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Practical Business, Legal and Clinical Guidance for Ambulatory Surgery Centers ASCREVIEW March/April 2010 Vol. 2010 No. 3 20 Things to Know About Gastroenter- ology in ASCs By Renée Tomcanin G I and endoscopy continue to be profit- able specialties for ASCs in spite of some declines in reimbursement. Here are 20 important development, business and financial is- sues related to GI and endoscopy in ASCs. Reimbursement 1. Reimbursement for GI centers will continue to decrease. As has been the case for the last few years, reimbursements for GI procedures have decreased across the board. This has hit ASCs especially hard as surgery cen- ters often receive reimbursement at a percentage of hospital outpatient departments. “We anticipate that CMS will continue to pres- sure facility fees in a downward fashion,” says Barry Tanner, president and CEO of Physicians Endoscopy. “It is at least conceivable that free- standing ASCs could get rates at 50 percent of HOPD rates in the next four to five years.” 5 Tips for Growing Volume From David Daniel, CEO of Lakeland Surgical & Diagnostic Center By Lindsey Dunn Over the past several years, Lakeland (Fla.) Surgical & Diagnostic Center has steadily in- creased its case volume by 8 percent annually, and in 2009 the ASC performed nearly 19,000 cases and more than 31,500 procedures. LSDC’s large volumes can be attributed, in part, to its ownership structure which includes two large 11 Things to Know About the False Claims Act By Scott Becker, JD, CPA, and Julie Sullivan, JD, MPH 1. Initial development of the False Claims Act. The False Claims Act, also known as the “Lincoln Law” after its primary propo- nent, President Abraham Lincoln, was initially developed during the Civil War. The Act was a response to war profiteering by military contrac- tors who attempted to defraud the government, for example, by sending boxes of sawdust instead of guns or selling the same cavalry horse to the armed forces multiple times. The Act remained in its original form from its initial passage in 1863 until 1943, at which point various amendments de-incentivizing qui tam actions made the statute nearly obsolete. In 1986, the Act was amended again with greater incentives for private citizens to report fraud on the government. The Act has become an increasingly active mechanism to combat fraud and false claims submitted to the continued on page 7 continued on page 14 continued on page 15 June 10-12, 2010, Chicago TO REGISTER, CALL (703) 836-5904 or go to www.ascassociation.org/june2010.cfm. For the complete conference brochure, visit www.BeckersASC.com. ASC COMMUNICATIONS, ASC ASSOCIATION, AMBULATORY SURGERY FOUNDATION, BECKER’S ASC REVIEW AND BECKER’S ORTHOPEDIC & SPINE REVIEW Orthopedic, Spine and Pain Management-Driven ASC Conference Improving Profitability and Business and Legal Issues Inside: Orthopedic, Spine and Pain Management-Driven ASC Conference Brochure (p. 25)

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Page 1: Inside: Orthopedic, Spine and Pain Management-Driven ASC … · 2014. 10. 27. · 4 Sign up for the FREE Becker’s ASC Review E-Weekly at or call (800) 417-2035 Practical Business,

Practical Business, Legal and Clinical Guidance for Ambulatory Surgery CentersASCREVIEW

March/April 2010Vol. 2010 No. 3

20 Things to Know About Gastroenter-ology in ASCsBy Renée Tomcanin

GI and endoscopy continue to be profit-able specialties for ASCs in spite of some declines in reimbursement. Here are 20

important development, business and financial is-sues related to GI and endoscopy in ASCs.

Reimbursement1. Reimbursement for GI centers will continue to decrease. As has been the case for the last few years, reimbursements for GI procedures have decreased across the board. This has hit ASCs especially hard as surgery cen-ters often receive reimbursement at a percentage of hospital outpatient departments.

“We anticipate that CMS will continue to pres-sure facility fees in a downward fashion,” says Barry Tanner, president and CEO of Physicians Endoscopy. “It is at least conceivable that free-standing ASCs could get rates at 50 percent of HOPD rates in the next four to five years.”

5 Tips for Growing Volume From David Daniel, CEO of Lakeland Surgical & Diagnostic CenterBy Lindsey Dunn

Over the past several years, Lakeland (Fla.) Surgical & Diagnostic Center has steadily in-creased its case volume by 8 percent annually, and in 2009 the ASC performed nearly 19,000 cases and more than 31,500 procedures. LSDC’s large volumes can be attributed, in part, to its ownership structure which includes two large

11 Things to Know About the False Claims ActBy Scott Becker, JD, CPA, and Julie Sullivan, JD, MPH

1. Initial development of the False Claims Act. The False Claims Act, also known as the “Lincoln Law” after its primary propo-nent, President Abraham Lincoln, was initially developed during the Civil War. The Act was a response to war profiteering by military contrac-tors who attempted to defraud the government, for example, by sending boxes of sawdust instead of guns or selling the same cavalry horse to the armed forces multiple times. The Act remained in its original form from its initial passage in 1863 until 1943, at which point various amendments de-incentivizing qui tam actions made the statute nearly obsolete. In 1986, the Act was amended again with greater incentives for private citizens to report fraud on the government. The Act has become an increasingly active mechanism to combat fraud and false claims submitted to the

continued on page 7 continued on page 14 continued on page 15

June 10-12, 2010, ChicagoTo ReGIsTeR,

CALL (703) 836-5904 or go to

www.ascassociation.org/june2010.cfm.For the complete conference brochure,

visit www.BeckersAsC.com.

asc communications, asc association, ambulatory surgery Foundation, becKer’s asc reView and

becKer’s ortHoPedic & sPine reView

orthopedic, spine and Pain Management-Driven

AsC Conference Improving Profitability and Business and Legal Issues

Inside: Orthopedic, Spine and Pain Management-Driven ASC ConferenceBrochure (p. 25)

Page 2: Inside: Orthopedic, Spine and Pain Management-Driven ASC … · 2014. 10. 27. · 4 Sign up for the FREE Becker’s ASC Review E-Weekly at or call (800) 417-2035 Practical Business,
Page 3: Inside: Orthopedic, Spine and Pain Management-Driven ASC … · 2014. 10. 27. · 4 Sign up for the FREE Becker’s ASC Review E-Weekly at or call (800) 417-2035 Practical Business,

For more information, contact us at 847/853.6060, by email at [email protected] or log on to www.aaahc.org/basc.

Improving Health Care Quality through Accreditation

Choose the Leader in Ambulatory Health Care Accreditation.

AAAHC accreditation tells your patients that you are deeply committed to providing the highest quality of care.

Mark DeFrancesco, MD, MBA, FACOG President, AAAHC Trustee, Institute of Quality Improvement

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4 Sign up for the FREE Becker’s ASC Review E-Weekly at www.beckersasc.com or call (800) 417-2035

Practical Business, Legal and Clinical Guidance for Ambulatory Surgery CentersASCREVIEW

March/April 2010 Vol. 2010 No. 3

EdItorIaLRob Kurtz

Editor in Chief 800-417-2035 / [email protected]

Lindsey DunnWriter/Reporter/Assistant Editor

800-417-2035 / [email protected]

Leigh PageWriter/Reporter

800-417-2035 / [email protected]

Renée TomcaninWriter/Reporter

800-417-2035 /[email protected]

saLEs & PuBLIshIngJessica Cole

President & CEO800-417-2035 / [email protected]

Kim HursleyAccount Manager

800-417-2035 / [email protected]

Annie StokesAccount Manager

800-417-2035 / [email protected]

Lauren SturmExecutive Assistant

800-417-2035 / [email protected]

Scott BeckerPublisher

800-417-2035 / [email protected]

Becker’s ASC Review is published by ASC Commu-nications. All rights reserved. Reproduction in whole or in part of the contents without the express writ-ten permission is prohibited. For reprint or subscrip-tion requests, please contact (800) 417-2035 or e-mail [email protected].

For information regarding Becker’s ASC Review, Becker’s Hospital Review or Becker’s Orthopedic & Spine Practice Review, please call (800) 417-2035.

FEATuRES 1 20 Things to Know About Gastroenterology in ASCs

By renée tomcanin 1 5 Tips for Growing Volume From David Daniel, CEO of Lakeland Surgical & Diagnostic

Center By Lindsey dunn

1 11 Things to Know About the False Claims Act By scott Becker, Jd, CPa, and Julie sullivan, Jd, MPh

5 Publisher’s Letter By scott Becker, Jd, CPa

18 5 Biggest Issues Facing Gastroenterologists Today By Barry tanner, CPa, president and CEo, Physicians Endoscopy18 6 Statistics About Ophthalmologist Compensation19 6 Statistics About Gastroenterologist Compensation20 Growing Your ASC: Q&A With Robert Zasa of ASD Management By renée tomcanin22 22 GI/Endoscopy Statistics for Surgery Centers 25 Brochure for the Orthopedic, Spine and Pine Management-Driven ASC Conference31 Most Profitable Specialties for ASCs With Brian Mathis of Surgical Care Affiliates32 2010 CPT Coding Changes Analysis for Gastrointestinal Services in ASCs By susan garrison, executive vice president for healthcare consulting services,

Magnus Confidential34 5 Predictions for ASCs in 2010 By Lindsey dunn35 10 Ophthalmology-Driven ASCs to Know By Leigh Page35 28 of the Best Gastroenterologists in America36 7 Trends and Opportunities for Ophthalmology in Surgery Centers By Leigh Page39 10 Statistics and Facts About Ophthalmology and Ophthalmologists41 Drive ASC Denials Down to Reduce Costs and Drive Revenue Up By Bill gilbert, vice president of marketing, and Brice Voithofer, vice president of asC and

anesthesia services, advantEdge healthcare solutions44 Free Webinar — How To Recruit Top Talent: Recruiting The Impact Player45 8 Statistics on Registered Nurse Compensation45 Advertising Index

Practical Business, Legal and Clinical Guidance for Ambulatory Surgery CentersASCREVIEW

suBsCrIBE now!$199 for onE yEar

$299 for two yEars

Call (800) 417-2035!

to suBsCrIBE to the FREE

Becker’s ASC E-weekly, go to

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or e-mail [email protected]

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YOU’VE GIVEN ENOUGH.

866-982-7262 www.ascoa.com

Does owning a surgery center take too much out of you?

© 2010 Ambulatory Surgical Centers of America. All rights reserved.

ASCOA 10102-1 Beckers ASC March 2010.indd 1 2/3/10 3:45:00 PM

2009 was an interesting year. Many businesses weathered the storm better than expected. Others really struggled. We saw a number of ASC transac-tions close (spine as well as multi-specialty, portfolio diversification-driven and turnaround-driven) and several hospital transactions (specialty and acute care) close, far more later in the year than early in the year. We also had a long-term ASC client bring an antitrust suit that survived a motion for summary judgment. Finally, the healthcare community saw (1) tremen-dously increased effort by the government to collect on false claims ($2.4 billion collected in 2009; $1.6 billion from healthcare) and (2) a substantial decrease in private equity investments in healthcare — 125 in 2009 com-pared to 233 in 2008. Overall, it was a challenging year but a much more interesting year than expected.

This letter briefly discusses surgery centers, physician-owned hospitals, hospitals, the status of healthcare reform, upcoming conferences, compli-mentary publications and white papers, and upcoming speeches.

1. AsC transactions heat up. The transaction market for ASCs is quickly heating up. Many companies are again interested in acquiring surgery centers. Multiples for purchases are moving back in the right direction. There is also significant interest from hospitals in acquiring surgery centers. On the flip side, the long-term uncertainty in the healthcare economy is leading certain surgery centers to have more interest in examining transactions than

we have seen in a couple of years. Finally, the fact that surgery center revenue and reimbursement per case has normalized (as opposed to high out-of-net-work payments) in many places has led buyers to be more comfortable with the predictability of the revenue flow from surgery centers. For a copy of an article entitled “Buying and Selling of Ambulatory Surgery Centers — Pric-ing by Tier,” please e-mail me at [email protected].

Certain companies are particularly active in the majority investment acqui-sition sector. These include, for example, Surgical Care Affiliates, United Surgical Partners, Meridian Surgical Partners, Symbion, AmSurg, RMC Medstone, NovaMed, Medical Facilities Corp., National Surgical Care and Covenant Surgical Partners. We are also seeing several companies that are active in the minority investment interest area. These include Ambulatory Surgical Centers of America, HealthMark Partners, Regent Surgical Health, Practice Partners in Healthcare, Blue Chip Surgical Partners, ASD Manage-ment, Pinnacle III, Health Inventures, Physicians Endoscopy, Orion, C/N Group, Foundation Surgical Affiliates, Nueterra, Titan Health Corp, Surg-Center Development, Surgical Management Professionals and others.

For a brochure for our June 10-12 Orthopedic, Spine and Pain Manage-ment Driven ASC Conference, please turn to p. 25, e-mail [email protected] or visit www.BeckersASC.com.

Publisher’s Letter ASCs, Hospitals, Physician-Owned Hospitals, Healthcare and Insurance Reform; 8th Annual Orthopedic, Spine and Pain Management Driven ASC Conference: Special Discount Offer; June 10-12, 2010; Chicago

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6 Sign up for the FREE Becker’s ASC Review E-Weekly at www.beckersasc.com or call (800) 417-2035

2. Physician-owned hospitals continue to be targeted. Phy-sician-owned hospitals, which are gaining a reprieve as the main health-care bills have stalled, should not take too much comfort. We expect that the House and Senate will continue to target physician-owned hospitals and that the president will remain unsympathetic to their plight. Thus, it remains a good time to look very closely at long-term options for physi-cian-owned hospitals, whether existing hospitals or those that are under development. For those under development, we advise that hospitals pay the extra money to contractors and labor, if possible, to assure the facili-ties get opened as soon as possible. There were several concepts in the bills that were set forward that would have had an immediate impact on existing physician-owned hospitals. These concepts include that a facility could not condition ownership on any level of referrals to the facility, that a hospital must notify patients if it will not have physician on staff 24/7, as well as a few other concepts, and it will require action the day such a bill is enacted. Some of these actions may involve amending the operating agreement and bylaws of a facility. Other concepts such as prohibiting the expansion of operating rooms, procedures rooms and beds were also quite rigid as drafted and draconian.

3. hospitals focus on service line dominance and physician alignment. Leading hospitals continue to really focus on a number of service lines and assuring that in addition to general depth that the hospi-tal can absolutely excel and be considered the lead provider in certain key areas. Hospitals also continue to move forward with aggressive physician-alignment strategies. Increasingly, these strategies revolve around acquiring and employing physician practices. This gives hospitals greater comfort — at the risk of higher operating expenses and debt — that physician cases will continue to come to their hospitals. At the same time, this increased emphasis on employment provides challenges for physician-owned facili-ties and independent practices. Finally, we expect that hospital/payor nego-tiations will get much more difficult over the next couple years as employers look to payors to reign in healthcare costs. For a copy of the white paper entitled “Accelerating Physician-Hospital Collaboration,” please e-mail me at [email protected].

Some of the most active acquirers of hospitals include HCA, Commu-nity Health Systems, LHP Hospital Group, Health Management Associ-ates, Life Point Hospitals, National Surgical Hospitals and Universal Health Services.

4. healthcare vs. insurance reform. Healthcare reform itself has become so polarizing, based on the number of missteps and over reaches by the House and Senate, that it will be very interesting to see whether any level of healthcare reform (or what should possibly be focused on cer-tain aspects of insurance reform) can be accomplished this year. Health-care costs remain a problem for many in this economy, and the inability to gain coverage if you have a pre-existing condition is a grave problem. To learn more about the current state of healthcare reform, request a copy of “Republican Wins Senate Seat in Massachusetts: 8 Quick Thoughts” by e-mailing me at [email protected].

5. 8th Annual orthopedic, spine and Pain Management Driven AsC Conference: June 10-12, Chicago. We have on June 10-12, in cooperation with the ASC Association and Ambulatory Surgery Founda-tion, the 8th Annual Orthopedic, Spine and Pain Management Driven ASC Conference. For this event, we have the best agenda we have ever had. We have 120 speakers and 90 sessions. We have great political and general ses-sion speakers, 30 physician leaders and several great administrators speak-ing about how to improve profitability, and a number of speakers providing advice that can be used immediately to improve a center. Last year nearly 600 people attended the conference. To register, call (703) 836-5904, e-mail [email protected] or visit https://www.ascassociation.org/june2010.cfm.

If you desire to join this conference, please deduct $200 as an early registra-tion discount. Note, “$200 discount per Scott Becker” when you register. Please register by May 1 to take advantage of this offer.

If you would like a brochure for this event, please e-mail me at [email protected] or call me at (312) 750-6016.

6. Publications. If you would like to receive a free subscription to any of the following, please e-mail me at [email protected].

• Becker’s ASC Review E-weekly (twice weekly);

• Becker’s Healthcare Daily Alert (daily);

• Becker’s Hospital Review E-weekly (once per week); and

• Becker’s Orthopedic & Spine Review E-weekly (once per week).

We would be happy to sign you up for any of these four free of charge.

7. Free white papers. If you have an interest in either of the following white papers, we would be happy to provide these free of charge: (1) 11 Things to Know About the False Claims Act, or (2) Pricing by Tier in the ASC Market. Please e-mail me at [email protected] or call me at 312-750-6016.

Should you have any questions, please contact me at (312) 750-6016 or at [email protected].

Very truly yours,

Scott Becker

P.S. Reminder: To save $200 from the registration fee for the 8th Annual Orthopedic, Spine and Pain Management Driven ASC Conference, please note “$200 discount per Scott Becker” when you register. Please register by May 1 to take advantage of this offer. To register, call (703) 836-5904, e-mail [email protected] or visit https://www.ascassociation.org/june2010.cfm.

June 10-12, 2010, ChicagoTo ReGIsTeR,

CALL (703) 836-5904 or go to

www.ascassociation.org/june2010.cfm.For the complete conference brochure,

visit www.BeckersAsC.com.

asc communications, asc association, ambulatory surgery Foundation,

becKer’s asc reView and becKer’s ortHoPedic & sPine reView

orthopedic, spine and Pain Management-Driven

AsC Conference Improving Profitability and Business and

Legal Issues

Page 7: Inside: Orthopedic, Spine and Pain Management-Driven ASC … · 2014. 10. 27. · 4 Sign up for the FREE Becker’s ASC Review E-Weekly at or call (800) 417-2035 Practical Business,

7Sign up for the FREE Becker’s ASC Review E-Weekly at www.beckersasc.com or call (800) 417-2035

With CMS setting lower rates, a problematic trend could be seen across private insurers and third-party payors as their rates are often set relative to what CMS pays for Medicare-covered procedures. As a result, gastroenterologists and GI-driven ASCs must continue to run their cen-ters efficiently and economically.

“Unfortunately, reimbursements are likely to steadily decline over the next few years,” says Stephen Sears, MD, a gastroenterologist in Love-land, Colo. “This effect will cause ASCs to be-come more efficient or to stop operating. This may also drive more cases into the hospital set-ting. By doing so the procedural cost will double and in the end healthcare costs will increase. To remain profitable, the GI physician must focus on delivering quality care in the most efficient manner. That can be done with better bowel preps, training, state of the art technology and assessing quality measures.”

One consequence of decreasing GI reimburse-ments may be a reduction in the number of Medi-care patients a GI ASC sees in a year, according to Fernando Bermudez, MD, medical director, and

Beth Miller, administrator, of Eastside Endos-copy Center in Saint Clair Shores, Mich.

“Unless Congress changes the existing rules, Medicare will reduce the professional fees for procedures by 20 percent in 2010,” Dr. Bermu-dez says. “This won’t directly affect ASCs, but it may affect the willingness of gastroenterologists to perform endoscopies on Medicare patients and to do procedures on Medicare patients in the ASC setting.”

Irving Pike, MD, president of Gastroenterol-ogy Consultants in Virginia Beach, Va., has seen some ways in which physicians at ASCs have tried to combat declines in reimbursement. “Several ambulatory endoscopy centers have re-ported to me that they have recently negotiated an increased fee schedule from non-government insurance companies. In the past when Medicare payments to facilities were decreased, insurance companies did not follow with similar cuts, but ASC fee schedules remain substantially below HOPD fee schedules. In my opinion, insurance companies do not want to discourage physi-cians performing endoscopy in ASCs. I think at some point it may be plausible for ASCs to move more CMS cases to the hospital and fill the slots opened at the ASC with patients covered by non-government insured patients,” he says.

2. gaining access to hoPd rates alone is not reason enough to partner with a hospital. Although partnering with a hospital in order to gain access to outpatient department reimbursement rates can be a potentially attrac-tive strategy, GI-driven ASCs should be aware that they may not receive access to full HOPD rates, although they may be better than current reimbursements. Since many hospitals want to own 100 percent of the GI center, physicians may be asked to give up your ownership and ac-cess to future distributions.

“HOPD rates can increase GI center facility rev-enue 35-40 percent for non-Medicare patients,” says Jon Vick, president of ASCs Inc..

“If the GI physicians are going to be owners, then the expectation of getting HOPD rates is misplaced,” Mr. Tanner says. “Better rates may be possible, but HOPD rates are highly unlikely.”

In some cases the hospital and an ASC manage-ment development company may form a joint venture that then purchases a 51 percent interest in the center, according to Mr. Vick. “I suggest partnering with a management company first and letting the company negotiate with the hos-pital as the hospital partner will want to control the deal,” he says. “The management company

20 Things to Know About Gastroenterology in ASCs(continued from page 1)

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would then work on the side of the physicians and ensure that the hospital doesn’t ‘steamroll’ the physicians into accepting less than the center is worth. Additionally, with the ASC manage-ment company managing the center it will retain it efficiencies and economies.”

It is important to remember when considering this arrangement that even if a physician-owned ASC partners with a hospital, it is still a freestand-ing ASC and it does not become an HOPD nor does it share in the HOPD reimbursement rates, according to Rick Jacques, president and CEO of Covenant Surgical Partners. “Sometimes, howev-er, a hospital may have such good contracts with third-party payors that a partnership with the hos-pital would increase the reimbursement rates with payors other than Medicare,” he says.

3. declining pay may force gI physicians to seek new revenue opportunities. The proposed 21.5 percent cut in the physician fee schedule for specialists, including gastroenter-ologists, coupled with decreasing reimbursements for GI procedures, may encourage GI physicians to consider additional revenue streams.

“We believe that professional fees will continue to be pressured downward, and GI physicians will be forced to resign themselves to reduced

income or to capture a portion of the techni-cal fees,” Mr. Tanner says. “Those GI physicians that have not yet captured a portion of the tech-nical fees through ASC ownership are increas-ingly under pressure to do so by forming coali-tions, mergers with larger groups, etc.”

General business concerns 1. Good case volume depends on the market. While there is no definitive average number of cases GI centers should see to remain profitable, most GI ASCs have a good referral base from which they can pull patients. However, there are some figures to keep in mind to help you determine if your center is on target.

“The key is to maximize utilization of each avail-able procedure room,” Mr. Tanner says. “There is an average of 251 operating days per year, and full utilization for a GI procedure room operat-ing eight hours each day would be approximately 16 cases per day (30 minute time slots per case) or roughly 4,016 annual cases. Sixteen cases per day is rarely achieved due to cancellations, no shows, etc. However aiming for 80 percent utili-zation is certainly reasonable (around 3,200 cases annually). Achieving that sort of utilization per room, and assuming that the ASC is not over-built, should result in a successful GI ASC.”

Dr. Sears notes that physicians at the ASC where he practices average 12 procedures per day, or one every 30 minutes.

Mr. Jacques agrees that around 3,000 annual cases can lead to a successful center. “Most phy-sicians [who use GI ASCs] have well-established practices, and it is very unlikely that those cases will go away. The key is keeping your relation-ships within the community strong,” he says.

2. some gI centers have benefited from providing anesthesia. In the past, most GI procedures were performed under conscious se-dation, which the gastroenterologist administered prior to the procedure, according to Mr. Jacques. Since the patient was not fully sedated, moni-toring by an anesthesiologist was not necessary. However, over the past decade, the trend with GI procedures has moved toward monitored anes-thesia, using drugs such as propofol, which must be administered by an anesthesiologist or CRNA.

“I believe that monitored anesthesia care is fast becoming the standard of care,” Mr. Jacques says. “Patients who are under monitored anes-thesia often allow physicians to provide a more successful colonoscopy, because they are more comfortable. Under conscious sedation, al-though the patient may not remember the pro-

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cedure, they are still awake and uncomfortable, which may cause them to react and compromise how well the colonoscopy is performed.”

Mr. Jacques notes that centers have three options to keep them in compli-ance with what states mandate regarding anesthesia administration: 1) the physicians who own the ASC arrange to ‘employ’ an anesthesiologist or anesthetist who provides anesthesia through their private practice, 2) the ASC employs its own anesthesiologist or 3) the ASC contracts with an independent anesthesiology practice.

However, anesthesia is not covered for many GI procedures, so some gas-troenterologists have benefited by directing the administration by propofol. Mr. Tanner cautions that if physicians choose to do this, they must be aware of the regulations in their area regarding anesthesia administration.

Dr. Pike also notes a trend towards anesthesia in GI procedures but cau-tions that colonoscopies performed while the patient is under propofol have not been indicated for use by many gastroenterology societies.

“It is true some ASCs have turned to various models of anesthesia as an additional source of revenue,” he says. “I have seen information estimating that currently 40 percent of GI endoscopy is performed with deep sedation involving propofol. One concern I have about this practice is that as the total cost of GI endoscopy increases due to the additional cost of providing anes-thesia [and] the payment for both the professional fee for the endoscopy and anesthesia will be cut to control overall cost to insurers. It should be noted that the three GI societies have jointly written a letter indicating the opinion deep sedation with propofol administered by anesthesiologists or CRNAs is not warranted for standard GI endoscopic procedures.”

3. Beware of potential kickback scenarios with contract anes-thesia companies. As more GI centers consider providing anesthesia services, they may look to an outside company to assist them with the pro-cess. Mr. Jacques warns that some companies may enter into joint ventures with GI centers in ways that “push the envelope” with regard to the law.

“Some companies have been extremely aggressive when approaching gas-troenterologists about these joint ventures,” he says. “We’ve seen gastro-enterologists approached at a much higher rate over the past 1.5 years. Some scenarios have the company essentially providing kickbacks to the gastroenterologists for the contract to provide anesthesiology services to the center. The government is now looking very hard at these ‘pay for play’ arrangements.”

Procedures and gastroenterologist issues1. the number of procedures performed per endoscopy case can lead to lower reimbursements for secondary procedures. According to Mr. Tanner, the typical number of procedures per endoscopy case is 1.10-1.20. Many payors, including Medicare, often reimburse any secondary procedures at a much lower rate, which can affect revenue and efficiency in the ASC.

“The number of procedures per case impacts upon revenue per case be-cause for many payors, the second and third procedures are reimbursed at half and then 25 percent of the first procedure,” Mr. Tanner says. “There-fore, valuable procedure room time is being utilized at an ever decreasing rate. If the facility is essentially fully utilized, the impact is not as strong; however, if an ASC is struggling with utilization, then it may not be profit-able to perform these secondary procedures at one time.”

2. Payment data for some of the most common procedures in GI AsCs. Here are 2008 CMS payment data for some of the most com-monly performed GI procedures in ASCs.

Upper stomach-intestine scope for biopsy (CPT 43239)• average submitted charge: $1,451• average allowed charge $408• average payment: $321

Scope of colon for diagnosis (CPT 45378)• average submitted charge: $1,502• average allowed charge: $422• average payment: $330

Scope of colon with biopsy (CPT 45380)• average submitted charge: $1,549• average allowed charge: $406• average payment: $318

3. with the number of certified gastroenterologists decreas-ing, it is important to focus on recruiting. As with many medical professionals, the number of practicing gastroenterologists is decreasing as

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physicians retire or leave practice, and the num-ber of GI physicians coming out of medical school is not enough to sustain the rate of de-parting physicians. A recent New York Times re-port indicated an additional 1,050 GI physicians is needed by 2020 to meet the demand, with current employment around 10,390 as reported in the Times. According to Mr. Tanner, around 20 percent (2,000-2,500) of practicing GI physi-cians are at or close to retirement, and only 300 GI fellows graduate each year. Thus, competi-tion for new, talented GI physicians is high.

“Recruiting new physicians is difficult especially because there is such a demand for their services,” Mr. Tanner says. “They can literally pick a place on the map where they want to work and go there with near certainty of getting a good job. This makes it more difficult for smaller, more out of the mainstream communities to find and recruit GI physicians. Many physicians graduating today are seeking a better quality of life, and, for them, the employment model is a better option.”

Although the outlook for recruiting new physi-cians may seem grim, Mr. Tanner notes some new physicians may be looking for options out-side of the employment model. “There are still many entrepreneurial physicians not seeking employment, but they are looking for ownership

in an ASC knowing that the ASC will be respon-sible for a significant portion of their total medi-cal practice income,” he says.

4. single-specialty gI asCs have a lot to offer gastroenterologists. Although some concern has been raised by the trend of many specialists and practices seeking employ-ment with local hospitals, single-specialty GI ASCs offer gastroenterologists an additional source of income and autonomy that may not be available through the hospital. As a result, ASCs should demonstrate the potential benefits of ASC ownership to physicians looking to part-ner with the center.

“Many GI physicians who have ownership in a single-specialty ASC earn a substantial amount of ancillary income from their ASC ownership, sometimes as much as they earn from their pro-fessional fees,” Mr. Jacques says. “A single-special-ty ASC is an excellent recruiting tool for practices, because it gives the practice the ability to offer new physicians ownership in the center. A hos-pital trying to recruit physicians to their [facility] might not be able to offer the new physician the same ancillary income potential an independently-owned, single-specialty ASC can. Typically, once a hospital buys a physician practice and ASC, the physician income decreases substantially.”

Dr. Sears notes that some GI specialists may turn to the hospital to avoid feeling the financial hit of reduced reimbursements, but that reason alone is not enough for all GI physicians to turn away from private practice and ASCs. “I feel that remaining as a private practitioner, I have more to offer than as a salaried hospital employee,” he says. “In order to keep the edge on the hospitals, we will need to focus on an equivalent or better product for the same cost. Patients will be able to see what procedures cost at different facilities and in the future may refuse to be treated in the hospital setting due to the additional charges.”

5. although gI physicians aren’t run-ning to the hospitals, primary care phy-sicians are. Primary care physicians, who re-fer cases to gastroenterologists, are increasingly employed by hospitals. As a result, GI centers and their physicians should develop a positive relationship with hospitals.

“We have seen a significant number of PCPs employed by the hospitals,” says Dr. Bermudez. “This gives the hospitals significant leverage in the referral pattern to specialists, and it is very important that specialists, including gastroenter-ologists, maintain a good relationship with the hospital and work more like a partner than a competitor.”

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6. surgery centers should look to grow their referral base. When it comes to recruit-ing new physicians to your surgery center, look-ing within the local community still remains one of the best tactics. According to Mr. Jacques, there are probably unaffiliated physicians nearby who would jump at the opportunity to invest and perform cases at a single-specialty center, if approached properly and given a fair proposal.

“In order to grow, you also need to expand your referral base,” Mr. Jacques says. “Look into the areas of the community that are not getting screened for colon cancer. The same tried and true techniques that have worked in building a physician’s practice are still successful. Make sure you are consistently making call backs and follow-ups to local referring physicians.”

7. salary information for gastroenterol-ogists. In respect to other surgical and medical specialties, salaries for gastroenterologists have increased at an average rate. For example, the median salary in 2008 was $389,385, up 3.93 per-cent from 2007, compared with a 6.58 percent increase for ophthalmologists and a 5.80 percent for orthopedic surgeons over the same period, according to data from the American Medical Group Association’s 2009 Medical Group Compen-sation and Financial Survey. The average starting

salary for GI physicians was $275,000, according to the same report.

Here are regional median salaries for gastroen-terologists, according to the AMGA:

• East — $401,615• West — $385,611• South — $385,542• North — $394,417

Technology1. Virtual colonoscopy remains a hot topic. Although virtual colonoscopy, or com-puted tomography colonoscopy, is currently not covered in the ASC setting, it still remains a con-troversial and much discussed topic for gastro-enterology in ASCs.

Virtual colonoscopy is a non-invasive diagnostic tool used to detect polyps, which could be can-cerous. Proponents have touted its use because it is a more comfortable, less anxiety-causing al-ternative to traditional colonoscopy, which may encourage more patients to undergo screening for colon cancer.

However, if a polyp is detected, patients must then undergo a traditional diagnostic colonosco-py, which is one of the reasons it is not covered by most payors.

“Virtual colonoscopy is an excellent imaging tool,” says Dr. Sears. “It is less invasive and has a lower rate of complications but it has a number of sig-nificant limitations which will likely limit its use. It requires a full bowel prep and is a painful proce-dure as air is inflated in the colon and sedation is not administered (as it is during a colonoscopy).”

He also notes some other limitations. “It is un-reliable for small polyps which can represent 80 percent of polyps seen in the colon,” Dr. Sears says. “It has a high radiation exposure equivalent to 250 chest X-rays. Because of these limitations, the U.S. Preventive Task Force did not endorse it as a primary colon cancer screening tool. I do not feel it will impact screening colonoscopies, but it does offer an alternative to a barium ene-ma in the event of an incomplete colonoscopy.”

Dr. Bermudez agrees that virtual colonoscopy won’t surpass traditional colonoscopies. “I be-lieve the main role [of virtual colonoscopy] will be in screening average risk patients. It is possible that it will decrease the number of [traditional] colonoscopies in this group of patients. On the other hand, virtual colonoscopy will identify a number of lesions (real and not real) that will require diagnostic colonoscopies, increasing the demand for diagnostic colonoscopy,” he says.

Mr. Tanner notes, “If and when it does get CMS

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approval, I believe that if the technology reached some percentage of the population that is eligi-ble for screening but will not get screened due to fear of the invasive nature of the colonoscopy, then it will be good for patient care and will have limited impact upon GI ASC patient volumes.”

2. Capsule endoscopy’s impact on asCs is not yet known. Capsule endos-copy, in which a patient swallows a small cap-sule camera that downloads digital images of the small intestine for diagnosis, is still in early phases of development. Therefore, its impact on ASCs and tradition colonoscopy is still rela-tively unknown.

Dr. Bermudez notes that questions regarding the device’s sensitivity and cost need to be answered before it is considered a serious alternative to colonoscopy.

Mr. Tanner also does not think it will highly im-pact GI in ASCs. “Capsule endoscopy is not an approved ASC procedure, and currently it is pri-marily used for small bowel diagnostics. In that regard it is completely different from colonos-copy and non-threatening,” he says.

3. other new technologies are on the horizon, but may not improve on tradi-tional colonoscopy. Endoscopy, like other

medical fields, lends itself to new innovations such as chromoendoscopy, endo-capusle for colon examinations, third-eye endoscopy and narrow-band endoscopy. However, the new technology is only as effective as other non-technological procedures essential for clear screenings.

Dr. Bermudez says of new technologies, “Some of these techniques may have a significant cost that may not be justified by the potential ben-efits. I think that there are techniques that can significantly impact the quality of care at no cost, such as the quality of prep for colonosco-py, withdrawal time, polyp detection rate and ad-equate follow-up colonoscopies if polyps have been found.”

Development 1. Make sure you leave room to grow when building a new center. While you don’t want to overbuild, you should leave room for growth within the plans for a new GI-driven ASC. Not only will this help your center prepare for an increasing case load brought in by new physicians, it will also make your center more appealing to corporate partners if you end up looking for a partnership down the road.

“Most physicians start with two or three rooms

in their center. A successful outpatient center lends itself to more patients, and, over time, the center will be more attractive to physician users,” says Mr. Vick. “I usually advise physicians to add one more room than they think they will need because, in the end, they will need it.”

According to Mr. Vick, one area corporate part-ners look at when deciding whether or not to partner with a GI center is capacity for growth. “A center won’t be worth much to a corporate partner if there is no room for growth of the business or expansion of the facility,” he says.

2. Be prepared to research corporate partners. With the right corporate partner, GI centers can see their revenue and profits increase substantially, according to Mr. Vick. The table on p. 13 demonstrates how one physician-managed GI endoscopy center Mr. Vick worked with im-proved its earnings and profits after partnering with the right management company.

GI centers should take the time to research and perform due diligence when exploring partner-ships with a management company. Mr. Vick suggests looking at several companies’ track re-cords with regards to same store growth, man-agement services provided and satisfied physi-cian-partners.

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“The physician-owners need to see if a company 1) pays a fair market mul-tiple, 2) helps their centers grow and 3) helps the physicians’ distributions to increase,” Mr. Vick says. “Ask for a wide range of references from the potential partner’s centers. The company should be willing to provide a list of all of their centers rather than cherry picking the best. I’ve received a lot of phone calls from unhappy physicians who didn’t take these steps.”

3. the right corporate partner is not necessarily the one that offers the most money. Even if a GI center thoroughly researches corporate partners, many may be tempted to say yes to the one that offers the most money up front. However, it can be more advantageous to look at the long-term track record prior to signing an agreement.

“A company may offer a lower upfront multiple that is still competitive, but if they have a good track record, physicians may see a bigger increase in future distributions than may have occurred with a company with poorer manage-ment services but offering a higher upfront multiple,” Mr. Vick says.

Another partnership arrangement an ASC can consider is bringing in a cor-porate partner to purchase a minority interest during the ramp-up phase of

the center. “GI centers almost always increase in value in the first few years, and you [and the current partner] can look for a majority partner once the center matures and see a much higher return on investment,” Mr. Vick says.

4. Joint ventures with hospitals can be beneficial if the terms are right. Many GI centers look to local hospitals to help with the management of the center and to take advantage of hospital contracts and relationships with local physicians. However, like with corporate partners, GI centers should ensure that an agreement with a hospital is what is best for both partners.

Mr. Tanner says that the benefits of a hospital partner depend upon what the hospital can add to the economic success of the joint venture. “Con-tributing factors to consider are 1) does the hospital own or control any group of patients or payors that the ASC would not be able to contract with absent the hospital’s participation; 2) can the hospital improve upon third-party reimbursement and to what degree; 3) can the hospital add long-term security by being a partner as opposed to an adversary; 4) can the hospital purchasing power be leveraged to secure better cost for equipment and/or supplies; and 5) if the physicians are a coalition versus a single group, does the hospital benefit substantially from providing ancillary services such as pathology or even anesthesia?” Mr. Tanner says.

Mr. Vick recommends ASCs consider bringing in a third-party management company if partnering with a hospital to make sure that the GI center con-tinues to be operated efficiently and economically under the new ownership structure. “Most hospitals want to own 51 percent of the venture, but they don’t know how to manage GI centers,” he says. “Often, hospitals won’t offer as a good purchase price and often overburden the business with over-head costs, and the efficiency and economics of the center can suffer.” n

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multi-specialty group practices. However, it is the center’s dedication to patient and physician satisfaction that keeps the center growing, says David Daniel, CEO of LSDC.

“Currently, the LSDC has 80 active providers on its staff and they are very loyal to LSDC and much prefer to bring their patients to us over admitting them to the hospital, which is located next door,” says Mr. Daniel. “We keep expand-ing by keeping all our physicians, patients and staff happy and satisfied, but we are careful to not over build or over extend.”

Here are five suggestions Mr. Daniel gives for how other ASCs can experience similar volume growth.

1. ensure staff and operations are top-notch. The first step to maintain and grow volume is to distinguish your ASC from com-petitors through friendly, experienced staff and efficient operations, says Mr. Daniel. “The secret to increasing volumes at an ASC is ensuring you have the proper physical plant, state-of-the-art equipment, operational procedures, manage-

ment and experienced, specialized staff to sup-port using the physicians and surgeons to the optimal extent possible,” he says. “If you do this the physicians will come, the patients will follow and your volume will grow.”

2. only add specialties that make finan-cial sense for the center. Although adding additional specialties and physicians is usually an easy way to increase volume, Mr. Daniel warns that ASCs must first examine their local markets to see if there is demand for the services. “We evaluate if this specialty is profitable for an ASC or not, and if it will be a good fit for the organization,” he says.

At LSDC, the physician groups that own the center lead the recruiting efforts by bringing ad-ditional physicians to their groups who can in turn practice at the ASC, but ASC administra-tion provides input and suggestions throughout the process, says Mr. Daniel.

3. Consider hiring a full-time marketing point person. Mr. Daniel says that LSDC’s marketing efforts play a significant role in con-tributing to its high volumes. LSDC employs a full-time director of marking who is devoted to expanding the business. Her duties include main-taining the center’s Web site, ensuring seamless appointment scheduling, meeting weekly with

community groups to promote LSDC, following up on all patient comments and spearheading process improvement efforts, he says.

4. If a physician reduces his or her case load, investigate why. LSDC leadership monitors the number of cases each physician brings to the ASC, and if cases begin to drop, the leaders go directly to the physician to investigate why he or she is not using the ASC as frequently.

“For the most part the physicians prefer the LSDC over the hospital for outpatient proce-dures due to our exceptional efficiency, low infection rate and very high patient satisfaction scores,” says Mr. Daniel. However, if the physi-cian was to identify a problem, it would be im-mediately addressed, he says.

5. sweat the small stuff. Often, it’s the small things that keep physicians and patients coming to your ASC. “It’s the smaller things that set you apart and make the physicians feel welcome. Of-fering lunch if they’re working over those hours, having the types of scrubs they prefer and re-serving parking spaces — all of these things go a long way to make the physicians happy,” says Mr. Daniel. n

Learn more about LSDC at www.lsdc.net.

5 Tips for Growing Volume From David Daniel, CEO of Lakeland Surgical & Dianostic Center(continued from page 1)

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federal government ever since. For additional background information, see www.all-about-qui-tam.org/fca_history.shtml.

2. overview of qui tam concepts. Qui tam means “in the name of the king”. The concept of a qui tam action is similar to a whistleblower action and allows a private person, referred to as a “relator,” to file suit on behalf of the United States against those who have falsely or fraudu-lently claimed federal funds. Incentives are built in so that the qui tam relator is able to receive a part of the proceeds of a victory on behalf of the government. Further, the portion of an award amount that the relator retains is greater if the government does not join in the suit and therefore he or she does not receive the help of the government. Alternatively, if the govern-ment joins or “intervenes” in the lawsuit, the relator retains a lesser portion of any judgment or settlement obtained.

False Claims Act qui tam actions run the gamut of federally funded programs, from Medicare and Medicaid to defense and other government pro-curement contracts, federally insured mortgage and other federal housing programs, disaster assistance loans, agricultural subsidies and more. Persons who knowingly make false claims for federal funds are liable for three times the government’s loss plus a civil penalty of $5,500 to $11,000 for each claim. Relators recover 15 to 25 percent of the proceeds of a successful suit if the United States intervenes in the qui tam action, and up to 30 percent if the United States declines to intervene and the relator pursues the action alone. During fiscal year 2009 alone, relators were awarded $255 million. (This figure does not include relator shares awarded after Sept. 30, 2009.)

3. Top hospital recoveries. To see a list of the top 20 False Claims recoveries to date, go to www.taf.org/top20. Several hospitals and hospi-tal companies have paid massive settlements to resolve false claims actions against them, includ-ing St. Barnabas Hospitals, a non-profit hospital chain in New Jersey, which paid $265 million in 2006 to settle allegations related to improperly claiming “outlier” Medicare payments (addition-al payments for particularly difficult or complex procedures). Also in 2006, Tenet Healthcare, a national hospital system, agreed to pay the feder-al government $900 million for billing violations also involving manipulation of outlier payments, as well as kickbacks, upcoding and bill padding. Similarly, in 2000, Columbia HCA, the largest for-profit hospital chain in the country paid more than $731 million to settle False Claims Act alle-gations against it. Currently, Toumey Healthcare System in South Carolina is involved in a False Claims litigation based on physician self-referral law violations that resulted in the submission of false claims, a legal theory that proved successful

against a medical practice management company in the 2008 case U.S. v. Rogan in the Seventh Circuit Court of Appeals.

4. 2009 recoveries. In 2009, the U.S. gov-ernment recovered $2.4 billion dollars under the False Claims Act. This was the second highest an-nual collection amount recorded in history, thanks in large part to an enormous settlement between the government and Pfizer Inc. The Department of Justice made the following statement regarding the Pfizer settlement in Sept. 2009:

American pharmaceutical giant Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. hereinafter together “Pfiz-er”) have agreed to pay $2.3 billion, the largest health care fraud settlement in the history of the Department of Justice, to re-solve criminal and civil liability arising from the illegal promotion of certain pharma-ceutical products, the Justice Department announced today.

Pharmacia & Upjohn Company has agreed to plead guilty to a felony violation of the Food, Drug and Cosmetic Act for mis-branding Bextra with the intent to defraud or mislead. Bextra is an anti-inflammatory drug that Pfizer pulled from the market in 2005. Under the provisions of the Food,

Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA. Once ap-proved, the drug may not be marketed or promoted for so-called “off-label” uses – i.e., any use not specified in an application and approved by FDA. Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to ap-prove due to safety concerns. The compa-ny will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter. Pharmacia & Upjohn will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

In addition, Pfizer has agreed to pay $1 bil-lion to resolve allegations under the civil False Claims Act that the company illegally promoted four drugs – Bextra; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug – and caused false claims to be submitted to gov-ernment health care programs for uses that were not medically accepted indications and therefore not covered by those programs.

5. healthcare fraud — top industry for false Claims recovery. Healthcare fraud represents the largest and most profitable indus-try for qui tam false claims collections. Healthcare

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11 Things to Know About the False Claims Act (continued from page 1)

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fraud recoveries accounted for approximately $1.6 billion, more than two-thirds of the $2.4 billion dollars collected under the False Claims Act in total during 2009. Numerous federal agencies shared in these recoveries, including the Department of Health and Human Services, in connection with its Medi-care and Medicaid programs; the Office of Personnel Management, which administers the Federal Employees Health Benefits Program; the Depart-ment of Defense for its TRICARE insurance program; and the Department of Veterans Affairs.

6. Pharmaceutical and medical device companies – Main tar-gets. The largest qui tam settlements in 2009 came from pharmaceuti-cal and medical device companies, including Pfizer, Sanofi-Aventis, Bayer HealthCare, Quest Diagnostics and Eli Lilly, amongst others. The DOJ reported that pharmaceutical and device companies accounted for $866.7 million in settlements for federal recoveries, in addition to $402 million be-ing returned to state Medicaid programs.

7. retention of overpayments now can be considered a false Claims Act violation. In 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 which implemented signifi-cant changes to the False Claims Act, including the expansion of prohib-ited conduct under the False Claims Act to include not just the improper filing to collect monies, but also the known retention of overpayments by hospitals or other health care providers. The 2009 amendments also make clear that false claims submission to a state Medicaid program, although not directly submitted to the federal government, does constitute a viola-tion of the False Claims Act.

8. hospital sample false Claims policy. All healthcare providers and businesses submitting claims to the government for payment should have

healthcare regulatory and false claims policies in place to educate its employ-ees and agents and minimize the submission of false claims and the potential liability attached thereto. A good sample policy is available online at www.centralcommunityhospital.com. This sample policy is particularly designed to address a community hospital’s approach to false claims and other policies, and may need to be modified depending on the size of the entity, breadth of practice, or type of industry or provider submitting the claims.

9. Plaintiff’s law firms focus on qui tam. Over the past several years, there has been a dramatic increase in the number of qui tam suits. As a result, there are now law firms that focus exclusively on qui tam actions. One such firm, Warren Benson Law Group, states on its Web site (www.warrenbensonlaw.com/medicare-fraud.com):

In recent years, Medicare fraud and Medicaid fraud have been the two most active areas of qui tam litigation, outnumbering qui tam cases in-volving defense contractor fraud. It is estimated that Medicare fraud and other fraud cost the federal government billions of dollars each year.

There are numerous frauds Medicare and other healthcare providers and companies have devised to cheat the Government…[such as:] • Services not rendered • Upcoding schemes and Unbundling • Kickbacks and Self Referrals • Falsely Certifying and Giving False Information • Lack of Medical Necessity • Fraudulent Cost Reports • Grant or Research Fraud

These firms generally take qui tam cases on a contingency fee basis, mak-ing it enticing for potential relators to come forward and initiate litigation against the alleged wrong-doers.

10. Broad provider responsibility – scope of liability. In the face of the increasing scrutiny of claims and the relatively new era of Re-covery Audit Contractors, parties should understand the broad scope of what can be considered a false claim and their obligations to properly bill for services. A good discussion of the breadth of the provider’s respon-sibility is set forth in an article by Charlie Artz, a well-regarded healthcare attorney. See False Claims Act Implications in Physician’s News Digest (www.physiciansnews.com/law/805artz.html). A few of the key concepts dis-cussed by Mr. Artz are excerpted below:

In Re: Cardiac Devices Qui Tam Litigation, the U.S. District Court in Connecticut refused to dismiss a whistleblower’s case against health care providers who submitted claims for services that were not cov-ered by Medicare, held that the health care providers had a duty to familiarize themselves with all requirements for reimbursement, and allowed the False Claims Act case to proceed exposing the health care providers to millions of dollars in refunds and civil fines.

Although the opinion was close to 100 pages in length, the key facts can be summarized as follows. Then-HCFA published a manual over 1,000 pages in length containing literally hundreds of reimbursement rules and requirements. These billing guidelines were not statutes passed by Congress after the people had an opportunity to debate them. These were not regulations published with notice and comment by the general public or the health care community to make improve-ments or to object to certain clauses. These were purely interpretive guidelines published by the federal government. One of those several hundred billing guidelines contained a provision prohibiting reimburse-ment for any non-FDA approved device or service. The 40 hospital defendants in this massive federal court litigation submitted claims to Medicare and received payment for services provided to patients who participated in clinical trials involving several different investigational cardiac devices that had not been approved for marketing by the FDA. One clause in the hospital payment manual stated that medical devices

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not approved for marketing by FDA are considered investigational by Medicare and are not reasonable and necessary for the diagnosis and treatment of illness or injury under the Medicare statutory definition of medical necessity. Apparently, the hospitals billed these services by mistake, believing that since the clinical trial was approved, the pro-vider was allowed to bill Medicare for the device and related services.

A whistleblower realized many hospitals were billing Medicare for non-FDA approved cardiac devices and filed a civil false claims case in federal court. The federal government intervened and is now pros-ecuting the False Claims Act case against hospitals. The hospitals asked the federal court to dismiss the case for several reasons. One of the key defenses is that a simple violation of a statute or regulation does not, by itself, trigger False Claims Act liability. The federal court rejected that analysis and made the following key points that should guide your compliance efforts.

11. heightened regulatory and enforcement environment – False Claims Act and Anti-kickback statute. The government has looked to regulatory mechanisms like the False Claims Act to recover money spent improperly as a politically palatable way to attack healthcare providers and healthcare costs. Given the demonstrated success of this strategy, we expect more, not less, recovery of claims of this sort. As Wil-liam Corr, Deputy Secretary of the U.S. Department of Health and Human Services, stated on October 28, 2009:

As a result of the priority given to combating health care fraud by Presi-dent Obama, the government has been able to achieve a more rapid response to fraudulent schemes and increase its recovery of more funds lost to fraud than in previous years. For example, HHS Office of In-

spector General investigations have resulted in $4.0 billion in receivables for FY 2009, increase from $3.2 billion in DIG investigative receivables in FY2008. Strike force cases typically are indicted and litigated faster than traditional criminal health care fraud cases.

Since March 2007 strike force cases that included HHS agents have obtained 189 convictions, 443 indictments, and total an estimated $227 million in expected recoveries. During this time, the Department of Justice also secured the largest health care fraud settlement in history against a pharmaceutical company for Medicare and Medicaid fraud and for violating the Food, Drug and Cosmetic Act. I refer to the $2.3 billion settlement with Pfizer to resolve criminal and civil liability arising from the illegal promotion of certain pharmaceutical products. n

Contact Scott Becker at [email protected].

June 10-12, 2010, ChicagoTo ReGIsTeR,

CALL (703) 836-5904 or go to www.ascassociation.org/june2010.cfm.

For the complete conference brochure, visit www.BeckersAsC.com.

asc communications, asc association, ambulatory surgery Foundation, becKer’s asc reView and becKer’s ortHoPedic & sPine reView

orthopedic, spine and Pain Management-Driven AsC Conference

Improving Profitability and Business and Legal Issues

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Here are five of the biggest issues currently fac-ing gastroenterologists.

1. Increasing complexity and cost of business management

a. New regulatory demands in the areas of technology, security, staffing, continuous quality improvement, record retention and documenta-tion, etc., have contributed toward making the business of medicine ever more costly and de-manding upon physician’s time and expertise. This past year alone has brought substantial increased scrutiny of ASCs with new rules on infection control, new CMS rules for Condition for Coverage, new accreditation agency regula-tions, Red Flag Rules, etc. All of these issues demand more time and consume more capital resources. Full compliance must be achieved in a declining reimbursement environment.

b. Gastroenterologists, realizing the increased costs and complexities of sustaining their busi-ness model, have begun to explore survival al-ternatives such as hospital employment options and/or mergers into super-groups as well as aggressively exploring the potential capture of ancillary revenues.

2. need to define, report and self-moni-tor a standard of care that will maximize the value of the specialty

a. Gastroenterologists need to create the tools that will define the value of the specialty for pa-tients, payers and referring physicians. Measures for standard of care and standard of perfor-mance need to be well documented and available for scrutiny. The veil is being lifted and patients are beginning to seek evidence of documented quality performance metrics in the areas of qual-ity of care, accessibility and cost.

b. The three GI societies need to come together and work as one to add value to the specialty. It is important for gastroenterologists to speak with a single voice, to have strong unified repre-sentation and to take charge of setting the stan-dard of care and performance metrics that will define, protect and promote the specialty.

3. recruitment/shortage of new physi-cians/encroachment

a. More GI physicians are approaching retire-ment than there are new physicians joining the specialty to replace them.

b. There is increasing demand for GI services, as patient demographics continue to change and as patient education improves.

c. Vastly improved technology is paving the way for non-gastroenterologists to be more aggres-

5 Biggest Issues Facing Gastroenterologists TodayBy Barry Tanner, CPA, president and CEO, Physicians Endoscopy

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ASC E-weekly, go to www.BeckersAsC.com

or e-mail [email protected]

6 Statistics About Ophthalmologist Compensation

Here are the average annual salaries for ophthalmologists by re-gion, according to the American Medical Group Association’s 2009 AMGA Medical Group Compensation and Financial Survey.

1. Median, all regions — $325,384 2. Average starting salary, all regions — $215,000 3. East — $285,866 4. West — $321,726 5. South — $310,368 6. North — $354,500 n

Source: AMGA.

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sive in providing endoscopic services further emphasizing the need for metrics and differentiation.

4. Change the way gI specialist services are marketed

a. As patients increasingly take more control over their own healthcare and proactively make healthcare decisions, it will be imperative that gastroen-terologists do more to market their scope of services, their quality, their availability and their patient education directly to patients through various forms of media. It is time to recognize that we live in a highly competitive world, and in this market niche, the competition is not other well-trained gastroenterologists, it is the potential encroachment of mediocrity, non-GI endoscopists and failure to clearly differentiate.

5. Declining reimbursement

a. Professional fees/facility fees/change in consult fees, etc., are all under attack.

b. Increasing costs — especially in the areas of staffing and benefits, insur-ance, new technologies including electronic medical records and processes such as HIPAA, infection control, etc., — all have similar impact upon the chances for continued success.

c. Gastroenterologists are overworked and increasingly under-appreciated.

d. The need to see ever increasing number of patients has dramatically increased the use of physician extenders. n

Mr. Tanner is president and CEO of Physicians Endoscopy, which specializes in de-velopment and management of free-standing, single-specialty ambulatory surgery centers. Learn more about Physicians Endoscopy at www.endocenters.com.

6 Statistics About Gastroenterologist Compensation

Here are the average annual salaries for gastroenterologists by re-gion, according to the American Medical Group Association’s 2009 AMGA Medical Group Compensation and Financial Survey.

1. Median, all regions — $389,385 2. Average starting salary, all regions — $275,000 3. East — $401,615 4. West — $385,611 5. South — $385,542 6. North — $394,417 n

Source: AMGA.

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Q: solid business fundamentals are es-sential to the success of asCs. what can centers do to ensure their process-es are running as effectively and effi-ciently as possible?

Robert Zasa: Case costing remains as impor-tant as ever. At our centers, we are currently run-ning some spring housekeeping to see where we can reduce items we buy. For example, we may see a reduction in reimbursement from HMOs when it comes to surgical implants. In this case, we go back to the payor and try to renegotiate rates. We will be honest with the payors and ex-plain that we can’t afford to do the cases at the current rates, which will, in turn, force them to go back to the hospitals and pay a higher rate. Often, we will be able to negotiate a new rate.

Aside from reviewing case costs and reimburse-ment rates, we look at all areas of the practice, including staffing costs, suppliers, etc., to see what we can do to get better pricing. Recently, we’ve

been able to work with our GPO to contract for more items on more of discount. We’ve also shopped distributors to see if we can get better pricing. Overall, though, staffing and supplies ac-count for the biggest variable costs in an ASC, and we make sure we are reviewing these areas.

Q: AsCs continue to have concerns over falling reimbursements, as they have in the past. how can asCs make sure that they are receiving adequate reimburse-ment on their cases and what should be done to improve these rates?

RZ: As with case costing, ASCs should review their reimbursements per case. At our centers, we review one specialty every month so that it becomes a routine practice. We also perform a retroactive contract analysis of the top 20 or so procedures at our ASCs by CPT code. The top 20 codes will typically represent 80 percent of your business at your ASC.

Using these codes, we perform a payor break-down, including case volume per payor, so we can track any disparities among the rates. You want to make sure you have a good sense of what you are doing per payor.

For example, you might discover you are doing 200 cases for Cigna at $100 and 300 for Blue Cross at $50. This way you can see what insurers are more profitable for your center and which ones it may be necessary to renegotiate with.

ASCs should also receive annual notification of changes in reimbursement from payors, so that they can prepare for significant changes.

Q: what opportunities for growth exist for asCs currently? are there any new developments or procedures beneficial to service lines in asCs?

RZ: One opportunity we’ve taken is to go back to our existing physicians to make sure that they are

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maximizing the use of the center. We have also ex-amined CMS’s list of newly approved procedures for ASCs and ask our physicians what they are will-ing to or want to learn. For example, we had a gen-eral surgeon say he was interested in learning new endoscopic procedures. We already had the equip-ment for other specialties, so it was worthwhile to have the surgeon train on the new techniques and add them to the ASC. Keeping constant commu-nication open with your investors will help you to gauge the interest of your surgeons.

Spine and retina also remain popular new areas for growth, and, again, we add these specialties according to physician interest. Retina is now paid by Medicare, so it can be a profitable addi-tion for ASCs. We’ve had outside surgeons from other ASCs come in and demo these areas for our surgeons, and if there is interest we look into adding the procedure.

Q: Reports have shown that more new physicians are choosing the hospital setting over private practice. how can this effect the ability of asCs to recruit new physicians?

RZ: Hospital employment can be good for ASCs that are in joint ventures with hospitals as it means new physicians will continuously be added on to the center. ASCs can also benefit

in entering into joint ventures with hospitals, as the recruiting office will see the surgery center as key to attracting new surgeons. For instance, a hospital may be attracted to a new orthopedic surgeon, and the ASC can help bring the sur-geon in because it can offer a place where he or

she can work and have ownership. n

Mr. Zasa is a managing and founding partner of ASD Management, which specializes in development and man-agement of new and existing ASCs. Learn more about ASD Management at www.asdmanagement.com.

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Here are 22 statistics about GI/endoscopy in surgery centers.

1. GI/endoscopy represents 25 percent of the average case volume in surgery centers, the most of all specialties. The average surgery center per-forms 4,869 cases annually, which would average to about 1,217 GI cases annually.

2. The average gross charges for GI cases are $3,040. The average case revenue is $790.

3. Surgery centers in the Southwest received the highest average net revenue per GI case with $950. Average net revenue was lowest in the Southeast at $653 per case.

4. Here are the average net revenues per GI case by the number of operating rooms in a surgery center:

• 1-2 ORs — $676• 3-4 ORs — $771• More than 4 ORs — $947

5. Here are the average net revenues per GI case by a surgery center’s total annual case volume:

• Less than 3,000 cases — $748• 3,000-5,999 cases — $843• More than 5,999 cases — $772

6. Here are the average net revenues per GI case by a surgery center’s total net revenue:

• Less than $4.5 million — $692• $4.5-$7.0 million — $763• More than $7.0 million — $959

Medicare charges and paymentsHere is the average 2008 Medicare sub charge (sub-mitted charges divided by allowed services), average allow charge (Medicare-allowed charges divided by allowed services, including co-pays and deductibles paid by patient), and average payment (Medicare payments divided by allowed services, not includ-ing co-pays and deductibles paid by patient) for 16 GI procedures commonly performed in ASCs.

CPT copyright 2008 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.

7. Upper stomach-intestine scope, simple (CPT 43234)

• average sub charge: $1,025• average allow charge: $329• average payment: $259

8. Upper stomach-intestine scope for diagnosis (CPT 43235)

• average sub charge: $1,117• average allow charge: $325• average payment: $255

9. Stomach-intestine scope, inject intestine wall (CPT 43236)

• average sub charge: $1,359• average allow charge: $338• average payment: $267

22 GI/Endoscopy Statistics for Surgery Centers

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10. Upper stomach-intestine scope for biopsy (CPT 43239)

• average sub charge: $1,451• average allow charge: $408• average payment: $321

11. Stomach-intestine scope ultrasound guided biopsy (CPT 43242)

• average sub charge: $2,116• average allow charge: $404• average payment: $320

12. Stomach-intestine scope for foreign body removal (CPT 43247)

• average sub charge: $1,458• average allow charge: $408• average payment: $322

13. Stomach-intestine scope with ultrasound exam (CPT 43259)

• average sub charge: $2,232• average allow charge: $452• average payment: $359

14. Scope of upper small intestine (CPT 44360)• average sub charge: $1,419• average allow charge: $416• average payment: $328

15. Scope of upper small intestine with biopsy (CPT 44361)

• average sub charge: $1,344• average allow charge: $425• average payment: $336

16. Scope of colon thru ostomy for diagnosis (CPT 44388)

• average sub charge: $1,325• average allow charge: $334• average payment: $262

17. Scope of colon with biopsy thru ostomy (CPT 44389)

• average sub charge: $1,354• average allow charge: $325• average payment: $255

18. Scope of sigmoid colon only with biopsy (CPT 45331)

• average sub charge: $967• average allow charge: $267• average payment: $208

19. Scope of colon for diagnosis (CPT 45378)• average sub charge: $1,502• average allow charge: $422• average payment: $330

20. Scope of colon with biopsy (CPT 45380)• average sub charge: $1,549• average allow charge: $406• average payment: $318

21. Cancer screen colon scope, high risk patient (HCPCS G0105)

• average sub charge: $1,308• average allow charge: $409• average payment: $306

22. Cancer screen colon scope, not high risk patient (HCPCS G0121)

• average sub charge: $1,415• average allow charge: $412• average payment: $308 n

Sources:Items 1-6: VMG Health’s 2009 Intellimarker (www.vmghealth.com)Items 7-22: CMS

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Visit our website to downloadthe 2009 Intellimarker ASCBenchmarking Study

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Orthopedic, Spine and Pain Management-Driven ASC

ConferenceImproving Profitability and Business and Legal Issues

The 8Th AnnuAl ConferenCe from ASC CommuniCATionS And The AmbulATory Surgery foundATion

June 10-12, 2010Westin Hotel • North Michigan Avenue • Chicago, Illinois

For more information, call (703) 836-5904 or (800) 417-2035If you would like to sponsor or exhibit at this event, please call (800) 417-2035

• Improve Your Profits Monday Morning• Great topics and speakers focused on key business,

financial, clinical and legal issues facing Orthopedic, Spine and Pain Management-Driven ASCs

• 91 Sessions, 112 Speakers• 30 Physician Leaders as Speakers, 29 CEOs as Speakers• Focused on Orthopedic Surgeons, Orthopedic Spine Sur-

geons, Neurosurgeons and Pain Management Physicians, ASC Physician Owners, Administrators and Others

• Immediately useful guidance plus great keynote speakers

• New and Advanced Procedures for ASCs — Spine, Total Joints, Uniknees and More

• Have an outstanding time in Chicago• Earn Your CME, CASC, CEU Credits - 13.5 CASC

credits and 13.5 CME and CEU credits• Big Thoughts Combined with Practical Guidance• Great Networking• Understand the Impact of Healthcare Reform on ASCs• Orthopedics, Spine and Pain Management• Benchmarking, Cost Cutting, Safe Harbors, Billing and

Coding, Revenue Growth and more

Improving the Profitability of Orthopedic, Spine and Pain Management-Driven ASC – Thrive Now and in the Future

Practical Business, Legal and Clinical Guidance for Ambulatory Surgery CentersASCREVIEW

Business and Legal Issues for Orthopedic and Spine PracticesREVIEW

To register, contact the Ambulatory Surgery Foundation (703) 836-5904 or fax (703) 836-2090 • [email protected]

Register online: https://www.ascassociation.org/june2010.cfm

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Improving the Profitability of Your Orthopedic, Spine and Pain Management- Driven ASC –Thrive Now and in the Future

This exclusive orthopedic, spine and pain-focused ASC conference brings together surgeons, physician leaders, administrators and ASC business and clinical leaders to discuss how to improve your ASC and its bottom line and how to manage challenging clinical, business and financial issues.• 91 Sessions• 112 Speakers• 29 CEOs as Speakers• 30 Physician Leaders as Speakers• Joe Flower, Healthcare Futurist,

and Ron Brownstein, Political Director of Atlantic Media Company

• Great Participants From All Over the Country

• Business, Clinical and Legal Issues

The Becker’s ASC Review/ASC Communications – Ambulatory Surgery Foundation difference:

1) Benefit from the combined ef-forts of Becker’s ASC Review/ASC Communications and the Ambulatory Surgery Foundation to attract attendees and speak-ers that are among the smartest people in the ASC industry today.

2) Take discussion and thinking to the highest levels, focusing on the physician-owners, medical direc-tors, ASC administrators and busi-ness minded directors of nursing.

3) Access expert views from all sides of the ASC world.

Pre Conference – Thursday, June 10, 201011:30am – 1:00pm Registration12:00pm – 4:30pm Exhibitor Set-Up1:00pm – 5:20pm Pre-Conference Workshop • Concurrent Sessions A, B, C, D, E, F5:20pm - 7:00pm Reception, Cash Raffles and Exhibits

Main Conference – Friday, June 11, 20107:00am – 8:00am Continental Breakfast and Registration8:00am – 5:15pm Main conference, Including Lunch and Exhibit Hall Breaks5:15pm – 7:00pm Reception, Cash Raffles, Exhibit Hall

Conference – Saturday, June 12, 20107:00am – 8:00am Continental Breakfast and Registration8:15am – 1:00pm Conference

PROgRAM SCheDuLe

Thursday, June 10, 2010 Track A – Improving Profits, Turning Around ASCs, and Benchmarking1:00 – 1:45 pm

5 Keys to Maximizing an Orthopedic-Driven ASC’s Returns in a Tough Economy - Brent Lambert, MD, FACS, President & Owner, Ambulatory Surgical Centers of America

1:50 – 2:30 pmRunning Your Orthopedic Program Smarter - Benchmarking - Improving Revenues per Case, Reducing Hours per Case, Supply Costs per Case, Staffing and More - Thomas J. Bombardier, MD, FACS, Founding Principal, Ambulatory Surgical Centers of America

2:30 – 3:15 pmThe Changing Future of Health Care in the United State - Joe Flower, Healthcare Futurist

3:20 – 4:00 pmAssessing and Improving the Profitability of Orthopedic and Spine in ASCs - Luke Lambert, CFA, MBA, CASC, CEO, Ambulatory Surgical Centers of America

4:05 – 4:40 pmA Step by Step Guide to Recruiting Orthopedic and Spine Surgeons - Chris Suscha, VP of Business Development, Meridian Surgical Partners

4:45 – 5:20 pmSelling Shares and Resyndication - Larry Taylor, CEO, Practice Partners in Healthcare, and Melissa Szabad, JD, Partner, and Bart Walker, JD, Attorney, McGuireWoods, LLP

Track B – Business Planning for ASCs, Spine, Orthopedics, and Pain1:00 – 1:45 pm

Business Planning for Orthopedic and Spine Driven Centers - Tom Mallon, CEO, Regent Surgical Health, Jeff Simmons, President Western Region, Regent Surgical Health

1:50 – 2:30 pmBuilding Outstanding and Profitable Pain Management Programs, Making Pain Profitable - Robin Fowler, MD, Executive Director & Owner, Interventional Spine & Pain Management

3:20 – 4:00 pmEstablishing an ASC - 10 Keys for Success - Bill Southwick, President & CEO, Healthmark Partners

4:05 – 4:40 pmEnterprise Risk Management - Dottie Bollinger, RN, JD, LHRM, CHC, CASC, Laser Spine Institute

4:45 – 5:20 pmHandling 5 Key Problems in the ASC Life Cycle - Joseph Zasa, JD, Partner, ASD Management

Track C – Special Procedures Issues1:00 – 1:45 pm

Minimally Invasive Spine Surgery in ASCs - Greg Poulter, MD, Surgeon, Peak One Surgery Center, Lisa Austin, RN, CASC, Vice President of Operations, Pinnacle III

1:50 – 2:30 pmThe Best Procedures to add to ASCs Now - John Hajjar, MD

3:20 – 4:00 pmRecruiting Great Doctors - 5 Key Concepts from an Industry Veteran - Robert Zasa, MSHHA, FACMPE, Partner, Woodrum ASD

4:05 – 4:40 pmHandling Complex Spine Cases in an ASC, Clinical and Financial Issues - Marcus Williamson, President, Neospine Services Symbion Healthcare

4:45 – 5:20 pmExtending the Life Span of Your ASC - 10 Key Concepts - Boyd Faust, CPA, CFO, Titan Health

Track D – general Management1:00 – 1:45 pm

How An Existing, Successful Orthopedic/Pain ASC in New Jersey is Planning for Impending Rate Compression in the State, and Adjusting its Strategy Going Forward Now That a Moratorium on New ASC Development Has Gone Into Effect - David Hall, Chairman or Sean Rambo, Vice President of Operations, Titan Health, Key Physician from Titan NJ ASC

1:50 – 2:30 pmHow to Reduce Hours Per Case, How to Hire Great DONs and Staff - Joyce Deno, Chief Operations Officer, Eastern Region, Regent Surgical Health

To RegisTeR, call (703) 836-5904 • Fax (703) 836-2090 • email [email protected] Register online at https://www.ascassociation.org/june2010.cfm

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To RegisTeR, call (703) 836-5904 • Fax (703) 836-2090 • email [email protected] Register online at https://www.ascassociation.org/june2010.cfm

3:20 – 4:00 pmThe Success, Failure and Demise of ASCs - An MD Leaders Perspective - Larry Parrish, Illinois Sports Medicine & Orthopedic Surgery Center, Dave Raab, MD, Illinois Sports Medicine & Orthopedic Surgery Center, Jeff Visotsky, MD, Illinois Sports Medicine & Orthopedic Surgery Center

4:05 – 4:40 pmHow to Effectively Measure and Track Patient Quality - David Shapiro, MD, Director of Medical Affairs, AMSURG

4:45 – 5:20 pm5 Tips for Managing Anesthesia in Your ASC - Marc Koch, MD, President & CEO. Somnia Anesthesia

Track e - Billing, Coding and Contracting for ASCs1:00 – 1:45 pm

Managed Care Negotiation Strategies for Orthopedic and Spine - 10 Key Concepts- Naya Kehayes, MPH, CEO, Eveia Health Consulting and Management

1:50 – 2:30 pm10 Ways to Improve an ASCs Orthopedic Spine and Pain Coding - Stephanie Ellis, RN, President, Ellis Medical Consulting

3:20 – 4:00 pmA 40 Minute Billing Boot Camp - What Centers Need To Do To Improve Their Billing and Coding - Caryl Serbin, RN BSN LHRM, President & Founder, Serbin Surgery Center Billing

4:05 – 4:40 pmHow to Hire Great Administrators and What Should They Be Paid? Greg Zoch, Partner & Managing Director, Kaye Bassman International

4:45 – 5:20 pmDriving Revenues Up by Driving Denials Down - Bill Gilbert, VP of Marketing, AdvantEdge Healthcare Solutions

Track F - Buying and Selling ASCs and hospitals, Valuation Issues For ASCs, Anti Kickback Issues1:00 – 1:45 pm

ASC Transactions, Current Market Analysis and Valuations, Greg Koonsman, Senior Partner, VMG Health

1:50 – 2:30 pm5 Anti Kickback and Stark Act Cases - Scott Becker, JD, CPA, Partner, Elissa Moore, JD, and Lainey Gilmer, Associate, McGuireWoods LLP

3:20 – 4:00 pmExcelling Without Orthopedics and Spine -Key Concepts for Great ASC Performance - Joseph Zasa, JD, Partner, ASD Management, Skip Daube, MD, Founder, Surgical Center for Excellence, Panama City

4:05 – 4:40 pmBuying, Selling and Syndication ASCs - Henry H. Bloom, Founder, and Robert S. Goettling, Esq., The Bloom Organization, Todd Mello, ASA AVA MBA, Principal & Founder, Healthcare Appraisers

4:45 – 5:20 pmPhysician Owned Hospitals - Key Concepts to Increase Profits - Tom Michaud, CEO, Foundation Surgery

5:20 pm Cocktail Reception, Cash Raffles and Exhibits

Friday, June 11, 2010 8:00 am

Introductions - Scott Becker, JD, CPA, Partner, McGuireWoods, LLP

8:10 – 9:00 amThe Best Ideas for Orthopedic and Spine Driven ASCs Now - Brent Lambert, MD, FACS, President & Owner, Ambulatory Surgical Centers of America, Joseph Burkhardt, MD, Brookside Surgery Center, Kenny Hancock, President, Meridian Surgical Partners, James T. Caillouette, MD, Chairman, Newport Orthopedic Institute

9:05 – 10:00 amThe Politics of Health Care Reform, Ron Brownstein, Political Director, Atlantic Media Company

10:00 – 11:00 amNetworking Break & Exhibits

general Session A11:05 – 11:45 AM

Key Developments That Will Transform the Business of Orthopedic Surgery - John Cherf, MD MPH MBA, OrthoIndex

11:50 – 12:30 PMKey Concepts to Improve the Profitability of Spine Programs, John Caruso, MD, Jim Lynch, MD, Founder, Surgery Center of Reno, Moderator, Jeff Leland, Managing Director, Blue Chip Surgical Center Partners

geNeRAL SeSSION B11:05 – 11:45 AM

A National View of Political Advocacy Efforts and ASCs, Andrew Hayek, CEO Surgical Care Affiliates, Chairman ASC Coalition

11:50 – 12:30 PMEffective Cost Cutting and Benchmarking for Your ASC - 5 Examples - Robert Welti, MD, Medical Director & Administrator, Santa Barbara Surgery Center, Introduced by Tom Mallon, CEO, Regent Surgical Health

12:30 – 1:30 PMNetworking Lunch & Exhibits

Concurrent Sessions A, B, C, D, e, FA - Improving Profits, and Fixing ASCs1:30 – 2:05 pm

10 Key Concepts for Managed Care Contracting Orthopedics, and Spine and Pain - Naya Kehayes, MPH, CEO, Eveia Health Consulting & Management

2:10 – 2:40 pmKey Tips for Success - Orthopedics in ASCs - What Works and What Doesn’t - Greg Deconciliis, Administrator, Boston Out-Patient Surgical Suites

2:40 – 3:35 pmNetworking Break & Exhibits

3:35 – 4:10 pm10 Keys to Improve Billing and Collections - Caryl Serbin, RN BSN LHRM, President & Founder, Serbin Surgical Center Billing

4:15 – 4:45 pmOut of Network - Will it Still Work? What Do I Need to Know? What is the Future? Thomas J. Pliura, MD, JD, President & CEO, Zchart

4:50 – 5:20 pmThe 5 Best Ways to Improve Billings and Collections and to Improve Revenue Cycle Management - Lisa Rock, President, National Medical Billing Services, and Michael Storch, National Client Representative, MNET Financial, Inc.

Track B – Orthopedic and Spine ASC Issues1:30 – 2:05 pm

New Procedure Advancements for Spine Centers - Jimmy St. Louis, VP of Integrated Business Development, Laser Spine Institute

2:10 – 2:40 pmKey Thoughts on Handling Total Joints in ASCs - James T. Caillouette, MD, Chairman, Newport Orthopedic Institute

2:40 – 3:35pmNetworking Break & Exhibits

3:35 – 4:10 pmHand Surgery in ASCs - Key Concepts for Clinical and Financial Success - R. Blake Curd, MD, Orthopedic Institute, Todd Flickema, SVP, Surgical Management Professionals, Kyle Goldammer, SVP Finance, Surgical Management Professionals

4:15 – 4:45 pmUni Knees in the Outpatient Setting - Is This Right Fit for Your ASC? - Clinical and Financial Issues - Joseph Burkhardt, D.O., Brookside Surgery Center, Sarah Martin, R.N., Regional Vice President, Meridian Surgical Partners, Becky Klein, Director of Clinical Operations, Brookside Surgery Center

4:45 – 5:20 pmCreating a Spine Center in a Small Community, Daniel Tomes, MD, Introduced by Jeff Leland, Managing Director, Blue Chip Surgical Center Partners

Track C – Pain Management, Spine and Implant Costs1:30 – 2:05 pm

Pain Management at an ASC: Benefits and Pitfalls - Brannon Frank, MD, Arise Healthcare

2:10 – 2:40 pmPain Management in ASCs - Current Ideas to Increase Profits - Amy Mowles, President & CEO, Mowles Medical Practice Management

2:40 – 3:35 pmExhibit Hall Break

3:35 – 4:10 pmNegotiating Implant Payments with Payors and Payments for Multiple Procedures and Other Issues - Marcus Williamson, President Neospine Division, Symbion Healthcare, and Jamie Pearlman

4:15 – 4:45 pmManaging Pain Practice-Protocols, Branding and Other Tips to Improve Profitability - Faisal M. Rahman, MD, CEO, APAC Group of Healthcare Companies

4:45 – 5:20 pmLeadership in the ASC Context - What is Great Leadership and How Can it Make a Difference - Ed Hetrick, President & CEO, Facility Development Management

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To RegisTeR, call (703) 836-5904 • Fax (703) 836-2090 • email [email protected] Register online at https://www.ascassociation.org/june2010.cfm

Track D – Physician Owned hospitals, Spine Cost Comparison1:30 – 2:40 pm

The Best Ideas for Physician Owned Orthopedic and Spine Focused Hospitals Now - Tom Macy, CEO, Nebraska Orthopedic Hospital, John Rex-Waller, CEO National Surgical Hospitals, Tom Michaud, CEO, Foundation Surgical Affiliates, R. Blake Curd, MD, Orthopedic Institute, and Scott Becker, JD, CPA, Partner, McGuireWoods, LLP, Moderators

2:40 – 3:35 PMExhibit Hall Break

3:35 – 4:10 pmLeveraging Engagement to Maximize the Supply Chain - Tom Macy, CEO, Nebraska Orthopedic Hospital and Anna McCaslin, CFO, Nebraska Orthopedic Hospital

4:15 – 4:45 pmConverting an ASC to a Hospital - Russ Greene, RN, CEO, Physicians Specialty Hospital, Fayetteville

4:50 – 5:20 pmAmbulatory Spine Surgery - ASC vs. Hospital Reimbursement Comparison - David Abraham, M.D., Reading Neck & Spine Center

Track e – Orthopedic and Spine Practice Issues, Selling units and Implants1:30 – 2:05 pm

Physician Practice Partnering with Medical Centers - The Good, Bad and the Ugly - Dennis Viellieu, CEO, Midwest Orthopaedics at Rush

2:10 – 2:40 pmKey Ideas for Improving Orthopedic Practice Profits - John Martin, CEO, OrthoIndy

2:40 – 3:35 PMExhibit Hall Break

3:35 – 4:10 pmSelling Units to Physicians - How Are Shares Valued - Todd Mello, Healthcare Appraisers

4:15 – 4:45 pmBuyers Perspective on Selling Your ASC, What ASCs Need to Know Now, Acquisition Strategy, ASC Acquisitions in the Current Economic Environment, How Buyers Value ASCs - Evie Miller, CPA, VP Development, USPI, William Kennedy, SVP Business Development, CFA, Senior Partner, NovaMed, Greg Koonsman, CFA, Senior Partner, VMG Health, Moderator Scott Downing, JD, Partner, McGuireWoods, LLP

4:50 – 5:20 pmMarketing Your ASC and Attracting Patients and Physicians - Mike Lipomi, President, RMC Medstone Capital

Track F – Clinical Quality, governance and Profits1:30 – 2:05 pm

The Impact of Healthcare Reform on ASCs2:10 – 2:40 pm

Clinical and Quality Management of Newer Events in ASCs - Holly Hampe, Director, Patient Safety and Quality, Amerinet

2:40 – 3:35 pmExhibit Hall Break

3:35 – 4:10 pmImproving ASC Performance Through Innovative Governance Techniques - Michael Grant, MD, Center for Ambulatory Surgery, David Myers, MD, Center for Ambulatory Surgery, Ravi Chopra, CEO, The C/N Group

4:15 – 4:15 pm3 Great Ways to Improve Profitability - Nicola Hawkinson, CEO & Founder, Spine Search, Mel Gunawardena, Founder & CEO, Medigain, Inc., Tom Jacobs, CEO, MedHQ, Moderator, Robert Zasa, MSHHA FACMPE, Partner, ASD Management

4:50 – 5:20 pmBuilding Smart in 2010 - John Marasco, Principal & Owner, Marasco & Associates

5:25 – 7:00 PMCocktail Reception, Cash Raffles and Exhibits

Saturday, June 12, 2010 8:00 - 8:15 am

Opening Remarks - Dr. Tom Price, US Congressman

8:15 – 8:45 amWashington Update - Kathy Bryant, JD, President, ASC Association

Concurrent Track Sessions A, B, C, D, and eTrack A8:50 – 9:30 am

Financial Benchmarking - Rob Westergard, Chief Financial Officer, Ambulatory Surgical Centers of America

9:35 – 10:10 amKey Concepts to Managing an Effective Interventional Pain Management Practice and Center - Laxmaiah Manchikanti, MD, CEO & Chairman of the Board, American Society of Interventional Pain Physicians

10:15 – 10:50 amAn Analysis of Clinical Outcomes for Spine Procedures Performed in ASCs - Ken Pettine, MD, Loveland Surgery Center

10:55 – 11:30 amRecruiting & Syndication of Orthopedic, Pain Management and Spine Physicians - Updates, Challenges and Strategies - Kenny Spitler, Senior VP Development, Healthmark Partners

11:35 – 12;10 pmA Successful Spine Surgery Center That Includes Neuro and Orthopedic Spine Surgeons, Lessens Learned, Problems to Avoid - Thomas Forget, MD, Neurosurgeon

12:15 – 1:00 pm4 Key Topics (1) Healthcare Reform and ASCs, (2) Should You Convert Your ASC to a HOPD (Hospital Outpatient Department) - The Pros and Cons and Key Issues to Consider, (3) Safe Harbors and (4) Out of Network - Scott Becker, JD, CPA, Partner, and Amber Walsh, JD, Attorney, McGuireWoods, LLP

Track B8:50 – 9:30 am

The 7 Best Ways to Increase ASC Profits Now - Larry Taylor, CEO, Practice Partners in Healthcare

9:35 – 10:10 amThe 10 Statistics Your ASC Should Examine Each Week - Michael Rucker, COO, Surgical Care Affiliates

10:15 – 10:50 amSurgeon Owned Implant Distrbution- John Steinmann, DO, Founder & CEO, Synergy Surgical Technologies

10:55 – 12:10 pmCase Costing and Benchmarking for Orthopedic, Spine and Pain Driven ASCs - Susan Kizirian, COO, Ambulatory Surgical Centers of America and Anne Geier, VP, Ambulatory Surgical Centers of America

Track C 9:35 – 10:10 am

Current Business, and Clinical Thoughts on Spine Procedures in an ASC - Richard A. Kube II, MD, FACSS, Owner/CEO, Prairie Spine & Pain Institute, and Bryan Zowin, President, Physician Advantage

10:15 – 10:50 amHow Changes in the Reimbursement Market will Change the Orthopedic, Spine and Pain Management Device Market -Carl R. Noback, MD, Medical Director, Innovative Pain Solutions, LLC

10:55 – 11:30 AMManaging Orthopedic Device Costs in the ASC - John Cherf, MD MPH MBA, OrthoIndex

11:35 – 12:10 pmBack to the Future - Hospital Employed Physicians, How Big Will This Be? - Les Jebson, Executive Director, University of Florida, Orthopaedics and Sports Medicine Institute

Track D 10:15 – 10:50 am

Current Challenges in Financing ASCs and Financing Acquisitions and Expansions - Robert Westergard, CPA, CFO, Ambulatory Surgical Centers of America and Mike Karnes, CFO Regent Surgical Health, Moderator, Anthony Mai, SVP Healthcare Finance, Sun National Bank

10:55 – 11:30 amDoes a Captive Insurance Company Make Sense for your Large Orthopedic or Spine Practice, Pat Sedlack, SVP, Marsh McLennan, J. Brian Jackson, Partner, McGuireWoods LLP

11:35 – 12:10 pmUniknees in ASCs - Walter Shelton, MD, Mississippi Surgical Center

Track e10:15 – 10:50 am

5 Steps to a More Prosperous ASC- How to Improve Billing and Coding - Kim Woodruff, VP Corporate Finance and Compliance, Pinnacle III

10:55 – 11:30 amKey Concepts on the Smart Use of Information Technology in ASCs - Marion Jenkins, CEO & Founder, QSE Technologies, Craig Veach, SVP Operations, Amkai

11:35 – 12:10 pmMaximizing the ROI on Technology Use and Investments - Sean Benson, Co-Founder and Vice President of Consulting, ProVation Medical

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To join the asc association call (703) 836-8808

For more information, call (800) 417-2035 or email [email protected]

if you would like to sponsor or exhibit at this event, please call (800) 417-2035.

register by may 1, 2010 and SAVe!

Great topics and speakers focused on key business, financial, clinical and legal issues facing ASCs – • 91 Sessions• 112 Speakers

8Th AnnuAl ConferenCe from ASC CommuniCATionS And The AmbulATory Surgery foundATion

Orthopedic, Spine and Pain Management-Driven ASC Conference

Improving Profitability and Business and Legal Issues

To register, contact the Ambulatory Surgery Foundation

(703) 836-5904 • Fax (703) [email protected]

Register Online:

https://www.ascassociation.org/june2010.cfm

• 5 Keys to Maximizing an Orthopedic Driven ASC’s Returns in a Tough Economy - Brent Lambert, MD, FACS, President & Owner, Ambulatory Surgical Centers of America

• The 7 Best Ways to Increase ASC Profits Now - Larry Taylor, CEO, Practice Partners in Healthcare

• The Changing Future of Health Care in the United States - Joe Flower, Healthcare Futurist

• The Politics of Health Care Reform - Ron Brownstein, Political Director, Atlantic Media Company

• Key Concepts to Improve the Profitability of Spine Programs - John Caruso, MD, Jim Lynch, MD, Founder Surgery Center of Reno, Moderator, Jeff Leland, Managing Director, Blue Chip Surgical Center Partners

• ASC Transactions, Current Market Analysis and Valuations, - Greg Koonsman, Senior Partner, VMG Health

• Establishing an ASC - 10 Keys for Success - Bill Southwick, President & CEO, Healthmark Partners

• A National View of Political Advocacy Efforts and ASCs - Andrew Hayek, CEO, Surgical Care Affiliates, Chairman, ASC Coalition

• Washington Update - Kathy Bryant, JD, President, ASC Association

• Building Outstanding and Profitable Pain Management Programs, Making Pain Profitable - Robin Fowler, MD, Executive Director & Owner, Interventional Spine & Pain Management

• How to Effectively Measure and Track Patient Quality - David Shapiro, MD, Director of Medical Affairs, AMSURG

• 5 Tips for Managing Anesthesia in Your ASC - Marc Koch, MD, President & CEO. Somnia Anesthesia

• Physician Practice Partnering with Medical Centers - The Good, Bad and the Ugly - Dennis Viellieu, CEO, Midwest Orthopaedics at Rush

• Improving ASC Performance Through Innovative Governance Techniques - Michael Grant, MD, Center for Ambulatory Surgery, David Myers, MD, Center for Ambulatory Surgery, Ravi Chopra, CEO, The C/N Group

• Key Concepts to Managing an Effective Interventional Pain Management Practice and Center - Laxmaiah Manchikanti, MD, CEO & Chairman of the Board, American Society of Interventional Pain Physicians

• Financial Benchmarking - Rob Westergard, Chief Financial Officer, Ambulatory Surgical Centers of America

• How Changes in the Reimbursement Market will Change the Orthopedic, Spine and Pain Management Device Market -Carl R. Noback, MD, Medical Director, Innovative Pain Solutions, LLC

To RegisTeR, call (703) 836-5904 • Fax (703) 836-2090 • email [email protected] Register online at https://www.ascassociation.org/june2010.cfm

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REGiStRAtioN foRM Photocopies are acceptable. Please print or type below. Please use a separate registration form for each attendee.

RegISTRATION FeeSannual conFeRence & exhibiTsReceive multiple registrant discount(s). The more people you send, the greater discount you receive. The prices listed below are per person. Your registration includes all conference sessions, materials and the meal functions.

MAIN CONFeReNCe ONLY FeeS AMOuNT FeeS AMOuNT (Before 5/1/10) (After 5/1/10)

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Subtract $100 per Attendee if either a Paid ASC Association Member or Becker’s ASC Review Paid Subscriber (-$100) $ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

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hOTeL ReSeRVATIONSWestin Hotel has set aside special group rates for conference attendees. To make a reservation, go to http://www.starwoodmeeting.com/Book/ orthopedic2010

The Westin 909 N. Michigan AvenueChicago, IL 60611(312) 943-7200Group Room Rates: $289

ASC ASSOCIATIONFor ASC Association membership information please call (703) 836-8808, or visit www.ascassociation.org

CONFeReNCe QueSTIONSFor additional information or questions regarding the conference please contact Ambulatory Surgery FoundationPhone: (703) 836-5904Fax: (703) 836-2090email: [email protected]

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geNeRAL INFORMATIONRegISTRATION INFORMATION

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Visit www.beckersasc.com.

Orthopedic, Spine and Pain Management-Driven ASC ConferenceImproving Profitability and Business and Legal Issues

T h e 8 T h A n n u A l C o n f e r e n C e f r o m A S C C o m m u n i C A T i o n S A n d T h e A m b u l A T o r y S u r g e r y f o u n d A T i o nJunE 10-12, 2010

W E S T I N H O T E L • C H I C A G O , I L L I N O I S

To regiSTer, CAll (703) 836-5904

RegISTeR ONLINe AT: https://www.ascassociation.

org/june2010.cfm

TO RegISTeRcompleTe RegisTRaTion FoRm and mail oR Fax as Follows:Mail: Make checks payable to Ambulatory Surgery Foundation June Conference and mail to: Ambulatory Surgery Foundation Meeting Registration, 1012 Cameron St., Alexandria, VA 22314Fax: Fax registration form with credit card information to (703) 836-2090Call: Call (703) 836-5904 to register by phoneEmail: [email protected] site: www.BeckersASC.com Cancellation Policy: Written cancellation requests must be received by May 1, 2010. Refunds are subject to a $100 processing fee. Refunds will not be made after this date.

Multi-Attendee Discount Policy: To be eligible for the discount, your ASC must be registered at one time and work at the same address. Just copy the registration form for each attendee. Employees from a 2nd location are not eligible for the discount.

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31Sign up for the FREE Becker’s ASC Review E-Weekly at www.beckersasc.com or call (800) 417-2035

Brian Mathis, vice president of strategy at Surgical Care Affiliates in Birmingham, Ala., discusses surgical specialties with the highest profitability in ASCs and how to achieve profitability.

orthopedics. This specialty shows consistently strong profitability, pro-vided that the ASC can manage supply costs and negotiate payor contracts effectively. SCA has aggregated the spending of 130 centers, achieving 15-20 percent supply cost savings relative to independent centers. Such savings can make all the difference in ASC profitability.

Because of the high volume of orthopedic procedures and the heavy use of implants, there must be a sophisticated contract negotiation strategy that ensures appropriate payment for each procedure. This requires understanding the profitability of individual case types and, where necessary, structuring contracts to provide carve-outs from stan-dard fee schedules.

otolaryngology (Ent). At SCA we are very focused on helping each of our partnerships achieve success and use a data-driven process to help optimize decision-making. When one of our centers has open block time or is looking to optimize their case mix, we provide them data on profitability per minute by specialty, and ENT is at the top of the list to pursue.

We foresee slow but steady volume growth for this specialty. The implant and supply costs are generally less of a concern for ENT than for or-thopedic cases. While there is rarely enough ENT volume to develop a single-specialty center, otolaryngology is a terrific addition to multi-spe-cialty ASCs. Unlike faster-paced procedures like GI or eye, which require a single-specialty center or a focused area within your multi-specialty center, ENT cases can be intermingled with a wide variety of other cases and still be efficient and profitable.

gastroenterology. GI is very different from ENT. It is a low-margin specialty in which profitability depends almost entirely on utilization. Sin-gle-specialty GI centers with five or six active physicians and tight man-agement of labor and supply costs are attractive partnerships for us. In fact, simply the management of supply costs can make all the difference

between average and excellent returns. This applies to individual centers or even ones owned by small chains.

Utilization is the key in GI, so we try to determine if we can help our physi-cians grow their volumes through joint marketing efforts or other means. The volume outlook for GI is stable and there will continue to be down-ward rate pressure, so ASCs need to keep utilization high.

Bariatrics. While this specialty is a very small part of our portfolio, we know it can be profitable and the volume outlook is terrific. Bariat-rics is shifting to the outpatient setting, making ASCs an attractive site to do these procedures. Not all insurers cover ASC-based bariatrics but coverage is increasing. Some of our centers have successfully negoti-ated with payors by forming a team of physicians, the center adminis-trator and our corporate managed care team. They meet with the payor and present data on both the clinical and financial advantages of ASCs. The self-pay market is significant for these procedures and is likely to recover with the economy.

ASCs do not necessarily need to create and manage total care programs in order to add bariatric procedures to their case mix. One alterative is partnering with a company that already manages a total care program and would be attracted to a high quality, lowering cost at site of service. An-other is relying on physicians to manage or engage in their own total care programs. The latter is typically more attractive from a profitability stand-point, but can be tougher to initiate.

spine. ASCs can handle specific types of spine cases from orthopedic surgeons and neurosurgeons. The volume of procedures that can be done safely in an ASC will continue to grow as technology improves. Cost sav-ings for payors shifting these cases from hospitals to ASCs is enormous, but the shift requires significant payor education. Because spine implants are so expensive, the contracting team must make sure payments are appro-priate. Each case will represent substantial income if contracting goals are met. Only two to three spine surgeries a week are needed to make a great contribution to a multi-specialty center. n

Contact Brian Mathis at [email protected].

Most Profitable Specialties for ASCs With Brian Mathis of Surgical Care Affiliates

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2010 CPT Coding Changes Analysis for Gastrointestinal Services in ASCsBy Susan Garrison, executive vice president for healthcare consulting services, Magnus Confidential

CPT copyright 2008 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.

Excision of rectal tumor ▪ 45171 — Excision of rectal tumor, transanal approach; not including muscularis propria (i.e., partial thickness). The reimbursement is approx-imately $565.

▪ 45172 — Excision of rectal tumor, including muscularis propria (i.e., full thickness). The re-imbursement is approximately $960.

Codes 45171 and 45172 are new, replacing the now deleted CPT 45170. CPT 45171 is for partial-thickness excision of rectal wall tumors, which are typically small or benign and not ame-nable to endoscopic excision. CPT 45172 is re-ported for full-thickness excision of rectal wall tumors, which are typically larger than those re-moved via partial thickness.

Anus section of CPT surgery There are extensive and important changes within the anus section of CPT surgery. The instruction-al guidelines, presented here, are new and assist in gaining a snapshot of the important changes.

▪ 46083 — Incision of thrombosed external hemorrhoid

▪ 46200 — Fissurectomy, including sphinctero-tomy, when performed.

This code has been revised with the removal of “with or without” spincterotomy, because a spincterotomy is typically performed with this pro-cedure. The reimbursement is approximately $826.

▪ 46221, 46945, 46946 — Ligation of internal hemorrhoids

▪ 46250-46262, 46320 — Excision of internal and/or external hemorrhoids

▪ 46500 — Injection of hemorrhoids

▪ 46930 — Destruction of internal hemorrhoids by thermal energy

▪ 46999 — Destruction of hemorrhoids by cry-osurgery.

▪ 46947 — Hemorrhoidopexy

Hemorrhoidectomy procedures ▪ 46221 — Hemorrhoidectomy, internal, by rub-

ber band ligations. This reimbursement pays $105.

▪ 46945 — Hemorrhoidectomy, internal, by liga-tion other than rubber band; single hemorrhoid column/group. The reimbursement is approxi-mately $132.

▪ 46946 — 2 or more hemorrhoid columns/groups. The reimbursement is approximately $503.

▪ 46250 — Hemorrhoidectomy, external, 2 or more columns/groups. The reimbursement is approximately $842.

▪ 46255 — Hemorrhoidectomy, internal and ex-ternal, single column/group

▪ 46260 — Hemorrhoidectomy, internal and ex-ternal, 2 or more columns/groups.

Codes 46221, 46945 and 46946 are for coding internal hemorrhoidectomy procedures. CPT 46221 is for rubber band ligation and CPT 46945/46 are using other than rubber band liga-tion. Codes 46945/46 have been relocated from the suture section since it does not involve sutures. These codes, along with CPT 46250, 46255 and

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46260, are revised to note the number of column. Note: See the illustration in the CPT codebook.

Lastly, a cross-reference note has been included to direct users to the un-listed code 46999 to identify removal of a single external-only column via hemorrhoidectomy.

Excision of papilla or tags▪ 46220 — Excision of single external papilla or tag, anus. The reimburse-ment is approximately $503.

▪ 46230 — Excision of multiple external papillae or tags, anus. The reim-bursement is approximately $800.

Because these two codes involve similar work, the language for CPT 46230 has been changed to complement the language for code 46220. CPT 46220 can be used to identify single papilla or tag removal while CPT 46230 can be used to identify removal of multiple tags or papillae.

Surgical treatment of anal fistula▪ 46275 — Surgical treatment of anal fistula (fistulectomy/fistulotomy); intersphincteric. The reimbursement is approximately $842.

▪ 46280 — Transsphincteric, suprasphincteric, extrasphincteric or multiple, including placement of seton, when performed. The reimbursement is ap-proximately $871.

Code 46275 has been revised by replacing the term “submuscular” with “intersphincteric” to more specifically define the service performed. On the other hand, code 46280 was changed to better describe procedures included as “complex” treatment of an anal fistula, but “complex” has been replaced with the phrase “transsphincteric, suprasphincteric, extras-phincteric.”

Repair of anorectal fistula▪ 46707 — Repair of anorectal fistula with plug – that is, a porcine small intestine submucosa, or SIS. The reimbursement is approximately $1,209.

While code 46707 is new, this is not a new procedure. It replaces Category III code 0170T. This is for the surgery that — through a minimally-inva-sive, sphincter-sparing option — treats anal fistulae. In this procedure, the fistula tract of an SIS-derived “plug” is placed so that it spans the entire length of the fistula tract from the internal to the external opening to sup-port healing and closure. The plug is sutured in place at both the internal and external openings.

Placement of interstitial device▪ 49411 — Placement of interstitial device(s) for radiation therapy guid-ance (e.g., fiducial markers, dosimeter), percutaneous, intra-abdominal, intra-pelvic (except prostate), and/or retroperitoneum, single or multiple. The reimbursement is approximately $281.

This is a new code to describe placement of an interstitial device, such as a fiducial marker or dosimeter, using any of a varying number of approaches. The interstitial device is placed for the purpose of radiation therapy guid-ance. Code 49411 is reported only once, regardless of the number of de-vices placed.

Repositioning of a feeding tube▪ 43761 — Repositioning of a naso- or oro-gastric feeding tube, through the duodenum for enteric nutrition. The ASC reimbursement is approxi-mately $342.

This code has been changed to simply highlight that it is to be used for re-positioning of the naso- or oro-gastric feeding tube. The 2009 description did not include naso- and oro-.

FYI: Changed laparoscopy codes (not cov-ered in an ASC)▪ 43281 — Laparoscopy, surgical, repair of paraesophageal hernia, includes fundoplasty, when performed; without implantation of mesh

▪ 43282 — Laparoscopy with implantation of mesh

▪ 43775 — Laparoscopy, surgical, gastric restrictive procedure; longitudinal gastrectomy

How to apply this knowledge1. Learn which codes have been deleted, added or changed.

2. For any charge tickets with obsolete codes, cross through the deleted codes so if an older charge ticket is used, it doesn’t contain an outdated code that will be rejected.

3. Study the new codes and determine what kind of physician education or querying might be needed. Coders based at the ASC might want to contact staff at the physician’s office to see which new codes would most impact the practice. Then determine which of those will be performed in the ASC.

4. If you know of any 2009 cases that might fit the new codes, pull the documentation to see if it is appropriate for the new codes. This also ap-plies to codes with changed descriptions. You might find there are areas where documentation needs improvement, in which case you’ll need to work on that with the physicians.

5. Determine what financial impact the changes will have on your center. Do you need to re-focus your marketing to physicians and the community? n

Contact Susan Garrison, executive vice president for healthcare consulting services at Magnus Confidential in Dawsonville, Ga., at [email protected].

The information provided should be utilized for educational purposes only. Facilities are ultimately responsible for verifying the reporting policies of individual commercial and MAC/FI carriers prior to claim submissions.

to suBsCrIBE to the FREE Becker’s ASC E-weekly,

go to www.BeckersAsC.com

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1. Increasing government oversight. David Kwiat, MD, an ophthalmologist and part-owner of Fulton County Ambulatory Surgery Center in Johnstown, N.Y., predicts that ASCs will be additionally pressed for resources due to additional governmental control and oversight coupled with decreasing reimbursements.

“This provides a situation that decreases the profit margin of an ASC as the government pays less and their reporting requirements increase our overhead through the need to hire more staff,” he says.

2. different survey standards. Craig J. Bak-ken, CMPE, CEO of Rocky Mountain Gastro-enterology Associates and Endoscopy Centers, says one major change affecting ASCs in 2010 will be new survey requirements that reflect the new CMS Conditions for Coverage for ASCs.

“ASCs across the country are going to scramble to comply with state survey standards for Medi-care recertification and state licensure where ap-plicable as the new standards associated with the updated Conditions for Coverage are utilized in

surveys in 2010,” he says. “Endoscopy centers will be challenged with new requirements for history and physicals prior to the date of the procedure when practicing “open endoscopy” scheduling.”

3. Increased pressure on medical sup-pliers to reduce costs. If healthcare fa-cilities continue to receive pressure to cut costs, additional pressure to reduce these costs will be passed on to medical suppliers and manufactur-ers whose products can play a large role in case costs, predicts Vicki Merrick, RN, CASC, direc-tor of operations for Health Inventures.

4. Continued tight credit market. Corbett Jackson, administrator of Sutter Roseville En-doscopy Center in Rosville, Calif., predicts that continued tight credit markets will keep new ASCs from breaking ground and existing cen-ters from expanding or adding new equipment. However, she says this may leave many existing centers poised for a successful 2010 if they are able to appropriately oversee payor mix and col-lections.

“Tightly managing payor mix and collecting pa-tient payments before service will remain a pri-ority as high unemployment percentages remain and patient deductibles and coinsurances con-tinue to rise,” she says. “Just like it was 40 years ago when the first ASC opened, centers that are able to grow volume will win in 2010.”

5. Continued interest in joint ventures with hospitals. Increasing oversight and de-creasing reimbursement will continue to drive ASCs toward considering joint ventures with hospitals, says Dr. Kwiat.

“The higher reimbursements and preferential government treatment that hospitals receive has made [considering a hospital joint venture] the best strategic move for us at this point in time,” he says. “I think given the current environment the trend may be toward consolidation and joint ventures in the future regardless.” n

Contact Lindsey Dunn at [email protected].

5 Predictions for ASCs in 2010By Lindsey Dunn

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Here are 10 ophthalmology-driven ASCs to know. To view profiles of and learn more about these organizations, visit

www.BeckersASC.com. Note: Facilities are listed alphabetically by facility name.

Dulaney Eye Institute (Towson, Md.).

Eye-Q Vision Care (Fresno, Calif.).

Eye Center of Columbus (Ohio).

Laser and Surgical Services at the Center for Sight (Sarasota, Fla.).

Mattax-Neu-Prater Eye Center and Surgery Center (Springfield, Mo.).

New Vision Cataract Center (Norwalk, Conn.).

Northern Virginia Eye Surgery Center (Fairfax, Va).

St. Luke’s Cataract and Laser Institute (Tarpon Springs, Fla.).

Surgical Eye Center of Morgantown (W. Va.).

Winchester (Va.) Eye Surgery Center. n

Here are 28 of the best gastroenterologists in America. To view pro-files of and learn more about these physicians, visit www.Becker-sASC.com. Note: Physicians are listed alphabetically by last name.

Fernando Bermudez, MD (Eastside Endoscopy Center, St. Clair Shores, Mich.)

Robert “Bruce” Cameron, MD (Endoscopy Center at Bainbridge, Chagrin Falls, Ohio)

Delbert L. Chumley, MD (Gastroenterology Consultants, San Antonio)

Stephen Deal, MD (Carolina Digestive Health Associates, Charlotte, N.C.)

Thomas Deas Jr., MD (Fort Worth Endoscopy Center, Fort Worth, Texas)

M. Brian Fennerty, MD (Oregon Health & Science University, Portland, Ore.)

David Fleischer, MD (Mayo Clinic Arizona, Phoenix)

James T. Frakes, MD (Rockford Gastroenterology Associates, Rockford, Ill.)

Gary Gitnick, MD (University of California, Los Angeles)

Gail A. Hecht, MD (University of Illinois at Chicago)

Reed B. Hogan, MD (GI Associates and Endoscopy Center, Jackson, Miss.)

David A. Johnson, MD (Eastern Virginia Medical School, Norfolk, Va.)

Anthony Kalloo, MD (John Hopkins University, Baltimore)

Philip O. Katz, MD (Albert Einstein Medical Center, Philadelphia)

James S. Leavitt, MD (Miami Endoscopy Center, Miami)

Arthur McCullough, MD (Cleveland Clinic, Cleveland)

Steven J. Morris, MD, JD (Atlanta Gastroenterology Associates, Atlanta)

Irving Pike, MD (Gastroenterology Consultants, Virginia Beach, Va.)

Daniel K. Podolsky, MD (Massachusetts General Hospital, Boston)

Douglas K. Rex, MD (Indiana University, Bloomington, Ind.)

Robert A. Sable, MD (Riverdale Gastroenterology and Liver Diseases, Bronx, N.Y.)

Robert S. Sandler, MD (University of North Carolina, Chapel Hill, N.C.)

Harry Sarles Jr., MD (Digestive Health Associates of Texas, Garland, Texas)

Leonard Stein, MD (Long Island Center for Digestive Health, Long Island, N.Y.)

Ian L. Taylor, MD (SUNY Downstate Medical Center, Brooklyn, N.Y.)

Jacques Van Dam, MD, PhD (Stanford University, Stanford, Calif.)

Kenneth K. Wang, MD (Mayo Clinic, Rochester, Minn.)

James J. Weber, MD (Texas Digestive Disease Consultants, Dallas) n

10 Ophthalmology-Driven ASCs to KnowBy Leigh Page

28 of the Best Gastroenterologists in America

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1. Increasing volumes as the population ages. ASCs can expect an increase in demand for ophthalmic surgical procedures as Baby Boom-ers begin to age, says Richard Lee, MD, an ophthalmologist at Eastbay Eye Specialists in Oakland, Calif., who performs cases at EyeMD Laser and Surgery Center, also in Oakland, and is a member of the American Acad-emy of Ophthalmology.

“The number of Medicare patients is expected to double in number over the next two decades as Baby Boomers begin to age, which will keep ophthalmology very busy,” says Dr. Lee. “Surgical volumes [for ophthalmology] are expected to increase 30-50 percent over those years.”

2. Continued focus on efficiency. ASCs that continue to focus on efficiency should experience continued success, say several ophthal-mologists.

“Improving efficiencies and an increased focus on cost containment will allow ASCs to keep up with pressures of continued reduced reimburse-ments,” says Cary Silverman, MD, an ophthalmologist at River Drive Sur-gery Center in Elmwood Park, N.J.

ASCs’ costs are traditionally lower than hospitals for ophthalmology cases, and the savings ASCs offer should continue to bring eye cases to ASCs.

“The average facility fee at an ASC is $1000-$1,100, with hospital fees run-ning up to three times as much in some cases, says Dr. Lee.

3. growing case loads slowly. Even adding only one additional case per day can have a big impact on profitability.

Dr. Lee says his ASC worked to add an additional case per day for subse-quent years, allowing volumes to grow slowly.

“There is this pressure to attract only the best and the fastest physicians for an ASC, and that’s fine until you run out of doctors,” says Dr. Lee. “You don’t need to do that. As you become more efficient, adding one more case a day can build your volumes over time.”

Because of the principle of marginal costs, Dr. Lee’s ASC was able to gen-erate a 60 percent increase in profitability from just a 16 percent increase in surgical volume in 2009, he says.

Becker’s ASC Review ChannelsVisit the following Channels found on www.BeckersASC.com to find news and analysis on critical surgery center issues.1. AsC Turnarounds: Ideas to Improve Performance — Sponsored by ASCOA (www.ascoa.com;

(866) 98-ASCOA)

2. Valuation Issues for asCs and hospitals — Sponsored by VMG Health (www.vmghealth.com; (214) 369-4888)

3. AsC Coding, Billing and Collections — Sponsored by AdvantEdge Healthcare Solutions (www.ahsrcm.com; (877) 501-1611)

4. Anesthesia — Sponsored by Somnia Anesthesia Services (www.somniaanesthesiaservices.com; (877) 476-6642)

5. gastroenterology and Endoscopy — Sponsored by Physicians Endoscopy (www.endocenters.com; (877) 442-3687)

6. stark Act and Anti-Kickback statute7. AsC Conferences and events8. hospital and health system Conferences and Events9. Becker’s hospital review / Becker’s asC review — 50 Best Places to work 201010. america’s 10 Best hospitals and 20 Best Community hospitals11. AsC Poll

7 Trends and Opportunities for Ophthalmology in Surgery CentersBy Lindsey Dunn

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4. Multi-focal implants with cataract procedures. Physicians can offer improved patient outcomes and increase ASC revenue by offering patients a high-end muti-focal implant while undergoing cataract surgery, says Peter Colquhoun, MD, an ophthalmologist at Southwest Michigan Eye Center in Battle Creek, Mich., and a physician-owner of Brookside Surgery Center, also in Battle Creek.

Although the price of lens implants are bundled into payments for cata-ract surgery, if a physician and patient select a higher-end multi-focal im-plant, such Alcon’s ReStor IOL or Abbott’s ReZoom IOL, ASCs, at least in Michigan, can balance bill a patient for the additional cost of the lens, says Dr. Colquhoun. Balancing billing allows for cataract patients, who are often covered by Medicare, to receive the highest-level technology — a technol-ogy that Medicare would otherwise deny, he says.

5. Retinal procedures. While cataract surgery remains the most poplar ophthalmic procedure within the ASC setting, expanding to retinal proce-dures, such as pars plana vitrectomy, can be profitable if centers are willing to invest in the equipment needed to perform these cases. Shorter proce-dure times and less-invasive techniques have made retinal procedures now appropriate for the ASC setting.

“There is a long history of the ASC being mainly relegated to cataract sur-gery, with retina surgery traditionally being done in hospitals,” says Pravin Dugel, MD, an ophthalmologist at Retinal Consultants of Arizona in Phoe-nix who performs cases at Spectra Eye Institute in Sun City, Ariz., and member of the AAO. “Changes in instrumentation and reimbursement have made retinal procedures applicable for the ASC-setting, and that’s where growth [for ASCs] lies.”

Equipping an ASC for retinal procedures may cost as much as $200,000-$400,000, but can be “fantastic investment” if the physicians are committed and dedicated to the program, says Dr. Dugel.

6. Glaucoma procedures. Glaucoma procedures may also be a way for ophthalmology service lines to expand their offering and attract more cases.

Dr. David Kwiat, MD, FACS, an ophthalmologist at Kwiat Eye and La-ser surgery who practices at Fulton County Ambulatory Surgery Center in Johnstown, N.Y., says his ASC is focusing on adding glaucoma procedures such as cyclophotocoagulation.

“For an ASC like ours that focus mainly on anterior segment surgery, add-ing glaucoma procedures should prove beneficial,” says Dr. Kwiat. “The patient benefits as well with a less invasive glaucoma treatment option and less postoperative difficulties.”

Dr. Colquhoun says his practice is considering recruiting a glaucoma spe-cialist in the coming year, who could then perform some procedures such as implantations of mini shunts to treat glaucoma, at the ASC.

7. oculoplastics. Although the volume of plastic surgery has dropped dramatically with the economy, Dr. Colquhoun expects some of that busi-ness to rebound in 2010. “With the economy improving in the next year, we are hoping lid corrections and other elective ophthalmic procedures, such as LASIK, will increase,” he says. n

Contact Lindsey Dunn at [email protected].

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10 Statistics and Facts About Ophthalmology and Ophthalmologists 1. There are approximately 23,861 ophthal-mologists in the United States, according to the American Medical Association.

2. The median salary for ophthalmologists is $325,384, and the average starting salary for ophthalmologists is $215,000, according to the American Medical Group Association’s 2009 AMGA Medical Group Compensation and Financial Survey. Here are the average salaries of ophthal-mologists by region:

• East — $285,866• West — $321,726• South — $310,368• North — $354,500

3. Ophthalmologists can perform nearly 100 percent of their procedures in the ASC set-ting, according to Satish Modi, MD, an oph-thalmologist and founding owner of Dutchess Ambulatory Surgery Center in Poughkeepsie, N.Y. Some of the more profitable ophthalmic procedures performed in the ASC setting in-

clude phacoemulsification, or cataract remov-al, phacoemulsification with intraocular lens implantation and certain glaucoma and retina treatments, according to Dr. Modi.

4. Ophthalmology represents 18 percent of the average case volume in surgery centers, second behind GI/endoscopy (25 percent). The average surgery center performs 4,869 cases annually, which would average to around 876 ophthalmol-ogy cases annually, according to VMG Health’s 2009 Intellimarker.

5. Cataract surgery is one of the most com-mon procedures in the United States, with more than 22 million Americans age 40 and older affected by cataracts. By age 80, more than half of all American will have cataracts and had cataract surgery, according to the National Eye Institute. The number of cata-ract cases is expected to increase in the next 10 years as a result of the aging baby boom generation, according to David Kwiat, MD,

an ophthalmologist and part-owner of Fulton County Ambulatory Surgery Center in John-stown, N.Y.

6. The average total time a patient undergoing a cataract removal spends in an ambulatory facil-ity is 117 minutes (from check-in to discharge), according to the Accreditation Association for Ambulatory Health Care Institute for Quality Improvement’s Performance Measurement and Bench-marking in Ambulatory Organizations survey. The average time from check-in to the beginning of the procedure (incision) is 81 minutes. The aver-age procedure takes 14 minutes and the average recovery time is 22 minutes.

7. The average gross charges for ophthalmology cases performed in the ASC are $5,385. The av-erage case revenue is $1,226, according to VMG Health’s 2009 Intellimarker.

8. Here is the average 2008 Medicare sub charge (submitted charges divided by allowed services),

© 2010 Allen Medical Systems Inc. All Rights Reserved 1. Lynch, J. (2009, May). Is It Time to Add Spine? Outpatient Surgery.Jackson is a trademark of Mizuho Orthopaedic Systems, Inc. D-770463-A3 February 11, 2010

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average allow charge (Medicare-allowed charges divided by allowed services, including co-pays and deductibles paid by patient), and average payment (Medicare payments divided by allowed services, not including co-pays and deductibles paid by patient) for two ophthalmology proce-dures commonly performed in ASCs.

CPT copyright 2008 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.

Post-cataract laser surgery (CPT 66821)• average sub charge: $1,019 • average allow charge: $282 • average payment: $221

Cataract removal, insertion of lens (CPT 66984)

• average sub charge: $2,990 • average allow charge $964 • average payment: $763

9. Ophthalmology cases have the highest rate of incorrect procedures within the operating room, according to a study in the Nov. 2009 issue of the Archives of Surgery. The study found that 1.8 adverse events were reported per 10,000, more so than any other surgical specialty.

10. There are seven recognized subspecialties

within ophthalmology, according to the Ameri-can Academy of Ophthalmology. They include: cornea and external disease, glaucoma, neuro-

ophthalmology, ophthalmic pathology, ophthal-mic plastic surgery, pediatric ophthalmology and vitreoretinal diseases. n

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Drive ASC Denials Down to Reduce Costs and Drive Revenue upBy Bill Gilbert, vice president of marketing, and Brice Voithofer, vice president of ASC and anesthesia services, AdvantEdge Healthcare Solutions

Billing is one of the most critical (and often overlooked) processes in the success of every surgery center. Most people involved

in directing and operating ASCs know that billing and coding require daily attention to detail, trained staff and a solid understanding of ever-changing payor “rules.” Yet, somehow, the importance of “denial management” is still not understood very well, even though it is a trendy buzzword.

In fact, denial management is treated in many different ways based on the construct of a cen-ter’s business functions. Here is one successful approach for managing and preventing denials.

Denial management as a comprehensive processBefore we jump into suggestions, we’d like to make some observations. First, it appears that some centers view denial management as the “catch all” for unresolved claims. This attitude

creates a negative perception, and makes it un-inviting for staff members to dig in and resolve open issues, which can lead to a larger pile of open issues.

Other centers appoint senior staff members to deal with denials and make sure they are resolved quickly. But many of these centers don’t have metrics in place for denial rates or an under-standing of what causes the denials. Appointing senior staff members to handle denials is the proper approach if the end goal is to improve denial processes, but it is not a good use of time if they are merely correcting a denial and re-sub-mitting the claim for payment.

We at AdvantEdge prefer to take a comprehen-sive approach. From that perspective, “denial management” appears to be a misleading label that should be replaced by “denial prevention and management.” How did we come to this approach? Like everyone else, we started with

a number of denials to resolve. Then, we real-ized the denials could be viewed as “defects,” leading us to a holistic approach using basic quality improvement or Total Quality Manage-ment techniques.

The first step in this approach is to analyze the causes. In our case, we analyzed a sample of 30,000 claims and the resulting 1,500 “first pass” denials and found that, like most analyses of this type, an “80/20” pattern emerged: 80 percent of the denials were a result of approximately 20 percent of the causes. For example, “patient not insured” (a claim incurred before/after coverage) was at the top of the list. In most cases, this was caused by incorrect insurance information, such as transposed digits, old insurance card, etc.

From looking at the root causes, it became clear that many denials are preventable — but not by the billing department. Everyone knows that accurate billing starts the first time a patient in-

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The paper chase ends here.zCHART EMR means the end of busy work. No more chart assembly. No more filing or re-filing. No more copying. Put an end to paper handling. Paper charts create an endless confusion of forms and procedures. Confusion leads to inefficiencies and mistakes. Put an end to your paper chase with zCHART EMR.

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teracts with the center. But showing hard data with a preventable denial rate (or error rate) of 5-10 percent or more makes the costs of the er-rors and the benefit of denial prevention much more tangible.

Now, let’s consider the costs associated with re-solving a denial caused by incorrect insurance information. First, the billing staff receives the denial and looks for the specific data elements required to resubmit the claim. When they real-ize the insurance information submitted matches the center’s records, it’s time to call the patient, assuming there is a reliable phone number, and wait for a call back. Or, the staff may call the referring physician’s office for the accurate data. Once the correct information is obtained, the claim can be updated and resubmitted. Let’s add up the costs: nearly an hour of billing staff time ($20 with conservative loading); 10 or 15 min-utes for the referring physician’s staff ($5); and three to six weeks delay in getting paid ($30 for one month’s delay on a $3,000 payment). The to-tal: over $50 per “simple” error. If the error rate is five percent — which is actually lower than the average for many centers — for a center that does 300 cases per month, the center is incurring an annual cost penalty of $9,000. Plus, don’t for-get the referring physician’s costs, the impact on

patient satisfaction from the follow-up calls, de-layed cashflow and an increase in days in A/R.

Considering the costs and the nature of these potentially preventable denials, it becomes obvi-ous that improving the quality of information at the front-end will result in significant benefits on the back-end.

3 best practices for improvementHere are three practical steps that we have found successful to bring about significant improvement.

1. Awareness and training. This obviously includes the front-end staff — especially schedul-ers and intake personnel. But, it must also include referring physicians’ office staff. In addition, educating the physicians themselves can be very helpful. It’s important to remember that mistakes happen at the “seams” — the handoffs between individuals and organizations. Educating each per-son about how the information they “produce” is used by others can be very effective.

2. solid procedures and job aids. As an example, schedulers should know that obtaining or confirming insurance information is a key job responsibility for every call. They should have a checklist or form (on paper or a computer) that

highlights each piece of information required. For instance, simply getting the primary insurance number is often insufficient — leading to a denial. This happens when the patient has secondary in-surance, or when it is a motor vehicle or workers’ compensation case. When the patient presents, the intake person should confirm each piece of information, including a comparison with the pa-tient’s insurance card. They should then ask, “Is this insurance still in effect?” and “Are you still employed by the same employer?” It’s not un-common in today’s economy to have someone covered at the time the surgery is scheduled, but not when the date of surgery arrives.

An even better procedure is to verify the patient’s eligibility when they are scheduled or when they present, or both. This procedure also allows the center to know the exact amount for which the patient is responsible, and collect some (or all) of it prior to surgery (a recommended best prac-tice). We have seen great examples where the re-ferring physician provides the patient with all of the necessary forms to be sent to the center at time of scheduling; that way if the information is incomplete, a call is made before the surgery to gather the missing information.

3. Physician documentation. Many deni-als for medical necessity result from incomplete

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documentation that eventually gets updated and may result in payment, but only after an amended claim is filed (e.g., an ACL repair that is denied for medical necessity because the tear and previous steps at mitigation are not initially documented). However, the costs of the error are much higher than the $50 for an error in in-surance coverage since they involve both staff time and physician time.

There are also some instances where the details of the procedure are not clear, requiring the coder to code to the lowest common denomi-nator or request additional documentation. To combat this, try periodic education and/or re-minders for physicians. These can be done in conjunction with board meetings. Some centers have been very successful with an occasional “open house” for referring physicians and their staff. Usually held in the evening with food, these informal settings can help to promote the ASC and show attendees how they benefit from following the recommended processes, using the proper forms, etc. If one or more referring of-fices perform better than the others, have them explain their success and follow up with a one-page summary that others can carry away. It is important for each stakeholder, and particularly the physicians, to understand that a very suc-cessful clinical outcome might result in a poor

business outcome if all parties involved do not perform with precision and accuracy.

As these examples illustrate, there are a number of practical steps that can reduce denials sub-stantially. Think about denials in two categories. Those deemed as “first pass” denials are caused by a process error that shouldn’t have happened. In other words, these are preventable denials.

On the other hand, “second pass” denials are those which may truly result in no payment; or which require substantial additional effort to col-lect. Fortunately, this category is much smaller than the first. Second pass denials include those where medical necessity is questioned by the payor. In some cases, this can be a result of in-complete documentation by the surgeon (anoth-er preventable error), but there are cases where the payor prevails. Another second pass cause can be timely filing, assuming it isn’t caused by documentation or other preventable delays. Fi-nally, there can be a legitimate “patient is not covered” denial, which is the reason for the in-take questions suggested earlier about whether insurance is current.

Establish benchmarks and goalsEach center should establish targets for first pass

and second pass denial rates. We’ve been asked about industry benchmarks for these targets. However, our experience shows that denial rates vary significantly depending on payor mix (work-ers’ compensation and motor vehicle cases gen-erally drive the rate up), locale and in-network/out-of-network mix. A center that is primar-ily in-network with otherwise favorable factors should probably target second pass rates in the 1-2 percent range. A center with a less favorable mix may target a rate closer to 5 percent.

First pass denial rates have similar variability. Here, the exact benchmark is less important than understanding the current performance of the center. This analysis is the critical first step in “denial prevention and management.” After all, nearly everyone has heard the famous Peter Drucker quote, “You can only manage what you can measure.” Start by looking at denials over the past 3-12 months, using transaction codes or similar mechanisms available to generate the data. Look at the trends by type, by payor, by surgeon and by location if you have more than one. You might also look at patterns by day of week and by surgery type.

This analysis will provide your “80/20” insight. The next step is to take the 20 percent of issues that cause 80 percent of the denials and identify

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the ones to be addressed with staff education, procedures and job aids, the ones that require surgeon involvement and ones that can be dealt with directly by the billing staff. As with the implementation of any complex process, start to eliminate one root cause at a time. This will enable staff members to gain insight to the pro-cess, recognize some substantial wins and see the fruits of their labor.

As you implement these action steps, be sure to track and analyze the denials, at least monthly. You will most likely see a substantial reduction, followed by continuous, incremental reductions. And you should see a cost reduction from the combination of less billing staff time and lower error rates throughout both front-end and back-end processes. In our billing operation, we’ve had success tying monthly and quarterly employee bonus payments to a combination of productivi-ty and quality, where quality is measured by error rate. We don’t recommend this as a first step, but it is an example of integrating improved quality into the fabric of an operation.

As your process matures, pay particular attention to payor patterns. In today’s fluid environment, you may experience jumps in denials from pay-ors that had low rates just a few months ago. We should also point out that the same analysis

should be applied to claims not paid in full — those should be thought of as partial denials. Payor patterns and trends are particularly useful for these cases since they equip the center for a discussion with the payor about payments versus contracted rates. n

AdvantEdge Healthcare Solutions, an IBM Business Partner, develops medical billing technology and offers billing and A/R services for ASCs. For more informa-tion, visit www.ahsrcm.com.

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Note: Ad page number(s) given in parentheses

aaahC. [email protected] / www.aaahc.org / (847) 853-6060 (p. 3)Access MediQuip. [email protected]/www.accessmediquip.com / (877) 985-4850 (p. 37)advantEdge healthcare solutions. [email protected] / www.ahsrcm.com / (877) 501-1611 (p. 47)allen Medical systems. [email protected] / www.allenmedical.com / (800)433-5774 (p. 38)Amerinet. [email protected] / www.amerinet-gpo.com / (800) 388-2638 (p. 12, 31)AsC Billing specialists. [email protected] / www.ascbill.com / (602) 740-0554 (p. 14)AsD Management. [email protected] / [email protected] / www.asdmanagement.com / (626) 403-9555 (p. 21)AsCoA. [email protected] / www.ascoa.com / (866) 982-7262 (p. 5, 9)AsCs Inc. [email protected] / www.ascs-inc.com / (760) 751-0250 (p. 40)Blue Chip surgical Center Partners. [email protected] / www.bluechipsurgical.com / (513) 561-8900 (p. 45)the C/n group. [email protected] / www.thecng.com / (219) 736-2700 (p. 10)the Coding network. [email protected] / www.codingnetwork.com / (888) 263-3633 Covenant surgical Partners. [email protected] / www.covenantsurgicalpartners.com / (615) 345-6903 (p. 43)

CTQ solutions. [email protected] / www.ctqsolutions.com / (877) 208-7605 (p. 31, 33, 35)Cygnus Medical. [email protected] / www.cybertechmedical.com / (800) 220-4224. (p. 22)EVEIa hEaLth Consulting & Management. [email protected] / www.eveia.com / (425) 657-0494 (p. 21)healthCare appraisers. [email protected] / www.healthcareappraisers.com / (561) 330-3488 (p. 13)healthcare facilities accreditation Program. [email protected] /www.hfap.org / (312) 202-8258 (p. 8)healthMark Partners. [email protected] / www.healthmarkpartners.com / (800) 250-2432 (p. 23)health Inventures. [email protected] / www.healthinventures.com / (877) 304-8940 (p. 40)ImagefIrst healthcare Laundry specialists. [email protected] / www.imagefirstmedical.com / (800) 932-7472 (p. 32)MD Technologies. [email protected] / (815) 598-3143 / www.mdtechnologiesinc.com (p. 20)MedhQ. [email protected] / www.medhq.net / (708) 492-0519 (p. 32)Medical-surgical Partners. [email protected] / www.medicalsurgicalpartners.com / (916) 797-4874 (p. 17)MEdtegrity. [email protected] / www.medtegrity.us / (888) 546-3650 (p. 15)Meridian surgical Partners. [email protected] | [email protected] / www.meridiansurgicalpartners.com / (615) 301-8142 (p. 7)

Mnet Financial. [email protected] / www.mnetfinancial.com / (866) 648-4677 (p. 41)national Medical Billing services. [email protected] / www.asccoding.com / (866) 773-6711 (p. 41)orion Medical services. [email protected] / www.orionmedicalservices.com / (877) 391-5390 (p. 44)Practice Partners. [email protected] / www.practicepartners.org / (205) 824-6250 (p. 10, 16, 18, 45)ProVation Medical. [email protected] / www.provationmedical.com / (612) 313-1500 (p. 19)serbin surgery Center Billing. [email protected] / www.ascbilling.com / (866) 889-7722 (p. 9, 11)sourceMedical. [email protected] / www.sourcemed.net / (866) 675-3546 (p. 46)spine surgical Innovation. [email protected] / www.spinesurgicalinnovation.com / (800) 350-8188 (p. 11)sun healthCare finance. [email protected] / www.sunnb.com/healthcare / (877) SUN-HCFT (p. 34)surgical notes. [email protected] / www.surgicalnotes.com / (214) 821-3850 (p. 2)Vantage outsourcing. [email protected] / www.vantageoutsourcing.com / (800) 594-1474 (p. 39)VMg health. [email protected] / [email protected] / www.vmghealth.com / (214) 369-4888 (p. 24, 32, back cover)zChart Electronic Medical records. [email protected] / www.zchart.com / (866) 924-2787 (p. 42)

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8 Statistics on Registered nurse Compensation

Here are statistics on the earnings of registered nurses from the Bureau of Labor Statistics’ Occupational Outlook

Handbook: 2010-2011 Edition.

1. Median annual earnings of registered nurses was $62,450 in May 2008.

2. Median annual earnings of the lowest 10 per-cent earned less than $43,410.

3. Median annual earning of the highest 10 per-cent earned more than $92,240.

4. Median annual earnings of those employed by employment services was $68,160.

5. Median annual earnings of those employed by general medical and surgical hospitals was $63,880.

6. Median annual earnings of those employed by physician offices was $59,210.

7. Median annual earnings of those employed by home healthcare services was $58,740.

8. Median annual earnings of those employed by nursing care facilities was $57,060. n

Source: Bureau of Labor Statistics’ Occupational Outlook Handbook: 2010-2011 Edition.

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Leverage.

SC 5762

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SourcePlus Eligibility – powered by Encircle Healthcare -- is a secure, fully-automated and integrated eligibility verification tool that can help your center dramatically reduce staff time spent on the phone, while improving the overall claims submission process, reducing claim rejections and improving cash flow by driving improved up-front patient collections.

SourcePlus RCM – powered by ZirMed is a complete web-based revenue cycle management solution that will streamline every aspect of your revenue cycle. Through the integration of powerful healthcare analytics and smart financial services, ZirMed enables you to leverage the power of technology to cure administrative burdens, and optimize reimbursement and cash flow.

SourceMedical, ZirMed and Encircle Healthcare. Together providing innovative solutions to surgery centers.

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Visit our website to downloadthe 2009 Intellimarker ASCBenchmarking Study