How did you decide to open your own outpatient cath lab?
In the rural setting where I practice, there is only one hospital in the entire county. There is no other hospital within an hour’s drive to take my patients to and perform catheterizations that wouldn’t disrupt the patient flow in my clinic. I knew there had to be a better way. I put my thoughts on paper in terms of requirements and wishes, and decided to learn what was required by my state to open and operate an outpatient cardiac cath lab. I knew that designing the space to permit smooth patient flow would be the easy part — anyone who has spent their career working in a cath lab has ideas of “if I was building a new cath lab from scratch, I would make sure I included A, B, and C”.
Two prior cardiac cath labs had existed in Alabama in years past, but were shuttered due to newly enacted laws that limited their scope. Once I determined that those state laws had since been modified, I knew the time was right. I spent a great deal of time conducting my own feasibility study — determining what payor would reimburse for outpatient procedures, reviewing my own volume, and creating a proforma, as well as researching what certification or credentialing would be required. I decided to use existing, unbuilt space in the main level of my two-story office to construct a cardiac cath lab, applying all the lessons I have learned about cath lab workflow over my career.
How is an outpatient cardiac cath lab different from an outpatient vascular lab?
Cardiac catheterization requires hemodynamic parameter monitoring functionality that is not necessarily required by a vascular lab. The critical component is the hemodynamic monitoring software and hardware. Several versions exist — Mac-Lab (GE Healthcare), Witt (Philips), McKesson, and other proprietary softwares. This software provides rhythm strips, hemodynamic monitoring, and the ability to scribe the sequence of events in the classic “control room” that all cardiac cath labs have. Vascular labs do not typically require hemodynamic monitoring outside of a rolling sphygmomanometer, and maybe oximetry. End tidal CO2 monitoring may be added if significant sedation is required. In some states, including the state in which I work, the law states that the citizens of that state cannot undergo cardiac angiography in a non-fixed cath lab setting (mobile C-arm). Therefore, a floor-mounted or ceiling-mounted x-ray suite is required to perform heart catheterizations in some states.
How should someone go about planning an office-based lab (OBL)?
The first step is determining the need. The need of the community, the need of your patients, and the need of the practice itself. Once a need has been established, then estimate the number of potential cases that can be appropriately performed in an OBL setting. At this point, don’t factor in the growth that will happen from marketing and word-of-mouth. If you determine that sufficient volume exists to justify a deeper look, then involve your healthcare attorney and your billing company. By creating a proforma of all the types of procedures you intend to perform in an OBL, you can determine if your venture will float, and if so, the specific volume you need to break even. Meet with an architect familiar with healthcare applications to determine a ballpark estimate for cost of construction, and add 30% to that estimate. Discuss with your banker the financing arrangements available to you, including your own cash infusion and working capital on the tail end. To determine how much working capital you will require, have a discussion with several interventional product suppliers about net 30/60/90 payment options. As you can imagine, there are many moving parts, and you need each piece of information to help determine other pieces of information. If this makes you dizzy, you may want to hire a consultant who builds OBLs for a living. If this proposition excites you, then read on!
What do you need to consider prior to investing resources in an OBL?
Due to the considerable time and cost investment to open an OBL, due diligence is required before expending the resources. Assessment of your current case mix is first — do you have more cases than you can get on the schedule at the hospital where you work? Do you have a considerable backlog of peripheral interventions waiting for a time slot? Are there untapped geographical regions to which you can market, and that would allow you to grow your existing referral base and volume? Would your local hospital attempt to interfere with your plans, or outright oppose it with the state in which you practice? Would your local hospital try to retaliate against you for steering patients away from their facility? Do you have the resources available to fund construction? What cases do you wish to perform in an outpatient setting? Are you willing to seek further training to perform different types of cases (fibroid embolization, dialysis graft access work, etc.) from the bread-and-butter peripheral intervention? Would your vendors assist you in consignment inventory and training opportunities? Do you have access to trained cath lab staff or would they need on-the-job training? How many staff members would you want present in a given case at a given time? Who would handle your billing? Would you hire a professional coder, or would you have your physicians attending coding classes and be responsible for coding properly? Would you participate in registries? Would you seek accreditation? Who would handle staffing, staff education, and staff certification of competencies?
How long was the regulatory process to obtain state approval?
I was fortunate to find a very helpful individual within the State Health and Planning Development Agency (SHPDA) who provided me with the “denial letter” from a previous applicant that spelled out the agency’s requirements. In my letter, I made sure that my proposed lab satisfied all their requirements. My proposal was posted on a public discussion board for 8 weeks, during a “public comment period”. This period is intended to allow ample time for any entity to object to an application for a Certificate of Need (CON). However, my request was not for a CON, but for a letter of non-reviewability. I was requesting acknowledgement that my facility was exempt from their oversight — that rationale was rooted in another state law that provides for the ability of a physician to build and open an operative suite within the walls of their primary medical office. My request was uncontestable by the only hospital within the service area of my office, codified by state law. After the obligatory public discussion period, I received a letter from SHPDA with their conditions to proceed.
If we had elected to construct in a freestanding building, the local hospital could have offered resistance and tried to delay our progress by contesting our need to build a cath lab. Since we built inside the four walls of our existing medical office, we were protected by statute written into the code of the state of Alabama. No one could contest our right to build a cath lab within our own office.
Do you need to partner with a company to handle the construction and management?
This depends on your organizational skills. If you are a detail-oriented planner who can create timelines and flowcharts of all the tasks required to open an OBL, then you do not need to partner with a company that builds cath labs for a living. Typically, these companies go 50/50 with you on investment, and they build hospital-style cath labs, meaning that the cost of a lab they design would be roughly double what you could do by yourself. In return, they take 50% of the gross revenues in perpetuity. Forever. This percentage may be higher if they are managing the lab once it opens.
Certainly, partnering with one of these companies would be an easy way to build an OBL: you would not need to get involved with the state, the architect, the general contractor, the local building inspectors, or selecting furniture and equipment. And while the end product may look just like a hospital facility (at the cost of a hospital facility), you will give away half your lifetime gross revenue to this company.
In my experience, I navigated the state regulatory agencies with relative ease and located a builder capable of constructing the space. The biggest challenge we encountered was an electrical engineer with the architect who insisted on planning our office-based lab with the backup and redundancy of a hospital facility. Since OBLs don’t deal with critically ill patients, patients on a ventilator, or trauma patients, the electrical requirements are different. OBLs do not require a fire alarm enunciator system. Since very few OBLs have been built in our region, the electrical engineer’s only experience was with hospital labs and he refused to acknowledge that an OBL did not need those costly features. Fortunately, our electrician was exceptionally talented. He followed the detailed construction plans provided by one of our established vendors and complied with local building code, creating a facility that operates efficiently and safely. Construction took us approximately 9 months, and we finished on budget.
What construction considerations affect the cost of an OBL?
Constructing a fixed ceiling-mount or floor-mount cath lab requires lead shielding of the interior walls, which are not required with a mobile C-arm. Shielding doors, windows, and walls becomes expensive, depending on what is on the other side of those walls. Exterior walls do not need to be shielded.
Running medical gases inside the walls changes the electrical codes significantly. So, we opted for tanks of oxygen and portable suction, rather than in-wall gas plumbing. We discovered this during construction — we had planned to have a pillar next to each bay in the post-anesthesia care unit (PACU), with medical gas nipples, electrical outlets, and network jacks on the pillar. Upon learning of the three-fold increase in cost to shield all electrical wires run in the walls with medical gases in the wall, we opted for the portable tank option.
We opted for the latest A/V technology and thus have the capability of video conferencing between the cath lab itself and any other location with web camera capabilities. We constructed a conference room with three 4K monitors connected to micro-PCs, recessed screen with HD projector, and video conferencing. Surprisingly, this did not add much to the cost of the product, but added considerable functionality.
We chose to install hard-wired telemetry monitors at each of the five bays in the PACU, networked to the nurse station in the PACU. This was not a requirement, but a safety measure with which we are very pleased.
An ionized air antimicrobial filter was included to kill pathogens such as MRSA, VRE, E Coli, and C Diff. This filter is in-line with the HVAC system, and seamless to the casual observer. At the time of construction, we were the first and only facility in the county to utilize this filter. We utilized a Fujitsu mini-split HVAC system (commonly seen in Asia and Europe), because of its ability to create zones and regulate the temperature and humidity in each zone separately.
There is no patient access between the lower level cath level and the second level medical office. Installing a commercial elevator would add approximately $100,000 to the cost of the construction, and countless delays with engineering work, not to mention additional upstairs construction work to create an elevator shaft. Our building is on a grade. The upper level has a parking lot at that level, with handicap accessible ramp, and the entire main level is “barrier free” to comply with the Americans with Disabilities Act (ADA). We instruct patients coming for a procedure to park on the lower side of the building and enter through that entrance, which in the future will make a convenient arrangement to operate an ambulatory surgery center (ASC), complete with its own access.
How is an ASC different from an OBL?
Ambulatory surgical centers are typically joint ventures between multiple physicians, and are designed with multiple operating suites, holding areas, and supply rooms. Most ASCs are built under a CON, and many are owned by hospitals. ASCs operate under a different payment structure than either a hospital or an OBL. ASCs usually have a higher standard for construction (wider doors, emergency backup power, etc.) than OBLs. ASCs are subject to mandatory quality reporting to Centers for Medicare & Medicaid Services (CMS) that OBLs are not subject to. ASCs allow a wider range of procedures to be performed than OBLs (such as pacemakers and coronary stenting). Many insurance companies have taken the stance that they must certify an ASC in order to reimburse services performed in that setting. In our state, the only commercial insurance agency offering health insurance is Blue Cross/Blue Shield, and they have gone on record to state that they will not certify any more ASCs. This seems counterintuitive since ASCs receive lower reimbursement than their inpatient counterparts. There are some physician-owned facilities that operate on certain days of the week as an ASC, and operate on other days as an OBL. OBLs are not subject to the same scrutiny as an ASC, and typically are single-specialty facilities, as opposed to ASCs, where multiple operative specialties can function. ASCs charge a facility fee like a hospital does, which is separate from the professional fee billed by the physician. OBLs are typically owned by a group of physicians in a single specialty, and as such, OBLs typically charge a global fee which is considerably lower than the separate facility fee and the professional fee of the ASC. Since Certificates of Need (CON) can take several years to obtain, at a cost of several hundred thousand dollars, this process becomes cost prohibitive, and the OBL may be a more attractive option for a cardiologist or a vascular surgeon looking to enter this arena at the lowest cost of entry. If cost is not an option, it would be wise to design your OBL to meet the construction requirements of an ASC from the planning stages, so you do not have to perform duplicate construction work at a later date if you elect to operate as an ASC at a later date.
What is the layout of your outpatient invasive suite?
We designed a dual-sided control room sandwiched by two 20 ft x 28 ft procedure suites. One of the procedure suites became our functional cath lab, and the other was left open for future growth. We currently use that room to host large groups, such as when we held an open house event or hosted a group of 30 business leaders in the community. Eventually, it may be built out as a computed tomography (CT) scanner suite or another angio suite. There is a physician office attached to the control room. The cath lab’s main door opens to a 5-bed PACU with a nursing station. On the other side of the PACU are two vein ablation rooms. The goal was to be able to flip-flop between rooms such that one patient could be getting greater saphenous vein (GSV) mapping while the other room was being used for the ablation procedure. By the time the endovenous laser therapy (EVLT) was complete, the next patient was ready to begin. We have a clean utility room, a dirty utility room with autoclave, two staff offices, an exam room, several storage rooms, and the high-tech conference room. The waiting room seats 16 and there is a small reception office. All the restrooms have five photocell sensors — light switch, flush valve, soap dispenser, faucet, and paper towel dispenser. The light switch is on a 10-minute timer. Most of our electrical outlets include USB plugs to charge wireless devices. Each bay in the cath lab has its own ceiling-mounted television.
How long did construction take to complete the facility?
From start to finish, construction took 9 months. This was an interior buildout with minimal exterior work — one overhead door had to be removed, framed and bricked in, another exterior door had to be cut. Front doors were replaced. Other than that, all the work was interior buildout, so weather had minimal impact on the timeline. The company that refurbished and certified our Siemens cath lab unit kept in close contact with our contractor so that there was no delay from when the room was ready to accept the x-ray equipment to complete installation of the cath lab room itself, the mechanical room, and the control room.
How did you determine your staffing needs?
Having worked in cath labs for 18 years before opening our own, we had seen lean operations, well-staffed labs, and everything in between. To balance safety and efficiency, we decided on a staff of five: a monitor tech, a scrubbed assist, a circulating RN, a PACU RN, and a PACU medical assistant, plus the physician. If we are having a particularly busy day, we will pull another medical assistant from upstairs. Since we recover our own patients, it was important to have sufficient staff so that the workflow can proceed smoothly, regardless of the number of cases that day. As the physician of record, I try not to leave my staff alone with a patient unless I absolutely have to be somewhere else. They appreciate the camaraderie, and the physician’s willingness to help, even though they don’t need my help!
What emergency equipment do you keep on hand?
We have multiple biphasic Zoll defibrillators with a fully stocked hospital crash cart in the cath lab itself, a duplicate setup in the PACU, and a third identical setup in our nuclear medicine lab. We keep Wallgraft stents (Boston Scientific) on the shelf in the event of a peripheral arterial dissection with vascular compromise, coronary guides, coronary balloons and coronary stents in the event of a coronary dissection with hemodynamic compromise, and we have an intra-aortic balloon pump (IABP). We perform competencies on the IABP on regular intervals. All our staff is advanced cardiac life support (ACLS) certified. The crash cart contains intubation supplies, and we have suction and oxygen in the procedure room.
How did you select your inventory?
We worked with the vendors that were most receptive to working with OBLs. We explained two relevant factors to each vendor — the fact that the payors reimburse considerably less in the outpatient setting for the same procedure compared to a hospital setting, and that the rural setting where we practice was assigned the lowest wage index (0.67) in the country, and this is used as a multiplier to determine the reimbursement in our location. If the vendor was willing to provide us with aggressive pricing, we engaged with them. We selected products that utilized a .035 platform, and products that utilized a .014 platform. We felt that the .018 platform did not add anything to our portfolio other than saddling us with additional product that we didn’t need. Since opening, we have adjusted our inventory to reflect our case mix and volume.
How did you get a handle on the enormous cost of interventional products like stents and atherectomy?
We met with all the product vendors, explained our plans, and requested that they develop a consignment inventory suitable to our needs. We work with Boston Scientific, Ra Medical Systems, Abbott, Biotronik, Cordis, and several others. The higher cost products such as stents, balloons, intravascular ultrasound catheters, wires, guides, and sheaths are consigned. We periodically review our consignment inventory, review par levels, and adjust our inventory on hand with our projected product usage. Products typically arrive two to three days after we order them, so we do not need to keep more than a month’s inventory on hand. We do keep IABP catheters, covered stents, and emergency products on hand that we hope will expire on the shelf. These products are typically not consigned, but we happily replace expired emergency products as the cost of doing business. We constantly price-compare between vendors for disposable supplies — we use Medline, Merit, McKesson, and US Endovascular, as well as several smaller vendors for specialty items like RadPads (Worldwide Innovations & Technologies).
Do you do self-audits on your documentation?
We perform self-audits on a regular basis. We randomly pull charts, review for completeness, and review the physician documentation against the angiographic images and the billing codes used. Given that there is only one physician involved, this is a simple, streamlined process. We update our billing sheets annually, deleting outdated codes and adding new ones. We utilize a democratic system whereby any employee is encouraged to speak up if they think they have a better way to improve efficiency, reduce risk of an error, or improve on patient safety. We routinely review our forms and documents to help the staff perform their charting efficiently. We also send medical records off to third-party coders periodically to validate our coding techniques.
What billing challenges did you encounter with the OBL?
It is no surprise that each insurance company tries to confuse the billing department, each with their own set of rules. We stay on top of our billing, so that any procedure that has not been reimbursed within 60 days gets focused review and inquiries are made into the status of the claim. Frequently, we discover that the payor made a change to their policy and did not publicize the change, resulting in our claim being held for document review of documents the payor never requested. We pre-authorize all procedures at the time the procedure is scheduled, and re-verify active eligibility the morning of the procedure. We also verify that any required pre-authorizations have been received prior to the procedure being performed the morning prior to the case. Failure to stay on top of the moving target that is insurance company rules will result in denial of large claims. As difficult as it is to be profitable in this current payor environment, denial of a peripheral intervention claim can be a very costly situation for a small, single-physician OBL.
Do you participate in any registries?
Currently, there are two American College of Cardiology (ACC) outpatient registries: the PINNACLE registry and the Diabetes Collaborative Registry. We are planning to participate in the PINNACLE registry. While this database readily communicates with our current electronic health record (EHR), Amazing Charts, we are in the process of determining if it will communicate seamlessly with MedStreaming, the EHR to which we will be transitioning in the next six months.
Do you perform radial artery access for heart catheterizations?
We employ a radial-first approach. We attended training on radial artery access and began the radial-first initiative February 2018. We access via the right radial with ultrasound access, but we will use the left radial for access if necessary. If we encounter a radial loop or considerable radial spasm that does not respond to sedation, we will convert over to femoral access. We use the PreludeSync (Merit Medical) for hemostasis and to monitor the patient for two hours post procedure. Radial access has been very well received by patients, since they can sit up immediately post procedure, and can eat, read, watch TV, roll over, bend their legs, and be more comfortable overall. Our radiation monitoring badges have not shown a significant increase in radiation exposure since adopting the radial-first approach. We plan to adopt a distal radial (snuffbox) access approach later this year.
What changes do you see happening in the future of OBLs?
As patients come to experience the convenience of OBLs, and as payors discover the cost savings of OBL procedures, there will be a deliberate paradigm shift to the outpatient setting, free of a hospital. In this environment where scrutiny is increasing on the cost of procedures, the OBL shines as a way to reduce expense and still deliver high-quality care. Patient satisfaction increases, complications decrease (fewer handoffs between departments, fewer access site complications with radial artery access), and patient co-payments decrease. I foresee a trend to perform as much in the outpatient setting as possible. Injectable loop recorders are expected to get an outpatient procedure code in 2020. We will petition the local state quality agency (in our case, the Alabama Quality Assurance Foundation) to embark on a pilot program to expand our offerings, such as pacemakers. Despite all the posturing and rhetoric from both sides of Congress, I do not expect any dramatic changes in the next 12 months.
Will site-neutral payments affect OBLs/ASCs in a positive way or a negative way?
The 2019 Final CMS rule allows for an increase in procedures payable in an ASC setting. Seventeen new procedures are now payable in an ASC setting, including 12 that are cardiovascular procedures. Payment for clinic visits to hospital outpatient centers will be reduced to the same amount as physician offices. This rule negatively impacts hospitals, but does not raise the reimbursement for OBLs.
Dr. Sanjeev Saxena can be contacted at email@example.com.