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Orthopedics and ASCs: Renegotiate Payer Rates to Maximize Profitability

Orthopedics and ASCs: Renegotiate Payer Rates to Maximize Profitability

Review ASC managed care contracts to achieve higher reimbursement rates for orthopedics

The ASC Association lists orthopedics as the most common specialty for ambulatory surgery centers (ASCs) nationwide. According to VMG Health’s 2022 “Multi-Specialty ASC Benchmarking Study,” orthopedic surgeries bring in more revenue than any other specialty – up to $4,009 per case. With higher reimbursement rates comes greater financial stability, which is why orthopedic procedures are largely considered the most strategic option for running a profitable and successful outpatient facility.

As orthopedic procedures shift to being performed in the outpatient setting, many in the ambulatory surgery industry are cashing in on attractive reimbursement opportunities. While high acuity cases such as total joints can double or even triple a surgery center’s cash per case, the cost per case can also increase. Plus, ASC payer contracts might not be updated to reflect the best reimbursement rates for orthopedic procedures.

As Nader Samii, National Medical’s CEO, states: “When adding orthopedics to your ASC, you could do everything right, but if you have bad rates in your managed care contracts, you could be underwater from day one.”

Managed care contracts can be incredibly complex, which is why National Medical specializes in renegotiating payer rates on our clients’ behalf to reflect appropriate rates for high acuity cases, such as total joint procedures.

If you’re considering adding orthopedic procedures to your surgery center, the first step is to review your managed care contracts. National Medical’s Managed Care Contract Checklist is available in our e-book titled The Financial Impact of Managed Care Contracting in Orthopedics. Utilize this checklist to determine if your ASC’s payer contract rates need to be renegotiated.

When you’re ready to negotiate rates for orthopedic procedures with commercial payers:

  • First benchmark the reimbursements for orthopedic procedures at hospitals, outpatient centers, and ASCs in your region. This information will help you understand how far you can negotiate. You can also use this data to show payers how much they’ll save by moving a procedure to your facility.
  • Stress the value of any technology you use and the advantages it brings to your practice and to payers.
  • Bring data to the table that speaks to the quality of your surgeons and their outcomes.
  • Determine the frequency with which you perform existing procedures, plus the estimated gains for orthopedic procedures. When negotiating managed care contracts, you may want to focus on securing competitive rates for procedures you perform more frequently, as well as the cases that can bring in the highest reimbursement value, such as total joints.

Completing National Medical’s Managed Care Contract Checklist will help you determine the fixed and variable costs for orthopedic procedures, your target profit margin, and if it’s time to renegotiate payer rates.

To learn more about how to maximize the financial value of your ASC’s orthopedic program, view our webinar The Business of Powering Profitability in Your Orthopedic Surgery Center.


This post was first published November 9, 2022 and was updated December 16, 2022.

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