2017 Proposed Medicare Payment Rates Released

July 7, 2016

The Centers for Medicare & Medicaid Services (CMS) released the 2017 proposed payment rule for ASCs and hospital outpatient departments (HOPDs) today. You can download a copy on ASCA's web site.

Some initial observations about the 764-page proposal follow. ASCA will be providing additional analysis soon, including a rate calculator that allows users to determine what ASCs will be paid locally if the proposal is adopted.

1.2 percent rate update

If the proposed rule were to be finalized as drafted, ASCs would see an effective update of 1.2 percent—a combination of a 1.7 percent inflation update based on CMS’s estimation of the change in Consumer Price Index for All Urban Consumers (CPI-U) and a productivity reduction mandated by the Affordable Care Act of 0.5 percentage points. However, CMS does not take into account sequestration in its proposed rule. This statutory 2 percent reduction remains in effect until at least 2024 unless Congress acts.

The information below provides a comparison between the 2017 ASC and HOPD reimbursement proposals:





Inflation update factor





Productivity reduction mandated by the ACA


0.5 percentage points


0.5 percentage points

Additional reduction mandated by the ACA




0.75 percentage points

Effective update





Conversion factor





Eight new procedures proposed

The agency has proposed to add eight new procedures to the ASC list of payable procedures for 2017. This includes five codes that are currently payable in the HOPD setting, as well as three codes that are currently on the inpatient-only list. Unfortunately, all of these codes are add-on codes, and thus will not be separately payable. These codes are:

• 20936 (Sp bone agrft local add-on)

• 20937 (Sp bone agrft morsel add-on)

• 20938 (Sp bone agrft struct add-on)

• 22552 (Addl neck spine fusion)

• 22840 (Insert spine fixation device)

• 22842 (Insert spine fixation device)

• 22845 (Insert spine fixation device)

• 22851 (Apply spine prosth device)

“In addition to our perennial concern that the use of different inflation factors continues the divergence in payments between ASCs and HOPDs for performing the same procedures, we are also disappointed that CMS remains slow to recognize that ASCs can safely perform many more procedures than currently allowed," said ASCA CEO Bill Prentice. "Adding procedures that ASCs are currently performing with great success on commercial patients to our list of payable procedures would reduce costs for both beneficiaries and the Medicare program.”

Solicitation of Public Comments on the Possible Removal of Total Knee Arthroplasty (TKA) Procedure from the IPO List

CMS is also seeking public comments on whether CPT code 27447 (Total knee arthroplasty) should be removed from the inpatient-only list. ASCA has been strongly advocating for this code’s removal from the inpatient-only list, and will be requesting help from the ASC community to support this proposal in industry comments.

Changes to the ASC Quality Reporting Program

CMS did not propose to add any new measures to the ASC Quality Reporting Program for 2018 or 2019 payment determinations. They did, however, propose seven new measures be added for 2020 payment determinations. Those measures are:

Two proposed measures require data to be submitted directly to CMS via a CMS Web-based tool are: (1) ASC-13: Normothermia Outcome, percentage of patients having surgical procedures under general or neuraxial anesthesia of 60 minutes or more in duration who are normothermic within 15 minutes of arrival in the post-anesthesia care unit (PACU), and (2) ASC-14: Unplanned Anterior Vitrectomy, a procedure performed when vitreous inadvertently prolapses into the anterior segment of the eye during cataract surgery.

There are also five proposed measures based on the use of the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS). They are: (1) ASC-15a: OAS CAHPS – About Facilities and Staff; (2) ASC- 15b: OAS CAHPS – Communication About Procedure; (3) ASC-15c: OAS CAHPS – Preparation for Discharge and Recovery; (4) ASC-15d: OAS CAHPS – Overall Rating of Facility; and (5) ASC-15e: OAS CAHPS – Recommendation of Facility.

ASCA will continue to analyze the rule in detail and will soon provide more information to help ASC operators understand the impact of the proposal on their centers.