Ambulatory surgery centers (ASCs) have become a large and growing part of the health care industry. ASCs offer same-day surgical care, including diagnostic and preventive procedures, and their popularity has recently grown.
As health care costs continue to climb and technological advances accelerate throughout the industry, high-quality and lower-cost health care services can often be delivered to an ever-growing sector of the patient population at ASCs. ASCs are attractive to patients as an alternative to in-hospital care because they may offer more personalized post-procedure care, leading to fewer complications and lower recidivism. Additionally, they may also entice payers by providing high-quality but lower-cost care.
The trend of higher-acuity procedures shifting from inpatient hospital settings to ASCs has continued, with specialties including orthopedics, cardiology, and others seeing growth. And as Centers for Medicare & Medicaid Services (CMS) continues to add procedure codes to ASCs’ Covered Procedure List, this expansion will only increase.
ASCs face a variety of litigation risks in their operations. These risks arise from several sources including patient care, regulatory compliance, and operational issues. Below are some of the key litigation risks for ASCs today:
- Contractual Disputes: From vendors and suppliers to insurance companies, disputes over terms and reimbursement for services can arise. ASCs often face challenges with network disputes and insurance companies underpaying their medical claims. When an ASC believes it has been underpaid, it can take several steps to seek proper reimbursement. However, the process can be costly and time-consuming, and ASCs should retain experienced counsel to help them navigate disputes and prepare for legal action. When payment issues are ongoing and systemic, the financial consequences are significant, as exemplified by a recent $421 million Louisiana jury verdict against Blue Cross Blue Shield for fraud and underpayments to an ASC. Regular audits and staff training can also help prevent ongoing underpayment issues. These audits and trainings should cover topics unique to ASCs, including coding, coverage, payment, and enrollment issues.
- Compliance Systems: ASCs must be vigilant regarding compliance concerns, including Health Insurance Portability Accountability Act compliance, anti-kickback laws, compliance with CMS guidelines and state-specific regulations, accreditation standards for organizations and individual providers, and whistleblower exposure for allegedly fraudulent billing practices, such as upcoding and unbundling.
- Sales, Acquisitions, and Investments: ASC sale/acquisition activity has intensified over the past few years. These activities and arrangements can lead to conflicts with physicians regarding employment contracts, poaching, noncompete clauses, or partnership and ownership agreements. ASCs may consider retaining legal counsel to advise regarding these corporate issues as well as taxation issues for nonprofit ASCs and anti-kickback restrictions for ASC owners.
Several industry and market factors are influencing litigation frequency for ASCs, including:
- Regulatory Changes: Changes in health care regulations like updates to CMS guidelines or new state laws can impact the frequency of litigation. ASCs need to stay current to avoid potential compliance issues.
- Health Care Costs: Rising costs for health care services may lead to more patients demanding (often less expensive) care at ASCs. Rising health care costs may also result in more disputes over billing and insurance coverage.
- Increased Use of AI by Insurance Companies: As insurance companies increase their use of artificial intelligence (AI) tools in claims processing and adjudication systems, ASCs may face an increase in claims denials and underpayments leading to more disputes.
- Economic and Market Factors: The market for investments, buyouts, and acquisitions in ASCs presents opportunities as well as compliance risks. Overall economic challenges can lead to cost-cutting measures, and provider shortages in specialty sectors can impact staffing, both of which may increase the risk of litigation.
Protecting an ASC and its personnel against litigation involving these areas and risks requires up-to-date compliance policies, training for staff, ongoing monitoring/audits, and legal counsel to advise on risk mitigation and litigation strategy. Navigating the complex legal and regulatory environment while minimizing risks is critical as ASCs provide broader and higher-acuity care and services to greater numbers of patients.
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