August 15, 2023

ASC Industry Awareness

ASC Industry Is Poised for Growth

The American public increasingly became aware of the high value that ASCs bring to their own healthcare during the recent pandemic. Coupled with high hospital outpatient facility fees, though legal but now under scrutiny, ASCs are growing in their share of potential patients’ minds. The fact that over 50% of commercially insured patients are enrolled in high deductible plans also drives patient searches for care at high-quality lower-cost ASCs. We are seeing new ASCs opening in 2023 that are not in traditional ASC growth states. Five ASCs are slated to open in California in the next 45 days. A new ASC is opening in Fairhope, Alabama; bringing a 6OR facility to the residents of that area. In addition, six ASCs that previously closed are reopening in 2023!

Challenges to Overcome

ASCs, like other providers, experience some problems in the healthcare market. Garnering favorable, adequate reimbursements is a big issue that Contego ASC and OBS clients face. Contego is mitigating that trend for independent surgeons who want to remain so by optimizing reimbursements, which function as a hedge against future difficult insurer contract negotiations. Another issue stifling ASC growth in some states are certificate of need laws, which can hamper growth right out of the gate. Even so, six ASCs are now popping up in CON states.


Healthcare Industry/Trends

Claims Denials under the Scope

A July 24 class action lawsuit in the U.S. District Court for the Eastern District of California, accused Cigna of using an algorithm in its software, PxDx, to reject over 300,000 claims en masse (average claim denial time = 1.2 seconds), rather than making determinations individually as required by California health insurance law. The suit alleges that Cigna physicians can deny claims in batches of hundreds or thousands without ever opening patient fields. Cigna responded that they use the PxDx software to accelerate payments to physicians for low-cost tests and treatments but that patients are not denied care. On July 31, The US Department of Labor sued a subsidiary of UnitedHealth Group for routinely denying emergency room services and screening claims since 2015 for over 2,000 self-funded employee benefit plans.

Health System Fissures

Though the COVID public health emergency officially ended in May, primary care providers are still burdened and experiencing sustained staffing shortages. Some hospitals that spent big on traveling nurses during the pandemic are now short on cash. Due to those dwindling cash reserves, 78 hospitals are cutting jobs in 2023. Rural hospitals are particularly affected; an estimated 16 in the state of Kentucky alone are in danger of closing. The US health system as we have known it is not only under pressure from costs and low margins, but also from new competitors, like Amazon Clinic, which has just expanded its telehealth service nationwide. Healthcare C-suite leaders are looking at system redesigns to compete.


Healthcare Digital Transformation Watch

Healthcare and AI

Artificial Intelligence algorithms can monitor patient data, lab results, and vital signs. Operational efficiencies, guided diagnosis, and population health management can also be fortified with generative AI. Systems like UNC Health are creating their own generative AI tools to respond to questions about and within their health systems. AI is expanding the range of remote monitors, oximeters, and sensors on medical devices. Payers are already using AI technology to speed up and streamline prior authorizations. These are early days for AI and healthcare; both challenge and promise are in the offing. One such current challenge – 70% of Americans are concerned about the implications of AI use in healthcare.


Healthcare M&A, Valuation, Revenue Cycle

Service Complementarity a Big Driver

Hospital M&A deal volume has returned to pre-pandemic levels as healthcare systems look for complementary services. CVS, Optum, and Walgreens are all grabbing shares of the $265 billion of Medicare services expected to move to home health by 2025. HCA and HonorHealth are doing the same in the urgent care market, fueling a buying boom that builds greater control of slices of healthcare through purchasing complementary service lines. Many Surgery Partners and Optum 2023 deals reflect the same move toward deals that enhance complementary services.


Out-of-Network Watch

NSA Déjà vu All Over Again

Billing arbitration through the No Surprises Act is slogging through its own groundhog day. The NSA passed in December 2020 to prevent surprise billing. Execution of the included independent dispute resolution process for out-of-network claims is still at the center of this high stakes game of whack-a-mole with payers and employers approving of determinations solely based on qualifying payment amounts (payers’ median in-network rates) and providers disapproving. A Texas federal judge ruled with the Texas Medical Association (TMA) in its first suit contra HHS and the QPA in early 2022. The ruling did not result in sufficient execution changes from the administration. So, the TMA filed suits #2, #3, and #4 and won. CMS has again paused OON billing arbitration to reset administrative fees to a workable rate.



Biden Administration Healthcare Cost Proposals

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

A new initiative from the Biden Administration announced August 10 is part of an ongoing effort to grow the nursing workforce and should be considered a starting point in the HHS and Biden administration’s commitment to developing the country’s health workforce.

The initiative aims to remove financial barriers for pursuing healthcare education by providing tuition assistance, child support, or partial educational loan forgiveness to qualifying awardees. Other awards offer more intensive training opportunities for registered nurses, including a nurse practitioner residency program that is similar to the model used to train physicians and a nurse anesthetist traineeship.

Demand for registered nurses and nurse practitioners has reached critical levels after the COVID-19 pandemic pushed caregivers to leave the workforce. Attrition escalated to such a level that the American Nurses Association urged the HHS to declare the nursing shortage a national crisis in 2021.

Other nursing programs experience similar constraints. More than 91,000 qualified applications were rejected from nursing programs in 2021, the American Association of Colleges of Nursing found, due to limited classroom space, educators, and clinical sites for teaching.

HHS has previously allocated funds to address pipeline concerns. In 2022, HHS invested $13 million, in partnership with the Department of Labor, to expand nursing programs’ capacity, by increasing the number of nursing preceptors available to supervise students’ clinical rotations and the number of students who could train in acute settings.

Last month, HHS Secretary Becerra announced the HHS Health Workforce Initiative, which pledges a proposed $2.7 billion toward workforce training, scholarship, loan repayment and wellbeing programs for healthcare workers.


At a Glance

Payer Mix in Nation’s Largest For-Profit Health Systems
Share of Payers and Percentages Grows over Time

Bureau of Labor Statistics’ Jobs to 2031
Nurse Practitioner the Fastest Growing Occupation

Arrests in Several States in Bizarre Harvard Remains Trade
Nationwide Network Connected to Harvard Med School

Some Hospitals Embracing RV Living for Patient Families
RV Life on Campus Makes Stay Easier for All Involved

American Fitness Index Measures 100 Fittest American Cities
How Did Your City Fare?


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