2019 Proposed Medicare Payment Rule Released

July 25, 2018

The Centers for Medicare & Medicaid Services (CMS) released the 2019 proposed payment rule for ASCs and hospital outpatient departments (HOPDs) today. Of note, CMS has addressed a number of long-requested ASCA priorities, including proposing to align update factors, moving ASCs to the hospital market basket that is used to update HOPD payments. Under the proposal, CMS would use the hospital market basket to update ASC payments for the five-year period of calendar year (CY) 2019 through CY 2023.

“We are grateful that CMS, after years of urging by ASCA, is proposing to measure inflation in ASCs by using the hospital market basket,” said ASCA CEO Bill Prentice. “ASCs use the same staff, services and supplies as hospital outpatient departments so it only makes sense to apply the same inflation rate for our yearly updates.”

Some other initial observations about the 761-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.

2.0% 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 2.0 percent—a combination of a 2.8 percent inflation update based on the hospital market basket and a productivity reduction mandated by the Affordable Care Act of 0.8 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 consider sequestration in its proposed rule. This statutory 2.0 percent reduction remains in effect until at least 2024 unless Congress acts.

The information below provides a comparison between the 2019 ASC and HOPD reimbursement proposals:

Inflation update factor 2.8% 2.8%
Productivity reduction mandated by the ACA 0.8 percentage points 0.8 percentage points
Additional reduction mandated by the ACA N/A 0.75 percentage points
Effective update 2.0% 1.25%
Conversion factor $46.500 $79.546

Lower Device Intensive Procedure Threshold Proposed

CMS is also proposing to define ASC device-intensive procedures as those procedures with a device offset percentage greater than 30 percent based on the standard OPPS APC rate-setting methodology. The current threshold is 40 percent, and ASCA has advocated strongly for a lower threshold.

Proposed Changes to List of ASC Covered Surgical Procedures

CMS is proposing to revise their definition of “surgery” in the ASC payment system to account for certain “surgery-like” procedures that are assigned codes outside the Current Procedural Terminology (CPT) surgical range. In addition, they are proposing to add 12 cardiac catheterization procedures to the ASC covered procedures list. These codes can be found in Table 40 of the rule, beginning on page 440 of 761.

Proposed Payment for Non-Opioid Pain Management Therapy

For 2019, CMS is proposing to provide separate payment for non-opioid pain management drugs that function as a supply when used in a surgical procedure when the procedure is performed in an ASC. Currently, HCPCS code C9290, Exparel, is the only code that meets the proposed criteria and will receive separate payment when used in a surgical procedure when the procedure is performed in an ASC.

No Action Taken on Total Joint Replacements

As expected, CMS did not propose to add any total joint replacement codes to the ASC-payable list for 2019.

Changes to the ASC Quality Reporting Program

There were sweeping changes proposed to the ASC Quality Reporting (ASCQR) Program. Most significantly, CMS is proposing to remove a total of eight measures from the ASCQR Program measure set across the CY 2020 and CY 2021 payment determinations. Specifically, beginning with the CY 2020 payment determination, they are proposing to remove: ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel; and beginning with the CY 2021 payment determination, they are proposing to remove: ASC-1: Patient Burn; ASC-2: Patient Fall; ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; ASC-4: All-Cause Hospital Transfer/Admission; ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients; ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps - Avoidance of Inappropriate Use; and voluntary measure ASC-11: Cataracts - Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery.

CMS did not yet propose to mandate implementation of the Consumer Assessment of Healthcare Providers and Systems Outpatient and Ambulatory Surgery Survey (OAS CAHPS) under the ASCQR Program.

With regards to quality, Prentice added, “The reduction of measures in the ASC Quality Reporting Program demonstrates the outstanding performance of ASCs in preventing serious adverse events and a finding by CMS that it is no longer necessary to collect this data. We look forward to working with CMS staff to identify new measures that focus on patient outcomes and provide actionable data that can be used by patients, providers and regulators.”

Comments are due September 24, 2018.

ASCA members are to be congratulated, as they are directly responsible for the changes proposed in this rule. We thank you for your help and appreciate your continued willingness to support ASCA’s advocacy efforts.

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.