WASHINGTON WATCH

Legislative and Regulatory Challenges and Opportunities Facing the Ophthalmic ASC in 2016

BY MICHAEL A. ROMANSKY, JD

A lame duck President; a gridlocked Congress; the majority party in disarray; a vicious Presidential election campaign; a vacuous debate on healthcare policy. What does this portend for our healthcare system?

Ascertaining the answer to that question is way above my pay grade. That said, in many ways, these situations will have little impact on the legislative and regulatory matters of concern to our ophthalmic ambulatory surgery centers. Let’s drill down and focus on the priorities of the Outpatient Ophthalmic Surgery Society (OOSS) and our strategies for interacting with policymakers so we can enable our centers to not just survive, but thrive in this increasingly regulated and cost-conscious healthcare environment.

Office-based Cataract Surgery

This past summer, the Centers for Medicare and Medicaid Services (CMS) issued a Request for Information regarding the advisability of providing a facility fee for cataract surgery performed in the physician’s office. The agency stated, “We believe that it is now possible for cataract surgery to be furnished in an in-office surgical suite, especially for routine cases . . . in patients with no comorbidities . . .” From the OOSS perspective, there is a clear and unequivocal response: This is a bad idea that, if implemented without adequate regulatory oversight and safeguards, potentially threatens the health and safety of patients.

Why are we so skeptical? First, although cataract complications are infrequent, they can be vision- and life-threatening. And, despite the meticulous care and preoperative assessment provided by the surgical team, it is generally unknown in advance whether complications will occur and which are more likely to occur. Moreover, if we define candidates for surgery in the office suite as those with no comorbidities, the universe of patients eligible for office cataract surgery will be miniscule. OOSS engaged 170 ophthalmic ASCs (representing more than 400,000 cases) in a study to assess comorbidities in our patients. Sixty-four percent presented with hypertension and 95% are taking five or more prescription medications. Only 6% of patients presented with no coexisting conditions.

The bottom line is that the overwhelming majority of cataract patients present with comorbidity profiles that warrant rigorous attention to patient health and safety — namely infection control, environment, anesthesia, nursing, governance, and supervision — inherent in the federal ASC Conditions for Coverage. In contrast, the surgical suite in the physician’s office is not, at present, rigorously regulated by federal or state government. The OOSS position is unequivocal. Consideration of providing payment incentives for office cataract surgery is misguided and premature, and should be deferred until CMS:

1. Further considers the patient health and safety risks to cataract patients who might be treated in offices rather than ASCs or hospitals;

2. Develops standards of care for office surgical suites that are comparable to those applied to ASCs with regard to the protection of the health and safety of Medicare beneficiaries;

3. Identifies a model for the appropriate regulation of office-based surgical facilities and the enforcement of health and safety standards;

4. Implements a pilot or demonstration project in limited geographic areas with respect to which quality of care, patient health and safety, and payment in the office cataract facility can be adequately evaluated.

OOSS conducted the comorbidity study discussed above, submitted detailed comments to the agency on its request for information on the advisability of paying for office cataract surgery, enlisted the support of other ophthalmology and ASC organizations to our cause, and is meeting with key policymakers at CMS and in Congress to ensure that our patients are treated in an appropriately regulated environment like the ASC.

Ophthalmic ASC Sterilization Practices

Notwithstanding the exceptional record of ASCs in providing vision-restoring surgical care to millions of Medicare patients each year with negligible infection rates, the ophthalmology and ASC communities continue to battle over appropriate infection control standards for ophthalmic ASCs. In 2014, CMS issued an update to the Medicare Conditions for Coverage mandating that immediate use steam sterilization (IUSS) could no longer be used in the ASC to clean instruments. Such a policy appeared to require ASCs to utilize terminal sterilization units and likely acquire many more sets of instruments.

OOSS, the American Society for Cataract and Refractive Surgery (ASCRS), and the American Academy of Ophthalmology (AAO) have begun a comprehensive effort to educate CMS staff regarding the etiology of TASS and endophthalmitis and the current sterilization and instrument cleaning practices of ophthalmic ASCs. We’ve made some progress. CMS believes that the term IUSS, which can no longer be used on a routine basis, refers to the practice formerly known as “flash” sterilization. According to the agency, most eye centers are utilizing short-cycle steam sterilization, “a form of terminal sterilization that is acceptable for routine use for a wrapped/contained load where pre-cleaning of instruments is performed according to the manufacturers’ instructions, and the load meets the device manufacturer’s instructions for use (IFU), includes use of a complete dry time and is packaged in a wrap or rigid sterilization container validated for later use.”

Facilities must be vigilant in conforming all cleaning procedures to the directions applicable to all equipment, instruments, and supplies. Compliance can pose challenges. The manufacturer’s instructions for use that accompany ophthalmic instruments and cleaning baths may call for the use of enzymatic cleaners, a practice that OOSS, ASCRS, and AAO believe is associated with outbreaks of toxic anterior segment syndrome (TASS). (Our organizations have issued Recommendations Regarding Use of Enzyme Detergent for Cleaning Intraocular Surgical Instruments.) We will continue to engage in a dialogue with CMS, as well as FDA and other standard-setting organizations, such as the Association for the Advancement of Medical Instrumentation, until we can reach agreement on appropriate sterilization and infection control standards.

ASC Payment Rates

ASC payments are annually updated for inflation by the percentage increase in the CPI-Urban less a multifactor productivity adjustment; for 2016, the overall update factor is 0.3%. Payments are also adjusted to reflect modifications to hospital outpatient rates; as such, adjustments to specific ophthalmic procedures, varied widely: cataract 66984 and glaucoma surgery 66170, +2%; corneal transplant 65755 and laser retina 67040, +7%; vitrectomy 67036, -71%.

For 2017, the Medicare Payment Advisory Commission has recommended that ASCs receive no update in payment rates and that facilities be subject to some form of cost reporting. MedPAC’s recommendations are often ignored by Congress and CMS. We believe this proposal represents the opening volley in a 2017 budget battle that will play out throughout the next year. OOSS and the ASC community will continue to urge CMS to update rates by the Hospital Market Basket, which is provided to HOPDs and is typically about one point higher than the CPI-U. Because ASCs treat the same patients for the same conditions and consume comparable resources in delivering surgical care, there is no justification for ASCs receiving a lesser increase than hospitals.

As a failsafe, the ASC community has developed legislation, The ASC Quality and Access Act of 2015, which would direct CMS to provide ASCs with the same update hospitals as well as add an ASC voice to the Advisory Panel on Hospital Outpatient Payment (important as our rates are linked to HOPD payments) and require CMS to disclose the criteria it uses to determine which procedures may be performed in the ASC setting.

Leveling the Playing Field

Federal policymakers are at last beginning to comprehend the perverse consequences of a reimbursement system that overpays hospitals and underpays ASCs for providing the same services. OOSS and the ASC community have been informing policymakers of an insidiously wasteful practice under which hospitals acquire ASCs and convert them to HOPD status to achieve substantially higher reimbursements. To illustrate, the day after such a conversion, the new “hospital” entity (same patient, same location, same surgeons, same staff, same facility costs) receives $1,750, compared to the $976 it was paid the day before when it was an ASC. Last year’s bipartisan budget legislation put an end to this practice, placing a ban on hospitals acquiring off-campus facilities, such as ASCs and physician offices, and then the charging the Medicare program and beneficiaries at the higher hospital rates.

This is just the tip of the iceberg. Any time a patient is treated in an HOPD rather than an ASC, the government and the beneficiary pay a much higher price. MedPAC, the HHS Office of the Inspector General, and a plethora of health policy analysts argue that HOPDs should be paid at the ASC rates (which is about 45% lower than current hospital payments) for services: (1) that are furnished in ASCs more than half the time; (2) that are infrequently provided with an emergency room visit; and (3) where patient severity in the HOPD is no greater than in the ASC. Most high-volume eye surgeries would meet these parameters. Will Congress take the plunge and adopt this proposal? Time will tell, but the approach is being seriously considered on Capitol Hill.

Why should ASCs care about this development when our rates might not increase? First, services will undoubtedly migrate from the HOPD to surgery centers — many hospitals already are less than enamored about ophthalmic surgery and this concern would be heightened if payment rates are substantially reduced. Second, the fact that ASCs and hospitals would be reimbursed at the same rate for many procedures solidifies our case that our centers should receive the same annual update. Importantly, ASCs and hospitals would have identical interests in lobbying for higher payments, allowing surgery centers to ride the coattails of the gargantuan hospital lobbying forces.

All in all, were Congress to adopt this policy of leveling the playing field with respect to HOPD and ASC rates, the increase in revenues to ASCs from expanded volume of cataract, vitreoretinal, and other cases would likely be substantial.

ASC Quality Reporting: Ophthalmic-specific Measures

Although quality reporting has not posed a particularly burdensome exercise to date, the ophthalmology and ASC communities have been concerned with CMS initiatives to transition from process- to outcomes-based measures that focus on cataract surgery. To date, CMS has proposed several — very misguided, we believe — ophthalmic measures, including reporting on (1) Complications that Occur Within 30 days Following Cataract Surgery that Require Additional Surgical Intervention, and (2) Improvement in Patient’s Visual Function Within 90 days Following Cataract Surgery. We have managed to essentially kill these measures by arguing that they fail to meet what we believe are the foundational criteria for facility-level quality reporting measures in the ASC. Any ASC measure quality should:

• Relate to an episode of care that occurs within the confines of the ASC;

• Encompass data that is available within the ASC;

• Be collectable by the ASC staff;

• Generate conclusions that are actionable by the facility, thereby enabling the ASC to potentially improve the quality of care offered to its patients;

• Have been validity-tested in the ASC environment.

Let’s be clear on one point: the government is clearly intent on devising and implementing measures relating to high-volume services and specialties, such as ophthalmology. Increasingly impatient with the efforts of CMS and other agencies to develop and proffer reasonable and appropriate ASC quality measures, the ophthalmology and ASC communities have decided to develop our own measures that meet the aforementioned parameters, are not unduly burdensome, and will potentially generate meaningful data for consumers. Among these are two that CMS and the National Quality Forum’s Measures Application Partnership appear to believe have merit: Unplanned Anterior Vitrectomy in Cataract Surgery Patients and Incidence of Toxic Anterior Segment Syndrome (TASS) in Cataract Surgery Patients. These measures are well supported by the clinical literature, and we believe that measuring these events in the ASC and HOPD settings will present an opportunity to improve the quality of cataract surgery for Medicare patients who receive their care in an ASC. ■