AmSurg | About AmSurg

About Ambulatory Surgery Centers (ASCs)
Since the inception of the Medicare benefit in 1982, ASCs have steadily expanded the role they play in meeting the surgical needs of Medicare beneficiaries. ASCs provide high-quality, patient-focused care at a savings to the Medicare program and its beneficiaries, and provide more than 5,000 types of procedures to Medicare beneficiaries today. In 2008, CMS implemented a revised ASC payment system, which set ASC payment rates at 63% of the payment amount for the same volume of services provided in the hospital outpatient department (HOPD). ASC payments were reduced by a “conversion factor” to set the payment amount for ASC services less than the OPPS rate for the same procedure.

On July 18, 2008, CMS proposed payment policies for ASC services for CY 2009, which would further reduce ASC payments to 59% of the HOPD rate.

What CMS Proposed
For January 1, 2008, CMS used its broad statutory authority to tie ASC payments to the HOPD PPS (OPPS). While we support linking the two payment systems, CMS has proposed a payment adjustment to the ASC payment system that widens the gap between ASC and OPPS payments. Specifically, CMS has proposed applying an “ASC scaler” to the relative weight of each procedure performed in an ASC. The relative weight of each procedure represents the cost of performing a procedure, and is updated annually by CMS as new data becomes available. This ASC scaler reduces the relative weight of the ASC procedure to an amount less than the relative weight of the same procedure when performed in the HOPD.

What is the practical result of this decision? In addition to the conversion factor reduction to the ASC payment rate, CMS would also reduce the relative weight of each procedure performed in the ASC -- even if an HOPD and ASC were located across the street from each other! This amounts to a second reduction to ASC payments.

CMS also proposes to use the consumer price index (CPI-U) as the measure of inflation for annually updating ASC payment rates, instead of the hospital market basket index. All other Medicare provider payment systems use the relevant medical market basket update for their annual inflation updates.

Why CMS’ Proposals Are Harmful to ASCs
ASC Scaler: The ASC and OPPS relative weights should be equal in both settings. The proposed ASC scaler (i.e., a smaller relative weight than the OPPS) breaks the direct link between ASC and HOPD weights and produces payment differentials that are neither sensible nor good policy. Many ASCs specialize in just one type of procedure - they cannot subsidize payment reductions to one procedure or line of business with payment increases to another. For some specialized providers where the Medicare population is the primary source of patients, modifications to their payer mix are not an option.

Inflation Update: CMS should adopt the hospital market basket as the measure for updating ASC cost increases, rather than using the CPI-U. The CPI-U is an inaccurate measure of inflation in the ASC setting because it measures the average change in prices over time of all goods and services purchased by households, not hospitals. Quite obviously, ASCs purchase a basket of goods and services more similar to a hospital than a household.

How You Can Help?
• Let CMS know that you care about Medicare beneficiary access to life-saving outpatient
surgical procedures, such as colonoscopies!

• Voice your concerns with their proposed rule, and urge them to adopt the following changes:

• Cease rescaling ASC relative weights as it further exacerbates the gap between ASC and OPPS payments!