Your Path to Program Success: Expert Advice

Freestanding Ambulatory Surgery Centers: A New Strategy for Cardiovascular Services?

Christine McIntyre, Vice President, Corazon, Inc.

Christine McIntyre, Vice President, Corazon, Inc.

With the advent of the Affordable Care Act and the move to value-based care, hospitals and healthcare systems are facing stiff competition from freestanding ambulatory service sites, especially those that offer outpatient imaging, physician office-based procedures, and ambulatory surgery. Gaining in popularity across the country, ambulatory surgery centers (ASCs) provide operational and economic efficiencies, allowing for very competitive pricing, ease of patient access, and increased opportunities for physician engagement. As such, Corazon believes hospitals and healthcare systems should consider strategies for how to capitalize on this trend, especially in the cardiovascular service line.

More than 35.8 million outpatient surgical procedures are performed annually in hospital outpatient departments (HOPD) and in freestanding ASCs nationwide.1 As of 2017, more than half of all outpatient surgeries were performed in an ASC.2 Looking ahead, there is no doubt ASCs can expect steady growth through this year and beyond. There are over 6100 ASCs in the United States, and approximately 5500 are Medicare-certified. Based on responses from a recent report from HealthCare Appraisers and the Ambulatory Surgery Center Association, 53% percent of respondents reported planning to purchase one to five ASCs and/or having interest in an ASC in the next 12 months.3

The Centers for Medicare & Medicaid Services’ (CMS) final 2019 payment rule revised the definition of “surgery,” which resulted in the addition of 12 cardiac catheterization procedures (Table 1) to the Medicare ASC payable list, specifically for vascular, electrophysiology, and diagnostic cardiac cath procedures.4

This move in cardiovascular (CV) procedure reimbursement is expected to continue with more leveling of volume between the hospital and the outpatient ambulatory care settings, particularly if elective percutaneous coronary intervention (PCI) follows suit. CMS is not the only payor permitting cardiac procedure performance in the ASC setting. With appropriate state licensure and payor agreements, several private payors, such as United Healthcare, Cigna, and Humana, already allow coronary stenting in the ASC setting.

Technological advances have led to increased volume for ASCs in orthopedics, gastroenterology, ophthalmology, pain management, and spine, as well as improving the safety of these procedures in the outpatient setting. Today, the shift to outpatient services is also influenced by technology, but to a greater extent, by the need to lower cost and improve convenient access to care for both payors and patients. With CV procedural advances, such as radial access, vascular closure devices, and the adoption of same-day discharge programs, the addition of cardiac catheterization procedures for ASCs may be the impetus for many cardiovascular programs to reevaluate their outpatient strategy for the cardiovascular outpatient migration to an ASC.

ASCs have a distinct set of requirements that necessitates thorough analysis, as well as expertise and guidance. Providers stepping into this setting of care need to be vigilant about their program development in order to ensure compliance with the highly regulated program requirements from CMS and other payors, as well as the significant capital outlay for an ASC. Corazon advocates a sound business planning process to weigh the volume, revenue, capacity, and physician engagement impact of your strategy — all very important elements to consider so that the transition of appropriate cases occurs without negative impact on clinical outcomes, program financials, or operational efficiency. Table 2 provides some of the benefits and risks of an ASC, and the business implications to consider.

With CMS’ support of the safety and efficacy of diagnostic catheterizations in the ASC setting, the potential for PCI approval in the ASC can be reasonably anticipated within the next two to four years. When this occurs, the advantages for the payor, the patient, and the interventionalist could change the paradigm in CV services. Within the next five years, some experts predict that hospital-based cath labs will focus on urgent inpatient procedures and myocardial ischemia patients, leaving the ASCs to play a much greater role in CV services for elective coronary intervention and other cardiac cases.

ASCs may be the next step in the value transition, provide a better patient experience for cardiovascular patients, and may represent a strong strategic alternative for cardiovascular service lines (CVSL) to consider for the future. Given this evolving landscape, administrators need to perform an internal readiness assessment to determine whether their programs are prepared for this transition. Key considerations will relate to clinical staffing, employed physician contracts, operational metrics, appropriation of newly vacated space for other procedure types, and, of course, the financial impact.   

These considerations, as well as the distinct set of regulatory and operational components, will require thoughtful and thorough analysis. Corazon recommends a gap assessment as a first step, especially in regards to overall CV service line strategy and future preparedness. A specific market-based analysis of important service line inpatient and outpatient strategies will strengthen the success of the cardiac program components and of the organization overall. 

Christine McIntyre is a Vice President at Corazon, Inc., offering strategic program development for the heart, vascular, neuro, and orthopedic specialties. Corazon offers a full continuum of consulting, software solution, recruitment, and interim management services for hospitals, health systems and practices of all sizes across the country and in Canada. To learn more, visit www.corazoninc.com or call (412) 364-8200. To reach the author, email cmcintyre@corazoninc.com.

References
  1. Ambulatory Surgical Care Growth. ASC surgical volumes grow in 46 of 40 largest markets while hospitals lose share. Available online at https://www.franklintrustratings.com/ambulatory-surgical-trends-2018/. Accessed July 16, 2019.
  2. Health Industry Distributors Association. 2018 Ambulatory Surgery Center Market Report. Available online at https://www.hida.org/distribution/research/market-reports/2018-Ambulatory-Surgery-Center-Market-Report.aspx. Accessed July 16, 2019.
  3. Ambulatory Surgery Center Valuation Survey. 2019 ASC Benchmarking Survey: Executive Summary. HealthCare Appraisers. Available online at https://www.healthcareappraisers.com/insights/valuation-surveys. Accessed July 19, 2019.
  4. Ambulatory Surgical Center Payment-Final Rule CY2019 Payment Rates. Available online at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices-Items/CMS-1695-FC.html. Accessed July 16, 2019.
  5. Medscape Cardiology Compensation Report 2018. Available online at  https://www.medscape.com/slideshow/2018-compensation-cardiologist-6009651#7. Accessed July 16, 2019.