The payments for similar knee and shoulder surgeries performed in ambulatory surgery centers (ASCs) were lower compared with hospital outpatient departments in many study states, with few exceptions, according to a new FlashReport from the Workers Compensation Research Institute (WCRI).

“Some studies indicate that ASCs provide care that is less expensive than services provided in hospitals,” said Ramona Tanabe, WCRI’s executive vice president and counsel. “This analysis is important since evidence about ASC surgeries from other payors (Medicare or group health insurance) may not apply in workers’ compensation settings.”

The following are a sample of the findings in the report:

  • In 14 states, payments for knee surgeries done at ASCs were at least 21 percent lower than payments for hospital outpatient surgeries in 2016. In 3 states, the payments were similar, and in Indiana, payments for ASC surgeries were 59 percent higher than payments for hospital outpatient surgeries. Similar results were found for shoulder surgeries.
  • The differences in payments for ASC and hospital outpatient surgeries may be attributed to multiple factors, such as a state’s fee schedule regulations, network participation rates, or negotiated prices. For example, in Indiana, payments for hospital outpatient surgeries are reimbursed at 200 percent of Medicare after the adoption of a hospital fee schedule in 2014, while payments to ASCs remain unregulated.
  • Changes in states’ fee schedules impacted the trends in ASC payments for surgeries in a number of states. For example, in North Carolina, average payments for knee surgeries decreased 55 percent between 2012 and 2016. In New York, average payments for knee surgeries increased 50 percent between 2015 and 2016.

The 18 states included in this study, WCRI FlashReport: Comparing Payments to Ambulatory Surgery Centers and Hospital Outpatient Departments, are California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. They were selected because they are geographically diverse; represent a range of system features; and represent the range of states that are higher, near the middle, and lower on costs per claim.

The authors examined payments to ASC and hospital outpatient departments by looking at the most common groups of surgeries conducted in outpatient settings—knee and shoulder arthroscopies. The study shows information on all payments to these two types of facilities (ASCs and hospital outpatient departments) within a surgical episode, excluding payments to surgeons or other medical professionals.

Dr. Bogdan Savych and Dr. Rebecca Yang are the authors of the study. To learn more about this study or to purchase a copy, visit WCRI’s website at https://www.wcrinet.org/reports/wcri-flashreport-comparing-payments-to-ambulatory-surgery-centers-and-hospi.