A new research article published in the March 2022 issue of the Journal of the American Academy of Orthopaedic Surgeons (JAAOS) shows low costs for orthopedic surgery at ASCs compared to hospital outpatient departments (HOPD) even as utilization of ASCs increases. Past research, such as analysis from KNG Health Consulting in 2020, showed significant savings due to orthopedic procedure performance in ASCs for Medicare beneficiaries. That analysis revealed that musculoskeletal procedures performed in ASCs as opposed to HOPDs saved Medicare $3.26 billion between 2011 and 2018. However, less research has been done on commercial populations that utilize outpatient sites of service—such as ASCs and HOPDs—with even greater frequency due to better baseline health compared to Medicare beneficiaries.
The JAAOS researchers looked at commercial claims for a group of common orthopedic surgery procedures between 2013 and 2018. The procedures studied were open carpal tunnel release (CTR), lumbar microdiscectomy (LMD), anterior cruciate ligament (ACL) reconstruction, knee arthroscopy (KA), arthroscopic rotator cuff repair (RCR) and bunion repair (BR). Primary outcome measures were ASC utilization and total cost per surgical case, and the authors also considered technical fees—which is facility fees—and the surgeon’s professional fee. The final claims set included 990,980 commercial cases, with KA, CTR and RCR representing the highest volume services at 38 percent, 17 percent and 15 percent, respectively.
The researchers found that commercial ASC utilization increased from 31 percent across all procedures in 2013 to 34 percent in 2018. The procedures experiencing the highest growth rate in that period were LMD, 3.3 percent, and KA, 1.8 percent. By 2018, ASCs accounted for 39.1 percent of commercial KA and at least 35 percent of commercial claims for all procedures studied except for LMD, which was 18.5 percent of commercial volume in ASCs.
On average, total costs were 26 percent lower for orthopedic surgical procedures at ASCs compared to HOPDs. This finding held true even when running an analysis that controlled for differences in the patient populations such as age, sex and comorbidity. The facility fee was, on average, 33 percent lower at ASCs than HOPDs. This is less than the disparity between ASC and HOPD Medicare reimbursement—on average ASCs are paid roughly half of the HOPD Medicare facility payment—and still shows significant savings potential for moving eligible procedures to ASCs. Authors of the study also found that the commercial facility payment increased faster for HOPDs—3.1 percent annual growth—in the period studied compared to ASCs—0.4 percent annual growth. Surgeon professional payments were 11 percent higher at ASCs compared to HOPDs, which the authors theorize might be due to commercial payers trying to incentivize procedure performance in the lower-cost ASC setting. Even with the higher professional payment, the average knee arthroscopy was 46.6 percent more expensive if performed in an HOPD compared to an ASC.
These findings further confirm ASCs as a low-cost, high-quality site of service for outpatient orthopedic procedures. The authors looked at commonly performed procedures, some of which are performed with even greater frequency in ASCs for Medicare beneficiaries. For example, ASCs performed almost half of knee arthroscopies—HCPCS 29880 and 29881—on Medicare beneficiaries in 2018. While certain patients will always be better suited for the hospital setting based on age or comorbidity, ASCA expects that further migration for commonly performed outpatient surgical procedures will continue to occur, not just in the orthopedic specialty but across all surgical specialties.
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