Ambulatory Surgery Centers: What are Your Options for Anesthesia Service Arrangements
For ambulatory surgery centers ("ASC's") the provision of anesthesia services is an essential arm of surgical procedures. Traditionally, most anesthesia service arrangements involved simple "fee-for-service" relationships where the ASC submits medical bills for the facility fees and the anesthesia service provider submits medical bills for the "professional" services rendered. However, this fee-for-service relationship overlooks and often underestimates the provision of anesthesia services as both a potentially valuable source of revenue for the ASC and, critically, a source of inefficiency for the ASC in terms of compliance standards, quality control and stability.
Increasing Revenue and Reimbursement In recent years, in addition to the constant and erratic governmental reformations to the federal and individual state health care systems, insurance carriers have become increasingly savvy in finding explanations for their "denial," "rejection" and/or "adjustment" of an ASC's medical bills. For the resistant ASC's, insurance carriers supplement their "explanations" with the popular "request for additional medical documentation" to find additional explanations to support their findings and seal the proverbial deal.
These market forces necessitated the progression from traditional fee-for-service systems to "employment and/or independent contractor" systems or the more modern "joint-venture" systems. Both anesthesia service systems are described and evaluated below.
Anesthesia Service Provider as Employee and/or Independent Contractor: Many ASC's now model their business relationships after the systems found in most hospitals and hire anesthesia service providers as employees and/or independent contractors for the provision of anesthesia services to the ASC's patients.
In the employment/independent contractor system the anesthesia service provider assigns the ASC his or her rights to submit medical bills for the anesthesia services provided to the ASC and the ASC submits the medical bills to insurance carriers under its own name or under the name of the anesthesia service provider. In exchange the ASC pays the anesthesia service provider either a flat per-case fee, a salary and/or a predetermined productivity-based fee.
The employment/independent contractor system can be problematic in that some insurance carriers deny and/or adjust an ASC's medical claims when the carrier identifies both a facility fee and "professional" anesthesia services fee on behalf of the ASC.
In evaluating regulatory considerations, state specific laws concerning the corporate practice of medicine and unlawful kickbacks can be implicated in systems where an ASC acts as an "employer" of the anesthesia service provider. The employment/independent contractor system must also be evaluated in light of the federal anti-kickback statute to ensure that the anesthesia services provider is being paid a "fair market value" in exchange for the anesthesia services being provided.
Joint-Venture Systems for Anesthesia Services: ASC's may also consider forming or contracting with a separately formed anesthesia service entity to establish a "joint-venture system" wherein the anesthesia service entity is either owned by the ASC itself, owend by the individual owners of the ASC or, in certain circumstances, owned by select physicians. The joint-venture system allows the anesthesia services entity to submit medical bill for the anesthesia services provided to the ASC while the ASC continues to bill for the facility fees. In determining which, if any, joint-venture system is acceptable for a particular ASC, the following variables must be considered and evaluated:
o How the anesthesia service entity's profits will be allocated to its owners; o Whether the distribution of ownership in the anesthesia service entity mirrors that of the of ASC; o Whether the anesthesia service entity charges the ASC for administrative support, billing and coding services, maintenance, etc.; and o Whether the new entity employs the anesthesia service providers and bills for their services.
Joint-venture systems, depending on their unique structure and organization, come with a number of compliance concerns and, among other things, can implicate the federal anti-kickback statute as well as state specific laws concerning unlawful kickbacks and unlawful fee-splitting. These regulatory implications must be evaluated once the full concept of the proposed joint venture system is outlined.
Inefficiency Triggers and Quality Control
With any anesthesia service arrangement, the ASC must consistently review its "internal processes" to evaluate and resolve areas of inefficiency in administration, quality control and patient safety. Internal process reviews often begin with a review of the ASC's ongoing accreditation requirements and, in terms of anesthesia services, will likely focus on the following:
(i) the anesthesia service provider's access and availability to patients;
(ii) pre and post operative care directives;
(iii) directives concerning maintenance and support of Anesthesia equipment, medication and/or supplies;
(iv) maintenance of medical records, auditing and quality control initiatives;
(v) board certification, licensure, continuing education, and liability insurance; and
With regard to the day-to-day operations of the ASC, the ASC and the anesthesia service provider also encouraged to conduct an honest and thorough cost-benefit analysis focused on the provision of anesthesia services to determine whether there are any areas that can be "modernized" or "updated" for a more productive and cost-effective work product. While this type of "operations" review will have a different subject and focus with each individual ASC, the following are general modernization methods for consideration:
Electronic Health Records ("EHR"): In addition to receiving Medicare (or Medicaid's) "incentive payments" for timely conversion to and "meaningful use" of an EHR system by "eligible professionals" (if applicable), an ASC will benefit from the sophisticated practice management tools that EHR systems offer such as patient schedulers, various accounting reports and electronic prescription submission. Moreover, many EHR systems are internet based and offer providers maximum flexibility in accessing notes, records and electronic prescription submissions.
Administrative and Support Staff: Hiring an efficient, friendly and reliable administrative and support staff may be one of the most critical components of any ASC's functionality. Although often underestimated, staff involvement and feedback concerning the day-to-day operations of an ASC can have a significant positive effect on an ASC's bottom line. An ASC's staff is its "frontline" to patients and physicians and, as such, should always be an ASC's first source for determining areas of inefficiency in administration, quality control and patient safety. In recent studies, top areas of concern for ASC staff are often noted as "inadequate continuing education and training" and "lack of regularly scheduled staff meetings and forums to review areas of inefficiency."
Use of Technologically Advanced Equipment, Materials and Supplies: ASC's are also encouraged to work with their anesthesia service providers to improve the quality of patient care through the use of innovative technology and its applications. Again, while this type of review and analysis will have a different subject and focus with each individual ASC, ASC's can often find ways to increase revenue implementing the use of technologically advanced anesthesia service equipment, materials and supplies.
With the foregoing considerations in mind, ASC's are encouraged to review their current anesthesia services arrangement and consider whether there exist any opportunities to increase revenue and reimbursement dollars for the anesthesia services being provided and to weed-out inefficiency triggers.
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