Last month, Winnie Marie Jones underwent a heart catheterization procedure in which three stents were placed in her coronary arteries to open blockages.
Unlike her husband, Robert, who had a cardiac stent procedure several years ago, Winnie didn’t go to the hospital for the surgery. The 70-year-old Medicare patient had it done in a free-standing ambulatory surgery center, Medfinity Plano, located about 15 minutes from where she lives in Garland, Texas. She was back home less than five hours after the procedure started.
“It was so smooth,” she marveled. “We parked right in front. I didn’t have to wait. The procedure started around 8:30 in the morning, and I was home by 1 in the afternoon. And the staff was supergreat.”
In January, Medicare started paying for six types of percutaneous coronary intervention, or PCI, procedures, also known as angioplasties, which it previously paid for only in inpatient or hospital outpatient settings. The CMS reimburses ASCs about 40% less for these services than it pays for hospital outpatient care. In fiscal 2018, it covered more than 150,000 of these procedures at a cost of about $1 billion in facility fees alone, according to CMS data.
The CMS rule allowing ASCs to perform these lucrative PCI procedures, finalized last November, is widely expected to speed the migration of cardiovascular procedures out of hospitals and into the ambulatory sites. In addition, the agency has asked for public comment on whether it should pay for 14 more codes for higher-risk coronary intervention procedures in ASCs.
Some commercial insurers already are covering both diagnostic and interventional catheterizations in ASCs for non-Medicare patients in states where it is permitted.
The Medicare payment policy change has spurred a rush by ambulatory surgery companies, independent cardiology groups, some hospitals, private equity investors and insurers to enter into or expand their ambulatory cardiovascular business. Cardiology groups and ASCs specializing in cardiovascular care say they’re being swamped with acquisition and joint venture offers.
“We see this as a big opportunity,” said Dr. Dan Murrey, chief medical officer of Optum-owned Surgical Care Affiliates, which operates 210 ASCs around the country, some as joint ventures with hospitals. “With Medicare opening up interventional cardiology, that provides a critical mass of procedures and makes it easier for interventional cardiologists to make the shift to ASCs.”
Texas is host to a lot of activity. “Every major health system in the Dallas area has asked us if we’re interested in selling our ASC, but we’re not,” said Dr. Rick Snyder, whose cardiology group HeartPlace co-owns two Medfinity ASCs with National Cardiovascular Providers. His group did 23 PCIs on Medicare patients in January and February. “They see where the market is going.”
If a significant share of these procedures move out of the hospital as expected, hospitals will be hard hit financially. That blow would come on top of the likely migration of many other lucrative procedures to ASCs, including total knee replacements, which the CMS also approved in ASCs starting Jan. 1.
Experts say hospitals will have to think hard about whether to try to keep these services in the hospital or develop an ambulatory strategy for cardiovascular services, which account for about 20% of total Medicare spending.
For many hospitals, “this is not an exciting opportunity,” said Julie Bass, a senior consultant for cardiovascular services at the Advisory Board. “The reimbursement is lower, and folks are trying to figure out how that fits into the bottom line. Do they build new relationships to retain outpatient revenue from those services?”