December 13, 2023

ASC Industry Awareness

Final CMS 2024 ASC Payment Rule Released

CMS proposed raising Medicare ASC rates 2.8% for 2024 and landed, in their final rule after ASCA consultation, nudging that up to 3.1%. Click here to view 2024 CMS final rule documents. The comment period runs through January 1, 2024. Click here for the rule overview factsheet. Further provisions for hospital price transparency are also going into effect with the final rule. In a move the ASC industry welcomes but did not anticipate, CMS added total shoulder and total ankle replacements to the list of covered ASC procedures. If you want to take a deeper dive into the decision-making process this year and ASCA’s role in shifting CMS perceptions, check out this 2024 final rule podcast.

New ASCs in Motion Heading into 2024

If current and planned projects are any indication, 2024 is also shaping up to be a very good year for new ASC starts. These eleven ortho/spine practices have identified growth opportunities to stretch toward in the New Year. These six ASCs have either started building or planned to start in Q4. In the Mountain West, a new orthopedic center with an ASC is opening in Broomfield, CO and a new medical campus with a surgery center is opening in Saratoga Springs, UT. In the Midwest, a shopping mall is being converted into a medical center and ASC. In the Southeast, new centers in Chattanooga, TN and Winston-Salem, NC each received state approvals.


Healthcare Industry/Trends

Medicare Advantage (MA) Denials Jump

According to a report generated from a national sample of 1,300 hospitals by the American Hospital Association (AHA), Medicare Advantage denials rose 56% over the January 2022 to July 2023 study period. During the same 18-month period, commercial insurance denials for hospitals increased by 20%. Medicare Advantage is still popular with seniors, with nearly half of all Medicare-aged people signing up for an MA plan, but is losing favor with doctors and hospitals. Health systems, hospitals, and orthopedic providers are either dropping or threatening to drop MA plans. Clearly, if MA continues on this path, it becomes unsustainable for patient subscribers. Humana and UHC are showing signs of waning confidence in their Medicare Advantage business lines.

Rising Costs and Consolidation in Health Insurance

In part due to consolidation in the health insurance market, employers expect their health benefits outlay to rise by 5.4% per employee for 2024. Health insurance industry consolidation and rising costs have driven bipartisan congressional acknowledgement that insurers are bypassing PPACA medical loss ratios. In a notable nod to rising costs and health insurance consolidation, Cigna and Humana were in merger talks early this month, which Cigna just called off. Had this deal gone through, it would have created a Cigna that is as powerful as UHC. Additionally, the US Congress is looking into anticompetitive health insurer behavior that is driving up drug costs.


Healthcare Digital Transformation Watch

Will AI Take Center Stage in Healthcare in 2024?

Five big predictions for healthcare AI for 2024 suggest that it will be a big year for artificial intelligence to improve outcomes, reduce payer friction, and combat workforce shortages. Epic is using AI to make improvements in the way EHRs work. Advances are being made rapidly in the number of artificial intelligence and machine learning-enabled medical devices available in a wide variety of specialties. Promise is not the same as reality and some areas, such as revenue cycle management, experience more barriers to successful adoption. Americans are cautiously optimistic about AI improving healthcare. In a recent survey, 53% of patients said that generative AI could improve medical care access and wait times.


Healthcare M&A, Valuation, Revenue Cycle

RCM Understaffing: A Critical Issue for Practices

In August, Experian Health ran a survey of 200 healthcare providers’ revenue cycle management (RCM) functions to gain a better sense of how a lack of RCM staffing is making an impact on revenue and patient engagement. Ninety-six percent of respondents said their organizations’ revenue channels (payer reimbursements and patient collections) have been affected negatively by understaffing. A full 92% of healthcare executives say their RCM departments are inadequately staffed, so this is no small issue. RCM staff shortages make it much more difficult to deal with denials in order to obtain payment. Outsourcing to RCM-focused organizations, like Contego, in addition to augmenting efforts with RCM technology are ways to cope with this significant challenge.


Out-of-Network Watch

NSA’s IDR Process Still Unsettled

The No Surprises Act’s (NSA) Independent Dispute Resolution (IDR) process is still leaving providers with a surprise headache two years after the law went into effect. The number of disputes is much higher than congress provided for and lagging resolutions are financially onerous for providers. Around thirty providers and public healthcare companies have named the legislation as the cause of significant financial risk, a handful of those having filed Chapter 11 protection. A component piece of this challenge stems from insurers ignoring the legislation and in so doing passing along financial burden to providers. In late October, federal government agencies proposed changes to the IDR process to advance early communication and open negotiation.



New Efforts to Promote Competition in Health Care

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

08 December 2023

The Biden Administration recently announced several new initiatives intended to “promote competition” in the health care sector. These initiatives reflect a broad range of concerns about rising costs in health care, including pointed references to “price gouging” and “profiteering” by private equity and big business. They also complement a number of enforcement actions, guidance statements, and rulemakings that the Federal Trade Commission (FTC), Department of Justice (DOJ), and Department of Health and Human Services (HHS) have taken over the past three years to promote competition in the health care sector.

Some of the initiatives:

  • HHS, FTC, and DOJ are taking steps to promote the sharing of data among themselves to identify so-called “roll-up” acquisitions, such as mergers or acquisitions that may be too small to require reporting to the FTC or DOJ.
  • In the near future, the DOJ, FTC, and HHS will issue a joint Request for Information to the public, seeking information on the topic of “corporate greed in health care.”  This Request for Information will be used to identify areas for future regulatory and enforcement activity by these agencies.
  • Finally, the Centers for Medicare & Medicaid Services (CMS) is taking steps to increase the transparency of certain data it keeps about health care organizations. For the first time, CMS will publicize data about the ownership of Federal Qualified Health Centers and Rural Health Clinics. CMS will also explore ways to increase the transparency of data about Medicare Advantage plans and performance, starting with a request for information from the public on this topic to begin in early 2024.


At a Glance

ASCs Gaining More National Publication Attention
US News to Debut “Best” Ambulatory Surgery Centers in 2024

President Biden Invokes Cold War Era Law
Defense Production Act to Boost Investment in Medical Supplies

2024 to be a Make or Break Year for Many Hospitals
Due to Staff Shortages, Wage Pressure, and Inflation

Healthcare Hiring Bolsters Cooling US Labor Market
Healthcare Industry a Bright Spot for Jobs

CVS Pharmacy to Reorient the Way It Is Paid in 2024
Moving toward a More Transparent ”Cost Plus” Strategy


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