Ambulatory Surgical Centers: The Need for a New Medicare Payment System

Medicare’s Current Payment System:

  • Ambulatory surgical centers (ASCs) receive a facility fee for certain procedures, which must be on an “approved” list. Use of an inclusion list delays adding new procedures, particularly new technology, to the approved list
  • The ASC fee schedule is divided into nine payment groups, which are not clinically coherent and have payments rates based on old cost data collected from in accurate survey mechanism.
  • The use of only nine payment groups increases the likelihood of under and over payments. As a result, there are disparities between ASC and hospital outpatient department (HOPD) payments.

Current State of ASC Payments:

  • In a January 2003 report, the Office of the Inspector General (OIG) recommended greater parity between ASC and HOPD payments rates because current disparities result in an estimated $1.1 billion in additional Medicare program payments.
  • In a March 2004 report, the Medicare Payment Advisory Commission (MedPAC), recommended the following:
    • Create more payment groups based on clinical and cost similarity;
    • Use more recent cost data;
    • Utilize the HOPD APC groups and eliminate the “approved” list. Establish an “exclusionary” list to protect patient safety.
    • Base ASC payment rates on the with HOPD prospective payment system to ensure that Medicare does not pay more for the same procedure in either setting and eliminate site-of-service differentials.
    • The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) froze ASC payments at 2003 levels until 2009, and requires CMS to implement a new ASC payment system, sometime between January 2006 and January 2008.

ASIPP’s Concerns and Recommendations:

  • ASIPP strongly supports a shift from an “approved” list to an “exclusionary” list because CMS has not yet developed a rational and efficient process for adding procedures to the “approved list.”
  • ASIPP agrees that the HOPD payment methodology is more refined than the method used to calculate ASC payments, but stresses that there still are significant problems with the accuracy of hospital claims data and hospitals reporting of costs and charges. Consequently, should the ASC payment system be based on the HOPD system there must be a safety net built in to ensure adequate cost coverage.
  • It would be inaccurate to assume that it costs hospitals more to furnish all services, and, that ASCs should, therefore, be paid some percentage less then hospitals. This will lead to the same site-of-service discrepancies the OIG and MedPAC believe need to be eliminated.
  • For example, should the decision be made to pay ASCs 75% of the payment rates paid for hospital outpatient department services all of the following services would be paid well below current ASC rates and less than it costs to purchase the supplies to perform the procedure.

Procedure

CPT Code

Current ASC

75% HOPD

Spinal puncture 

62270

$333

$93

Nerve injections

64415, 64415, 64417, 64420, 64430, 64517

$333

$93

Blood patch

2273

$333

$231

Nerve injections

64410, 64421, 64472, 64476, G0260

$333

$231

Nerve injections

62280, 62281, 62282, 62310, 62311, 62318, 62319, 64470, 64475, 64479, 64480, 64483, 64484, 64510, 64520, 64530, 64623, 64627, 64680

$333

$231

*To ensure continued access, payment changes must accurately reflect the costs of delivering services.