Ambulatory Surgery Centers (ASC) :

Impact on Community Hospitals in CON Review

PHHPC Planning Committee

Date: May 15, 2019

2

• History and Background

• Current CON Review Process

• ASC Trends

• Policy Considerations

3

• Studies comparing ambulatory surgery outcomes in hospital

outpatient departments, ambulatory surgery centers, and

physician offices generally conclude that outcomes are

similar, regardless of setting, when risk-adjusted for patient

acuity.

• A high level comparison of costs and reimbursement shows

that, on average, procedures tend to be most expensive in

hospital settings and least expensive in physician offices,

with ASC’s in the middle.

History and Background

4

• Current need methodology was designed to encourage the

expansion of free standing ASC’s to enhance access.

• At the same time, the Department also recognizes the vital

role played by hospitals in our health care delivery system.

Many of these essential services are cross-subsidized by

services such as ambulatory surgery.

History and Background

5

History and Background

• Since the early 2000s, at PHHPC’s request, the

Department solicits feedback from surrounding hospitals

regarding the impact the proposed ASC would have on

their operations/financial viability when a hospital is not a

direct member of proposed ownership.

• Currently, the Department will only recommend disapproval

of a new site if the impact is such that the Department

concludes it will likely result in the closure of a local

hospital.

May 14, 2019 6

History and Background

• Since approximately 2006, PHHPC has imposed a limited

duration operating certificate on newly established

freestanding ASC’s, which do not have a hospital as a

direct operator or member, as a way to monitor ASC’s

efforts in reaching the un- and under- insured populations.

May 14, 2019 7

Current ASC Review Criteria

NYCRR 10 Section 709.5

• Documentation that proposed facility/service will be sufficiently used to make it financially feasible.

• Documentation that proposed facility/service will increase access, including to the underserved.

• Documentation that proposed facility/service will increase availability of services, including a written policy to provide charity care.

• Documentation that proposed facility is willing and able to safely serve patients in accordance with NYCRR 10 Part 755.

May 14, 2019 8

• Limited Life, 2% Charity Care and an appropriate

percentage Medicaid.

• Soliciting feedback from surrounding hospitals as to the

impact the proposed ASC would have on their

operations/financial viability.

Policy

Current ASC Review Criteria

9

NYS ASC penetration per 100,000 population

by year (2007-2008; 2017-2019)

Year 2007 a 2008 a 2017 a 2018 a 2019 b

Population Estimate 19,132,335 19,212,436 19,590,719 19,542,209 19,875,625

Ambulatory Surgery Centers c 290 284 371 378 383

Ratio (ASCs/100,000 People) 1.5 1.9 1.9 1.9 1.9

a New York State Department of Labor

b 2019 population estimates from a web source,http://worldpopulationreview.com/states/new-york-population/

c Health facility information system (HFIS) 2017-2019

Prepared on 5/1/2019 by OPCHSM-DMAR

10

Number of ASCs per Part B beneficiary varies widely across states

Source: March 2019, MedPac analysis

of CMS denominator file for 2017

Nu

mb

er

of

AS

Cs p

er

100,0

00 b

en

efi

cia

ries

40

35

30

25

20

15

10

5

0MD AK NJ NE AZ NV MS DE UT IN LA TX ND PA OH MT MN SC IL MI RI NM NY KY AL VT

GA WY ID WA CO CA KS SD OR TN AR FL NH HI MO CT WI OK NC ME MA IA VA DC WV

State

45

11

New York State Ambulatory Surgery Centers by Facility Type and Region

HSA Region Hospital Based

Hospital Extension Clinics

Diagnostic &

Treatment Center Total

Western (HSA=1) 23 3 13 39

Finger Lakes (HSA=2) 17 3 6 26

Central NY (HSA=3) 22 7 18 47

NYPENN (HSA=4) 4 1 0 5

Northeastern (HSA=5) 25 5 14 44

Hudson Valley (HSA=6) 26 2 20 48

NYC Boroughs (HSA=7) 53 13 58 124

Nassau-Suffolk (HSA=8) 21 4 25 50

Total 191 38 154 383

New York State ASC’s By Facility Type/Region

Source: HFIS, as of 4/25/2019

12

New York State ASC’s (excluding hospitals &

their extension clinics) by Region

Single Specialty

HSA Region

Multi-

SpecialtyMultiple Single

SpecialtyGastro-

enterology

Ophth-

mology

Orth-

pedics

Pain

Management

Non

Specified Total

Western (HSA=1) 8 1 1 2 0 0 1 13Finger Lakes (HSA=2) 5 0 0 1 0 0 0 6Central NY (HSA=3) 4 5 2 1 3 2 1 18Northeastern (HSA=5) 3 1 1 5 2 2 0 14Hudson Valley (HSA=6) 13 1 4 2 0 0 0 20NYC Boroughs (HSA=7) 26 6 13 7 1 2 3 58Nassau-Suffolk (HSA=8) 14 2 7 1 1 0 0 25

Total 73 16 28 19 7 6 5 154

Source: HFIS, as of 4/25/2019

13

Distribution of Ambulatory Surgery

Procedures by Facility Setting in NYSData Source: SPARCS

2007

Hospital

Hospital Extension Clinic

Diagnostic & Treatment Center

87.4%

1.9% 10.7%

2017

61.4%7.8%

30.7%

Hospital

Hospital Extension Clinic

Diagnostic & Treatment Center

14

Distribution of Most Common Ambulatory

Surgery Procedures by Facility Setting in NYS

Data Source: SPARCS

Colonoscopy and Biopsy (CCS=76)

2007

Hospital

Hospital Extension Clinic

Diagnostic & Treatment Center

2017

Hospital

Hospital Extension Clinic

Diagnostic & Treatment Center

46.9%

7%

46.1%76%

20.3%

3.7%

15

Distribution of Most Common Ambulatory

Surgery Procedures by Facility Setting in NYSLens & Cataract Procedures(CCS=15)

Data Source: SPARCS 2017

Hospital

Hospital Extension Clinic

Diagnostic & Treatment Center

28.7%

6%65.3%

2007

Hospital

Hospital Extension Clinic

Diagnostic & Treatment Center

2.6%

40.1%

57.3%

16

Between 2008 and 2018: 87 ASC’s (DT&C’s)

have been approved, 1 disapproved

0

2

4

6

8

10

12

14

16

18

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

17

Hospital Affiliated ASCs 11%

Independent ASCs 89%

Hospital Affiliated ASCs vs. Independent ASCs (Approved 2008-2018)

Hospital Affiliated ASCs

Independent ASCs

18

Counties with Critical Access Hospitals

and Sole Community Hospitals

Source: HFIS, as of 05/07/2019.

Chemung

Onondaga

Monroe

Livingston

Orange

Schenectady

Montgomery

Greene

Putnam

Saratoga

Erie Albany

Allegany

Broome

Columbia

Dutchess

Fulton

Genesee

Hamilton

Niagara

Oneida

Ontario

Rensselaer

Westchester

Rockland

Seneca

Tioga

Warren

Washington

Wayne

Legend:

Primary Care Hospital - Critical Access Hospital (19)

Hospital - Sole Community Provider (20)

Ambulatory Surgery Centers - Hospital Extension Clinics (21)

Ambulatory Surgery Centers - Diagnostic & Treatment Centers (71)

Distribution of Critical Access Hospitals, Sole

Community Hospitals, Ambulatory Surgery Centers -

(DT&Cs) and Ambulatory Surgery Centers - (Hospital

Extension Clinics)

in Upstate New York Counties.

19

Policy Considerations

• What factors should be considered in recommending

approval or disapproval of a proposed ASC?

• When should limited life be imposed?

20

Thank You