Adding Spine Surgery to an existing ambulatory surgery center is not an easy task, says Jay Rom, president of Blue Chip Surgical Center Partners in Cincinnati.
It is especially difficult to get in-network insurance coverage for spine, but Blue Chip has successfully negotiated coverage with Blue Cross Blue Shield plans in Maryland, Missouri, Oregon and Nebraska, as well as UnitedHealthcare in Missouri and Aetna in Maryland.
"Getting payor coverage for spine remains one of the most significant challenges," Mr. Rom says. "You really need to know what you are doing." Success with insurers involves carefully following all steps in the process of adding spine to a surgery center. Here he cites nine key steps to do so.
1. Identify enough spine surgeons. The ASC will need at least two spine surgeons to justify the investment. One surgeon may be possible if he has a significant outpatient practice. But a neurosurgeon only performs about half of his cases on an outpatient basis.
2. Get spine surgeons' commitment. To assure their commitment, the spine surgeons need to join the practice. But before they will agree to take this step, they will probably want to work in the ASC during a trial period of several months. The ASC would have to provide spine surgery equipment, such as a C-arm and a microscope, which can be obtained from some vendors on a trial basis. However, it may be difficult to get equipment for the amount of time the surgeon desires.
3. Negotiate a lower implant rate. Before negotiating coverage, the ASC has to understand its costs, especially for implants. This is a two-step process. First, bring the spine surgeons together and ask them to agree on an implant. The goal is to have volume that can be then be negotiated with the vendor, which is then the second step. "Even if all the surgeons already use the same vendor, they may have separate contracts," Mr. Rom says. "Savings can be realized by bringing that volume together.
4. Understand other costs. Besides implants, the other extra costs of for spine surgery are the additional equipment and instruments, costing between $300,000 and $500,000. Also, spine patients have a longer recovery period, requiring extra time of the clinical staff.
5. Get past lack of Medicare coverage. "When you first propose spine to an insurer, they will say, 'We'll pay a percentage of Medicare,' " Mr. Rom says. "Then when you say, 'Medicare doesn't cover spine,' it gets complicated." Make it clear Medicare has to worry about older, frailer patients than private insurers. "We tell them we wouldn't plan to do Medicare patients, anyway, because it represents an older population that might not do well with spine procedures," he says.
6. Educate payors. "Whenever a payor doesn't have a set of procedures on its list we have to educate them," Mr. Rom says. That man the ASC must provide cost and quality data. It may take months for the payor to calculate its own rate, and when it proposes a reimbursement level, it is usually too low to be acceptable the first time around. "This whole process can take as much as a year and include several offers," Mr. Rom says.
7. Discuss out-of-network rates. Stress that the payor will have a chance to get payments below the ASC's current out-of-network rates. "The higher out-of-network rates are a good incentive for the payor to negotiate an in-network rate," Mr. Rom says.
8. Discuss hospital rates. The ASC can obtain information on reimbursement rates for spine procedures in the hospital and show that its rates would be much lower. "The rates we negotiate are 30-40 percent below what the hospital charges," Mr. Rom says.
9. Cite coverage with other plans. Citing ASC spine contracts with a Blues plan in another state can help in negotiations with another Blues carrier but it will not be very convincing to other payors.
Learn more about Blue Chip Surgical Center Partners.
Read more from Blue Chip:
- 5 Tips for Containing Spine Implant Costs
- 4 Tips for Managing Orthopedic Surgery Center Costs
- 8 Ways for Surgery Centers to Reduce Look-Alike/Sound-Alike Drug Errors