An aging, but active, patient population and the ability to provide more aggressive care suggest that the demand for orthopedic services will continue to increase in the coming years. Add the new favorable reimbursement rates under Medicare's new ASC payment system, and you'll see why orthopedic surgery — including knee and shoulder arthroscopy, meniscectomy, ACL reconstruction, hand and wrist surgeries, fracture care, and nerve and tendon treatment — is a clear winner. Here's how your facility can take advantage.

Capital equipment
If you're adding or expanding orthopedic services at your ASC, some capital equipment purchases may be in order. Chief among those purchases should be intraoperative fluoroscopic imaging devices, if your facility doesn't already own them; arthroscopes and arthroscopy towers, as well as high-definition monitors to display the results; and OR tables that allow beach-chair positioning. Depending on the procedures your surgeons intend to pursue, power tools such as drills and saws may also be necessary.

You can equip an ASC for orthopedic services for around $50,000 to $100,000. While this sounds like a lot up front, if you've compiled a solid business plan, you'll see that you stand to earn a fair amount more with the new service line. With moderate volume, the equipment will easily pay for itself.

Supplies and implants
A large percentage of orthopedic cases use implants of some sort. But Medicare's new rules won't provide separate payments for devices used in orthopedic surgeries, such as screws or suture anchors.

Medicare won't reimburse ASCs for G0289 (arthroscopy, knee, surgical, for removal of loose body, foreign body, debridement/ shaving of articular cartilage (chondroplasty)) at the time of another surgical knee arthroscopy in a different compartment of the same knee. This code is valued for intraoperative services only for the physician. It provides no facility payment. If only chondroplasty is performed on a Medicare patient, then CMS will reimburse the code 29877. If it is performed with any other arthroscopic procedure, there is no separate payment.

Code 20555 was added for placement of needles or catheters into muscle or soft tissue for subsequent interstitial radioelement application (at the time of or subsequent to the procedure). It excludes the following codes: 19296 to 19298 (breast), 41019 (soft tissue, head/neck), 55875 (prostate) and 55920 (pelvis/genitalia). Previously, there was no code for the placement of needles or catheters in musculoskeletal areas. The fully implemented 2008 National Rate will be $1,208.50.

Codes 24350 to 24352, 24354 and 24356 were deleted. New tenotomy codes, with simpler descriptions, were added to allow greater flexibility in reporting medial and lateral debridement procedures for the treatment of epicondylitis.

To be sure, these costs weren't paid before the new rates, so it shouldn't actually have too much effect on payment. However, it will still be crucial for you to work with surgeons and sales representatives to minimize the costs of these supplies and implants as well as the durable medical equipment — slings, knee immobilizers and the like — needed post-operatively.

It's a communications issue. Whoever does the purchasing can't make unilateral decisions against surgeons' requests. In physician-owned ASCs, of course, you have the mutual goal of keeping costs down in order to optimize revenues. Even there you run the risk of overspending if each physician-owner demands different options. In that case, you must strongly sell the concept of standardizing supplies.

You probably won't have to hire a new staff to support the orthopedic specialists you'll bring on board, but you'll need scrub techs and circulating nurses who are familiar with their procedures. This might require that a few staff members who'll be routinely assigned to orthopedic surgeries attend some courses, formal training or in-services with vendors' reps to familiarize themselves with the equipment and how it works. Your anesthesiologists and CRNAs will also need to keep pace with the new service line, so ensure that they're comfortable with regional anesthesia techniques. Also keep in mind that you may have to adjust your staff to maintain efficiency, particularly during case set-ups and takedowns. Turnover times are sometimes longer between orthopedic surgeries due to the fact that there's often more equipment to move and arthroscopic fluid on the floor to clean.

Medicare caveat
While orthopedic services are a lucrative business for an ASC to be in, it should be noted that many outpatient orthopedic procedures at ASCs are performed on patients with private insurance. Patients on Medicare, on the other hand, are often steered toward hospitals for their surgeries due to the need for 23-hour observation and older patients' co-morbidities, factors that would be less cost-efficient for ASCs to handle. In other words, if your ASC serves only Medicare patients, the payment system's changes will show you some benefits, but not as many as other facilities might see, since many of your orthopedic cases may be scheduled at hospitals.

Still, I don't think anybody disputes that orthopedic surgery is a winner here. And the ambulatory surgery field recognizes that assertion. On a personal note: since Medicare's changes were announced, I've been approached by two ASCs looking to increase their volume of orthopedic surgeries. And even though I'm on the faculty of a large medical university, I've joined the staff of one of them.

I mention this to illustrate two points: first, ASCs are looking to grow their orthopedic service line. Second, as a result, orthopedic specialists are going to be able to leverage a good deal for themselves, whether that means asking for choice equipment, more block time or faster turnovers. All told, it looks like a win-win situation.