Battling at the State Level

Battling at the State Level

By Kelly M. Pyrek

While surgical hospitals are waging their battle, advocates of ambulatory surgery centers (ASCs) have been working overtime to champion similar issues closer to home. One of the more beleaguered states — joining South Carolina with its moratorium on ASCs and New Jersey with its tax on ASCs — is Colorado, which successfully fended off a state Senate bill which would have prevented physicians from referring patients to any facility in which they had a financial interest, as well as a bill that would restrict convalescent care licenses for ASCs.

“The opposition is more prepared than last year so we will have our work cut out for us,” observes Rob Schwartz, executive director of the Colorado Ambulatory Surgery Center Association (CASCA).

Schwartz, who at press time in mid- November addressed the members of the South Carolina Ambulatory Surgery Center Association (SCASCA), says CASCA has worked with SCASCA to fight against the moratorium on ASCs proposed by the South Carolina Department of Health and Environmental Control (DHEC).

“CASCA helped organize an ad hoc coalition of special interest groups that were concerned about the moratorium,” Schwartz says. “The first task was organizing the different groups; the second was re-educating the administrators and doctors about how to be effective in a political environment. We spent a lot of time teaching people about public policy. Part of the challenge for our industry is that when someone decides he wants to go to medical school and become a doctor, no one tells him how much he will have to deal with government when executing his responsibilities. So, human nature being what it is, we all like doing what we are comfortable doing. Therefore, we are trying to enhance the level of comfort that doctors, nurses and administrators have in interacting with policymakers, including giving them the tools and skills to do it. We also hired a superb lobbyist to navigate the political waters.”

Schwartz continues, “Most importantly, we began a grassroots campaign, contacting elected officials to communicate a message to DHEC about the problems that a moratorium would create. I thought the DHEC staff was professional and accessible, and open to listening to another point of view. The staff pulled the moratorium off the table and I think they deserve kudos because in many states, bureaucrats take a fixed position. The DHEC staff exemplifies the best of what government should be all about, which is listening to different viewpoints.”

Schwartz is calling it a victory for ASCs everywhere, but cautions that more work is still ahead. “The language in the regulations is still to be discussed and it’s incumbent upon physicians, nurses, and administrators to make the best case as to why there should be a level playing field between hospitals and ASCs. A level playing field allows patients to have a choice, and we can compete on issues of high quality, low infection rates, low cost, and excellent service delivery and outcomes. That’s the case we are continuing to make to DHEC staff.”

ASC advocates say the involvement of ASC owners and operators at the state level is critical to the survival of the industry.

“We are passionate about and invested heavily in the state associations to ensure that organizationally, they are continuing to build their political capability,” says Craig Jeffries, executive director of the American Association of Ambulatory Surgery Centers (AAASC). “If you were to take an inventory of state associations this year compared to last year, I’ll bet eight state associations had a state lobbyist on retainer last year, compared to 15 to 20 of them today. So, leadership has emerged and increased at the state level. Some of that is from physician-owned ASCs, and some from the corporate ASCs that have a vested interest in what’s going on in some of the states. They have recognized the strategic need for their administrators or regional operations people to invest in developing the state associations.”

Frequently, members of the industry want to get involved, but are lacking important skill sets through no fault of their own. Schwartz wants to remedy that.

“You’re not going to get spontaneous involvement because these people are so busy,” he says. “So, CASCA decided to meet with physician groups on a grassroots level, getting doctors to join our association in twos and threes. More importantly, we’re training them for and giving them leadership roles. When they went to medical school, they weren’t taught about public policy and its impact on their profession. They don’t come out of school with the political skill sets they need, so we’ve walked them through the issues, listening to their frustrations and their concerns about making a difference. We’ve had a significant number of doctors coming to the state capitol, testifying, lobbying, and sending letters to their representatives. Last year we had two major battles, and they saw that their efforts made a difference. We are preparing for another tough session coming up in the next few months.”

It’s a grassroots approach that is starting to pay significant dividends. The AAASC reports that it has made significant inroads in establishing important alliances with policymakers.

“Our focus this year has been on building congressional relationships and developing champions of the industry within specialty societies that have interest in the physician ownership issue,” Jeffries says. “With regard to developing these congressional champions, we have held or participated in successful fundraisers for Congressman Joe Barton, chairman of the Committee on Energy and Commerce, as well as for Congressman Jim Nussle, chairman of the House Budget Committee. We also participated in a very successful fundraiser for Nancy Johnson, chair of the health subcommittee of the Ways and Means Committee. And Montana Sen. Max Baccus sent his people to surgery centers this past summer; it means he understands ASCs are an important emerging component of healthcare. He wants his staff to understand ASCs’ value, so there’s a senator that could be very key for us.”

Jeffries continues, “Another key person for whom we did a fundraiser that I’m very excited about is Congressman Tom Price, who filled Newt Gingrich’s old seat in Georgia. He is an orthopedic surgeon, and was the managing physician of a surgery center in the 1990s, so here’s a guy who knows the industry intimately, is well versed in the physician-ownership issue, and knows the value of surgery centers in the local market. While I would love to tell you that all of these people will be advocating for ASCs, with the exception of Tom Price, who absolutely will, I think that for the others, the goal is to make sure that as ASC issues arise, they will bring us into that policy discussion. They will be open to the value of physician-owned surgery centers. We have inventoried members of Congress who are personal friends of physicians who own surgery centers, and these are members of Congress across the board; they may not have a healthcare committee assignment, but they are foot soldiers in the battle.”

Jeffries says state ASC associations are growing in their efforts and in their influence. “The industry is getting an incredible amount of support from some key state ASC organizations in Colorado, Florida, Ohio, Washington, Idaho, and Texas, who are cultivating congressional champions from their states. They understand the need to not distract from their core mission to protect their turf in their respective states, but they also understand their role in supporting the activities at the federal level. Their motivation is the Medicare reimbursement freeze and a continuing effort by the AHA and state hospital associations to curb the growth of ASCs.”

Now that senators-and representatives-elect are seated at the state and federal levels, the question remains, how will the results of the 2004 election impact ASC issues?

“Who is in the White House or in Congress has an impact on our tactical objectives, but overall, the AHA and the Federation of American Health Systems are the antagonists here; challenges are not springing up because health economists or healthcare policymakers are saying that surgery centers are bad,” Jeffries says. “It’s an industry sector that is protecting its turf and I think they are strong with both Republicans and Democrats.”

“In general, our messages are those that should work with either party, although there are some exceptions because some individuals are less favorable toward certain aspects of healthcare policy,” says Kathy Bryant, JD, executive vice president of the Federated Ambulatory Surgery Association (FASA). “We must make sure our grassroots efforts are strong and that we know the people who are talking to members of Congress understand the ASC situation in the local districts because Washington is going to be looking at national averages and that may not reflect what’s happening in the districts. FASA’s recent ASC Open House Day relates to that kind of activity. A Pennsylvania ASC had more than 300 people at their open house, including congressional representatives. Successes like that allow FASA to focus national attention on the interaction between surgery centers and policymakers. The ASC industry hasn’t done a lot of this, so we’re not going to be able to turn things around in a year or so — it’s a slow and steady building of these relationships.”

The creation of a united front to represent the ASC industry is the goal of many lobbyists and representatives of associations fighting on behalf of surgery centers. “We must bring together all of the elements of the industry,” says Jeffries. “We’d love to have a common set of objectives and a broad strategy that is embraced by our colleagues at FASA, within the state associations, and among the specialty physician groups. The next step is bringing those people and groups together to determine what the priorities are.

The budget deficit is going to be a huge issue in Washington this year, so the issues that we need to put high on our agenda are protecting physician ownership, protecting any further erosion of current payment by Medicare, expanding the ASC procedures list, positioning ourselves to get out of the payment freeze as soon as possible, and making sure that the rebasing process continues at a pace for successful implementation in the period from 2006 to 2008. It’s an ambitious agenda.”

Schwartz believes that 2005 will demand continued vigilance of dangerous precedents such as the New Jersey tax on ASC receipts of more than $300,000. “We’re currently working in six other states besides our own, and we’re seeing state hospital associations taking ideas such as the New Jersey tax on ASCs to other states. Those ideas are relating to taxation, moratoriums, restrictions on referrals, economic credentialing and terminating privileges; the challenges to ASCs are popping up in a lot of different ways in other states.”

So, what’s ahead for 2005? “MedPAC has become more familiar with the ASC industry; our lobbyist and their staff members have had good conversations about issues such as the ASC procedures list and rebasing, so we might be turning some corners there,” Bryant says. “They will either say we should get a big reimbursement increase or we shouldn’t. If they say we should, then we are in good shape to explain to members of Congress why it makes sense to increase Medicare payments to ASCs. If MedPAC thinks the payments are adequate, we will continue to disagree with them like we have the last few years and our response to that will be: here is what ASCs do, here are the benefits to patients, here’s why they are more cost-effective to the Medicare program than HOPDs, and here’s why MedPAC should encourage ASCs, not discourage them.”

It’s an argument that is resonating in South Carolina. “DHEC (pulling back) on the moratorium is definitely a victory,” she adds. “A lot of people contributed to that effort. Regarding the New Jersey tax on ASCs, a bill was introduced to repeal it, and two bills were introduced to modify it, and no doubt we will see some kind of modification to the legislation.

The tax is another good example of people in the ASC industry needing to be ready for these kinds of attacks. I don’t think anyone in New Jersey had the data to show that ASCs were providing charity care. As a result, the governor said, ‘If you aren’t, we’ll tax you to pay for charity care.’ Far too often someone has made a statement and if you are not right there to challenge it with your own data, the misconception is perpetuated. The hospital association has not provided data to substantiate its claims and they are believed unless we are able to effectively counteract them. We are focusing our efforts on gathering this crucial data. They were saying we weren’t treating Medicare patients; our data shows now that 66.2 percent of ASCs provide greater than 30 percent of care to Medicare patients — data like this makes it harder for the hospital association to make that kind of argument.”

Bryant says the key to 2005 is continuing to fight the good fight. “I think the ASC industry as a whole is becoming better educated about the need for government relations, and the need for continual efforts directed at Capitol Hill and state governments. Our message is be on the Hill all the time and be an active part of the process.”