Technical advances in anesthesia, orthopedic devices, and surgical procedures, coupled with shifting payer models, are making it possible for surgeons to perform more spine and orthopedic procedures in the ambulatory surgical center (ASC) setting. According to Don Phalen, Vice President of Development at Regent Surgical Health, this convergence is changing the game when it comes to hospital-surgeon ASC joint ventures focused on spine and orthopedics.
“Joint venture spine and orthopedic centers are very different today than they were five to 10 years ago,” says Phalen, who predicts a number of related trends will continue over the next five years. In the first installment in a two-part series, Phalen summarizes how procedures and payer models are shifting – and in a follow-up blog, Phalen discusses strategies to overcome joint ventures hurdles.
Procedures, Payer Models Shifting
“Surgeons are becoming more comfortable moving appropriate spine and ortho cases to an outpatient setting due to advances including new surgical techniques, innovative technologies, as well as changes that minimize time under anesthesia,” Phalen explains. “Additionally, changes in payer models shift the risk, and incentivize hospital partners financially to move cases to an outpatient setting.”
Phalen says as recently as five years ago, hospitals didn’t want to let go of those cases. But now, rather than losing the cases entirely, they want to be part of the shift as new payer models take hold and reimbursements continue to shrink.
“As hospitals realize that payers will no longer reimburse at historical fee-for-service levels; we find they are increasingly more interested in participating in joint ventures,” says Phalen. “Additionally, surgeons realize that by allowing a hospital to partner with them, the hospital partner can use its leverage to negotiate better rates on behalf of the partnership. Payers also win as the physicians and hospitals work together to shift more outpatient cases the to the ASC from the hospital, which is typically a higher cost point of care.”
When hospitals and surgery centers join forces, hospitals can use their leverage to increase the rate of reimbursement, notes Phalen. “While an ASC typically gets about 55% of the reimbursement compared to hospital rates, a hospital partner may be able to negotiate those up higher on behalf of the joint venture – creating a win-win for the partnership.”
Another key contributor to the win-win? Phalen notes that the federal agency Centers for Medicare & Medicaid Services (CMS) recently approved 10 new CPT codes for outpatient spine surgery.
For more information on Regent Surgical Health’s management of hospital-surgeon joint ventures, click here.