5 Observations on Handling Out-of-Network Reimbursement From Surgery Center Leaders

Out-of-network reimbursement is one of the most discussed issues in the ASC industry, as payors continue to pressure physicians to take cases to in-network centers. The strategy, which used to be a profit-driver in successful centers, is disappearing in some areas of the country — though experts say the demise is moving more slowly than expected. Here, four industry experts discuss the future of out-of-network, how and when to contract with payors, and how to ensure correct reimbursement with either strategy.

1. Go in-network when reduced case volume and total review outweigh OON profit. Rob Murphy, president of Murphy Healthcare Group, says surgery centers should consider moving in-network when reduced case volume and total revenue outweigh the benefits of high per-case revenue of out-of-network cases. Increasingly, payors are putting pressure on physicians to take cases to in-network surgery centers, meaning out-of-network centers may see their case volume decline if they opt for a purely OON strategy.

Mr. Murphy says going in-network can be profitable if the move generates a sufficient increase in volume to cancel out the lower revenue per case. To determine whether this is a good move, speak to physicians about the cases they take elsewhere because of the center's out-of-network status. Administrators should also determine whether the center and staff can handle an increase in volume, since the ASC may already be running at full capacity.

2. Be persistent when moving in-network. Mr. Murphy stresses that going in-network is only a good idea if the move increases the center's overall profit margin. In other words, when deciding whether to move in-network, make sure to negotiate profitable rates with payors to ensure your center can survive.

"Don't sign contracts that don't increase the overall profit margin," Mr. Murphy says. ASCs have an advantage in negotiations because their cases typically cost less than hospital cases, which saves payors money. ASC administrators can sell this advantage to the payor by pointing out the amount saved on a typical case at the ASC versus the hospital.

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