Decreasing Reimbursement Rates & The Importance Of In-Network Procedures

  • Healthcare Management
  • case management - medical management
  • June 14, 2022

Many ambulatory surgery centers (ASCs) are out-of-network. But with decreasing reimbursement rates, in-network procedures is increasing.

The Shift To Value-Based Care

As healthcare continues to shift more and more toward value-based payment models, the case volume in ambulatory surgery centers (ASCs) continues to rise. In fact, by 2022, the US Ambulatory Surgery Center Market Report estimates that ASC volume will see a large increase in every service line, with the biggest jump in orthopedics and spine care. As reimbursement rates decrease, administrators need to understand the importance of in-network procedures.

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What can ASCs bill for?

Billing works differently in ASCs than in hospitals. Because an ASC is a specific entity that provides only specific procedures, Medicare has an approved list of procedures for ASCs. Procedures are approved based on whether the operation can be performed in a physician’s office, whether the need for the operation is an emergency, and whether the procedure is urgent or elective.

Decreasing rates

Medicare reimburses ASCs as a portion of the amount given to hospitals. In 2003, ASC procedures cost Medicare 83% of the amount paid to hospitals for the same services. Now, those same procedures cost Medicare 53%. Because of this difference, more and more private insurance companies and employers are driving patients toward ASCs.

Varying reimbursement rates

Out-of-network ASCs get higher reimbursement rates. However, in the last 10-20 years, reimbursement rates have significantly declined. When risk-averse payers underpay an out-of-network ASC, the profitability that the ASC is hoping for does not come to fruition. For many ASCs, being out-of-network is actually not bringing in more money.

Why in-network procedures are important

While going in-network can be daunting for an ASC, the process can yield great results. For patients, choosing in-network providers yields the lowest out-of-pocket costs. And patients who can find a medical provider who is in-network are typically more satisfied with the overall experience. And of course, a positive patient experience is crucial for keeping quality scores up and continuing to get paid for value.

Aligning all payers

ASC administrators should understand exactly what reimbursement methods an ASC is using. But using multiple reimbursement methods can make actually getting paid even more difficult. Each payer has unique processes and parameters that the ASCs must meet. Each ASC would do well to evaluate reimbursement policies, especially to prepare for the next negotiation of managed care contracts. Be sure to do the necessary research so that an ASC remains profitable and can continue to serve patients.

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