The site-neutrality movement, aimed at standardizing payments across outpatient health care settings, has rapidly emerged as an important discussion among ambulatory surgery center (ASC) operators.
While potentially beneficial in driving procedures into lower-cost environments by eliminating hospital facility fees, industry leaders have mixed perspectives on its implementation.
Michael McClain, managing partner at Left Coast Healthcare Advisors, told Ambulatory Surgery Center News his initial optimism was tempered by significant concerns about what implementation might actually look like.
“I think on the surface it sounds very positive,” McClain said. “How could this possibly be a bad idea? Let’s pay everybody the same rate. But as you dig deeper, it’s quite insidious because it doesn’t take into account the ideal state, the right patient and the right location of service based on acuity.”
Left Coast Healthcare Advisors is an ambulatory health care consulting and advisory firm.
Additionally, relying on historical data for reimbursement might inadvertently reinforce inefficiencies, McClain added.
“If 90% of your business has been done in a hospital, and it should have been done in a lower-cost setting, you’re establishing the rate in the wrong place,” he said. “A much more thoughtful approach is really to take a look at the acuity of the patient and reimbursing for that level of service.”
Moreover, focusing solely on facility fees ignores another critical dimension: physician payments, McClain said.
“Physicians often get paid the exact same amount regardless of location, even though the effort required may vary greatly depending on the place of service,” he said. “We also have to look at the ways we code and weight physician services. If there was a differential in payment, would that change behavior? Sure. Is there potential for abuse? Sure. But we’ve already opened that door with things like ASC and physician ownership.”
Dr. Robert Bray, founding director of DISC Surgery Centers, said he was optimistic about the potential impacts of site neutrality, seeing it as aligned with ASC operators’ strengths in efficiency.
“It would be great if rates were equalized with hospital outpatient department (HOPD) rates because hospitals usually get higher reimbursement,” Bray said. “But we already operate with what we have. Our efficiency is high; we know our data, our costs, and our low complication rates.”
DISC Surgery Centers operates several spine, orthopedic and pain management facilities DISC operates across California.
Bray said as DISC scales its specialized spine and orthopedic operations, the center’s negotiating power increases, enhancing cost control and patient value.
“As we scale, doing hundreds, then thousands of spine cases, plus hundreds of joint replacements, we can negotiate better prices for equipment and supplies,” he said. “The payers see improved outcomes at a lower cost, and that helps them sell their products. Patients get a single copay or deductible, and everything is wrapped in.”
Liz Hunt, director of finance and operations at Green Mountain Surgery Center, said hospitals themselves could benefit from proactively adapting to the new payment landscape by establishing efficient outpatient operations.
Green Mountain Surgery Center is the only multi-specialty ASC still in Vermont.
“If hospitals were to put the money in, potentially hire consultants to build a low-cost ASC, they could be incentivized by site-neutral patients,” Hunt said.
“Hospitals inherently carry inefficiencies due to their roles as trauma centers dealing with high-acuity patients who might need immediate OR access,” she continued. “That’s what hospitals are for, to save lives.”
Site neutrality could encourage prioritizing patient care over financial incentives, Hunt added.
“I think when you start incentivizing people by way of, you’re just not going to get paid anymore, so do the right thing, maybe we can get the right mindset going,” she said.
