"Why are we the big loser as opposed to everyone else?" asks an American College of Gastroenterology rep.

No question GI got the short end of the stick when you inspect Medicare's revised ASC payment system. No other specialty fared worse than GI, which went from being one of the higher paid specialties, reimbursed at 89 percent of the outpatient hospital rate, to one that no longer may be viable in the outpatient setting to which it is ideally suited.

In 2011, when the new payment system is fully phased in, CMS expects to pay ASCs 65 percent of the outpatient hospital rate. For GI, this represents a 27 percent cut that will force many GI ASCs to operate at almost 20 percent below costs - hard to fathom when you consider that CMS says one of the principles that guided the new payment system was an attempt to match reimbursement closer to the actual cost of providing care.

"We can't just lower expenses because we have the fixed costs of rent, staff salaries and expensive equipment," says Ronald Vender, MD, of the Gastroenterology Center of Connecticut in Hamden.

The current rate for a diagnostic colonoscopy performed in an ASC is $446. The payment for this procedure will drop to $427.76 next year and will likely settle at $373.04 in 2011. Why Medicare saw fit to drastically reduce the facility fee for tests such as colonoscopy when performed in a surgery center at a time when demand is increasing defies logic.

"What is ironic is that Congress passed a Medicare colon cancer screening benefit in 1998 and has studies showing that not enough Medicare beneficiaries are taking advantage of it, and then CMS is proposing regulations that will result in diminished access for these potentially life-saving procedures," says Sarkis Chobanian, MD, a staff physician at Gastrointestinal Associates in Knoxville, Tenn.

GI ASCs are expected to bear the brunt of these cuts. The ACG predicts a bleak future for endoscopy suites, saying one-third of them will be forced to close and that many others will be forced to turn away Medicare beneficiaries. This means GI services could return to the less efficient and more expensive hospital setting.

"Clearly, this rule will not let us stay sustainable," says Edward Cattau Jr., MD, chairman of the National Affairs Committee for the ACG and a physician at Memphis Gastroenterology Group in Germantown, Tenn. "We looked at our costs here, and we have a very efficient unit, and after this rule goes into effect we'll be reimbursed at 15 percent below the costs."

For more, see our cover story on page 34, "Can GI Pass Its Toughest Test?"