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Does anyone have any experience with contract negotiations for surgical procedures, which are typically performed in a facility (SOSD=0), and are now performed in an OBSS (Office-Based Surgical Suite)? The POS is now 11.

This is growing in popularity in orthopedics (hand and wrist), podiatry (foot procedures), and ophthalmology (cataract surgery).

While still somewhat rare, with the advent of WALANT and improvements in local anesthesia, a lot of surgeons are looking for ways to provide a superior service to their patients that is both safe and convenient by establishing an OBSS.

Note that this issue covers 90-day surgical procedures where the “Non-Facility NA INDICATOR” flag in the PFSRVU database has a status indicator of "NA". The procedures are easy to identify as the NON-FAC PE = FAC PE (therefore zero). It is not an issue where the surgeon is compensated for the OBSS or with simple 10-day procedures commonly performed in the office. They will have a SOSD. Interestingly enough, the amount can range from a few dollars to thousands.

When the Site-of-Service Differential (SOSD) equals zero there is no additional reimbursement for the office surgical suite overhead. Since you are saving both the insurance company and the patient the expense of a separate facility bill, the strategy is to negotiate a carve-out for the office overhead. This has to be done with each carrier, individually.

I’ve spent considerable time gathering information on this but would love to communicate with other managers, billers, and coders that have actually worked the process. There is so little information on this topic!

Thanks

- Jeff
 
Many years ago the office I worked for created a AAAASF surgical suite when we were moving into a new location being built for us.
I spent about 2 years attempting unsuccessfully to negotiate additional payment for the surgical suite. We would get the payment rate for non-facility, but if it was the same as facility or with a small differential, many procedures did not cover the additional expenses. We continued to use the surgical suite more as a convenience to the physician. There was not a local surgi-center at the time, and minors were done at the hospital. At the hospital, maybe in 8 hours we could do 8 procedures. In our surgical suite, we could do those same 8 procedures in maybe 4-5 hours, with the physician seeing appointments while waiting for room turnover. It did make the physician more productive, but we just a bit more than broke even considering the cost of the RN, equipment, certification, staff training, etc. It was not a money making situation which the physician thought it would be when building out.

At one point, a consult guy said his company could bill out separately as a facility and out of network with a different tax ID for commercial insurance. He insisted we would make much more than previous. The whole situation seemed shady to me, unless we met the requirements for Article 28 which was impossible for us. I had found several articles where physician offices had been doing exactly as he was proposing. Some insurances pursued the offices legally, some insurances basically said well, you got away with it for now, but no more going forward. He was a slick salesman, and the physician agreed to a trial with him for a specific insurance only. After several cases, I analyzed the payments, and it was not any additional payment, with the headache of additional work and suspicious billing practices. We terminated that agreement.

We continued using our AAAASF surgical suite unless it was a case we knew we would actually lose money on (very expensive disposable equipment). To help offset the expenses, we also sublet the space and employees to other physicians days we were not using it. Once there was a local surgi-center option, we converted that space and gave up our certification.

I will also note that each state creates their own regulations about what constitutes a "facility." In some states the process and reimbursement could drastically differ. Every insurance I attempted to negotiate with, either I couldn't reach the right person, or they just didn't care. I got the basic response of "if you don't like the reimbursement, then don't do the procedure in your surgical suite." We were just too small to be on their radar to be willing to negotiate with us. The same exact thing occurred anytime I tried to negotiate our fee schedule for anything (not just for OBS). I won't say it's impossible, but I will say I was unable despite my own efforts and that of consultants.
 
Thank you so much for the feedback. This is all very helpful and your experience with OBS is common.

Note that zero SOSD is technically different from low SOSD. If zero the code could be re-evaluated and the NON-FAC PE flag changed. The AMA RUC committee would determine a fair (NON-FAC PE) RVU amount. If the reimbursement is low, that is a different problem, because it was already evaluated and the direct and indirect expenses were deemed to be low.

When negotiating with the carrier, the best tactic appears to be illustrating the savings to the insurance company. From those who have successfully negotiated reimbursement, it’s key that you find the right person at the insurance company. Some won't understand; others won't care. This point alone could mean success or failure. Sell the benefits to the patient AND the insurance company.

From your e-mail it appeared that you had some leverage with procedures performed in the hospital--the most expensive of the three options (ASC, HOPD, hospital).

In regard to the "consult guy" and billing out an OBSS as a facility under a separate tax ID. DON'T DO IT! I agree with you; your POS=11, office, and an office is never a facility.

When the SOSD = zero the clinic is not being reimbursed for office "overhead"; the NON-FAC PE = FAC PE. While you are effectively requesting a "facility fee" for your OBSS, technical—and officially it is not because an office is not a facility!

This issue is very complex, full of jargon and concepts that even the most seasoned coders and billers will never encounter their entire career. I know, I was introduced to coding in 1992! I have spent hundreds of hours researching this and I firmly believe that the OBSS is beneficial to the patients, the carriers, the surgeons and the entire healthcare system.

WALANT, in particular, is preferred for many hand-and-wrist procedures where having an awake patient is useful. You are correct that each state has different requirements in regard to an OBSS. Some states are very strict with clear guidelines whereas others don’t offer anything.

Once again, thanks for your feedback and feedback is welcome—both success stories and not-so-successful stories.

- Jeff
 
When negotiating with the carrier, the best tactic appears to be illustrating the savings to the insurance company.

In my experience, the only insurance entity that gave two hoots about what we wanted was a local HMO, and that is only because we're a specialty that is not well-represented. The rest of the insurance companies are a big machine that doesn't know how to do anything other than chug along the tracks that are already laid out.
 
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