Uncovering Healthcare Profitability

Outpatient surgery options expanding under new regs

THE ISSUE: New state regulations allow ambulatory surgery centers to expand.

LOCAL IMPACT: The independent centers may perform certain surgeries for less money than hospital outpatient departments. Under the new regulations, patients could have more options.

More patients in Massachusetts could soon have surgery outside of traditional hospitals.

Under a set of new state medical regulations approved Jan. 11, existing freestanding ambulatory surgery centers will be allowed to apply for permission to expand or offer new lines of patient service without being affiliated with an acute care hospital. The new regulations lift a 20-year moratorium on new outpatient surgical capacity, said Ronna Wallace, executive director of the Massachusetts Association of Ambulatory Surgery Centers.

Independent ambulatory surgery centers perform outpatient surgeries, providing an alternative to hospital care. Types of procedures typically offered in ambulatory settings include cataract surgery, joint surgeries, colonoscopies, biopsies, orthopedic procedures and diagnostic care.

“These new regulations will allow existing ambulatory surgery centers to meet market needs,” Wallace said. “If an orthopedic facility sees the need to add pain management services, they will now be allowed to apply to the Department of Public Health for a certificate to begin offering pain management.”

While she doesn’t have plans to expand the Cataract and Laser Center in Dedham, administrator Kathleen Carey said it’s good that the new regulations allow for it. She helped garner support for the changes to the regulations.

“The final draft is much better than what was proposed,” she said, adding that an expansion would require a determination of need review.

When the draft regulations were first proposed, they included a provision that would have required ambulatory surgery centers to be in an affiliation or joint venture with an acute care hospital in order to apply for a new determination of need. The determination-of-need process is the mechanism through which healthcare facilities seek state regulators’ approval for major capital expenditures, acquisitions, additions and changes in services.

The MAASC and the Massachusetts Medical Society opposed that provision, which was ultimately struck from the final regulations.

Proponents of freestanding ambulatory surgery centers say they reduce costs for patients and insurers. A procedure performed at an ambulatory surgery center, they say, can often cost half the amount of money as an identical procedure performed at a hospital outpatient department. Hospitals, Wallace said, typically have higher overhead costs because they provide a more wide-ranging scope of care, including advanced surgeries, maternity care and emergency care.

“I see increased access for patients and lower costs,” Wallace said.

There are currently 56 ambulatory surgery centers in Massachusetts, down from 63 in 2008. The facilities treat an estimated 300,000 annually.

The Massachusetts Health and Hospital Association supports the Department of Public Health’s new determination-of-need, regulations, including the reforms regarding ambulatory surgery centers, or ASCs.

“We believe the DPH struck an equal and important balance between public transparency and the management of the healthcare delivery system,” Anuj Goel, the MHA’s vice president of legal and regulatory affairs, said in an email.

The DPH is expected in the coming weeks to issue final requirements for the application process healthcare providers will use when they want to make changes to their infrastructure.

“MHA looks forward to working with DPH as those key components of the process are developed,” Goel said.

Massachusetts Medical Society President James Gessner and MAASC Gregory DeConcillis issued a joint statement supporting the new regulations.

“Patients will gain greater access to care, and providers will benefit from a level playing field for freestanding ambulatory surgery centers and be better able to meet the needs of patients,” they said.

The new regulations are part of a larger overhaul of the state’s determination-of-need program, an update state officials hailed as the first such major reform to the system in more than 40 years.

Health and Human Services Secretary Marylou Sudders said in a statement that overhauling the state determination-of-needs system “will create a simplified and more relevant DoN process, which retains strong regulatory oversight and increases accountability for applicants.”

“This has been a mammoth, year-long effort that brought nearly every stakeholder to the table and has resulted in a product that will serve the Commonwealth and its residents well for years to come,” she said.