ASC Industry Awareness
ASC Growth Pathways
ASC leaders keep finding new and fascinating ways to expand. Fifteen ASCs opened or announced their near-term opening last month. Near Birmingham, AL, what was once a mall will soon to be home to a medical center that will include an ASC. In the past decade, orthopedics had its big ASC boom. This decade cardiology is emerging as the big new ASC opportunity. The imminent migration of electrophysiology procedures from hospitals to ASCs would become reality in 2026 if Medicare/Medicaid issues reimbursement codes for certain ablation procedures. In the orthopedic ASC world, OrthoIndy and Indiana Hand to Shoulder are aligning their practices to share operational resources so they can continue to deliver the highest quality, reasonably priced care that is a hallmark of independent practices.
CMS ASC Proposals and Final Rules for 2025
Pressure to move procedures to outpatient settings continues to mount, in part due to cost-containment desires. On average, procedures cost 58% more to be done in hospital outpatient departments than they do in ASCs or physicians’ offices. This past July, CMS proposed a 2.6% increase for HOPDs and ASCs for 2025 for outpatient care. CMS raised their final rule to 2.9%.docx for ASCs for next year. However, it will come across as robbing Peter to pay Paul since CMS has set another pay cut to physicians for 2025, this time coming in at an effective rate of 2.83%. This cut is troubling to physician groups since it is the fifth year in a row for such payment cuts, which comprise a 10%+ decrease since 2020.
Healthcare Industry/Trends
Movements in Retail Healthcare
Last spring, Walmart announced the closing of all 51 of its in-store clinics after a five year run in five states. In lieu of those clinics, Walmart is expanding on-location primary care through relationships with primary care organizations such as Humana’s CenterWell (23 clinics) and Mercy Primary Care (3 clinics). Some big noise is being made about the millions employers could save by using pass-through pharmacy benefit managers rather than the big PBMs they have traditionally used. Walgreens is stemming its recent net loss of $3 billion by closing 1,200 stores over the next three years in addition to closing its primary care VillageMD clinics, but is expanding primary care to 30 states through patient pay virtual visits.
The Risks of Medicare Advantage (MA) Going into 2025
Medicare Advantage plans are not fully complying with the “two-midnight rule” for Medicare beneficiaries for starters. However, that is a comparatively minimal risk. MA plan enrollees are experiencing the same prior authorization and denial issues as other commercial subscribers. Hospitals are tiring of fighting for MA reimbursements so millions of subscribers are losing coverage as both insurers and hospitals drop MA plans. An October US Senate report took on MA insurers for using predictive algorithmic tools that sharply increased claims denials for MA beneficiaries. Healthcare CFOs believe they are going to have to find fixes to this series of nagging MA issues. The sickest patients are now getting out of MA plans and shifting to traditional Medicare. It all stacks up to make a difficult 2025 for MA plans, providers, and beneficiaries.
Healthcare Digital Transformation Watch
Artificial Intelligence Adoption Accelerates
An AI arms race is clearly underway in revenue cycle management, as payers and providers jockey for the pole position in claims review. Patients are not without recourse, since this tool uses AI to help fight back when insurers potentially wrongly deny a claim. Parakeet Health has launched a generative AI voice platform that seeks to improve patient engagement with healthcare providers, largely by automating repetitive tasks. Salesforce has just launched pre-built AI tools specifically designed for healthcare provider operations, also seeking to minimize routine tasks. Healthcare AI adoption is accelerating as providers focus on simplifying operations, though AI governance and transparency still lag.
Revenue Cycle Management (RCM)
The Claims Denial Challenge
This years’ Healthcare Financial Management Association survey of health system revenue cycle executives found that approximately 40% reported a struggle with “elevated fatal denial rates,” with over half coping with elevated Medicare Advantage denial rates. According to Experian Health’s 2024 State of Claims survey, 75% of providers say their claims denials are increasing. Claims denials continue to be an increasingly large thorn in the side for providers while physicians simply want better reimbursement rates and fewer administrative hassles from private payers; 94% reporting that their employers have low to no leverage with insurers. The American Medical Association is weighing in, pushing for tighter prior authorization regulations and cuts in retrospective denials.
Patient Advocacy
When Legitimate Claims Are Denied
Much of the reason patient financial advocacy exists is the lack of alignment at play in the US healthcare market between providers’ desire to provide needed value to patients and third party payers providing what they promise to their patient subscribers. This growing tension is noticeable in the increase of articles in the popular press informing patients on topics like these: what to do when your insurance denies medically necessary care, how to fight back when your health insurance plan denies a claim, and how to decipher denials and codes on your Explanation of Benefits documents. Increasing payment delays, denials, and deviations from plan promises are making proactive patient financial discussions a protective necessity for patients and providers.
DME/Surgery
Ortho/Spine Tech Advances as Demographics Shift
Advancement in technologies are propelling the durable medical equipment market to develop innovative products that enhance patient outcomes and as demographics skew older, these products increasingly enable home care. Orthopedic procedures continue to make strides that push more outpatient procedures and home recovery, which will eventually include total joint procedures. Surgical robots are gifts that just keep giving in orthopedics and spine. Those same demographics are enabling orthopedic practices to gear up for a spike in knee replacement surgeries even as outpatient spine cases have grown 193% in Medicare patients over the last ten years.
Out-of-Network Watch
Latest on NSA and OON BCBS Wrangling
The federal regulators appear to have snatched a partial win from the jaws of defeat in the interpretation of how the qualifying payment amount in No Surprise Act disputes will be determined, to the chagrin of providers. When Congress passed NSA in 2020, few believed the legal maneuvering would still be active. Some policy experts are advocating less tortured solutions to how networks and unpaid patient debt function. Medicare Advantage plans are providing inaccurate in-network lists, which creates havoc for patients and providers that are out-of-network with no contract for 2025. In a win for out-of-network providers, a $421M legal judgment was awarded in October due to BCBS of Louisiana’s claims underpayment. BCBS plans to appeal the decision.
In Our Pipeline
- We received NY State Dept. Of Education approval for Circle Health Medical, owned by Dr. Singal, a Long Island, NY interventional spine and robotic surgery specialist. We believe we will start see cases toward the end of November or early December.
- We submitted our first 23 claims for George Bolotin’s accredited OBS, Avenue U Kings County Medical, in Brooklyn and on September 11 received the first payment and are off to the races. We made them $209k in September. He has received $72k in reimbursements so far for the month of October. Contego is setting up Orchid Medical, his second OBS, in The Bronx. We are filing paperwork this week and believe it will be up and running in January.
- Contego signed the professional service business deal with Dr. Richard Loninger, DPM in NYC. We are in a 25 case trial. We have added Aetna now to UHC. Liam plans to meet with Dr. Loninger about his site in NJ.
At a Glance
When Health Plans Delay and Deny, They Must Say Why
AMA’s Common Sense Push for Insurer Reforms
Why Medicare Pay Reform Is AMA’s Top Advocacy Priority
Medicare Threatens Access to and Sustainability of Care
Medicare Patient Access and Practice Stabilization Act
If Passed, Would Boost Physician Pay by 4.7%
What Is Happening with Health Insurance Headed into 2025?
Consumer and Tech Trends, Regulatory Shifts
Children’s Hospital LA Teams Up with Sesame Street
Together Build a Unique Rehab Program for Children and Families
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