On January 9, 3,500 nurses at Montefiore Medical Center in the Bronx and 3,600 at Mt. Sinai Manhattan went on strike, with hundreds picketing. As of day three of the strike, patient chaos was growing. In the early morning of Jan. 12, day four of the strike, both hospitals and the New York State Nurses Association have reached tentative agreements.


Healthcare Digital Transformation Watch

HiT Trends from 2022 to 2023

Ongoing interoperability snags, commitments to solve healthcare data fragmentation, EHR and Big Tech successes and failures were among the big healthcare information technology stories of 2022. According to tech research and advisory firm, Forrester, tech leaders will be striving to become more cloud-native in 2023. MedCity News has dubbed 2023: The Year of the Healthcare Cloud, as medical CIOs seek to transition from on-premise equipment to cloud environments. Many carry a great deal of hope into 2023 that robotic process automation can increasingly deliver on its promise to reduce healthcare inefficiencies significantly.


Healthcare M&A, Valuation, Revenue Cycle

2022 to 2023 Potpourri

Keep an eye on Optum. It will continue to buy chunks of healthcare, as it did in 2022. Two small New Jersey health systems signed a letter of intent to merge in December into a two-hospital system with an annual revenue of $2.2 billion. Hospital deals were susceptible to unwinding in 2022, particularly in the first half of the year. Last week, RSI, a national RCM for hospitals and large physician practices, announced its acquisition of Invicta Health Solutions, which demonstrates anew the continuing soundness of the healthcare RCM market. Walgreens is seeking to make low-acuity care as easy as a drugstore run as their subsidiary, Village MD, acquired Summit Health. Several BCBS companies are forming a collective to tackle medication affordability.


Out-of-Network Watch

Action on NSA IDR Disputes Continues in 2023

The No Surprises Act went into effect January 1, 2022 as a means of consumer protection against surprise emergency medical bills. See here for an overview of how payers, providers, and patients have responded to the act in its first full year. The initial CMS report on the independent dispute resolution (IDR) process for April 15-September 30, 2022 indicates that CMS recognizes the need to enhance the intake and processing of disputes. A whopping five times more medical bills have headed to dispute than anticipated. Ten payers are involved in 85% of disputes. The qualifying payment amount (QPA) method (the payer’s median in-network contract rate) of IDR employed has been a sticking point for providers. On December 20, The Texas Medical Association headed to court to challenge the QPA where the federal judge questioned the government’s defense. No specific timetable has been set for the court to render its decision.



Good News for Hospitals and Physicians from a Congressional Committee

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

A prominent congressional advisory commission voted this week to recommend that Congress cut Medicare payments to home health agencies, nursing homes, and inpatient rehabilitation facilities in 2024.

However, in good news for many other health care providers, the Medicare Payment Advisory Commission recommends increasing the 2024 Medicare base payment rates for acute care hospitals, physicians, and other health professionals. The panel also called on lawmakers to hike Medicare payments next year for physicians and hospitals that serve large numbers of low-income beneficiaries.

In its upcoming March 2023 report to Congress, the commission will urge lawmakers to impose a 7% cut for home health agencies next year, while calling for 3% cuts for nursing homes and rehab facilities.

The recommendations are based on findings that Medicare payments for all three provider groups currently exceed the costs to provide beneficiary care. Representatives for those industries have countered that their profits have been eaten away during the Covid-19 pandemic by rising labor and supply costs and medical inflation.

Under the commission recommendations, Medicare rates for acute care hospitals would increase by 1% over the amount specified in current law. Final updates for 2024 will not be set until summer of 2023, but based on the second-quarter 2022 forecasts by the Centers for Medicare & Medicaid Services, the “current law” update would be an increase of 2.8%, the commission reported previously.

The commission also recommends that Congress increase the Medicare base payment rate for doctors and other health professionals by 50% of the projected increase in the Medicare Economic Index, a measure of inflation that estimates changes in physician operating costs.


At a Glance

As of January 1, Payers Provide Cost Comparison Tool
Allowing Members to Receive an Estimate of Cost-Sharing Online

Rising Healthcare Insurance at Universities Hits Families
Paying Mandatory Medical Insurance and Health Service Fees

Half a Million Health Care Workers Were Hired Last Year
We Are Back to Pre-Pandemic Levels but Still Need More

Two-Year Telehealth Extension in the Omnibus Spending Bill
Grants Time to Reach Solutions That are More Permanent

HHS Renews Public Health Emergency for 90 Days
New Extension Runs through April 11, 2023


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