“Why do we need a payer strategy specific to the ambulatory surgery centers we want to develop?” health system leaders often ask us. “After all, we already have rates ...”

Answer: What got you here won’t get you there. Your health system may have aced contracts with insurers that cover inpatient (IP), hospital outpatient (HOPD), and other services. But an ASC-focused payer strategy for the surgery center network your health system aspires to build is uncharted territory.

You can’t afford for the crucial ASC revenue stream to be a sideline project or an afterthought.

You need a roadmap, and any good roadmap starts with a hard look at where you are now and where you want to go.

As someone with years of experience on both the payer and provider sides of ASC insurance contracting and reimbursement, here are five questions I ask health systems looking to develop surgery center networks:

Question #1: Is your health system’s ASC payer strategy part of your health system’s overall payer strategy for all sites of service?

Follow-up Questions: Where are ASCs in the broader landscape of your payer strategy for inpatient, outpatient, ancillary, and physician service lines? Are your ASC rate negotiations aligned with your health system’s broader payer negotiations?

Outpatient surgery will grow 14% between 2024 and 2034 — a growth rate that far surpasses every other site of care besides home health and virtual E&M visits, Sg2 forecasts. ASC volume will grow 21% — outpacing 13% HOPD growth and 3% inpatient growth during the upcoming decade, Sg2 predicts.

To capitalize on this momentum, your health system should have an ASC-focused payer strategy.

Question #2: Do you have an existing ASC portfolio with rates in place already?

Follow-up Question: How mature are those rates and are they optimized for your ASC portfolio?

Without optimized ASC contracts, across all payers and specialties, your surgery center network could lose millions in uncaptured revenue over time.

Question #3: What is your strategy for improving the ASC rates your health system has currently?

Follow-up Questions: Have you developed an overall payer strategy for your surgery center network or has your payer strategy developed case-by-case as you develop individual ASCs? Are your ASC rate negotiations on-cycle or off-cycle with payer negotiations for your health system’s other service lines?

When the Compass Surgical Partners payer strategy team collaborates with our health system partners to plan for robust profit margins for both HOPD and ASC service lines, we scrutinize current HOPD case data to discern what case migration will look like.

Next, we forecast how much those cases could really cost in the ASC setting, based on our experience and expertise. This intel empowers us to articulate cost savings to payers as we develop healthy outpatient surgery profit margins for our health system partners.

Payers are not always right, and could shortchange you on the ASC rates. If you can curate data that demonstrates the opportunity for higher-quality outpatient surgical care at lower costs, you could explain the value proposition, and perhaps secure the reimbursement rates you deserve.

Question #4: Do your current ASC contracts contain ready rates or assignment language?

Follow-up Questions: Has someone with ASC-focused expertise negotiated contracts for your existing ASCs and achieved ready rates to support new surgery center launches?

Locking in ready-rate language creates a payer strategy ‘run ramp’ for future HOPD-to-ASC conversions, de novo ASCs, and acquisitions that your health system is planning.

Success Story: The Compass Surgical Partners payer strategy team recently partnered with a $1.8B, multi-site health system to negotiate rates for two HOPD-to-ASC conversions. The team achieved highly competitive for the partnership’s first two ASCs and locked in ready rates for future HOPD-to-ASC conversions, de novo ASCs, and acquisitions.  

The health system did not have to ‘trade away’ revenue to achieve favorable ASC contracts with payers. The value proposition that Compass calculated clearly demonstrated to payers that they could offer solid reimbursement for procedures performed in the ASC and still save money they typically spend when those same procedures are performed in the ASC.

Question #5: What is your assessment of other providers in your service areas?

Follow-up Questions: Why do you want to develop a surgery center network? Do you want to improve your position in the service areas or are you trying to get ahead of other providers? What are your goals for physician alignment?

A sound ASC payer strategy is the foundation of your surgery network’s financial health. It benefits not only your ambulatory surgery center, but also your patients and your health system as a whole.

Next up — Stacy shows you how to make sure your HOPD-to-ASC conversion or de novo ASC hits the ground running: ‘Proactive Payer Credentialing Preps Your New ASC for Financial Success.’

Contact us to explore your options for creating a payer strategy for your surgery center network.

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