Barry Tanner, president and CEO of Physicians Endoscopy, believes ASCs will be net winners under the new health reform law.
"We don't know how this new law will mature over the next 5-10 years, but I do believe that ASCs will essentially be net winners in the game that is about to be played, because of their proven ability to deliver high quality, cost effective care," he says.
Here, Mr. Tanner itemizes the ways he expects ASCs will be impacted by health reform.
1. More surgical volume. Surgery centers will take a share of the 32 million previously uninsured Americans who get coverage in 2014. Many of these patients will be paying at Medicaid-level rates and "that would be painful and put new pressures on centers to be more effective and efficient," he says, "but I believe ASCs could handle it." Since most ASCs have at least some excess capacity, they could absorb more low-paying patients without losing money. "As with most industries, the most efficient and well-managed ASC will rise to the occasion and be successful," he says.
2. An opportunity for better relations with hospitals. Since hospitals alone will not have the capacity to deal with 32 million more people seeking care, Mr. Tanner thinks this could be an opportunity for hospitals to start seeing ASCs as "part of the solution, not the problem."
3. Payors will take advantage of ASCs' lower costs. "ASCs offer a cost-effective alternative for insurers who find themselves under increasing pressure to control costs," Mr. Tanner says. He thinks insurers' expenses are going to rise dramatically for at least two reasons. First, they will be barred from money-saving practices such as denial of coverage for preexisting conditions. Second, plans will have to deal with an influx of previously uninsured people with significantly more health problems, the result of not having had coverage before.
4. More physicians will join ASCs. Physicians' fees are going to be squeezed even more than now, prompting more of them to invest in and work in ASCs so that they can share in the facility fee and take advantage of more efficient scheduling.
5. Better productivity adjustment than expected. The original House reform bill created a "productivity adjustment" that would have gone into effect this year, causing a reduction in ASC reimbursements. But the final law starts the adjustment next year, when it is expected to provide an increase in reimbursements. "While I'd prefer not to have the productivity adjustment at all, pushing it back a year will be helpful," Mr. Tanner says. "It will give the economy a chance to recover, and any potential increase in the CPI will help to offset the negative impact of the productivity adjustment."
6. More patients for screening colonoscopies. The health reform law bars Medicare and private insurers from charging patients copayments for screening colonoscopies, starting in 2011. That change is expected to increase volume, which would directly benefit ASCs that perform colonoscopies.
7. Not providing cost reports may actually be a disadvantage. The final health reform law removes a proposal in the original House bill that would have required ASCs to submit Medicare cost reports to CMS. Some ASC leaders argue this data would only be used to reduce reimbursements, but Mr. Tanner thinks the discarded requirement might actually have helped ASCs.
"I am in favor of cost reporting as long as proven low-cost providers are rewarded for their efforts and not punished with even lower reimbursement," he says. Medicare currently pays ASCs 41 percent less than HOPDs receive for the same procedure, and "we should be proud of this and strive to be even better," he adds. "If cost reports could have been used to reward ASCs for their low cost efficiency, that would have been a positive accomplishment."
8. Ban on physician-owned hospitals doesn't affect ASCs. Most ASCs could never be physician-owned hospitals because their physical plant could not be transformed into a hospital. "Although I hate to see any important innovation stymied, I don't think that this negatively impacts upon ASCs in general," Mr. Tanner says.
Reach Barry Tanner at btanner@endocenters.com and learn more about Physicians Endoscopy at www.endocenters.com.
"We don't know how this new law will mature over the next 5-10 years, but I do believe that ASCs will essentially be net winners in the game that is about to be played, because of their proven ability to deliver high quality, cost effective care," he says.
Here, Mr. Tanner itemizes the ways he expects ASCs will be impacted by health reform.
1. More surgical volume. Surgery centers will take a share of the 32 million previously uninsured Americans who get coverage in 2014. Many of these patients will be paying at Medicaid-level rates and "that would be painful and put new pressures on centers to be more effective and efficient," he says, "but I believe ASCs could handle it." Since most ASCs have at least some excess capacity, they could absorb more low-paying patients without losing money. "As with most industries, the most efficient and well-managed ASC will rise to the occasion and be successful," he says.
2. An opportunity for better relations with hospitals. Since hospitals alone will not have the capacity to deal with 32 million more people seeking care, Mr. Tanner thinks this could be an opportunity for hospitals to start seeing ASCs as "part of the solution, not the problem."
3. Payors will take advantage of ASCs' lower costs. "ASCs offer a cost-effective alternative for insurers who find themselves under increasing pressure to control costs," Mr. Tanner says. He thinks insurers' expenses are going to rise dramatically for at least two reasons. First, they will be barred from money-saving practices such as denial of coverage for preexisting conditions. Second, plans will have to deal with an influx of previously uninsured people with significantly more health problems, the result of not having had coverage before.
4. More physicians will join ASCs. Physicians' fees are going to be squeezed even more than now, prompting more of them to invest in and work in ASCs so that they can share in the facility fee and take advantage of more efficient scheduling.
5. Better productivity adjustment than expected. The original House reform bill created a "productivity adjustment" that would have gone into effect this year, causing a reduction in ASC reimbursements. But the final law starts the adjustment next year, when it is expected to provide an increase in reimbursements. "While I'd prefer not to have the productivity adjustment at all, pushing it back a year will be helpful," Mr. Tanner says. "It will give the economy a chance to recover, and any potential increase in the CPI will help to offset the negative impact of the productivity adjustment."
6. More patients for screening colonoscopies. The health reform law bars Medicare and private insurers from charging patients copayments for screening colonoscopies, starting in 2011. That change is expected to increase volume, which would directly benefit ASCs that perform colonoscopies.
7. Not providing cost reports may actually be a disadvantage. The final health reform law removes a proposal in the original House bill that would have required ASCs to submit Medicare cost reports to CMS. Some ASC leaders argue this data would only be used to reduce reimbursements, but Mr. Tanner thinks the discarded requirement might actually have helped ASCs.
"I am in favor of cost reporting as long as proven low-cost providers are rewarded for their efforts and not punished with even lower reimbursement," he says. Medicare currently pays ASCs 41 percent less than HOPDs receive for the same procedure, and "we should be proud of this and strive to be even better," he adds. "If cost reports could have been used to reward ASCs for their low cost efficiency, that would have been a positive accomplishment."
8. Ban on physician-owned hospitals doesn't affect ASCs. Most ASCs could never be physician-owned hospitals because their physical plant could not be transformed into a hospital. "Although I hate to see any important innovation stymied, I don't think that this negatively impacts upon ASCs in general," Mr. Tanner says.
Reach Barry Tanner at btanner@endocenters.com and learn more about Physicians Endoscopy at www.endocenters.com.