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REGULATORY REVIEW


CMS Makes Significant Changes to ASC Conditions for Coverage Impact on individual facilities varies widely based on state law and accrediting bodies BY KARA NEWBURY


On September 25, 2019, the Centers for Medicare & Medicaid Services (CMS) announced a final rule to relieve burden on


healthcare providers by “removing unnecessary, obsolete or excessively burdensome Medicare compliance requirements for healthcare providers and suppliers.” CMS estimates that these changes will collectively save healthcare providers approximately $843 million in the first year and slightly more in future years. There are two changes specific to ASCs and a third—regarding emergency prep- aredness requirements—that impacts many providers, including ASCs. As


a reminder, the federal


government sets the floor. States may not take away any of the rights or responsibilities established by the federal government, but they may add rights and responsibilities. In many states, the following changes might not be as sweeping due to statutes and regulations. In addition, accrediting organizations often have stricter requirements than the new federal regulations.


Transfer Agreements with Hospitals Background In 2014, a member facility that was fighting to keep its doors open contacted ASCA. The facility was in a rural community, and the only local hospital refused to enter into a transfer agreement with the ASC. The stipulations imposed on admitting privileges were beyond burdensome and, eventually, the hospital stopped providing admitting privileges. Through our weekly Government Affairs Update, we asked if other


ASCA members were facing similar issues. While not always to the extreme of potentially having to shut their doors, members m clear that hospitals were often playing hardball, and


ASC compliance with this


regulation relied solely on the good faith of the hospital. We reached out to CMS, the Department of Justice (DOJ) and the Federal Trade Commission (FTC). The consensus of the agencies was that CMS should change its regulations. ASCA requested that if a hospital transfer agreement or admitting privileges were to continue to be required, CMS should acknowledge if a “good faith effort” was made and that would


satisfy


this requirement. This would greatly benefit facilities that found themselves at the mercy of a hospital unwilling to work with them. Also, a precedent for this option existed in the “good faith


26 ASC FOCUS JANUARY 2020 | ascfocus.org


effort” alternative already included in the skilled nursing regulations.


Proposed Rule: Finally, in September 2018, CMS proposed changes to this requirement.


Although the proposed


changes were more sweeping than what ASCA had requested, ASCA was pleased to see CMS address the concerns the association had raised. CMS proposed to remove the requirements at 42 CFR 416.41(b)(3), “Standard: Hospitalization” for an ASC to have a written transfer agreement or hospital admitting privileges for all physicians who practice within the ASC. According to CMS, this was meant, in part, “to address the competition barriers that currently exist in some situations where hospitals providing outpatient surgical services refuse to sign written transfer agreements or grant admitting privileges to physicians performing surgery in


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