On Nov. 1, the CMS released the final rule establishing the list of procedures and payment rates for Medicare ambulatory surgery center services in 2007. The 2007 rule implements several important changes for ASCs:
The CMS adopted many of the recommended additions to the procedure list proposed by the American Association of Ambulatory Surgery Centers resulting in the addition of 21 new codes to the 2007 procedure list. For a list of new procedures go to aaasc.org/advocacy/documents/table1.pdf.
Revisions of the American Medical Association’s current procedural terminology codes resulted in the addition of 25 codes and deletion of 22. For a list of CPT coding changes go to aaasc.org/advocacy/documents/table2.pdf .
Pursuant to a provision in the Deficit Reduction Act of 2005, the CMS will require ASCs to collect a 25% copayment from beneficiaries for screening colonoscopies (CPT G0105, G0121). This aligns the ASC and hospital outpatient coinsurance rates for these services, resulting in an increase in beneficiaries’ out-of-pocket spending on this important service.
The CMS also implemented the Deficit Reduction Act provision limiting payment for ASC procedures to the lesser of the outpatient prospective payment system rate or the ASC grouper payment. This statutory change affects 275 codes. For a list of procedures affected by the DRA cap go to aaasc.org/advocacy/documents/table3.pdf .
Other resources may be found at aaasc.org/advocacy/FinalMedicareRulePaymentandProceduresEffectiveJanuary2007.htm.
Payment and procedures changes effective January 2008
In November 2006, voters made the Democratic Party the majority party in both the House and Senate. This shift in power will have a dramatic impact on the healthcare initiatives Congress will debate in 2007. The shift in power also brought to Washington many new members who may have little, if any, knowledge about ASCs.
The changes in Congress will certainly impact ASCs. ASC stakeholders may be more familiar with Ways and Means health subcommittee Chairman Pete Stark (D-Calif.) for his objection to physicians’ ownership of, and referral arrangements for, healthcare services for Medicare beneficiaries. Stark’s interest in the financial arrangements negotiated by physicians, hospitals and other providers will likely be debated by his committee in 2007. The AAASC will be closely monitoring any congressional action on physician ownership issues to ensure that the interests of ASCs, physicians who practice there and the patients they serve will continue to be protected.
Although the final rule for the new ASC payment system is now in the hands of the CMS, Congress will continue to play an important role in shaping the administration’s ASC policy. ASCs across the country play a vital role in ensuring that both Democrats and Republicans understand and advocate for ASCs’ continued ability to provide patients with a high-quality, convenient and less-expensive option for outpatient surgery. When Medicare beneficiaries choose ASCs for their outpatient surgeries, both the beneficiary and the Medicare program save money.
The CMS will publish a final rule in the spring that will address the parameters of the new ASC payment system to be implemented in January 2008. The broad statutory authority granted to the CMS to design a new ASC payment system in the Medicare Modernization Act of 2003 presents the Medicare program with a unique opportunity to better align payments to providers of outpatient surgical services.
Given the outdated cost data and crude payment categories underlying the current ASC system, the AAASC welcomes the opportunity to link the ASC and hospital outpatient-department payment systems. Although the hospital outpatient department-payment system is imperfect, it represents the best proxy for the relative cost of procedures performed in an ASC.
We will focus on three basic principles to monitor the success of the CMS’ final rule:
Maximizing the alignment of the ASC and hospital outpatient-department payment systems eliminates distortions between the payment systems that could inappropriately influence site-of-service selection. Aligning the payment systems for ASCs and hospital outpatient departments will improve the transparency of cost data used to evaluate outpatient surgical services for Medicare beneficiaries. The benefits to taxpayers and Medicare consumers will be maximized by aligning the payment policies to the greatest extent permitted under the law.
Ensuring there is beneficiary access to a wide range of surgical procedures that can be safely and efficiently performed in an ASC. ASCs are an important component of beneficiaries’ access to surgical services. As innovations in science and technology have progressed, ASCs have demonstrated tremendous capacity to meet the growing need for outpatient surgical services. In some areas and specialties, ASCs are performing more than 50% of the volume for certain procedures. Sudden changes in payments for services can have a significant effect on Medicare beneficiaries’ access to services predominantly performed in ASCs.
Establishing fair and reasonable payment rates will allow beneficiaries and the Medicare program to save money on procedures that can be safely performed at a lower cost in an ASC than the hospital outpatient department.
Other resources may be found at aaasc.org/advocacy/ASCLegislationResources.html
Craig Jeffries is the executive director of the American Association of Ambulatory Surgery Centers, Johnson City, Tenn.