What should you do now? Analyze the impact
What should you do now? Analyze the impact
Submit your cost information to HCFA
Now that the Health Care Financing Administration (HCFA) has published its Federal Register notice regarding the proposed reimbursement system for ambulatory surgery centers (ASCs), what should you do?
"Evaluate where things are clearly intolerable," advises John Harries, MD, president of the American Association of Ambulatory Surgery Centers in Chicago.
First, look at how the proposed rates will impact your top line, suggests Craig Lind, managing director of Lind/Fitzsimons LLC, a management consulting firm in San Francisco. "You don't know exactly what your [case] mixes will be going forth, but take the proposed rates and apply them to your historical caseload, and figure out what impact the rates would have had if used historically," Lind says.
He suggests performing that analysis over the CPT codes you've used in the past 12 months.
Determine the appropriateness of the groupings and rates for at least your highest-volume procedures, suggests Nancy Kessler, BSN, MS, executive director of El Camino Surgery Center in Mountain View, CA.
"That's going to be a huge issue," Kessler says. "And this is one analysis that every center should be able to do."
Even if you analyze only your top 10 procedures, it would be better than ignoring the changes, she says. "The key is for Medicare to get good information from us," she says, referring to the Aug. 11 deadline for submitting comments to HCFA. (For information on how to submit comments, see box, "Where to go for more details," p. 104.)
Second, evaluate how the proposed rates relate to your actual cost of operation, Lind suggests. Take at least 10 or 20 of your highest-volume CPTs for this analysis, he suggests.
"You may even be willing to live with a situation where you don't cover all your costs, but at least cover your variable cost," such as supply costs, Lind says. Physicians' preference cards should provide a good estimate of supply costs, he says.
Take salaries into consideration
The next step is to look at the clinical salary component of cost, Lind says.
For each case performed, record the number of minutes of OR time, he says. Divide the total clinical salaries by your total number of OR minutes to determine the total clinical salary cost per OR minute. Next, multiply the number of minutes to perform a procedure by the average clinical salary cost per OR minute.
The final piece of the analysis is to allocate your overhead costs to individual procedures. This step can be done by allocating the overhead cost in proportion to the number of OR minutes incurred in performing a procedure, Lind says.
Consider using teams to examine the impact by specialty and develop cost-cutting moves, Kessler suggests. At El Camino Surgery Center, nurses are on teams according to specialty. They meet on an ongoing basis with physicians to develop the capital equipment budget and predict caseloads for the coming year.
Those teams will be given information related to current and future payments for procedures, as well as fixed costs, variable costs, and total costs, Kessler says.
"They're going to sit down with physicians and the business office and do an analysis of what that [information] means by specialty for them in terms of what it cost to do cases, in terms of time and materials, and - from the physicians' point of view - what would be medically appropriate," Kessler says. Physicians at her center have been cooperative about standardizing supplies, such as the intraocular lens, she says. "But if it's in their judgment that it's a medical necessity to have a more expensive lens, we buy it."
Share your analysis with HCFA
The bottom line: Crunch the numbers, Lind advises. "From our perspective, you need to run some sort of analysis at whatever level of detail that is practical and possible for your center," he says.
And give this information to HCFA, Kessler emphasizes. Based on her discussions with HCFA officials, "That's what they're begging people to do," she says.
Don't just say you like or don't like the proposed changes, Kessler suggests. Instead, tell HCFA what your costs and issues are.
"There's no point in getting distraught about it," she says. "Buckle down and do the work that's needed to give useful input."
Harries agrees. "The first issue is to try to educate and correct HCFA on these problems," he says. "We don't think this is the end of this whole story."
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