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Growing Your Orthopedic Practice: Key Tactics for Success with Managed Care Contracts and ASCs

According to VMG Health’s 2022 “Multi-specialty ASC Benchmarking Study,” orthopedic procedures can bring in up to $4,009 per case for ambulatory surgery centers (ASCs), which is more than any other specialty.¹

Adding orthopedic procedures, such as total joints, to your surgery center can significantly increase revenue and financial stability. However, the first step is to review existing managed care contracts to ensure you have appropriate reimbursement rates for these high acuity cases. 

While high acuity cases such as total joints can double or even triple a surgery center’s cash per case, the cost per case can also increase. Plus, your payer contracts might not be updated to reflect the best reimbursement rates for orthopedic procedures or the implants they require.  

Outpatient managed care contracts can be incredibly complex, which is why nimble specializes in renegotiating payer rates on our clients’ behalf for high acuity cases, such as total joint procedures.  

 As Nader Samii, nimble’s CEO, states: “When adding orthopedics to your ASC, you could do everything right, but if you have bad rates in your managed care contracts, you could be underwater from day one.” 

Here’s how your surgery center can navigate the contract negotiation process: 

Orthopedic ASCs maximize profitability with managed care contract strategies. 

 After gathering copies of your contracts, the next step is to conduct a managed care contract analysis. This process identifies any areas where payer terms can be negotiated to market or above market rates. 

 When an Ambulatory Surgery Center in South Carolina learned their in-house billing and facility management were underperforming, the board members turned to nimble to provide revenue cycle management solutions, including coding and billing strategies for total joint procedures. 

Before the surgery center transitioned from its billing system, nimble reviewed all managed care contracts to avoid any compliance concerns. After taking a comprehensive look at the chargemaster and reimbursement terms, a case analysis was conducted to determine the cost per case and cash per case by payer on every procedure.  

 The ASC’s contractual rates were then benchmarked prior to negotiation to show where payer terms could be improved.  

 This strategy resulted in new managed care rates for all procedures. The surgery center increased the cash per case on total joint procedures and all other surgical procedures. In two years, the ASC doubled its revenue, proving comprehensive financial success begins with contract rates that fully maximize reimbursement. 

Benchmark reimbursements.

If you’ve determined your managed care contracts don’t accurately reflect orthopedic procedures, but you’re not sure what the reimbursement should be, you’ll need to collect data on payer rates for these procedures at hospitals, outpatient centers, and ASCs in your region.  

You can gather this data by contacting local facilities or by accessing benchmarking data through industry databases and consulting firms. This information will help you understand how far you can negotiate. You can also use benchmarking data to show payers how much they’ll save by moving a procedure to your facility. 

Stress the benefits of your ASC’s technology.

Be prepared to emphasize your facility’s unique advantages, including technology that improves patient care, during contract negotiations.

For example, if your ASC has invested in advanced imaging technology or surgical robotics, you can use this as evidence of your commitment to providing high-quality care. You can also explain how these technologies help reduce complications, shorten recovery times, and lower overall costs for payers. 

When presenting this information to payers, be clear and specific about the benefits. Use data and case studies to illustrate advantages and cost savings; you can also highlight how your ASC is using specific technology to improve patient outcomes and reduce readmissions. 

Ultimately, you can strengthen your negotiating position with payers and make a compelling case for higher reimbursement rates by demonstrating the value of the technology you use.

Bring data to the table on the quality of your surgeons and their outcomes.

Payers want to work with high-quality ASCs that deliver positive outcomes. Demonstrating the expertise and success of your surgeons can position your ASC as a valuable partner in delivering top-quality care.  

To do this, you can collect data on your surgeons’ experience, board certifications, and complication rates for specific procedures. You can also gather patient satisfaction scores and other measures of quality that demonstrate the positive outcomes achieved at your ASC. 

When presenting this information to payers, it’s important to be clear and specific about the data. Use graphs, charts, and other visuals to illustrate the results and highlight the areas where your ASC excels. You can also provide case studies and patient testimonials that show the positive experiences of patients who have received care at your facility. 

By providing evidence of your surgeons’ expertise and success rates, you can make a strong case for higher reimbursement rates. 

Determine how often you perform existing procedures.

If your ASC is performing certain cases more often than others, you may want to focus on securing competitive rates for these procedures.

Analyze your claims history to determine how often you perform procedures and which cases currently bring in the most revenue. This data can help you secure competitive rates for the most frequently performed procedures and improve your ASC’s revenue and profitability. 

You can also reference benchmarking data and other industry resources to determine what the market rate is for these procedures in your region and use that information as a basis for your negotiations. 

Estimate the gains for orthopedic procedures.

Projecting the profit margin on the orthopedic procedures that you’re looking to add to your facility will help you determine which cases offer the most financial benefit.  

Armed with this information, you can approach payers with specific rate requests for the procedures that matter most to your ASC. This can help you negotiate more effectively and secure more favorable contract terms that improve your financial performance and profitability.

Key Takeaways

In 2022, the Ambulatory Surgery Center Association (ASCA) listed orthopedics as the most common specialty for Medicare-certified ASCs nationwide.² As orthopedic procedures continue to migrate to the outpatient setting, many in the ambulatory surgery industry are cashing in on attractive reimbursement opportunities.  

With higher reimbursements comes greater financial stability, which is why orthopedic procedures are considered a wise strategy for running a profitable and successful outpatient facility. 

However, the financial gains associated with these procedures can vary due to your facility’s managed care contracts. Before adding orthopedic specialties to your existing portfolio, set your ASC up for long-term success by securing appropriate reimbursements for orthopedic cases. 

Are you looking for ways to improve your revenue cycle management? Take the first step towards optimizing your revenue cycle process by requesting a revenue assessment from our team of RCM experts. Request a demo.