Emerging Trends in the Face of the Pandemic The virus has enhanced the appeal of ASCs by highlighting their strengths and advantages BY TAYLOR BURNS

Impact of Pandemic and Federal Support Prior to the ongoing coronavirus pandemic, the national ASC mar-

ket was already experiencing sub- stantial growth due to its placement across two converging trends: the consumerization of healthcare ser- vices and the ongoing industry-wide transition from fee-for-service care to value-based care. Advancements in clinical practices and technology have enabled ASCs to safely provide a greater variety of surgical proce- dures with a consumer-centric focus prioritizing patient experience across each stage of care. These increased capabilities, coupled with a growing Medicare population, have driven a migration of higher-acuity procedures from hospitals to ASCs. Since 2005, the percentage of outpatient proce- dures performed at ASCs has grown from 32 percent to nearly 60 percent, according to the latest industry data published by Research and Markets. Shortly before the pandemic, Bain & Company projected that ASCs would perform 27 million procedures annu- ally by 2021, achieving a compound annual growth of 5.3 percent over 2015 volumes and 6.4 percent over 2018 volumes. Beginning in mid-March, the

coronavirus pandemic resulted in a near-complete shutdown of the national ASC market. National Med- ical Billing Services of St. Louis. Missouri, one of the largest ASC rev- enue cycle management companies in the US, reported that approximately 75 percent of ASC operations were halted within the span of a week. By

the end of April, ASC volumes plum- meted to 20 percent of pre-pandemic levels. This forced ASC operators to rethink their finances and conserve their cash positions with a combi- nation of newly focused priorities: pursuing receivables more aggres- sively, accessing additional sources of funding, reducing/deferring non- payroll expenses wherever feasible, and balancing the management of payroll costs with the preservation of employee morale. Many ASCs were able to secure

forgivable loans (provided at least 60 percent went to covering payroll) from the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security Act signed into

law on March 27, 2020. By the end of June 2020, more than 1,700 ASCs had accepted some level of PPP funding, with about two-thirds accepting funds between $150,000 and $350,000 each. The Centers for Medicare & Medicaid Services (CMS) and the US Depart- ment of Health & Human Services (HHS) also rolled out a number of ini- tiatives to further assist the industry. These included: $30 billion in Provider Relief Fund grants; up to three months of advance Medicare payments; blan- ket Stark Law waivers; and the Hos- pitals Without Walls initiative, which allows ASCs to temporarily function and bill as hospitals. Notably,

the pandemic did not appear to adversely affect patient pay- The advice and opinions expressed in this column are those of the author and do not represent official Ambulatory Surgery Center Association policy or opinion. ASC FOCUS FEBRUARY 2021 | 7

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