Payers Acquiring ASCs

Want to keep your reimbursement costs for services down? Buy or affiliate with the service providers. Payers pressured by the Affordable Care Act (ACA) to keep costs low are looking to ambulatory surgery centers (ASCs)—already low-cost providers—as acquisitions.

While this trend has grown over the past few years with payers like Kaiser Permanente and Geisinger, other payers have been showing recent signs of interest, too. Highmark, for example, recently announced its plan to construct 10 ASCs in Pennsylvania.

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In a Healthcare Payer News article, author Joan Dentler said, “Since ASCs have argued for years that they are the lower cost surgery model, payers will look to identify how low the reimbursement for surgery centers can go. But when the ASC uses this argument, it does not want to receive the lowest reimbursement possible. It is looking to receive reimbursement just low enough to make it worthwhile for the payer to reward the surgery center with the contract.”

Challenges for payers include understanding how to keep owners and providers active and engaged, as their motivation is generally outside of reimbursement, case scheduling, supplies and equipment, and other areas of management payers are not used to organizing. “It’s important to remember that one of the biggest concerns for physicians and third-party management companies, and hospitals investing in ASCs, is the need to maximize the revenue cycle and maintain their profit margins. For payers, procedure coding, billing and reimbursement are not the center’s primary business focus, but rather operational efficiency and cost savings. Potential partners need to discuss these differences very candidly and find ways to bridge any gaps in their ownership objectives,” Dentler said.

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