Navigating the Changes in Healthcare and Reimbursement

The Future is ASC Value Based Contracting

Navigating the Changes in Healthcare and Reimbursement

The Future is ASC Value Based Contracting

The long anticipated vote on the AHCA passed the house today (May 4, 2017). This is the first step the GOP has been waiting for to repeal and replace Obamacare. The foreseeable changes in the healthcare and reimbursement landscape have experts in the industry talking about the future ambulatory surgery centers to improve financial performance, while supporting safety and quality of patient care.

In order to learn how to successfully navigate this changing and challenging environment, Marilyn Denegre-Rumbin, JD MBA, the Director of Payer & Reimbursement Strategy at Cardinal Health gives an overview on the factors that are converging to create a new window of opportunity for ASCs. These factors include the rise of alternate payment models (such as value-based purchasing and shared savings), a shifting focus on payer mix and patient demographics—and the expansion of Medicaid Managed Care.

What opportunities can I leverage to increase the reimbursement for my ASC?

  • Moving cases from hospitals to ASCs
  • Leverage a relationship with your Payor(s). The payor relies on ASCs to help them accomplish their goal of providing quality care at a lower out-of-pocket cost for its members. If your ASC is equipped to take on larger acuity cases, this can put you in a strong position to obtain higher ASC reimbursement.
  • Develop arrangements with physicians including ACO’s to leverage special case rate arrangementolls and secure market access to drive patients.

You talk about commercial being the highest percentage of the payer mix, what if I am already maximizing the reimbursement on my commercial contracts?

  • Great question, the first thing I would say is to make sure you’re truly maximizing your commercial reimbursement. You can never be too sure that you are implementing all the right steps to achieve this. I would suggest asking yourself a couple of verifying questions;
    • Have you carefully looked over how your commercial payers are reimbursing your ASC?
    • Has a payer contracting professional evaluated your opportunities?
    • Does Cardinal Health offer consulting services?

I am currently operating as an independent ASC, it seems as though ASCs who are partnered with a health system or management company receive better commercial contracts. Should I think about partnering with a hospital or management company for this reason?

  • This is another good question. Here are my thoughts.
    • Often times partnering with a health system or management company lends benefits in the area of negotiation. They may be able to assist ASCs with negotiating better commercial contracts.
    • However, being independent isn’t a bad thing either.

Why is Value Based Payment Models and Contracting an important consideration for the ASC’s?

  • The landscape is shifting under the US health care industry. With the volume-to-value transformation put in place by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), traditional fee-for-service payments are being replaced with a financial incentive framework that rewards for improved quality, outcomes, and costs. This shift to value-based reimbursement models creates a new paradigm in which care is delivered by an entire coordinated care community sharing in the responsibility—and risk—of outcomes and costs, touching almost every part of the health care delivery operations.
  • While the law directly impacts only Medicare payments today, it lays the groundwork and provides strong incentives for other payers to move in the same direction, thus potentially disrupting the health care system at all levels.
  • Ultimately, value-based payments transform traditional business models by putting significant revenue– and risk– at stake. Building the outcomes-based financial models and data infrastructure to maximize value-based care (VBC) reimbursement pathways will be fundamental to sustainable growth in the future. The health care players left standing strong will likely be the ones that strategically embrace change starting now to understand the impact of MACRA and the new value-based payment models to their organizations and customize the broad array of value-focused shared saving, shared risk and bundled payment models that will work for their individual situations and populations.

With regards to negotiating managed care contracts what would be your first step or recommendation for strategy?

  • My first step” Don’t bring a knife to a gunfight” as quoted from Sun Tzu, the author of the Art of War. The Art of War presents the basic principles of warfare and gives military leaders advice on when and how to fight. Its 13 chapters offer specific battle strategies–for example, one tells commanders how to move armies through inhospitable terrain, while another explains how to use and respond to different types of weapons–but they also give more general advice about conflicts and their resolution. Rules like “He will win who knows when to fight and when not to fight;” “He will win who knows how to handle both superior and inferior forces;” “He will win whose army is animated by the same spirit throughout all its ranks;” “Victory usually goes to the army who has better trained officers and men;” and “Know the enemy and know yourself; in a hundred battles you will never be in peril” can be applied to particular battle situations as well as to other kinds of disagreements and challenges.
  • ASC’s must have a strategy, a clear understanding and plan for change with your payers, physicians and patients. Evaluate what your strengths, weaknesses , opportunities and threats are within your contract strategy. Be prepared, know when to collaborate, compromise , and don’t be short sighted. (“Don’t bring a knife to a gunfight!”)

Marilyn Denegre-Rumbin and Q1 Productions are also presenting a webinar “Opportunities in the ASC to Navigate the Future of Medical Device Reimbursement – Value Based Contracting Strategies” Thursday, May 25, 2017 – 11:00AM EDT to 12:00PM EDT. It is important to respond and adapt to the changing landscape of healthcare. To stay up to date on best practices and industry news, join our mailing list.