by
A Philadelphia-based health insurer that has been steering patients toward ambulatory surgery centers is now joining forces with a prominent local health system and a midsized ASC operator to build out the local ASC network.
Independence Blue Cross (IBX), Penn Medicine and Regent Surgical unveiled their partnership on Sept. 24, saying they plan to develop at least 18 ASCs to “rapidly expand access to high-quality outpatient surgical care” in the greater Philadelphia area.
Travis Messina, CEO of Nashville, Tennessee-based Regent, told ASC News that his organization was a natural fit to join the partnership because it has carved out a niche as a preferred partner for academic medical centers looking to develop and invest in ASCs. But while pacts between management services organizations like Regent and health systems like Penn are not uncommon, bringing an insurer into the mix is rare.
“What’s really unique about this partnership is that Penn Medicine has a really strong relationship with the the local Blue Cross plan, Independence Blue Cross,” Messina said.
“The two CEOs, Kevin [Mahoney] and Kelly [Munson], wanted to create an option that really provided access and convenience, and a low-cost alternative without sacrificing the quality of care that Penn Medicine is accustomed to delivering to its patients,” he added. “So when we had the opportunity to meet, it really … allowed us to accomplish those three goals, and we started beginning the planning process for our new partnership.”
The three organizations, which will be forming a not-yet-named company, said in a press release that the timing and scope of their future projects are still being determined and “will depend on a variety of factors, including regulatory approvals, community needs and market conditions.”
Messina said a “substantial portion” of the ASCs will be de novos, but the organizations might also invest in existing centers and convert existing hospital outpatient departments (HOPDs) into ASCs.
The goal is to open the first surgery centers next year, according to Messina. Location-wise, he said he expects Penn, Regent and IBX will focus first on developing ASCs within Penn’s primary service areas. The new ASCs are likely to be multispecialty, with a “heavy focus” on GI, ophthalmology and orthopedics, Messina added.
Regent Surgical manages nearly 40 ASCs across the country. Its most recent addition was the Integrated Surgical Center of Arizona, a multispecialty surgery center in Avondale, Arizona.
A pro-ASC insurer
The new partnership also comes after IBX implemented a policy for its commercially insured and Medicare Advantage members, effective June 1, that aims to encourage low-risk patients to use ASCs for select surgeries.
Essentially, IBX will refuse to cover surgeries in a hospital or HOPD that could be safely performed in an ASC. Highmark, a Pittsburgh-based insurer that competes with IBX in the Philadelphia area, has a similar policy.
Per IBX’s policy, physicians can get a waiver to perform a patient’s surgery elsewhere if they don’t have privileges at an ASC. The idea is to avoid interrupting the patient-doctor relationship, IBX Chief Operating Officer Richard Snyder, MD, previously told ASC News.
However, Snyder has said he expects to “tighten that policy” once more ASCs are available in the region and physicians get privileges to operate there.
And rather than wait for more ASCs to be built in the Philadelphia region, IBX will now have a hand in building them.
“Health care needs to work better for the people we serve, and that means creating more convenient ways to access high-quality affordable care,” IBX President and CEO Kelly Munson said in a statement. “This partnership brings together the right organizations to expand access, improve affordability, and deliver a better experience for the people and communities we serve.”
Historically, Philadelphia has not been as much of a hotspot for ASC development as much as the Southeast and Southwest regions of the U.S. While Pennsylvania doesn’t have a Certificate of Need law on the books – a major regulatory barrier to ASC development – many of its physicians are employed by health systems rather than part of independent groups, making them less likely to co-develop ASCs.
Messina told ASC News he estimates that roughly 33% of ASC-eligible surgical cases are performed in that care setting in the Philadelphia area, while the national average is closer to 60%.
Penn Medicine, however, has already had a hand in developing an ASC in the Philadelphia area. The Ambulatory Cardiovascular Center of Pennsylvania, which opened its doors this summer in Wayne, Pennsylvania, is a joint venture between Penn, UnitedHealth Group-owned SCA Health, Cardiology Consultants of Philadelphia and Cardiovascular Logistics.
Penn operates other outpatient surgery facilities, such as Penn Medicine Radnor, but they are classified and billed as HOPDs, not ASCs. Medicare payment rates for most services performed at ASCs are about 46% lower than when the same services are performed at HOPDs, according to the Medicare Payment Advisory Commission.
Other local health systems have not been as ASC friendly. Jefferson Health recently sued IBX over its pro-ASC policy and other coverage shifts, claiming that the ASC coverage move alone cost it more than $35 million. IBX has filed the dismiss the lawsuit, but the court has not yet ruled on that motion.