For physicians who own an ASC or have an interest in one

CMS revamps ASC payment system for 2008

The Centers for Medicare & Medicaid Services (CMS) issued its final rule outlining a revised ambulatory surgery center (ASC) payment system and an expanded list of Medicare-approved procedures for ASCs on Monday. CMS also issued a combined OPPS/ASC proposed rule that would update the hospital Outpatient Prospective Payment System (OPPS), effective for services provided during calendar year 2008 for Medicare beneficiaries.

New payment system in 2008
The new ASC payment system is based on the OPPS, using OPPS relative payment weights for Ambulatory Payment Classifications (APC) as a guideline. ASCs will receive 65% of the OPPS rates under the proposed OPPS/ASC payment system, or 67% of the corresponding payment rates for the APCs, which is slightly higher than the originally proposed 62%, according to CMS’ press release.

“Based upon all of our analysis, 73% would be budget neutral in 2008 with maximizing the absolute volume of procedures that could move from the hospital to the ASC, which of course at 73% would save Medicare 27% on every single procedure. I think CMS missed a big opportunity here, and we are still commenting on the proposed rule,” says Kathy Bryant, president of FASA.

Craig Jeffries, executive director of the American Association of Ambulatory Surgery Centers (AAASC), agreed with Bryant’s sentiments.

“We are pleased with CMS’ final rule on ASC payment as it moves toward the policy objectives of the AAASC. Unfortunately, CMS has fallen short on a number of key areas. The impact of 67% based on the proposed 62% or the 65% based on a recalibration and updated data for the 2008 implementation is still woefully below a rate necessary to sustain access for Medicare beneficiaries to the lower cost environment available in the ASC.”

The final rule’s payment rates will be published as part of the 2008 OPPS/ASC final rule later this year. The final rule will create a four-year transition period for implementing the revised rates so that ASCs have sufficient time to adjust to the new system.

“I think the four-year transition clearly benefits areas like specialties or specific surgery centers where these changes would be abrupt decreases,” Bryant says. “It’s something that we had suggested—there should be a fair transition so we think that’s positive on the whole. Although certainly for some ASCs it’s a big negative. It’s not so much a positive or negative for ASCs, but a positive or negative depending on whether most of your procedures are going up or going down in payment.”

According to a FASA press release, The association encouraged CMS to phase in the new system because “changes in reimbursement for specific procedures and specialties may disproportionately impact certain types of ASCs, especially certain types of single-specialty ASCs.”

List reform in 2008
The final rule also includes an update to the ASC list of Medicare-approved procedures effective January 1, 2008. The rule adds 790 procedures to the list in 2008, including device-intensive procedures, ancillary radiology services, and drugs and biologicals, according to a CMS press release.

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