On today’s episode you’ll hear our interview with Mike Scribner and John Crew. We covered a variety of topics, such the No Suprises Act and other regulatory and legislative trends, and the role of Medicare Advantage in Ambulatory Care. We also talked about the impact of traditional Medicare to independent ASC’s and the managed care strategies independent ASC’s can take and utilize in 2023.
Guest: John Crew, Principle & Founder, SHP LLC
Principal and Co-Founder of SHP, John W. Crew is a graduate of Valdosta State University and has over 25 years of experience in healthcare. He is experienced in ACO formation and management, IPA/PHO formation and management, managed care, and development of ancillary revenue streams.
John resides in Athens, GA (Home of the back to back college football national champions) with his beautiful wife Vickie. They have 2 sons that are now out conquering the world.
You can reach him @ jcrew@shpllc.com or (912) 691-5711.
Guest: Mike Scribner, Principle & Founder, SHP LLC
Mike Scribner is the Principal of Strategic Healthcare Partners (SHP), based in Savannah, GA. He has an extensive background in managed care contracting, revenue cycle, CFO support, budget
development, decision support, and growth strategy development. He holds a Master’s in Accounting from the University of Mississippi and is a member of HFMA and NAHU.
Mike began his career at Ernst & Young in Memphis, Tennessee. He later served as the Director of Finance at LeBonheur Children’s Medical Center, then Director of Managed Care for its parent organization, Methodist Health System. Mike moved to Savannah, Georgia in 1996 to become CFO for CareOne Home Health at Memorial Health University Medical Center. During his tenure with Memorial Health System, Mike served in capacities of Vice President of Finance/Administrator-Corporate Finance, then Vice President of Managed Care/Homecare for the Health System.
Mike left Memorial in 2004 and launched a managed care consulting firm called Health Resources Group. In December of 2008, HRG and Preferred Healthcare Consultant (PHC) combined to form Strategic Healthcare Partners (SHP), which now has offices in Villa Rica in the
Atlanta area and Savannah.
Mike lives in Savannah with his wife, Stephanie, two children and three grandchildren. He has served as an active youth ministry volunteer for the past 25 years, while also cheering on his beloved Rebels!
You can reach him @ mscribner@shpllc.com or (912) 691-5711.
Transcript
Speaker 1:
Thank you. Explored key issues in the ambulatory surgery center market with experts Mike Scribner and John Crew. In this episode, Mike and John dive into a range of timely topics, including the implications of the no Surprises Act, regulatory and legislative trends and the growing influence of Medicare Advantage in ambulatory care. They also discuss the challenges and opportunities presented by traditional Medicare for independent ASCs, managing shared care strategies that help ASCs navigate the evolving landscape in 2023 and beyond. So, whether you’re part of an ASC, a healthcare professional or simply interested in the latest developments in the industry, this replay still offers valuable insights into strategies, even in today’s market. Tune in to gain a deeper understanding of the forces shaping ambulatory care and stay ahead as we revisit this vital conversation.
Speaker 2:
Hey everyone, I’m Jason Crosby with Strategic Healthcare Partners and your host for today’s episode where we are kicking off season two. I am joined by SHP principals Mike Scribner and John Crew, where today we will discuss marketplace trends with ambulatory surgery centers, or ASCs. So with that, let’s just jump right into the conversation. John, you start us off. Take a brief look back at recent trends in the ASC market. What has impacted such things such as value-based care, no Surprises Act or other regulatory changes as of late for ASCs?
Speaker 3:
Well, jason, thanks for asking, and again, this is John Crew. We do want to take a moment to take a look back at all the things that have happened or are happening as it relates to ASCs, particularly in the value-based care world, the no Surprises Act, price and transparency. There’s a lot of regulations, I would say, and Mike can certainly comment to this. I would say that when a lot of folks were building their ASCs, there was an opportunity about whether or not they wanted to be in networks, stay out of network, what worked best, a lot of people trying to determine the financial situations for their ASC. And I think we’re seeing a significant change in the marketplace now that’s affecting all of that, particularly as it relates to Medicare Advantage.
Speaker 3:
And I say that because and Mike can certainly comment here I would say that we’re seeing from our client base, the fastest growing clinical population out there now is Medicare Advantage. Historically speaking, we for a long time really, we stayed in the red, white and blue model, Medicare sort of creeped along and kept growing. But now we see in a lot of cases where their client bases were now as far as a Medicare population in and of itself, that nearly two thirds of their population is Medicare Advantage now, where just a few years ago that would have been the exact opposite and there’d been more red, white and blue. Any thoughts around that, michael? Yeah?
Speaker 4:
John, this is Mike. I guess kind of to step back into your opening comment, the landscape from an ASC perspective, from our perspective, a managed care perspective, has changed drastically over the last seven or eight years. You go back seven, eight, ten years and, just like you said in your opening comment, that a lot of ASCs, where they’re fed by their practice ownership and it kind of breaks down the connectivity of managed care of the referral source. When the referral source is built in there’s really no reason to have to contract in order to achieve the volume. Therefore it became more of a financial game of what made sense to be in versus out of network. But just like you’re alluding to, there’s been a whole host of factors that kind of dampened that ability over the past several years the emergence of high deductible plans, the rollout of the exchange plans, that kind of put that on steroids and kind of moved up high deductible plans into kind of more of the normalcy. You kind of couple that with no surprises act that we were commenting on that between the fact that it imposes a prohibition against balanced billing, coupled with kind of built-in federally ordained mechanisms to put a value-based price on it that lowers the gap between in versus out of network potential reimbursement that also kind of shut down angles of benefit for being out of network in the first place, which has kind of led the ASC community to have to go back and, you know, on a payer by payer, product line by product line basis, have to redetermine whether or not to get a network.
Speaker 4:
And a lot of times at this point the answer is yes, that they do need to go back and build a contracted portfolio in order to maintain the ability to see those patients. And then, adding on the point that you were just talking about with the Medicare Advantage world, again you go back seven years ago and, just like you said, 10% of the Medicare population, 15% of the Medicare population, is in a Medicare Advantage plan at that point. Now, with it being over half, maybe as much as two-thirds, like you were talking about, and as those plans have rolled from all PPO orientation and full out-of-network benefits and all those kinds of deployments, that again made it where you didn’t really have to contract in order to play. Now we’re at a point where there’s more HMO in the market, no out-of-network benefit HMOs in the market, such that again it’s tougher to get your patient from practice to ASC, no matter what the payer source is now in the current world, and so it’s changed the world dramatically.
Speaker 3:
You know that’s a great point.
Speaker 3:
Michael, you touched on something that I think it’s too easy to lose sight of and it’s too easy for me to lose sight of as well is the fact that when you think about a practice, that open ASC and I’m not trying to be redundant, but the fact that you really fill that ASC up with your own patients, and today now you’re going to have to look external about how you get your patients and I know we’ll talk about value-based care in a minute but I think about all the growth of the vendors that are coming into the marketplaces.
Speaker 3:
You think about our friends in Florida where we’ve had aggressive MA growth and aggressive MA value-based growth, and now how they have to work with others to get their referral base, and so that’s a change that we’re going to see. We’ll talk more about, but that’s a change we’re seeing and I think that’s a significant change and just as important as understanding. That is, if you’re going to have to move in that flow of understanding that I’m now going to have to contract more, it’s got to be essential to an ASC now to financially understand what that means to them, because there’s a reasonable likelihood that you’re simply going to reprice your patient population. It may not be a new population, you’re simply going to reprice it, and understanding the financial impact of that to your ASC I think is essential to that.
Speaker 4:
Which, as of today has and John, jump back in and tell me your experience. As of today, our general reaction in the market has been that because these market forces are kind of pushing pricing down and limiting the referral sources to the point where I have to go back and contract to get in, which also kind of serves to depress the pricing in the first place, the basic practice reaction is we’ll have to cram more volume through there at the lower pricing in order to retain what I had before, which is a. That’s a tough place to be because that’s a, you know, now I have to. There’s only so much volume, as you always talk about, and that I have to. You know I much volume, as you always talk about, and that I have to. You know I’m already attempting to do as much as I can in the ASC setting and not in the hospital setting in order to kind of feed the practices on mechanism.
Speaker 4:
But it’s a tough place to be right now. And what has always sort of perplexed me is that From an ASC perspective, the same care is typically being rendered much less expensive than the hospital, and yet mostly the you know, especially the urban hospitals, and yet the ability to get the payers to recognize that and, to you know, understand the savings that’s already in pocket and you know, provide some kind of enhancements to rates. To address that has been. It’s been tough, it’s been very lacking in the market to kind of get the payers to kind of bite on that.
Speaker 3:
Well, I think there’s two things that impact that you argue with me. I think the first is is that, when you look at it from a commercial standpoint, that you know 75% of the commercial population self-insured. So a carrier really is writing checks out of somebody else’s checking account. It’s not their own money at risk. And then the other thing is is whether people agree with this or not, that the reality of it is is you talk to care about how do I sell product? I’ve got to have the hospital. I can’t sell product without the hospital. And so the question is is whether you have a, you know whether the hospital is accepting of ASEs being in their marketplace or whether they see them as more predatory and so they push back against them. So those are facets in a marketplace that just play out.
Speaker 4:
But I will say that I don’t know if this is kind of a glimmer of hope at the end of that rainbow.
Speaker 4:
We now do have the best information we’ve ever had to at least make the market and or the payers aware of that, because with the hospital pricing transparency and we represent hospitals as well, and so this is definitely a double-edged sword, and you know sort of think about this from market to market definitely a double-edged sword.
Speaker 4:
And you know sort of think about this from market to market, but strictly from the perspective of an independent practice that owns an ASC, that the pricing transparency data, once it moved from just billed charges to payer-based pricing transparency data, became the best data set available to either, on one hand, prove to a payer from a legitimate third party non-antitrust problem kind of way to prove to a payer how much savings you’re bringing to the table or, on the other hand, to be able to show the market how much you’re able to save a particular carrier or employer or what have you that between those two, being able to leverage that information to either drive volume to an employer or to drive a renegotiation and pointed that at a payer is, I feel like we are absolutely just scratching the surface of being able to use that data appropriately to benefit one of those two, because I’m either going to drive volume by being Walmart or Target although I hate the analogy of that or I’ve got to be able to drive pricing up by being able to show that I’m providing the same quality service as a hospital for a third of the price.
Speaker 4:
That one of those two has to be true if you leverage that data appropriately.
Speaker 3:
So let me ask you this, michael.
Speaker 3:
So think about this now. One of the challenges that you have as an ASC and I’ll use the analogy with the hospital, the real challenge with an ASC today that’s positioned on is if you go back into the payer with that information and you say, all right, I can save you money, I can do these procedures for less cost. The real challenge that they get faced with is, even if a payer wants to address it and wants to adopt that, what keeps them from then? But if I’m going to do that, I’m going to take a bite out of your physician side, out of your physician reimbursement. Historically speaking, like and I’ve always wondered about this, particularly in the rural markets I never understood why ambulatory service centers don’t coalesce and have like an IPA that that can separate the, the, the contracting with a payer, because otherwise you’re always put your physician portion portion. If you can separate it completely out, then you’re only addressing the ASC call side or the contractual side of it, and you’re leaving your physician side alone, so that the payer sees them separately, would you?
Speaker 3:
agree with that.
Speaker 4:
But I think the issue is more core than that. Where I feel like our efforts tend to break down first are that when we’re in front of the payer with a high-quality ASC, the comparison point from a pricing perspective that the payer wants to make is this ASC versus other ASCs. The pricing comparison we want them to make is this ASC versus the hospital that these doctors would be taking those cases to if they weren’t doing the cases in the ASC. And it is. It’s been heretofore fairly difficult to get the payers to cross over that line, even when you know they’re driving massive amounts of savings between those two, two sets of numbers, between those two sets of numbers, especially now that we have the public data set to kind of prove that out. Whatever that magic sauce is to make the payer understand it from the true savings perspective that’s out there. Because the only rationale I can come up with is that the payer must believe that if they move together the pricing of hospital outpatient surgical services and ASC services closer together, that the ASC setting is just going to drive all kind of extra volume through there and ramp up that volume so much that the savings are worn away by existing volume that’s now paid way way higher.
Speaker 4:
I don’t understand that because, again, you know you well know, john the ASCs that we serve are traditionally L&R. That that practice owns that ASC. It’s their volume getting from A to B. Therefore it’s not a typically a certificate of need ASC that is taking cases from a whole bunch of outside surgeons in the market. It’s usually that one practice. And so the idea that somehow a little bit better pricing is going to drive massive amounts of additional volume through there, it doesn’t seem like it bears any sense of reality. Volume through there, it doesn’t seem like it bears any sense of reality. And yet getting the payer to think in terms of the savings of the shifted cases versus just the comparison point of other ASCs has been a real challenge for us.
Speaker 3:
I get it and I know we got to move on. I still like the idea of ASCs, considering how to coalesce, only because in today’s world who contracts is not always the same. The same person that contracts for the physician may not be the same person that contracts for ASCs and so forth and so I think of having that message and being able to take it in a bigger geography. I think has some opportunities there, but I know we have to move on from that.
Speaker 4:
Before we do. I agree with that, and nothing I was saying previously really kind of runs against that. I think, just like it has made sense for physicians to come together or hospitals to come together, whether or not it’s clinically integrated or not, even if you’re just sort of solving logistical issues on the payer side in order to facilitate, you know, some form of better contracting out there, I think all that’s absolutely legitimate, I mean obviously within the context of, you know, legal antitrust compliant kind of mannerisms with all that.
Speaker 2:
All right, great, let’s kind of pivot a little bit. We’ve talked a lot of backgrounds in the ASC market. Now let’s take a couple of topics and kind of look forward. You guys hit on the points of comparing the hospital patient departments, reimbursement mechanisms, differences between those areas and ASCs. Speak to what? If an ASC administrator is listening, physician is listening today, what sort of strategies would you tell them to look forward to, given those discrepancies? And if you will speak to how their ASC fits into the various value-based care models that are out there and those that you see coming down the pipe?
Speaker 3:
This is John again. I’ll sort of start out and then Mike and just sort of add in his thoughts on this. I think, realistically, if you look and I think it varies by state there are certainly states that are more progressive and have evolved more, has much more specific capitated models in terms of a lot of their MA and value-based models. Value-based really is at its infancy. While payers are trying to create some models, most of it is all based on cost-based models versus actual care or savings, things of that nature, and so the reality of it is is their focus is primary care physicians and so even the venture capitalists that have funded these models. They’re really all about how do you get attribution and where does that attribution come from? And that comes from your primary care base. But if I was an ASC now this is John’s perspective and Mike can comment on this but if I was an ASC, I would think in today’s model what I would look for is I would look around and see if I’ve got core primary care practices that are heavily involved in value-based care, and most of that is going to be in the traditional ACO models red, white and blue Medicare that first came out and it’s going to be in the Medicare the fast growing Medicare Advantage, and then it’s going to be in the Medicare that the fast growing Medicare Advantage and then it’s going to be in some of the commercial platforms as well. Most noticeably, I would say, blue Cross is a PHC program is another place where there’s going to be some significant growth.
Speaker 3:
And if I looked in those models, I would. I would say I would work with those providers and say, ok, I may not participate in the financial aspects of it, but here’s what I can do. I can. I can. I can be in a better commutative place than you’re going to be Maybe with other institutions that are in that marketplace or other agencies. I can get your patients in on a timely manner. I can communicate to you on a timely manner. I can provide the clinical responses back to you in a timely manner. I can provide the clinical responses back to you in a timely manner, all the things that they need today to be effective in managing their attribution.
Speaker 3:
And but what the real benefit of this? And I go back, and I think Michael made such an astute point about this earlier. But the real benefit to me for an ASC is now I’m going to get a definitive referral source. I am no longer depending on my patients to be what feeds my ASC. I’ve got a definitive referral source and it’s human nature for a physician. If you’re taking my Medicare patients, I’m going to send you all of my patients. I don’t tend to send them spotty. I tend to find a place that I’m comfortable with and that I have a lot of faith in and that’s where I’m going to send them.
Speaker 3:
And so back to that point of Michael about where you’re going to get your patients from. This is an opportunity for you. If you have value based models in your community with your primary care, how you collaborate with them for that base. And I will say this if they’re in your, if they’re in your community and I do think this is indicative of the rural communities don’t always look strictly to the independent primary care. You absolutely have to. But don’t forget that RHCs and FQs, or particularly FQs, they’re FQs that participate in these value-based models, so they’re a great resource to collaborate with as well.
Speaker 4:
Stated differently what I hear you saying. I think this is absolutely true in the market that for surgical specialists right now the value-based play is really a fee-for-service play wrapped in value-based clothing. Because in order to grow my referral base and the sort of the attractiveness of my practice up until now it’s been you know, my general reputation in the market probably not based with a whole lot of quality data per se, because it’s more relationally based on all that. And then it’s the interactivity between my staff from the primary care staff in order to make it easy to get a patient in and the right information goes back over that. At the end of the day, that’s been our basic attractiveness to a primary care. Now there’s a whole new angle of how I can be attractive to them by understanding their value base play and it’s not so much about me horning my way in to get part of those dollars, but it’s me being such an effective partner in that, understanding the goals that you’re supposed to meet, primary care physician, such that if I assist you in that and I help you meet your goals, then I ought to be your natural play on the other side. I don’t think anybody would push back on that because, to the degree that becomes either quality-based or cost-based, that’s exactly how the program ought to be working, that I need to be held accountable for higher quality and lower overall cost.
Speaker 4:
To the degree I understand that and that makes me an attractive receiver of primary care volume, that is, you know, that’s the brand new version of the physician liaison service that we traditionally have done out there to make sure our primary care practices are happy with us.
Speaker 4:
There’s just a whole other angle for the ones that are sort of diving in the deep end of the pool of value-based world. That will be for me to have a platform to be attractive to you and I think, john, like you’re saying, I don’t think Georgia’s on the cutting edge of this. I think we lag behind other states and I think there’s other places to look at in the country that have probably been farther developed with this for us to look at and go. What does it really look like to be a really effective surgeon that has an ASC, but a really effective surgeon growing my referral base by being effective with helping a primary care group or groups meet their measurements under this and that, whether or not it’s tomorrow or a year from now or two years from now, five years from now, that is going to be. I think, from our perspective, that’s going to be one of the lead, if not the lead way that specialists get their volume in the future.
Speaker 3:
Yeah, you know, mike, I’m going to say this. I know we got to go, but I am going to say this because I think you touched on it again. You know we are underdeveloped. We talk about being in a fee-for-service as far as, as you said, wrapped in a value-based clothing, but the reality of it is is when these new models come in, absolutely come and make no mistake about it.
Speaker 3:
There are organizations that are already here. They’re going to be more coming and the reason that they come here is it’s a virgin market that they just feel like getting in on the front edge is what’s going to make them as successful. They have been in other states, but in their models they gravitate out of the fee-for-service and into the capitated models and that’s where they want to drive everybody. So, as they’re trying to drive providers into those capitated models, being a referral base that’s cost effective and trend and going back to your point, pricing transparency will be incredibly important in this to be able to demonstrate to these plans and these other providers. Here’s my cost for these set of services and these are the things that I can do to impact your dollars, and I think you’ll see tighter to two points. I think you’ll see tighter relationships between specialists, particularly with ASCs and primary care, because they’re going to be bound by the cost of that plan, because again they’re going to drive it towards capitation. But great, great point.
Speaker 2:
All right. Great dialogue fills with helpful information for providers to take forward. We hope the audience enjoyed the dialogue format versus our historical Q&A format. We found it very productive and we certainly look to pick back up next time around as we start diving into primary care and specialist trends, just as we did with ASCs today. So with that, thanks John, thanks Mike. Appreciate y’all’s time today.
Speaker 1:
You’ve been listening to Beyond the Stethoscope, Vital Conversations with SHP, a production of Strategic Healthcare Partners.
Speaker 2:
For more information about our podcast, including back episodes, show notes, transcripts and more, visit our website at shplccom slash podcasts.
Speaker 1:
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Speaker 2:
And our podcast wouldn’t be possible without our wonderful team of folks.
Speaker 1:
Editing and production assistance by Nyla Weave and myself, Aaron Higgins.
Speaker 2:
And your episode hosts are Aaron Higgins and myself, Jason Crosby.
Speaker 1:
Our social media coordinator is Jeremy Miller.
Speaker 2:
Our executive producers are also our principals Mike Scribner and John Crew.
Speaker 1:
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Speaker 2:
As always, thank you for listening and have a great, wonderful day.