REGULATORY REVIEW
ume—or in its own silo—in this sec- ond scaling process.
Under the statute implementing the
new ASC payment system in 2008, CMS was required to apply this budget neutrality adjustment—the ASC weight scalar—only in the first year of imple- mentation of the new payment system. CMS, however, continued to apply the scalar every year after that first year. A major consequence of this siloed approach to budget neutrality is the ever-increasing payment differentials between ASC and HOPD payments. If costs are supposed to be contained look- ing at the ASC payment system alone, that means any increase in volume would lead to stagnation or a decrease in reim- bursement rates. ASCs’ highest volume procedures are often hit the hardest by this policy. For example, in 2020, ASCs received an average inflation update of 2.7 percent across all codes within the ASC payment system. However, the average effective update drops to 2.54 percent when just looking at the top 100 codes ASCs perform and to 1.74 percent for the top 10 codes. There is no evidence of growing dif- ferences in capital and operating costs in the two settings to support this grow- ing payment differential. By maintain- ing budget neutrality in silos, instead of looking at HOPDs and ASCs collec- tively, the positive impact of aligning the ASC and HOPD update factors is negated, and CMS will not achieve the long-term savings desired.
In the Final Rule establishing the
ASC payment system (72 Fed. Reg. 42532, August 2, 2007), CMS suggested that the scaling of the relative weights is a design element that will protect ASCs from changes in the OPPS relative weights that could significantly decrease payments for certain procedures. How- ever, the trend in the OPPS relative weights suggests that the scaling factor for ASCs will rarely, if ever, result in an increase in ASC relative weights. As the graph on page 20 indicates, the reduction due to application of the ASC weight scalar has increased significantly since the ASC payment system was aligned
CMS will not see significant volume shift to the ASC setting until the ASC weight scalar issue is resolved.”
—Kara Newbury, ASCA
with the HOPD payment system. For the first time ever, in 2018, the ASC weight scalar fell under 0.9000 to 0.8995, for a 10.1 percent reduction to the ASC weights, and in 2020, CMS finalized a staggeringly low adjustment of 0.8550; a 14.5 percent reduction to ASC weights. Application of the ASC weight sca- lar widens the gap between hospital and ASC payments and discourages case migration that would benefit Medicare and its beneficiaries. The historical trend seen above, and the absence of any indi- cation that it is likely to reverse in the future, suggests that the continued appli- cation of the ASC weight scalar will exacerbate the growing divergence in ASC and HOPD rates. In so doing, the agency is needlessly increasing Medi- care program costs by making it finan- cially untenable for ASCs to perform many procedures that are otherwise clin- ically appropriate and, therefore, encour- aging physicians and hospitals to furnish those procedures in the more expensive HOPD setting. To ensure that ASCs remain a viable alternative for Medicare beneficiaries in need of outpatient surgi- cal care, CMS must make a change.
ASCA Policy Proposals ASCA has been advocating for CMS to make changes to ASC payment pol- icy that would arrest this growing pay- ment disparity. Specifically, we urge CMS to discontinue use of the ASC relative weight scalar, which contrib- utes substantially to the rate divergence. CMS has the statutory authority to sim- ply eliminate the weight scalar, but this has been a politically untenable solution since, on its face, it would cost Medicare money. Although ASCA argues that vol-
ume would, in fact, shift to the lower- cost ASC setting if this policy change were to be made, CMS does not project savings. Instead, the agency views the change as contributing to a significant increase to the payment system. Recognizing CMS’ concerns, over
the past two payment rule cycles, ASCA has proposed a different policy change that would be budget neutral while pro- viding stability to ASC payment weights and rates. ASCA recommends that CMS combine the ASC volume for services that have a national payment amount based on the OPPS relative payment weights with the OPPS volume and con- duct one single budget neutrality calcula- tion to scale the relative weights for both HOPDs and ASCs just one time. This would eliminate any difference in the total payment between the current year and the update year based on changes in the weights. This proposal would be budget neutral.
At a meeting in February 2019, CMS
staff questioned their statutory author- ity to make this change. To be respon- sive to CMS’ concerns, ASCA obtained a legal opinion from the law firm Arnold & Porter on this matter. The memo con- cluded that there is nothing in statute that prohibits CMS from pursuing this policy change. Attorneys higher up in the administration are still questioning CMS’ authority to institute this change, so as this article goes to press, ASCA is seeking a second legal memo supporting position. ASCA also has worked with its con- gressional supporters, encouraging them to reach out to the US Department of Health and Human Services (HHS) and the administration to voice concerns with the current payment policy and support ASCA’s proposed changes. ASCA will continue to work with policymakers to achieve improved parity between ASC and HOPD reimbursements to ensure ASCs remain a viable healthcare option for Medicare beneficiaries.
Kara Newbury is ASCA’s director of Government Affairs and regulatory counsel. Write her at
knewbury@ascassociation.org.
ASC FOCUS APRIL 2020 |
ascfocus.org 23
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30
