From anesthesia reimbursement declines to supply chain costs, seven ASC leaders joined Becker's to discuss the biggest ASC challenges in 2025.
Editor's note: These responses were edited lightly for clarity and length.
Question: What's the profitability killer you're most worried about in 2025 and why?
Frank Garofalo. Administrator of Providence Summit Surgery Center (Santa Clarita, Calif.): Anesthesia costs and income guarantees. The current market is standardizing income guarantee and elevated supplemental anesthesia group costs. Reimbursement is lacking in covering anesthesia costs to reimbursement ratios.
Barbara Graves. Administrator of Greater Cleveland (Ohio) Hospital's The Surgery Center: Without a doubt, the continued increase in supply costs and shipping is taking a toll on profitability, coupled with the third-party lack of overall reimbursement increases. It seems like every few months there have been issues with supplies and the solution to that has been alternate suppliers increasing their prices because there is a demand. Shipping costs are going through the roof.
Brian Grochowski, MD. ASC Director at Froedtert & Medical College of Wisconsin (Milwaukee): Costly implants, low reimbursement rates.
Kristi Manutai, RN. Regional Administrator for North State Surgery Centers (Redding, Calif.):
1. Anesthesia coverage issues:
- Limited availability: Difficulty securing reliable anesthesia providers can lead to operating room delays or cancellations.
- Cost increases: Higher daily rates for anesthesia services, particularly if renegotiations are frequent, extreme strain on profit margins.
2. Payer contracting challenges:
- Declining reimbursement: Payers are increasingly pushing for lower rates, making it harder to maintain margins.
- Delay in reimbursements: Payers are increasing their denial rate, requesting multiple documents, denying d/t timely filing stating they did not receive the initial claim.
3. Coding and billing errors:
- Incorrect or incomplete coding: Errors in CPT, ICD-10, or HCPCS codes, or failing to include modifiers.
- Bundled services: Billing separately for services that are considered part of a bundled payment.
- Unlisted or experimental codes: Using codes for experimental procedures not covered by the payer.
Cara Roeck. Administrator of Surgery Center of Aventura (Fla.): One of the biggest profitability challenges for 2025 is managing rising supply chain costs and staffing expenses. Inflationary pressures have significantly increased the cost of surgical supplies and implants, while competition for highly skilled staff has driven up wages. These factors can compress margins, especially in specialties like orthopedics and spine, which often rely on high-cost implants. In addition, changes in payer reimbursement structures, particularly as CMS and commercial payers continue to negotiate rates, could further challenge ASC profitability. Proactively addressing these concerns through strategic cost management, optimizing case mix, and leveraging technology to improve operational efficiency will be critical for maintaining financial health.
Allison Schoenfuss, RN. Administrator of Atrium Health Surgery Center Rock Hill (S.C.): Orthopedic implant reimbursements. Contract negotiations need to be updated to support growth in the ASC setting.
Juan Uson. Administrator of the Surgery Center of Wasilla (South Lakes, Ala.): Nothing new, but we continue to experience it and it is getting worse.
- Medical supplies. In our location, Alaska, delayed production of medical supplies due to natural disasters affecting manufacturing sites resulted in the cancellation of cases, tight margin due to high cost of medical supplies, and paying premium pricing to out-of-contract vendors.
- Salary, wages and benefits: Limited staffing resulting in paying premium wages, hiring seasonal nurses.