The Future of VACs: Valuation and Strategic Considerations

Published by HFMA Vascular access centers operating as extensions of physician practices saw declines in payment rates in 2017 that could threaten their viability. These organizations have the option of converting to ambulatory surgery centers, however, thereby realizing increases in payment. It is critical for healthcare finance leaders to understand these risks and opportunities as part of organizational strategic planning. Vascular access centers (VACs) are outpatient facilities that specialize in treatment of patients with end-stage renal disease (ESRD) who have problems with vascular access (for example, where efforts to access a vein or artery result in prolonged bleeding, inadequate blood flow, or increased venous pressure). Dialysis is a primary cause of such problems and the associated need for treatment in a VAC. About 80.3 percent of patients with ESRD undergoing dialysis are treated via catheter, which means that VACs also play a critical role in reducing the hospitalization of patients with ESRD by allowing nonemergency interventional procedures to be performed in an outpatient setting. For patients who do not have ESRD, VACs may offer an alternative setting for other interventional vascular procedures, including vascular access for reasons related to medical oncology, peripheral arterial disease (PAD), and enteral nutritional and medicine delivery. Many VACs operate under an extension-of-practice (EOP) model, whereby procedures are performed and billed as an in-office ancillary service of the physician practice and paid under the Medicare Physician Fee Schedule (MPFS). Beginning Jan. 1, 2017, changes in the MPFS resulted in significant payment cuts for several commonly performed vascular access procedures, and as a result, VACs operated under the EOP model are seeing significant declines in revenue and profits. As the exhibit below shows, the bundling of certain CPT codes and reductions in the fee schedule has reduced payment for certain VAC procedures by as much as 47 percent. Continue to the full article.