ASC Adviser

ASC Payment: Myth and Reality

In the bowels of the Centers for Medicare and Medicaid Services (CMS), bureaucrats are furiously putting the finishing touches on a regulation that will revamp the manner in which ambulatory surgery centers (ASCs) are paid and regulated. In the quarter-century since Congress mandated that CMS pay ASCs for the facility services they provide, but for modest additions to the list of services that are permitted to be performed in ASCs and occasional cost-of-living adjustments, little has changed. In fact, the base payment rates to ASCs remain unchanged since 1989.

In the years since the ASC community effectively killed a draconian 1998 payment rule, the Outpatient Ophthalmic Surgery Society (OOSS) — with the American Society of Cataract and Refractive Surgery, American Academy of Ophthalmology and the ASC community — has cornered, consulted with and cajoled CMS into developing a better reimbursement mousetrap that will enable ophthalmic surgical facilities to continue providing high quality and lower cost care to Medicare patients. This new payment system will become effective on Jan. 1, 2008.

Our Differences and Similarities

Let’s examine the differences between our industry’s positions and the proposed rule issued by CMS:

■ Coverage of services. Currently, ASCs can only be reimbursed for services that have been approved for being performed in an ASC; the agency has a horrific record in updating the list to account for advances in technology. The ASC community advocates that CMS should replace this "inclusive" list of approved procedures with an "exclusive" list. Any service performed in a hospital outpatient department (HOPD) would be covered in an ASC unless the agency has determined that the specific procedure is unsafe when performed in an ASC. Our position was essentially adopted by CMS and, effective in 2008, virtually every ASC-performed ophthalmic surgical service will be eligible for payment.

■ Facility payment rates. The ASC community believes that ASC payments should be linked to the payment rates that HOPDs receive under Medicare, generally paying ASCs 75% of the HOPD fee schedule amount for each covered service. CMS has embraced the concept of this "crosswalk" between hospital and ASC rates but has proposed to establish the ASC conversion rate at 62%. Even more disappointing, the agency has proposed to pay for lower intensity "office-type" cases at the lower of the ASC conversion rate with the practice expense amount paid under the Medicare physician fee schedule.

■ Annual updates. We strongly believe that if hospital and ASC payment systems are to be aligned, ASCs should receive the same annual updates afforded HOPDs. Nonetheless, CMS has proposed that ASCs receive the Consumer Price Index-Urban, while hospitals continue to be updated on the basis of the higher Hospital Market Basket.

■ Bundling of services. The ASC industry believes that ASCs should receive the additional payments that HOPDs are provided for innovative drugs and devices, ancillaries, implants and other items and services. In the proposed rule, CMS maintains different payment rules for ASCs and HOPDs.

The Devil in the Details

It is indisputable that, to date, the ophthalmology and ASC communities have had a measurable impact on CMS’ rule-making effort. On the "big issues" relating to fundamental payment system reform, CMS has incorporated our recommendations. ASC payments will be linked to hospital rates. Rates will be updated annually. Hundreds more procedures will be eligible for payment. For vitreoretinal surgery, payments will increase by several hundred dollars per case. Under the proposed 62% ASC conversion rate, the cataract facility fee would drop slightly for a year or two and then escalate, commencing in 2010.

The devil is in the details and these details are being formulated at this moment. OOSS and its members submitted comprehensive comments to the proposed ASC payment rule. We have joined the ASC community in supporting federal legislation that would, among other things, direct CMS to increase the ASC conversion factor from 62% to 75%. Our legislative and regulatory recommendations are tethered to the principles that patients and their surgeons — not the federal government — should decide whether surgery will be performed in a hospital or ASC. It is our position that ASC payments should be sufficient to enable facilities to continue to offer patient-friendly, high-quality care to the nation’s Medicare beneficiaries. OM

The Outpatient Ophthalmic Surgery Society (OOSS) is a professional medical organization that provides advocacy, education and practice management support to the nation’s ophthalmic ASCs. For more information about OOSS, contact Claudia A. McDougal, executive director, at 866-892-1001 or visit www.ooss.org.