News | July 16, 2007

FASA Weighs in on Medicare ASC Payment Reform

July 17, 2007 – FASA, the national association representing ambulatory surgery centers (ASCs), commented on the CMS’ final rule to reform the way Medicare sets payments for surgical procedures performed in ASCs. Effective January 1, 2008, the CMS rule sets ASC payment rates at no more than 67 percent of the corresponding hospital outpatient department (HOPD) rates for the same procedures. If proposed HOPD rates are adopted, ASC payment rates would be no more than 65 percent of the corresponding HOPD rates.

“While we are pleased that CMS has increased ASC payment rates from its proposed rule,” said FASA President Kathy Bryant, “we don’t believe CMS has gone far enough. To ensure that patient choice and patient access to top-quality surgical care are protected, we believe these payments need to be much higher and other provisions of the new rule need to be changed.”

“In 2003,” continued Bryant, “ASCs were paid approximately 86.5 percent of HOPD rates. In addition, an industry analysis shows that maximum benefits, while complying with statutory restrictions, would be achieved if ASCs received approximately 75 percent of the HOPD rates. Because CMS is still setting ASC payment rates so low, payments for some procedures will be cut significantly. On top of four years without a payment increase, this is likely to mean that some procedures now performed in ASCs will be forced back into the hospitals, where those procedures will ultimately cost Medicare and its beneficiaries more.”

“By failing to directly link the ASC and HOPD payment systems,” Bryant asserted, “CMS lost a real opportunity to improve health care cost transparency for beneficiaries. The continued differences in the two payment systems this rule includes will make it impossible for beneficiaries to directly and easily compare the costs of having surgery in ASCs and HOPDs, and to make informed choices about their healthcare.”

FASA did express support for provisions in the rule that (1) expand the list of procedures Medicare will reimburse ASCs for providing, (2) allow Medicare payments for fluoroscopy services, (3) provide for full payments for implants and other devices for Medicare beneficiaries and (4) incorporate a phase-in period for the new payment system.

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