Medicare’s decision to reimburse ambulatory surgery centers for certain cardiovascular procedures has invited a flurry of deals and partnerships.
To take advantage of Medicare’s new payment rule, ambulatory surgery companies, independent cardiology groups, and some hospital systems are racing to assemble capital and physicians to develop ambulatory sites for providing angioplasties and other cardiovascular services.
The harder piece may be finding available interventional cardiologists, when an estimated 80% of cardiologists already are employed by hospitals.
Phoenix-based Banner Health is addressing that challenge by offering both its employed and independent cardiologists an opportunity to invest in ambulatory surgery sites as a joint venture with the system. That’s a new business option for cardiologists that’s long been available to surgeons.
“It’s good they have this opportunity to invest in centers where they practice,” said Joan Thiel, Banner’s vice president of ambulatory services. “It makes them highly engaged in quality and cost-effectiveness and aligns everyone’s incentives.”
The investing doctors will have to perform at least 30% of their cases in the ASC to fall within the federal government’s safe-harbor guidelines and avoid scrutiny under the anti-kickback and Stark laws. Medicare generally pays physicians the same professional fee in hospital outpatient and ASC settings.
While many hospitals are holding back because Medicare pays about 40% less for heart catheterization procedures in ASCs than in hospital outpatient cath labs, Banner is embracing the shift.
Banner plans to have ambulatory sites for cardiovascular procedures throughout the Phoenix area, with the first one opening next year. Thiel said the lower-cost sites will be a good fit for managed-care contracts.
AdventHealth in Florida is another hospital system planning to jump into ambulatory cardiovascular services. It currently shares ownership with cardiologist groups in an ASC near The Villages, a giant retirement community in central Florida.
Advent will be working with multispecialty ASCs to open a number of cath labs as early as this summer, with the likelihood that up to 50% of all its angioplasties will be done in ambulatory settings in the near future, said Gordon Wesley, executive director of Advent’s Cardiovascular Institute. The system will consider outright acquisitions, strategic partnerships and joint ventures with its own employed cardiologists.
It will cost anywhere from $400,000 to $1 million to equip those existing ASCs to perform coronary stent procedures, he said.
“We shouldn’t just sit in the hospital and hope folks will come to us,” Wesley said. “If we don’t build it, others will.”
In response to the new Medicare policy, two multistate ambulatory surgery companies say they’re scouting for hospital and cardiology partners in expanding their cardiovascular business, which includes electrophysiology procedures and catheterizations to open blood vessels in the legs.
Dr. Dan Murrey, chief medical officer of Optum-owned Surgical Care Affiliates, said health system participation will vary market by market—about half of its 210 facilities are partnerships with hospitals. The company currently is eyeing California, Missouri and South Dakota. “Hospitals in some markets get that we need to make this shift to lower-cost settings, and in other markets not,” he said.
It’s also necessary to make interventional cardiologists feel clinically comfortable doing cases in ambulatory settings, and showing them that it’s economically viable. “Physician acceptance is the biggest issue,” Murrey said. “It typically starts with a handful of physician champions who want to provide more convenience and lower costs for patients.”
Kelly Bemis, chief clinical officer at Fresenius-owned National Cardiovascular Partners, said her company would welcome hospital investment in opening new ASCs. Twenty of its 22 facilities currently do cardiovascular work.
But she’s not optimistic in the short term. The company currently has only one hospital partner—Methodist Health System—in three ambulatory sites in the Houston area. “We aren’t seeing any uptick in interest from hospitals,” she said. “My gut says hospitals would like to keep those cases in their outpatient labs.”
Hospitals may be quietly mulling their ambulatory cardiovascular strategies, but some observers warn they may find themselves outflanked by competitors if they don’t act soon.
Larry Sobal, CEO of the Heart and Vascular Institute of Wisconsin in Appleton, a cardiology group that broke away from ThedaCare last year, said he’s talked with all three local hospital systems about investing in a cardiovascular ASC but hasn’t received any firm commitments yet. He’s also talked with private equity investors and other physician groups.
“The hospitals are not very excited about this because they’re reluctant to give up the higher reimbursement,” Sobal said. “But they may look around town and see multiple other ASCs owned exclusively by independent physician practices and say this is the one they want to be involved in.”