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REGULATORY REVIEW


Research Shows ASCs Lower Medicare Costs by Billions Projections say ASCs will reduce Medicare spending by $73.4 billion from 2019 to 2028 BY ALEX TAIRA


Background


ASCs perform roughly 6.8 million vital surgical, diagnostic and preventive procedures for Medicare


beneficiaries each year, according to the Centers for Medicare & Medic- aid Services’ (CMS) 2018 data. That includes 75 percent of beneficiary cataract removals, 50 percent of colonoscopies and well over 100,000 colorectal cancer screenings, con- tributing to the decades-long decline in colorectal cancer incidence and mortality, according to the Ameri- can Cancer Society. Despite the wide range of services available at ASCs, a small number of procedures have historically represented a large per- centage of the surgical volume per- formed on Medicare beneficiaries. For example, cataract removal with intraocular lens insertion (Health- care Common Procedure Coding System [HCPCS] 66984) and upper gastrointestinal procedure with biopsy (HCPCS 43239) have been the top two most common codes per- formed at ASCs on Medicare benefi- ciaries since at least 2008. According to the Medicare Payment Advisory Commission (MedPAC), just 28 pro- cedures account for 75 percent of all Medicare volume at ASCs. Recent advancements in surgical techniques and technology, however, have created opportunities for new medical specialties to move proce- dures to the outpatient setting. Health- care intelligence firm Sg2 projects that 85 percent of all healthcare pro- cedures will be performed outpatient by 2028, due in large part to advances in specialties like orthopedics, cardi-


ology and spine, which are still over- whelmingly performed on an inpa- tient basis. The Centers for Medicare & Medicaid Services (CMS) tends to be more conservative than private payers in approving procedures for reimbursement due to the higher-risk nature of Medicare’s beneficiary pool. In 2019, however, the agency final- ized proposals allowing new complex procedures, including coronary inter- ventions and total knee replacements, to be reimbursed in ASCs. Perfor- mance of these procedures, and oth- ers like them, in the lower-cost ASC setting has the potential to save Medi- care and its beneficiaries billions in the coming years.


Savings Analysis


In 2013, researchers at the Univer- sity of California-Berkeley analyzed Medicare data to determine how much money ASCs had saved the pro-


18 ASC FOCUS FEBRUARY 2021 | ascfocus.org


gram in recent years. They found that from 2008 to 2011, ASCs reduced costs to the Medicare program and its beneficiaries by $7.5 billion, includ- ing $2.3 billion in 2011 alone. The analysis also projected future sav- ings and found that if total volume and ASC share of Medicare outpa- tient procedures increased, ASCs could save the program as much as $57.6 billion from 2013 to 2022. In September 2020, ASCA shared new analyses conducted by KNG Health Consulting, LLC (KNG) that con- firms the findings of the 2013 analy- sis and shows even greater potential for Medicare savings due to ASCs in the coming decade. KNG examined real Medicare claims data in the period 2011 to 2018 to determine the average claims paid amount for every procedure performed in a hospital outpatient department (HOPD) or ASC. The


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