ASC Orthopedic Implant Reimbursements Explained

Ambulatory Surgery Centers (ASCs) face significant challenges in securing for orthopedic implants reimbursement, challenges that have only gotten worse over the years. Implant costs often represent one of the highest expense items for ASCs, sometimes exceeding the total reimbursement received for a procedure. Optimizing your implant spend is critical, with so much of your case profitability riding on one item.

This introduction explores the complex landscape of implant reimbursement in ASCs, including the various reimbursement models employed by payers, the strategies ASCs use to navigate these challenges, and the ongoing efforts to avoid erroneous claim denials.

Implant Reimbursement Models

Payers utilize various reimbursement models for orthopedic implants in ASCs, including:

• • • • • • • • • No separate reimbursement for implants
            • 100% reimbursement of implant cost plus markup
            • Reimbursement only after a certain dollar threshold is met
            • Carve-outs for specific implants

It’s imperative for ASCs to fully understand their payer contracts and take measures to ensure they’re fairly compensated for procedures.

Let’s say, for example, you have a payer contract with a $1000 threshold on a particular implant before they will reimburse you. If your RCM bills the implant at $995, the payer won’t reimburse your ASC for the implant.

However, if you chose to utilize kitting in your billing to increase the total cost of the implant plus a disposable, your total cost would be $1000 and qualify for the full reimbursement. Simple situations like this can mean the difference between your ASC taking a $995 loss or being reimbursed $1000 all because of $5.

Challenges in Implant Reimbursement

Inadequate reimbursement that fails to cover the full cost of implants is a major hurdle for ASCs, potentially leading to financial losses on procedures. Navigating complex reimbursement models and negotiating favorable contracts with payers require significant effort and expertise.

Common issues:

• Using incorrect CPT codes
• No “watchdog” to ensure payer contracts are honored
• Not getting pre-authorization
• post-authorization clawback

In most cases, having safeguards in place can significantly reduce the risk of your ASC not receiving the proper reimbursement. This can mean increasing internal audits or leveraging the expertise of an ASC orthopedic implant revenue management company.

Negotiation and Vendor Relationships

ASCs can negotiate strategically with payers and implant vendors to optimize implant reimbursement. Payer contracts are carefully constructed to ensure hardware and implants are adequately reimbursed for complex procedures, however, they often use a standard that might not apply to all cases or situations.

It’s helpful to calculate in-depth case costing on all surgery cases to ensure that the reimbursement will be enough to justify doing the surgery at the ASC. If not, it might be worthwhile to seek a better reimbursement arrangement from the payer. 

Manufacturers may offer rebates or volume-based discounts to incentivize loyalty and increase market share. These negotiations are crucial, as implant costs can sometimes exceed the total reimbursement received for a procedure. By leveraging these relationships, ASCs can maintain profitability while offering high-quality care and competing with hospitals in the orthopedic surgery market.

For negotiations with payers and vendors to be successful, it’s imperative to have in-depth data that details your exact costs and usage so you can make a compelling case. It can also help to get surgeon support as you build your case for higher reimbursements or lower costs.

Avoiding Erroneous Denials

ASCs should implement comprehensive strategies to minimize erroneous denials of implant claims. These include maintaining accurate and thorough documentation, utilizing efficient record retrieval systems, and ensuring proper coding practices with specific HCPCS codes when available.

Developing a payer reference tool and tracking implant reimbursement can help staff navigate complex payer requirements. Timely claim submission, even without waiting for manufacturer invoices, and prompt follow-up on denials are crucial for maintaining cash flow.

Regular internal and external audits, coupled with ongoing staff training on payer-specific guidelines, can proactively identify and correct errors, significantly reducing the risk of claim denials.

This strategies are important not just during the pre-authorization phase, but post-operation as well. With more and more payers demanding post-authorization audits and issuing clawbacks for discrepancies, you need to have detailed documentation and procedures to prevent erroneous denials.

Third-Party Implant Billing Services

Third-party implant billing services have emerged as a valuable solution for Ambulatory Surgery Centers (ASCs) navigating the complex landscape of orthopedic implant reimbursement.

These specialized companies offer services that can help ASCs maximize reimbursement and minimize claim denials by leveraging their expertise in implant price negotiations, supply chain optimization, and ASC financial analysis.

Some third-party providers even offer to purchase implants directly, reimburse the ASC for costs, or assume the risk of obtaining reimbursement from payers, effectively streamlining the financial process for ASCs. This arrangement allows ASCs to focus on patient care while potentially improving their financial outcomes in the challenging implant reimbursement environment.

With over 9,000 ASCs currently in the United States and continued explosive growth expected, navigating the complexities of orthopedic implant reimbursements is critical to your ASC’s financial success. The landscape is changing rapidly, and leveraging trusted experts can help you adapt to these changes and foresee them to better prepare for the future.

For more information on how you can better face these challenges, book a complimentary discovery call here.