The final ASC payment rule for 2019 provides some long-awaited improvements regarding how ASC payment rates are determined, according to the details released Nov. 2 by CMS.

“We view this rule from 50,000 feet as an affirmation that CMS sees the ASC model as a valuable part of the Medicare program and believes that we can play a role going forward in reducing costs for the Medicare system,” says Bill Prentice, chief executive officer of the Ambulatory Surgery Center Association (ASCA).CMS made several changes that have been on ASCA’s wish list for years. “We look forward to seeing the impact of these changes in 2019, and we expect to see additional migration to the ASC setting,” Prentice says. “One thing we know is when cases migrate to the surgery center setting, the healthcare system saves money.”

The new rule has changed the way ASC payment rates are updated by tying their rate increases to the same inflation rate that has been used for hospital outpatient departments (HOPD). For instance, for both ASCs and HOPDs, the inflation update factor (before reductions) will be 2.9%. ( Prior to this change, ASC payments were updated using an inflationary measure related more closely to the cost of consumer goods than to the costs involved in providing healthcare. This resulted in increasingly divergent Medicare reimbursement between ASCs and HOPDs. “We have been asking, probably for a decade or more, to be updated for inflation on the same terms as [HOPDs],” Prentice says. “In this rule, [CMS] did that, and it will help us.”

ASCs still will not be paid the same as HOPDs, but at least the difference between the two reimbursements no longer will increase because of the inflationary measure applied to the updates, Prentice notes.

“We see this as a positive element that will encourage more ASCs to see Medicare patients,” he says. “Putting ASCs on the hospital market basket is a strong signal to ASC physicians that CMS values what they do.”

More surgeons will bring Medicare cases to their surgery center, which could save money for the Medicare program as ASCs, Prentice predicts.

As the entire ASC model is based on providing efficient care, Prentice believes the new rule and its resulting better reimbursement will not cause ASCs to deviate from that model.

“ASCs still are reimbursed roughly half of what a [HOPD] receives for performing the same procedure on a Medicare beneficiary,” he explains. “The Medicare payment change for ASCs does not make rates closer to each other, but it prevents [rates] from getting further apart from each other based on the inflation measure used to set the new rates.” Another change in the 2019 Medicare payment rule for ASCs will make it more feasible for surgery centers to take on cases with expensive implants and other devices.

“The change is moving the device-intensive threshold from 40% to 30%, which makes it more likely a surgeon will bring a device-intensive procedure to the ASC,” Prentice offers.

The device-intensive policy involves the cost of a device vs. the cost of the procedure. Previously, the rule dictated that if the device costs 40% or more of the total procedure’s cost in the HOPD setting, then the ASC will be reimbursed for the cost of the device.

Now that this threshold has been lowered to 30%, there are more procedures with devices that will meet the threshold. This means it could be more likely ASCs will be reimbursed adequately for the procedure, Prentice believes.

"This reduces the financial barriers to bringing device-intensive procedures to the ASC,” he says. “It was hard to actually come out even financially on them before.” ASCs will submit the procedure codes for those procedures as before. Medicare has included reimbursement for the devices in its payments for those codes already, Prentice adds.

Another rule update concerns pain management. Previously, ASCs were not permitted to be paid separately for certain nonopioid pain modalities. With the Trump Administration focused on combatting the opioid epidemic, the goal is to find nonopioid alternatives for surgical and other pain.

Under the new rule, ASCs can be reimbursed separately for one specific alternative — Exparel, a long-acting local anesthetic.

Prentice notes that the updated rule applies only to Exparel. However, with other long-acting local anesthetics and other nonopioid alternatives heading to market soon, he hopes the rules will be amended further at a later date to expand choices available to ASCs.