REGULATORY REVIEW
Medicare’s 2017 Final Payment Rule A detailed analysis BY KARA NEWBURY
The Centers for Medi- care & Medicaid Services (CMS) issued its final pay- ment rule regulating 2017 ASC Medicare payments
on November 1, 2016. Provisions in that rule went into effect January 1, 2017. Overall, ASCA was disappointed in the 2017 rule, in which CMS failed to add requested codes to the ASC- payable list and mandated use of the problematic Outpatient and Ambula- tory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) survey. On a positive note, the effective payment update for ASCs in 2017 is higher than the update that was in the proposed rule.
CPI-U Versus Hospital Market Basket Facility fees for hospital outpatient departments (HOPDs) are updated annually based on the hospital market basket, which measures the inflation of medical costs such as equipment, supplies and staffing. ASC facility fees are updated based on the Con- sumer Price Index for all Urban Con- sumers (CPI-U), which measures the cost of consumer goods such as bread, milk and gasoline and is historically lower than the hospital market basket. CMS finalized an effective pay- ment update of 1.9 percent for ASCs. This increase is based on the CPI-U update of 2.2 percent minus a 0.3 per- centage point productivity adjustment required by the Affordable Care Act (ACA). This payment update is higher than the 1.2 percent update in the pro- posed rule, which was based on an inflation rate of 1.7 percent minus a 0.5 percentage point productivity adjustment. It is also significantly higher than last year’s update, which was 0.3 percent.
20 ASC FOCUS FEBRUARY 2017 According to the rule, HOPDs will
receive a 1.65 percent increase. This update is based on a 2.7 percent mar- ket basket minus a 0.3 percent adjust- ment for economy-wide productivity and a 0.75 percentage point adjustment required by the ACA. It is rare for the ASC update to
be higher than the HOPD update. Without the second negative adjust- ment, HOPDs would receive a much larger update than ASCs. The dispar- ity between the CPI-U and the hospital market basket is due in large part to the different update factors used for each site of service. If the ACA is repealed and replaced this year, eliminating the adjustments outlined above, the dis- parity in payments between ASCs and HOPDs will grow. As in previous years, in its formal comments submitted to CMS follow- ing release of the proposed rule last year, ASCA requested that CMS use the hospital market basket to update ASCs. This would align the two update factors and prevent the con- tinuing divergence in payment rates. As a reminder, the rates that CMS released do not take into consideration sequestration, a 2 percent cut in Medi-
Track the Latest Regulatory and Legislative News for ASCs
Visit ASCA’s web site every week to stay up to date on the latest government affairs news affecting the ASC industry. Every week, ASCA’s Government Affairs Update newsletter is posted online for ASCA members to read. The weekly newsletter tracks and analyzes the latest legislative and regulatory developments concerning ASCs.
www.ascassociation.org/ GovtAffairsUpdate
care provider payments imposed in the Budget Control Act signed into law in August 2011. Sequestration reduces only the portion Medicare pays provid- ers by 2 percent; the patient responsi- bility is not impacted by sequestration.
Procedure List
CMS finalized the addition of the fol- lowing 10 codes to the ASC list of pay- able procedures for 2016, determining that these procedures are safe and effec- tive when performed in the ASC setting: ■
20936 (Sp bone agrft local add-on) ■ 20937 (Sp bone agrft morsel add-on) ■ 20938 (Sp bone agrft struct add-on) ■ 22552 (Addl neck spine fusion) ■ 22840 (Insert spine fixation device) ■ 22842 (Insert spine fixation device) ■ 22845 (Insert spine fixation device ■ 22853 (Insj biomechanical device) ■ 22854 (Insj biomechanical device) ■
22859 (Insj biomechanical device) ASCA advocated
for dozens of
other codes to be added. Unfortu- nately, in the final rule, more than 300 codes that are payable when performed in HOPDs are still not designated as payable in the ASC setting. ASCA will continue to encourage CMS to move these procedures to the ASC payable list, particularly focusing on those codes being performed in high vol- umes in HOPDs, an indicator that they are safe to be performed on the Medi- care population in outpatient settings.
Device-Intensive Procedures CMS also maintained the device- intensive policy change it imple- mented in 2015. That means CMS con- tinues to define ASC device-intensive procedures as those that are assigned to any ambulatory payment classifica- tion (APC) group with a device cost greater than 40 percent of the total cost
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