October 16, 2023

ASC Industry Awareness

2023 a Boom Year for New ASCs

As of the beginning of Q3, 65 new ASCs of all stripes were either built or in development. Each new OBS or ASC meets reality and serves patients well because physicians and others have taken the time to design and plan to align mission with construction. As of June, Jax Spine & Pain Centers completed their new 54,000 sq. ft. multispecialty surgery center with UF Health Jacksonville (FL). This July in North Liberty, Iowa, Steindler Orthopedic Clinic, an independent orthopedic practice, broke ground on a new ASC, expected to open in 2025. In early September, Indiana Joint Replacement Institute began building a 4 OR ASC in Noblesville, as the first tenant of Noblesville’s Innovation Mile development.

ASCs Vying to Maintain Independence (Contego Reimbursement Value Add)

Even though ASCs are growing, that does not mean they are growing concern free. Inflation has pushed up expenses for ASCs and reimbursements are not keeping pace, placing strains on profitability. In their 94th Physician Report, Medical Economics® lists lower reimbursements among the top five reasons physician finances worsened in 2022. ASC reimbursement trends are curtailing their ability to thrive. For many centers, margin compression is real and unsustainable. ASCs are vying to maintain the benefits of their cultures of independence and Contego is aligned with those goals, helping ASCs and OBSs to optimize their reimbursements and gain margin while mitigating risk.


Healthcare Industry/Trends

How Long Will Kaiser Permanente Strike Last?

On October 4, over 75,000 of Kaiser Permanente unionized workers staged the largest strike of healthcare workers in U.S. history. Unions are pressing for better wages and a reduction of understaffing. The three-day strike in California, Washington, Oregon, and Colorado further delayed some vaccines and surgeries, though physicians were not part of this strike. While the three-day strike is over, bargaining is still ongoing since no agreement has been reached (as of the date of this article). Kaiser healthcare unions indicate that a weeklong strike is a possibility in early November if terms are not settled. Workers claim chronic understaffing is a bottom line issue. Kaiser says it is due to a shortage of healthcare workers.

Cigna Suits Pile Up

On September 30, The U.S. Attorney’s Office, Eastern District of Pennsylvania announced that Cigna Group agreed to pay over $172 million to resolve False Claims Act allegations. The settlement is to recompense the government’s Medicare Advantage program for false patient diagnoses and flagrant overcharges from 2012-2019. The lawsuits are piling up against Cigna as several members have filed independent class-action complaints regarding Cigna’s use of their PxDx AI tool for allegedly automating mass denials. Cigna refutes the claim, saying that PxDx allows them to automate provider reimbursements for correct claims. Legislation regarding the use of AI in the health insurance claims process has now been introduced in the state of Pennsylvania.


Healthcare M&A, Valuation, Revenue Cycle

Deal Volume Off

The quantity of healthcare mergers and acquisitions hit a three-year low in Q2, but pent up demand should spur more activity in the last half of the year. However, according to Forbes, the next billion-dollar healthcare startups are raising funds. Walmart is looking to grow its capabilities in senior care with the potential acquisition of ChenMed, which has 125 clinics across 15 states. The $3.3 billion deal that UnitedHealth proposed for home healthcare services company, Amedisys, is now undergoing a Department of Justice antitrust review. Musculoskeletal solutions company, Globus Medical tied the knot with NuVasive, expanding their global reach in spine and orthopedic care.


Out-of-Network Watch

Financial Impact of Flawed NSA Implementation

The 2020 No Surprises Act (NSA) is working well in protecting patients from surprise bills, but haggling over the independent dispute resolution (IDR) process continues, in large part due to the fact that government implementation veered from original written congressional intent. After an August 25 IDR pause, on September 21 CMS directed IDR groups to resume processing already-submitted disputes and on October 6 CMS reopened the Federal IDR portal for initiation of selected new single and bundled disputes. Healthcare bankruptcies trended up sharply from 2021 to 2022 due to a number of factors, including the flawed implementation of NSA’s IDR provisions.



Important Proposed Revision to Medicare Overpayment Rules for All Providers That Accept Medicare

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

In December 2022, the Centers for Medicare & Medicaid Services (“CMS”) proposed a rule to amend the current regulations for Medicare overpayments. This new proposed rule could be effective as early as the beginning of calendar year 2024.

The Medicare overpayment regulations require a provider to report and return a Medicare overpayment within 60 days of “identification” of the overpayment. A provider failing to report and return an overpayment within 60 days of identification creates a separate basis for liability under the False Claims Act (“FCA”). The current overpayment regulations define the concept of “identification” of an overpayment as when an individual “has, or should have” through “reasonable diligence” determined that they have received an overpayment and have quantified the amount of the overpayment. To date, CMS commentary has provided clarification that “reasonable diligence” means a timely, good faith investigation of credible information of an overpayment, which, outside of instances involving extraordinary circumstances, should take no more than six months.

If the amendments are adopted as proposed, they would change the definition of “identification” for a Medicare overpayment by removing the “reasonable diligence” standard and replacing it with the FCA’s “knowing” standard. Under the FCA, “knowledge” is defined as actual knowledge, reckless disregard, or deliberate ignorance. Therefore, a Medicare Advantage organization, or Part D sponsor, provider, or supplier will have “identified” an overpayment if they have actual knowledge of the overpayment or act with either reckless disregard or deliberate ignorance of the overpayment. Another notable difference between the current “reasonable diligence” standard and the new, proposed “knowing” standard is removal of the requirement that an overpayment must be quantified before it is “identified.”


At a Glance

Reimbursements for Rural Practices Insufficient
Congressional RFI Explores Ways to Improve Rural Healthcare Access

Individual Coverage Health Reimbursement Arrangement (ICHRA)
Pros and Cons for Employee Health Benefits

What Is the Difference between an HMO and a PPO?
Basic Refresher on Health Insurance Terms

What Can Employers Do about the Rising Price of Healthcare?
Indiana Employers Group Takes a Swing at It

Can a Generation Change Healthcare Delivery?
This Orthopedic Leader Thinks Millennials Are Doing Just That


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