February 16, 2017

There are many variables in the development of an ambulatory surgery center; however, these four components are critical to consider in the early stages of ASC development.

Physician Commitment: Having a core group of physicians who are committed both financially through an investment and to performing cases at the center, is the most important aspect of a successful surgery center. The physician investor group can either be from one practice or several practices and are typically independent.

Case Volume: This is one of the most frequently asked questions in the development process and as many other variables the answer depends on the specialty mix of the case/procedures to be performed at the facility. In general, in a reasonable reimbursement market for multi-speciality surgery center with two operating rooms and two procedure rooms a case volume of 2,500 cases per year would provide a solid return on investment. In lower reimbursement market the case volume would require 3,000-3,500 procedures to provide a profit. Specialties to include in a multi-specialty center include orthopedic, pain, GI, ophthalmology, ENT, general surgery or a start.

Note, the final destination of adequate case volume depends on the project and market specifics including payor environment, multi-specialty case-mix, CPT code mix, to name a few.

Consideration of which cases a physician will actually perform at the ASC and those he/she will continue to do at the hospital should be reviewed. Last, you will need to have an understanding of procedures allowed in an outpatient. Contact Practice Partners if you need assistance in determining outpatient versus inpatient allowed procedures. https://practicepartners.org/feasibility-study/

Mix of CPT Codes: It is necessary to match the number of CPT codes per surgical case to determine the total charge per procedure. For each physician investor, request a report showing surgical cases and CPT codes associated with the cases on a 12-month time frame.

Payor Mix: A thorough understanding of outpatient reimbursement and the payor mix of a proposed center has a significant impact on the center’s ROI. That portion of the business is government (Medicare/Medicaid/Tricare)? How do current state laws direct and outline Work comp reimbursements? How much of the market is monopolized by one or two major Payors? Is there an opportunity for out of network revenue when in network, for whatever reason, is not viable. All questions to consider and understand when considering the right payor mix.