Ambulatory Surgery Centers vs. Hospital Outpatient Departments. Which Is Better?

Members of the claim management team need to look for solutions to the rising cost of health care in workers’ compensation claim. As various medical facilities diversify, it should be an important consideration to look at providing quality health care to injured workers via ambulatory surgery centers. These centers can provide the same care as outpatient facilities in hospitals, but at a lower cost, and better service.

What is an Ambulatory Surgery Center?

Ambulatory surgery centers specialize in providing various healthcare services one would normally receive at a hospital, but often at a reduced cost. These services can include the following:

• Surgical procedures: Primarily surgeries that involve bones, joints, and soft tissue. Common surgeries involve the knee, shoulder, and elbow;
• Pain management treatment: Common procedures include injections, TENS united, exercise interventions, physical medicine, and rehabilitation; and
• Diagnostic services: These include EMGs, MRIs, and CT scans.  X-rays can also be performed.

They are not connected to a hospital, but used by surgeons to provide less complicated procedures that often do not result in an overnight stay. These centers are often known for providing better care at lower costs. They often are driven by the fact they do not require staffing for the variety of services a hospital will offer, which reduces the need for costly administrative and regulatory oversight. Although not connected to a hospital, they have access to lifesaving technology in case problems arise.

Driving Costs Savings Through Research

Claim handlers should do their research before directing injured employees to ambulatory surgery centers. This can result in cost savings in certain circumstances. A 2018 study by the Workers’ Compensation Research Institute (WCRI) entitled, Payments to Ambulatory Surgery Centers, highlights the effectiveness of these facilities.  Examples of this include:

• Knee arthroscopy procedures saved workers’ compensation programs as much as $2,000 per procedures;
• Shoulder arthroscopy surgeries were about $3,000 less in the states of Pennsylvania, New York, and Michigan; and
• A savings of roughly 45% when shoulder rotator cuff surgeries were undertaken at ambulatory surgery centers, when compared to outpatient healthcare facilities.

The study noted that various factors were attributed to the savings when an ambulatory surgery center. This included state workers’ compensation medical fee schedules, network participation rates, or other price controls that were negotiated in advance. It is also worth noting the study was not all inclusive, but did sample 23 states. The jurisdictions survey covered more than 66% of all workers’ compensation benefits paid in the years involved in the study.

In a related study, Comparing Payments to Ambulatory Surgery Centers and Hospital Outpatient Departments, the WRCI reviewed data from California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. These states were selected given their geographic locations, overall workforce sizes, and various pricing schemes within the programs. While ambulatory surgery centers were not cost effective in all jurisdictions and types of procedures, the study did indicate these centers generally provide services at a lower cost than those same services performed in a hospital outpatient setting.

“While ambulatory surgery centers were not cost effective in all jurisdictions and types of procedures, the study did indicate these centers generally provide services at a lower cost than those same services performed in a hospital outpatient setting.”

Concern was expressed by some as a result of these studies that ambulatory surgery centers could not continue to provide quality services at lower costs for the long term. The result has been the implementation of fee schedules that are specifically helpful to the centers and allow for them to increase their billing rates. One such instances is Minnesota, which implemented a more favorable payment framework in October 2018. Notwithstanding this change, ambulatory surgery centers continue to be a viable option for members of the claim management team who seek to direct injured employees to quality healthcare facilities with the cost as one consideration.

Conclusions

Ambulatory surgery centers are able to provide specialized services to a growing segment of injured employees. These are the same services one could receive at an outpatient hospital program, but at a reduced cost to the workers’ compensation insurance carrier. Claim handlers should explore these options as they seek to reduce overall program costs.

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