ASCA CEO Discusses Proposed 2019 ASC Payment Rule A Q&A with Bill Prentice

On July 25, the Centers for Medicare & Medicaid Ser- vices (CMS) released the 2019 proposed payment rule for ASCs and hospital

outpatient departments (HOPD). ASCA Chief Executive Officer Bill Prentice talks about the policy changes proposed and the implications of those changes for ASCs.

Overall, what is ASCA’s view of CMS’ proposed 2019 rule changes for ASCs? PRENTICE: The changes proposed in this year’s rule are among the most significant I have seen in my eight years with ASCA. Overall, I would say they demonstrate greater recognition of the quality and value ASCs provide than we have seen in any previous rule- making. For example, foremost among the proposed changes is a decision to update ASC payments using the hos- pital market basket inflation factor, a much more realistic indicator of ris- ing costs in the ASC space than what CMS has been using. We have fought for this change over the last decade and are appreciative to see it included. Other changes in the rule include

provisions to encourage the migra- tion of device-intensive procedures to ASCs, allow for several new cardiac procedures in the ASC setting and make sweeping changes to the ASC Quality Reporting program. These proposed changes are posi-

tive and beneficial for ASCs and the patients they serve, so it’s critically important that every ASCA member understand that they have an oppor- tunity until September 24 to provide feedback to CMS (at comment?D=CMS-2018-0078-0002). The final decisions on all these changes will be made when the final rule is published in November. Begin-


ning next week, ASCA members can go to our website to learn more about submitting comments.

How is CMS proposing to change the annual inflationary adjustment for ASCs? PRENTICE: Under the proposal, CMS would use the hospital market basket to update ASC payments for the five-year period of calendar year (CY) 2019 through CY 2023. Historically, ASCs have been short-

changed by a requirement that our adjustments be based on the Consumer Price Index for All Urban Consum- ers, or the CPI-U, (which focuses on broad consumer price changes) rather than the hospital market basket. But since ASCs use the same staff, services and supplies as HOPDs, it only makes sense to apply the same inflation rate for our yearly updates.

If the proposed rule were to be final- ized as drafted, ASCs would see, on average over all covered procedures, an effective update of 2.0 percent—a combination of a 2.8 percent inflation update based on the hospital market basket and a productivity reduction mandated by the Affordable Care Act of 0.8 percentage points. It should be noted that this adjustment is an aver- age and that updates can vary signifi- cantly by code and specialty.

What is CMS proposing regarding device intensive procedures performed in ASCs? PRENTICE: CMS is proposing to reduce the threshold definition of device intensive procedures in ASCs from 40 percent to 30 percent—a policy change that we have been advocating for over the past several years to encourage migra- tion of these procedures into ASCs. This means that if the device por- tion of the overall procedure equals


30 percent or more of the total cost in the HOPD, the total device cost will be included in the reimbursement rate when the procedure is performed in the ASC. If the rule is adopted as pro- posed, it would result in a net increase of 142 new device intensive procedures that ASCs could afford to provide for Medicare beneficiaries for the first time, effectively growing the approved list from the current 154 device-intensive procedures to 296 procedures in 2019 and beyond.

What new procedures have been proposed for the ASC setting? PRENTICE: CMS is proposing to revise the definition of “surgery” in the ASC payment system to account for certain “surgery-like” procedures that are assigned codes outside the Current Procedural Terminology (CPT) surgi- cal range. This change allows them to propose adding 12 cardiac catheteriza- tion procedures to the ASC covered procedures list.

Last year CMS allowed HOPDs to perform total joint replacement procedures. Did this rule make any changes regarding those procedures in ASCs?

PRENTICE: No, and we didn’t expect any total joint replacement codes to be added this year. We say this even though we know that many ASCs around the country are safely and effec- tively performing these procedures on non-Medicare patients. One issue is that the reimbursement CMS applied to the procedures it moved to the HOPD last year seems to be too low to encourage migration from the inpatient space.

Speaking of procedures, CMS is proposing to review procedures that were added to the ASC list in

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