Cost-Cutting at Whose Expense?
Answer: If the Centers for Medicare & Medicaid Services (CMS) uses a cost survey to rebase ambulatory surgery center reimbursement rates in a manner similar to the hospital outpatient prospective payment system.

Question: When is cost-cutting not such a good thing?
It flies in the face of logic, but your cost-cutting efforts of today could drive down the reimbursement rates of tomorrow. Let's take as an example cataract cases. Whether it's the hunt for the cheapest supplies or the practice of using "re-sposables" (a friend defined this for me as a disposable instrument/article which is used repeatedly), slashing supply costs is an art form.

But there's a real possibility that CMS will use a cost survey to set new ASC payment rates in the next year or two, and many speculate that costs will be tied to reimbursements if the outpatient prospective payment system migrates to ASCs. So the more dollars you shave off of your cataract supplies, the more CMS will shave off of your reimbursement level. It's unfair and it's unfortunate, but ASCs may be penalized for doing such a good job of driving down their per-case costs.

There's a better way to improve the financial health of a procedure than slashing costs. As RN Barbara Harmer recommends in "9 Strategies for Economizing Cataract Cases" (page 46), increase your efficiency and your volume. CMS can't penalize you for doing more cases, only for how much it costs you to do each case.

"A revenue increase from higher procedure volume can dwarf the benefit of a cost reduction," says Brette McClellan, director of health policy & government relations with Alcon Surgical. "Improving surgical efficiency can increase revenue by allowing more procedures to be performed in a given period of time. It takes a lot of cost cutting to get the same impact as a 10-20% volume increase, and the volume increase doesn't wreak havoc on future reimbursement amounts."

Another way to improve revenue without hurting reimbursement, says Ms. McClellan: Hire an expert to improve coding and billing accuracy, so that your facility is receiving every dollar to which it is legally entitled.