ASC Quality and Access Act of 2017

Ambulatory Surgical Center Quality and Access Act of 2017 (H.R. 1838/S.1001)

Enacting the Ambulatory Surgical Center Quality and Access Act of 2017, sponsored by US Representatives Devin Nunes (R-CA) and John Larson (D-CT), is necessary to ensure that the Medicare program and its beneficiaries continue to enjoy the high level of care and cost savings that the more than 5,400 ambulatory surgery centers (ASCs) across the nation provide.

ASCs are modern health care facilities focused on providing same-day outpatient surgical care, including diagnostic and preventive health care procedures. ASCs have transformed the outpatient experience for millions of Americans by offering a convenient, personalized, lower-cost setting of care―and have done so with a strong track record of top-quality care and positive patient outcomes.

According to a recent analysis by the University of California-Berkeley Nicholas C. Petris Center on Health Care Markets and Consumer Welfare, during the four-year period from 2008 to 2011, ASCs saved the Medicare program $7.5 billion―$2.3 billion in 2011 alone. The Berkeley researchers also found that ASCs have the potential to save Medicare up to $57.6 billion more over the next decade. These savings occur because Medicare pays significantly less—and patients' coinsurance is less—for the same procedures when performed in ASCs instead of hospital outpatient departments (HOPDs).

A growing disparity in payments between ASCs and HOPDs, however, is jeopardizing the industry. Over the past decade, ASCs have been subjected to a six-year payment rate freeze and hamstrung by payment updates determined using an inflation measure that is unrelated to the true costs of providing health care services.

To ensure Medicare patients have access to the high-quality, cost-effective services ASCs provide, the Ambulatory Surgical Center Quality and Access Act of 2017 will enact the following reforms:

Update Reimbursement for ASC Services Using the Same Update Factor as HOPDs—The Hospital Market Basket

On average, Medicare pays ASCs less than 50% of HOPD rates for the same procedures. This payment disparity exists, in part, because ASC payment rates are updated using the Consumer Price Index for All Urban Consumers (CPI-U) while HOPD payment increases are based on the hospital market basket. The CPI-U does not appropriately measure the increase in costs in an ASC, while the hospital market basket is based on factors directly related to the increasing costs of providing medical care—inflationary pressures shared by both hospitals and ASCs. Since there are no significant differences in the cost of goods and services provided by ASCs and HOPDs, the same update mechanism should apply.

Add an ASC Representative to the Advisory Panel on Hospital Outpatient Payment

This provision will add an ASC representative to CMS’ Advisory Panel on Hospital Outpatient Payment (HOP)—a 15-member panel that impacts payment policies for both HOPDs and ASCs. Currently, statute requires all HOP members be employed by a hospital or hospital system. Since decisions made by the HOP impact ASC facility fees and the list of procedures that Medicare will reimburse ASCs for providing, ASCs—like hospitals—should have an industry representative on the Panel.

Disclose Criteria Used to Determine the ASC Procedure List

CMS can exclude a procedure from the ASC procedure list because of a general concern for six specific criteria. CMS, however, is not required to disclose which of the criteria trigger the exclusion for a given procedure. This makes it difficult for ASCs to marshal the data needed to challenge these decisions.

This provision within the Ambulatory Surgery Center Payment Transparency Act of 2018 would add clarity to the CMS review process by requiring CMS to disclose which of the criteria trigger the exclusion and prohibit CMS from excluding procedures reported with unlisted codes from the ASC setting. Adding procedures that can be performed safely in an ASC setting to this list saves Medicare and its beneficiaries money.

Create Transparency of Quality Reporting and Medicare Beneficiary Information

Both ASCs and HOPDs who treat Medicare patients are required to submit quality data based on measures established by CMS. In the event that a measure is applicable to both the ASC and the HOPD setting, CMS would be required to post the results online in a “side-by-side comparison.” The publicly available data would include quality measures for both sites of service in the same geographical area.