Ambulatory Surgery Centers and Pain Management

[DigableCat]

http://www.mowles.com/HowtoProfitinPain4.doc

http://www.mowles.com/fee_schedule.htm

A friend recently pointed me in the direction of these articles explaining the economics of having an Ambulatory Surgery Center(ASC) that performs pain management procedures.

For those of us that are considering approaching a practice that does not have a pain management service, I think it's very helpful to explain the cost benefits associated with having a pain management specialist in their practice. It also seems helpful for those of us who wish to manage their own ASCs in the future.

Are ACSs worth the investment?
When is the best time to try and set one up? After a few years of being established in your practice? One friend knew a person who set up theirs during their fellowship.

I welcome any insight/opinions from those of you in practice.

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[Aether2000]

Times are changing...Medicare already reimburses the physician 1/3 the amount they would receive by doing a procedure in the office if it is done in an ASC. Several other payors are examining this as an option. Some are already cutting deals with pain docs to give them a premium over the physician fee if they will keep the cases out of an ASC/hospital. On the other hand, investment in an ASC (there are over 3000 in the US) as a partner in a multispecialty arena or as a partner in an ancillary specialty use with large volume (Ortho) does make sense. Unless a hospital has partial ownership of the ASC, the physician must perform at least 1/3 of their cases in the ASC which works as long as there is not a split practice between 2-3 different cities.
New regs on construction mandated by HHS add some rather expensive pieces of equipment to an ASC: a full sprinkler system, special door systems, and a generator big enough to power a city in case of power failure. On the other hand, the ventilation requirements in the procedure room have been relaxed for pain management. Overall, the cost of a small ASC with one procedure room and minimal space ranges from $600,000 to $1.5 mil depending on the bells and whistles purchased, the cost of land, etc.
Unless you are in a group of 2 very busy pain physicians or 3-4 moderately busy pain physicians, a single specialty ASC may not be worth the investment these days. If you go multispecialty, you risk the ire of the local hospital that will often fight to prevent the construction of such in the legal arena, or restrict physician's privileges in the hospital.

 

[DigableCat]

Thanks for the reply.

In the case where a multi-discipline surgical practice will already have a C-arm(but not a pain physician), how much more difficult will it be to have it adaptable to be used in an interventional pain setting?

 

[Aether2000]

Most C-arms will work for pain management but the older models such as the OEC 9000 and OEC 9400 require considerably more fiddling with the contrast and brightness images on the screen and result in an increased radiation exposure time due to the image intensifier attempting to balance the radiation output. Sometimes it takes 2-4 seconds of radiation exposure during the first image in a new position of the C on such units to get a picture on the video display. The more modern machines, 9600 and 9800 are digital and require much less initial radiation. However, on either set of machines, the subsequent exposure time is similar. The bells and whistles on a C-arm may be compeling, but some have not yet reached the point that they are clinically useful (3-D Fluoroscopy). Digital subtraction is nice, but costs a significant amount to add on to current units and is not absolutely necessary. The older Ziehm machines work well as long as you are not heavy on the fluoro pedal. Extended exposures such as with discography or vertebroplasty caused the machine to completely shut down until it cooled off which sometimes was 30 minutes. Siemans and Phillips make some nice newer units, but I have used the older units without difficulty except in the obese.
The OEC 7600 is cumbersome as there is but one video screen that swivels on each side of the arm, and the machines often do not have a 3.5 inch IBM disc output. The 3-D fluoro units are slow, and require numerous adjustments to make the transition from lateral to AP.
A super C size arm is nice, esp with obese patients, and may be necessary if down-the-beam techniques are to be used for discography or any intradiscal work with long needles.
One of the main issues in multispecialty centers is the table, rather than the C-arms, most of which are adaptable. The tables often have radio-opaque bars, rods, and hardware in the surface of the table. Oblique views are difficult due to these interferences: cervical obliques may be impossible. Some of the tables such as Skytron have extensions available that are long and free of metal.

 

[PainDr]

In Feb. I attended the AAPM annual meeting. There was a group there called Foundation Surgery Affiliates. Their website is www.foundationsurgery.com . Anyone heard of them? Supposedly, they will build and manage your ASC with a personal investment of only $5000 and you retain 80% ownership. Sounds too good to be true. However, to be fair, I didn't actually talk to them, I just picked up their brochure. Anyone have any thoughts?

 

[Amy Mowles]

Be wary of misguided information. Pain Management is considered Tier I procedures for any ASC to offer. Relatively low cost on equipment and supplies, 3-4 patients per hour (many times more than 3-4 billable procedures) fast room around/short recovery adds significant income to any new or existing ASC.

The costs to bulid an ASC vary significantly from State to State. Consider the cost of land in the area, new building construction or build out of existing space costs.

43 States require a License to operate an ASC prior to Medicare Certification. It is the State License that dictates the physical environment. Many of these states use the AIA Guidelines for Design and Contruction of Hospitals and HealthCare Facilities. Chapter 9 refers to Outpatient Facilities..an ASC is NOT a hospital! States that use the Guidelines in full or in part, generally make for larger ASC's. The latest version in use is 2001. This is the version that finally gave a flavor to Operating Rooms. Class A-local sedation, Class B-limited to IVCS and Class C-General Anesthesia. Each Class is then tied to its own required spaces. 2006 version is in comment period.

Medicare Certification on the other hand requires conformance with the NFPA 2000. The Conditions for coverage actually have little to say about "the environment". Safe and Appropriate is about it. NFPA does not require a hospital grade generator or piped gases unless the facility is using General Anesthesia.

Many of you may be interested in this conference coming up next month.
ASC Communications
Proudly Presents
3rd Annual Ambulatory Surgery Center
Orthopedics, Neurosurgery and Pain Management
Conference and Exhibits
http://www.beckersasc.com/

 

[Aether2000]

I am aware of insurers who are now paying physicians a premium to perform the same procedures in their office rather than an ASC. As many physicians are implementing fluoro suites in their offices anyway due to increased revenue from medicare (approximately triple to quadruple what they are paid to do the same procedure in an ASC), there is an increased incentive for physicians to negotiate with insurers for a premium rather than build a single specialty ASC. There is also apparently a new movement that would certify procedure rooms in physician's offices underway and that may have an impact with insurers.
Having a friend who just completed an ASC, a very large generator system WAS required although not the capactiy of a hospital.
Amy is correct in the sizes of OR rooms in an ASC is determined by interestingly the type of anesthesia rather than the type of surgery or surgical requirements. The breakdowns are 121/225/400 square feet minimum for local/IV sedation/general anesthesia with the rooms needing to be nearly square (there is a minimum length of walls).
Some states have certificate of need requirements in which justification of the ASC must be made and comments from the local medical community including hospitals, can throw up barriers to ASC construction and development. These are usually not insurmountable but can be expensive in the attorneys fees paid to obtain the CON.
I have been approached by several companies in the past few years with management/construction offers that vary anywhere from 20% to 100% of the cost of construction being assumed by me, then the "management team" would take over. At this time being in a practice that has 2 MDs and a NP, it is not in our best interest financially to build an ASC. The least possible price we had for construction of the ASC, parking lot, land, without any equipment was $600,000 for a one OR suite ASC with minimal seating and configured in a way that would require variance approval by the state. Many of the quotes were much higher. To construct a shell of 6,000 square feet and use 4,000 for a substantial ASC would cost over $1,000,000.
Finally there is the issue of cost shifting that is occuring to patients. Insurers over the past 2 years have markedly increased the deductable cost to the patient and many have increased the percentages paid after the deductable is met. This trend will continue unchecked. Therefore a single epidural injection which used to cost the patient out of pocket $100 in an ASC may now cost $1000 due to increases in deductables. Many ASCs require the copay and deductable be paid up front. Therefore ASCs may be on the verge of pricing themselves out of the market for simple injections. I have had many patients cancel procedures over the past 6 months due to the increasing out of pocket costs to perform 5 minute injections in an ASC and have shifted the procedure to our office for only a fraction of the cost.
It will be interesting to see if the upcoming conference addresses these issues.

 

[Amy Mowles]

Wow! I certainly did not intend to start the great debate! There are significant issues to evaluate in determing the best venue for any given practice. $ should never be the only motivating factor. I know of many very successful office based pain practices. Office vs. ASC really boils down to the State Regulations, types and volumes of procedures performed and the payor mix of that practice.

I do not believe that there is a cost shifting out of ASC's. The only instance in which a patient would be responsible for that amount of $ out of pocket would be if the ASC is not a participating provider with the insurance company. If pain management was not so "viable" in ASC's, these companies would not be in the business of seeking you all out! There are close to 4 thousand ASC's in this country with proven track records of patient/physician/community satisfaction. The ASC industries are very powerful with the regulatory and legislative issues. The cost shifting is due to the different payment systems used by Medicare. We hope that CMS will accept the proposal to mirror the 2 payment systems so that ASC's will be paid based on an exclusionary list (rather than an inclusionary one) and the payment will be based on actual cost and clinical coherence.

There are actually very few states that have CON without exemptions. Many states that are CON have exeptions, i.e., 1 OR, cost of project threshold, wholly physician owned, etc. Strict CON states make the process less "desirable" but certainly not unobtainable.

Leases usually include an allowance ($25-$35 per SF) for build-out that is never enough. The actual annual costs of space will be rent plus loan to pay for balance of build-out. Leased space almost always has a higher annual cost than owned, simply because owners expect a return on their investment. Unless land is at a premium or there is no existing space to build a building, it's probably not the best option.

Developing an ASC from ground up is more about the real estate and business investment. Typically the return on equity investment is very high.

Now, for office based practices. It is a given that Medicare recognizes a site of service differential. Not all payors do this, as a matter of fact, most do not. The key is in negotiations and the willingness of the payor to listen to fact. I personally spend countless hours on this daunting task alone.

Many state departments of health are extending jurisdiction over office based surgical practices that use sedation. A current list of these states can be found on aaahc.org. There is an accreditation status available for office based surgical practices after they have been performing procedures for 6 months. This accreditation may meet the individual states jurisdiction and will certainly give you a standard for running your practice but will not give you facility fees or leverage with payors.

Hope this helps!

 

[Aether2000]

Amy, as always you are a fountain of knowledge!! Thanks so much for all the info you posted here.
My main concern is the cost shifting that is going on within the patient's insurance, not directly related to ASCs. But we have seen a huge change over the past two years and I wonder where it will end. Our ASC surgery schedule prints the amount of money to be collected up front and I am increasingly concerned about these amounts in a blue collar population.
Two years ago I didn't think I would ever have need for a fluoro suite in my office but as a part owner of a single specialty ASC, I ran the numbers and found I would do much better in an office fluoro suite for Medicare cases. The extra income from Medicare minus expenses I would generate for an in-office practice paid for the entire fluoroscopy unit and table in 20 weeks. I also find performance of procedures in the office is a convenience for patients as they do not have to complete the paperwork, have their entire H&P recorded from scratch by a nurse on each visit, change into hospital gowns, arrive one hour early, etc.
But of course I still use an ASC for thoracic vertebroplasties, RF procedures (esp. trigeminal, sphenopalatine ganglion, etc) and most commercially insured payors.
The site of service is becoming increasingly thorny between the hospital, ASC, and office in trying to decide what to do where, and I am sure you offer your clients templates on which procedures should be performed in each location.
All of that being said about ASCs, I strongly prefer them to hospitals with their glacial case turnover pace, absurd policies (for instance at one hospital, we are reported to the quality assurance committee if we do not document the patient had specifically received a trial of NSAIDs prior to performing an epidural steroid injection), high patient and physician hassle factor, and wait time for fluoroscopy techs because the perpetually brain dead nurses forget to call them until the patient is prepped and draped, etc.
GO ASCs!!!

 

[Amy Mowles]

It shouldn't be this way, eh? It should be the most appropriate venue!