Bert, MD Abstract Since the introduction of arthrosco-py to North America in 1965, the de-velopment of minimally invasive or-thopaedic surgical techniques has steadily progressed.1As a r
Trang 1Office Ambulatory Surgery Centers:
Creation and Management
Neal C Small, MD, and Jack M Bert, MD
Abstract
Since the introduction of
arthrosco-py to North America in 1965, the
de-velopment of minimally invasive
or-thopaedic surgical techniques has
steadily progressed.1As a result,
be-ginning in the 1980s,2some
ortho-paedic procedures were moved from
the hospital environment to the
free-standing ambulatory surgery center
and, more recently, to the
ortho-paedic office ambulatory surgery
center (OASC) Early concern for
pa-tient safety led to preoperative
eval-uation, intraoperative monitoring,
and postoperative care being
de-signed into the centers.3,4
The cost-effectiveness of OASCs
soon became evident to third-party
payers, as well as to surgeons and
patients Payers became less
reluc-tant to preauthorize surgery in the
office environment once the issues of
facility charges and patient safety
were addressed to their satisfaction
The emphasis on cost containment,
which heightened in the early 1990s,
accelerated the development of
OASCs in the mid to late 1990s.5
However, without state licensure, Medicare certification, and accredi-tation, anesthesia restrictions lim-ited the types of procedures that could be done in an office operatory
General anesthesia could not be ad-ministered in a nonlicensed facility, and even when local anesthesia or monitored conscious sedation was used,6 most third-party payers would not preauthorize procedures
These payers stipulated Medicare certification as a requirement for placing the OASC on their panel of approved facilities In addition, licensure by both the state and Medicare and accreditation by the Accreditation Association for Am-bulatory Health Care (AAAHC) or the Joint Commission on Accredita-tion of Healthcare OrganizaAccredita-tions re-quire appropriate design and con-struction of these facilities.7,8
Owners of OASCs responded to these concerns Obtaining state li-censure allowed the use of general anesthesia, so that the number of surgical procedures done in the
li-censed OASCs increased.9 With Medicare certification and AAAHC accreditation, virtually all payers, in-cluding workers’ compensation, would then reimburse for facility use in a licensed OASC.10 Recent studies have confirmed that outpa-tient ambulatory orthopaedic sur-gery is safe, efficient, and cost effec-tive,3,5,9leading to wider acceptance
of OASCs by orthopaedic surgeons
Benefits of a Licensed OASC
The proximity of the operating room
to the clinic in an OASC (Fig 1) im-proves productivity, efficiency, and convenience The surgeon can
exam-Dr Small is Associate Clinical Professor, Ortho-pedic Surgery, University of Texas Southwestern Medical School, Dallas, TX Dr Bert is Clinical Professor, University of Minnesota School of Medicine, Minneapolis, MN, and President and Medical Director, Summit Orthopedics, St Paul, MN.
One or more of the authors or the departments with which they are affiliated has received some-thing of value from a commercial or other party related directly or indirectly to the subject of this article.
Reprint requests: Dr Bert, Suite 307, 17 West Exchange Street, St Paul, MN 55102-1034 Copyright 2003 by the American Academy of Orthopaedic Surgeons.
Among orthopaedic surgeons, the popularity of in-office ambulatory surgery has
steadily increased Changing practice patterns, including utilization of office
sur-gery centers, have resulted in improved efficiency and increased revenue However,
accurate feasibility and market analyses are necessary before considering the
addi-tion of a surgery center to an orthopaedic practice The legal requirements to
op-erate a center include state licensure, Medicare certification, and accreditation In
addition, approved construction design and effective operations management are
essential.
J Am Acad Orthop Surg 2003;11:157-162
Trang 2ine patients and provide office care
while the operating room is being
prepared for the next procedure
Some surgeons have reported a
sav-ings of as many as 8 hours per week
because of this single improvement
in practice efficiency.11
Patient satisfaction is usually
quite high among those who have
OASC.12Patients may feel less
anx-ious in the office environment as op-posed to that of the hospital Results
of satisfaction surveys indicate that patients appreciate the amount of personal attention they receive, par-ticularly in postanesthesia recovery (Fig 2) Patients’ families also report
a high satisfaction rate
The OASC appears to be more cost effective than either the hospital operating room or the hospital
out-patient surgery department.5,9The fees for freestanding OASCs, which are scheduled to take effect on July
1, 2003, have been published in the
Federal Register.13OASC facility fees are to be reimbursed at a lower rate than hospital facility fees because the cost to deliver a procedure is less for an OASC than for a hospital
An example of the difference be-tween Medicare-allowable facility fees for the hospital outpatient sur-gery department compared with those for the OASC can be illustrated
using Current Procedural Terminology
(CPT) code 29881 (arthroscopic men-iscectomy) The Centers for Medi-care & Medicaid Services published
a proposed ambulatory payment classification group payment rate of
$1,048 for CPT code 29881 when the procedure is done in the hospital outpatient surgery department.14
The facility reimbursement to OASCs published in the Final Rule
of the Centers for Medicare & Med-icaid Services is $630.13This differ-ence in facility fees is a direct result
of the substantially lower costs re-quired to perform surgery in non-hospital facilities.15 Even though most third-party payers reimburse for facility use at a higher level than
Figure 1 A, Single operating room B, Double operating room.
Figure 2 Postanesthesia recovery area.
Trang 3the Medicare-allowable rate, payers
nevertheless perceive the OASC to
be cost effective compared with
hos-pital operating rooms and hoshos-pital
outpatient surgery departments
Creating an OASC
Individual state laws regarding
health care facilities development
must be studied before creating an
OASC because some states require a
certificate of need, which allows the
physician group to construct the
proposed facility Obtaining a
certif-icate of need may involve local or
statewide political issues because of
possible resistance to
physician-owned surgery centers by local
hos-pitals Some states have dropped the
certificate of need requirement, are
in the process of doing so, or are
re-viewing the law; other states have
exemptions for single-specialty
OASCs Several states have
certifi-cate of need exemptions allowing
fa-cilities to be constructed with
expen-diture limitations Despite strong
opposition by hospital lobbyists, it
appears that certificate of need
quirements are being steadily
re-duced.7
The process of planning,
design-ing, and building an OASC, as well
as obtaining licensure, certification,
and accreditation, takes
approxi-mately 1 year to 18 months to
com-plete and can be divided into five
phases: phase 1, feasibility and
mar-ket analysis (approximately 1
month); phase 2, legal issues and
de-sign (3 months); phase 3,
construc-tion and staffing (6 months or more);
phase 4, licensing and Medicare
re-quirements (2 months); and phase 5,
accreditation (optional but
recom-mended)
Phase 1: Feasibility and Market
Analysis
A feasibility analysis should be
done to determine whether a clinic
should build an OASC A limited
preliminary analysis can help deter-mine whether the clinic should ex-pend the time and incur the expense
of a full feasibility analysis and pro forma
The detailed feasibility analysis involves evaluating the explanations
of benefits for the surgical proce-dures as well as analyzing by CPT code the procedures done by each surgeon The subspecialty mix of the surgeons and the average operating time per procedure of each must be assessed Fee schedules and collec-tion percentages must be analyzed
In addition, local construction costs must be reviewed Many other fac-tors, including a cost analysis for the facility, are used to determine likely gross revenues and net profitability
of the OASC When the feasibility analysis is complete, the analyst can determine if the practice entity is an appropriate candidate for an OASC
A market analysis is critically im-portant, as well By reviewing the marketplace, assessing the competi-tion, and performing a payer analy-sis, the practice will be able to deter-mine whether it should proceed with development or whether the market forces and payers in the area will restrict the practice from refer-ring patients to its surgical unit Be-cause the cost of an OASC can be sig-nificant, the importance of the feasibility and market analyses can-not be underestimated These analy-ses provide the necessary informa-tion to decide whether the OASC should be built and, if so, what size the facility should be
Phase 2: Legality and Design
Before proceeding with design and construction, the practice may wish to form a new legal entity, such
as a limited liability corporation, to own and operate the OASC Legal counsel should study the ownership alternatives and create the entity
Also, the new entity should have a billing number different from that of the practice itself
A medical architect will work with the state licensure board to ensure that the OASC is designed according to state guidelines and within Medicaspecific design re-quirements This design process var-ies considerably depending on the size of the facility and whether it will require remodeling of or addition to existing space or necessitate new construction
Phase 3: Construction and Staffing
The construction phase may last from a few months to a year or more
An architect and construction firm familiar with code requirements for medical facilities can eliminate
cost-ly revisions Contracting with third-party payers also must begin during phase 3
The OASC staff should be hired during this phase The nurse
manag-er should be brought on early to as-sist in ordering equipment, materi-als, and supplies appropriate for the procedures to be done in the facility Consultants can aid in this process The OASC owners can either
direct-ly hire staff necessary for payer rela-tions and financial management or use the services of a company with experience in OASC management The anesthesia staff should be se-lected during this phase to assist with the installation and testing of an-esthesia machines and monitoring equipment, as well as related items Some practice-owned centers provide ownership interests for some or all
of the anesthesia staff, but most work with independent anesthesiologists who have no financial interest in the OASC Sometimes the anesthesiolo-gist is employed by the center, which then bills for anesthesia professional services provided during surgery Phase 3 concludes when a certificate
of occupancy is obtained
Phase 4: Licensing and Medicare
Phase 4 includes the state licen-sure process and Medicare
Trang 4certifica-tion State licensure is required for
Medicare certification To achieve
state licensure and eventual
Medi-care certification, requirements must
be met in several areas, including
fa-cility design and construction
De-tailed documentation of such items
as appropriate committee meetings
and staff credentialing also is
neces-sary (Table 1)
Phase 5: Accreditation
Accreditation is optional, but
some payers require accreditation in
addition to licensure and
certifica-tion Accreditation can be obtained
from the AAAHC or the Joint
Com-mission on Accreditation of
Health-care Organizations
Anticipating and Correcting Potential Problems
Substantial preliminary payer nego-tiations, accomplished payer mar-keting, and professional manage-ment are necessary for a successful OASC Because of stringent state li-censure, Medicare, and AAAHC re-quirements, problems for the OASC rarely involve issues of patient
safe-ty or operating room qualisafe-ty The usual reasons that facilities do not function at maximum capacity are management difficulties with such procedures as contracting, schedul-ing, or billing Underutilization may occur because of problems with
pay-er contracting, scheduling, patient flow, and inventory management Contracting difficulties should be minimal or nonexistent because cost savings and patient preference for the OASC have led to acceptance by most payers Although scheduling and pa-tient flow issues may be a potential problem, software programs can elim-inate much of the complexity for the nurse manager and scheduler Sup-ply inventories often are inappropri-ate for the OASC caseload; many OASCs struggle with either inade-quate stock or an overabundance of certain supplies Inventory control software can help with these problems Staffing inconsistencies are among the most common difficulties
encoun-Table 1
Medicare Requirements for OASC Certification
Structural The design must comply with state health facilities commission structural guidelines
The operating room must be at least 250 sq ft
The OASC must have a separate recovery room and waiting room
The OASC must meet Life Safety Code standards of the National Fire Protection Association Policies and
procedures
The OASC must have a governing body
The OASC must perform ongoing quality assurance
All medical staff must be credentialed by a credentialing committee
Medical privileges must be periodically reappraised by the OASC credentialing committee Policies and procedures must exist for nonmedical personnel
Patient safety All OASC personnel must be trained to use emergency medical equipment
A registered nurse must be in attendance whenever a patient is in the OASC
A written transfer agreement must be in effect with a local hospital, and all surgeons using the facility must be on the staff of that hospital
Emergency
equipment
The OASC must have comprehensive emergency equipment, including emergency call system; oxygen; mechanical ventilatory assistance, including airways, manual breathing bag, and ventila-tor; cardiac defibrillaventila-tor; cardiac moniventila-tor; tracheotomy set; laryngoscopes and endotracheal tubes; suction equipment; and other emergency medical equipment specified by the medical staff Ancillary services
and contracts
The OASC must provide pharmaceutical services under the supervision of a pharmacy director The OASC must have its own laboratory or must use a Medicare-certified laboratory
The OASC must use a Medicare-certified radiology facility
Administrative Medical records identical to hospital records must be developed and maintained
Random surveys of the OASC by the Centers for Medicare & Medicaid Services must be anticipated The OASC must maintain accurate financial records containing data that enable the Centers for Medicare & Medicaid Services to determine payment rates for covered surgical procedures
Trang 5tered by newly opened OASCs
De-spite the fact that staffing usually
be-gins in phase 3, some clinics are
unable to hire qualified personnel
quickly enough Many OASCs
per-form 200 or more procedures per
month soon after obtaining licensure,
certification, and accreditation The
OASC nurse manager may be unable
to provide adequate staffing if
person-nel needs are not fully addressed well
in advance of opening Understaffing
risks inadequate patient care, while
the expense of overstaffing impairs
OASC profitability The use of
part-time employees may be advisable
Also, continuing education for OASC
personnel is important to maintain
quality patient care and employee
morale
Some facilities have problems
with CPT coding, billing, and
collec-tion of OASC facility fees,
particular-ly in the first several months after
opening Difficulties with CPT
cod-ing and collection of facility fees can
severely compromise a clinic’s
over-all cash flow The facility fee revenue
represents at least one third of the
gross revenue for a typical
ortho-paedic group practice with an
OASC Some practices have been
overwhelmed by the additional
bill-ing volume and frustrated by a cash
flow shortage during the start-up
phase This problem can be avoided
with proper forecasting, training,
and preparation.11
Many practice entities do not
ad-equately anticipate the debt service
and other ongoing overhead
expens-es that begin even before the OASC
is opened These anticipated costs
necessitate that the center secure a
line of credit several months before
opening It can take at least 90 to 180
days before the facility fee
reim-bursements compensate for ongoing expenses such as salaries, rent, and other costs Because payers often are unfamiliar with the new billing en-tity, the claims process is slower than when the professional fee claims are reviewed This collection window for accounts receivable decreases considerably once payers become fa-miliar with the new facility
Allowable facility fees must be well understood, and in some in-stances it is beneficial to accept out-of-network benefits for facility use because of improved reimburse-ment Discounted contracts usually are not advisable unless they repsent significant volume and the re-imbursement is greater than the cost
of the service provided Hiring or consulting with a contracting spe-cialist familiar with the nuances of OASC reimbursement can be of great benefit
Enjoying the OASC
The quality of professional life that the OASC provides surgeons is be-yond the expectations of most.16,17
The importance of operating in a comfortable, well-conceived envi-ronment of one’s own design should not be underestimated The surgeon can make reasonable changes with-out dealing with the layers of ad-ministration and committees typical
of the hospital environment Sur-geons who have completed an OASC often wonder why they
wait-ed so long to simplify their profes-sional lives and enjoy improved practice profitability As technology progresses and appropriate facilities are completed, and if insurance re-imbursements are allowed, many
minimally invasive procedures now performed in the hospital may be done in an OASC This is also a trend
in other specialties, such as ophthal-mology, otolaryngology, plastic sur-gery, and urology
Summary
Office ambulatory orthopaedic sur-gery has become an increasingly widespread method for delivering certain types of orthopaedic surgical care In many states, there has been
hospital-based and freestanding am-bulatory surgery centers to practice-owned OASCs States requiring a certificate of need may delay or pre-vent the development of OASCs, al-though certain exemptions may be available in some states with certif-icate of need requirements; these ex-emptions should be carefully re-searched Legislative changes are under way in many states to modify
or eliminate the certificate of need process Orthopaedic surgeons should be aware of the stringent re-quirements for securing state licen-sure and Medicare certification for the OASC In addition, a somewhat lengthy process from feasibility analysis to facility completion should be anticipated However, an OASC can help a practice contain medical costs, improve efficiency, control the surgical environment, and enhance patient satisfaction The practice group can help ensure
a high quality of orthopaedic care
by hiring their own surgical staff Properly managed, the OASC can provide an additional source of rev-enue to offset declining reimburse-ments
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