February 15, 2024

ASC Industry Awareness

Procedure Migration Fuels ASC Growth

Robotic surgical procedures and anesthesia advances are enabling more types of surgeries to be performed safely in surgery centers, which creates new growth opportunities. As of late, spine procedure migration to ASCs is creating a sales boom for spinal surgical devices, creating mutually enforceable growth. In addition to total joint replacements, minimally invasive spine surgeries, and robotic procedures, advances in cardiovascular procedures are also enabling them to migrate to surgery centers. Growth for many ASCs over the course of 2024 will come from shifting cases out of hospitals to ASCs as payers look to reduce cost and patients seek personalized care.

Certificate of Need (CoN) Effects on ASCs

Certificate of need laws began to dot the states in the late 1970s and by 1982, every state but Louisiana had some type of CoN program. The twin CoN goals of decreasing cost and increasing charitable healthcare have been proven unreachable since CoN programs limit entrants, decrease supply, and thereby raise costs. In response in 2023, four states (NY, SC, NC, and MS) made significant adjustments to their CoN laws. Twenty states now have more ASCs than hospitals, a situation which is aided by states where CoN laws are not applicable to ASCs. The majority of recent ASC developments are in states with no CoN limitations. The new, privately funded Magnolia Surgery Center just opened in Conroe, TX. Intermountain healthcare opened a unique ASC and recovery hotel in Murray, UT.


Healthcare Industry/Trends

Employers Having More Payer Conversations

While direct contracting for self-insured employers has been around for a while, the yearly rising costs of insurance contracting are pressing more employers to negotiate direct arrangements with healthcare providers. Historically, larger healthcare systems were the only entities in position for employer contracting, but now even orthopedic practices are seeing the benefits of direct-to-employer contracts. Another twist in contracting being explored is bringing employers, providers, and payers to the contracting table together. The realities of annual contracting and costs associated with employer healthcare coverage are pressing new models for employee health benefits into the market.

Hospital Finances Trying to Stabilize

Over the past few years, practice expenses have been rising faster than revenue, hospitals have been hit hard by bankruptcies, and rising hospital closures are creating some nervousness about aspects of healthcare in the US. Even so, operating margins have been slowly on the rise since March 2023 and data suggest that hospital financial performance toward the end of 2023 signaled stabilization. However, some hospitals are still experiencing losses. A Wisconsin hospital system closure has surprised local officials and resulted in 1,000 lost jobs and economic challenges are forcing the closure or sale of a previously stable and successful Idaho physician group.


Healthcare M&A, Valuation, Revenue Cycle

Healthcare M&A Margin for Error Shrinks

Healthcare bankruptcies reached a five-year peak in 2023. Deal volume in healthcare declined in 2023 but value rose due to large deals. In order for dealmakers to exit 2024 well, they will seek to improve their M&A capabilities and their margin for error is smaller. Citing the potential implications of higher medical costs, CVS Health has cut its 2024 guidance. Tenet is following a strategy of selling off hospitals to increase its financial standing. Barring regulatory challenges, HCSC is planning for a $3.3 billion acquisition of Cigna’s Medicare business. Optum is keeping its growth boom intact with a new partnership with Allina Health, which will transition 2,000 information system and RCM staff to Optum.


Out-of-Network Watch

Jury Still Out on NSA

The 2021 No Surprises Act (NSA) went into partial effect on January 1, 2022 and its execution has been in dispute ever since. On the positive side, it has shielded patients from $10 million in surprise bills. Major changes are being made to the Independent Dispute Resolution (IDR) process, which has been the center of confusion and angst. The American Hospital Association is satisfied with the batching portion of the changes, but voiced concerns that the proposal does not require payers to share how they arrive at the qualifying payment amount, which still leaves accuracy and transparency issues for providers. To date, many clinicians are losing more than they can gain challenging insurer payments under the NSA.


Healthcare Digital Transformation Watch

Financial Pressures Driving HiT Transformation

Telehealth utilization rose stratospherically during the COVID pandemic, then dipped precipitously, and now is finding sustainable growth in utilization nationally, in part due to generational preferences and partially as a means to corral provider costs. Artificial Intelligence is moving toward realizing gains in coding data, enabling billers to verify coding accuracy and tackle more complex cases. Technology-induced redundancy shifts work as currently formulated, creating upskilling opportunities. Healthcare information technology (HiT) adoptions can significantly benefit patient care while reducing some areas of cost. Health systems are under pressure to do more with less, which has resulted in some HiT job cuts, demonstrating that systems may still often see HiT as a cost center more than a business driver.



Obligations under the Family and Medical Leave Act

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

We have all come to appreciate that maintenance of one’s mental health is as important as physical health, in the healthcare industry as well as the general population.  Nearly 1 in 20 adults in the US experience a serious mental illness every year, according to recent data from the National Alliance on Mental Illness. As a result, healthcare employers should take time to understand their legal obligations related to leave requests, including under the Family and Medical Leave Act (FMLA).

The FMLA only covers mental health conditions that rise to the level of a serious health condition. This includes inpatient care in a hospital, hospice, or residential medical care facility, or continuing treatment by a healthcare provider that prevents the employee from performing the functions of their position. Any mental health condition, including depression and anxiety, has the potential to qualify as a serious mental health condition. Workplace stress could even rise to this level under certain circumstances.

However, a diagnosis alone is not enough to trigger an employer’s obligations. Many mental health conditions are on a spectrum, with variations ranging in severity. Whether an employee’s condition qualifies for FMLA leave needs to be determined on a case-by-case basis.

An employee should apprise their employer of the specifics of their mental health condition in a way that makes it reasonably plain that the condition is serious, and tell their employer this reason for their absence.

However, employees must do more than simply state that they have a mental illness for an employer to be considered “on notice” of a serious mental health condition. Generally, an employee must provide details about the mental condition, including its severity and any incapacity that may occur. Where an employee has a drastic and noticeable change in behavior or mood, an employer may be considered “on notice” without this disclosure.

On the other hand, an employer already “on notice” of a serious mental health condition, such as because an employee has previously taken leave to obtain treatment, then an employee may simply inform the employer that they need leave for that same mental illness, even if the employee does not spell out the severity for each leave request.

If an employee requests FMLA leave for a serious mental health condition, the same obligations are triggered as with any other serious health condition, including employer notice and designation obligations.


At a Glance

Twenty of the Most Architecturally Beautiful Hospitals in the US
Wide Range of Styles from All over the Country

How to Adapt as Healthcare Workforce Management Shifts
Limits on Talent Pool Means Stiff Competition for Staff

Meet the 24-Year-Old CEO of a Colorado Hospital
Believes Lack of Healthcare Experience Worked in His Favor

Protections Are a Major Concern at Emotional Maryland Hearing
on Medical Aid in Dying/Assisted Suicide Bill

Neuralink Implants Brain Chip in First Human
Goal Is to Help Patients Suffering with Paralysis


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