Until fairly recently, total joint replacement was considered to be far too complex to handle in the outpatient setting. It was thought that patients needed to stay in the hospital for at least two to three days before they could be transferred to a rehab facility and start physical therapy. Our facility is one of the rising numbers of ambulatory surgery centers that is proving that this just isn't true. Since we've opened our doors in February 2000, we've done about 30 total knee replacements. This represents six percent of our cases, and the number is rising. Everyone involved with bringing these procedures to our center has realized a number of benefits. Our patients are able to start rehab almost right after surgery, which decreases recovery time. This is especially appealing to younger, healthier patients. Our surgeons appreciate our friendly, efficient environment and staff. After some initial resistance, our payors are realizing that we are saving them money on the total cost of care. And finally, our bottom line has gotten better-we're turning a profit of about five to 15 percent above cost, depending on the insurance company and the surgeon.

In addition to our total knee cases, we recently did our first total elbow, and our first total hip is scheduled for next month. But total knees is where it all began for us. If you're thinking of offering this procedure or any total joint procedure, perhaps our experience will be useful to you.

Building blocks
In the process of establishing our center and preparing it for total joint replacement, we identified several key building blocks:

• The ASC and rehab facility must be physically close to one another. Ours are literally next door, but something within a two-mile radius is acceptable. Fresh post-op patients can't tolerate a 10 to 15 mile trip to rehab. The ASC and rehab facility should be associated in some way, and it's best if they're part of the same organization. This enables you to provide a continuum of care and may simplify insurance billing.
  
  Total joint replacement was a priority for our ASC before it was even built. As part of the HealthSouth organization, the center was conceived as a satellite to the Grandview Surgery and Laser Center in Camp Hill, Pa., and was purposely located adjacent to the HealthSouth Rehabilitation Hospital of Mechanicsburg.
• To convince surgeons and payors that you will be able to handle these procedures, it helps to map out every step of the process. Before we began offering total knees, we had heard that our orthopods were dissatisfied with conditions at the local hospital. They approached us with the idea of doing total knees at our center, but we had to prove that we could do it. We made our case by establishing a total knee patient pathway, which is a five-day, standardized plan for patients (which we customize as needed). The pathway describes everything from lab tests to procedure protocols to pain meds for each day until the patient is sent home from rehab (if we deviate from the patient pathways, we document why). The patient pathway helped us prove to our surgeons that we were capable of handling these cases. They also came in handy when we were negotiating for payor contracts (more on this later).
• Educate your patients. Our ASC coordinator and the rehab's orthopedic coordinator have put together a once-a-month, pre-surgery tour and patient education program, where prospective patients can come in and learn what exactly is going to happen during the operation. At each session, someone from anesthesia, a physical therapist and a nurse are available to answer any questions.
• Make sure your staff is qualified. We hired OR nurses with strong orthopedic experience, and the same two or three scrub nurses handle all orthopedic cases. We selected pre-op and recovery nurses with backgrounds in ICU, emergency medicine, and hospital PACU. We find this hands-on experience invaluable in providing the very best patient care.
• Obtain the necessary equipment. If you already do orthopedics, you'll already have the necessary drills, saws and tourniquets. Aditionally, we had to purchase cement and cement mixing devices. Any implants and special instruments are brought into the facility the day before surgery by the sales rep, and our staff wraps and sterilizes the instruments prior to surgery.
• Prepare the rehab staff and rehab facility. Rehab is accustomed to admitting these patients two to three days post-op, not right after a procedure. To help them prepare, we went to the rehab facility and offered to help them brush up on their acute nursing skills for the immediate post-op patient. The staff also received certification in Advanced Life Support and training in monitoring epidurals and PCA pumps. We also helped them contract with a hospital blood bank and obtain Continuous Passive Motion Machines, which are devices that keep the knee moving in a bending motion, which keeps the blood moving and prevents stiffness. The rehab facility ended up purchasing two CPM machines, and they lease more depending on our caseload.

Insurance matters
Because managed care companies don't really see total knee replacement as an outpatient procedure, we knew that obtaining reimbursement would be tricky. We initially approached the top five insurance companies in the area with our proposal.

Even though we proved that we would in fact be reducing the total cost to our payors, we encountered skepticism. They questioned us in two areas: First, they weren't certain that we could handle total knees without complications. Also, initially, they couldn't see the need to pay separately for the implants, as we were requesting (total knee implants typically cost between $3,000 and $5,000).

To allay their fears in the first matter, we took our patient pathways to each payor to demonstratehow we would do these cases. We even brought along two orthopedic surgeons to one of our payor negotiation meetings to answer any questions.

To demonstrate the need for a separate implant reimbursement charge and prove that we weren't overcharging our payors for implants, we first showed them the vendor's original invoices for these devices. We explained that if implant costs increased, it would be impossible for us to absorb that cost plus the cost of the rest of the case. Most of our payors then agreed to "carve out" the cost of the implant. We now submit our billing claims in two parts: First we submit the vendor's invoice on the implant with no markup. We then submit the facility fee (we've negotiated different fees with 10 different payors). This way, even if the cost of implants increases, our facility fee is guaranteed. To be fair to our payors, we actively negotiate with vendors to keep the implant cost as low as possible. One thing that helps is that area hospitals had already established a standard cost with total joint vendors, and we make the vendors stick to it.

Our experience with insurers has been mixed. One insurer is more cutting-edge, and made the transition smoothly. With others, it was more of a long, painful process that took real persistence on our part.

How it works
Scheduling patients for total knees is similar to scheduling any patients, with a bit of extra precaution thrown in. The physician first evaluates these patients, who range in age from 30 to 64. We then take our own comprehensive health history by phone, looking for any conditions that place the patient outside the norm for his or her age group. If we identify any potential risks, we request an anesthesia consultation prior to the day of surgery.

Patients who fit our criteria arrive two hours before surgery (all other patients arrive one hour prior). We use the extra time to fill out all the paperwork for the rehab, so the patient can be discharged from the ASC and admitted without a hitch.

The procedure takes anywhere from one to two hours. The patient remains in our PACU for two to three hours. During that time, our recovery nurses set up a PCA pump or they continue the epidural (oral pain meds are not adequate). Our discharge criteria are the same as for any patient: He or she must be stable and awake, and we prefer that the patient is not nauseated.

We contracted with an ambulance service to transfer the patient to the rehab facility. One of the nurses accompanies the patient and carries along the chart and the admission paperwork; he or she gets the patient settled in the rehab facility and helps the rehab staff set up the PCA pump or maintain the epidural. To keep costs down with patient transfers, we negotiated with the ambulance company for a special one-way rate (the nurse walks back to the ASC), based on an average of 10 trips per month.

Patients begin therapy almost immediately-if the surgery occurs in the morning, for example, they're in therapy by the afternoon. Despite bypassing the traditional hospital stay, they are usually able to leave within three to five days.

Positive outcomes
At this point, I would say that our experience with total knees has been very positive, with outcomes that are as good as, if not better than, inpatient surgery. About six surgeons are now performing these procedures regularly, and we expect more as the word spreads. Our surgeons like the personal, low-key atmosphere, and their patients like the fact that they return home more quickly. We believe that if Medicare would cover the procedure for ASCs, our caseload for total knees would increase dramatically.

Because Medicare does not pay for this procedure on an outpatient basis, we miss out on about 70 percent of the market for total joint replacement. To effect change, our ASC is petitioning Medicare to become an outpatient test center for total joints. We believe that if our ASC and others can demonstrate positive outcomes as well as cost savings, we'll win Medicare over on this.

If you're already doing total joints or would like to, you should consider sending a position paper, preferably demonstrating some patient outcomes, to Medicare, stating why you disagree with their position (as stated in the June 1998 Federal Register). Certainly, whenever our position paper appears in the Federal Register, we would appreciate letters of support from the ambulatory industry, especially since we expect strong opposition from hospitals.

While total joint replacement is a serious move for any ASC, we've proven that it's entirely doable and profitable. With so many aging Baby Boomers moving through the health care system, we believe the future for doing these procedures in the outpatient setting looks exceptionally bright.

Ms. Turnbaugh is Administrator at Grandview Surgery Center at Mechanicsburg, Mechanicsburg, Pa.