Although value-based care models offer the potential for lower costs and improved outcomes in ambulatory surgery centers (ASCs), these types of reimbursement structures remain relatively few and far between.
Indeed, only a fraction of ASC-focused physicians are currently involved in value-based arrangements, according to a group of industry leaders who spoke about the topic at a recent conference.
One culprit is the complexity of older payer systems that cannot easily adapt to prospective or bundled-payment structures.
Another is the challenge of obtaining reliable data on outcomes and costs.
“I think we just struggle with the right type of data collection in order to fight back or negotiate with each payer in the correct way,” Dr. Sangyoon Jason Shin, regional medical director of ambulatory care and medical director of pre-operative services for the Center for Transgender Medicine and Surgery at Mount Sinai, said during the conference. “Step one [is to] have the right infrastructure to get the right type of data, so you do have that in hand in order to negotiate correctly.”
Defining value-based care
Value-based care carries multiple interpretations, Maria Todd, administrator with the Robotic Orthopaedic Institute St. George, said during the conference.
“Value-based purchasing is a misnomer,” Todd said. “It should be value-based selling.”
Health care organizations need to define and present their “value” clearly before expecting payers to compensate fairly, she added.
While federal programs such as Medicare may talk about value-based purchasing, private payers and self-funded employers often have widely varying interpretations, Todd said. Even basic questions, such as which services fall within a bundle or how a postoperative complication gets billed, remain inconsistent across payers.
Providers must define exactly what is included in their bundled service, from the precise start and end of the care episode to which elements are “extras” that fall outside the bundle, Todd said.
Without these clear definitions, payers will assume any additional service is already included, potentially undercutting revenue, she added.
“You have to understand what it is you’re trying to create as a value item for sale,” she said. “You don’t have a patient who understands that. So how can you get them to give you the feedback if they are satisfied?”
Securing direct contracts and bundles
Some in the ASC space are seeing success with direct contracting, a model that circumvents traditional insurance reimbursement by contracting with self-funded employers or third-party administrators (TPAs) that represent them.
Jean Ann Scarafia, vice president of operations with Commons Clinic, a Los Angeles-based sports medicine clinic that operates its own ASC, said that the clinic works directly with a major commercial payer to establish prospective bundled payments for spine cases.
“We ultimately sold the contract by pushing our value proposition of being able to take cases out of more expensive Cedar Sinai or UCLA hospital systems that were in our market,” she said.
The system means high margins for her clinic while still producing cost savings for payers because the ASC setting is inherently lower cost than a hospital, she said.
“On those spine cases, we do get paid upwards of 250% to 300% of Medicare, and then we’re able to manage that known budget prospectively on the case, making sure that we coordinate all components of the care in the episode under that margin threshold that we’ve set,” she said.
By meticulously tracking supplies, surgeon time and overhead, ASCs can provide predictable bundled rates to self-funded employers and conveners, often including warranties on implants and a carefully defined “episode of care” period, Todd added.
“If you don’t know your costs, you cannot tell if the program price offered is within the realm of possibility,” Todd said.
