6 Ways to Increase Profitability of Your Orthopedic-Driven ASCWritten by Jaimie Oh | November 01, 2010
Ann Margaret McCraw, CEO, and Belinda Rutledge, administrator, of Midlands Orthopaedics Surgery Center in Columbia, S.C., share six tips on how orthopedic-driven ASCs can increase profitability.
1. Maintain open communication with the Workers' Compensation Commission to increase your orthopedic ASC's maximum allowable payment. Under the South Carolina Workers' Compensation Act, the medical fees paid to physicians, ASCs and hospitals are subject to fee schedules set by the Commission. In 2006, South Carolina's Commission set the fee schedule for ASCs and hospitals at 140 percent of Medicare. Hospital representatives were included in discussions leading up to the finalized rule, but ASC owners were not. ASCs were successful in obtaining an injunction to delay implementation of the new payment schedule for ASCs until litigation on the matter was completed. In Sept. 2010, the South Carolina Supreme Court ruled in favor of the Commission, and the revised fee schedule is now in effect for ASCs. Although this is a situation that arises on a state-to-state basis, ASCs should maintain positive, proactive communication with their state's Worker's Compensation Commission to establish a fee that is fair and reasonable.
"The flat 140 percent also means that implants may no longer be paid separately as they have been previously, and that's our number one priority," Ms. McCraw explains. "Our focus is to highlight the disparity between 140 percent of Medicare for an ASC as compared to a HOPD and to illustrate the cost savings to the system for every case performed in an ASC rather than a hospital. Education is the key. Commissioners have many stakeholders to satisfy, and they are not experts on reimbursement. Our strategy is to explain the often unintended consequences that accompany payment decisions in hopes of securing implants carve outs in the future."
2. Expand and promote your orthopedic ASC's services. Orthopedic surgery centers should consider expanding upon their already existing services by adding new specialties or different orthopedic procedures to accomodate a wider spectrum of patients. Ms. McCraw says Midlands Orthopaedics recently added spine procedures and is considering adding total joint procedures to its range of services as well. Ms. Rutledge adds one key addition to the ASC's staff has been its new spine physician, whose expertise in outpatient spine work has been very helpful in growing that line of business.
3. Look for cheaper alternatives for equipment. After bringing on the new spine physician in late 2009, Midlands Orthopaedics faced the challenge of researching and buying new equipment and supplies the new physician would need in order to perform spine procedures. Ms. Rutledge says she worked closely with the physician for several months before he officially joined the surgery center so they could jointly agree on the least expensive options without compromising on the quality of the instruments.
"We didn't want to spend a lot of money on a spine table, and it took about eight months just to find a quality used spine table because a brand new one will cost you around $160,000," she says. "We finally purchased a used spine table for half that price after working with three vendors and working out the best deal. The key is that we worked with that surgeon to develop and bring in all the equipment he would need to build his practice."
4. Focus on enhancing your orthopedic ASC's managed care contracts. Even with decreasing Medicare reimbursements and its struggle with the local Workers' Compensation Commission, Midlands Orthopaedics is keeping a focus goal on achieving improved implant coverage by negotiating managed care contracts with its payors. With implants being one of an orthopedic ASC's largest supply costs, it is critical orthopedic-driven ASCs work diligently and closely with payors to carve those costs out so they can continue to keep those cases in the ASC and generate more revenue.
"We are having success obtaining implant carve outs with our private payers because they recognize the cost savings ASCs offer them," Ms. McCraw says. "Even securing cost only for implants increases our volume by allowing us to retain cases that would otherwise be sent to the hospital.”
5. Install technology. There is an infinite number of ways ASCs can adopt technology to cut costs and generate more revenue. Midlands Orthopaedics is pursuing implementation of new software as part of a facility-wide goal to improve scheduling and case costing. The software will allow Ms. McCraw and Ms. Rutledge to better measure cost per CPT and per surgeon. Now only is this information valuable for insurance contracting, but it is useful to influence physician behavior.
"We will be able to evaluate the supply and staffing cost for each case per CPT code. Even if the same CPT code is performed by different surgeons, there can be significantly different cost outcomes. So there's a benefit in showing and knowing what particular procedures are costing you on average," she says. "And if you have a surgeon who is an outlier, the data may encourage him to consider different techniques or supplies without compromising quality."
6. Elect staff members to monitor finances, particularly pre-collection and billing functions. There are approximately three staff members who work at Midlands Orthopaedics as financial account specialists. These specialists' primary role is to meet with patients before surgery to pre-collect copays, deductibles and co-insurance amounts and work out payment plans as needed, Ms. McCraw says. Delegating specific responsibilities, such as pre-procedural collections, to staff members helps ASCs collect in a more efficient manner.
"Our financial account specialists collect both for our professional practice and ASC, so our patients don't have to make separates trips for different bills," she says. "These staff members are trained to have those sensitive conversations with our patients and know how to interpret statements, EOBs and explain deductibles. So it helps our ASC and practice because the payments from one patient are all funneled to a specialist, and it's nice for our patients because it alleviates confusion on their part as they navigates bills from both entities."
Learn more about Midlands Orthopaedics Surgery Center.
© Copyright ASC COMMUNICATIONS 2011. Interested in LINKING to or REPRINTING this content? View our policies here.