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MEDICARE MONITOR Medicare’s New Payment Rules


and the Road Ahead This year’s ASC payment system looks much the same as last year’s, but fundamental changes could be on the horizon. BY JONATHAN BEAL


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n 2013, Medicare will continue to pay ASCs based on the substantially


revised payment system that the agency implemented in 2008. Since 2008, the annual update to the ASC payment sys- tem has been an exercise in small ad- justments rather than drastic change. The Centers for Medicare & Medicaid Services (CMS) has continually provid- ed ASCs with a modest annual payment update based on the Consumer Price Index for All Urban Consumers (CPI- U), while providing hospital outpatient departments (HOPDs) with a more generous increase based on the hospital market basket. Additionally, CMS has expanded the list of ASC payable pro- cedures slowly, while continuing to pay HOPDs for a much larger set of outpa- tient surgical procedures. These trends continue in 2013: ASC rates will increase by 0.6 percent while HOPDs will see a 1.8 percent increase. The 0.6 percent increase was worse than the 1.3 percent increase that CMS proposed this past summer because the agency revised downward its estima- tion of the change in the CPI-U.


In contrast, ASCs fared slightly bet-


ter when CMS finalized which proce- dures to add to the ASC list. The agency had proposed to add 16 procedures, but based on feedback from the ASC com- munity, added an additional nine pro- cedures for a total of 25. HOPDs, how- ever, continue to be paid for more than 366 procedures that are not covered in ASCs. Further, CMS’ process of deter- mining which procedures will be added to the ASC list of payable procedures continues to lack transparency. At the same time, CMS has shown


no interest in making other fundamental changes to how Medicare pays ASCs. For example, the agency has refused to expand the number of procedures for which ASCs are paid fully for devices or to make changes to the process it uses to cap ASC rates at the physician practice expense. The ASC community’s arguments that cite a need to pay ASCs adequate- ly, especially in the face of the ASC to HOPD conversions that are taking place, seem to be mostly ignored. Like- wise, the wisdom of reducing Medicare


costs by encouraging Medicare ben- eficiaries to seek care in the lower cost ASC setting seems to have had little effect on the decision makers at CMS. Instead, the bureaucrats charged with overseeing the ASC payment system appear content to maintain the status quo, flawed as it might be, that was put in place back in 2008. The fiscal realities facing the na-


tion could, however, provide an impe- tus for greater changes in the way all providers, including ASCs, are paid. With the election behind us, Congress and the president are faced with a bun- dle of thorny financial issues. As this issue of ASC Focus magazine goes to press, it remains to be seen what steps, if any, President Barack Obama and the current Congress will take to avoid the impending fiscal cliff. It is more than a fair bet, however, that any long-term solution will likely wait until the president’s second term be- gins and the new Congress is sworn in. Debates over balancing spending with revenues are likely to be a central focus moving forward. With Obama’s victory, the large-scale changes to Medicare coverage champi- oned by the Republican vice presidential nominee Paul Ryan are probably off the table. The pressure to reduce Medicare spending, however, will persist and, perhaps, intensify as solutions to curtail run-away Medicare spending without imposing too much burden on Medicare beneficiaries are sought. ASCs have a strong argument to


make during this debate: that they are not being allowed to do enough to bring down the cost of health care. Currently, HOPDs perform twice as many of the procedures that Medicare will cover in the ASC setting than ASCs perform. Additionally, extensive savings could be realized by allowing ASCs to per- form all clinically appropriate proce- dures for Medicare beneficiaries. CMS’ status quo approach to the ASC payment system to date has done


26 ASC FOCUS JANUARY 2013


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