ASCs livid over CMS plan to curb approved procedures

Ambulatory surgery centers are fuming over potentially losing more than 250 procedures they can offer patients if the Centers for Medicare and Medicaid Services reinstates the inpatient-only list limiting them to hospitals, according to comments on CMS’s proposed outpatient pay rule for 2022.

Ambulatory surgery centers argue that CMS doesn’t have enough information to support such a significant policy change. The providers also claim the agency made a series of flawed assumptions about the real-world impact of restoring the inpatient-only list and limiting the procedures allowed under the ambulatory surgery center covered procedures list, known as the ASC-CPL, according to the Ambulatory Surgery Center Association.

“While ASCA was not expecting the 267 codes that were proposed—and later finalized—to be added to the ASC-CPL in 2021, we were even more surprised that one year later CMS is proposing to completely reverse course. We have serious concerns with the way this was handled and the discussion surrounding this issue included in the proposed rule,” ASCA wrote in a letter. “The same medical officers who allowed for the codes’ addition in 2021 are now claiming, without evidence, that these codes may not be safely performed in the ASC setting.”

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CMS maintains that halting reimbursements to ambulatory surgery centers for hundreds of procedures would have little effect because ambulatory surgery centers had not yet started performing the newly added procedures. But that isn’t true, the ASCA wrote.

“This supposition ignores the reality that it takes time to add new procedures in a facility, and the data CMS would have at this point in the year is extremely limited. In addition, CMS’s addition of codes to the ASC-CPL often opens the door for other payors to reimburse for these procedures, and as such, many facilities may have started with other patient populations before taking on any sort of significant Medicare volume,” ASCA wrote.

Forty-two percent of ambulatory surgery centers have already invested in technology, staff or training related to the newly added codes, according to an ASCA survey of its members.

The ASCA also thinks CMS overstated the differences between hospital outpatient departments, or HOPDs, and ambulatory surgery centers in justifying its decision to remove almost 260 procedures from its covered procedure list.

“An HOPD is a department of a hospital—not a fully-functioning hospital on its own. It simply provides outpatient services, hence the name. An off-campus HOPD can be up to 35 miles away from a hospital’s campus, is not open 24/7 and is not necessarily equipped with—or even close to—an emergency department,” ASCA wrote. “The primary difference between the settings is the much higher reimbursement rate HOPDs receive over ASCs.”

President Joe Biden’s administration wants to halt the phase-out of the inpatient-only list and reinstate patient safety criteria for evaluating whether Medicare should pay ambulatory surgery centers for a given procedure. In its 2021 outpatient pay rule, CMS allowed ambulatory surgery centers to perform those additional procedures starting this year. But Medicare plans to stop reimbursing for most of those services next year.

Hospitals expressed support for the agency.

“The [inpatient-only] list was put into place to protect beneficiaries. Many of its services are surgery procedures that are high risk—complicated and invasive procedures with the potential for multiple days in the hospital and an arduous rehabilitation and recovery period, and which require the care and coordinated services provided in the inpatient setting of a hospital,” the American Hospital Association wrote in a letter. “Allowing these procedures to be evaluated using the criteria in place prior to 2021 would result in greater consideration of the impact removing services from the list has on beneficiary safety.”

Eliminating the inpatient-only list could strain hospital budgets since it would likely lead to more treatment in lower-cost settings. The Biden administration is still deciding whether to eliminate or scale back the inpatient-only list in the future, but pausing the policy allowing ambulatory surgical centers to perform more procedures could buy hospitals time.

“It also would allow providers affected by the COVID-19 [public health emergency] additional time to prepare to furnish appropriate services safely and efficiently if some are removed from the [inpatient-only] list,” the AHA wrote.

Former President Donald Trump’s administration asserted that quality and safety concerns about ACSs broadening their offerings were overblown. Commercial insurers already pay for such services outside of hospitals, then-CMS Administrator Seema Verma said at the time.

Ambulatory surgery centers still agree.

“It is insulting to physicians to insinuate that they would risk the health or life of their patients by intentionally bringing them to an inappropriate setting. The physicians who work in ASCs are much better equipped to determine which cases should be in an ASC than CMS clinicians—most of whom are not surgeons,” ASCA wrote in its letter.

The Biden administration also requested comments on how to collect cost data from ambulatory surgery centers without creating too much burden.

“CMS could create a streamlined process for ASCs to track and submit a limited amount of cost data. The streamlined cost reporting would include a set of cost variables from all ASCs that is more limited than what is collected through formal cost reports, which would require less time for ASCs to complete. Alternatively, CMS could require ASCs to submit cost data from their existing cost accounting systems, provided the definitions of their reported cost variables are consistent with CMS’s definitions,” the Medicare Payment Advisory Commission wrote in a letter.

MedPAC previously recommended CMS require ambulatory surgery centers to report cost data for more than a decade because ambulatory surgery centers have strong financial incentives to only carry out the most profitable services and their Medicare rates might be too high, according to the panel.

“ASC payment rates are largely tied to [outpatient prospective payment system] payments, which are based on data from hospital outpatient claims and hospital cost reports. Although ASCs and HOPDs have similarities in their cost structures, important differences likely exist because HOPDs provide a much broader range of services and face costs that ASCs do not, such as requirements for standby capacity and emergency care. These differences in cost structure coupled with ASC payment rates based on OPPS payment rates likely create misalignments between ASC costs and ASC payment rates,” MedPAC wrote.

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