This Week in Surgery Centers: Monica Daniel – Choosing the Best Option: Opening an ASC, OBL, or Hybrid-Facility

Monica Daniel – Choosing the Best Option: Opening an ASC, OBL, or Hybrid-Facility

Here’s what to expect on this week’s episode. 🎙️

Office-based labs are becoming increasingly popular with physicians and patients. What’s behind the sudden interest?

Monica Daniel, President of Axiom Integrated Services, has been consulting and helping ASCs for 25+ years. Over the last few years, Monica has seen an increase in interest in office-based labs, the steps to develop OBLs, and OBL/ASC hybrid-facilities.

🚀 Monica shared valuable insights into what is driving this trend and the strategic considerations that healthcare providers need to think through before deciding they want to convert an ASC to an OBL, vice-versa, or create a hybrid facility.

The rise of OBLs and their integration with ASCs to form hybrid facilities offers a ‘best of both worlds’ scenario, catering to diverse healthcare delivery needs.

State licensing, Medicare certifications, and specific operational guidelines play a crucial role in differentiating ASCs and OBLs.

The growth trajectory in the OBL sector is impressive, with revenue projections jumping from $11 billion in 2023 to an estimated $18 billion by 2030.

Choosing an ASC, OBL, or hybrid facility hinges on patient population, procedural reimbursements, and regulatory requirements.

Regulatory flexibility across states impacts where and how specific procedures can be conducted outside traditional hospital settings.

Find the full episode on Apple Podcasts, Spotify, or YouTube to hear all the details.

Episode Transcript

0:01
Welcome to This Week in Surgery Centers.

0:03
If you’re in the ASC industry, then you’re in the right place.

0:07
Every week, we’ll start the episode off by sharing an interesting conversation we had with our featured guest, and then we’ll close the episode by recapping the latest news impacting surgery centers.

0:17
We’re excited to share with you what we have.

0:19
So let’s get started and see what the industry’s been up to.

0:26
Hi everyone.

0:27
Here’s what you can expect on today’s episode.

0:30
Monica Daniel is the principal and founder of Axiom Integrated Services and she has been consulting and helping AS CS for over 25 years.

0:40
And over the last few years, Monica has seen an increase in interest in the development of OB LS office based labs and that’s what we’re diving into today.

0:50
So we’re covering the differences between an ASC and OBL and then also the option of a hybrid facility.

0:57
We’re also talking through the key factors to consider when choosing which structure is right for you, how reimbursement differs and other OBL trends that Monica has been seeing.

1:08
And after my conversation with Monica, we will switch to our Data and Insights segment.

1:13
And today we’ll break down the average number of days it takes a S CS to bill, so the number of days between the date of service and the date the claim was made.

1:22
And then I’ll share some tips to help you kind of close that gap and reduce your turn around time.

1:26
And lastly, we are just two weeks out from ASCA in Orlando, which is super exciting.

1:32
HST will be at booth seven O 9 and we have a really fun prize that anyone can win.

1:38
We’ll have all of our products available for walkthroughs and then we actually have two speaking sessions this year.

1:44
So one is on Thursday, April 18th titled Unleash the Power of Data to Transform Your ASC that Will Evans will give.

1:53
And then we have a second one on Friday, April 19th titled How to Prepare for and Navigate Board Level Conversations.

2:01
And that is actually a panel.

2:02
So Nick last will be the moderator and then our two panelists will be Tina Piotrowsky and Doctor David Shapiro.

2:10
So if you want to learn more, just go to hscpathways.com/aska for all the logistics.

2:16
And then I do really hope you’ll all swing by the booths to say hello.

2:20
So I hope everyone enjoys the episode.

2:21
And here’s what’s going on this week in surgery centers.

2:28
Hi Monica.

2:29
Welcome to the podcast.

2:31
Good morning.

2:32
Thanks so much for coming on today.

2:34
Can you share a little bit about yourself with our listeners, please?

2:39
Sure, sure.

2:40
So my name is Monica Daniel, I am the President of Axiom Integrated Services out of Chicago, IL.

2:47
We are a healthcare consulting company that’s been in business for 25 plus years, really in the ambulatory sector for the most part dealing with brand new surgery center start-ups, office based labs, office based accreditation, ASC accreditation.

3:03
So anything really in that ambulatory sector is where we reside.

3:07
Awesome.

3:08
And I’m really excited that you’re on today because we have covered a lot about outpatient growth, but we have not talked about OB LS at all yet and I know that’s such a hot topic, an important topic right now.

3:21
So for our listeners who may not be familiar or might just need a refresher, could you explain the difference between an ASC and OBL and then and even a hybrid facility?

3:33
Sure, sure.

3:34
So I think some of the key elements to an ambulatory surgery center would be state licensing.

3:40
So in some states, there is the mandate that you must be a licensed facility within that state.

3:46
We still do have in some states where there is a certificate of need or Acon that is required that’s typically required before you even start construction of that surgery center.

3:57
So that’s one component.

3:59
And another component I would say is Medicare certification.

4:02
So as a surgery center, you can go and become accredited or certified as a Medicare facility.

4:10
Within that component of those Medicare requirements, there is a little thing called Co mingling of patients.

4:16
I’ll get into that because it plays into our hybrid component in a minute, but that is a real key component under Medicare.

4:24
And I think those are kind of some of the the top areas as well as being able to build a facility fee as a surgery center.

4:31
And now if we get into what’s more of an office based lab or an office based surgical suite, that’s really considered as more of an extension of a physician practice.

4:42
So physicians have their practice, they see their patients and they can do surgical procedures within that space.

4:49
There are some requirements in certain states where we have thresholds.

4:53
So for instance, they will not allow you to do more than 50% of your overall patient volume as surgical volume.

5:01
So those are some things to consider.

5:03
I think another piece to that puzzle is the anesthetic component.

5:08
So in some states, you have to watch where your level of anesthesia is, whether that’s maybe they only allow you to do local anesthetic, it may only be that they allow you to do conscious sedation within some states.

5:22
So that’s another piece to the office space side.

5:25
And usually in those settings we will see, we’ll see mainly that that’s kind of an extension of the physician practice and that’s also constructed as a part of the physician practice itself.

5:37
So that’s the OBL office based surgical side.

5:41
Now we get to the the fun piece of the ASC and the OBL hybrid and that’s really the, I would say the best of both worlds.

5:49
It’s the combination of both the ASC and the OBL.

5:53
So the facility itself would need to be constructed as a surgery center, meeting all of those life safety requirements, going through licensing if needed, going through Medicare certification and anything of those that aspect.

6:07
And then it really only acts as a surgery center on certain days of the week.

6:12
So that means maybe on Monday and Tuesday we’re going to act as a surgery center.

6:17
Then the OBL kicks in on Wednesday through Friday.

6:20
And so that OBL will be where we’re going to do those OBL cases Wednesday through Friday.

6:27
And this is the piece of the commingling.

6:30
So because of the fact that Medicare says that we cannot Co mingle patients meaning if I have surgical patients they need to be there just for surgery as a surgery center you couldn’t have office being seen or office based patients being seen at that same time.

6:45
So we try and in this OBL hybrid you will have lease agreements that will structure so that things are kept very, very separate between these two entities.

6:56
So that kind of gives you the basis of all three of those components and kind of how they are structured.

7:02
Yeah.

7:02
And are most of those restrictions just kind of checks and balances just to make sure because you had mentioned the 50%, I think that’s interesting that so a physician who sees somebody at their practice can only technically send 50% to for surgical procedures.

7:20
It is more that they can only do 50% of their surgical volume within their facility.

7:27
So if I had, let’s say 1000 patient visits, I could only do 499 surgeries within my practice itself.

7:35
I gotcha.

7:36
And that’s just in some state.

7:38
Yeah.

7:38
So it’s one of those things to where we want to look at in any state.

7:42
When we go in to assist a client, we’re looking at what their surgery center mandates are.

7:47
We’re looking at what the office based mandates are to make sure that they’re compliant with any of those.

7:53
OK, perfect.

7:55
And we know that there are roughly 6200 Medicare certified AS CS.

7:59
That’s a number we can pull.

8:01
We can’t put an exact number on how many OB LS or hybrid facilities there may be.

8:06
But can you try to give us a sense of kind of the growing interest right now?

8:10
Yes, I can tell you that in our practice itself probably within the last three, three to five years, we have seen just a huge explosion on the OBL side.

8:20
I want to say it started there first really the physicians kind of pushing those cases into their OBL, starting those office based labs.

8:28
But now we’re also seeing where a lot of those physicians who started those office based labs are now saying, hey you know what Monica, I’d like to also build a surgery center because they see that need based on reimbursements and how that’s kind of migrating into different areas.

8:44
So they’re taking their office based labs now to the next level and saying we’d like to start a surgery center.

8:50
I think I saw Erica where some of the revenue numbers were around 11 billion for office based labs in 2023 migrating up now until 18 billion by 2030.

9:01
So you’re going to start seeing a lot more of this being shifted into these either OBL or ASC or hybrid sectors.

9:08
Wow, that’s crazy growth and what are kind of some of the key factors that should guide a health system or a provider who’s trying to choose between an ASEOBL hybrid or I think it’s interesting AS CS might want to outfit a an OBLOBLS might want to expand to an ASC.

9:25
So, so many combos here.

9:27
Yes, there’s a lot of different combinations and I think one of the key pieces to this is patient population.

9:33
We’ll have a physician groups that will come to us and maybe they’re currently part of a hospital system.

9:40
If you have those patients in a hospital system and they can’t migrate out with you, then it doesn’t make sense for you to try and create an office based lab, right.

9:49
So that’s one piece to the puzzle.

9:51
I think another piece is just the fact that I always tell physicians, please walk before you can run.

9:57
If you are a group right and you would like to start a an ambulatory surgery center or an office based lab, let’s start with the office based lab first if that makes sense.

10:08
Let’s get you accustomed to kind of what that feels like, how that that is handled because there’s much less regulatory requirements on that office based lab than there’s going to be in the ambulatory surgery center.

10:20
So we try and kind of get them, let’s walk before we can run types of cases is another key component to this.

10:27
If I have a group of physicians that as we look at what their patient population is and the majority of their cases are reimbursable in OBL, then we should head down that OBL path first.

10:40
But if a lot of their cases can’t be reimbursed in an office based lab and it’s more of that surgery center, then I want to try and drive them and say maybe we need to look at the surgery center 1st.

10:51
So I think those are are key components to it.

10:54
And then just just the expense of it as well, I mean it’s not in a cheap option to try and head down that surgery center path because you do have more of those regulatory requirements for your construction.

11:07
So again, that might drive the factor of maybe we want to start with an OBL.

11:10
And if someone is right now opening up a surgery center working on a de Novo project, would you recommend that when they’re outfitting and doing their construction that they’re considering the OBL restrictions just in case they want to go that route?

11:25
If you have a group of physicians that let’s say is looking to do a, an OBL, it’s very hard for you to go from an OBL into an AS because of the fact just with that whole construction, the requirements that a surgery center is going to have.

11:43
But at the same token, I’ll say it’s very difficult to say, let’s build this as though it’s a surgery center because that’s a lot of additional expense that maybe you may never go down that path.

11:54
So if you’re going to do it, I’d say do an OBL, but do it in the most cost efficient manner that you can.

12:01
And when that time comes, if you do think that you want to go for a surgery center, maybe either we’re looking at expanding what you currently have or finding a whole different location, sure.

12:12
OK, that makes sense.

12:14
And I’m sure one driving factor of this would be reimbursement.

12:19
So how does reimbursement differ between an ASC and an OBL?

12:23
Yes, so it’s probably one of the biggest driving factors to this whole piece of the puzzle, right, is just because there are certain codes Medicare has allowed to be done in an ASC.

12:35
There’s certain codes that Medicare even allows for a physician to bill on his professional fees as an additional reimbursement for the OBL.

12:45
So when we look at this, it’s really comes back to that feasibility and saying do I head down the path based on these codes being reimbursed in an OBL or do I head down the path of that ASC because these codes can be reimbursed in that ASC.

13:01
So it’s a fine line in both that hybrid is when you have that group that says Monica, I can do both ASC procedures and OBL procedures, that’s when that hybrid becomes very, very important because they can capture on both of those aspects and that makes a lot of sense then for us to do that ASC and that OBL hybrid.

13:23
So the reimbursing factor is really and I think we’re starting to also see where Medicare is shifting things maybe from an OBL into an ASC.

13:33
So where before they were paying in that office based, we’re now seeing it shifting into the surgery center side.

13:40
And that’s I think a driving piece to where some of those physicians who started an OBL are deciding maybe I need to do an ASC because I’m going to have to shift these cases into a surgery center soon that makes sense.

13:53
So you can kind of back in to your answer of ASC or OBL based on physician skill set and of course other variables as well.

14:00
Who are their patients, who who do they have for patients, what types of procedures are they they doing will really dictate which type of facility we probably want to head them down.

14:12
Gotcha.

14:13
And what trends are you seeing right now with these facilities?

14:17
Any specific state specialties?

14:20
What are you seeing right now?

14:21
Yeah.

14:21
I think the hard part right now is the fact that we still have so many states that maybe don’t allow cardiac procedures to be done or cardiovascular procedures to be done, not even just in an OBL, but maybe even in an ASC.

14:36
Pennsylvania was one that just recently rescinded some of its requirements that they could only be done in a hospital setting.

14:44
So you really are looking at if you’re a physician group, you’re looking to see does my state even allow me to do these in an OBL or an ASC environment.

14:54
So I think that’s the trend is starting where we’re Colorado recently kind of rescinded some of its restrictions on that and is allowing some of these cardiac procedures to be done in an ASC.

15:05
But there’s also requirements for regulatory reporting.

15:08
So they want to see what these outcomes look like.

15:11
They want to make sure that these are being done in a safe environment and I understand that I think also no matter what, even if you’re doing office based surgery might not even just be these procedures, it could be plastics or pain management or whatever.

15:25
We’re still seeing that some states have requirements for accreditation in an office based setting.

15:30
So they need to make sure that they’re reviewing those state requirements.

15:34
So I think it’s just really a matter of how are we seeing Medicare push things into these surgery centers, into these OB LS.

15:42
That’s probably the biggest trend and how these states are kind of taking it on to say, OK, maybe we do need to to lessen some of the restrictions and allow some of these to be done in these settings.

15:53
So that’s I think the biggest trend that I’m seeing.

15:56
Yeah, that’s interesting that you had mentioned reporting.

15:59
Do OB LS have the same level of like quality measure reporting and all of that that AS CS do or it’s even less?

16:07
No, not at all because again they’re not really regulated about the only regulatory body that an OBL or an OB S has is really whoever they’re using is their accrediting body.

16:19
And the reporting requirements are really going to be more of what is that Joint Commission that AAA, the Quad A’s of the world that maybe are those accrediting bodies, the ACH CS that are out there, what are they mandate they have to report.

16:35
But that really is just internal.

16:36
So all of the NHS and reporting that we have to do on the surgery center side of things or the quality metrics or things like that that fall under Medicare, that’s not a requirement for an OB.

16:47
That has to also be a wonderful driving factor for some physicians as well.

16:54
It sure is because when you think of a physician practice, we’re dealing with lesser staff.

16:59
Maybe we’re only dealing with staff that have our only medical assistants there.

17:04
They don’t maybe even have any nursing staff within a physician practice or things of that nature.

17:09
So when we come in, there is sometimes a lot of education that has to go on when we’re getting them prepared, when they’re getting them ready for that accreditation.

17:19
But then also just like you said, how do we also educate them on maintaining patient safety, maintaining the regulatory requirements that maybe they’re not required to do, but we want them to do to make sure that it’s still a safe environment for those patients that are coming in?

17:36
Yes, absolutely.

17:38
All right, Monica, well, I feel like we could talk about this for probably another three hours at least, but a lot to it, right?

17:45
A lot to it.

17:46
It’s super interesting.

17:47
I mean, I just think there’s so much right now to with procedures being pushed to the outpatient space.

17:52
So to add this extra component to it, it’s just super interesting to see in five years looking back, what will the breakout of AS, CS versus OB, LS and hybrid facilities be?

18:04
Yeah, it really is.

18:05
I think it’s exciting for me when I have one that we build out and you see that Cath lab built out in the ambulatory setting.

18:12
And it’s just the physicians are always so happy and it’s just it’s a beautiful thing to see.

18:17
So yeah, that’s awesome.

18:20
All right.

18:20
We do this every week with our guests.

18:23
What is one thing our listeners can do this week to improve their surgery centers or OB?

18:28
LS sure.

18:30
I would say probably in in light of the fact that I think I just finished four surveys in the last week, Sterilization, sterilization is such a huge hit area.

18:41
I think that any administrator or manager would do themselves some good by digging into their sterile processing area, looking at maybe any gaps that they may have and pulling every possible instruction for use or manufacturer guideline that they have for any product, any instrument, any piece of equipment to make sure that they’re following by cleaning practices or just even operational practices based on those particular items.

19:09
Because it’s something that every surveyor right now is digging into really, really hard.

19:13
That is great advice.

19:15
Thank you very much for coming on today.

19:17
We appreciate it.

19:19
Thank you.

19:20
Thanks for having me.

19:25
Welcome to Data and Insights, where we turn data into dialogue and numbers into narratives.

19:32
So HSC Pathways released a State of the Industry report late last year highlighting best practices, key process steps and KPIs for every step of the patient journey and for nearly every recurring administrative duty.

19:45
Most importantly, using our own unique data set from our clients, we were able to extract data points so that anyone in the industry could compare themselves to their peers.

19:55
Two quick disclaimers, We only pulled data from clients who gave us permission, and we omitted any extreme outliers.

20:03
So after analyzing data from over 450 AS CS across the country, we determined that on average, AS CS are taking 3.6 days to bill.

20:14
So our data analysts derive this metric by counting the days between the date of service and the date the claim was made.

20:22
So let’s break down that days to bill number just a little further so you have even more contact.

20:28
So here is here it is broken out by number of O Rs.

20:31
So AS CS with one OR take four days to bill, two to four O Rs.

20:38
Take three days to bill, 5 to 9 O Rs.

20:42
Take 410 to 14 O Rs.

20:46
Take three and then 15 + O Rs.

20:49
Take four.

20:50
So they’re all between 3:00 and 4:00.

20:52
There’s not a huge amount of difference there, but the range is 3.1 days to to 4.4 days.

21:01
So why does this data point matter?

21:03
Days to bill is obviously a key indicator of the efficiency of the revenue cycle, as the number directly affects the speed at which your surgery center receives payments from payers.

21:15
And by keeping days to bill, low surgery centers can optimize cash flow and reduce the risk of delayed payments or cash flow interruptions.

21:25
It’s also really important for compliance with regulatory requirements and for maintaining A transparent and efficient billing process.

21:33
So how can you shorten the number of days it takes to submit your claim, right?

21:37
OK, you do your due diligence, you understand your number, but how can we make that turn around even faster?

21:43
So utilizing Ehrs and practice management systems that are ideally integrated with clearing houses will help to streamline this process significantly.

21:54
You know human error is inevitable, but using software and also employing well trained coders who are well versed in the latest coding standards and guidelines will help to reduce denials and avoidable mistakes.

22:09
And when a denial does occur, it’s important to take meticulous notes and review everything to avoid making the same errors in the future.

22:18
And any upfront technology costs will soon be recouped as your days to build number decreases.

22:24
Some other KPIs to track would be claim submission time, claim denial rates, and a percentage of electronic claim submissions as well.

22:33
Ideally all, but that’s OK if not, and as always, trying to identify some sort of pattern can be super helpful.

22:41
So are there specific procedures or providers that seem to take longer to get the claim submitted?

22:47
Insights like that can be invaluable and help you get to the root cause.

22:52
If you’re interested in more data points and use cases, subscribe to the podcast so that you don’t miss any upcoming segments.

22:59
Or just head to our website to check out the full State of the Industry Report to get your hands on even more data.

23:05
And that officially wraps up this week’s podcast.

23:08
Thank you, as always for spending a few minutes of your week with us.

23:12
Make sure to subscribe or leave a review on whichever platform you’re listening from.

23:17
I hope you have a great day and we will see you again next week.