While the healthcare environment has undergone dynamic change over the last 50 years, the demand for more affordable, accessible and higher-quality patient care services has remained constant.
For some cardiologists and orthopedists, the answer to this demand is found in an efficient, convenient and lower-cost Ambulatory Surgery Center (ASC) setting. Currently, more than 50 percent of all outpatient procedures in the United States occur in the ASC setting, including 41 percent of all orthopedic surgeries. With approximately half of all cardiology surgeries and 68 percent of all orthopedic surgeries projected to occur in the ASC setting by the mid-2020s, according to some projections, cardiologists and orthopedists appear primed to benefit from a significant expansion of ASC approved procedures.
Recent modifications to the Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Payment System by the Centers for Medicare and Medicaid Services (CMS) have accelerated the migration to the ASC setting by cardiologists and orthopedists.
In its recent modifications, CMS expanded its list of approved ASC procedures to include multiple orthopedic procedures, including total joint procedures. Similarly, CMS approved several cardiology procedures for the ASC setting, including cardiac catheterization procedures, percutaneous transluminal coronary angioplasty procedures, percutaneous transcatheter intracoronary stent placement procedures and certain device implantation and replacement procedures.
More significantly, CMS has emphasized its intent to add 267 procedures to the list, including orthopedic procedures such as glenohumeral joint arthroplasty (CPT Code: 23470) and total shoulder arthroplasty revision (CPT Code: 23473).
Notably, as part of its modifications for the 2021 calendar year, CMS further committed to eliminating its Inpatient Only (IPO) list--which prohibited Medicare reimbursement for the listed procedures unless the procedures were performed in the hospital inpatient setting--by 2024. In the first phase of its rollback of the IPO list, CMS removed nearly 300 primarily musculoskeletal-related procedures from the IPO list.
Although the reasons for CMS' modifications vary, one thing is clear: CMS' actions represent a growing acceptance of the expanding role of outpatient facilities, including ASCs, in the provision of orthopedic and cardiology services. In light of these modifications, cardiologists and orthopedists can expect the migration of procedures to the ASC setting to continue.
CMS' modifications may not be the only factor driving orthopedists' and cardiologists' migration to ASCs. While subject to debate, ASC proponents claim that ASCs can offer numerous benefits when compared to traditional hospital operating facilities.
Historically, hospital-based procedures may be subject to extended waiting periods, lengthy patient recovery times spent in the hospital, scheduling uncertainty and higher costs. In contrast, proponents assert that ASCs can relieve many of these burdens. Due to the specialized focus of many ASCs, physicians often have input into the facilities' layout and configuration to improve efficiency and operations for each specialties' particular needs. This specialization allows some ASCs to offer faster turnaround times between procedures, improving physicians' efficiency.
Depending on payor policies, patients may also see a reduced financial obligation from receiving care in an ASC since insurers often require co-pays and deductibles that are significantly lower. Anecdotal evidence indicates that these lower co-pays and deductibles can lead to patients receiving more timely care, allowing a faster recovery process in some cases.
ASCs can provide physicians with certain quality of life benefits unavailable in hospital settings. Unlike hospital-based surgeries, physicians' procedures in an ASC are rarely bumped for more urgent emergency procedures. The opportunity for physicians to have an ownership interest in an ASC can also be a motivator, as the ownership offers physicians financial benefits as well as the ability to provide input on operational and business decisions.
At the same time, physicians must also weigh the drawbacks of practicing in an ASC. Since ASCs are not located on hospital campuses, physicians may lack the on-site services and resources, including lab services, imaging services, and emergency access to other providers, that hospitals typically provide. In addition, ownership of an ASC entails obligations and responsibilities for balancing budgets, managing personnel, instituting policies and procedures, and a host of other issues. Physicians partnering with traditional hospitals in the development and operation of an ASC can offer a convenient path forward for physicians and for traditional hospital systems.
In addition, certain state-based restrictions can provide roadblocks to physicians seeking to offer ASC-based services. Although CMS has expanded the ASC services that may be reimbursed under Medicare, certain states apply different standards as to what services may be performed in an ASC or non-hospitals setting. Accordingly, before performing any new ASC orthopedic or cardiology services, physicians must ensure that the applicable state law permits the expansion of services.
Additionally, several states, including Alabama, maintain certificate of need laws mandating that physicians receive governmental approval prior to developing a new ASC or expanding the services offered by existing single-specialty ASCs. As a consequence, physicians interested in evaluating ASC opportunities should consult with trusted advisors to develop a detailed strategy for any proposed ASC service offerings.
CMS' recent modifications and the benefits of an ASC setting will likely prompt many physicians to evaluate whether practicing in an ASC would benefit their practice. Physicians and hospitals should evaluate, both jointly and separately, whether and how an ASC-based surgical practice fits into their plans.
Zachary Trotter and Gunnar Bowles practice healthcare law in the Birmingham office of Waller.