The Centers for Medicare & Medicaid Services (CMS) has proposed a big change to its ASC payment system for 2019. This could be good news for surgery centers.

  • The change would move the ASC payment system to hospital market basket updates instead of CPI-U updates.
  • The ASC community has been asking CMS to use the same annual payment update factor for ASCs that it uses for hospital outpatient departments for nearly a decade.
  • CMS also proposes reducing the threshold definition of device-intensive procedures in ASCs from 40% to 30%, which would be another positive change.

In late July, the Centers for Medicare & Medicaid Services (CMS) proposed to change its Medicare ASC payment system for 2019 to the hospital market basket update instead of the CPI-U.

CMS received comments on the proposal through Sept. 24, and is expected to produce the final rule in November. Same-Day Surgery asked William Prentice, CEO of the Ambulatory Surgery Center Association (ASCA), to answer some questions about this proposed change.

SDS: Is this the change ASCA and others have been asking for over the years? If so, how might this affect the ASC industry? What would be the next step?

Prentice: The ASC community has been asking CMS to use the same annual payment update factor for ASCs that it uses for hospital outpatient departments (HOPDs) for nearly a decade. We are pleased to see this provision included in the proposed rule.

Updating ASC payments each year based on the hospital market basket, a measure of the costs involved in delivering healthcare like medical instruments, pharmaceuticals, and labor, makes far more sense than basing those updates on the CPI-U, a measure of the cost of consumer goods like food, fuel, and clothing.

If this proposal is adopted in the final rule, we expect the Medicare program and its beneficiaries to experience increased savings as [more] procedures migrate to the lower-cost ASC setting ... We see this proposal as a strong step toward recognizing the value that ASCs provide to the Medicare program and halting the growth in the disparity that exists in the rates Medicare pays HOPDs and ASCs to perform the same procedures.

Our next step will be to ask CMS, as we have in the past, to either eliminate or retool the secondary rescaling system it currently applies to ASC payments. That system, enacted to promote budget neutrality, does not apply to HOPDs and continues to support growing payment disparities between the two entities.

SDS: How might this proposed rule expand each ASC’s business? Do you think surgery centers will be able to prepare for expected expansion?

Prentice: At the same time CMS is proposing to update ASC payments each year based on the hospital market basket, it is proposing to reduce the threshold definition of device-intensive procedures in ASCs from 40% to 30%. [This is] another policy change that ASCs have been asking for over several years. If that portion of the rule is adopted as proposed, we expect to see a net increase of 131 new device-intensive procedures for ASCs, growing the approved list from 154 to 285 procedures in 2019 and beyond.

If both these proposals are finalized, we expect more Medicare patients to be able to receive the care they need in ASCs. Time will tell exactly how many more. CMS and the ASC community will be monitoring those numbers carefully. Many ASCs already have the capacity they need to treat more patients.

As the number of procedures that can be performed safely in the outpatient setting continues to grow, for the first time in many years, we are seeing a small uptick in the number of new ASCs being developed.

SDS: What else in the proposed rule will most affect ASCs in their day-to-day operations?

Prentice: The proposed rule ... suggests revising the definition of “surgery” in the ASC payment system to include certain “surgery-like” procedures that are in line with the definition of surgery used by the American College of Surgeons but assigned codes outside the Current Procedural Terminology (CPT) surgical range. This change, which ASCA has requested in the past, allows CMS to propose adding 12 cardiac catheterization procedures to the ASC-covered procedures list in 2019.

Recognizing that current payment policy serves as an impediment to using nonopioids for postsurgical pain in ASCs, a provision in the proposed rule would allow ASCs to get paid for non-opioid pain relief drugs when used in a surgical procedure. ASCA helped bring this issue to CMS’ attention and supports this policy change. We also ask that any members of the ASC community with alternative drugs that could qualify for coverage under this provision contact ASCA.

The proposed rule also suggests sweeping changes to Medicare’s ASC quality reporting program, including the removal of eight quality measures over a two-year period.

The rationale that CMS is using to justify the removal of four of these measures is that ASCs have “topped out” on them. [This is] CMS’ way of saying that performance on these measures in the ASC setting is so consistently high that there is almost no room for improvement.

For the other four measures, CMS indicates it agrees with what the ASC community suggested earlier: Those measures are not related to quality; therefore, [those measures] should not be included in a quality reporting program.

SDS: What is your understanding of “meaningful measures?” Does CMS provide enough information to make it straightforward for ASCs to implement the quality priorities and objectives in their policies and procedures?

Prentice: ASCA supports CMS in its decision to implement quality measures that are both meaningful to patients and minimally burdensome to the healthcare providers who report them. We expect that more work is needed before these can be put in place and look forward to working with CMS to define and implement these measures.

One area ASCA will be focusing on is ensuring that all outpatient surgery providers report on many of the same quality measures so that patients can make meaningful comparisons and informed decisions about where to have the procedures they need.

SDS: If the proposed changes are approved, how should ASCs prepare?

Prentice: We recommend that all ASCs make certain that once Medicare’s final payment rule is released, they have everything in place to continue reporting quality measures in 2019. We will need to wait and see exactly what that will entail.

What we do know now is that ASCs will be expected to report on at least two new measures next year: ASC-13: Normothermia and ASC-14: Unplanned Anterior Vitrectomy. The proposed rule makes no changes to the reporting requirements surrounding those measures. ASCs have begun collecting data this year to file the 2019 reports required.

SDS: Is there anything else about this proposed rule that ASCs should know?

Prentice: One topic the proposed rule did not address is noteworthy: It did not identify a release date for the Consumer Assessment of Healthcare Providers and Systems Outpatient and Ambulatory Surgery Survey proposed a few years ago. ASCA continues to have serious concerns about the length of that survey and the lack of an email option, but remains hopeful that CMS will address those concerns before requiring ASCs to begin using the survey with their patients.

Finally, the proposed rule also indicated that CMS will be reviewing the procedures that were added to the ASC list in the last three years. Recognizing the differences that can exist between Medicare and non-Medicare patients, ASCA supports this oversight and plans to submit research and comments confirming the safety and efficacy of these procedures in the ASC setting.

ASCA also encourages ASC physicians and staff who have firsthand experience with those procedures in the ASC setting to submit comments. We invite anyone with questions about the comment submission process to call ASCA for assistance.

(Editor’s Note: Learn more about the CMS proposed changes online by visiting: http://bit.ly/2Ni5SCo.)