ASCs that are expanding their services might find that high-acuity spine cases can work well. Some strategies for expanding into spine cases are similar to expanding into total joint cases.
CMS still does not cover some spine cases, such as lumbar fusions, but ASCs can perform these for commercial payers, says Lianne McDowell, CASC, administrator at South Portland Surgical Center in Tualatin, OR. But it will only work if the ASC can control its costs, she cautions.
“It’s good to have someone on staff who is savvy about costs and recovery times,” McDowell says.
McDowell suggests taking the following steps when starting a high-acuity spine program:
• Step 1: Identify patients by checking data. Start with a checklist of patients who are healthy enough to undergo surgery in an ambulatory surgery setting and who are not on Medicare, McDowell says. Then, ask a spine surgeon to send information about one of these patients to review the case and payer. This first patient will serve as a test case to see how well the procedure will work, financially, for the ASC.
The patient’s insurance and the patient — through copays — would spend more in a hospital outpatient setting, and the ASC administrator can use this as leverage when negotiating with the insurer, she suggests.
“Patients are becoming more savvy about costs, and this allows me to push with the payer to use their benefits to do a carve-out to get the procedure covered,” McDowell says. “The patient wants to come to the ambulatory surgery center because he will pay less money and go home the same day.”
When negotiating with commercial payers, be prepared with invoices to make them aware of the ASC’s costs, she adds.
“I know they’ll pay less if the patient comes to the ASC, and sometimes that can be a factor,” McDowell says.
So far, the response to these requests has worked well. “It’s a win-win-win: a win for payer, a win for facility, and a win for patient,” she says.
• Step 2: Once approved, work on completing the contract. After an ASC receives approval, the next challenge is to move the case through quickly. The payer might have approved the surgery in a same-day surgery setting, but this doesn’t mean they plan to pay enough to make the case worthwhile to the ASC. So, more negotiations are necessary.
“They might say, ‘I’ll give you $10,000,’ and I say, ‘I need $15,000,’” McDowell says. “Look at your costs and time involved and know the patient’s benefits, too.”
There likely will be a back-and-forth discussion on the amount paid to cover the procedure and on how to negotiate and approve the contract in a timely manner. They might ask for two months to push the contract through all the appropriate approval channels, and the ASC administrator can lobby for it to happen in three weeks, McDowell explains.
“The contract manager can negotiate, but will still need approval from someone higher up,” she adds.
• Step 3: Manage the patient’s time in recovery and expectations. The patient should know that he or she will go home on the same day of the surgery. Make sure the patient understands the time it might take to recover, whether it’s four hours or 12 hours — in the case of ASCs that are authorized to offer 23-hour stays.
The ASC also must be sure the recovery period is manageable. For instance, if the patient experiences pain that is not well managed, then it’s possible the ASC will have to transfer the patient to a hospital, which would be a poor way to start with spine surgery cases, McDowell says.
“You have all of these costs when patients stay longer, including staffing time,” she adds.
A good strategy for managing recovery time is to work with surgeons, McDowell says. There should be some communication about the surgeon’s expectations for the first high-acuity spine case. For example, the surgeon might request the patient stay for 23 hours, just for observation. If this occurs, the ASC must make two nurses available to staff the center overnight. This raises the procedure cost and could result in a financial loss for this test case, McDowell warns.
“If you feel you could afford that loss, then take that data back to the payer and say, ‘Here’s patient Jones, who stayed the night and went home, and, now, can we talk about getting this procedure carved out and doing more of them?’” she says.
• Step 4: Push forward. “Don’t just do one case if you’re successful at it,” McDowell says. “Make sure surgeons are mindful of how we did this lumbar fusion, and it went great.”
Talk about how it worked and what made it successful. Soon, other surgeons might be comfortable with cases like this one. Part of moving ahead is collecting solid data. McDowell has used data as part of renegotiations with payers.
“I got a spine surgeon involved because we wanted to get better payment because of the costs — even though we worked hard to bring down costs,” she says. “We had real data showing how we were really bringing down our costs.”
McDowell showed data on the ASC’s costs in 2011 when it opened and compared these with current costs or a particular cost-intensive procedure.
“Costs decreased by 44% because we worked with vendors to bring down the costs,” she explains. “We even brought disposable supplies down 28% for one spine procedure.”
The ASC administrator also can show how some expenses, such as labor costs, will not decrease.
When McDowell engages in these discussions with payers, she starts with the highest-cost cases to show them that data.
“Once you get the contract, work to continue to bring it down to a lower cost,” she offers. “I always start with the highest cost and most complex ones, like artificial disc replacement, and I show payers how we’ve worked to bring down costs.”
Lowering costs also will help keep the ASC competitive should Medicare start covering these cases.
“Medicare pays less, but if you get your costs down, it will work,” McDowell says. “What kind of opportunities do you have to make it feasible to bring down costs and add these cases to the center without losing money?”