This article is the first in our multi-part series in which we take an in-depth look at the analytics required to determine whether you should consider adding an office-based lab (OBL) to your existing practice.
As practice reimbursement continues to remain stagnant or decline, many vein and vascular practices are considering their options to increase revenues. The growth of Office Based Labs (OBLs) seems to be a logical transition for outpatient venous and endovascular care. While many procedures were once performed solely in a hospital outpatient setting, clinical advances have made it possible to perform complex procedures in the office setting, safely and cost-effectively.
Office-based surgery is defined as any surgical procedure performed by a licensed physician in the office setting. Place of service code 11 (“non-facility”) is used and global billing applies, which results in higher reimbursement because payment is combined for professional and technical components of the procedure. Since nearly all peripheral diagnostic and interventional vein procedures can now be performed in an office-based facility, this may be an attractive option to capture more revenue, as well as boost productivity, all while enhancing the overall patient care experience.
From a patient’s perspective, the main issue is whether a medical office is an appropriate setting for the type of procedure proposed. Is the staff trained? Is the equipment similar to what is used in the hospital? As we see more types of procedures migrate to the office setting, it’s important to ensure that procedures are done safely by qualified staff and that all patient experiences in the office setting, good and bad, are reported. Many states have implemented regulations to promote the safety and quality of procedures performed in office settings. These state-specific criteria must be met by physicians who wish to offer office-based procedures.
Some states follow AMA guidelines and require a physician’s office to be accredited by a nationally recognized accreditation agency when performing procedures requiring Level II anesthesia (moderate or “conscious” sedation) or higher. It is important to know your state’s regulations regarding office-based surgical procedures.
Growth has been accelerated by significant advances in minimally invasive vascular procedures and devices, which in turn enhance efficiency and safety of various venous and endovascular procedures performed in the OBL.
To begin our analysis, we approached Philips, the industry leader in OBL development, to join a roundtable discussion to understand their view of the market, including the risks and rewards that developing an OBL may bring to a practice.
David Schmiege: What major trends are driving the healthcare industry in the next 5-10 years?
Brandon Scanlon: I think we’ll see the progression of procedures to the outpatient setting. We’ve seen healthcare become much more top-of-mind, not only in the political arena, but across the country in general, due to rising costs. There’s a trend and a desire to drive these costs down. At the same time, there have been technological advancements and more minimally invasive approaches that allow certain procedures to be done safely in the outpatient setting. I see significant trends toward moving out of the hospital to drive efficiency in the healthcare system.
Michael Ferguson: I agree, a lot of healthcare is beginning to move out of the hospital. In doing so, it opens up opportunities in the ASC and OBL world, for both arterial and venous procedures. Faster, more seamless care is an attraction for patients.
David Schmiege: What are the advantages for opening an office-based lab for vein specialists?
Brandon Scanlon: As a vein specialist, he/she often has the referral base to open an office-based lab. Ask yourself a few questions: 1) have you had a patient whom you’ve treated the great saphenous, small saphenous and perforators on who has returned with unresolved symptoms? 2) Do you have patients with unresolved lower extremity edema who have tested negative for CHF and placed them on diuretics with no improvement? Whether he/she chooses to focus on superficial only or offers the full range of procedures for deep venous, there is a clear need to treat the patients underlying cause, not just the symptom.
Michael Ferguson: For the physician, there are the benefits of ease of the procedure, option of selecting your equipment and products, less wait time in between cases, and the choice to schedule his or her cases when works best. Then it falls back to the patients, as well. Patients are able to get quicker care and often it is less expensive, by going to these OBLs and ASCs.
David Schmiege: What are the challenges for OBLs in the next 5-10 years?
Brandon Scanlon: What I think we will see in the OBL setting are new codes as procedures migrate out of the hospital. Traditionally, we tend to see an increase in reimbursement for new codes, which is often the incentive that helps drive those procedures out. You then see a gradual reduction of reimbursement to a level that can still be profitable, but may not be as appealing as it was when the codes were first introduced. The other question creating challenges is whether the OBL or ASC is the right environment for the procedure. We have seen a rise of hybrids in these labs where they operate as both an ASC and an OBL. The question more broadly is, how do you diversify as an OBL physician and how do you establish the right setting that enables patient care but also enables flexibility? This single decision can influence your broader business dramatically.
Michael Ferguson: I think that for both the arterial and venous sides, it comes down to whether reimbursement can be maintained, or will even remain. On a regular basis we run into situations where reimbursements put OBLs at risk every year.
David Schmiege: What types of venous and endovascular procedures are performed in an OBL?
Brandon Scanlon: Obviously we see a lot of peripheral artery disease and a lot of deep venous disease. I know you’re referring to OBL, but if you look more broadly into the ASC setting, we’re also seeing some electrophysiology and rhythm device procedures. There is also a potential move to interventional oncology and a growing interest in low risk coronary PCI in the ASC/OBL. We see some physicians doing fistulas, as well.
Michael Ferguson: You get deep vein and May-Thurner treatments in the OBL. You get a number of venous clot removals being done there as well. The venous side of the business is very well represented in the OBL world. Probably more so than the arterial side.
David Schmiege: What physician specialties will Medicare and payers be allowed to perform procedures in an OBL?
Brandon Scanlon: Recently we’ve seen a real significant growth in interventional cardiologist OBLs. Looking forward, we believe that the next wave is interventional coronary procedures and low risk PCIs. This year the ASC setting received new and updated codes reimbursing diagnostic coronary work. Many key opinion leaders and societies that we work with see that as a strong signal that we can anticipate low risk coronary PCIs in the ASC setting.
Michael Ferguson: Right now either CMS or Medicare is paying for the cardiology specialty, interventional radiology specialty, and the vascular surgeon specialty. We’ve also seen general surgeons and some interventional nephrologists go into OBLs and do well.
David Schmiege: What is the difference between a traditional OBL and a hybrid OBL / ASC?
Brandon Scanlon: Traditionally an OBL place of service, as designated by CMS, is a site that is set up to do a limited scope of procedures. We see a lot of interventional work, a lot of PAD, some deep venous, and naturally you have the superficial venous, as well. The big differences are that ASCs require a certificate of need, certain accreditations and significant building requirements, where OBLs, depending on the state, may not. Practically speaking, ASCs require incremental investment for additional equipment and likely more space. The ASC and hybrid model of OBL and ASC are set up for more variability in procedures, allowing the physician to practice in the setting that is most appropriate for that patient.We also see OBLs or ASCs frequently delineated along specialty lines.
David Schmiege: When did you develop Philips SymphonySuite and what services does it offer to practices considering an OBL?
Brandon Scanlon: When Philips looked at the full healthcare continuum, we knew we needed to be part of the trend to drive down healthcare costs, increase efficiency, and improve patient care. That’s where the SymphonySuite program was born. It began in 2016 and today involves everything that helps a physician take their passion for having their own independent practice, where they control patient care, and makes it possible. We have a team that specializes in building OBLs and hybrid labs across the country. They’re involved in every aspect (including relationships outside the Philips portfolio), allowing physicians to focus on treating patients while we help them build a business. So getting more specific, the basics are the X-ray system, the ultrasound system, the table, the patient monitors, and the service. We also offer unique financing programs that allow physicians to look at their long-term practice and see the best partnerships.
One thing that really differentiates Philips SymphonySuite is our experience. We’ve helped a large number of physicians set up their own labs and we know what it takes. We’re also the only company that can say, “We understand your number one fear is whether your business is going to be successful. We can provide you with the equipment that you need to get started, as well as the high value disposable devices and consumables for diagnostics and therapeutics that will ensure your patients are treated in the way you want them to be treated to achieve the best outcomes.” We can support multiple types of atherectomy, whether it be hybrid or laser – also diagnostic IVUS and other devices such as crossing catheters. No other company can look a physician in the eye and honestly say “We’re in this with you, side-by-side, for the long run” and we have all the required equipment and expertise to make it possible. We believe that makes us very unique.
Michael Ferguson: SymphonySuite has been around now for nearly three years. We work with the physician to make the Philips experience the best it can be. We establish one point of contact instead of numerous points of contact within Philips, so there is just one person with which to discuss any important topic. We understand the differing cost parameters of hospitals vs. OBLs. We’ve made it more enticing for physicians to look at Philips as the partner of choice.
The other piece of the puzzle that Philips brings to the table is the strength of our business development managers. Each has an average of 15 years of experience in this market. They apply that expertise to build exceptional OBLs. And we install quality products/equipment, and we sell disposables which can be used with our capital equipment, which may result in increased cost savings for an OBL owner.
David Schmiege: What advice do you have for physicians considering opening an OBL?
Brandon Scanlon: What I would encourage anyone building out a practice to do is to think long-term about what will increase the chances for success and not get too hung up on an individual line item. What I mean by that is, for example, someone might find the cheapest construction contractor. However, if they have limited experience in building an OBL or ASC, we’ve seen this result in all kinds of delays and challenges that end up costing far more than what was originally saved. That plays into who you decide to partner with on the industry side, whether it be for equipment or devices. Choosing the right partner can really streamline things. Choosing a partner that has been there, done that, and set up labs all across the country as the market leader, is a big difference from collaborating with a company who only plays in one small part of that puzzle, or who is just getting started.
Another key consideration is that you don’t necessarily have to do every procedure yourself. There may be someone well-respected in your geographical area that you can establish a business relationship with that can come in and work together with you to build something that is multispecialty. This is an option we’re seeing more of these days.
Michael Ferguson: A key consideration is determining what specialty you want to pursue. Do you want to become a multispecialty business, or do you want to focus on the one specialty that is your strength? It’s important to answer these questions to decide whether the business should be an office based lab or a hybrid ASC, how big the space should be, and what type of equipment is required. Secondly, you need to understand where your patients are coming from and what your referral network looks like – this is critical to defining your practice.
Getting the right staff is another key consideration. One thing that we’ve seen with many of the physicians we’ve worked with is that they’re able to attract some really high caliber staff. By doing so, they ensure that the patient enjoys the best experience. By setting up an independent practice, physicians are able to build the business around the patient experience, and not be restricted to working within the framework of a larger institution. Patients like this, and because referrals from patients are common, a good practice rating is critical, whether it be on a Google search or on WebMD. Patients are more informed and look for specialized care.
David Schmiege: Why is IVUS considered a standard of care for most venous procedures?
Brandon Scanlon: IVUS is critical in these practices, specifically if you’re moving into deep venous to determine whether you have iliac vein compression or identifying the extent of disease. IVUS should always be used for device selection, sizing, and planning purposes. In VIDIO, the first prospective multicenter study comparing multiplanar venography to phased array intravascular ultrasound, IVUS changed 57% of venous treatment plans. We have seen growth in the adoption of IVUS as a result of the clear benefit and many studies done around the value in both of these procedures. We are also seeing this throughout PAD and the arterial system when using atherectomy to determine the right type of atherectomy and what type of debulking needs to be done. The same is true when stenting to make sure that you have the right size stent and that it’s well opposed within the vessel. So that becomes critical.
Michael Ferguson: IVUS tells you the untold story. Typically, you’d have to really inject a lot of contrast to get a good two dimensional view. By bringing in IVUS, you can now easily see a true three dimensional view of what is actually going on with the patient. You can better diagnose and then better treat.
David Schmiege: What agency is recommended for OBL accreditation?
Brandon Scanlon: I would highly recommend an accredited body, especially when becoming an ASC. I would also highly recommend that physicians with an OBL or Hybrid engage with the Outpatient Endovascular and Interventional Society (OEIS) because it is important that physicians have an advocate to help bring about change in a self-regulating manner. I think becoming part of the OEIS registry as well as gaining accreditation through JCAHO, AAAASF, or other accrediting bodies is critical to continuing the advancement and movement of these procedures. That is what will ultimately ensure quality for patients and the long-term viability of these sites of service.
Michael Ferguson: Great question. I think right now, OBL accreditation is being considered by a couple of different societies. The OEIS society is trying to lead the way to get OBL accreditation down on paper. I also know that the Society of Vascular Surgery (SVS) is working toward OBL accreditation. It would be best if both these societies could work together to come up with one set of accreditation rules.