SCASCA Fights for Rights; Demands Fair Workers’ Comp Reimbursement

The South Carolina (SC) state association has been busy of late fighting the powers that be. On Sept. 29, 2006 eight SC ambulatory surgery centers (ASCs) and the South Carolina ASC Association (SCASCA) filed suit challenging reimbursement changes established by the SC Workers’ Compensation Commission.

The Commission established a new payment system, effective Oct. 1, 2006 that limited workers’ compensation (WC) payment to ASCs to no more than 140 percent of the Medicare payment.

“In so doing, they had not researched and understood ASC/Medicare reimbursement,” asserts J. Clay Fowler, FACHE, vice president and administrator of Parkridge Surgery Center, LLC (Parkridge is a SC-based multi-specialty, joint venture ASC).

Fowler, who also serves as president-elect of the SCASCA continues, “What they didn’t seem to understand is a.) it is not the same as hospital reimbursement and everybody in the country knew that it was about to change; and b.) they didn’t understand that the state of South Carolina has something called the Administrative Procedures Act and it says that any rate-setting agency in the state has to follow certain guidelines when setting rates — including involving all affected parties, holding hearings and taking testimonies.”

Fowler says the state’s ASCs were never contacted concerning the changes. In fact, “I was contacted by a member ASC just as soon as this announcement was made in the newspapers,” he recalls. “That’s how we all found out about our rate change.”

Mike Pankey, RN, MBA, administrator of the Ambulatory Surgery Center of Spartanburg and member of the SCASCA, said the changes would have shocking effects on many of the state’s ASCs — including his. “We believe the cut would be about 70 percent on the payment,” he asserts. “This would affect our bottom line by about $250,000 net income because we would have to stop doing workers’ comp as the new fee schedule will not cover the cost of many of the procedures.”

Fowler and the SCASCA members decided to take action. “Together, we went as an association and had a meeting with the WC Commission. They listened a little bit and said they’d get back to us. At the same time, some of the national companies had kind of banded together and had a similar meeting with similar non-results.”

Fowler continues, “We all received a letter from the Commission saying that they were going to go forward with the no more than 140 percent of Medicare, which included of course no implant carve out. So we banded together, had a meeting with the most-effected surgery centers and we agreed to hire an attorney.”

Fowler says they selected an attorney who has a specialization in SC in rate setting cases; not necessarily a healthcare attorney, he notes. Through the attorney, the association met with the Commission again and this time presented an overview of the cost associated with surgery centers, about the charges relative to that of hospitals and the value they provide.

“We asked for the WC Commission to work with us to find a fair rate,” Fowler shares. However, the results of the meeting were not favorable. “Not one commissioner made a motion to even discuss what we had brought before them. It was really disheartening.”

The very next week, SCASCA formed a consortium that included ASCs throughout the state as well as some of the industry’s bigger players: Health South, Symbion, Amsurg, and other ASC-related companies. “We were all together working as one.”

The attorney filed a motion for a temporary restraining order on the payment system for ASCs based on the principle that the damage would be so great that it would do irreparable harm to the ASCs.

At the hearing, Fowler says the attorney pointed to the Administrative Procedures Act and argued that the Commission violated that law. After waiting several months, the judge finally rendered a decision, and in March 2007 the final written decision was released — the temporary restraining order was placed. The restraining order covered all ASCs in the state of SC and was set to be retroactive to Oct. 1, 2006. Under the restraining order, all ASCs would be owed the higher rate until a hearing could be held and a final determination can be made on the case.

The Commission appealed.

“So the appealet judge reviewed the first judge’s rational and determined that that judge had complied with the law in making that ruling,” Fowler recalls. The Commission appealed again, and again the order was upheld — this time by a three-judge panel.

The Commission recently withdrew its latest appeal in interest of moving forward to a hearing. In the meantime, the ASC WC payment system reverts back to the interim discount-tocharge method (charges minus 12.1 percent) that was in effect prior to the Oct. 1 changes.

Fowler says that as it stands today, most of the insurance companies have complied and are paying. However, some centers are being hit with pretty hard consequences. Pankey, for example, says his center currently has about $350,000 in over 180 days for this financial class. “With the confusion, many payers have delayed payment or won’t pay according to the injunction,” he states.

Fowler points out that other states are watching these proceedings and that the outcome could very well set precedence nationally. “We are very committed to our course,” he says.

Pankey echoes that dedication and recognizes the fact that there truly is strength in numbers. “Without the association it would be difficult to fight this,” he says. “Legal fees would be difficult to handle as well as time involved in the fight. I am proud of SCASCA and its leadership, and for the courage they have shown in this. I think Columbia now knows we will voice our opinion in the future.”

Fowler adds that this issue has been “a flashpoint for us” as an association. “It’s also become a rallying point,” he adds. “We’ve picked up a lot of membership here in the state. We’ve picked up 11 new surgery centers. It’s been a good point where we’ve been able to demonstrate that we provide value to our membership and we’re advocating for ASCs in the state of SC. It’s WC today, but it could very well be some other issue tomorrow.”

SCASCA is currently awaiting the trial date which is expected to be set at the end of this year or early next year. 

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines