June 15, 2023

ASC Industry Awareness

Growth Opportunities for ASCs/OBSs/OBLs

What are $130.6 Billion, 70%, and 2.5%? ASC market growth projection by 2031 (3.9% compound annual growth), the percentage of independent ASCs, and the annual numerical ASC growth rate. All three numbers point to excellent ASC growth. With nine new ASCs in April and eleven in May, 2023 is setting a solid pace for continued ASC growth and development. Growing demand, expansion of specialized services, and technological advances are combining to create more revenue opportunities for ASCs. Certificate of Need laws are under pressure in several states, which, if rescinded, would open yet more ASC growth.

What Is Happening with Orthopedic ASCs

The average costs of knee and hip scope procedures at ASCs v HOPDs makes it clear why ASCs are increasingly the preferred choice for patients, physicians, and payers. The migration of orthopedic surgeries to ASCs has been so significant that a Florida Orthopedic Clinic CEO believes that 70% of all orthopedic procedures eventually will be done in the lower-cost ASC setting. This kind of growth is creating the impetus for hospital conversions to ASCs like this one in New Jersey. There is still ample room for orthopedic ASCs in many places across the country, since geographic ASC dispersion is uneven.  See here to read the thoughts of five orthopedic surgeons as they share their vantage points on the future of orthopedics.


Healthcare Industry/Trends

Hospitals Adjust to Lower Margins

According to a Kaufman Hall analysis, inflation and the end of the COVID-19 public health emergency (along with the increasing difficulty in obtaining adequate and timely reimbursements) are creating a 0% (break-even) average hospital financial margin. Five health systems are reporting massive operating losses. Across the nation, 60 hospitals and health systems are reacting by cutting jobs, a number that rises monthly. Healthcare job cuts are up 81% from the first five months of 2022. Seven of eight most recently reported hospital closures and bankruptcies this year are based in rural areas. Staffing costs are rising by 10% this year, adding to the financial challenges faced by many US hospitals.

Retail Healthcare Moves

Walmart is boosting the wages of 7,000 pharmacists and opticians, in an effort to communicate their dedication to their health and wellness business. CVS Health’s sales rose 11% in Q1, enabling it to add in-home services and primary care clinics for seniors. As of July 31, Amazon will be dropping its health and fitness device line, Halo. Deerfield, IL-based Walgreens is laying off 10% of its corporate employees in a move that will open up $5.4 billion to cover opioid litigation. Even with the benefits for patients, the retailing of medicine does have some potential downsides, notably the difference between being independent, original, and nimble as opposed to focusing on corporate compliance and cost reduction.


Healthcare Digital Transformation Watch

Inching toward Healthcare’s Virtual Future

Machine learning, deep learning, algorithms, data, AI, VR … at this point it all seems to have yet unrealized potential for benefit (and harm) in healthcare. ChatGPT may be able to help healthcare workers manage workloads and drive better patient care. Researchers are testing how virtual reality could reduce the need for sedatives during surgery. Ninety percent of futurists say that within a decade, virtual models (known as digital twins) will be used widely in healthcare to develop more personalized treatment protocols. These developments are now upon us and the need for transparency and safety guardrails for AI is obvious.


Healthcare M&A, Valuation, Revenue Cycle

Provider Groups Growing via M&As

Cardiovascular ASCs are on a tear. Cardiovascular Assocs. Of America just merged with Novocardia to create the strongest cardiovascular network in the US. US Heart & Vascular has announced a partnership with large cardiovascular group, HeartPlace. Anesthesia took a big leap in April as National Partners in Healthcare expanded to 12 additional states through their new partnership with Medstream Anesthesia. Optum is seeking to buy home health provider, Amedisys, for $3 billion. Optum’s buying spree is raising concerns over lack of checks and balances that could lead to it becoming a socialized medicine system, run by UHC for the federal government. Orthopedics has made big moves too in the first half of 2023. Hughston Clinic Orthopedics has expanded to Springfield, TN. Physician-led Orthopaedic Solutions Management completed its sixth partnership, this one with Tallahassee Orthopedic Clinic.


Out-of-Network Watch

NSA Still being Worked Out

In February, HHS suspended and then in March, restarted surprise medical billing independent payment determinations, demonstrating the difficulty of adequate and equitable implementation of this portion of the No Surprises Act (NSA). In April, HHS filed an appeal of the most recent Texas Medical Association decision regarding the independent dispute resolution portion of the Act. There are still significant issues with the NSA from a provider’s perspective, including additional pre-authorization impediments, claim follow-up snags, and the positioning of Medicare rates as the benchmark for in-network and out-of-network reimbursements. Several states are also working out the implementation of their surprise billing statues.




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

This week the U.S. House of Representatives plans to vote on H.R. 277, the REINS Act, and H.R. 288, SOPRA. Both bills directly and broadly threaten public health and the environment.

The REINS Act would prevent the federal government from carrying out actions mandated by Congress, including laws with strong bipartisan support, and could prevent implementation of critical public health, safety or environmental protections. The REINS Act would require both the House and Senate to approve major rules, including rules mandated by existing law, within 70 days.

If one or both chambers failed to approve a rule, the rule would not take effect and would be tabled until the next congressional session. Congress could prevent existing laws from being carried out, resulting in gridlock at an unprecedented scale. This would effectively give one chamber of Congress veto power over any new significant public health, safety or environmental protections, no matter how non-controversial or sensible they may be.

SOPRA would hinder agencies’ ability to protect the public by allowing judges to substitute their own policy interpretations for agencies’ expert determinations, creating regulatory uncertainty and reversing decades of established precedent.

Federal regulations provide the backbone for the enforcement of existing federal health statutes that protect not only patients, but also providers and medical facilities. This kind of action would undermine the entirety of federal oversight, which protects every person and provider from fraud and abuse by dishonest actors in our communities.


At a Glance

Why We are Universally Bad at Selecting Health Insurance
Choose an Appropriate Plan. Do not Let Inertia Rule.

How UHC Grew Bigger than Biggest US Banks
Has Highest Price per Share on the Dow Jones

Hospital System Denied Care to Patients with Medical Debt
More Systems Joining in As Medical Debt Rises 

44-Year-Old Impersonating Physician Treats Thousands in LA
Owned and Operated Blood Testing/Treatment Center

Insurance Commissioners Eyeing Cigna
Following Report of Automated Batch Claims Denials


To subscribe or unsubscribe to ASCs in Motion, simply send an email request to levans@contegollc.com.

To inquire about Contego’s expert reimbursement solutions:
Call 855.505.8346 x1245 or Email info@contegollc.com

Contego Solutions, LLC