From the Hill

ASCs and CMS: An Ongoing Battle

By Michael A. Romansky, JD

Will the White House change hands in November? Will the Republican Party take over the Senate? Will the landmark healthcare reform legislation enacted barely 2 years ago jog toward implementation, be decimated by a Supreme Court rejection of the individual insurance mandate or be repealed by Congress? Will the economy recover? Will SGR be resolved in 2012 — or in our lifetimes? For purposes of our discussion today — the fate, the profitability, the extent of regulation of the ophthalmic ambulatory surgery center — does the resolution of these “big picture” political, health policy, economic and regulatory matters make a critical difference?

At the risk of overstating the point, I think not. The legislative and regulatory issues that affect the ASC industry aren't generally adjudicated by the White House or the Speaker of the House of Representatives. Our battles are gutted out in the mid to upper levels of the Centers for Medicare and Medicaid Services. Our advocates are a handful of key Senators, Representatives and staffers, who by virtue of their positions and the influence of their constituents on ASC issues, or their interest in the benefits offered by surgery centers, are on our side.

My point is this: As a progressive ophthalmologist operating in an ASC, working with the Outpatient Ophthalmic Surgery Society (OOSS), you can make a tremendous difference in ensuring that the ophthalmic ASC remains a high quality, cost-effective, patient-centered component of the nation's healthcare delivery system and a profitable part of your practice.

It's quite remarkable that over the past quarter-century, as professional fees have declined year after year, ASC facility fees have gradually risen or remained stable. The list of procedures for which ASC facility reimbursement is provided now includes virtually every ophthalmic surgical service. And, for two decades, the ASC community has beaten back every effort of the hospital community to curtail surgeon ownership of ASCs. During this past year, our efforts have led to:

• The repeal of CMS' arbitrary limits on the surgeon's ability to refer a patient to an ASC and perform surgery on the same day
• An increase in the ASC cost of living adjustment
• Adoption of an ASC quality reporting program by CMS that comports to the standards developed by the ASC industry.

Consideration of the challenges in 2012 requires a look back at 2011, because, as is almost always the case, many of the battles will remain the same.

“Big” Healthcare Reform Versus
“ASC” Healthcare Reform

I lack the foresight and wisdom to predict whether The Patient Protection and Affordable Care Act will survive well beyond the 2012 elections. The only provision of the law that directly impacted ASCs was the imposition on all providers of a negative “productivity adjustment” against annual updates (in 2012, 1.4%). However, one thing is clear, at a time when public policymakers are searching for meaningful healthcare reform — improving quality and access, while reducing costs — ASCs should be an indelible part of the solution. The country's 5,100 surgery centers are doing an exemplary job of expanding their role to meet the surgical needs of the Medicare population while saving hundreds of millions of dollars annually. Nowhere is this phenomenon more evident than in the ophthalmic ASC, where 60% of patients elect to undergo cataract surgery.

OOSS believes that the ASC industry needs its own version of “healthcare reform” in the form of enactment of H.R. 2108 and S. 1173, The Ambulatory Surgical Center Quality and Access Act of 2009. Among other features, this bill would promote an ASC's ability to continue to serve Medicare patients by improving facility payments to our centers. This would be accomplished by: (1) providing ASCs an annual inflation update at the Hospital Market Basket (used to pay hospitals) rather than the lower Consumer Price Index – Urban (CPI-U); (2) improving the new Medicare ASC quality reporting program; (3) establishing a value-based purchasing program under which ASCs that meet quality standards are rewarded with bonus payments and (4) expanding the ASC industry's consultative role in policy development activities at CMS. Working with the ASC and ophthalmology communities, and with OOSS members at the grassroots level, our goal in 2012 will be secure passage of this vital legislation.

ASC Payment Rates

In November, CMS released its final 2012 Medicare ASC payment regulation. Despite government-wide cost-containment pressures, facility payments for ophthalmic services increased, although slightly, across the board as CMS provided a 1.6% update (the highest in almost a decade), almost a point higher than offered in the proposed rule. Payments for certain retina procedures received substantial increases. Unfortunately, looking forward, because the Congressional “Supercommittee” charged with identifying over a billion dollars in deficit reductions failed in its mission, it's likely that ASC and all other provider payment rate updates in 2013 will be reduced through “sequestration” by 2%.

While ASCs received a satisfactory update for 2012 from a policy standpoint, CMS once again refused to adopt our industry's recommendation that the Hospital Market Basket rather than the CPI-U be used as the index for updating ASC payment rates. As noted above, the ASC industry will continue to seek this important change via legislation and regulation and hope to be armed with more ammunition in the years ahead. The HHS Office of Inspector General (OIG) will conduct a study in 2012 of the “appropriateness of Medicare's methodology for setting ambulatory surgical center payment rates under the revised payment system.” We will certainly raise our concerns with the OIG regarding the impact of cost-of-living differentials on the growing disparity in payment rates to ASCs and hospitals. Policymakers are also taking an interest in documented reports that hospitals are acquiring ASCs and converting them to HOPDs (enabling them to bill for surgical services at the higher hospital rates).

Quality Reporting

For years, our industry has been touting ASC quality as equal or superior to that of hospitals. Over the next several years, surgery centers will have many opportunities to prove this point. In what is likely to be the most significant change in the Medicare ASC program since the advent of the program, ASCs will be required to submit quality data to the CMS, beginning in October 2012. We're pleased that the agency adopted a number of the recommendations made by OOSS and the ASC community:

• Reporting will commence Oct. 1, 2012; the proposal included the impractical start date of Jan. 1.
• Effective Oct. 1, 2012, ASCs will be required to report on: patient burns; patient falls in the ASC; wrong site, wrong side, wrong patient, wrong procedure, wrong implant; hospital transfer/admission; and prophylactic IV antibiotic timing. (As recommended by our industry, CMS only included those measures developed by the ASC Quality Collaboration, of which OOSS and the ASC Association are members.) Effective in 2013, facilities will be required to report on two additional measures: 2012 volume of certain procedures; and, demonstration that a safe surgery checklist was in use in 2012. In 2014, in addition to potential measures in specialty areas, CMS will add Influenza Vaccination Coverage among Healthcare Personnel.
• CMS is empowered to confer penalties of 2% on facilities that fail to comply with quality reporting requirements. The ASC community will continue to strenuously argue that penalties should be phased in over time.

Our industry's legislation would go further than the CMS program in some important ways, mandating that to the extent possible, HOPDs and ASCs report on comparable quality measures, and that such data be made available to the public in the same geographic areas on a side-by-side comparative basis. In addition, CMS would have to publish on a geographical basis comparative beneficiary copayment amounts. Finally, if facilities are to be penalized for failure to report, we believe that a value-based purchasing program should be established to reward those facilities that have excellent quality results.

Medicare Conditions for Coverage

No development in Washington has generated more confusion and aggravation for ophthalmic surgery centers over the past 2 years than the revised Medicare ASC Conditions for Coverage (CfC) issued in 2009. The most arbitrary and capricious of the rules prohibited, except under narrow circumstances, a patient from receiving surgical care in an ASC on the same day that the surgeon refers him to the facility. The rule has had the onerous effect of precluding same-day diagnosis for and performance of Yag procedures to the inconvenience of beneficiaries and consternation of surgeons.

After 2 years of intensive advocacy by OOSS and ASC and ophthalmology communities, the White House and HHS announced that this regulation was being withdrawn as one of many that were “unnecessary, obsolete, or burdensome … to American hospitals and healthcare providers.” CMS also issued a proposed rule eliminating the specific list of emergency equipment ASCs must have on hand, and allowing facilities, in conjunction with medical staff and their governing bodies, to develop policies and procedures that specify emergency equipment appropriate to the services are they provide. Despite these victories, there remain a plethora of CfC-related challenges as ophthalmic ASCs face new and sometimes ambiguous and inconsistently applied standards.

So What's A Facility To Do?

We may wish that healthcare reform hadn't been enacted. We may be irritated that CMS continues to try to nickel-and-dime surgery centers out of reasonable annual updates even though ASCs are the best example of value health care in the entire delivery system. With the policies developed and implemented by OOSS and the ASC community, in conjunction with support from ophthalmic societies, government relations programs and grassroots lobbying, ophthalmic agencies have not only survived, but have thrived in this competitive, highly regulated and budget conscious environment.

Indeed, over the past several months, we've accomplished several important goals in a highly regulatory, budget-conscious environment: repeal of the draconian limitation on same-day surgery; implementation of a quality reporting program that includes reasonable and achievable measures and standards; and adoption of our most extensive ASC update in a decade. ◊