By Bill Prentice
ASCA is the leading advocate for the growth, success and sustainability of surgery centers across the U.S. ASCs have become a cornerstone of modern healthcare, providing cost-effective and high-quality outpatient care for millions of patients each year. Given what we know about the interests of the new administration concerning healthcare, we think our 2025 public policy priorities are well-positioned for serious consideration as the year progresses.
ASCA’s advocacy focus this year is primarily on improving reimbursement rates for ASCs, reducing regulatory burden and streamlining compliance.
Improving Reimbursement Rates
ASCs save Medicare more than $5.3 billion annually simply by existing as an alternative to other sites of service. ASCA is working with the Centers for Medicare & Medicaid Services (CMS) to adopt policies that encourage the migration of more procedures to the surgery center setting to generate even greater savings to the healthcare system.
This migration can be achieved by aligning the conversion factor, adjusting the ASC weight scalar and adding procedures to the ASC Covered Procedures List (ASC-CPL).
Aligning the conversion factor. CMS must continue to use the same formula to adjust ASC and hospital outpatient department (HOPD) payments for inflation each year. Before 2019, CMS used to update ASC payments based on the Consumer Price Index for All Urban Consumers (CPI-U), a number derived using a formula that measures the cost of commodities like milk, eggs and gasoline. Hospitals, on the other hand, would be updated based on the hospital market basket. Not surprisingly, that number, which measures the rising cost of medical goods and services, historically resulted in substantially higher reimbursement.
In 2019, as a result of ASCA advocacy, CMS started using the hospital market basket to adjust payments for surgery centers as part of a five-year pilot program. Factoring in the impact of the COVID-19 pandemic on procedure volume for part of that five-year period, the agency extended the trial an additional two years, until 2025.
During this trial period, we saw promising signs of procedure migration from the higher-cost HOPD setting to the lower-cost ASC setting. When analyzing surgical volume across three outpatient settings – HOPDs, ASCs and physician offices – surgery centers have increased the fee-for-service market share for the top four CPT codes by volume (a cataract code and three gastroenterology codes) and growth has outpaced that of HOPDs. For our highest-volume CPT code, a cataract code (66984), ASCs performed 74.4 percent of the volume across the three sites of service in 2019 and 79.6 percent of the volume by 2023. In that same time, the HOPD share dropped from 22.4 percent in 2019 to 18.7 percent in 2023. Even for a procedure with less room for growth in the ASC setting due to already high volume, ASCs were still able to shift more of these procedures to the lower-cost setting, generating savings for Medicare and its beneficiaries.
This shift can be attributed at least in part to the payment having kept pace with that of the HOPD rate due to the use of the hospital market basket. CMS needs to continue to use the hospital market basket for ASCs, ensuring continued migration and additional savings to the Medicare program.
Adjusting the ASC weight scalar. HOPD relative payment weights under fee for service Medicare have long been scaled for budget neutrality, similar to other Medicare payment systems. In 2009, when CMS aligned the ASC payment system with the payment system for HOPDs, the legislation directing the U.S. Department of Health & Human Services (HHS) to implement the revised ASC payment system required CMS to apply a second ASC-specific weight scalar in the first year of implementation of the new payment system. However, CMS has needlessly continued to apply this calculation to ASC payment weights annually. Even though the ASC payment system is tied to the HOPD payment system, our payments take a second cut.
We are continuing to insist that CMS eliminate the ASC weight scalar. When CMS aligned the ASC and HOPD update factors under the first Trump administration in 2019, it became even clearer that this secondary scaling adjustment must be eliminated to align the payment systems and motivate increased migration of surgery to the ASC setting. To generate additional savings and greater access to surgery centers for Medicare beneficiaries, the ASC weight scalar must be eliminated.
Adding procedures to the ASC-CPL. ASCA keeps requesting CMS to add procedures to the ASC-CPL when clinicians provide outcomes data supporting their inclusion. At the very least, CMS must exhibit greater transparency by publishing a rationale when declining to add procedures to the ASC-CPL that are requested by doctors performing these procedures on an outpatient basis safely every day. Surgery center physicians deserve to know exactly why CMS thinks certain procedures are unsafe to perform in the surgery center setting, so those clinicians have an opportunity to present relevant data to show the procedures are clinically justified to be on the ASC-CPL.
ASCA is working with CMS to add CPT codes 22630 (lumbar interbody fusion) and 22633 (combined interbody fusion with a posterior fusion) and cardiac ablation codes to the ASC-CPL for calendar year 2025.
Reducing Regulatory Burden and Streamlining Compliance
ASCA continues to work with CMS to reassess measures added in recent years to the ASC Quality Reporting (ASCQR) Program. ASCQR program participation remains high among ASCs. According to CMS’ 2025 ASCQR Program payment determination lists, of the 6,012 ASCs included in the release, 5,714 facilities will receive the full annual payment update (APU) for 2025. The other 298 ASCs required to participate did not meet all requirements for a full APU. That 298 number is down from 341 in 2024.
ASCA supports a robust ASCQR Program that fosters facility improvement and provides the public with information needed to select an appropriate site of care. However, when these elements are lacking, as with recently added measures – such as the ASC-20: COVID-19 Vaccination Coverage Among HCP – the program only increases the burden on facilities without providing any benefit to patients or healthcare facilities. In addition, no measure should be added until it has been tested in the ASC setting. The health equity measures ASC-22 through ASC-24 have not been tested in the ASC setting. We continue to impress upon CMS to delay inclusion of measures ASC-22 through ASC-24 until they have been tested in the ASC setting.
The Whole is Greater Than the Sum of its Parts
ASCA’s 2025 public policy priorities aim to save Medicare and the U.S. healthcare system millions of dollars and improve patient outcome. Our policies reflect a strategic approach to ensure continued access to ASCs by beneficiaries and, consequently, lower costs for the U.S. healthcare system. By advocating for fair reimbursement, expanding patient access to care, reducing regulatory burdens and maintaining a sustainable payment system, ASCA aims to migrate more procedures to the lower-cost ASC setting. These efforts are critical for the continued success of ASCs and for the future of healthcare, where cost-effective, patient-centered outpatient care is foundational to delivering high-quality services to a diverse and growing population.
