ASCs Add Substantial Value To Outpatient Surgery

By Larry D. Taylor and Rebecca R. Craig

Ambulatory surgery centers (ASCs) are not new to the healthcare industry, but recent technological advances and the potential for COVID-19 infection in the hospital setting are driving many third-party administrators to take a deeper look.

Joint procedures, spine procedures, critical diagnostic procedures, and many other surgeries are being performed with great success in ASCs, both in terms of outcomes and cost.

One study of savings in ASCs shows they reduce commercial insurance costs by $38 billion annually and save commercially insured patients $5 billion each year. Medicare has been slower to embrace ASCs than commercial payers, but the Centers for Medicare & Medicaid Services’ (CMS) own data shows that, on average, ASC procedures cost about 50 percent of what they cost in hospital outpatient departments (HOPDs).

There are currently more than 5,800 Medicare-certified ASCs in the US. They provide ophthalmology, orthopedic, gastroenterology, pain management, urology, plastic, podiatric, spine, otolaryngology, general surgery, gynecology, dental and cardiovascular outpatient surgical care to the program’s beneficiaries.

Standards And Accreditation

Regulation is one of the top concerns of third-party administrators (TPAs) when considering ASCs. In fact, there is little difference between the health and safety requirements HOPDs and ASCs meet.

Most ASCs are Medicare-certified, and all such ASCs must meet CMS’s Conditions for Coverage related to:

• Complying with state licensure requirements
• Setting up a governing body and management systems to ensure accountability and legal responsibility
• Safely performing surgical services by qualified physicians
• Implementing quality assessment and performance improvement plans
• Providing a safe and sanitary environment
• Ensuring all medical staff are legally and professionally qualified and credentialed
• Ensuring the nursing needs of all patients are met
• Maintaining complete and accurate medical records
• Providing safe and effective pharmaceutical services
• Providing lab and radiologic services or having procedures for obtaining them
• Informing patients of their rights
• Minimizing infections and the spread of communicable diseases
• Providing appropriate patient admission, pre- and post-surgical assessments, and all discharge requirements
• Complying with federal, state, and local emergency preparedness requirements

Additionally, ASCs are subject to regulatory oversight from a variety of other federal and state agencies, and the overwhelming majority must meet state licensing requirements.  

In many cases, ASCs voluntarily seek accreditation from independent bodies that also certify other healthcare facilities. These include the Accreditation Association for Ambulatory Health Care (AAAHC), the American Association for Accreditation of Ambulatory Surgery Facilities (AAAASF), The Joint Commission (TJC), and the Healthcare Facilities Accreditation Program (HFAP).

Quality And Patient Satisfaction

Direct comparison of patient outcomes between ASCs and HOPDs requires risk adjustment because ASC patients are, on average, healthier than those in hospitals. However, a study that looked at Medicare patient data found patients who had a procedure done in an ASC were less likely to be hospitalized or visit the emergency department (ED) on the same day as their surgery than patients who were treated in a hospital. The same held true for hospitalizations and ED visits within a week or a month of surgery.

Another study looked at 965 patients who underwent total hip arthroplasty (THA) between 2013 and 2018, some in an ASC and others in an HOPD. After examining 90-day complication rates, revision rates, all-cause reoperation rates, ED visits, and readmission rates, the study found that there was no statistically significant difference in the rates of complications between the two groups.

ASCs were early advocates of an ASC-specific quality reporting program run by CMS. Before this program was established, a group of ASCs formed the ASC Quality Collaboration, which publishes a quarterly, publicly available report based on data provided by ASCs across the country. The 4th Quarter 2019 report included data from 1,648 ASCs.

The report shows performance data for these facility-level quality measures:

• Patient fall in the ASC
• Patient burn
• All-cause hospital transfer/admission
• Wrong site, side, patient, procedure, or implant
• Prophylactic IV antibiotic timing
• Appropriate surgical-site hair removal
• Normothermia
• Unplanned anterior vitrectomy
• Toxic anterior segment syndrome
• All-cause emergency department visit within one day of discharge
• All-cause unplanned hospital admission with one day of discharge

CMS instituted its quality reporting program for ASCs in 2012, stipulating that ASCs that did not report data were subject to reductions in their Medicare payment rates, further incenting them to focus on their facility’s quality metrics and high standards of care.

Today, CMS reports ASC data on Hospital Compare by facility, by state, and nationally so providers and patients can compare surgery centers against others in their area for both quality and patient satisfaction.

Although ASC reporting to the national Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey is currently voluntary, the highly focused, efficient nature of ASCs leads to high levels of patient satisfaction across virtually all measures.

ASCs tend to be small facilities with a high level of concierge-like customer service. Physicians, nurses, and other clinicians have set hours and no on-call schedule, and all staff is highly engaged in ensuring a comfortable environment and successful outcomes for patients. This results in a high degree of employee satisfaction and translates into focused, compassionate patient care. Patient feedback is used to find ways to elevate care even further, and any necessary changes can be implemented more quickly than in a hospital setting.

Unlike hospitals, ASCs never intentionally bring sick patients into their facilities. Also, because they are small and function autonomously, ASCs are nimble and can quickly implement new policies like expanded screening or sanitation protocols. These factors combine to reduce the chance of infection from a virus such as COVID-19.

With most patients preferring to recover at home, the majority are discharged on the day of surgery. In states where overnight stays are allowed, however, many ASCs offer that option. This is especially important as ASCs expand the types of surgeries they perform—patients who have undergone a more complicated procedure, don’t have a caregiver at home or both can stay the night, receiving individualized nursing care and avoiding the often-noisy hospital environment.

Cost Comparison

In 2013, researchers from the School of Public Health at the University of California—Berkeley analyzed Medicare data to identify how much money ASCs saved CMS between 2008 and 2011. In those four years, ASCs saved Medicare and its beneficiaries $7.5 billion. Approximately $6 billion of the savings were accrued by the program, and the remaining $1.5 billion went directly to beneficiaries.

During the time studied, Medicare was reimbursing ASCs at an average of 58 percent of the rate it reimburses HOPDs for the same procedure. For example, in 2011, Medicare beneficiaries (excluding Medicare Advantage) had 1,709,175 cataract surgeries, of which, 1,120,388 were performed in ASCs. The reimbursements per surgery were $951 for an ASC and $1,691 for an HOPD, meaning Medicare saved $740 each time a patient chose to receive treatment in an ASC. When applied across the cataract surgeries performed in ASCs in 2011, the savings for this single procedure was $829 million.

The Ambulatory Surgery Center Association (ASCA) is in the process of updating this study and hopes to release the new analysis by the end of 2020.

Preliminary Data Shows:

1. ASCs saved the Medicare program $28.7 billion between 2011 and 2018.
2. Annual savings due to ASCs rose from $3.1 billion in 2011 to $4.2 billion in 2018.
3. If volume migration continues at a rate comparable to migration rates seen between 2011 and 2018, ASCs are projected to save Medicare $73.4 billion from 2019 to 2028.

Today, on average, procedures for Medicare beneficiaries in ASCs cost about 50 percent of the cost for the same procedure performed in an HOPD. For example, using the Procedure Price Lookup tool on Medicare.gov, the total cost of a gallbladder removal using a laparoscope is $2,194. The same procedure at an HOPD is $4,833.

Some of the cost differences can be attributed to hospitals’ need to cost shift from less profitable areas, such as the emergency department. Indeed, data from Healthcare Bluebook shows that, while fees for anesthesia and professional services tend to be similar for all surgeries performed in a geographic area, the facility fees vary widely — from as little as $2,000 to as much as $16,000 in the case of a tonsillectomy.

A significant amount of savings results from the higher efficiency levels seen in ASCs. In some instances, hospital surgical directors have consulted with ASCs in their area to better understand the potential for greater efficiency in their departments.

Rise In Outpatient Surgery

Healthcare intelligence firm Sg2 predicts that 85 percent of surgeries will be performed in the outpatient setting by 2028. Cancer, dermatology, gynecology, gastroenterology, urology, ENT, and ophthalmology procedures have already shifted in large part. Vascular, burns and wounds, orthopedics, general surgery, spine, pulmonology, and cardiology are beginning to shift to outpatient, while categories like neuroscience, infectious disease, and obstetric, will mainly stay in the inpatient setting.

There are several reasons for the shift from inpatient to outpatient, particularly at ASCs.

1. New technology is making outpatient surgery safer and more comfortable. In many cases, ASCs have been the innovator in those advances or led in their adoption.
2. The U.S. has an aging population, but older people are healthier than in the past, with fewer co-morbidities, making them prime candidates for outpatient surgeries.
3. Medicare and other payers prefer the lower cost/high-quality equation at ASCs.
4. Advanced techniques, especially in anesthesia, mean ASCs can perform surgery on higher-risk patients than before. ASCs traditionally treated only American Society of Anesthesiologists (ASA) physical status category 1s and 2s but are increasingly able to treat ASA 3s and 4s.

Locating ASCs

There’s little standardization in ASC names, which can confuse third-party administrators (TPAs) searching for centers in their area. ASCA is aware of this problem and is available to help TPAs and others find Medicare-certified ASCs. “The Find an ASC” page on the Advancing Surgical Care website that ASCA maintains at www.advancingsurgicalcare.com lets users type in an address, city, or ZIP code to find an ASC. Users can adjust the search area from 1 mile to 700 miles and have the option to also show hospital locations.

Conclusion

With a focus on patient safety, positive clinical outcomes, and efficiency, ASCs are a natural choice for outpatient procedures, especially during times of communicable disease spread. Since most ASCs are Medicare-certified, there is little difference between their health and safety requirements and those of HOPDs.

Government and commercial payers are increasingly recognizing the ability of ASCs to provide the same or better care at significantly lower rates than HOPDs. At the same time, patients are increasingly able to price-shop between various settings and benefit from lower co-pays.

With 85 percent of surgeries predicted to be performed in the outpatient setting by 2028, healthcare costs rising, and the U.S. population aging, ASCs fit with the trend toward consumerism in healthcare and present a significant value proposition for the surgical sector.

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Author The Authors

Larry D. Taylor, AT, C, CASC
President and CEO
Practice Partners in Healthcare, Inc.
Birmingham, AL

Rebecca R. Craig, RN, MBA, CNOR, CASC, COC
Chief Executive Officer
Harmony Surgery Center, LLC
Peak Surgical Management, LLC
Fort Collins, CO