EXECUTIVE SUMMARY

The Ambulatory Surgery Center Association has learned over time that it requires patience to achieve regulatory and legislative goals. The group is trying again to convince Congress to pass the Ambulatory Surgical Center Quality and Access Act. The 2017 version would correct the unbalanced Medicare reimbursement formulas for ASCs and hospital outpatient departments (HOPDs).

• In 2003, ASCs received 86% of what HOPDs were paid.

• Now, ASCs receive 49% of what HOPDs are paid.

• The cause of the difference is that ASC payments are updated based on the consumer price index for “All Urban Consumers” and not on the hospital market basket.


A Republican Congress and president might be the combination that will result in success for a bill that has long received bipartisan support, only to go nowhere. U.S. Reps. Devin Nunes, R-CA, and John Larson, D-CT, in March reintroduced The Ambulatory Surgical Center Quality and Access Act of 2017 as a solution to a flaw in current ASC Medicare reimbursement policy.

“Similar legislation has been introduced in the past — not the exact version,” says Kristin Murphy, MBA, assistant director of legislative affairs for the ASCA.

There’s a widening disparity between what CMS pays ASCs and hospital outpatient departments (HOPDs), Murphy says.

“In 2003, ASCs received 86% of what HOPDs were paid; now, ASCs receive 49% of what HOPDs are paid on average,” she explains. “The bill does a couple of things, but one of the primary components addresses how ASCs are measured in terms of inflationary rates.”

HOPD payments are updated based on the hospital market basket, which measures costs of prescription drugs, nursing, and other healthcare-related goods and services.

ASC payments are updated based on the consumer price index for All Urban Consumers (CPI-U), which reflects the prices of items such as bread, milk, and gasoline, Murphy explains.

“The fact that HOPDs and ASCs are updated on different inflationary factors has contributed significantly to this widening disparity over time,” she says.

Using CPI-U to estimate inflationary trends is the default setting the government uses. Either Department of Health and Human Services (HHS) Secretary Tom Price can use his authority to move ASCs from the CPI-U to the hospital market basket, or Congress can pass legislation requiring such a move.

Such a change is good for healthcare patients and the healthcare industry, Murphy argues.

A recent analysis found that ASCs saved the Medicare program $7.5 billion between 2008 and 2011, according to the University of California, Berkeley, Nicholas C. Petris Center on Health Care Markets and Consumer Welfare.1

In the last Congress, the bill that would have fixed this problem received 93 bipartisan cosponsors, yet the bill still didn’t make it through the two-year congressional window.

The current bill also has received bipartisan support, with more than two dozen sponsors in the House.

“The Ambulatory Surgical Center Quality and Access Act will make sure patients continue to receive access to high-quality, cost-efficient care,” Murphy says.

The bill has been referred to the House Energy and Commerce and the Ways and Means committees. Similar legislation is expected to be introduced in the Senate soon.

“Although the legislation didn’t pass last year, there were some provisions in the past that have been adopted by CMS, so we’re happy about that,” Murphy says.

ASCA has seen how patience and years of work can result in necessary changes. For example, in 2006, the organization and its community of ASCs asked CMS to establish a uniform quality reporting system to allow ASCs to publicly demonstrate their performance on set quality measures. CMS implemented the Ambulatory Surgical Center Quality Reporting Program six years later, on Oct. 1, 2012.

If the ASC Quality and Access Act passes, it will equalize the inflationary updates between ASCs and HOPDs. It also would require ASCs to share quality reporting information in a format that makes sense to patients, Murphy says.

The bill would give ASCs a seat on the HHS Advisory Panel on Outpatient Hospital Payments. The panel is influential in determining how hospitals are paid, Murphy adds.

“When CMS is deciding whether a procedure should be performed in an ASC setting, this legislation would require CMS to disclose which of those criteria they are using to deny those procedures,” Murphy says.

ASCs then would have information that could be helpful in engaging in a dialogue with CMS about the decision.

“We could respond to CMS with studies, saying, ‘Here’s the data that show it allows us to provide this procedure safely and effectively,’” Murphy explains. “This enables us to engage in data-driven dialogue.”

REFERENCE

  1. Fulton B, Kim S. Medicare cost savings tied to ambulatory surgery centers. ASCA and Berkeley University of California report. Available at: http://bit.ly/2oZG4iM. Accessed April 21, 2017.