Change to HOPD rates to impact specialties

Surgery center managers should determine how the new reimbursement system, scheduled to take effect in 2008, will affect their current case mix, suggests Caryl A. Serbin, RN, BSN, LHRM, president and founder of Surgery Consultants of America and Serbin Surgery Center Billing, both in Fort Myers, FL.

The new system is proposed to reimburse at 75% of the hospital outpatient department (HOPD) rate. To determine the impact, Serbin created a spreadsheet with some of the higher volume procedures for the centers she manages. Then she looked at the rate change. Serbin determined, for example, that most ear, nose, and throat (ENT) procedures would increase, and her centers perform a significant number of ENT cases. "That’s a specialty we want to continue to market to," Serbin says.

On the flip side, Serbin has to identify specialties that wouldn’t be so fortunate, she says. "Ones that stands out the most, in terms of potential cuts, are GI [gastrointestinal procedures] and pain management," Serbin says. "If I were a center that did only GI and pain management, I’d be concerned, but there’s not as much impact on multispecialty."

To determine the impact, you obviously have to know what your costs are, says Mike Pankey, RN, MBA, administrator at Ambulatory Surgery Center of Spartanburg (SC). "The general rule of business is that if you’re covering your direct cost related to a case, you should continue to do it," he says. "If you can’t cover your direct cost, you can’t make it up in volume."

Pankey has been performing cost analysis on different specialties and determining how ambulatory payment classifications (APCs), the foundation of the new reimbursement system, would affect his center’s reimbursement. In addition to pain management and GI, ophthalmology is an area of concern. "We do a lot of it, and it will be hit hard," he says. His center has been experiencing a 1% profit margin in terms of direct and indirect costs for those procedures, Pankey says. "We may not be able to cover our indirect costs, but we probably still can cover our direct costs," he says.

Serbin has determined the percentage of increases and decreases to be as follows:

  • Ear, nose, and throat (ENT). Proposed rate ranges from a 30% increase (from $717 to $930.71) for tonsillectomy/adenoidectomy, ages 12 and older [Current Procedural Terminology (CPT) 42821] to an 82% increase (from $510 to $930.71) for tonsillectomy/adenoidectomy, younger than 12 years (CPT 42820);
  • Orthopedics. Proposed rate ranges from an 11% decrease (from $1,339 to $1,197.73) for arthroscopy, wrist, release carpal ligament (CPT 29848) to a 265% increase (from $510 to $1,862.50) for arthroscopy, shoulder, decompression/acromio (CPT 29826) and a 265% increase (at the same dollar amounts) for arthroscopically aided anterior cruciate ligament repair (CPT 29888);
  • Urology. Proposed rate ranges from a 60% decrease (from $446 to $177.54) for biopsy of prostate (CPT 55700) to a 145% increase (from $630 to $1,541.72) for prostatectomy [transurethral resection of the prostate (TURP), CPT 52601].
  • Podiatry. Proposed rate ranges from a 14% decrease (from $1,339 to $1,154.03) for endoscopic plantar fasciotomy (CPT 29893) to a 159% increase (from $446 to $1,154.03) for bunion surgery, Keller type (CPT 28292).
  • Gynecology. Proposed rate ranges from a 62% increase (from $446 to $723.40) for dilation and curettage [D&C (CPT 58120)] to a 258% increase (from $510 to $1,827.13) for laparoscopy with fulguration of oviducts by device (CPT 58671).
  • General surgery. Proposed range ranges from a 21% increase (from $995 to $1,199.89) for repair recurrent inguinal hernia, any age (CPT 49520) to a 190% increase (from $630 to $1,827.13) for laparoscopy with repair inguinal hernia, initial (CPT 49650).
  • Gastrointestinal. Proposed rate ranges from a 44% decrease (from $333 to $185.84) for flexible sigmoidoscopy, with biopsy (CPT 45331) to a 4% increase (from $333 to $345) for esophagogastroduodenoscopy [EGD (CPT 43235)];
  • Ophthalmology. Proposed rate ranges from a 51% decrease (from $446 to $217.50) for after cataract laser surgery (CPT 66821) to a 138% increase (from $717 to $1,706.47) for repair of detached retina (CPT 67107).
  • Pain management. Proposed rate ranges from a 30% decrease (from $333 to $232.11) for sacroiliac joint injection (27096, CPT G0260) to a 25% decrease for several procedures.