Between half and three-fourths of the nation’s 45,000-odd anesthesiologists spend at least part of their workday in an ambulatory surgery center (ASC) or other out-of-hospital setting. Those who do should be paying attention to a slew of legislative and economic changes poised to reshape the approximately 5,300 Medicare-certified ASCs in the United States.
That was the message emerging from a panel held at the 2014 annual meeting of the Society for Ambulatory Surgery. Arnaldo Valedon, MD, chief of the Ambulatory Division and managing partner at First Colonies Anesthesia Associates, in Baltimore, moderated the panel, which included William Prentice, JD, executive director of the ASC Association (ASCA) and Nap Gary Jr., JD, chief operating officer of Regent Surgical Health, who spoke about the challenges and opportunities in the year ahead.
No Closure on the SGR
The cost of fixing the sustainable growth rate (SGR)—a formula established by Congress to keep the federal health spending in check by tying physician payments to projected economic growth—has skyrocketed over the past decade. At one point, estimates from the Congressional Budget Office projected that a fix would cost as much as $350 billion over 10 years. In the past year, however, because of the downturn of the economy and changes in inflation, that estimate dropped to between $140 billion and $145 billion over 10 years, Mr. Prentice said. Yet Congress has failed to come up with a permanent solution to the payment problem, instead passing a 12-month fix to avoid a March 31, 2014, deadline that would have resulted in a 24% cut to physician payments. When Congress tries to solve the SGR problem next year, the costs likely will be higher, Mr. Prentice said.
“Congress swung and missed at a wonderful opportunity to finally come up with a long-term fix for the problem of physician reimbursement,” Mr. Prentice said. “They just, once again, kicked that can down the road.”
The Affordable Care Act Is Here To Stay
The partisan climate in Congress means any significant changes to the Affordable Care Act (ACA) are unlikely until after the next congressional election. Even if Republicans dominate elections in the House of Representatives and the Senate—an outcome that’s far from certain—President Obama would veto any attempt to derail his signature legislative achievement, Mr. Prentice said.
Mr. Prentice predicted, however, that Republicans and Democrats in Congress will soon start to see the many flaws in the law. The employer mandate—the provision that any business with more than 50 employees must purchase health insurance or pay a penalty—is one area in which Mr. Prentice sees potential for bipartisan support for change.
The ACA’s Effects on ASCs Remain Murky
Eight million people signed up for health insurance under the ACA as of the April 15 deadline. About half of enrollees were deemed eligible for Medicaid. The effect of the plan on ASCs hinges on who has enrolled—whether they are the so-called “young invincibles,” younger men and women who consume relatively few health care resources, or seniors with comorbidities who consume much more—and which plans they have chosen.
Plans on the exchanges range from bronze to platinum. Platinum plans tend to have higher premiums and lower deductibles. If the majority of newly insured individuals signed up for bronze plans, with high deductibles, high copays and low premiums, these higher payments might prevent people from getting outpatient surgery unless it’s an emergency, Mr. Prentice said.
“Will it move the needle in terms of volume in the ASC?” Mr. Prentice asked. He’s not optimistic.
Nap Gary Jr., JD, is more hopeful. The ACA’s stated goal is to improve the quality of health care while cutting costs at the same time, he told Anesthesiology News. “Those are two objectives that are right at the heart and soul of ambulatory service,” Mr. Gary said. Patients could spend $1,000 in a hospital or $560 for the same services in an ASC.
“There’s an opportunity for enormous savings to the government and to the patients by having those procedures performed in ASCs.”
A recent study by the University of California, Berkeley’s Nicholas C. Petris Center on Health Care Markets and Consumer Welfare found that ASCs saved Medicare and its beneficiaries $7.5 billion between 2008 and 2011. The researchers also projected that ASCs could save Medicare $57.6 billion over the next decade.
By providing health care across the entire continuum in a manner that’s more efficient and less expensive and assures high-quality outcomes, ASCs will meet ACA’s core objectives, Mr. Gary said.
Addressing the Inflation Index Is Critical
The average payment rate for cases performed in an ASC declined from 65% to 55% of the hospital payment rate for the same services between 2008 and 2014, Mr. Prentice said. (These averages are based on payment tables and policies the ASCA analyzed after the Centers for Medicare & Medicaid Services [CMS] made them available.)
One of the bills currently under review in Congress, the Ambulatory Surgical Center Quality and Access Act of 2013, aims to change the inflation index for ASCs to match that of hospitals, which in turn affects reimbursement.
The inflation index is an annual measure based on the cost of doing business. A hospital’s inflation index, the “market basket update,” is consistent with the cost of the goods and supplies it purchases, Mr. Gary said. But an ASC’s inflation update is based on the Consumer Price Index for All Urban Consumers (CPIU). Many of the goods and services associated with the CPIU are unrelated to the goods an ASC needs to function. Cupcakes, beer and gasoline are tallied by the CPIU. These items tend to be less inflationary than the goods medical providers require, Mr. Gary noted.
There is no legislative reason for ASCs to rely on this particular index instead of the market basket update. According to the ASCA, the decision was made by the CMS and earlier attempts to reverse it have been thwarted.
Because the hospital’s inflation update increases every year, the payment differential between hospitals and ASCs also continues to increase. This widening gap prompted more than 60 ASCs to end their relationship with Medicare over the past three years, according to the report from the University of California, Berkeley.
The CPIU also includes a productivity adjustment, an assumption by economists that businesses will find more efficient ways to operate. This assumption reduces reimbursement rates for ASCs. The ACA also includes a productivity adjustment that applies to ASCs. As a result, centers are doubly penalized.
Electronic Health Records: ‘Meaningful Use’ Hurts ASCs
When hospitals began integrating electronic health records (EHRs), physicians, in exchange for certain bonuses, were required to show that they were using EHRs for 50% of patient encounters. Because ASCs have been slow to adopt EHRs, they are at a significant disadvantage. “It is now a disincentive for surgeons to bring their cases to the ASCs,” Mr. Prentice said.
ASC advocates are looking to create a legislative solution, such as implementing a three-year grace period for centers to develop their EHR systems. The fix also would ensure that cases physicians bring to the ASCs would not count against their meaningful use quota.
The ASCA has developed a task force to determine how to build a certified EHR system in the ASC environment that the CMS will endorse.
Measuring Quality Is the Best Way To Improve Care and Strengthen ASCs’ Reputation
In the past, the public’s perception of ASCs may have been that they were less safe than hospitals. “One of the things that we’ve initiated in the last few years is an effort to measure what’s going on in a surgery center in an effort to establish that patient safety and the quality of care is just as good if not better than what a patient would receive in a hospital setting,” Mr. Gary said.
About a year ago, the Agency for Healthcare Research and Quality developed a project in outpatient settings that focused on establishing safe surgery checklists. Within the next two years, the CMS plans to develop a patient experience of care survey, which patients will complete after each visit. When surveys start to become a standard part of care, ASCs must be ready.
“I think projects like this are going to be a wonderful way for us to make sure that all of our centers are really at the top of our game,” Mr. Prentice said.
Physicians Must Talk To Their Legislators
ASCs can perform almost all of the same surgeries as hospitals and at a lower cost, Mr. Gary said, and physicians in ASCs must help the government to recognize their role in the health care system under the ACA.
Dr. Valedon said it is important to ask who is “at the table” in Washington supporting the interests of ASCs. “I tell my friends and colleagues, ‘if you’re not at the table, you’re on the menu,’” he said.
These include Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee; Rep. John Larson (D-Conn.) and Rep. Devin Nunes (R-Calif.). Mr. Nunes and Mr. Wyden introduced the Ambulatory Surgical Center Quality and Access Act in the House and Senate last June. It now boasts 55 co-sponsors in the House and seven in the Senate.
Dr. Valedon, Mr. Gary and Mr. Prentice agreed that physicians need to be more politically engaged for the sake of their livelihood and for their patients. “You all have state lawmakers,” Mr. Prentice said. “They need to know who you are. They need to know your perspective on these things, because if you’re not telling them, trust me, health systems and the insurers are.”