The Ambulatory Surgery Center Advocacy Committee Expresses Concern Over 2011 Proposed Payment Rule Released by CMS
ASCs Continue to Advocate for Stabilization of a Payment System across All Providers of Outpatient Care
Washington, DC, July 9, 2010 –The Centers for Medicare and Medicaid Services (CMS) issued the annual 2011 proposed payment rule for hospital outpatient departments (HOPDs) and ambulatory surgery centers (ASCs) on Friday, July 2. With this proposed rule, CMS is implementing the final step transitioning ASCs from the historic ‘grouper’ system to the revised ASC payment system based exclusively on the relative weights used in the hospital outpatient prospective payment system (OPPS). The ASC Advocacy Committee (ASCAC) is disappointed that CMS failed to act on important recommendations from the ASC and physician community to better align the ASC and HOPD payment systems to prevent the rates paid under the two systems from drifting further apart in the coming years.
Payment updates to HOPDs are currently based on the hospital market basket, while, for years, payment updates to ASCs have been based on the Consumer Price Index for all Urban Consumers (CPI-U). ASCs are the only healthcare facilities that receive payment updates based on CPI-U, a measure of inflation for goods and services purchased by consumers, based largely on prices for energy and housing. Unlike the CPI-U, the market basket is a direct measure of inflation for the goods and services purchased by healthcare facilities. In March 2010, the Medicare Payment Advisory Commission’s (MedPAC) annual report to Congress acknowledged that the CPI-U is an inaccurate mechanism for updating ASC payments. In June, 32 members of the House of Representatives wrote to CMS urging the agency to update payments using the hospital market basket which is employed to update hospital inpatient and outpatient payments.
“We urge CMS to adopt the hospital market basket as the ASC inflation index” said Andrew Hayek, Chair of the Ambulatory Surgery Center Advocacy Committee and President and CEO of Surgical Care Affiliates. “Aligning the indexes across ASCs and HOPDs would provide a positive update for ASC payments consistent with MedPAC's recommendation and ensure that ASCs have the resources needed to implement new technology, enhanced reporting systems, and the ability to continue providing high quality, patient-centered care.”
While the update for ASCs will be positive at 1.6 percent, after taking into account the decrease resulting from the productivity adjustment stipulated in a provision of the health care reform legislation that passed earlier this year, the update will net out at a zero percent increase in ASC payments for 2011. This means ASC payments will have been frozen for seven of the past eight years even though input costs continue to rise. The hospital market basket is projected to be a 2.4 percent update, and after the productivity adjustment, will leave the HOPD update at 2.15 percent.
Over the last seven years, the relationship between ASC and HOPD payments fell from 86 to 58 percent for identical services. Under the 2011 CMS proposed rule for ASC services, ASC rates will drop below 56 percent of the hospital rate for the identical service. Absent CMS adopting the changes requested by the ASCAC and many physician organizations, the gap between HOPD and ASC rates will persist and worsen over time.
ASCs are often the most cost-effective surgical setting both for patients, payors and the health care system. Compared to the hospital outpatient setting, every procedure performed in an ASC saves the Medicare program more than 40 percent and saves Medicare beneficiaries more than 50 percent on co-payments. In fact, shifting just half of all eligible outpatient procedures from hospital outpatient departments (HOPD) to ASCs would save Medicare an additional $2.3 billion. The ASCAC maintains that CMS should use the same index when updating HOPD and ASC payments to ensure that the ASC payment accurately reflects the inflationary pressures faced by ASCs. Yet the CMS rule would threaten access to ASCs and therefore lead to patients receiving the identical services in the highest cost modality of care.
The proposed rule, CMS-1504-P, is posted at the Federal Register here, and the proposed rule and accompanying files is posted on the CMS website here. For a detailed look at how the rule impacts the ASC industry, visit “ASC Policy Focus” on www.advancingsurgicalcare.com.
About the Ambulatory Surgery Center Advocacy Committee
The Ambulatory Surgery Center Advocacy Committee (ASCAC) 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.
Media Contact:
Christina Plourde
202/587-2596
cplourde@spectrumscience.com
