2018 Final ASC Medicare Payment Rule Released

November 1, 2017

The Centers for Medicare & Medicaid Services (CMS) released its 2018 final payment rule for ASCs and hospital outpatient departments (HOPDs) today. Both ASCs and HOPDs will receive lower increases than were proposed in July. Download a copy of the rule.

On average, ASC payment rates will increase by 1.2 percent in 2018. 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 increase is lower than the 1.9 percent effective update that was included in the proposed rule.

“Yet again, ASC payments fall farther behind those of hospital outpatient departments because CMS continues to use an inflation factor—the CPI-U—that doesn’t focus on the costs of goods and services in the healthcare market,” said Bill Prentice, CEO of the Ambulatory Surgery Center Association. “CMS insists on waiting for a perfect replacement to the CPI-U while a good one, the hospital market basket, is available.”

Hospital outpatient departments (HOPDs) will receive a 1.35 percent increase, based on a 2.7 percent market basket update minus a 0.6 percent adjustment for economy-wide productivity and a 0.75 percentage point adjustment required by statute. This increase is lower than the 1.75 percent effective update that was included in the proposed rule.

Please note that these are average increases, and that updates may vary significantly by code and specialty. It is also important to note that CMS does not consider sequestration in this 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 final rule updates:

Inflation update factor 1.7% 2.7%
Productivity reduction mandated by the ACA 0.5 percentage points 0.6 percentage points
Additional reduction mandated by the ACA n/a 0.75 percentage points
Effective update 1.2% 1.35%
Conversion factor $45.575 $78.636

Three New Procedures Finalized

The agency finalized the addition of three new procedures to the ASC list of payable procedures for 2018. These codes are:

  • 22856 (Cerv artific diskectomy);
  • 22858 (Second level cer diskectomy); and
  • 58572 (Tlh uterus over 250 g)

In the proposed rule, CMS solicited comments on whether total knee arthroplasty, partial hip arthroplasty (PHA) and total hip arthroplasty (THA) meet the criteria to be added to the ASC-Payable List. In this final rule, CMS made the determination that these codes should continue to be excluded from the ASC Covered Procedures List, stating that “because our understanding is that these procedures typically require more than 24 hours of active medical care following the procedure.”

Removal of Total Knee Arthroplasty Procedure from the IPO List

CMS did finalize the removal of total knee arthroplasty (TKA) from the inpatient-only list for 2018. CMS indicated that, regarding other joint replacement codes, they were going to allow for further discussion before finalizing their removal from the inpatient-only list.

Changes to the ASC Quality Reporting Program

There were significant changes proposed to the ASC Quality Reporting (ASCQR) Program. Most significantly, CMS is delaying 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 is also removing 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.

“ASCA remains fully committed to assisting CMS in developing a robust quality reporting program that can guide patients to the appropriate site of service for the care they need," Prentice added. "Beneficiaries deserve to know more about the cost and quality of the care they receive through the Medicare program.”

CMS did not finalize its proposal to adopt ASC-16: Toxic Anterior Segment Syndrome for the CY 2021 payment determination and subsequent years.

The Agency did, however, finalize 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).

Download the final rule. ASCA will conduct a more comprehensive review and provide more information in the coming weeks to help ASC operators understand the impact of the final rule on their facilities.

For more information, contact Kara Newbury.