CMS is increasing ASC payments by an inflation factor for the first time in more than six years.
On October 30, 2009, the Centers for Medicare and Medicaid Services (CMS) announced Medicare payment updates for ambulatory surgery center (ASC) services for 2010. These updates represent a mixed bag for ASCs.
Starting in 2008, CMS began implementing a vastly different methodology for reimbursing ASCs for services furnished to Medicare beneficiaries. The new payment system, which is conceptually and practically linked to Medicare’s hospital outpatient prospective payment system (OPPS), profoundly altered how and how much Medicare pays surgery centers. CMS is phasing in the new payment system over four years. The notice published in October 2009 announces updates to that payment system for the third year of the phase-in, 2010.
Perhaps the biggest news in the 2009 update is that CMS is increasing ASC payments by an inflation factor for the first time in more than six years. However, because the Medicare law specifies that ASC payments are to be inflated by the Consumer Price Index, whereas payments to hospitals are to be inflated by a separate inflator called the Market Basket Index, CMS is increasing ASC payments by only 1.2 percent (less adjustments to maintain budget neutrality), while hospital payments will be updated by 2.1 percent. As a result, the CY 2010 ASC conversion factor will be $41.873, while the hospital conversion factor for CY 2010 will be $67.406. Once other adjustments are factored in, ASC procedures not subject to the transition will be paid 59.4 percent of corresponding OPPS procedures in 2010, down from the 61 percent relationship currently in effect.
Covered Surgical Procedures
The payment rates discussed above apply only to those services that have been designated as covered by Medicare when furnished in the ASC setting. Nearly 3,500 procedures are currently approved for payment in the ASC setting.
CMS will be adding 28 procedures to the list of covered services, 26 of which are currently among those excluded from the ASC list because they were previously perceived to be too sophisticated for the ASC, and therefore not safe or requiring overnight stay if performed in ASCs. These additions reflect a willingness to re-examine procedures previously deemed too complicated for the ASC, and to view ASC capabilities more expansively.
At the same time, CMS is adding six procedures to the list of office-based services (procedures that are performed more than 50 percent of the time in a physician’s office setting are designated as “office based”), and making permanent the office-based designations of four surgical procedures that currently have temporary office-based designations. These 10 procedures will be paid the lesser of the ASC payment amount or the non-facility practice expense amount paid under the Medicare Physician Fee Schedule.
The final rule also signals that CMS may in the near future attempt to define physician supervision requirements applicable to ASCs perhaps akin to those applicable to hospital outpatient departments, as clarified in this final rule. CMS describes a comment received that expressed concern over the lack of express supervision requirements applicable to ASCs, and the reality that ASCs may have no physician supervision for extended periods post surgery. The commenter requested that CMS clarify why the same supervision requirements are not applied equally to hospitals and ASCs. CMS declined to define supervision requirements for ASCs in this rulemaking, but did solicit comments on this topic, which indicates that the agency may wade into this issue with a proposed standard in a future rulemaking. Comments on this subject must be received by December 29, 2009, to be considered by CMS.
The final rule is presently available here. It will be published in the Federal Register on November 20, 2009.