MedPAC Annual Report to Congress Recommends Update to ASC Payment Rates

Washington, DC, March 2, 2010 - The Ambulatory Surgery Center Advocacy Committee (ASCAC), which includes the national and state ASC associations as well as representatives of all types of ASC operators and physicians, expressed support for the Medicare Payment Advisory Commission’s (MedPAC) annual report to Congress recommending a payment update of 0.6 percent in CY2011. The payment update, in line with MedPAC’s recommendation for 2010, recognizes the need to update ASC payments.

“The ASCAC is pleased that MedPAC’s recommendations reflect the important role that ASCs play in the health care system,” said Andrew Hayek, Chair of the Ambulatory Surgery Center Advocacy Committee and President and Chief Executive Officer of Surgical Care Affiliates.

As important providers of essential surgical and diagnostic care, including many preventive services, ASCs perform more than 22 million surgeries in over 5,200 facilities throughout the country and are often the most cost-effective surgical setting both for patients, payors and the health care system. Every procedure performed in an ASC saves the Medicare program more than 40 percent and the Medicare beneficiary more than 50 percent on co-payments, as compared to the hospital outpatient setting.

Despite ASCs’ role in creating savings for the health care system, ASCs did not receive a payment rate increase for six years until 2010. As a result, ASCs are currently reimbursed by Medicare 42 percent less than hospital outpatient departments (HOPDs) for the same procedures.

MedPAC’s report acknowledges that the Consumer Price Index for all Urban consumers, CPI-U, which is used to determine reimbursement rates for ASCs, is an inappropriate mechanism for updating ASC payments. ASCs are the only outpatient care providers that receive payment updates based on CPI-U, a measure of cost inflation for the overall U.S. economy, rather than a market basket, which is tied directly to healthcare costs. MedPAC continues to seek data on the cost structure of ASCs; however the divergence between ASC and HOPD payment rates will continue as long as ASC payments remain tied to the CPI-U. 

“The ASC industry looks forward to working with MedPAC and policymakers to establish a stable and reliable Medicare payment structure for ASCs, such as the hospital market basket,” continued Hayek.

MedPAC also cited the value in having the Centers for Medicare and Medicaid Services (CMS) collect data on ASC quality. The ASCAC supports providing information on quality measures to promote industry transparency and encourages CMS to use its authority to collect data in all 50 states so that consumers can make an informed decision about their health care service provider. Since 2006, ASC industry leaders and trade associations with a focus on health care quality and safety regulation have worked together to develop independent quality measures appropriate for ASCs. The National Quality Forum has already endorsed six of these measures and over 20 percent of the industry is already voluntarily collecting data on the measures.

About the Ambulatory Surgery Center Advocacy Committee
Ambulatory Surgery Centers are health care facilitates that specialize in providing important surgical and preventive services in an outpatient setting. With approximately 5,200 Medicare-certified facilities throughout the country, ASCs perform more than 22 million surgeries per year. The Ambulatory Surgery Center Advocacy Committee is working on behalf of the industry to raise awareness of the important role that ASCs play in the health care system and the high-quality, cost-effective care that ASCs provide. The ASCAC includes the national and state ASC associations as well as representatives of all types of ASC operators and physicians. For more information about ASCs, visit www.advancingsurgicalcare.com.