Ambulatory surgery centers are trying to figure out how theyll cope with a new Medicare payment system that threatens to drastically reduce their reimbursement rates.
The CMS last week issued a series of regulations to revise the payment system for ASCs, setting a new compensation rate of 65% of what hospital outpatient departments get paid under Medicare. While some centers may seek to benefit under the rule, othersparticularly single-specialty ASCs, whose payments are expected to drop dramaticallywill be left with some tough decisions on whether to keep their Medicare patient base or to close their doors altogether.
ASCs that specialize in gastroenterology and are currently paid at 89% of the hospital outpatient rate, are expected to bear the brunt of these cuts.
The agency has dealt a disastrous death blow to GI ASCs through draconian cuts to payment, said David Johnson, president of the American College of Gastroenterology, in a written statement. This ill-conceived and unfair scheme threatens public health by severely limiting access to colorectal cancer screening in what is widely accepted as a safe, cost-effective setting for delivery of these healthcare services, he said.
Hospitals and ASCs, which compete directly with each other for patients, have had differing views on what the ASC payment system should look like. Regarding this latest rulemaking, We saw more efforts by hospital associations to influence the outcome of an ASC than ever before, said Kathy Bryant, president of FASA, a national trade group representing ASCs. Yet, the CMS didnt adopt all of the hospital lobbys arguments, including that no (more) procedures should be added to the ASC list, Bryant said.
The CMS ended up adding more than 700 new procedures to that list, she added.
The rulemaking to revise the ASC payment system and make it more in line with hospital outpatient departments or physicians offices was issued in two parts last week. The new payment rate was included in the annual proposed rulemaking for the hospital outpatient prospective payment system, or OPPS, whose final rulemaking is usually issued in November and goes into effect the following calendar year.
The final rule established the policies and formulas the CMS will use to calculate ASC payments, said Julie Cantor-Weinberg, vice president of public policy for the American College of Gastroenterology. But that 65% figure is still an estimate, she added. No one knows precisely what the final numbers will be until the final OPPS rule comes out in the fall.
Surgery centers wont actually feel the full impact of the rulemaking until 2011. Thats because the new payment rate of 65% of the hospital outpatient department payment rate will be phased in over a period of four years: 25% of the change in 2008, 50% in 2009, 75% in 2010 and 100% in 2011.
The hospital lobby didnt get everything it asked for in the final rulemaking.
The CMS procedures brings the total number of covered surgical procedures under the revised payment system to about 3,300. The agency stipulated that ASCs would get paid for any procedure that is determined by the CMS not to pose a safety risk to Medicare beneficiaries, and would not require an overnight stay.
Despite this emphasis on safety, the American Hospital Association was disappointed that its own set of safety measures werent in the final rule. If anything, the CMS took away some of those safety measures, said Roslyne Schulman, senior associate director for policy development at the AHA.
Craig Jeffries, executive director of the American Association of Ambulatory Surgery Centers, said that the CMS shouldnt have chosen the new procedures based solely on safety criteria. Instead, the agency should be trusting surgeons to do their own selections on patients that are good candidates for surgical centers, he said.
The AHA is also concerned that the CMS didnt implement quality reporting provisions for surgery centers. And because there has never been any adequate cost data on these surgery centers, there is also nothing to validate whether the new payment rates proposed for ASCs are appropriate, Schulman said.
The system we are announcing today will promote the goals of quality and efficiency in care furnished to people with Medicare in ambulatory surgery centers, said Leslie Norwalk, who resigned last week as the CMS acting administrator, in a written statement. The revised system will also take a major step forward toward eliminating financial incentives for choosing one care setting over another, she said.
Johnson and others in the industry dispute that fact. If anything, the rule will force Medicare patients to migrate back into the more expensive hospital outpatient setting, ultimately costing the federal government more, he said.