2018 Proposed Medicare Payment Rule Released

July 13, 2017

The Centers for Medicare & Medicaid Services (CMS) released the 2018 proposed payment rule for ASCs and hospital outpatient departments (HOPDs) today. You can download a copy here.

Some initial observations about the 664-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.

1.9% Average Rate Update

If the proposed rule were to be finalized as drafted, ASCs would see, on average over all covered procedures, an effective update of 1.9 percent—a combination of a 2.3 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 0.4 percentage points. Please note that this is an average, and that updates may vary significantly by code and specialty. It is also important to note that 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 2018 ASC and HOPD reimbursement proposals:

Inflation update factor 2.3% 2.9%
Productivity reduction mandated by the ACA 0.4 percentage points 0.4 percentage points
Additional reduction mandated by the ACA n/a 0.75 percentage points
Effective update 1.9% 1.75%
Conversion factor $45.876 $76.483

Three New Procedures Proposed

The agency has proposed to add three new procedures to the ASC list of payable procedures for 2018. These codes are:

  • 22856 (Cerv artific diskectomy), which has a J8 payment indicator, meaning it is a device-intensive code;
  • 22858 (Second level cer diskectomy), which has an N1 payment indicator, meaning it is packaged and not separately payable; and
  • 58572 (Tlh uterus over 250 g), which has a G2 payment indicator, meaning it is a non-office-based surgical code

In addition, CMS is soliciting comments on whether total knee arthroplasty, partial hip arthroplasty and total hip arthroplasty meet the criteria to be added to the ASC Payable List.

Proposed Removal of Total Knee Arthroplasty (TKA) Procedure from the IPO List

CMS is proposing to remove total knee arthroplasty from the inpatient-only list for 2018. In addition, they are soliciting comments on whether partial and total hip should also be removed from the inpatient-only list and as mentioned above, added to the ASC Covered Surgical Procedures List.

Changes to the ASC Quality Reporting Program

There were significant changes proposed to the ASC Quality Reporting Program. Most significantly, CMS is proposing to delay the mandatory implementation of the Consumer Assessment of Healthcare Providers and Systems Outpatient and Ambulatory Surgery Survey (OAS CAHPS) under the ASCQR Program for CY 2018 data collection. CMS also invites public comments on measures (ASC-15a-e). Under this proposal, ASCs that would like to continue to administer the survey under the voluntary national implementation, may do so in CY 2018.

“At first read, the proposed rule shows a greater recognition by CMS of the evolution in care provided in ASCs,” said ASCA CEO Bill Prentice. “Also, while we strongly support having a patient experience of care survey in both the ASC and hospital outpatient settings, we appreciate that the agency has delayed the implementation of the OAS-CAHPS measure until the costs and administrative burdens of the survey are reduced. We look forward to working with the agency to make those improvements as quickly as possible.”

CMS is also proposing to remove a total of three measures for the CY 2019 payment determination and subsequent years: (1) ASC-5: Prophylactic Intravenous (IV) Antibiotic Timing; (2) ASC-6: Safe Surgery Checklist Use; and (3) ASC-7: ASC Facility Volume Data on Selected Procedures.

CMS is proposing to adopt a total of three new measures for the ASCQR Program: one measure collected via a CMS web-based tool for the CY 2021 payment determination and subsequent years (ASC-16: Toxic Anterior Segment Syndrome), and two measures collected via claims for the CY 2022 payment determination and subsequent years (ASC-17: Hospital Visits after Orthopedic Ambulatory Surgical Center Procedures; and ASC-18: Hospital Visits after Urology Ambulatory Surgical Center Procedures).

CMS also invites public comments on the Ambulatory Breast Procedure Surgical Site Infection Outcome measure (NQF #3025) for potential inclusion in the ASCQR Program in future rulemaking.

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.