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ASCA Comments on Medicare’s 2018 Proposed ASC Payment Rule

By William Prentice

In early September, ASCA submitted formal comments to the Centers for Medicare & Medicaid Services (CMS) on Medicare’s proposed 2018 ASC payment rule. In addition to suggesting reimbursement rates for the procedures ASCs will provide to Medicare beneficiaries next year, the proposed rule suggests new Medicare payment policies. These include new quality reporting requirements for ASCs that would take effect next year and later. Once CMS considers all the comments it receives on its proposed payment rates and policies, it will issue a final rule. That rule will establish 2018 payments and is due out by November 1 this year.

Key recommendations ASCA made to CMS in its comments this year include the following:

CMS should replace the Consumer Price Index for All Urban Consumers (CPI-U) with the hospital market basket as the annual update mechanism for ASC payments.

ASCA continues to point out that the CPI-U is not a suitable inflation index to use to update ASC payments because it does not accurately reflect the costs borne by ASCs and others that provide surgical procedures. Only approximately 8.5 percent of the index’s inputs track anything having to do with health care, and even those inputs track a consumer’s experience purchasing health care items, rather than a provider’s experience purchasing the items necessary to furnish a health care service.

Medicare’s payments to hospital outpatient departments (HOPDs) are updated each year based on the hospital market basket. The market basket index reflects the cost of items and services needed to furnish an outpatient surgical procedure, such as compensation, utilities, labor-related services and non-labor related services. Since the annual increases in the cost of doing business in an HOPD – equipment, devices, implants, facility upkeep and staffing costs – are comparable in ASCs, ASCA continues to ask that ASC payments be updated each year using that same measure.

CMS should eliminate the secondary rescaling adjustment that is applied to the ASC relative weights. CMS applies an additional scaling factor to the ASC weights that is intended to maintain budget neutrality within the payment system; however, a consequence of this scaling is ever-increasing payment differentials between ASC and HOPD payments. There is no evidence of growing differences in capital and operating costs in the two settings to support this growing payment differential.

By applying ASC-specific adjustments like the scalar, CMS is exacerbating the gap between HOPD and ASC rates. In so doing, the agency is needlessly increasing program costs by making it financially untenable for ASCs to perform many procedures that are otherwise clinically appropriate. In the process, CMS is encouraging physicians and hospitals to furnish those procedures in the more expensive HOPD setting. To ensure that ASCs remain a viable alternative for Medicare beneficiaries, ASCA continues to recommend that CMS discontinue use of the ASC relative weight scalar.

CMS should reimburse ASCs for all the same surgical codes for which it reimburses HOPDs. In its proposed rule, CMS proposes to add three new procedures – 22856 (Cerv artific diskectomy), 22858 (Second level cer diskectomy) and 58572 (Tlh uterus over 250 g) – to the ASC list of payable procedures for 2018. ASCA pointed out that second level spine codes, such as CPT 22858, come with significant additional costs, including increased operating room and staff time. Therefore, CMS will not see volume migrate out of the inpatient setting and into the ASC without providing adequate reimbursement for this code. ASCA also indicated that it would appreciate an opportunity to further discuss with CMS officials how the decision to package this and other codes together has negatively impacted the migration of procedures to the outpatient setting.

ASCA noted that it appreciates that CMS has acknowledged that these procedures are safe and effective when done in the ASC setting but remains concerned that the agency continues to reimburse HOPDs for providing hundreds of other codes that it will not cover in ASCs. Specifically, there are 345 surgical CPT codes that are separately payable in the HOPD but not in the ASC. These procedures are designated as Surgical Procedures Excluded from Payment in ASCs, but are not included on the inpatient-only (IPO) list. Surgeons in ASCs are already performing these procedures safely on non-Medicare patients. With technological advances increasingly driving procedures from the inpatient to the outpatient setting, ASCA urged the agency to leverage the high-quality, cost-effective care that ASCs provide by reforming its current policy.

Since the survey and certification requirements are essentially the same in ASCs and HOPDs, ASCA pointed out, the primary difference between them is simply the payment rate assigned to each facility type. There is no credible safety argument to justify the expansive list of codes that are reimbursable in HOPDs but not ASCs. Therefore, ASCA requested that CMS simply maintain an IPO list and allow all other surgical codes to be performed in either an HOPD or an ASC.

CMS should remove total knee arthroplasty (TKA), partial hip arthroplasty (PHA) and total hip arthroplasty (THA) from the Medicare inpatient-only list and add these codes to the ASC-payable list. These procedures are currently being done safely and effectively on appropriate patient populations in ASCs. CMS uses five criteria when reviewing procedures to determine whether they should be removed from the IPO list and assigned to an Ambulatory Payment Classification (APC) group for payment under the Hospital Outpatient Prospective Payment System when provided in the hospital outpatient setting. While CMS notes that a procedure is not required to meet all the established criteria to be removed from the IPO list, ASCA noted that TKA, PHA and THA do meet all the criteria and should all be removed from the IPO list. ASCA also indicated that it believes CMS made its decision to propose removal of TKA from the IPO list in 2018 based on staff’s belief that the code meets these five criteria, and since the hip arthroplasty codes meet the same criteria, they should also be removed from the IPO list.

CMS should lower the device-intensive threshold to encourage migration of services to the ASC setting. CMS classifies codes with high, fixed device costs as “device-intensive codes,” which are currently defined as those procedures that have a device offset greater than 40 percent of the mean cost of the procedure when provided in the HOPD setting. When ASC services have device costs that are less than 40 percent of the overall cost in the HOPD setting, the conversion factor is applied to the entire relative weight for the service, effectively discounting the payment for the device by more than 40 percent over what is paid to the HOPD. Since an ASC’s non-device reimbursement is approximately 53.5 percent of that in the HOPD setting, ASCA recommended that CMS should lower the 40 percent threshold to 30 percent to allow for ASCs to perform more procedures with substantial device costs and encourage migration of these codes to the ASC setting.

ASCA supports the proposed delay of the Consumer Assessment of Healthcare Providers and Systems Outpatient and Ambulatory Surgery (OAS CAHPS) Survey. CMS cited its desire to “appropriately account for the burden associated with administering the survey in the outpatient setting of care” as one reason for delaying mandatory implementation of the OAS CAHPS survey and the five ASC Quality Reporting (ASCQR) program measures based on this survey. ASCA appreciates this reconsideration, and supports delaying mandatory implementation of the survey until it is shortened and an electronic option becomes available. Both developments would significantly reduce the cost and administrative burden to ASCs and make the survey easier for patients to complete.

New Quality Reporting Measures

CMS proposed to add several new measures to the ASCQR program. It proposed to adopt ASC-16: Toxic Anterior Segment Syndrome (TASS) for CY 2021 payment determination and subsequent years. ASCA supported the inclusion of this measure in the ASCQR Program. CMS also proposed two new measures for CY 2022 payment determination and subsequent years: ASC-17: Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures and ASC-18: Hospital Visits after Urology Ambulatory Surgical Center Procedures. While ASCA supports quality reporting, it continues to be concerned with these types of all-cause measures that rely on a retrospective analysis of claims over an extended period. As with current measure ASC-12: Facility Seven-Day Risk Standardized Hospital Visit Rate after Outpatient Colonoscopy, ASCA pointed out, measure scores and results will not be received until months after the patient’s visit, significantly limiting the usefulness of the information.

CMS also has invited public comment on the Ambulatory Breast Procedure Surgical Site Infection Outcome measure (NQF #3025) for potential inclusion in the ASCQR Program in future rulemaking. ASCA supported the inclusion of this measure in the ASCQR Program.

For more information, please write Kara Newbury at

William Prentice is the Chief Executive Officer of the Ambulatory Surgery Center Association.



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