March 26, 2024
Is your health system planning to launch a new ambulatory surgery center? You can build a strong financial foundation for your ASC if you work with payers to ramp up volume as soon as possible. You can achieve this goal—if you know the ropes.
The graph below illustrates the payer mix our team achieved for a recent HOPD-to-ASC conversion after licensure and before accreditation. A ramp up like this isn’t possible unless you persuade managed care organizations (MCOs) to credential your de novo ASC early.
Many health systems mistakenly assume that the journey to ASC-focused managed care contracts will be smooth and quick because they already have MCO contracts that cover inpatient (IP), hospital outpatient (HOPD), and other ancillary services.
But ASC MCO contracts are very different animals. Obstacles you haven’t experienced and don’t anticipate could put a big wrench in your ASC development plans. If you secure credentialing early, you can clear away some of these obstacles.
During the credentialing process, MCOs evaluate and approve your new ASC to participate in their networks. The four steps of the initial credentialing process are: application, verification, credentialing committee review, and decision. ASCs must re-credential every one to three years, depending on the payer.
Credentialing requirements vary by payer and by state. Some payers allow credentialing after state licensure. Payers that require a Medicare Provider Transaction Access Number (PTAN) prior to credentialing are slowest to ramp up.
As a health system, you have more leverage with payers than independent ASCs have. Use this leverage to your advantage.
Alert payers to your ASC development plans early in the process. Ask each payer to collaborate with you to ramp up ASC cases as soon as possible.
Case migration from your health system’s HOPD to your new ASC works to payers’ advantage because reimbursement is less for most low-risk, less invasive procedures when they are performed in ASCs. The sooner the case migration begins, the less payers pay out and the more they benefit.
Early credentialing benefits your health system because your ASC can begin collecting reimbursement well before it has ramped up to a full caseload. This ASC revenue cushions the temporary hit your HOPD takes as it offloads lower acuity cases to your new ASC and takes on greater volumes of higher acuity cases.
Case migration benefits patients too. Patients who are candidates for ASC procedures have access to high-quality, lower-cost care. Patients who need HOPD care benefit from being cared for in a facility that focuses on higher acuity cases.
Make credentialing a priority. Don’t let the hustle and bustle of launching a new ASC distract you from your early credentialing goals. If you don’t put a dedicated team on credentialing tasks, there will be delays.
Don’t accept antiquated credentialing practices. Don't let unnecessary red tape hamstring your ASC. Work with payer representatives to implement the best possible date for each contract to take effect. If the people you are working with seem to be dragging their feet, escalate your credentialing requests to a payer representative who understands the benefits ASCs create for payers and patients.
Create a 3-month run ramp. Start credentialing discussions with payers at least three months prior to licensure. Gather all the materials you need for the applications three months prior to licensure as well—including accurate demographic and supporting information.
Do you want to learn more about how to deploy proven, analytical approaches to secure ASC-focused payer contracts that are optimal for your health system? Contact us and to schedule a time to talk.
