So your doctor just said, “You need surgery.” Now what? Do you have the surgery where your doctor tells you or can you shop around?
Nowadays, the health care environment has become extremely complicated for patients (and doctors’ offices). And many false assumptions persist about how and where health care is provided. In addition, patients are usually paying more out-of-pocket for their health care today so health care is becoming more consumer-driven than service-driven.
If you need surgery, there can be many options in addition to a traditional hospital for where to have the surgery. These include an ambulatory surgery center (ASC), a hospital outpatient department (HOPD) or a physician’s office. (Obviously, the type of surgery you are having may dictate whether you have a choice of location.)
▪ An ASC is a distinct and independent facility that provides surgical services for patients who do not require hospitalization and when the expected duration of services will not exceed 24 hours.
▪ A HOPD is similar to an ASC but it is considered part of a hospital.
▪ A physician’s office is a clinic setting.
Medicare pays ASCs less than it pays HOPDs. This difference between reimbursements is — in part — because a HOPD has greater overhead because of its connection with a larger organization so it can charge hospital-based rates (which are always higher than an ASC).
An ASC, however, is an independent entity with inherent efficiencies and cost controls. In general, each of these options has different out-of-pocket costs, capabilities and insurance coverage limitations.
Since ASCs are reimbursed about 55 to 60 percent of what a HOPD is paid, these savings also reduce the out-of-pocket cost to patients. For example, a cataract surgery under Medicare might pay an ASC $964 but will pay a HOPD $1,670. And the patient’s out-of-pocket is $192 in an ASC but $350 in a HOPD.
Again, the complexity of these options is that every surgery is not medically appropriate in every location. Also, insurance policies often place limits on where a surgery can be performed. For instance, a “routine” vasectomy has become a common surgical procedure often done in a physician’s office under local anesthesia, and insurance companies know this.
Therefore, if a “routine” vasectomy is performed in an ASC or HOPD, the insurance company will either not pay or will pay a significantly reduced amount since the surgical location was not appropriate (right surgery, right location).
However, the lines are blurred between an ASC and HOPD while they are quite clear between an ASC or HOPD vs. a physician office. Pursuing the right location for the right surgery can result in a cost savings to your pocket. In addition, the cost savings can help to keep insurance premium costs from growing so quickly.
There are recognized differences between ASCs and HOPDs. On average, the length of time for surgical cases was significantly less in an ASC (98 minutes) vs a HOPD (147 minutes).
Another difference between the two appears to be in the type of patient insurance coverage. For instance, in 2012, Medicaid patients accounted for 5.1 percent of ASC volume and 12 percent of HOPD volume. (In 2006, it was 3.9 percent for ASCs and 8.1 percent for HOPDs). ASCs, however, are associated with several advantages given their independent nature: greater patient convenience in location and scheduling, coinsurance is lower (out-of-pocket) and specialized staff.
Unfortunately, a physician cannot perform a surgery in any ASC or HOPD without advanced planning and paperwork. In particular, different surgical specialties require unique supplies and equipment.
And a physician must be “privileged” or approved via a formal process to ensure he/she has the appropriate credentials (education), experience and malpractice coverage before performing a surgery in an ASC or HOPD. All of this preparation takes time and usually a physician needs to commit to performing many surgeries in the same location to justify the effort in planning and paperwork.
What can you do? Ask your physician about whether he/she can perform your surgery in an ASC. If not, consider your options: (1) Accept the location your physician is privileged at and have the surgery there or (2) Get a second opinion with a physician privileged at an ASC, assuming an ASC is appropriate for the type of surgery you need.
Ultimately, you are the one having surgery so having it done by a physician you’re comfortable with, confident in and at a location that is appropriate from a medical and cost standpoint are completely in your control.
Ask questions and explore your options. After all, you have choices — and you’re the one paying the bill.
Gregory S. Feltenberger (PhD, MBA, FACMPE, FACHE) is the CEO of Idaho Urologic Institute. He has more than 20 years of executive-level and administrative health care experience. Idaho Urologic Institute is based in Meridian with offices in Boise and Nampa. Learn more at Idurology.com.