Orthopedic trends. Though ASC- based orthopedic activity is more mature in its development, the grow- ing adoption of robotics along with increased coverage by commercial payers is continuing to drive total joint migration. CMS recently added total hip replacements to the ASC Covered Procedures List (ASC CPL) for 2021 and is also moving to elimi- nate the Inpatient Only (IPO) list in its entirety over a three-year period, starting with 298 codes in 2021. The majority of these codes are muscu- loskeletal-related services. Bain & Company projects that by the mid- 2020s, ASCs will capture nearly 70 percent of total orthopedic proce- dures performed annually, up 26 per- cent from their 2018 levels.

ments—a testament perhaps to the effectiveness of a refocused receivables management. Mnet Health—a revenue cycle management firm that partners with more than 700 ASCs nation- wide—reported a 1.6 percent year- over-year patient payment increase in June 2020, attributing the rise to increased patient interest in protecting personal credit scores, patients being more reachable at home and gratitude toward front-line healthcare workers. As various states began reallow-

ing elective surgeries, Pinnacle notes that many ASCs were able to recover more than half of their pre-pandemic volumes in response to scheduling backlogs by the end of May 2020. By the end of July 2020, the Health- care Financial Management Associa- tion reported that elective surgeries at ASCs had largely returned to their January 2020 levels.

Renewed Appeal and Expected Growth Despite its disruptive impact to ASC operations, the coronavirus pandemic


has actually served to enhance the appeal of ASCs by further highlight- ing the strengths and advantages they provide patients, providers and pay- ers. In addition to offering better out- comes at lower costs relative to hos- pitals, ASCs are now able to better address pandemic-related concerns with cleaner environments via new sanitation guidelines, a stronger sense of safety via new screening protocols and greater scheduling flexibility via extended operating hours. This enhanced appeal has proven timely as recent policy changes from CMS are already expected to drive more orthopedic, spine and cardiol- ogy procedures to ASCs over the next few years. Additionally, according to a McKinsey survey of 500+ physicians conducted six weeks into the pan- demic, nearly half of physicians across all specialties are expected to refer more of their patients to ASCs than they did pre-pandemic. Thus, with most ASCs now back at pre-pandemic levels, the ASC market is once again positioned for significant growth.


Spine trends. Recent growth in ASC-based spine activity has been driven by the migration of high-dol- lar procedures like joint fusions and disc replacements. Pinnacle research indicates that more than 170 ASCs in the US offer minimally invasive spine surgery with at least 10 spine- focused ASCs launched or announced since the start of the pandemic. CMS removed spine laminectomies from its IPO list in 2020—signaling a future addition to the ASC CPL— and also is eliminating dozens of spine procedures from its IPO list in 2021. As the track record of success- ful outcomes becomes more widely acknowledged and the use of robot- ics becomes more prominent, ASC operators can expect to see a greater inflow of high-risk patient popula- tions. Bain & Company projects that by the mid-2020s, ASCs will triple their spine volumes from 2018 and capture 30 percent of total spine pro- cedures performed annually.

Cardiology trends. Currently the fastest growing ASC specialty, recent ASC-based cardiology activity has been driven by the migration of car-

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