Still, FASA and the American Association of Ambulatory Surgery Centers, which collectively represent almost 4,000 ASCs nationwide, found a lot to like in CMS' final rule revising the payment system for services furnished by ASCs to Medicare beneficiaries, compared with initial proposals CMS issued in August 2006, which would have set the ASC payment rate at only 62% of rates for hospital outpatient services.

Among the positive changes cited by the ASC trade groups were:

• The addition of 793 surgical procedures to the list eligible for Medicare reimbursement, beginning in 2008. When implemented, the expanded list of Medicare-eligible procedures will total about 3,300. CMS said it generally will exclude from Medicare payments "only those surgical procedures determined to pose a significant safety risk to beneficiaries or that are expected to require an overnight stay following the procedure in the ASC." (For more detailed CMS guidance on which procedures performed at ASCs would be excluded from payments, see the chart accompanying this article.)
  
• Phasing in the policy pegging ASC reimbursement rates to about 65% of HOPD rates over four years, instead of CMS' original proposal for only a one-year transition. Under the final rule, CMS decided that ASC payments in calendar year 2008 will be based 25% on HOPD rates and 75% on the current reimbursement rates for ASCs. In 2009, the ASC payment rate will be based 50% on 2007 rates and 50% on HOPD rates. In 2010, ASC payments will be 75% HOPD-based, and the full-100% HOPD rate basis kicks in for calendar year 2011. ASC reimbursement rates will not get an annual inflation update in 2009, but in 2010 and thereafter, the ASC conversion factor will increase at the level of inflation in the annual price index for urban consumers (CPI-U).
  
• Recognizing the high cost of certain implant devices, relative to a hospital's or an ASC's total facility cost of providing an implant service by paying 100% of the hospital Outpatient Prospective Payment System (OPPS) rate for devices that cost more than half the median cost for the related procedure. The remaining portion of the ASC's implant service cost still would be reimbursed at the 65%-of-HOPD-rate formula.
  
• Reimbursing ASCs for fluoroscopy services.

The final rule issued by CMS July 16 sets ASC payment rates at no more than 67% of the corresponding Outpatient Prospective Payment System (OPPS) rates for HOPD surgical procedures. But adoption of an annual update of OPPS rates included in a CMS proposal also issued July 16 would result in ASC payment rates of about 65% of OPPS rates for the corresponding procedures, according to CMS estimates.

CMS initially had proposed paying only 62% of the OPPS rates for Medicare-eligible surgeries performed in ASCs. FASA President Kathy Bryant acknowledged the upward revision in the final rule but insisted that "payments need to be much higher" to ensure protection of patient choice and access to top-quality surgical care. She predicted that the low rates set for ASCs may result in some procedures now performed in ASCs being "forced back into the hospitals, where those procedures will ultimately cost Medicare and its beneficiaries more."

AAASC Executive Director Craig Jeffries said he believed "the longer transition period CMS provided to implement the payment reforms and other adjustment in the final rule will prevent Medicare beneficiaries from having to seek surgical care in the more expensive hospital outpatient department." But Jeffries warned that adopting the final payments rule could force many ASCs "to make difficult choices about whether to continue offering certain services."

Final Calendar Year 2008 ASC payment rates will be published in the OPPS/ASC final rule due in November. In the meantime, CMS will take comments on the proposed rule until Sept. 14.