Is Your ASC Ready for Spine Surgery?

We’re witnessing a perfect storm of factors converging at the perfect time to make outpatient spine one of surgery’s hottest specialties. There’s overwhelming physician buy-in, widespread insurer acceptance, proven statistics on lower complication rates, and higher patient and staff satisfaction. Plus, the pandemic continues to overwhelm hospitals and push patients toward ASCs. For well-positioned facilities, now is the time to consider adding an outpatient spine program or ramping up an existing one. 

We’ve been doing outpatient spine surgeries for more than 20 years, and we’ve seen what it takes to succeed. Whether you’re looking to start a new program, enhance an existing one or take on more complex, high-acuity cases, there are several questions you need to ask yourself first.

Outpatient spine programs that flourish have a surgeon who is well-known in the community, trained in the latest minimally invasive techniques and motivated by better and safer care, and happier patients and staff — and is willing to take honest feedback and direction from staff. That combination isn’t always the easiest to come by — and the latter is especially important. Outpatient spine programs work best when they’re run as a true democracy.

Everyone at our facility — surgeons, the administrator, anesthesia providers and the nurses who carefully screen patients and often know the details of their conditions better than anyone — gets a vote on whether we should take a case. It’s not uncommon for nurses to voice concerns about a potential patient or for an anesthesia provider to request a cardiac clearance before clearing a patient for surgery. That’s part of the due diligence needed to ensure surgeries are performed safely, effectively and efficiently.

You could have the most-talented, forward-thinking surgeons in the world, but if you don’t have an administrator who can look at every piece of the operational puzzle and run the program based on quality metrics, your center isn’t going to succeed. Your administrator is the lifeblood of the entire operation.

We’ve made a lot of money doing outpatient spine, but we have never — emphasis on the never  — focused on running through cases simply to make money. We have always emphasized quality first, and any financial benefits we currently enjoy are solely the result of trying to learn from each case and go into the next one better prepared to provide meticulously analyzed, outcome-based care that’s better than the care they would receive elsewhere. When a trend emerges in the outpatient market, it’s only natural to see financial opportunity. But spine isn’t the type of specialty you can go in and just start moving cases. It costs a lot of money to do this well.

From an equipment standpoint, you need a C-arm ($160,000 and up, though you would have this if you’re doing pain cases), special spine tables ($45,000 to $100,000), surgical microscopes ($150,000 to $275,000) and instrumentation that includes drills (approximately $35,000), retractors ($15,000 to $20,000 each) and instrument trays that are specific to your facility’s surgeons and case mix. You need to properly evaluate if your case volumes and margins justify these costs. For instance, we needed to exceed 300 cases per year to scale margins enough to cover equipment costs.

When we started our outpatient spine program, every procedure we performed was out of network — not because we wanted it that way, but because none of the insurers would give us a contract to perform spine surgery in the ambulatory setting. Thankfully, that’s changed, and payers now realize outpatient spine leads to lower infection rates, fewer complications and lower costs, as well as higher-quality care and better patient satisfaction. Your reimbursement is tightly connected to your payer contracts, and it’s much easier to get smaller cases covered as they become mainstream in the ASC setting. But you need history and benchmarking to prove you can handle these cases and get the attention of the carriers. When negotiating with carriers, lean on your patient outcome and satisfaction data.

You might not need to beg insurers to reimburse spine procedures done on an outpatient basis, but they do need an impeccable knowledge of their own case costs, which vary greatly based on a number of factors, including geographic location. In general, we expect to cover case costs and make a small profit. Not every case goes as planned, and the risk for a higher cost is always possible due to lengthier-than-expected stays or the need for additional implants and biologics. This should be accounted for in your case costing. Profit margin varies based on case acuity; the more complex cases have the potential for a higher margin, but they also carry more variability in costs.

Put safeguards in place to prevent unnecessary costs from eating away your margins. For instance, we have service contracts that state we authorize X implant only; reps can’t sell for other things. They can use whatever they’d like, but under our contract, vendor reps can’t charge us for any unauthorized implants.

Reimbursement varies greatly from payor to payor, and the codes for outpatient spine are changing almost daily, so you need to stay on top of what your contract says and what your surgeons are doing in the OR. From a coding standpoint, these aren’t simple procedures. There’s a plethora of codes for every case, and they can change drastically with one word. Make sure everything that was documented matches up with what was authorized preoperatively.

For instance, consider a procedure performed on a patient with a ruptured disc. Normally, you would post this as a microdiscectomy because the surgeon always does a decompression on the way into the disc. Now, let’s say that the surgeon doing this case dictates that spinal stenosis, separate from the herniated disc, is a part of that patient’s diagnosis. Dictating that stenosis diagnosis completely changes the coding and, as a result, the reimbursement of the procedure. As this case demonstrates, make sure surgeons are aware of this small but significant distinction.

Bottom line: Know all of your case costs like the back of your hand, review payer contracts with a fine-toothed comb and keep everyone in the loop about proper authorization for the ever-changing reimbursement landscape. OSM