1 00:00:00,000 --> 00:00:02,159 Hi, everyone. This is Brian Zimmerman with Becker's 2 00:00:02,159 --> 00:00:04,240 Healthcare. Thank you so much for tuning into 3 00:00:04,240 --> 00:00:07,519 the Becker's Healthcare podcast. Today, we're on-site in 4 00:00:07,519 --> 00:00:10,000 Chicago at Becker's thirty first annual meeting, the 5 00:00:10,000 --> 00:00:11,939 business and operations of ASCs, 6 00:00:12,335 --> 00:00:14,115 and we're going to talk about how ambulatory 7 00:00:14,335 --> 00:00:17,875 surgery centers can navigate the evolving regulatory landscape 8 00:00:18,255 --> 00:00:21,154 from state level reforms to federal payment changes 9 00:00:21,375 --> 00:00:23,554 and what these shifts mean for growth, compliance, 10 00:00:23,855 --> 00:00:25,154 and long term strategy. 11 00:00:25,769 --> 00:00:28,089 Joining me for this discussion is Michelle Huntsman, 12 00:00:28,089 --> 00:00:30,750 a partner with Holland and Knight. Michelle, welcome. 13 00:00:31,050 --> 00:00:32,649 Thank you for having me, Brian. I'm very 14 00:00:32,649 --> 00:00:34,570 excited to be here. Yep. To to get 15 00:00:34,570 --> 00:00:36,250 us started here, can you just, I guess, 16 00:00:36,250 --> 00:00:38,250 share with listeners a bit about your background 17 00:00:38,250 --> 00:00:40,674 so they can appreciate your perspective and and 18 00:00:40,674 --> 00:00:42,375 what you're doing now. Absolutely. 19 00:00:42,755 --> 00:00:44,914 So I am a partner at Holland and 20 00:00:44,914 --> 00:00:46,695 Knight in their Houston office. 21 00:00:47,475 --> 00:00:50,114 I was previously with another large law firm 22 00:00:50,114 --> 00:00:52,114 in the Houston area for almost a decade 23 00:00:52,114 --> 00:00:54,534 before joining Holland and Knight this summer. 24 00:00:54,920 --> 00:00:57,020 And my practice focuses it's 25 00:00:57,880 --> 00:00:59,820 on health care m and a and transactional 26 00:00:59,880 --> 00:01:02,219 work. I say I major in transactional work, 27 00:01:02,439 --> 00:01:03,960 and then I have a minor in health 28 00:01:04,040 --> 00:01:05,739 in a health care regulatory practice. 29 00:01:06,120 --> 00:01:09,000 So, we do a significant amount of ASC 30 00:01:09,000 --> 00:01:11,055 joint venture work, syndication work, 31 00:01:11,515 --> 00:01:13,594 and then all of the ancillary compliance work 32 00:01:13,594 --> 00:01:15,435 that comes from the operational side of the 33 00:01:15,435 --> 00:01:17,515 AC industry. For sure. We're definitely gonna pull 34 00:01:17,594 --> 00:01:19,355 tug on some of that expertise here in 35 00:01:19,355 --> 00:01:19,995 just a moment. 36 00:01:20,555 --> 00:01:22,474 Let let's get into it. So, obviously, I 37 00:01:22,474 --> 00:01:22,974 think 38 00:01:23,275 --> 00:01:25,560 big theme at the the conference here right 39 00:01:25,560 --> 00:01:27,819 now and the big theme in general 40 00:01:28,120 --> 00:01:30,920 is just the the rapid pace of change 41 00:01:30,920 --> 00:01:33,240 in the ASC space, thinking from state level 42 00:01:33,240 --> 00:01:36,520 legislative activity to new federal reporting and payment 43 00:01:36,520 --> 00:01:37,020 updates. 44 00:01:37,560 --> 00:01:40,875 From your perspective, what's driving this increased sort 45 00:01:40,875 --> 00:01:42,894 of regulatory momentum around ASCs? 46 00:01:43,515 --> 00:01:45,194 And and what does it signal about the 47 00:01:45,194 --> 00:01:47,435 direction of the sector overall? Where where is 48 00:01:47,435 --> 00:01:49,515 it headed? What's going on? It's a great 49 00:01:49,515 --> 00:01:51,515 question, and it's the million dollar question from 50 00:01:51,674 --> 00:01:53,834 for everyone in the ASC industry right now. 51 00:01:53,834 --> 00:01:56,129 So I think there's there's three factors that 52 00:01:56,129 --> 00:01:57,649 we need to take a look at when 53 00:01:57,649 --> 00:01:59,269 responding to this type of question. 54 00:01:59,649 --> 00:02:02,209 And the first is the undeniable shift to 55 00:02:02,209 --> 00:02:04,869 the outpatient care setting. We're seeing 56 00:02:05,329 --> 00:02:08,769 advances in minimally invasive procedures and just a 57 00:02:08,769 --> 00:02:11,814 general federal protocol that is accelerating migration 58 00:02:12,114 --> 00:02:14,194 of surgeries from the hospital setting to the 59 00:02:14,194 --> 00:02:16,594 outpatient care setting. And the second is just 60 00:02:16,594 --> 00:02:19,234 cost containment. So Medicare sees the value in 61 00:02:19,234 --> 00:02:21,474 shifting procedures from the hospital setting to the 62 00:02:21,474 --> 00:02:23,719 ASC setting. Her autistic assistant the other day 63 00:02:23,719 --> 00:02:24,219 that, 64 00:02:24,680 --> 00:02:27,400 it's estimated the federal government saves about 4,000,000,000 65 00:02:27,400 --> 00:02:29,500 with a b dollars each year 66 00:02:29,879 --> 00:02:31,819 based on the allocation of surgeries 67 00:02:32,439 --> 00:02:34,620 in the ASC setting. So 68 00:02:35,245 --> 00:02:37,965 from that, we're seeing a complete policy modern 69 00:02:38,205 --> 00:02:39,825 modernization push from CMS 70 00:02:40,365 --> 00:02:43,325 where they're really working to put more procedures 71 00:02:43,325 --> 00:02:44,224 on the ASC 72 00:02:44,605 --> 00:02:47,325 covered procedure list. So so generally, what what 73 00:02:47,325 --> 00:02:49,325 this means is is we're watching the ASC 74 00:02:49,325 --> 00:02:50,305 industry mature. 75 00:02:50,659 --> 00:02:52,419 And by mature, I don't mean slow down 76 00:02:52,419 --> 00:02:54,580 in growth. I actually settle into being one 77 00:02:54,580 --> 00:02:56,360 of the pillars of the health care industry, 78 00:02:56,979 --> 00:02:57,479 which 79 00:02:57,939 --> 00:02:59,460 is going to present a whole new set 80 00:02:59,460 --> 00:03:01,240 of issues for all the the actors 81 00:03:01,540 --> 00:03:03,400 and just an exciting time for our industry. 82 00:03:03,540 --> 00:03:05,219 Yeah. There's a lot of excitement there in 83 00:03:05,219 --> 00:03:07,168 terms of becoming a a pillar of and 84 00:03:07,168 --> 00:03:09,275 and the advancement of technology too. It's gonna 85 00:03:09,275 --> 00:03:11,675 be more and more and more procedures are 86 00:03:11,675 --> 00:03:13,275 gonna be able to be in in the 87 00:03:13,275 --> 00:03:15,115 outpatient setting. More care is gonna be able 88 00:03:15,115 --> 00:03:17,115 to deliver there. But there's so much that's 89 00:03:17,115 --> 00:03:19,294 gonna have to change to accommodate that. 90 00:03:19,990 --> 00:03:21,590 Quickly before we move forward, but maybe you 91 00:03:21,590 --> 00:03:23,290 could talk about maybe some of the barriers 92 00:03:23,430 --> 00:03:26,330 that exist even with this regulatory momentum. Like, 93 00:03:26,469 --> 00:03:27,909 what are just gonna stand in the way 94 00:03:27,909 --> 00:03:29,590 of this? Staffing is one that comes to 95 00:03:29,590 --> 00:03:31,129 mind. Like, how are you gonna get 96 00:03:31,590 --> 00:03:34,525 enough physicians migrated out to these facilities in 97 00:03:34,525 --> 00:03:35,805 order to to do that? But just any 98 00:03:35,805 --> 00:03:37,965 other takes on terms of what barriers need 99 00:03:37,965 --> 00:03:39,165 to be knocked down to make that future 100 00:03:39,165 --> 00:03:41,085 a reality. So you're hitting the big one, 101 00:03:41,085 --> 00:03:43,324 right, is is staffing. And then second is 102 00:03:43,324 --> 00:03:43,824 that 103 00:03:44,284 --> 00:03:46,544 we're nationally seeing a 104 00:03:47,289 --> 00:03:47,789 reimbursement 105 00:03:48,090 --> 00:03:49,629 cut. Right? And so Medicare, 106 00:03:50,250 --> 00:03:52,909 the the adjustments Medicare makes to reimbursement 107 00:03:53,370 --> 00:03:55,530 are not in sync with the actual cost 108 00:03:55,530 --> 00:03:56,270 of staffing 109 00:03:56,729 --> 00:03:58,889 and just the general operation of the ASC. 110 00:03:58,889 --> 00:04:00,604 So there's this chasm between 111 00:04:00,905 --> 00:04:01,724 what physicians 112 00:04:02,104 --> 00:04:04,664 are getting paid and then what their costs 113 00:04:04,664 --> 00:04:06,344 are. So that's something we're gonna need to 114 00:04:06,344 --> 00:04:08,185 figure out as an industry is how we 115 00:04:08,185 --> 00:04:10,525 bridge that gap and make these ASCs economically 116 00:04:10,664 --> 00:04:11,164 viable. 117 00:04:11,465 --> 00:04:14,090 We're also seeing private payers take a similar 118 00:04:14,090 --> 00:04:17,550 tactic with reimbursement. So, again, navigating commercial payers 119 00:04:17,930 --> 00:04:20,569 and, working to ensure that the physicians and 120 00:04:20,569 --> 00:04:22,669 ASCs are getting reimbursed for the surgeries. 121 00:04:22,970 --> 00:04:24,970 Yeah. Let let's zero into on sort of, 122 00:04:24,970 --> 00:04:26,490 like, the state what's happening at the state 123 00:04:26,490 --> 00:04:28,285 level. And, of course, every state is different. 124 00:04:28,285 --> 00:04:28,785 But, 125 00:04:29,645 --> 00:04:31,485 you know, there there are some general themes 126 00:04:31,485 --> 00:04:34,464 coming up, like certificate of need changes, different, 127 00:04:34,925 --> 00:04:37,105 sort of assessments and transaction reporting. 128 00:04:37,645 --> 00:04:40,959 Thinking about those state level sort of happenings 129 00:04:40,959 --> 00:04:41,620 and developments, 130 00:04:42,240 --> 00:04:44,319 what do ASC leaders need to be thinking 131 00:04:44,319 --> 00:04:47,060 about now as they think about growth, partnership, 132 00:04:47,519 --> 00:04:49,839 and navigating some of these changes? So it's 133 00:04:49,839 --> 00:04:51,620 it's a great question. I think the interesting 134 00:04:51,680 --> 00:04:53,654 the interesting point there is the duality between 135 00:04:53,654 --> 00:04:55,894 the regulatory changes we're seeing across the nation. 136 00:04:55,894 --> 00:04:58,214 So on one hand, you see states relaxing 137 00:04:58,214 --> 00:05:01,115 the CON requirements or sometimes even full on 138 00:05:01,175 --> 00:05:03,254 repealing the CON requirements with this, which is 139 00:05:03,254 --> 00:05:04,935 great for our industry. It's it reduces a 140 00:05:04,935 --> 00:05:05,834 barrier to entry. 141 00:05:06,180 --> 00:05:07,860 And on the other hand, you see states 142 00:05:07,860 --> 00:05:11,060 enacting these very expansive health care transactional review 143 00:05:11,060 --> 00:05:13,399 laws, which are expensive, 144 00:05:14,259 --> 00:05:16,680 create additional time and considerations for our transaction. 145 00:05:16,740 --> 00:05:18,519 So it's a very interesting time 146 00:05:18,944 --> 00:05:21,264 to be a provider or a developer in 147 00:05:21,264 --> 00:05:22,324 the health care space. 148 00:05:22,704 --> 00:05:25,104 I think that the where the rubber meets 149 00:05:25,104 --> 00:05:27,185 the road on that and where we'll see 150 00:05:27,185 --> 00:05:28,784 the most success is where, 151 00:05:29,264 --> 00:05:29,764 states 152 00:05:30,384 --> 00:05:31,524 really embrace 153 00:05:32,230 --> 00:05:32,970 the importance 154 00:05:33,509 --> 00:05:35,670 of the ASC joint venture. And I think 155 00:05:35,670 --> 00:05:37,110 you see that in the Southeast and the 156 00:05:37,110 --> 00:05:39,189 Georges and the Carolina where they're saying, look, 157 00:05:39,189 --> 00:05:40,629 if you have a hospital in the county 158 00:05:40,629 --> 00:05:43,830 that's partnering with a, physician practice, you'll get 159 00:05:43,830 --> 00:05:45,589 the exemption from the CO and laws up 160 00:05:45,589 --> 00:05:47,205 to, I think it's a $5,000,000 161 00:05:47,205 --> 00:05:49,225 cap in in the Carolinas. And so 162 00:05:49,605 --> 00:05:50,425 that is, 163 00:05:51,205 --> 00:05:53,045 to me, where we're going to see the 164 00:05:53,045 --> 00:05:54,884 most growth is where our states really start 165 00:05:54,884 --> 00:05:56,824 to lean into the value that we're bringing. 166 00:05:57,205 --> 00:05:58,345 Yeah. And this is, 167 00:05:58,769 --> 00:06:00,449 I don't expect you to have, like, the 168 00:06:00,449 --> 00:06:02,370 the be all end all answer to this 169 00:06:02,370 --> 00:06:04,689 this next follow-up question that I'm just following 170 00:06:04,689 --> 00:06:08,129 my curiosity on. But when you're talking about 171 00:06:08,129 --> 00:06:09,029 helping policymakers 172 00:06:09,649 --> 00:06:10,149 understand 173 00:06:10,449 --> 00:06:12,290 the value of this shift, the value of 174 00:06:12,290 --> 00:06:14,544 the ASC, Have you heard anything or seen 175 00:06:14,544 --> 00:06:17,504 anything that's particularly effective? I just imagine for 176 00:06:17,504 --> 00:06:18,404 folks who are 177 00:06:18,785 --> 00:06:19,285 deeply 178 00:06:19,904 --> 00:06:21,985 involved in this industry care a lot about 179 00:06:21,985 --> 00:06:23,745 it, would want to know what's the most 180 00:06:23,745 --> 00:06:26,384 effective way to get my state rep to 181 00:06:26,384 --> 00:06:26,884 understand 182 00:06:27,500 --> 00:06:29,259 what's going on here and where we need 183 00:06:29,259 --> 00:06:29,919 their help? 184 00:06:30,539 --> 00:06:32,479 Yeah. It that is it's a good question. 185 00:06:33,339 --> 00:06:35,180 And when I think about the value that 186 00:06:35,180 --> 00:06:36,639 we're bringing to the community, 187 00:06:37,100 --> 00:06:41,085 it's affordable, accessible health care that it feels 188 00:06:41,085 --> 00:06:43,884 like something that's not a massive endeavor. So 189 00:06:43,884 --> 00:06:45,985 even now, you can go into the ASC 190 00:06:46,045 --> 00:06:48,845 setting and do a total shoulder replacement. Right? 191 00:06:48,845 --> 00:06:50,365 And they flip you upside down when you're 192 00:06:50,365 --> 00:06:52,464 under anesthesia and they're taking your shoulder out. 193 00:06:52,525 --> 00:06:54,305 That type of procedure seems 194 00:06:54,770 --> 00:06:56,770 so much less daunting when you're doing it 195 00:06:56,770 --> 00:06:58,610 in something that looks like a doctor's office 196 00:06:58,610 --> 00:07:01,509 versus a hospital, and it's much more affordable 197 00:07:01,650 --> 00:07:03,090 for the payers. And so I think what 198 00:07:03,090 --> 00:07:05,250 we have to show our state, our local 199 00:07:05,250 --> 00:07:07,090 representatives, and kind of the even the the 200 00:07:07,090 --> 00:07:07,590 reimbursement 201 00:07:08,210 --> 00:07:11,514 structure is that we're putting dollars back into 202 00:07:11,514 --> 00:07:13,694 the community, into the pockets of our patients, 203 00:07:14,555 --> 00:07:15,375 and also 204 00:07:16,154 --> 00:07:18,794 bridging the the disconnect between people who would 205 00:07:18,794 --> 00:07:21,194 not typically receive this type of care. Right. 206 00:07:21,194 --> 00:07:24,000 Right. Because it's it they were typically be 207 00:07:24,060 --> 00:07:26,220 more shut off from from that kind of 208 00:07:26,220 --> 00:07:26,720 access. 209 00:07:27,180 --> 00:07:29,660 That's an that's an interesting point. I'm gonna 210 00:07:29,660 --> 00:07:31,819 ask you now sort of, like, there's so 211 00:07:31,819 --> 00:07:33,420 many different things we could point to in 212 00:07:33,420 --> 00:07:36,074 terms of what's really what's really important, what's 213 00:07:36,074 --> 00:07:37,595 really pertinent. But if you had to narrow 214 00:07:37,595 --> 00:07:39,134 it down to the single most 215 00:07:39,435 --> 00:07:42,314 important regulatory or policy shift ASC leaders should 216 00:07:42,314 --> 00:07:43,694 be preparing for right now, 217 00:07:44,074 --> 00:07:45,914 what is it, and how that how should 218 00:07:45,914 --> 00:07:46,814 they be preparing? 219 00:07:47,509 --> 00:07:49,689 From my point of view, the the single 220 00:07:50,069 --> 00:07:52,470 biggest pressure point is going to be bridging 221 00:07:52,470 --> 00:07:55,290 the gap between reimbursement and rising costs. And 222 00:07:55,830 --> 00:07:57,110 it's a it's going to be a good 223 00:07:57,110 --> 00:07:58,629 problem to have because we are going to 224 00:07:58,629 --> 00:08:01,995 continue to see increasing ASC volumes. But with 225 00:08:01,995 --> 00:08:04,495 increasing ASC volumes means we need to understand 226 00:08:05,194 --> 00:08:07,694 how our ASCs are making money and ensure 227 00:08:07,995 --> 00:08:10,574 that the reimbursement rates for those new procedures, 228 00:08:11,275 --> 00:08:12,655 are effectively compensating, 229 00:08:13,435 --> 00:08:14,095 the provider. 230 00:08:14,569 --> 00:08:16,169 Yeah. And that's gonna be essential to make 231 00:08:16,169 --> 00:08:16,250 that 232 00:08:16,970 --> 00:08:19,209 this access, this expansion of access that you 233 00:08:19,209 --> 00:08:21,129 were hinting to possible. It's not gonna be 234 00:08:21,129 --> 00:08:23,629 possible unless that gap is bridged. Right? Absolutely. 235 00:08:23,689 --> 00:08:25,529 The physicians, they have a huge stake in 236 00:08:25,529 --> 00:08:27,129 this, and this is to many, it's it's 237 00:08:27,129 --> 00:08:29,050 their livelihood. This is what they do. And 238 00:08:29,050 --> 00:08:31,625 so to continue to provide that care, they 239 00:08:31,625 --> 00:08:33,225 need to be able to to have re 240 00:08:33,384 --> 00:08:35,705 reimbursement. I mean, it has to meet their 241 00:08:35,705 --> 00:08:38,504 costs. Yeah. Well, we we covered a good 242 00:08:38,504 --> 00:08:39,945 bit of ground here, but there's, of course, 243 00:08:39,945 --> 00:08:41,945 I think, several different avenues we could have 244 00:08:41,945 --> 00:08:42,445 gone. 245 00:08:42,850 --> 00:08:44,610 Before I let you go, is there anything 246 00:08:44,610 --> 00:08:46,049 we didn't touch on you wanna share, or 247 00:08:46,049 --> 00:08:48,529 maybe it's something you just wanna reemphasize, double 248 00:08:48,529 --> 00:08:49,970 down on folks? What do you want people 249 00:08:49,970 --> 00:08:53,090 to remember from from this listen? The the 250 00:08:53,090 --> 00:08:55,809 most successful ASCs are the ones that invest 251 00:08:55,809 --> 00:08:57,889 in their people. So I'd be remiss to 252 00:08:57,889 --> 00:09:01,065 not highlight the value that the nurses, the 253 00:09:01,065 --> 00:09:01,565 administrators, 254 00:09:02,105 --> 00:09:05,144 all of the staff bring and the value 255 00:09:05,144 --> 00:09:06,845 that they add to their local communities 256 00:09:07,304 --> 00:09:07,804 by 257 00:09:08,504 --> 00:09:11,245 working in the ASC industry, because that is 258 00:09:11,629 --> 00:09:14,909 just unsung heroes of allowing the entire industry 259 00:09:14,909 --> 00:09:15,970 to to expand. 260 00:09:16,269 --> 00:09:17,950 Great place to leave it. Michelle, thank you 261 00:09:17,950 --> 00:09:19,767 so much for coming on the podcast. We 262 00:09:19,767 --> 00:09:22,007 also wanna thank our podcast sponsor, Holland and 263 00:09:22,007 --> 00:09:23,767 Knight. You can tune to more podcasts from 264 00:09:23,767 --> 00:09:26,267 Becker's Health Care by visiting our podcast page 265 00:09:26,327 --> 00:09:28,507 at beckershospitalreview.com.