New APCs will profoundly affect urology centers
New APCs will profoundly affect urology centers
(Outpatient surgery centers are only now beginning to determine the full impact of the Baltimore-based Health Care Financing Administration's Medicare ambulatory payment classification [APC] regulations for ambulatory surgery centers [ASCs]. The hospital outpatient reimbursement system is based on the APC system, as well. Susan R. Kizirian, RN, BSN, MBA, executive director of Southeastern Urological Center in Tallahassee, FL, discusses what the impact of APCs is likely to be for urological surgeries.)
ORM: How do the new APCs affect urological procedures?
Kizirian: Several high-volume CPTs were dramatically affected. One high-volume urologic procedure that was deleted is the cystometrogram (CPT 51726). CPT 52000 (Cystoscopy) and 55700 (Prostate Biopsy) are two other high- volume urologic procedures whose reimbursement rates were lowered.
For CPT 52000, cystoscopy, which is an endoscopic procedure for visualization of the bladder and ureters, the proposed reimbursement rate was lowered by 32.5%. The rate changes from $314 to $212 under APC code 521. This procedure is the third most performed procedure across all settings in the United States, according to Physician Claims Data, Medicare Part B Extract and Summary System, as of July 22, 1998.
Also, CPT 55700, prostate biopsy, is to be decreased by 37%, from $422 to a new rate of $265, under APC 547. This is the 12th most performed procedure in the United States across all settings.
So the primary high-volume codes in urology will be lowered under the proposed APCs. That's the bad news.
ORM: Is there any good news about urology procedures?
Kizirian: CPT 52601, transurethral resection of the prostate - a procedure performed through a resectoscope to excise the prostate - is the 24th most performed procedure across all settings in the United States. Its reimbursement, APC 524, is to be increased from $595 to $1,131.
Additionally, extracorporeal shockwave lithotripsy, CPT 50590, is proposed for reimbursement at the ambulatory surgery center site of service at $2,107 under APC 527. This is the 73rd most performed procedure across all settings in the United States. HCFA had added this procedure to the ASC approved list in the early 1990s, but the procedure was frozen through an injunction filed by the American Lithotripsy Society due to flaws in the costing methodology used by HCFA to determine the reimbursement rate.
ORM: So, given these changes, what is the overall impact likely to be on ASCs that perform urology procedures?
Kizirian: The net effect is extremely adverse. Both cystoscopy, CPT 52000, and prostate biopsy, CPT 55700, have been dramatically reduced to levels below the cost of supplies and personnel costs. So what will happen is that ASCs will be unable to perform these procedures for Medicare patients. They will not be able to do so from a financial perspective, and Medicare patients will lose the ASC as a site of service for these procedures. They will have to be done in either a physician's office-based surgical unit, which are unregulated in almost all states, or in a hospital.
I would estimate that a urology center's volume for these two procedures comprises one-fourth to one-third of the volume of surgery annually across all payer types.
ORM: How will the commercial side be affected?
Kizirian: This proposed rule is the most massive change the ASC industry has faced to date. What will happen in the commercial arena is that if this proposed payment methodology and rates are implemented, most commercial payers will follow suit. So essentially, when you analyze the impact of this proposed rule, you need to look at how it will affect reimbursement across all payers.
At Southeastern Urological Center, we are participating with professional associations and trade associations in letter writing to our congressmen, preparing data on costs, and preparing comments to HCFA. We are letting HCFA know that what they are saying reimbursement rates should be and what we know in the industry about our costs do not agree. And with a high degree of certainty, we will see small ASCs that are single-specialty urology centers cease to exist if and when these APCs are implemented.
These proposed reimbursement rates would drive the choice of the site of service to physician office surgical suites or to the hospital. In the proposed rule published June 12, 1998, in the Federal Register, there is reference that supply fees will be added to CPTs on the physician reimbursement fee schedule so that procedures can be performed in the office setting. We think the payment rates should be site of service neutral rather than there be an incentive or disincentive - such as performing procedures at the ASC with reimbursement rates set at below costs - to do the procedure at some specific site that is not appropriate to the patient's health status. And because the Hospital Outpatient Reimbursement Methodology Proposed Rule is not expected to be implemented until after the Year 2000 due to computer problems at HCFA with Year 2000 issues, ASCS are definitely being put in an extremely disadvantageous position.
ORM: How difficult for your reimbursement staff is the switch to APCs?
Kizirian: Our information systems is addressing that now. There will be many difficulties in making the transition and meeting the proposed implementation deadline. (HCFA's deadline was still listed as Oct. 1, 1998, at the time Outpatient Reimbursement Management was published, although HCFA was considering an extension.)
They have not given the ASC industry enough time to analyze these sweeping changes or the time to make software changes. Again, HCFA officials themselves say they have Year 2000 computer glitches, so one of our questions is, "Can they handle this change?"n
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