Regulatory Affairs: CMS Proposal a ‘Horrible Three-Legged Stool’


ASC officials ‘mystified’ by 2024 plan for Medicare patients.

Expanding the landscape of surgeries for Medicare patients at ASCs in 2024 does not look promising.

ASC leaders lobbied the Centers for Medicare & Medicaid Services (CMS) to add more than 60 codes of surgeries to the ASC-approved list that are being safely performed at HOPDs across the country. Instead, in its annual Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule, CMS has recommended that only 26 surgical dental codes for procedures not commonly performed at most ASCs be approved.

“It is mystifying that CMS allows off-campus hospital outpatient departments to perform total shoulder joint surgeries yet prohibits similarly regulated surgery centers — served by identically trained surgeons, nurses and other staff — from performing them on even the otherwise healthiest beneficiaries,” says Bill Prentice, CEO of the Ambulatory Surgery Association Association (ASCA) in a statement. Mr. Prentice adds that ASCA did work with national dental organizations to get these codes added.

Shoulders get sacked

Tops on ASCA’s wish list, however, was to allow Medicare recipients to undergo total shoulder replacements in ASCs, a recommendation CMS did not accept.

Mr. Prentice notes CMS’ approval to allow some total knee procedures to move to ASCs in 2021 has saved Medicare an estimated $75 million. “By refusing to rely on the clinical expertise of surgeons, who are clearly the best positioned to determine the appropriate site of care for each patient, CMS is wasting millions of dollars each year by trapping care in higher-cost settings,” he says.

CMS is expected to issue its Final Rule, which will take effect Jan. 1, in November. Comments are being accepted until Sept. 11. David Shapiro, MD, CASC, a board member of the ASC Quality Collaboration, says the nonprofit advocacy group has prepared a lengthy response opposing the proposal that will be submitted to CMS before the deadline. ASCA says in its statement it will continue to lobby CMS on behalf of its members as well. CMS has also proposed an average 2.8% increase for procedures performed in ASCs, the same payment-rate amount increase proposed for HOPDs. Actual increases can vary widely based on what type of surgery is performed and the location of the ASC. Even though the proposed hike is the same for both settings, HOPDs still effectively get twice as much money for many procedures, says Dr. Shapiro.

“The reimbursement proposal and lack of new procedures is two strikes against us,” says Dr. Shapiro. “The third strike and third leg of this horrible stool is they want to make the ASC Quality Reporting Program even more complex, time consuming, cumbersome and expensive for ambulatory surgery centers.”

Mr. Prentice says the proposed readoption of the Quality Reporting Program includes the continuation of requiring COVID vaccine coverage for health care workers, which he characterized as a “burdensome measure,” and that ASCA would continue to oppose it.

When the Proposed Rule was issued in July, CMS explained its motivation behind the rule by saying, “In addition to proposing payment rates, this year’s rule includes proposed policies that align with several key goals of the (Biden) Administration, including promoting health equity, expanding access to behavioral health care, improving transparency in the health system, promoting safe, effective, and patient-centered care and addressing medical product shortages.”

Continuing frustration, but some good news

Dr. Shapiro says one of the continuing frustrations among ASC leaders and their advocates is they don’t get detailed rationales for CMS rejecting their proposals.

One piece of good news was CMS’ announcement that it plans to extend by two years the expiring pilot program that applies the Hospital Market Basket as the price index to determine the next year’s Medicare payment rates for ASCs. The Hospital Market Basket is a targeted examination of how inflation impacts the healthcare industry. This is the same model CMS uses for HOPDs, which explains why the proposed 2024 increase is 2.8% for both, says Dr. Shapiro.

Before the pilot began five years ago, CMS used the Consumer Price Index for All Urban Consumers (CPI-U) to determine payment rates for ASCs, which is a broader inflationary index not specific to healthcare spending. Dr. Shapiro says, historically, using that index resulted in HOPDs getting larger increases in most years than ASCs, which only increased the significant gap in the reimbursements receive for many identical procedures. Oddly, Dr. Shapiro says that 2024 payment rate might have been higher had CMS not extended the pilot program that uses the Hospital Market Basket, but he is OK with that because the latter model will benefit ASCs in most years and over time.

The 963-page Proposed Rule also includes a plan that calls for a patient-reported outcome-based performance measure for people who have undergone elective total hip or knee arthroplasty in ASCs. The program would be voluntary in 2025 and 2026 and mandatory by 2027. The ASC QC opposes the proposal.

“This one was a stunner, and a ridiculous one at that,” says. Dr. Shapiro. “It’s outrageous to contemplate the imposition of yet another set of lengthy survey questions upon our patients. It also presumes that ASCs have the staff to implement this, when in reality it would result in an incredible administrative burden.” In all, Dr. Shapiro thinks ASCs lost battles on payments, procedures and reporting. And when ASCs lose, older patients lose, he says.

“Medicare patients rightfully expect and deserve the same level of high-quality care that other people get and that they used to get when they were covered by commercial payers,” says Dr. Shapiro. “These longstanding CMS fiscal policies really preclude the ability of ASCs to offer many needed services to the Medicare population due to the imbalance between costs and payments.” OSM

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