Industry experts are expressing their appreciation for a 3.1% increase in Medicare payment rates in 2024 for ambulatory surgical centers (ASCs) that meet applicable quality reporting requirements. The increase in reimbursement is among the most significant changes under the Centers for Medicare and Medicaid Services (CMS) Final Rule for 2024, which went into effect on Jan. 1 and affects approximately 6,000 ASCs.
“Any time reimbursements aren’t cut, it’s a win,” says John T. McAllister, MD, spokesperson for the American Academy of Ophthalmology (AAO) and a practitioner at Northern Virginia Ophthalmology Associates in Falls Church, Virginia. “When reimbursements are increased, it’s a reason to celebrate. So, although 2023’s increase of 3.8% was somewhat larger, it’s still a big advocacy victory to have CMS award another 3.1% increase to ASCs’ payment rates.”
Dr. McAllister says the increases in 2023 and 2024 are particularly important and timely because the cost to provide care has increased due to a combination of high inflation and fewer people seeking in-person work.
Michael Romansky, JD, legal counsel for the Outpatient Ophthalmic Surgery Society (OOSS) in Washington, D.C., was also pleased with the increase. “ASCs have enjoyed an update for 25 straight years, and this year’s 3.1% increase is one of the highest ever,” he said. “It’s important to realize, however, that the updated percentage is the average across all surgical procedures.”
Kevin J. Corcoran, COE, CPC, CPMA, FNAO, senior consultant and co-founder of Corcoran Consulting Group in Springfield, Missouri, says the increase for intraocular procedures actually range from 3.9% to 154%, which is considerably higher than the 3.1% increase. The only intraocular procedure to see a reduction in reimbursement is implantation of the miniature telescope, which has decreased by 7.4% (Table 1).
Reimbursement for specific procedures increase as follows: 7.5% for cataract surgery; 9% for YAG; 8.4% for blepharoplasty; and 11% for implantation of iStent devices concurrent with cataract removal. Retinal procedures and corneal transplants increase by 4%, on average. “These are very significant increases that encompasses the vast majority of ophthalmic surgeries,” says John Blanck, a partner at Synergy Ventures in Kansas City, Missouri.
Calculating the Numbers
CMS’s update is based on the projected hospital market basket percentage increase of 3.3%, reduced by a 0.2 percentage point for the productivity adjustment. “Having CMS permanently maintain the application of the hospital market basket in computing the annual ASC payment will be an important advocacy benchmark in order to have ASCs consistently deliver care in this setting,” says Matthew Bauer, MBA, senior director of market access strategy at Glaukos Corporation in Aliso Viejo, California.
Although Dr. McAllister is grateful that CMS will continue to pay for outpatient surgeries using the hospital market basket at least through 2025, he says that CMS unfortunately continues to apply a secondary weight scalar for calculating ASC payments. ASC payments are based off of hospital outpatient department (HOPD) payments and then adjusted by a weight scalar.
HOPD payments already have their own weight scalar, however, so ASCs receive two slashes prior to having their payment determined. This is evidenced by the drastically different conversion factors for each setting. “We argue that this is inappropriate, because over time an ASC will continue to increase at a lower rate than a hospital,” Dr. McAllister says. “We have argued and will continue to argue against this process at future opportunities.”
The APC Family Grows
Along with the new ruling, CMS also established a new sixth level in the Intraocular Procedures Ambulatory Payment Classification (APC) family base under the Hospital Outpatient Prospective Payment System (OPPS). CMS divided APC 5492 into two APCs based on geometric mean costs, and created the new APC 5493 in which both CPT codes 66989 and 66991 were reassigned. Medicare will pay $4,985 for these microinvasive glaucoma surgery (MIGS) services.
“Adding a sixth level in the intraocular APC family will be a net positive for the ophthalmology field,” Dr. McAllister says. “The main value of CMS adding the sixth level is that it smooths the curve of the reimbursement distribution.”
CMS’s previous set of five APCs had a nearly $9,000 gap between lower and higher APCs. “As new technologies emerged, it became evident that there weren’t options to sufficiently capture the costs of providing these newer technologies,” Dr. McAllister explains.
By creating a sixth APC, CMS has allowed for more appropriate reimbursement of newer surgical procedures. “This should benefit most ASCs, because ASC payment rates are based off the HOPD APC rates. ASCs will now be paid for several of the extra expenses that they incur during the process of providing this care,” Dr. McAllister says.
Because ASC payments are a percentage of the HOPD payment, Bauer says this increases the 2024 payment for certain procedures such as stents, by more than 125%, compared to 2023—particularly with standalone trabecular bypass stents like the iStent infinite (0671T).
In the interval between the proposed rule and the final rule, CMS increased the 2024 final payment rates for these services by about 6%, which was unexpected, Corcoran says.
Other Changes to APCs
In addition to changing the number of APCs available, CMS also changed the APC to which a number of codes are assigned. This will change the reimbursement of these codes, Dr. McAllister says.
In doing so, CMS unfortunately designated some winners and some losers. For instance, the new combined MIGS/cataract codes 66989 and 66991 were moved from the new technology APC to the new 5493 APC, which is more than a $700 increase. Furthermore, 0671T was switched from 5491 to 5493, which is almost a $3,000 increase, and 0449T moved from 5492 to 5493, about a $1,000 increase.
In the process of making more APCs, CMS also dropped the reimbursement for higher levels. Therefore, even though the iris prosthesis codes 0616T, 0617T, and 0618T move up from 5495 to 5496, they effectively drop $1,500 in reimbursement, Dr. McAllister notes.
It’s important to note that these rates are lower in the ASC setting because the ASC conversion factor is lower than the HOPD. The final ASC conversion factor is $53.51 versus $87.38 for the HOPD.
Reporting Measure Remains Voluntary
One big disappointment was that CMS did not repeal the quality measure that asks facilities to evaluate a patient’s visual function 90 days after cataract surgery (ASC-11). However, the good news is that the measure will remain voluntary at least through 2024.
“It would be inappropriate to make this mandatory because ASCs aren’t licensed or qualified to evaluate a patient’s visual function,” Dr. McAllister says. “We would prefer that CMS remove this completely from the ASC Quality Reporting Program, but are grateful that the measure remains voluntary in this final rule.”
Blanck would definitely support a repeal because ASCs don’t have the ability to impact visual acuity, and furthermore, don’t have the data in their charts. The only way for ASCs to report on the data, would be for practices to send it to an ASC. “It’s inefficient and inappropriate for them to be the middle man,” he says.
Adds Romansky, “OOSS will continue to press CMS to withdraw this misguided measure. That said, we can live with the measure being voluntary, although it would seem like few, if any, facilities will opt to report on their patients’ visual function.”
Effective Case Costing
If you’re a manager or owner of an ASC and you don’t calculate the cost of each individual procedure, you’re playing with fire, says Michael Patterson, DO, ophthalmologist and part owner of Eye Centers of Tennessee and Cataract and Laser Center in Crossville, Tennessee.
Dr. Patterson points out that staffing costs at medical centers are at an all-time high. “It used to be fairly inexpensive to hire people at medical facilities because they offered stable jobs, but that’s no longer the case,” he says. If you’re going to keep your doors open, continue to employ your employees, and bring in new equipment and technology, you need to be sure to make a profit.”
Pay attention to the mix of procedures being done, and look carefully at how the changes in reimbursement will affect an ASC’s bottom line, Dr. McAllister says. The Final Rule Addenda AA provides the national payment rates for ASC-covered procedures. “It would be wise for each ASC director to run some calculations for next year’s projections,” he advises.
Along these lines, Blanck says that case costing is critically important to ensure that there aren’t any outliers in procedural or physician case costs. “It’s important to not only maximize an ASC’s profits, but to also ensure that it can continue to provide these procedures, invest in new technology, and hire the best staff,” he points out.
Corcoran says the most important factor in a profitable ASC is using a facility to capacity. “Case volume should be the highest priority,” he says. “While variable expenses are important and need to be watched, case volume has a greater impact on financial performance.”
Avoid Missing Revenue
An ASC can miss revenue by not using appropriate codes or modifiers, or by not billing for implants or allowed supplies. “Knowing the rules of proper coding is critical to avoid pitfalls, omissions, and to be properly reimbursed for the work performed at your ASC,” Dr. McAllister says. The American Academy of Ophthalmic Executives has created several resources to help with this.
Blanck would advise ASCs to carefully hire and train staff, have annual coding audits, and develop “cheat sheets” by payer and by procedure so an ASC knows which procedures are feasible for a patient based on the payer.
They should also retrospectively review all cases involving expensive devices and implants to ensure proper reimbursement. While this may seem too extensive, given that cataract cases with premium lenses, glaucoma stents, and billable supplies and drugs can now add almost $4,000 to each case, ASCs must have proper case costing, including matching revenue to expenses for these cases, Blanck says.
Final Thoughts
Medicare’s new payment rate increases ensure that ASCs can continue to provide high-quality, efficient, and effective ophthalmic surgery on Medicare patients, Blanck concludes. The increases make virtually all ophthalmic cases accessible at an ASC. While retina didn’t receive a large percentage increase, it still increased $78, which makes retina more feasible at an ASC.
Dr. McAllister says that there were several advocacy wins in CMS’s final rule for 2024 regarding outpatient surgery facility reimbursement, for which he is overall grateful. However, on the physician reimbursement side the situation is just the opposite. Medicare physicians are facing a significant cut in reimbursement for the upcoming year if Congress does not intervene. The 3.37% cut to physician reimbursement in CMS's 2024 Final Rule went into effect on Jan. 1, although in early January Congress was considering legislation that would mitigate or eliminate the Medicare reduction. OASC
