Medicare’s 2014 Final Rule Released

November 27, 2013

The Centers for Medicare & Medicaid Services (CMS) released its final 2014 ASC payment rule today.

According to the rule, ASC payment rates will increase by 1.2 percent in 2014. This increase is based on a projected rate of inflation of 1.7 percent minus a 0.5 percentage point productivity adjustment required by the Affordable Care Act. This payment update is higher than the 0.9 percent update in the proposed rule, which was based on an inflation rate of 1.4 percent minus a 0.5 percentage point productivity adjustment.

According to the rule, hospital outpatient departments (HOPDs) will receive a 1.7 percent increase, based on a 2.5 percent market basket minus both a 0.5 percent adjustment for economy-wide productivity and a 0.3 percentage point adjustment required by statute.

"While we are pleased to see a slight increase in our payments over the proposed rule, sequestration will still result in a negative update for ASCs in 2014 unless Congress acts. As usual, we are extremely disappointed that CMS continues to undervalue ASC payments by using the CPI-U to update them, a factor that even their own actuaries believe is inappropriate," said ASCA CEO Bill Prentice. "Using different update factors for ASCs and HOPDs widens the gap between HOPD payments and ASC payments, further incentivizes a disturbing trend of conversions of ASCs to HOPDs and increases costs to the Medicare program, it’s beneficiaries and taxpayers who support the program."

CMS also finalized three of the four new quality measures that were in the proposed rule. The new measures, which will affect payment in CY 2016, with data collection beginning in CY 2014, are as follows:

  1. Endoscopy/Poly Surveillance: Appropriate follow-up interval for normal colonoscopy in average risk patients;

  2. Endoscopy/Poly Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps – Avoidance of Inappropriate Use; and

  3. Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery.

Although the three measures were finalized, the rule indicates centers will only be required to report on a sample of cases for each measure. Sampling specifications will be published at a later date in the ASC Quality Reporting Specifications Manual on the QualityNet web site.

“We regret that CMS has rejected our very valid concerns about the new quality measures it has proposed, burdening ASCs to provide data on three measures that the facilities do not routinely possess,” said Prentice.

CMS did not finalize the “Complications within 30 Days following Cataract Surgery Requiring Additional Surgical Procedures” measure that was included in the proposed rule, so for now ASCs will not be required to report this information.

CMS also finalized its proposal to exempt smaller facilities, defined as those ASCs with fewer than 240 Medicare claims per year, from complying with the quality reporting requirements.

Although there were no new procedures in the proposed rule, CMS did move the following four codes to the ASC setting in the final rule: 27415, 27524, 60240 and 60500.

Click here to download the final rule. ASCA will continue to analyze the rule in detail and will provide more information next week to help ASC operators understand the impact of the final rule on their centers.

For more information, contact Kara Newbury at