Getting Skin in the Game

Orthopedic surgery can be a demanding specialty, and with its rewards comes its challenges and opportunities. No one knows this better than J.F. James Davidson, MD, who specializes in sports medicine, shoulder and knee surgery and who is part of Canyon Orthopaedic Surgeons and also practices at Gateway Surgery Center, both in the metropolitan Phoenix area. He discusses life inside and outside of the OR.

Q: Why was the specialty of orthopedics right for you?

A: I greatly respect physicians in other fields such as family practice, oncology and trauma surgery, to name just a few. Good physicians can solve a complicated medical puzzle and potentially save a sick person’s life. These physicians carry the burden of a weighty responsibility. One reason I chose orthopedics and specifically the area of sports medicine is because our patients usually have treatable problems and the capacity for relatively rapid improvement. They usually do not have life threatening conditions and are highly motivated to improve in order to maximize their quality of life. I remember rotating through cardiology and nephrology in medical school and learning the serious consequences of chronic disease. On the first day of the orthopedic clinic we examined a man with a fractured patella. The patient jovially answered our questions regarding how he managed to be kicked in the knee by a goat. In spite of the discomfort of the fracture the patient laughed at his unusual predicament. I though, now I have found the right specialty.

Q: The practice of medicine is becoming more challenging in terms of medical malpractice, tighter reimbursement, etc., so how do you cope with these modern challenges?

A: I have had some very good teachers and role models. Bill Brainard, MD, one of the founders of our group, Canyon Orthopaedics, taught by example the benefit of finding enjoyment in working with patients and colleagues, and in performing surgery. Our practice has the innate rewards of helping people, solving problems, interacting with others. My partners and I feel fortunate to do what we do. The negatives certainly can be a drain on the system, but we try to focus on the positive reasons that we come to work each day.

Q: Most physicians are never trained in business, and when they become medical entrepreneurs, they can be unprepared for the rigors of business. What has been the most valuable lesson you have learned about being a medical entrepreneur?

A: As I mentioned, I have had some very good teachers. Dave Ott, MD, was the driving force developing our successful orthopedic ASC, Gateway Surgery Center. He proved that bringing traditional competitors together for a common business goal can lead to a win for all. Prior to Gateway’s development, Canyon Orthopedics consulted with a national firm regarding the viability of creating a small ASC as an extension of our six-man group. The consultant determined that the project would be worthwhile, but with lower volume than ideal. Instead we became part of the 30-physician Gateway ASC. This has proven to be far more efficient and successful than the project we could have done on our own. Currently under construction is the Southwest Orthopedic and Spine Hospital, an orthopedic specialty hospital in Phoenix. For this project 37 orthopedists and spine specialists have partnered with Catholic Healthcare West and USPI to build what we are determined to be the highest quality orthopedic facility in the region. Finally, a number of currently independent orthopedic groups in greater Phoenix are now working on the merger of our established practices to form a single large orthopedic group. We are hopeful that this of relationship will benefit from similar synergy as Gateway Surgery Center.

Q: What clinical lessons have you learned from sports medicine that you carry over into your other practice, and vice versa?

A: A high school athlete with the goal of a college scholarship is driven to return to the playing field as quickly as possible. A few extra days off the field may mean missing a game and a chance to help his team win and shine for a college scout. The athlete wants aggressive treatment to get him back in the game as quickly as possible. In worker’s compensation cases, an injured worker may or may not have similar motivation to get back to work quickly. However, fast-tracking treatment leads to more rapid return to the job, and less time on sick leave. Similarly, the injured worker (and his employer) benefit from avoiding unnecessary operations, but meanwhile not delaying the inevitable procedure. If a surgery ultimately will be required then spending time on additional therapy is not advantageous. Making this determination requires experience and judgment. The same is true in the treatment of the athlete. On the other hand, many middle-aged athletes as well as injured workers have degenerative changes seen on an MRI. It is important to make clinical decisions as to what changes seen on scan are degenerative and incidental versus acute and painful. An over-read of an MRI can lead to a potentially avoidable surgery in both the athlete and laborer.

Q: What are the technological/clinical advancements in orthopedic surgery that get you most excited?

A: I’m excited by a number of new devices and procedures. I’m always on the look-out for methods leading to better or more reproducible results; easier or less invasive ways of doing procedures; and faster or less painful recoveries. Throughout the year the Arthroscopy Association of North America (AANA), hosts cadaver training courses to teach new techniques and improved ways of performing standard techniques. I have been an assistant instructor at the AANA shoulder courses for years and always learn from the master faculty leading the discussion and training. Two areas of special interest are the use of preoperative MRI to determine the pattern of rotator cuff tears and method of repair; and the use of an MRI to preoperatively design cutting jigs to add to the precision of total knee replacement.

Q: What do you believe is the future for outpatient orthopedic surgery in terms of keeping up with the ever changing medical and economic environment?

A: Practicing-physician involvement in management and ownership is one key. No one has a greater interest in maintaining a top-flight center than the orthopedist taking care of the patients, doing the surgery, and watching the bottom line. As we discussed earlier, my partners and I are betting on “big is better.” We built Gateway without a corporate partner. Last year for a number of reasons we sold a portion of our center to AmSurg. We are hopeful that this association will lead to economies of scale in purchasing and a stronger position in contracting. Cooperation with our colleagues has led to success in business and has improved our practice of orthopedics as well. We consult one another, adopt best practices, and learn from each other’s successes and failures. Healthcare is changing rapidly and we will all need to stay nimble to adjust to these changes.

J.F. James Davidson, MD, graduated with honors from Yale University and received his MD degree from Columbia University. He then completed his orthopedic residency and sports medicine fellowship in Phoenix. He is board certified by the American Board of Orthopaedic Surgery and is a fellow of the American Academy of Orthopaedic Surgeons. He has also served as an officer in the American Orthopedic Society for Sports Medicine and the Arthroscopy Association of North America. Davidson has published scientific papers and spoken nationally on topics ranging from anterior cruciate ligament reconstruction to arthroscopic rotator cuff repair. He is the lead spring training physician for the Chicago White Sox as well as the team orthopedist for several local schools. His special interests include disorders of the shoulder and knee. Davidson has been with Canyon Orthopaedic Surgeons since 1994.

2010 Management Guide

Dealing with Survey Deficiencies

After receiving 23 pages of citations and a threat of losing its license, a Texas ASC (that had gone three years without a state/Medicare survey) recognized its desperate situation. While many of the citations concerned the new conditions for coverage and multiple notes for the same deficiency, the center still needed to respond with corrections within 10 days. Typical of smaller facilities, the employees responsible for compliance activities are the same individuals involved in routine care. While intending to comply with regulations, patient treatment takes priority and administrative paperwork falls behind.

In addition to their daily routine, management now needed to research, evaluate and interpret the regulations in order to rewrite/update their policies within the response time. The practitioners (both administrative and physician) realized that the task they faced required the resources and skills of an outside expert. The facility searched for a consultant that could help solve their problems. Separated by 1,500 miles, with the days ticking away, recognizing travel arrangement difficulties and skyrocketing travel expenses, they requested FWI Healthcare’s assistance.

Receiving and reviewing their citations, FWI presented a cost-effective proposal to the client that was accepted. The client faxed requested documents for our analysis. We discussed existing materials and the need for changes. FWI also developed some revisions to their policy manual and the plan of correction for submission. This information was provided to the client and after telephone clarification and minor adjustments; the transcripts were ready for use.

The plan of correction was accepted and upon the surveyor’s return for a follow-up visit (finding everything to be acceptable), she recommended the license and certification be renewed.

Many small ASCs do not have personnel with experience, knowledge or time necessary to rapidly respond to deficiencies cited by survey agencies. This is where relying on the resources of consultants (who provide assistance on a fee for service basis) is invaluable. All of FWI’s work was completed with minimal expense and without either party leaving their office.

By Roger Pence, president, FWI Healthcare www.fwihealthcare.com • 419.298.3700

Challenges Unique to De Novo Facilities

De novo projects can be a long and not always painless process, but like turnarounds, they have incentives as well. With a new development, we are able to construct the center from the ground up to ensure our high standards are met and so high-quality care can be administered efficiently from day one. We are also able to form a great group of physician partners with the right balance for a successful ASC. Now, just because we get to make initial decisions on the facility and the business with our partners, it is not always roses when developing a new center. We deal with doubting partners, setbacks, stumbles and roadblocks. In the case of our new de novo facility in Mt. Dora, Fla. we hit an unusual roadblock — gopher turtles. Yes, gopher turtles. This protected species was living on our construction site. We had to have the turtles moved, but that could only be done after three consecutive days of 50 degrees or warmer weather. The turtle relocation caused about a six-week delay in the building process, and while no one could have anticipated a gopher turtle infestation, we took care of the situation and did what we could to get the project back on track.

We found that the perspective of the partnering physicians in de novo projects is quite different from that of partners in turnarounds. While in turnarounds we are often thought of as better managers than we are, sometimes in new developments we are thought of as worse. Partners focused on financial returns view any stumble on the way to distributions as a failure, when in fact, stumbles are a part of the process and sometimes result in positive outcomes. The objective is to have the “wiggle room” to adjust, correct problems, and move forward.

No matter what we encounter along the path to developing a new center, we are committed to our partners and the success of the center and look forward to developing new, successful centers across the country.

By Tom Mallon, CEO, Regent Surgical Health

www.regentsurgicalhealth.com 708.492.0531

Ostrich Strategies for ASCs: Never A Good Idea

The phrase “burying your head in the sand” has become synonymous with hiding from the truth or hiding at the first sign of danger. Ostriches are alleged to do that, but they actually do not. However, owners of distressed outpatient centers sometimes really do.

Our firm gets involved in helping distressed outpatient centers, including surgery centers, and our experience has shown that it is the rare owner who does not “bury his (or her) head in the sand” hoping that something will occur that will cause the source of the distress to simply go away. Employing an “ostrich strategy” is a bad idea, as well as a waste of valuable time and resources because the sources of distress rarely go away simply and easily.

The “ostrich strategy” usually results in the center being behind in payments to lenders, landlords, the taxing authority, staff and most vendors by the time we get involved. The task of pulling your head out of the sand and developing workable strategies is complex and multi-dimensional, and involves lawyers and lots of different personalities. In addition, there are always varying degrees of trust among the owners and the managers (who are also often owners). Getting to the core problems requires information analysis, lots of conversation and a site visit or two. Once those core issues are made clear, then the people leading the charge put a simple strategy in place. It needs to be simple because additional and incremental complexity will only complicate matters and likely make things worse. Our firm often leads the charge, but many times we do it in tandem with the center’s lawyers. Depending upon how far behind the center is with various creditors and what legal actions have already been taken, the lawyers may well take the lead.

Follow your strategies, keep your head out of the sand, stay calm and focused, engage the right professionals for you and you may be able to yourself of the sources of distress that caused you the problems in the first place.

By Robert S. Goodman, managing partner, The Mansfield Group www.mansfield-group.com 609.267.0990

Adding Specialties to Increase Profitability

Foundation Surgery Affiliate of Huntingdon Valley, Pa. is an AAAHC-accredited, multi-specialty ASC that opened in 2003. With four operating rooms, two procedure rooms and 19 surgeon partners, this 18,000-square-foot facility was profitable; however, there was still a tremendous opportunity for growth through increasing OR utilization and case volume. “We continually strive to develop new tools and methods that will enhance the profitability of our centers while also adapting to the changing outpatient surgery environment,” says FSA chief operations officer Thomas A. Newman. He recalls the FSA specialty and case analysis:

1. Take inventory. FSA creates a checklist of all specialties that can be performed at an ASC.

2. Analyze and evaluate. Management performs an extensive cost/benefit analysis, weighing equipment and labor costs against typical revenues provided by the specialty.

3. Determine which specialty is most worth pursuing.

4. Recruit surgeons. Utilize data collected in steps 1-3 and tap existing surgery partners as a primary resource for new partner candidates.

In the case of Huntingdon Valley, a surgeon partner suggested that the center consider adding fertility as a specialty. Based on that recommendation, FSA performed steps 2-4. During the first month of adding fertility, case volume increased 12 percent and overall revenues increased by more than 25 percent. As a result of this exercise, FSA formalized the process and rolled it out to all of its centers.

“Our center was already doing quite well when FSA performed the specialty and case analysis and presented the impact of adding gynecology partners specializing in fertility,” says center administrator Robert Puglisi. “Now, return is even higher as a direct result of adding our reproductive medicine partners.”

Larry Barmat, MD, one of the center’s fertility partners, says, “Reproductive medicine is almost tailored to the ASC environment because the procedures are of short duration and low risk, thereby lending them to being done in an outpatient setting.”

Chairman of the board Robert Mannherz, MD, says, “The addition of reproductive medicine has been positive for the center on several levels. It has increased the utilization of the center and our cash flow, as well as diversified our services to patients.”

By Caleb Germany, Foundation Surgery Affiliates www.foundationsurgery.com800.783.0404

Reimbursement and Billing Compliance Issues

A full financial, business office and clinical evaluation was performed by Surgery Consultants of America (SCA) and Serbin Surgery Center Billing (SCB); however, this case study is reporting only reimbursement and billing compliance issues. The initial findings were determined during the evaluation. The current improvements are results obtained after twelve months of reimbursement management by SCB.

The Medicare-certified, multi-specialty center was open 18 months, has two ORs and performs an average of 100 cases per month; the physician-owned clinic shared the same site with the ASC. The challenges were as follows:

» Practice software not meeting all ASC needs

» Billing outsourced to clinic billing staff resulting in:

•overwhelming volume

•increase in errors due to lack of ASC billing knowledge

» Revenue stream reduced to trickle

» Days in A/R escalating – 97 at time of evaluation

» Claim backlog growing – minimum 7 to 10 days lag time between services rendered and subsequent posting and billing

» Denial rate climbing – 20 percent to 25 percent first time denial rate

» Cost of staffing and supplies as a percentage of revenue continuing to increase because of claim backlog

» Non-compliance concerns mounting

Our findings and recommendations were as follows:

Processes

» Using practice software

» Recommend acquiring ASC software

» No CMS list of ASC covered services or matrix of insurance contracts

» Recommend providing both to scheduler and insurance verifier

» No up-front collections

» Recommend notifying patient of financial responsibility before DOS

Reimbursement

» Billing not up-to-date

» Recommend hiring additional staff or outsourcing

» Coding inaccuracies identified

» Recommend coding audit by certified coder – rebill where necessary

» Not following up on submitted claims

» Recommend audit to determine timely filing, refunds, resubmission claims

Compliance

» Receptionist making patient contact calls

» Recommend moving these calls to back desk for HIPAA reasons

» No notification to payor of out-of-network status

» Recommend notifying payor at time of verification and again at billing

» No advance notification of financial policy to patient

» Recommend providing written policy prior to DOS via phone or brochure

Our evaluation resulted in the following changes:

» Appointed separate ASC administrator

» Changed to ASC software

» Revised fee schedule

» Acquired copies of payor contracts

» Initiated use of bank lockbox

» Created new insurance verification position

» Established process to collect co-pays

» Developed financial policies to handle self-pay patients, payment plans, financial hardship cases, etc.

» Made changes in business office task responsibilities

Improvements included:

» No billing backlog

» Decrease in days in A/R – 58 percent (97 days to 41 days)

» Increase in average net revenue per case – 14 percent

» Increase in average charge per case – 31 percent

» Meeting billing compliance guidelines

By Caryl A. Serbin, RN, SSN, LHRM SURGERY CONSULTANTS OF AMERICAwww.surgecon.com 888-453-1144

Florida ASC Increases Revenues

Acting as a strategic business partner, NovaMeda dedicates an experienced team of experts to help our ASCs grow and prosper, while assuring the best possible experience and outcomes for both patients and physicians.

We recently increased the revenue of our Florida ASCs by employing a comprehensive managed care strategy. Over the last two years, we have renegotiated contracts with major payors in Florida and increased the value of the contracts by as much as 20 percent. This has equated to an increase in revenue of 5 percent to 10 percent for each of our four ASCs in Florida.

Developing and executing an overall managed care strategy can lead to major revenue enhancement and overall improved financial performance of our ASCs. Our strategy is founded upon the principles of maximizing the revenue of all our managed care contracts, assuring that the ASC is getting paid what it should based on the contract, and monitoring the performance of managed-care contracts to ensure the ASC is realizing projected revenue.

Executing our managed-care strategy begins by reviewing our ASC’s total book of business and managed-care contracts. Using best-of-breed financial models, we assign a value to each contract based on payor case/mix and market dynamics, and then negotiate (or renegotiate) each contract to ensure maximum revenue generated for our ASC. An ongoing process, we employ a proactive stance on managed-care contract negotiations to ensure the profitability of our ASCs.

By Lisa Streit, director of managed care, NovaMed www.novamed.com 888-NOVAMED

Implementation, Cons & More

The Practice Partners in Healthcare (PPH) team met with the physicians and began to plan for the implementation of the single-specialty center. During the planning process PPH reviewed volumes, expenses and thresholds in the CON. It was determined that additional surgeons would be necessary to make the center successful. PPH began to recruit additional surgeons to the project. To recruit physicians it was necessary to modify the operating and partnership agreements to make the arrangement fair for all physicians and not have the initial group control the project. PPH negotiated with the groups for a successful operating agreement and partnership arrangement to allow the entry of new physicians.

The ability of a third party to develop an independent plan, negotiate and execute is necessary to assure the original group and joining physicians that the best plan for the total partnership is presented. During the negotiations it was clear that the groups combining were fierce competitors and the role of PPH was to make fair and strategic decisions that would demonstrate to both groups the combined strength in the ASC setting but allowing the market forces to continue in the practice setting. Furthermore, the individuals had to work together to develop block time schedules and utilization of the center that would present the most favorable results. In doing so PPH developed a block time schedule that interfaced with both practices clinic schedule and inpatient surgical schedules. PPH developed a strategy and schedule designed for each group’s physician to follow block time by that same group. In doing so the potential conflicts of another group adding on patients and extending the operative day would only affect that group and not the competitor.

When administrators are considering modifying of implementing block time considerations on the impact of running over to other physician block time may reduce issues by this practice. The physicians could then work within their individual groups to correct reoccurring situations. Additionally, when administrators are planning for block time the utilization of historical operative or procedure times should be utilized when evaluating the duration of the individual block to allow for the anticipated daily throughput for each surgeon.

By Larry Taylor, president and CEO, Practice Partners in Healthcare, Incwww.practicepartners.org 205.824.6250

Joint Venture Feasibility

In early 2005, Alegent Health engaged Health Inventures (HI) to perform a feasibility study for joint-venturing (JV) outpatient surgery services with physicians at their Lakeside and Bergan Mercy Medical Center campuses in Omaha, Neb. HI conducted extensive physician interviews to educate physicians about the JV process and gauge interest. Based on positive feedback from the interviews and HI’s financial forecasts, it was determined that a JV was feasible.

The degree of physician interest showed enough case volume to occupy two new facilities. However, HI determined the most immediate opportunity to establish a JV was to convert an existing two OR HOPD to a free-standing ASC in a medical office building (MOB) on the Lakeside Campus. The conversion process included obtaining licensure and certification to operate as an ASC. This facility would operate for 18 months while a new facility with four ORs and one procedure room was built in the same building.

Throughout 2005, a steering committee with representatives from HI, Alegent Health, interested physician groups and legal counsel met regularly to determine the terms of the operating agreement and the governance structure of the JV. Meanwhile, valuation firm performed a third-party valuation of the existing ASC. Based on financial projections and this valuation, HI and deal counsel developed a private placement memorandum (PPM) and subscription agreement and opened the “offering” for physician investment.

The offering closed in December 2005. Two major surgeon groups and 19 individual physicians invested in the facility for a total of 31 physician users/owners. Alegent maintains 51 percent ownership in the new LLC that leases operating space from Alegent in the MOB.

The owners appointed a management board (MB) and clinical operations committee (COC) as the principal decision making authorities. The MB has equal physician/Alegent representation and the COC is physician-controlled.

In September 2007, the physician owners moved their cases from the upstairs ASC to the newly constructed facility on the ground floor of the MOB. The high subscription rate of the offering and cash flow from the existing facility provided adequate funding for the construction without any term debt financing. Only a line of credit was needed when the facility opened.

By Catherine A. Martin, contract manager, Health Inventures, LLCwww.healthinventures.com 877.304.8940

Compiled by Jessica Barreras

The Building Blocks of Patient Safety

Patient Safety Awareness Week is March 7-13, 2010, and this observance is always a good opportunity to review the patient safety initiatives you currently take at your ambulatory surgery center (ASC), as well as ask yourselves what you could do to take safety to the next level. I like what Doni Haas, RN and Lorri Zipperer, MA, have created in their “ABCs of Patient Safety” to remind healthcare professionals of common-sense ways to protect patients. With kudos to Haas and Zipperer and the National Patient Safety Foundation (NPSF), here are the ABC’s they recommend:

Accountability is not always about a person.

Blame hides the truth about error.

Cultures must change.

Document facts.

Error is our chance to see weakness in our systems and people.

Focus on prevention.

Gather evidence to support facts.

Hear when you listen.

Investigate cause.

Justice should include compassion, disclosure and compensation.

Knowledge must be shared.

Learning from others’ mistakes benefits all.

Make the effort to look beyond the obvious.

Nothing will change until you change it.

Opportunities for solutions are lost by blame.

Partner with patients and practitioners.

Question until you can no longer ask “why?”

Reporting error is suppressed by blame.

Systems are where practitioners practice.

Think about the blunt and sharp end.

Understand the role of accountability.

Value the patient’s perspective.

Why, Why, Why, Why, Why = root cause.

X-ray vision sees the deeper story.

You can make a difference.

Zeroing in on cause brings us one error closer to zero error.

For more resources, visit the NPSF at www.npsf.org.

Source: Haas D, Zipperer L. ABCs of patient safety. Focus Patient Safety. 2000;3(1):3.

Know Your APCs for ASCs

APCs for outpatient procedures performed in ambulatory surgery centers (ASCs) are part of an averaging and bundling system using CPT® procedure, HCPCS Level II and revenue codes submitted to Medicare on CMS=1500 forms, with UB-04 claim forms used by ASCs to file claims to most other payors. The APC system utilizes “packages” of CPT® and HCPCS Level II codes, based on clinical and facility resources and establishes payment rates for each APC grouping. This means the physical and human resources needed to provide the service and the geographic costs are bundled together using annually adjusted formulae, much as in hospital inpatient billing. Certain medications, services, and durable medical equipment are considered “pass through” and can be reported separately from an APC revenue code.

APCs are assigned based on the CPT® and HCPCS Level II codes reported by the provider for each service. Usually, more than one code will fall into an APC category. More than one CPT® and HCPCS Level II codes can be reported if needed.

But not all CPT® and HCPCS Level II codes qualify. They are all assigned a status indicator denoting the code’s relation to APCs — whether they qualify and how. The ASC must be careful to avoid reporting a code denoted as not reimbursable for ASC services unless a modifier and documentation support it. As a result, a limited group of modifiers are recommended as well. The status indicators can be found on CMS files including the CPT and HCPCS Level II codes, and most commercially published codebooks include them as icons.

Examples of the indicators include the following:

• A: Services furnished to a hospital outpatient that are paid under a fee schedule or payment system other than OPPS. This means fiscal intermediaries are reimbursing this code via a fee schedule not under APCs.
• C: Inpatient procedures. This is the kiss of death for an ASC claim’s success. This procedure is expected to be done in a hospital with the appropriate resources and an overnight stays.
• N: Items and services packaged into APC rates. This is paid under the APC OPPS and payment is packaged into payment for other services; there is no separate payment for this.

Restricted CPT® modifiers include:

• 50: Used when the exact same procedure is done on the exact body part of the opposite side. Also known as “bilateral”. Some insurance companies prefer the biller use the CPT® code twice instead. Ex: 10220-RT, 10200-LT. Check with carrier on which to use. Payment should be 150 percent.
• 51: Indicates multiple procedures were performed. The 51 appends to the second CPT® code and all CPT® codes thereafter. Medicare does not recognize modifier 51 for ASC services as this modifier is for use on physician claims only.
• 52: Indicates reduced services. Use when procedure is not completed as described in the official CPT® description.
• 73: Used when a procedure is discontinued before the anesthesia administration. Patient must be in the room where the procedure would have taken place. Payable at 50 percent of the Medicare allowable rate. Typically seen when patient’s blood pressure arises to a dangerous rate.
• 74: Used when a procedure is discontinued after the anesthesia administration. Patient must be in the room where the procedure would have taken place. Payable at 100 percent of rate. Typically seen when patient’s blood pressure arises to a dangerous rate.
• 78: Used when the patient has to return to the operating room during the global period for a procedure related to the first procedure, such as control of bleeding following a colonoscopy or sinus procedure.
• 79: Unrelated procedure or service by the same physician during the postoperative period. (Same day for an ASC setting.)

Rhonda Buckholtz, CPC, CPC-I, CGSC, COBGC, CPEDC, CENTC, is vice president of business and member development for the American Academy of Professional Coders (AAPC).

Innovation & Excellence Intersect at Renaissance Surgical Arts of Newport Harbor

Even before the Centers for Medicare and Medicaid Services (CMS) issued its new conditions for coverage relating to improved infection control practices in ambulatory surgery centers (ASCs), Bruce Wallace and Anthony Pings knew that infection prevention would be the cornerstone of their latest development project — a world-class multi-specialty ASC that would be destined to set the bar enormously high in terms of innovation, patient care, and surgeon and staff satisfaction.

Wallace, the CEO of Congero Development, architect Ping, the CEO of Anthony C. Pings and Associates, and Kathy Just, vice president of Congero and interior designer on the project were the driving forces behind Renaissance Surgical Arts of Newport Harbor, LLC, designed to be a preeminent medical facility led by notable surgical specialists working with cutting-edge operating room technologies within an innovation-rich, patient-focused, healing environment.

“This facility was truly designed around exceptional patient outcomes,” Wallace says, “and much of that has to do with integration of some newer equipment and emerging technologies that were not readily available before in the U.S. It also more fully addresses the needs of healthcare providers, as we have identified the challenges that their lifestyles incur and we have provided solutions for them.” In addition, Congero desired to bring a center of excellence to Orange County, California, as well as a project that was scalable to emerging technologies as they became available, with minimum invasiveness to the operations overall.

This 360-degree approach starts with the patient. “I conduct a lot of direct research with patients and physicians to determine what makes them happy,” Pings says. “We don’t ask patients what they want; instead, we ask them to describe their experiences and that’s when they are going to tell you what works and what doesn’t. Nobody wants to have surgery, so when we work on a project like this, we want to provide patients with the physical and emotional support they need.” To that end, Just worked to ensure that Renaissance was designed as a healing environment, with a sophisticated and rich décor that promotes pre-operative calm and facilitates post-operative recovery. To maintain normothermia and ward off post-surgical complications, patients are provided with forced-air heated garments and blankets, as well as IV solution warmers.

Pings adds, “We start a project like this from a patient-focused standpoint and blend that with needs of the clinical staff to create solutions that supports both parties in the best possible way.” For example, the center places a high priority on patient privacy; patient entrances and exits are separated, and private spaces have been created all throughout the pre- and post-surgical experience. “We believe in giving patients separate waiting areas,” Wallace says. “Because we are multi-specialty facility we don’t want patients sitting just anywhere — we don’t want a woman who has had a mastectomy sitting next to a woman having augmentation.” Wallace continues, “We accommodate patients in a tremendous number of ways, including doing what we can to make them feel welcome, lower their anxiety and make them comfortable. I want them to feel as though the staff and center was there for each of them personally.”

From the time the patient is prepped for surgery until recovery, aseptic technique is an omnipresent concern. “Infection control considerations were integrated into every decision we made,” Wallace affirms. That starts with the replacement of traditional gurneys with operating tables that first function as patient transport systems and then transfer – along with the patient – to a fixed base in the OR. Not only does this system – the first of its kind in the U.S. — save as much as 40 minutes in transfer time, but it helps eliminate cross-contamination during patient transfer. What’s more, the German-made tabletops by Trumpf can be completely sterilized.

“The tabletop you are on was never shared by another person between being sterilized,” Wallace emphasizes. “A classic place where bacteria transfers is the OR table itself. At other facilities, someone goes in with a squirt bottle between patients and they have 5 minutes to sterilize the table and the fact of the matter is that the table is definitely not sterilized in 5 minutes.”

Recognizing that proper decontamination and sterilization of medical devices and surgical instruments eliminates infections and produces operational cost-savings, the facility features a system that has taken patient and staff safety to the next level. Driven by selective automation, Renaissance’s sterile processing department, supported by Belimed equipment, is able to achieve efficiencies in the way surgical instruments are transported, washed and decontaminated, sterilized, reassembled and contained. Upholding the dedication to stringent infection control practices, instruments are sealed in trays and then pass from a “dirty” room to a “clean” room where they are sterilized and processed further, all in a department that has been designed with the goal of becoming more environmentally responsible in water and energy usage. All instruments have been marked with RFID technology, bar-coded, catalogued and tracked from purchase, and when an instrument approaches a sterilizer, the cycle is automatically set to the individual manufacturer’s care parameters – thus ensuring a longer instrument life and a repeatable sterilization process that ensures uniform processing and meets infection prevention standards. According to Pings, the backbone of the facility is a chamber sterilization system comprised of two discreet, low-intensity, stand-alone sterilization areas located between the operating rooms, and a central, high-intensity processing area in the operating corridor. The combined effect of the chamber system, sterilization process and smart utility use, allows for the elimination of up to eight full-time employees, with processing cut to a fraction of standard times while delivering vastly improved sterility assurance.

“Our system reduces staffing in central sterile (CS) and eliminates a lot of the cross-paths that exist elsewhere,” Pings says. People think if you are six feet away from dirty, you are OK, but those numbers don’t work anymore. Hospital CS departments are essentially one big room with workstations, and even the best-trained staff will violate those boundaries. That’s why the chamber sterilization concept works.”

Contributing to maintaining the line between sterile and unsterile is Congero’s proprietary LED system built into the floor and walls with a laser that resembles a light fixture placed before each terminal end of the OR corridor; this system replaces the traditional red-line tape used to delineate non-sterile areas from sterile areas. The center also features sterile lounges in the sterile corridor for staff to use on surgery days without having to gown out into non-sterile cover-ups to conduct business outside of the OR corridor. Staff can use phones and computers in the area while saving vast amounts of time in gowning out both ways; it adds up to a cost savings of approximately $8 per trip per staff member.

Contributing further to physician convenience is an adjacent, separate entity, the “hot office” area, instead of a conventional medical office building set-up where surgeons can have a place for pre-op and post-op patient consults, a design that extends the full use of the facility to office-based surgery convenience, according to Pings, who notes, “When you provide ways for physicians and staff not to work harder but to work more efficiently, they prefer it, and they are happier people.”

Pings continues, “What I push for the most is an understanding of the different needs of everyone involved at the center, and that includes surgeons. That physician lounge is one way to provide them with the productivity tools they need without having to leave substerile. We wanted to give them the support tools they need within their domain; for example, while they chart they can observe monitors that assist them in real-time tracking of pre-op and post-op patients. Go into the average surgical corridor and you see surgeons sitting on stools trying to have some sort of defendable territory between cases, and that’s neither appropriate nor conducive to surgeon satisfaction.”

The center is powered by a sophisticated IT platform that enables a number of progressive processes such as ultrasonic tracking of patients, staff and physicians for quick-location purposes; biometrics identification for narcotics dispersion; Bluetooth wireless monitoring of patient vitals; advanced telemedicine capabilities; RFID-driven nurse call system and much more. The IT capabilities extend to center management and operations such as inventory control, setting par levels and supplies ordering, plus patient scheduling, patient flow and H&P, and coding and billing, all handled with HIPAA-approved transmittal processes. The center’s eight ORs are equipped with state-of-the-art LCD displays, booms and an audiophile system, as well as CT and MRI in-room imaging. Renaissance is also home to a showroom and telemedicine center of excellence for Olympus Corp., which has installed a digital integration system utilizing rigid and flexible scopes, with one cart handling multiple surgical specialties.

How Renaissance fit into the existing Pacific Medical Plaza building is an achievement in itself, Pings says, since the entire project was a retrofit and where the anchor of the building was the nearly 19,000-square-foot ASC. “We were able to be extremely aggressive in our design in the allotted square footage,” he says. “The original ASC design had elements that were extremely challenging when you realized our space limitations. The design had to be created around the main stairwell in the very center of the structure and we relocated a second stairwell from one side of the building to the other.”

The innovations abound at Renaissance, which required a coordinated process of value engineering driven by the collective experience of the development team to deliver a cutting-edge ASC for very close to the cost of a standard facility. “We knew the challenges related to cost control for an ASC as ambitious as this,” noted Wallace. “However, what we could not have anticipated was trying to accomplish this amid one of the worst economic environments in U.S. history.” The upfront effort will continue to be realized through much lower operating costs thanks to better outcomes, automation and other inherent cost controls. “Cost is an overriding concern at any center but you must remember that upfront costs are ameliorated by cost savings in patient safety and efficiency,” Pings notes.

Key to Renaissance’s success is the partnership between stakeholders, according to Wallace. “This center is a culmination of many years of collaboration with Tony and Kathy as well as the relationship with a cooperative landlord who was of tremendous help in the development process and extremely supportive through the financial crisis. It was also critical to have physicians buy into your vision. We couldn’t have done it without the overwhelming support of the physicians; most of them put their money in, signed on the dotted line and sat back, leaving us to do what we were supposed to do.”

According to Wallace, the center is 70 percent physician owned, with Congero operating as a minority management company. Being a physician-driven facility, the opportunity to do things differently presented itself repeatedly, including how the center was staffed. “We created our own registry and share our staff with other facilities in the area,” Wallace explains. “By doing so we can reduce the labor-related load on the facility; for instance, on slower days with a lower case volume, we can share our staff with other facilities in the area. We believe having people standing around is bad for morale and bad for efficiency’s sake, and this arrangement is better for staff, if they need to take a day to meet personal or family obligations. The registry concept is a better way to accommodate staff who can work the hours they would like to work. And it allows physicians to have a schedule that fits their lives, too. It creates a real team spirit. We also incentivize staff to help increase the efficiency and profitability of the center, linking together their individual success and the success of the center for even better outcomes and operations.”

Making Infection Control Central to an ASC’s Operations

In my parallel life, I also edit one of our company’s sister publications, Infection Control Today (ICT) magazine, so as you can imagine, infection prevention in all healthcare environments is dear to my heart. I have been following closely the new conditions for coverage (CfCs) issued last year by the Centers for Medicare and Medicaid Services (CMS) addressing infection control in ambulatory surgery centers (ASCs), and the sense of panic that these CfCs have triggered. ASCs have traditionally enjoyed a very low infection rate, but some rather high-profile infectious outbreaks at outpatient facilities prompted a greater investigation by the government into the state of infection control at surgery centers and a few bad apples have forced a new regime. But perhaps that’s a very good thing in disguise. It’s true that human nature being what it is, people don’t always do what they are supposed to do, and so rules are made to enforce mandatory compliance. It’s always a shame when doing the right thing must be legislated instead of met voluntarily, but the bright spot in the new CfCs relating to infection control is the hope for even better patient outcomes — a distinct hallmark of the ASC industry in the first place.

In this issue you’ll meet Bruce Wallace and Anthony Pings, two people who have made infection control the focus of every decision they have made in the design and development of Renaissance Surgical Arts at Newport Harbor, LLC, a brand new multi-specialty ASC that will surely be a destination for healthcare in the Orange County, California region. Central to the center’s long list of innovations is the numerous concessions made to making infection control an imperative, from the multi-chamber sterile and substerile areas in between the operating rooms, to the extensively automated surgical device and instrument sterilization systems, to the use of touchless scrub sinks and surfaces impervious to bacteria.

Advocacy Committee Creating Unified Voice for the ASC Industry

In an effort to continue to represent the ASC industry on Capitol Hill and to create a bridge between two existing organizations, the ASC Advocacy Committee was launched last August and has been busy educating Washington policymakers about the value of ambulatory surgery centers. The committee is sponsored by the ASC Association and by the ASC Coalition, an affiliation of ASC associations and ASC management companies.

The Advocacy Committee includes ASCA, some of the largest state ASC associations, and more than a dozen major ASC companies. The funding is provided by the members; separately, ASCA, many state ASC associations, and many companies have their own PACs for direct political giving, according to Andrew Hayek, president and CEO of Surgical Care Affiliates and chair of this new committee.

Despite a health reform-related injection of chaos on Capitol Hill, Hayek says that the committee’s objectives have remained steadfast: “First, to create a clear, compelling message of how ASCs benefit the healthcare system; second, to hire the resources to help communicate this message (e.g,. PR firm, lobbyists, external studies); third, to create an active grassroots network among ASCs to communicate with legislators and policymakers; and, fourth, to create an open, collaborative organization, in which any parties interested in supporting ASCs are welcome to join us and participate.”

One of the most important roles of the committee is to educate lawmakers and to tell the ASC story. Hayek says the committee is in the design process of a PR campaign that will launch early next year. “We have added greater lobbying resources to help us communicate with legislators, policy makers and regulators in Washington, D.C.,” Hayek adds. “We have activated a much greater degree of coordinated grassroots efforts, and we are in the design phase of a grassroots database that will help us take this coordination to a much higher level. Lastly, we are coordinating our messaging across ASCA, state ASC associations, and companies to a greater degree. All of these components work together to help us tell our story in Washington, D.C.”

Another critical item on the committee’s agenda is to help define and promulgate the role that ASCs can play within the context of healthcare reform, and to continue to address key issues of reimbursement and physician ownership. “We have been active in communicating the very positive role that ASCs play in the healthcare system — providing outstanding clinical care at a lower cost to beneficiaries and Medicare,” Hayek says. “We have been active both on the Hill and with the Administration in advocating for higher ASC reimbursement rates, to help facilitate a greater migration of surgical cases from the HOPD setting to ASCs, which will help improve care and save beneficiaries and Medicare money.”

Hayek continues, “We have also engaged in conversations sharing the value of physician ownership in ASCs — ensuring the highest levels of patient care and greater efficiency in the delivery of services. One of the reasons that ASCs provide such outstanding care and simultaneously operate so efficiently is that physicians are ultimately responsible for the operations of the ASCs — clinically, operationally and financially. This leads to aligned interests in ensuring outstanding care, delivered in the most efficient manner.”

Counted among the ranks of the most ardent supporters of the committee is William Kennedy, senior vice president of business development. “We were original members of the ASC Coalition and are now active and enthusiastic supporters of the new group headed by Andy Hayek,” Kennedy confirms. “What we hope to accomplish is to make our industry known in Washington, and that includes CMS as well, so that they understand the good work that surgery centers are doing in terms of delivering low-cost, high-quality patient care to the community. And that we are also a very attractive surgical service at a very attractive price for very attractive outcomes. We want to ensure that our voice is heard above all of the noise made by the hospital associations.”

Kennedy emphasizes the importance of advocacy efforts at the grassroots level as well, something that physicians, administrators and nurses can accomplish to help protect their livelihoods. Because so many issues are springing up at the state level, Kennedy encourages ASC owner/operators to kick complacency to the curb and get involved.

“Many people think that issues impacting our industry are going to start at the state level and will proliferate, rather than coming down from Washington,” Kennedy says, “so there’s a critical need to be involved in your state ASC association.” Kennedy points to the restrictions on ASCs in New Jersey as a recent example. “Legislators are looking to restrict physician ownership and limit the surgery center industry. Grassroots advocacy will ensure that your voice is being heard by your Congress members. There are numerous ways to do this, and our industry has become much better at writing letters to legislators and providing some Congressional pressure. Holding open houses is a great way to get our story to the community; and when it does get out, it is very appealing to healthcare consumers. ASCs make good sense because we deliver the same results for about 40 percent less.”

While not every physician feels that he or she is cut out to be an industry advocate, Kennedy says the industry cannot afford to be bereft of its physician champions. “There’s a core group that galvanizes around advocacy efforts and then there are other people who say someone else can do the work — it’s kind of like public radio,” Kennedy says. “It’s critical to show physicians how not becoming involved can hurt them in dollars and cents. But at the same time it’s also about giving them a sense that they can make a difference. One of the things we are spending a lot of time on now is going back to people who have sent e-mails and letters to legislators to ensure they know their work has paid dividends.”

Hayek welcomes any ASCs or organizations with an interest in the ASC community to join the ASC Advocacy Committee’s efforts. “The Advocacy Committee is designed to be open and transparent — and we welcome both financial support and grassroots support,” he says.

Hayek can be reached at (205) 545-2755 or andrew.hayek@scasurgery.com. Or contact the committee’s executive director, Marian Lowe, at (202) 266-2606 ormarian.lowe@shcare.net.

OR Technology: A Glimpse Into The Future

As we move into 2010, a new wave of technology awaits us. Highly-developed health information technology (HIT)-driven systems and equipment are becoming the standard in many operating rooms (ORs), whether they are in a single-specialty ambulatory surgery centers (ASCs) or advanced surgical hospitals. It is important to stay up-to-date on these new technologies which not only reduce medical errors, but improve patient comfort and post discharge follow-up. The following case studies highlight this trend.

Enhancing Communication, Collaboration and Education: An Olympus Case Study

Three years after adopting integrated ENDOALPHA ORs, Penn State Hershey Medical Center is ready for more. As the only teaching hospital in central Pennsylvania, Penn State Milton S. Hershey Medical Center is one of the area’s largest healthcare providers. The hospital is equipped with 23 surgical suites and its department of surgery performs more than 19,000 procedures annually.

Staying Ahead of the Technology Curve

As industry trends move toward minimally invasive techniques, the hospital was quick to understand the benefits of integrated surgical suites as a way to stay competitive with the specialized technology demands of increasingly sophisticated procedures. “Several years ago, we realized we had a need for advanced, integrated technologies in our OR as we anticipated the convergence of laparoscopic and flexible endoscopic instrumentation,” says Randy Haluck, MD, professor of surgery and division chief for minimally invasive surgery and bariatrics. “We also recognized the need for a sophisticated system relative to data acquisition, storage, and transfer.”

Penn State Hershey began the process of integration in 2005, building three new Olympus ENDOALPHA surgical suites in 2006 and then converting two existing ORs to ENDOALPHAs the following year. The hospital anticipates completion of four more integrated ORs, for a total of 27 surgical rooms with one-third of them set up as state-of-the-art ENDOALPHAs this year.

Taking a Comprehensive Approach

True systems integration goes beyond the equipment and operating platform. It also takes into account the ergonomic design, workflow and technology optimization of each surgical suite. This means designing rooms with ceiling-mounted booms for holding imaging equipment and monitors off the floor, allowing for more efficient post-procedure clean-up and ergonomic positioning of monitors during the procedure. It means integrated equipment (scopes, imaging platforms, monitors, video and accessories) that work together and can be easily interchanged during a procedure. And it means a cohesive information management system for patient and procedural data, images, and audio that can be captured, stored, and retrieved from both inside and outside the sterile field. “We needed to have multiple surgical services using the same operating room, between general surgery, urology and minimally invasive GYN surgery,” says Gerald Harkins, MD, medical director for minimally invasive GYN surgery. “We’re all able to function in the ENDOALPHA laparoscopic suites, and it’s been a fantastic platform for that utilization.”

Experiencing the Installation Process

Olympus offers turnkey solutions, working with customers from start to finish on the design, construction and set-up of integrated operating and intervention rooms. “The flexibility of Olympus’ ENDOALPHA system means it can be easily customized to create a right-sized solution unique to each facility,” says David Alexander, Penn State Hershey’s Olympus integration consultant. “We were able to incorporate their legacy equipment along with their pre-existing video-conferencing system and streaming video package into their ENDOALPHA ORs to create one seamless solution. Hershey proved to be very knowledgeable, so it was a highly collaborative effort.”

Taking Centralized Control

The nerve center for each ENDOALPHA OR is a centralized control panel. With audio, video, data and images all controlled via a single touch screen, clinicians have the power to connect, communicate and collaborate with others outside the procedure room. Clinicians can also control surgical and room lighting, in-room observation cameras and all information and imaging systems without ever leaving the sterile field. To further enhance efficiency, the ENDOALPHA system provides preset capabilities so that monitors, lighting and all equipment can be custom-tailored to surgeon preferences and made available at the press of a button.

Communication, Collaboration, and Education

Penn State Hershey Medical Center’s custom-placed displays ensure all team members have the perfect view of live images. They regularly create video networks for sharing, collaboration and education from within and outside the hospital. “There’s no question that the Olympus system has dramatically changed how we teach in the OR,” says Peter Dillon, MD, chairman of Penn State Hershey’s surgery department and surgical director of perioperative services. “We’re now able to broadcast these procedures to first- and second-year medical students, exciting them about the wonders of surgery at a much earlier stage in their training. So it really has changed dramatically and in a very exciting fashion how we teach.” Haluck adds that it also gives the Penn State Hershey team a better way to collaborate with other physicians and share information with patients. “We can educate other physicians and record images for colleagues or bring them in when needed to confer and/or assist on a procedure. We are also able to show patients what their surgery was about and why they were having problems. That’s a great benefit to us, and certainly patients appreciate it as well.”

Interventional Radiology Breaks New Ground: A Skytron Case Study

Philips and Skytron have teamed up to help fully realize the promise of a hybrid angiography suite by implementing new cardiovascular solutions with the latest Allura Xper FD technology from Philips and state-of-the-art surgical lighting and boom technology from Skytron.

For more than a decade, Barry T. Katzen, MD, medical director of Baptist Cardiac and Vascular Institute (BCVI) in Miami, has pioneered the integration of surgical and interventional procedures. Katzen and his team continue to show that surgical procedures in an angiographic environment can be accomplished with the same degree of efficiency as in an OR.

“The specialties of interventional radiology and vascular surgery bring more to each other when we work together,” Katzen says. “Procedures that help drive this relationship include aneurysms of the thoracic aorta and abdominal aorta. Having an environment where we can use a surgical option allows us to think out of the box for individualized patient solutions.”

In 2008, Philips Healthcare and Skytron entered into a collaborative agreement to provide comprehensive, integrated solutions for the cardiovascular environment. Katzen seized the opportunity to refine the surroundings. Based on a well-coordinated plan from Philips and Skytron, a room at BCVI underwent a significant upgrade to enhance hybrid functionality.

“One of the great advantages of the new room design is it’s so spacious that we can all function effectively without being in each other’s way. Information can be transferred to the head of the bed — to the anesthesiologist — down to where we’re working very easily,” says James F. Benenati, MD, medical director of the peripheral vascular laboratory.

A Room That Works

BCVI’s surgical team appreciates the changes made. Katzen believes the upgrade has created a better environment for all involved. A recent experience demonstrated how the teams successfully combined surgical access with an interventional solution. A patient presented with critical narrowing of an artery to the brain and chest, and a narrowing of that same artery in the neck. “It was a very complex situation,” recalls Katzen, “but we combined our skills. The surgeons removed the plaque in the neck with an endarterectomy and we used that same access to go down and stent the chest.”

Installation With Minimal Impact

“We’re a busy lab and taking a room down for a period of time is always an inconvenience,” says Katzen. “The one thing everybody remarked upon was how fast this upgrade was accomplished.” In two and a half weeks, Philips and Skytron, working closely with the implementation team at BCVI, completed the staging and upgrade. The new room reflected the input of interventional radiologists, surgeons and anesthesiologists, with each group helping to define the clinical specifications to make it a multi-disciplinary environment.

OR Technology Update: A Steris Case Study

The epitome of surgical technology today is one OR in which surgeons can perform image-guided, catheter-based interventional procedures; minimally invasive endoscopic procedures; extremely precise robotic surgery; or full open surgery, depending on the case load or discoveries made in surgery. In this type of hybrid OR, integrated imaging, computerized patient information and live video routing technologies instantly display test results and critical real-time information on high-definition monitors in the sterile field. This allows surgeons and staff to ascertain the most timely and accurate diagnosis and treatment for the patient. It also helps them achieve the most flexible and effective uses of the room and optimize scheduling and utilization.

These are also the types of rooms in which medical leaders and pioneers train residents and other clinicians, develop new minimally invasive procedures, such as natural orifice trans-luminal endoscopic surgery (NOTES) and trans-catheter heart valve replacement and master new surgical devices.

These highly advanced rooms can incorporate advanced communications, connectivity, LED surgical lighting and high-definition visualization such as intra-operative fluoroscopy, intra-operative computerized tomography, magnetic resonance imaging, image-guided navigation, 3D software extrapolations of the imaging, robotics and many other technologies. Each of these tools are important in today’s hybrid OR, but when integrated correctly they form a seamless whole that is greater than the sum of its parts.

To accomplish this synergy, STERIS collaborates with leading manufacturers to design and install customized, integrated HD360°™ Hybrid ORs for healthcare facilities. STERIS project design managers configure STERIS’s open infrastructure Harmony® Lighting and Visualization systems, equipment management systems and advanced integration technologies with interoperative imaging, robotics, endoscopic and video technologies and more. The result is a suite that enables fully informed staff, highly efficient procedures, extremely flexible room use, successful surgeon recruitment, medical education, ongoing surgical innovation, leading edge robotic surgery, telemedicine, and new possibilities yet to be imagined.

OR Technology Update: A Berchtold Case Study

Problem

Before hybrid ORs existed, imaging and communications capabilities were not an option during cardiovascular and neurosurgery operations, resulting in patients getting diagnosed and treated in two different visits. Separate procedures and imaging consultation can be costlier for patients and surgeons, can result in additional stress, more down time and longer hospital stays for the patient, and are not conducive to emergencies that sometimes arise during surgery.

Solution

Combine minimally invasive and interventional surgical technologies with medical imaging and communications equipment in one operating room: the hybrid OR.

A growing trend involving endovascular procedures during cardiovascular and neurological surgeries requires equipment to accommodate open and closed procedures in the same room, even at the same time, although this is not necessarily planned from the start. The new hybrid OR model provides the surgeon flexibility in performing a variety of interventional, imaging and surgical services in one setting, eliminating the need to transfer the patient.

For example, two of the most popular hybrid ORs are for cardiovascular and neurosurgical procedures:

» Neurosurgical hybrid ORs can include magnetic resonance imaging (MRI); computed tomography (CT) and angiography equipment within a neurosurgical operating room.

»Cardiovascular hybrid ORs often features: Fixed ceiling- or floor-mounted C-arms, ultrasound and endoscopy equipment, coupled with cardiac catheter laboratories.

Because a hybrid OR is specifically designed for endovascular procedures, careful planning from the beginning can help to ensure all rooms are equipped with necessary tools. Some tips to consider while creating a specially designed hybrid OR include:

»Identify factors that are important to the hospital team, such as, should all equipment hanging from the ceiling (surgical arms, flat panel arms, etc.) be able to cover the whole patient in all orientations?

»Think as far ahead as you possibly can to “future proof” the room, reducing the need to renovate the OR moving forward. For example, what is the most extreme type of procedure the team might do in the OR? Then outfit the room in preparation for the procedure.

»Involve the end user at the very start of the project to give a real world perspective for offering scenarios, as well as discussing needs and concerns. This can include nurses, surgical technicians and staff, as well as anesthesiologists.

»Consult with the vendor providing lights, booms and imaging equipment to accommodate all of their needs. For example, many imaging companies have different requirements for ceiling heights.

Hybrid therapies enable hospitals and clinicians to provide less invasive care that is safe and cost-effective for the patient. Careful planning can lead to an effective hybrid operating room design that offers the following benefits:

» Cost-effective operations for patients and surgeons, with better outcomes.

» Reduced stress, faster recovery and reduced hospital stays for the patient.

»Safer procedures, especially in the case of an emergency.

New Bair Paws® Gown Brings “Flex Appeal” to Patient Warming: An Arizant Case Study

The recent Centers for Medicare and Medicaid Services (CMS) adoption of the SCIP-Infection-10 normothermia quality measure has made it more important than ever to simplify the process of warming every surgical patient. Arizant Healthcare’s latest innovation in forced-air warming, the Bair Paws Flex gown, does just that by incorporating a surgical warming product — Bair Hugger blankets — into a comfortable patient gown that warms before, during and after surgery.

While clinical versatility is a key benefit of the Bair Paws Flex gown, so is the practical economic approach of standardizing multiple warming capabilities into one gown that can accommodate most perioperative warming needs. While helping to improve outcomes and boosting patient satisfaction, the Bair Paws Flex gown may save facilities money by supplanting multiple OR warming blankets and the warmed cotton blankets and gowns often used to comfort patients.

Just One Gown Warms From Start to Finish

Before surgery, patients appreciate the Flex gown for its controllable warmth; they can simply dial the temperature of the air flowing through the gown to a level that’s comfortable. The surgical warming products built into the gown are unknown to the patient because they are deployed only by surgical staff.

In the operating room, the same Bair Paws Flex gown offers clinicians the ease and convenience of having multiple patient warming options available during surgery. Seamlessly integrated into the gown are: a head drape, adhesive tape to isolate the surgical field, and deployable arm extensions to transition into a Bair Hugger upper body blanket with tie strips. A second insert in the lower portion of the gown may be used to prewarm before surgery and then warm again as a lower body blanket once in the OR. The gown’s design allows upper or lower body warming for any surgical positioning — supine, prone or lateral.

After the procedure is over, the upper body blanket arm extensions, head drape and surgical tape strip perforate off, returning the garment to a standard warming gown for post-operative use through the lower warming blanket insert.

The Bair Paws Flex gown is comfortable for patients, convenient for clinicians and warms from pre-op to the OR to PACU. Best of all, it’s also economical. One gown handles almost all your warming needs, including contributing to quality goals like SCIP-10 and improved patient satisfaction. It incorporates a highly effective surgical warming device directly into a soft, comfortable hospital gown that does something positive for patients and hospital staff. It’s not just a gown. The Bair Paws Flex gown is a patient warming and patient satisfaction tool. It’s the future of patient warming, and it’s available today.

Practicing Arthroscopic Surgery on Computers, Not People: A Toltech/Sensable Case Study

Learning diagnostic knee arthroscopy is not unlike learning to play the violin — both art forms require a mixture of cognitive and proprioceptive skills that can only be developed through rigorous practice. And while both require intensive mentoring, surgical apprenticeship is unique in its resulting increase in operating room time and potentially patient risk. Just as with a violin that makes no sound, little can be learned from surrogate surgical environments having no objective feedback, including costly and labor-intensive cadaver training. And little transference of either skill can be expected from computer based training lacking the feel of the instrument(s).

In late 2009 the University of Michigan Medical Center’s Orthopaedic Surgery department, led by James Carpenter, MD, became an early adopter of the Knee Arthroscopy Surgery Trainer (KAST) from Touch of Life Technologies (ToLTech). This simulator was co-developed with the American Academy of Orthopaedic Surgeons (AAOS), Arthroscopy Association of North America (AANA), and the American Board of Orthopaedic Surgery (ABOS). It provides both cognitive and haptically-enabled skills training for the proper and efficient techniques required for diagnostic arthroscopy of the knee as done on an outpatient basis — including training to competency, and a modality for complete evaluation of residents’ skills.

In the KAST simulator, trainees hold a customized stylus in each hand — emulating the probe and camera used in actual surgery — that are attached to PHANTOM® force-feedback haptic devices, made by SensAble Technologies. The haptic devices allow trainees to navigate in true 3D space while interacting with high-resolution models that are viewed on-screen, as if through an actual arthroscope. The force feedback devices are programmed to push back on the user’s hand to deliver the “feeling” of the soft tissue, cartilage, and ligaments involved in knee arthroscopy.

The “Virtual Mentor” in KAST guides, critiques, and scores the resident on each part of the procedure. In one module, trainees must perform three steps for examining the medial meniscus with a probe. The Mentor requires the trainee to score 100 percent on each step before attempting subsequent tasks, and finally a time-trial. A special “cheater view,” only available at the novice level, shows the outside image of the knee (seen in the right hand portion of the Mentor screen), to help residents understand where the tools they are using are located with respect to the anatomy. KAST switches seamlessly between a right and a left knee, forcing the trainee to be ambidextrous with respect to the camera and probe.

Haptically-enabled surgical simulation provides cognitive and skills-based training — freeing up the outpatient facility’s attending physicians to teach higher-level skills, and giving residents unlimited autonomous practice opportunities. It allows residents’ skills to be objectively measured and validated before they undertake procedures on patients. The University of Michigan Health System’s Orthopaedic Surgery department plans trials comparing beginning residents who have trained on KAST, against a control group. Separate validation studies led by the AAOS using KAST are underway nationwide during 2010.

Ambulatory Surgery Center Outlook for 2010

With 2009 closed, the preparation for a successful 2010 is here. Most centers have considered the trends and utilization by surgeons and begun the budgeting process to establish goals and objectives for 2010. When setting those goals, the greatest factor for existing centers is capturing the appropriate cases from prior utilizers and recruiting new cases from surgeons seeking the efficiency of an ambulatory surgery center (ASC). Management team members need to assess their individual challenges at their center and work to contain cost, improve production and eliminate waste. Similarly, physician partners need to assess their role in the center in assisting the cost control, reviewing data on cost, preference items and consider case adoption when appropriate.

For centers under development or under consideration, team members should be recasting projections, timelines and fully understanding the progression from planning to operations making assurances that the plan reflects today’s environment. As the economy continues to remain slower than anticipated, the economic downturn results in the need for all members of the partnership to personally guarantee loans, there is additional scrutiny of the deal points, terms are aggressive and the process is slower than in past history.

In general, 2010 has many positive aspects to consider. From an operational aspect the decrease in professional fees result in surgeons seeking an ambulatory setting for partnership as well as the need for efficiencies to impact their total practice. The investment in an ASC is often a great stabilizer to a physician base attempting to control their surgical environment and production. An ASC could be formed easily around a smaller core group of physicians to assist in attaining their goals. As with any partnership, the greater affinity for the groups’ cohesiveness the greater focus on core principles and alignment.

As hospitals continue to have pressures and cuts in personnel, the ASC environment can recruit registered nurses and surgical techs more easily by bringing quality offerings with less pressure on elevated salaries. This will allow ASCs the ability to recruit and retain talented employees and bring value to those employees seeking part-time and PRN work schedule. The ASC setting can be of great value to registered nurses, as the flexibility of part-time and PRN work can fill current needs of local resources. Surgeons will continue to seek potential avenues for an ASC and hospitals may consider expanding the potential for joint-venture opportunities. A counter measure by hospitals may be to employ specialists and reducing the potential for surgical intervention outside the hospital catchment entities. This could reduce the availability of specialists needed to expand or develop existing or future ASCs.

Currently, building and labor costs are lower due to the economic pressures and the need for contractors to keep crews active, resulting in lower costs and rental rates. This is a critical point for existing center remodeling and expansion allowing for tired assets to be updated and keep pace in the local standard of care. Additionally, the start-up facility has the opportunity to increase margin by lower cost space and lower lease rates as the entire construction cost is decreased. This drives great value, as the fixed cost is often over a longer time frame and the savings great over the life of the lease. Additionally, the availability of new, used and refurbished equipment remains of value with the current pressures on companies to move existing equipment and reduce inventory in all categories. Equipment and surgical instrumentation companies are increasing the ability to provide valuable terms and payment methods to meet centers needs.

Reimbursement is always a challenge in any healthcare entity. In the ASC industry the negotiation of contracts and details that must be included in each negotiation is critical to the success of a center. Each year, a careful evaluation of the centers managed care contracts, covered codes, multiple procedures, carve-outs and implant reimbursement must be reviewed and negotiated. Beyond the contracting, the appropriate billing and collections- to-contract standards must be complied to receive each dollar on every case. As the consolidation of payors continues and contract language becomes more complex, it is essential that your team has the appropriate resources to grow net revenues. The collection of co-pay and deductibles must also be conducted in a proactive manner. Each patient must be notified of the expectations at time- of-service and associated costs of the surgical encounter. The evaluation of in and out-of-network must be weighed, justified and aligned with each state’s regulatory guidelines. As the co-pay and deductible becomes more burdensome on the population, the potential for the delay in elective cases being scheduled timely may occur.

As the healthcare debate continues, ASCs continue to be the lower-cost environment to assist in keeping healthcare costs from climbing into the future. Assuring the right case for the right environment is often an indicator that is overlooked in an ASC. Having partners understand the appropriate case type, acuity, co-morbidities and implant reimbursement is key to assisting in the profitability of cases. ASC management teams must communicate trends and encourage participation in the process allowing all employees become knowledgeable in the aggregate center costs. All team members must have the necessary attention to detail, high customer service and clinical excellence required of today’s successful ASC. The center’s management team must proactively manage the center to optimal levels to assure the clinical and financial performance of the center.

At Practice Partners in Healthcare we specialize in de novo and turn-around opportunities, providing a unique development process and management arrangements. Practice Partners is a minority equity holder, leaving the majority to physicians and hospital partners. We bring success-proven management expertise to the clinical, financial and regulatory performance of new and existing surgery centers. Experienced in both CON and non-CON states our team provides seasoned talent for developing and managing physician-owned and hospital-physician joint ventured surgery centers.

Larry Taylor is president and CEO of Practice Partners in Healthcare, Inc.

 

Legal Issues for 2010

The ambulatory surgery center industry (ASC) confronted both challenges and change in 2009. However, with numerous ASC developments underway and an economic recovery on the horizon, the ASC industry is poised to perform well in 2010. This article addresses the key business and critical healthcare regulatory developments of this past year and their potential impact on the ASC industry for 2010.

Sale to ASC Management Companies and Health Systems

A significant business issue confronted in 2009 by the ASC industry was the decline in transactions involving a sale of a significant equity interest in an ASC to an ASC management company or health system. This decline was likely precipitated at least in part by a few historical ASC management companies that slowed down their acquisition strategies due to the tightened credit market.

In addition, the terms and pricing associated with a sale of a significant equity stake in an ASC clearly changed. For the past few years, many ASC management companies and health systems were willing to acquire a controlling equity interest in an ASC for a 7-plus purchase price multiple. Most purchase price multiples have dropped into the 5-6 range.

The purchase price formula is typically calculated as follows: (i) the ASC’s earnings before interest, taxes, depreciation and amortization (EBITDA) for the prior twelve months; multiplied by (ii) the purchase price multiple (e.g., 5-6 range); less (iii) the ASC’s long-term liabilities; multiplied by (iv) the ownership percentage being purchased. For example,. assume an ASC with $800,000 in EBITDA and no long-term debt desires to sell a 51 percent interest to an ASC management company, then the purchase price could range from $2 million to $2.5 million (e.g., [($800,000 x 5 to 6) – $0] x 51 percent).

Some new well-funded corporate buyers have also emerged in 2009. Additionally, hospitals continue to have an appetite for ASC acquisitions. As a result, a slight uptick in these transactions can be anticipated for 2010. While purchase price multiples will likely hover in the 5-6 range, ASC companies have also introduced more creative strategies to make deals more attractive to selling physicians, including the use of earn-outs and staged transactions. These strategies warrant careful attention as they can introduce new healthcare regulatory and other legal issues into the mix.

Hospital/Physician Alignment Options and Changes to the Stark Law

Hospitals and health systems will likely continue to leverage their higher reimbursement rates and community branding as a means to attract ASCs to them over other corporate investors. Historically, some hospitals pursued an “under arrangement” transaction strategy with physicians in an ASC setting.

While the terms of an “under-arrangement” transaction can vary considerably, it typically involves a physician-owned company leasing the space, equipment and/or staff to the hospital — perhaps on a turn-key basis. The hospital bills Medicare and other payors for the services and pays the physician-owned entity a fixed fee, variable fee or hybrid fixed/variable fee.

However, Stark law changes that became effective as of Oct. 1, 2009 forced hospitals and physicians to restructure or unwind such arrangements. In particular, the scope of the Stark law was expanded to apply not only to the entity billing for a “designated health service” (i.e., the hospital) but also the entity that is performing the designated health service (i.e., the physician-owned entity). In addition, the Stark law no longer permits a physician owned entity to lease space or equipment on a per-click, percentage of revenue or other similar fee structure.

In what appears to be an emerging trend across the country, a number of health systems are also considering (or for many — reconsidering) a broad spectrum of hospital/physician alignment and integration options including physician practice acquisitions, use of the foundation model, and entering into professional service and employment arrangements with surgeons and other proceduralists. These strategies may be driven at least in part by the changes to the Stark law as well as the mutual desire of hospitals and physicians to collaborate in the provision of healthcare services in a more meaningful and long-term manner.

Migration of Procedures From Hospitals Into the ASC

At the individual ASC level, in spite of a slight decrease in demand, many ASCs have grown their profits. The revenue growth may be due in part to the movement into the ASC of procedures historically required to be performed in the hospital setting, such as vascular access and certain orthopedic procedures.

The emergence of these procedures new to the ASC setting has been primarily driven by advances in medical technology as well as the expanded list of Medicare ASC covered procedures under the revised ASC payment system. Adopted by the Centers for Medicare and Medicaid Services in 2007, the revised ASC payment system allows an ASC facility fee to be paid for any surgical procedure performed at an ASC, except those surgical procedures that CMS determines are either not safe when furnished in an ASC or in which the expected duration of services would exceed 24 hours following admission.

The addition of these procedures to an ASC can have an immediate positive impact on an ASC’s bottom-line. As a result, many ASCs are examining the viability of adding these procedures to their ASC by attracting the appropriate physician specialists and sub-specialists and properly equipping the facility for such procedures.

Physician Re-Syndications

Physician re-syndications (i.e., sale of equity interests to physicians) remain very active for a number of reasons. First, ASC companies and physician owners of ASCs often desire to solidify physician utilizers’ relationships to their ASC by having them purchase equity interests. Second, a number of ASCs are reselling equity that was repurchased from prior physician investors who are no longer utilizing the facility.

Many ASCs, however, are struggling with how to make the buy-in price to physicians more attractive. The purchase price must be consistent with fair market value to minimize anti-kickback law issues. The purchase price formula for a physician’s purchase of a minority interest is the same as the formula used by an ASC management company, except that a 2-4 purchase price multiple is typically used in lieu of the 5-7 multiple. The buy-in, however, can still be quite significant. For example, assume the same ASC, as previously mentioned, desires to sell to a 5 percent equity interest to a physician, then the purchase price could range from $80,000 to $160,000 (i.e., [($800,000 x 2 to 4) - $0] x 5 percent) Allowing the ASC or its owners to loan monies to the physician to buy-in, including through an advance of future ASC distributions, could raise regulatory concerns. Accordingly, an ASC may consider alternative strategies to make the purchase price more affordable. These strategies may include the use of a dividend recapitalization or preferred distribution (which are treated as a liability in the formula described above thereby reducing the purchase price).

Alternatively, an ASC could undergo a tax-free restructuring so that the ASC is owned through a physician group practice. Group practice ownership of an ASC may allow an ASC to depart from a fair market value buy-in price.

Physician Buy-Backs

Many ASCs continue to be confronted with physician partnership and “deadweight” issues. A recently filed lawsuit, DeBartolo v. HealthSouth Corp. brings to the forefront the issue of non-productive physician owners in ASCs. The lawsuit was filed by a surgeon investor in an ASC whose shares were repurchased because of his failure to perform at least one-third of his procedures at the ASC.

The case is significant because it addresses the critical issue of whether the repurchase of a physician’s equity interest for failing to utilize the ASC would violate the anti-kickback law. On the one hand, the federal anti-kickback law ASC safe harbor mandates that a physician must perform at least one-third of his procedures at the multi-specialty facility in which he has an ownership interest. However, regulatory concerns could also arise if an ASC’s redemption of a non-productive physician is intended to penalize the physician for not selecting this particular facility for the procedure.

Nevertheless, many ASCs have incorporated compliance with the one-third test requirement into their governing documents. If a physician owner fails to perform at least one-third of his or her ASC procedures at the ASC in which he or she is an owner, then the ASC’s governing document may provide that such physician’s ownership interest in the ASC can be repurchased by the ASC or its other owners.

In an early ruling in DeBartolo, the federal court dismissed the lawsuit indicating it should be addressed under state law. While too early to determine, this initial ruling suggests that physician buy-back issues may simply raise state contract law claims. It is therefore critical that an ASC’s governing document incorporates the latest terms and mechanisms for dealing with physician equity buy-backs in a manner that takes into account the latest regulatory and other legal guidance.

Conclusion

There is no denying that this past year was a bit sluggish for the ASC industry, particularly in the transactional front, as it faced its own set of challenges including dealing with aggressive payor “out-of-network” billing strategies and the potential impact of health system reform. However, most ASCs escaped generally unscathed from the economic woes of this past year.

As 2010 gets underway, there are a number of favorable indicators for the ASC industry. Newly emerging buyers with capital are in search of ASC acquisition opportunities. Hospitals remain interested in pursuing collaborative strategies with physicians, particularly in the ASC and other outpatient sectors. And, ASCs are adopting a number of revenue enhancement strategies including through performing procedures not historically performed in the ASC setting, physician re-syndications and by adding ancillary revenue streams (e.g., anesthesia). As a result, the ASC industry is poised to have a strong year in 2010.

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