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Topic: Analyze implant costs carefully

Ambulatory Surgery Reimbursement Update, October 21, 2008

CMS has bundled implant costs into the procedure reimbursement for almost all procedures under the new Medicare system.

“That means we have to spend a lot more time looking at the costs of those implants and the impact since we’re not going to be paid based on the cost and a slight markup,” said. John J. Goehle, MBA, CASC, CPA, vice president of finance at Facility Development & Management, LLC, in Orangeburg, NY. Goehle suggests the following steps.

• Identify the costs of your implants.
• Implement an educational program for your physicians to show them their implant costs, and highlight that they are no longer getting a little more than cost for those implants, he said.
• Try to negotiate with your vendors. In the past, vendors didn’t have much incentive to keep their costs or charges down. With the new payment system, you should convey to vendors that you now receive a fixed amount for implants and you need to find ways to reduce costs.
• Look into buying implants on a consignment basis, meaning that you don’t pay for them until the implant is actually used, Goehle said.
• Focus more time and resources into thorough case costing.

Try to do this monthly for procedures that have the highest volume at your center, Goehle said. Compare costs the different physicians incur, and compare your case costs to benchmarks. Find ways to reduce the number of supplies that go into a procedure by talking with physicians to see whether they could try to find less expensive alternatives for various supplies they use for procedures, Goehle said.

 Editor’s note: This topic is from the October 2008 issue of Ambulatory Surgery Coding and Reimbursement Insider

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