A total knee can pay an ASC $3,000 to $4,000 and tie up an operating room for four hours. Under the right contract, a carpal tunnel release can pay about the same and take 15 minutes.
That math anchored a panel on case mix and profitability at Becker’s 32nd Annual Business and Operations of ASCs conference. Nyleen Flores, chief administrative officer of Greensboro, Ga.-based Lake Oconee Orthopedics, and Raghu Reddy, CAO of Southfield, Mich.-based MiOrtho Surgery Center and member of ASCA’s education and programs committee and quality committee, walked through how they decide which cases earn a spot on the schedule.
Their shared answer: a good case and a profitable case are not the same thing.
“A good case does not always mean a profitable case,” Mr. Reddy said. “It could be a good block filler, but you’re not making any money.”
Here are five ways the panelists said they work the numbers.
1. Price the OR time, not the reimbursement
Ms. Flores said she renegotiated one contract to about $3,000 per carpal tunnel — a case she could run 15 times a day, compared with a total knee that pays similarly and fills four hours.
Big reimbursements can hide losses. She recalled a spine surgeon excited about a $25,000 case. “You’re going to spend 19 grand on the hardware alone, and you’re going to spend four hours in the OR,” she said. “I just lost money on you.”
Mr. Reddy warned that block utilization can mislead, too. A surgeon who fills a six-hour block with two cases looks efficient on paper. “How is the block translating into bottom-line results and profitability?” he said.
2. Put the numbers in front of surgeons
On a day his center ran 16 carpal tunnels, Mr. Reddy wrote “16 times 590” on the TV at the PACU nurses’ station — the count multiplied by the $590 the center paid per carpal tunnel blade. When the hand surgeons kept asking what it meant, he told them.
“The conversation changed so quickly,” he said. The alternative he put to them: a reusable blade at $12 per case.
Mr. Reddy said he doesn’t tell surgeons they can’t do a case. He shows them the economics in writing and lets them decide, bringing in peer surgeons or the board when a disagreement escalates. Ms. Flores said that conversation should start before a surgeon applies for privileges, covering the center’s equipment, implants and payer mix — and, for prospective owners, their capital investment.
3. Read every contract, especially for workers’ comp
Ms. Flores said many commercial payer contracts carry umbrella clauses that apply commercial rates to workers’ compensation cases instead of the state fee schedule. Some third-party networks use similar clauses.
After scrubbing 26 to 28 contracts at one Florida center and removing those clauses, she said, she raised payment for a shoulder case from about $3,000 to $17,000, because workers’ comp reimbursed implants and supplies that commercial contracts did not. Removing a clause triggered a 90-day waiting period, she said.
She also flagged Department of Labor claims, which now require additional fields on claim forms that many practice management systems don’t fill in automatically.
4. Audit vendors and invoices line by line
Ms. Flores said she once found a vendor charging a $50 delivery fee on every invoice, even though one rep delivered one tub of implants for a full day of cases. Over years, the fees added up to thousands of dollars.
Mr. Reddy is working to align his group’s 53 orthopedic and spine surgeons on single implant vendors to strengthen contract negotiations, and is pressing vendors on revision implant pricing as joint surgeons book more revisions. “My favorite [phrase] is, ‘Can you please help me?'” he said.
He also looks past the ASC’s own walls. His surgeons performed nearly 4,800 ASC-eligible commercial cases at the hospital last year, he said, while Medicare and Medicaid made up about 40% of the ASC’s volume.
5. Go slow on cases leaving the inpatient-only list
CMS plans to phase out the inpatient-only list, opening more complex procedures to ASCs. Ms. Flores said she’ll wait a couple of years. Before adding a procedure, she weighs space, equipment, resources, training and finances, plus credentialing criteria and the cost of bringing in hospital-trained nurses at $50 to $60 an hour.
“A lawsuit or a patient death is going to cost you a whole lot more” than the prestige of offering a new procedure, she said.
Mr. Reddy said leaders should also look past headline payment updates. While CMS’ 2027 update raises ASC rates 2.4%, he said, high-volume GI, pain and other procedures will take cuts. A GI center doing 10,000 cases at $40 to $45 less per case feels it quickly.
The bottom line
Mr. Reddy said ASC leaders should know their top 30 to 35 codes well enough to decide on a new case in 30 seconds — and should keep pressing on costs even when staff say they’ve already cut everything.
“The more you look, the more you find,” he said.
A total knee can pay an ASC $3,000 to $4,000 and tie up an operating room for four hours. Under the right contract, a carpal tunnel release can pay about the same and take 15 minutes.
That math anchored a panel on case mix and profitability at Becker’s 32nd Annual Business and Operations of ASCs conference. Nyleen Flores, chief administrative officer of Greensboro, Ga.-based Lake Oconee Orthopedics, and Raghu Reddy, CAO of Southfield, Mich.-based MiOrtho Surgery Center and member of ASCA’s education and programs committee and quality committee, walked through how they decide which cases earn a spot on the schedule.
Their shared answer: a good case and a profitable case are not the same thing.
“A good case does not always mean a profitable case,” Mr. Reddy said. “It could be a good block filler, but you’re not making any money.”
Here are five ways the panelists said they work the numbers.
1. Price the OR time, not the reimbursement
Ms. Flores said she renegotiated one contract to about $3,000 per carpal tunnel — a case she could run 15 times a day, compared with a total knee that pays similarly and fills four hours.
Big reimbursements can hide losses. She recalled a spine surgeon excited about a $25,000 case. “You’re going to spend 19 grand on the hardware alone, and you’re going to spend four hours in the OR,” she said. “I just lost money on you.”
Mr. Reddy warned that block utilization can mislead, too. A surgeon who fills a six-hour block with two cases looks efficient on paper. “How is the block translating into bottom-line results and profitability?” he said.
2. Put the numbers in front of surgeons
On a day his center ran 16 carpal tunnels, Mr. Reddy wrote “16 times 590” on the TV at the PACU nurses’ station — the count multiplied by the $590 the center paid per carpal tunnel blade. When the hand surgeons kept asking what it meant, he told them.
“The conversation changed so quickly,” he said. The alternative he put to them: a reusable blade at $12 per case.
Mr. Reddy said he doesn’t tell surgeons they can’t do a case. He shows them the economics in writing and lets them decide, bringing in peer surgeons or the board when a disagreement escalates. Ms. Flores said that conversation should start before a surgeon applies for privileges, covering the center’s equipment, implants and payer mix — and, for prospective owners, their capital investment.
3. Read every contract, especially for workers’ comp
Ms. Flores said many commercial payer contracts carry umbrella clauses that apply commercial rates to workers’ compensation cases instead of the state fee schedule. Some third-party networks use similar clauses.
After scrubbing 26 to 28 contracts at one Florida center and removing those clauses, she said, she raised payment for a shoulder case from about $3,000 to $17,000, because workers’ comp reimbursed implants and supplies that commercial contracts did not. Removing a clause triggered a 90-day waiting period, she said.
She also flagged Department of Labor claims, which now require additional fields on claim forms that many practice management systems don’t fill in automatically.
4. Audit vendors and invoices line by line
Ms. Flores said she once found a vendor charging a $50 delivery fee on every invoice, even though one rep delivered one tub of implants for a full day of cases. Over years, the fees added up to thousands of dollars.
Mr. Reddy is working to align his group’s 53 orthopedic and spine surgeons on single implant vendors to strengthen contract negotiations, and is pressing vendors on revision implant pricing as joint surgeons book more revisions. “My favorite [phrase] is, ‘Can you please help me?'” he said.
He also looks past the ASC’s own walls. His surgeons performed nearly 4,800 ASC-eligible commercial cases at the hospital last year, he said, while Medicare and Medicaid made up about 40% of the ASC’s volume.
5. Go slow on cases leaving the inpatient-only list
CMS plans to phase out the inpatient-only list, opening more complex procedures to ASCs. Ms. Flores said she’ll wait a couple of years. Before adding a procedure, she weighs space, equipment, resources, training and finances, plus credentialing criteria and the cost of bringing in hospital-trained nurses at $50 to $60 an hour.
“A lawsuit or a patient death is going to cost you a whole lot more” than the prestige of offering a new procedure, she said.
Mr. Reddy said leaders should also look past headline payment updates. While CMS’ 2027 update raises ASC rates 2.4%, he said, high-volume GI, pain and other procedures will take cuts. A GI center doing 10,000 cases at $40 to $45 less per case feels it quickly.
The bottom line
Mr. Reddy said ASC leaders should know their top 30 to 35 codes well enough to decide on a new case in 30 seconds — and should keep pressing on costs even when staff say they’ve already cut everything.
“The more you look, the more you find,” he said.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
