Beckers ASC Review
July 3, 2008
The new Medicare payment system and expanded list of procedures brought with them new, profitable opportunities for centers performing urological procedures or considering offering urology in the future.
In fact, while over 80 percent of urology procedures tracked in quarter four of 2007 were performed in hospitals, Millennium Research Group says it fully expects "these numbers will begin to shift to ASCs and office settings - providing additional market potential."
"The reimbursement shift may encourage physician and patient adoption of in-office procedures, expanding the number of facilities performing them," says Nadia Lachowsky, senior Marketrack analyst at MRG.
But to ensure a profitable return on this volume-driven specialty requires good business sense and careful planning and analysis. Follow this advice offered by several urology experts to help your ASC achieve financial success when offering and performing urological procedures.
1. Identify the best surgical location.
Since urology is often a volume-driven business, it is critical for you to determine which procedures you should perform in your surgery center and which should go to an office or hospital setting, says William C. Mobley, MD, FACS, of Spring Park Surgery Center in Davenport, Iowa.
With the fee changes, "some of the more sophisticated procedures pay better, but some of those procedures, even though they pay better, still don’t pay enough to justify moving them from a hospital to a surgery center partly because the volume is not there and partly because the fees still haven’t really caught up to the technology," Dr. Mobley says.
In some instances, Medicare is now paying less for less-sophisticated procedures, making them better candidates for an office environment where the facility offset for the professional services is not applied.
"It really comes down to a challenge of determining the best place to perform the surgical procedure: in the office, surgery center or hospital, then really clearly establishing each of those niches," he says. "The most valuable thing you can do to make this work is to have a clearly established relationship with the office of urologists that you’re working with."
Developing this relationship becomes easier if your ASC is partly owned by a group of urologists who will perform the office-appropriate procedures in their offices. If you do not have such an ownership structure, you will want to hold discussions with a nearby urology office and discuss the business relationship you are looking to build.
Once you have established a relationship with an office, then it’s just a matter of working with a local hospital to ensure you can refer patients to that location when performing the procedure is impractical for either the ASC or office.
"It’s important to realize that the surgery center business is a boutique business; it needs to establish its niche," says Dr. Mobley. "What is not profitable is trying to be as big and sophisticated as the hospital. There really are limitations to what you ought to be doing in a surgery center from a quality and a profit standpoint.
"You do a number of things really well and you’re happy with that. And the hospital does what makes sense. Once you have that little niche agreement, worked out, things go better."
So what are some of the more common urological procedures that should be performed in each setting?
• ASC. Some of the procedures that used to be performed in the hospital but are now ripe for the surgery center include implantation of penile prostheses and more advanced kidney stone procedures, Dr. Mobley says.
His surgery center also invested in a lithotripsy machine to perform related procedures.
"Medicare, in its most recent revision, has established the fact that a surgery center can directly bill for lithotripsy services and that reimbursement is much more commensurate with what it costs and is more profitable now than it used to be," he says. "A lot of those procedures used to flow through the hospital but now they’re done directly by the surgery center."
He has also seen some more sophisticated incontinence procedures that were once performed in a hospital, as an outpatient procedure, now finding their way into ASCs.
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Beckers ASC Review