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Three Studies Demonstrate Value ASCs Deliver to Public, Private Insurers

By Bill Prentice

Three important studies released recently contain findings that everyone interested in improving patient access to lower cost, high-quality outpatient surgical care should know.

The first study looks at Medicare cost reductions generated from 2011 to 2018 when the outpatient surgery procedures the program’s beneficiaries needed were provided in ASCs rather than hospital outpatient departments (HOPD). Then, it projects expected savings into 2028, with a special focus on total knee arthroplasty (TKA). The second study examines patient safety in ASCs since the COVID-19 public health emergency was declared earlier this year, and the third looks at the high level of quality and cost savings ASCs are able to offer private health insurers for an important group of gastroenterology procedures.

Let’s take a closer look.

ASCs Reduce Medicare Costs by Billions Each Year, Able to Cut Spending Even More

The first study, “Reducing Medicare Costs by Migrating Volume from Hospital Outpatient Departments to Ambulatory Surgery Centers,” is based on analysis provided by KNG Health Consulting LLC. The analysts who conducted the study looked at Medicare fee-for-service paid claims files to identify procedure-level paid amounts, outpatient procedure volumes and the share of outpatient procedures performed at ASCs.

The analysts found that procedures performed in ASCs rather than HOPDs reduced Medicare’s costs by $28.7 billion during the eight-year period from 2011 to 2018 as annual savings grew from $3.1 billion to $4.2 billion annually. From 2019 to 2028, the analysts project, ASCs will reduce Medicare’s costs by another $73.4 billion as the program’s savings due to procedures performed in ASCs grow from $4.3 billion to $12.2 billion annually.

To estimate future cost reductions tied to TKA and knee mosaicplasty, which were added to the ASC Covered Procedures List (CPL) in 2020, the analysts used the migration of partial knee arthroplasty (PKA) into the ASC setting when it was first approved for payment in ASCs as a model. Based on the PKA migration rates, the authors estimated that the ASC share of outpatient TKA and knee mosaicplasty would increase from 13.4 percent in 2020 to 18.0 percent in 2028, growing at 3.7 percent annually. At that rate, the savings ASCs could offer Medicare would total $2.95 billion. Even if the procedure migrated at only 25% of that projected rate, the savings would be $0.7 billion, and both of those figures would be in addition to the $73.4 billion cost reductions ASCs are expected to offer over other procedures.

In every case, Medicare could further reduce its future costs by enacting policies that encourage the migration of more procedures into the ASC setting. Some ideas ASCA supports include:

  • Continued use of the same factor – currently the hospital market basket – to update both ASC and HOPD payments for inflation each year
  • Appropriate payment rates for all device intensive procedures
  • Copay caps in ASCs that match those available in HOPDs
  • Elimination of a budget neutrality adjustment Medicare uses now to determine ASC payments that disincentivizes volume from migrating to ASCs and is contributing to a growing disparity in ASC and HOPD rates

ASCs Are Protecting Patients from COVID-19

The ASC Quality Collaboration (ASC QC) conducted the second study. Aiming to find out how safely ASCs have been able to provide care to their patients since the national COVID-19 public health emergency was declared earlier this year, the ASC QC surveyed more than 700 ASCs in eight states (CT, IL, LA, MA, MI, NJ, NY and PA). Three of those states (NY, NJ and LA) were already experiencing high rates of COVID-19 infection in their general population.

A total of 84,446 patients were included in the survey. Only 16 of those patients tested positive for COVID-19 within 14 days after their procedure, an infinitesimally small infection rate of just .02 percent. It should also be noted that there is no way of actually knowing when or how the 16 patients became infected.

What this survey data confirms is that ASCs, which had numerous safety protocols in place prior to the pandemic to prevent the spread of infections, can continue to perform essential surgeries without putting patients at greater risk of contracting COVID-19. Together with the additional COVID-19 safety measures ASCs have in place today, including heightened pre-operative screenings, additional sanitary measures and air filtration protocols, ASCs can maintain a safe, sanitary environment to treat patients, while keeping the health professionals providing their care protected.

Private Payer Data Shows Cost Savings and Quality

The third study, provided by Anthem’s Public Policy Institute, looks exclusively at the commercial insurance market. For private payers, it concludes that, “Over the next decade, the U.S. health care system could realize savings of approximately $12 billion if one in five upper gastrointestinal (GI) and colonoscopy procedures were performed in ASCs rather than in HOPDs.”

Anthem’s research examines claims from 3.7 million fully insured members of Anthem’s affiliated commercial health plans in calendar year 2019 across 14 states (CA, CO, CT, GA, IN, KY, ME, MO, NH, NV, NY, OH, VA and WI). Savings estimates were based on allowed amounts to facilities (i.e., HOPDs and ASCs) and did not include professional fees or member liability through cost sharing. The analysts considered 26 procedure codes.

The analysis also finds that “Shifting select procedures from a HOPD to an ASC produces the same quality outcomes and has the potential to be more convenient and less expensive for consumers. It may also benefit the health care system at large by reducing total costs and driving greater efficiency.” The report also says that, when it comes to creating savings for consumers, as well as for the overall health care system, by transitioning some procedures from hospital-based outpatient settings to ASCs, colonoscopy and upper GI procedures are just one piece of the potential savings.

The more data we examine, the clearer it becomes: ASCs are economical, high-quality providers of outpatient surgery and the right choice for millions of patients each year. Insurance providers and government officials across the country and in Washington, D.C., should be doing all they can to promote policies that support patient access to ASCs.

William Prentice is the chief executive officer of the Ambulatory Surgery Center Association.

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