May 17, 2019

Cardiology services: The next wave in ASCs?

Many experts see cardiovascular (CV) care as the next wave in ambulatory surgery centers (ASCs), and a hybrid office-based lab (OBL)/ASC model is gaining momentum across the country.

Robert J. Zasa, MSHHA, FACMPE, president and CEO of Ambulatory Systems Development, LLC, in Incline Village, Nevada, sees the hybrid arrangement as a prime growth area for ASCs. The company has established hybrid facilities in five locations, with a goal to establish five more in other areas. As Medicare continues to look at the types of cardiac procedures that could be performed in ASCs, it’s likely that private payers will follow, thus expanding this offering to more patients.

Dustin Douglas, RCIS, BSB

“It’s a lot less expensive to have a physician perform a proper cardiology surgery case in an outpatient setting than in a hospital, which is under more regulatory controls than an office,” Zasa says. And an outpatient facility offers greater comfort and convenience for patients.

But setting up these facilities is no easy task. Hybrid OBL/ASCs must comply with Medicare’s specific requirements, get proper certification, and gird themselves for any hospital competitors posing a challenge to their business under state Certificate of Need (CON) laws. “It’s a sophisticated shop to run,” says Marc Toth, chief executive officer of ACA Cardiovascular, Incline Village, Nevada, which has set up several hybrid OBL/ASC facilities throughout the United States and plans to add more.


Birth of the hybrid CV model

In 2008, the Centers for Medicare & Medicaid Services (CMS) significantly increased Medicare coverage for peripheral artery disease (PAD) treated in physicians’ offices, and almost overnight, the market shifted from the hospital to the office, with more than 500 OBLs doing these procedures. As a result, CMS added other codes for office-based CV work. In 2015, CMS approved electrophysiology pacemaker and implantable cardiac defibrillator implants for surgery centers.

Medicare now has anywhere from 70 to 100 approved CPT codes for ASC cardiology procedures. About 20 fall into the most “frequently used” category, which includes PAD and pacemaker codes. In 2019, Medicare added coronary diagnostic cases, “a huge step forward in coronary stenting,” says Toth. He anticipates Medicare will approve additional procedures for ASCs in 2020.

In 2010, a hybrid OBL/ASC model started to gain traction, as Medicare expanded its approvals of certain CV procedures in the outpatient setting. The next wave of ASC growth with these hybrids “is definitely taking off right now. We have about a dozen in various stages of development: 16 total projects, with 12 functioning as hybrid ASCs,” Toth says.


Hybrid OBL/ASC model

The hybrid model has attracted interventional cardiologists and interventional radiologists eager for lucrative Medicare reimbursement rates.

Many of these cardiologists had OBLs or were doing this type of work in catheterization (cath) labs. To get reimbursed by Medicare under the hybrid model, cardiologists must convert their OBL into a Medicare-accredited and certified surgery center that alternates as an OBL or a surgery center for different purposes on different days, with the OBL and the ASC maintaining separate tax ID and National Provider Identification (NPI) numbers.

“They are separate legal entities,” explains Zasa. The ASC gets facility fees only and does procedures from a Medicare-approved list. The OBL fee is an enhanced professional fee that combines a fee for the physician and some money for covering the expense of doing the procedure in the OBL.

When the ASC is open, patients who undergo procedures in the OR are billed by the ASC for a facility fee. The physician charges a separate professional fee for doing the procedure. When the OBL is open and a physician performs a procedure there, he or she bills the patient for an enhanced professional fee, using a professional NPI and tax ID number.

The Heart & Vascular Center in Bryan, Texas, one of the first CV hybrid models in the state, operates as an OBL on Monday, Tuesday, and Wednesday, and as an ASC on Thursday and Friday. The facility offers services including implantable cardioverter defibrillators, pacemakers, coronary angiograms and interventions, and peripheral angiograms and interventions.

Two local private practice cardiology groups partnered with National Cardiovascular Partners (NCP) in Houston, a pioneer of the hybrid model, to form the ASC/OBL. “NCP has an excellent process in place when opening new centers or converting an existing facility,” says Dustin Douglas, RCIS, BSB, the facility administrator.

“Our physician partners have complete control over how the center operates, the staffing at the center, and the equipment they use. NCP takes care of the rest. It’s a perfect partnership,” Douglas says. NCP partners with hybrid OBL/ASCs in Texas, California, Arizona, Kansas, Louisiana, and Florida.


Advantages to providers, patients

The hybrid structure offers certain financial advantages, Toth says.

Medicare provides different reimbursements for the same procedure based on site of service. The hybrid model “allows those providers to enjoy the best reimbursement based on site of service,” Toth says. Alternating between an OBL and ASC on different days offers a risk mitigation formula of sorts because “sometimes Medicare pays better in an ASC, sometimes in an OBL,” he explains.

A good example of this is Medicare’s decision in 2017 to reduce reimbursement for fistula repair in diabetic patients, angioplasty, and stenting by 40% in OBLs, a measure that forced 20% of these businesses to close their doors. “When this happened, many of these businesses came to us, asking them to help them convert to an ASC [to avoid the cuts],” Toth says.

At least 120 OBLs in the United States converted to ASCs. Many of these facilities received assistance from ACA Cardiovascular on building requirements and certifications.

The OBL/ASC model also benefits patients and the government, advocates say. ASC care often means same-day discharge for a CV procedure. The setting is also more private, serving just 10 to 15 patients at a time.

“At a hospital, a patient may get bounced from one department to the next with different nurses or staff. At a hybrid ASC, one nurse takes care of you when you come in the door from start to finish for quality continuity of care,” Douglas says. For this reason, Douglas says his facility enjoys a 99% patient satisfaction survey rate.

The hybrid model reduces costs for CMS because cases performed in this setting are 40% cheaper than in a hospital. “Our 10,000 square foot buildings are more efficient than a multimillion-dollar hospital campus,” says Toth.

That said, any ASC hybrid has to meet the same standards as a hospital in addition to meeting Medicare’s requirements. This means getting accredited by either the Joint Commission or the Accreditation Association for Ambulatory Health Care (AAAHC). Facilities should prepare for Medicare surveys in which the agency sends in a third party like AAAHC to assess the air conditioning, the width of hallways, and other minute details. “Everything has to be up to standards,” Toth emphasizes. Both the cath lab and ASC at the Heart & Vascular Center have Joint Commission accreditation.


CON challenges

Providers looking to set up a hybrid OBL/ASC should be aware of state laws affecting these businesses, says Jason S. Greis, JD, a partner with McGuireWoods LLP, Chicago, which represents a variety of healthcare providers. About one-third of all US states won’t allow ASCs to simultaneously operate as an OBL or ASC on alternating days. Most states also require that physicians go through an application process to add a new service line, or spend a certain dollar amount to build out an ASC to add a service line. It’s a process that doesn’t take place overnight, cautions Greis.

“What people don’t understand is, it can take 6 months to a year in non-Certificate of Need states, and even longer in CON states.” This is because an applicant has to go through an additional step of obtaining approval from a state’s CON board or department of planning to build a new facility. That can take 6 to 12 months, on average, Greis says.

Meetings to approve these types of facilities take place only at certain times of the year, and delays are often inevitable, Greis adds. “Even if your meeting is on the calendar, there’s no guarantee that you’re going to get a favorable decision. Or, your project may get pushed back to the next meeting.” A state agency health facility planning board in states with CON has the authority to determine whether there’s a need to develop a service line in a particular geographic area.

Competitors also present roadblocks if they object to a proposed service line that duplicates their own services. “Hospitals are notorious for doing this,” Greis says. In some states, competitors have an opportunity to object to new applications and attempt to “kill” a project. The Trump administration, which sees CON laws as a restriction to access to care, has supported their removal. “I don’t know if CON laws will be rolled back, but that would improve access to ASCs,” Toth says.

Not all states allow certain types of CV procedures in settings outside of a hospital. “While most will allow physicians to do peripheral vascular and cardiac rhythm management procedures, some states have regulatory barriers on performing cardiac cath and interventional procedures,” says Trey Domann, senior director of cardiovascular development at Surgical Care Affiliates (SCA) in Houston, which represents both ASCs and surgical hospital providers across the United States.

“CV care is complex, and each opportunity will have its own unique conditions that impact the business case,” Domann says. Physicians have to look at state regulations on procedure types, payer relationships, cost of build-out, and capital equipment, as well as CON statutes, to decide whether or not this is worth the risk. Health system leaders are also aware of how profitable the CV service line is, and they’d rather not lose these procedures to an ASC. “This is part of the reason so many CV physicians are either employed or closely affiliated in multiyear agreements with hospitals,” Domann says.

But not all hospitals are pushing back. Some, in fact, are thinking of establishing their own ASCs to do these types of procedures (sidebar below).

Federal officials have their own concerns related to financial motivations for setting up a hybrid. For example, exploring a hybrid to take advantage of differentials in reimbursement is a risk, Greis says. The government might respond with an investigation of any documents, emails, and text messages that might indicate improper intent or a violation of the federal Anti-Kickback Statute.

Hybrid developers should analyze the arrangement to ensure that it meets an exception under the federal Physician Self-Referral Law (Stark law), advises Greis. There are also state fraud and abuse laws to comply with, “and it is critical to review those statutes as well,” he adds.


Hospitals eyeing ASCs to expand CV care opportunities

Joe Sasson, PhD

Hospitals have reacted in a number of different ways to the outpatient cardiovascular (CV) services boom, says Joe Sasson, PhD, executive vice president of MedAxiom, Neptune Beach, Florida, a membership organization and consultancy focused on accelerating the transformation of CV care. “While some hospitals feel that ASCs [ambulatory surgery centers] may not pose a threat in their market, others are concerned enough that they’re planning to open their own ASCs to do CV procedures that we expect Medicare to approve in the near future,” Sasson says.

MedAxiom sees CV services as a growth area. In addition, there’s a continual push to lower costs by transitioning more work to the ambulatory setting as safely and effectively as possible when it’s appropriate to do so. “That includes ASCs,” Sasson says. Although some hospitals are waiting on safety data to reach a more confident positioning, “all are certain that the ASC is a lower-cost setting.” In a world of bundled payments and accountable care organizations, it’s an important view to take, he adds.

In 2018, MedAxiom announced a corporate partnership with National Cardiovascular Partners (NCP) in Houston and ACA Cardiovascular in Incline Village, Nevada, to provide its members with options surrounding a CV ASC strategy. Both organizations aim to help provide more accessible, lower-cost care in facilities focused on safety and an improved patient experience.

“Cardiovascular care is very market dependent, and there is little competition in some areas and a great amount of competition in others. Combined with the varying legislation that states have around ASCs, market-specific factors play an increasingly important role in determining a path forward for an ASC strategy,” Sasson says.

Because each situation is unique, healthcare systems should conduct a comprehensive market analysis before committing to any ASC strategy. Such an analysis should include:

• patient population characteristics

• disease prevalence

• state laws (including any Certificate of Need concerns)

• access and wait time concerns in the community

• the landscape of provider organizations (including ASCs already in existence or proposed to be built)

• other factors that shape an organization’s ASC strategy.

“This is certainly an area in which expert guidance is crucial,” Sasson says. “We believe that MedAxiom’s two partners in the ASC space do a phenomenal job of helping our members navigate these concerns.”


National Cardiovascular Partners Joins MedAxiom. September 25, 2018.

Separation of church and state

“You can’t be an OBL on the same days as an ASC,” Toth says. There needs to be a separation of church and state, so to speak. Some states require a separate entrance and exit, separate scheduling, and separate contracts for the ASC and OBL with private payers. “You might even have to answer the phones differently on different days,” adds Toth. Surgery centers in the meantime have stricter building and certification requirements than OBLs.

Toth advises ASC leaders to hire a professional management company to run the hybrid operation rather than rely on the office manager because it is a big job. Having unrealistic expectations for volume is another pitfall. Many physicians will open a center expecting that their respective partners will bring in a certain number of cases per week, and that may not happen, Toth notes. And some physicians might be keeping one foot in the hospital setting and may not be fully committed to the ASC, he adds.

Facilities that don’t have enough volume or procedures don’t go forward, Zasa says. Physicians need to assess their volume or caseloads, and know what types of procedures they’re going to offer. What procedures under which CPT codes will their physicians be comfortable with?

Then there’s the question of the facility itself. Cardiologists typically have an OBL procedure room in their office, or they might work in a medical office building with a cath lab. Zasa has seen some physicians look for a new location, which might mean moving and building a new office with a surgery center attached to it. The important thing is to have a firewall between the office and the surgery center, per Medicare’s rules for the hybrid facility, he says.

Constructing a new facility is very expensive, and existing buildings or office spaces may need renovations. “Before ASC leaders do this, they need to look at the costs involved to fix the facility to meet regulations,” Zasa says.


ASCs aren’t for everyone

Whether a patient has a CV procedure in an ASC or a hospital is ultimately up to the referring physician, Zasa notes.

Not all CV cases are appropriate outside of the hospital, Domann says (sidebar below). “States that have restrictions on cardiac cath and percutaneous coronary intervention outside of the hospital usually lump the procedures in with cardiac surgery, and you see language around prolonged entry into major blood vessels,” which means that only a select group of patients will be eligible for the outpatient setting.

Still, Domann anticipates that the outpatient boom will continue in the CV space. “With CMS adding 12 cardiac cath codes to the approved procedure list for ASCs for 2019, we have already engaged in conversations with states with existing cardiac restrictions around efforts to loosen up restrictions on performing these procedures outside of the hospital.” ✥


The three buckets of cardiac care

“Cardiovascular care is complex, and barriers to entry vary dramatically from market to market, which is why so many ASCs [ambulatory surgery centers] have not capitalized on what’s considered one of the last major service lines to enter into the ASC space,” says Trey Domann, senior director of cardiovascular development at Surgical Care Affiliates (SCA), in Houston, which represents both ASCs and surgical hospital providers across the United States.

Developing an office-based lab (OBL) for peripheral artery disease procedures has gotten easier over the past 10 years, with favorable reimbursement, minor construction, lower capital expenditures, and assistance from device and equipment vendors. The process gets more complicated once that OBL decides to transition to an ASC, Domann says. “Among other challenges, there’s an accreditation process to go through, state laws to comply with, and possible costly upgrades to the facility.” Any provider who wants to do this has to weigh the risks with the overall return on investment, Domann notes.

When adding cardiovascular (CV) procedures to a multispecialty center or developing an OBL/ASC hybrid model, SCA usually looks at the opportunity within three buckets of nationally targeted outpatient CV procedures. Cardiac rhythm management procedures are often the easiest to establish because little additional equipment or construction upgrades are needed.

“From a staff training perspective, it’s a relatively seamless integration,” says Domann. Procedures may include loop recorder, automatic implantable cardioverter defibrillator and pacemaker implants, and battery changeouts.

Adding peripheral vascular procedures to an existing ASC requires additional due diligence on the front end. “You have to make sure that your physicians are comfortable with the existing imaging equipment,” Domann says. It may be necessary to add a float table and an injector, and upgrade to a vascular package on the C-arm.

State regulatory barriers, cost of equipment, and space needs make cardiac catheterizations and interventions the most challenging bucket of procedures to add to an existing ASC. Compared to most multispecialty ORs and procedure rooms with mobile C-arms, catheterization (cath) labs with fixed unit C-arms need additional space for the equipment. Most cath labs have an additional control room for monitoring and recording the cases. “There is also more radiation involved with cath procedures, so you’ll need to look at adding lead shielding to the walls,” says Domann.


Jennifer Lubell is a healthcare writer based in Rockville, Maryland.



Jones W S, Mi X, Qualls L G, et al. Trends in settings for peripheral vascular intervention and the effect of changes in the Outpatient Prospective Payment System. J Am Coll Cardiol. 2015;65(5):920-927.


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