Medicare's 2020 Proposed Payment Rule Released

July 29, 2019

The Centers for Medicare & Medicaid Services (CMS) released the 2020 proposed payment rule for ASCs and hospital outpatient departments (HOPDs) today. Of note, CMS has proposed to add eight codes to the ASC-payable list, including total knee arthroplasty (TKA). CMS also proposed to continue to align the ASC update factor with that used to update HOPD payments. Under the proposal, CMS would continue to use the hospital market basket to update ASC payments for calendar year (CY) 2020 through CY 2023 as the agency assesses this policy’s impact on volume migration.

“We are grateful that this proposed rule continues the sound policy of updating ASC Medicare payments for inflation on par with hospital outpatient departments," says ASCA CEO Bill Prentice. “In addition, proposing to add total knee arthroplasty to our procedures list so soon after moving it from the inpatient-only list speaks well to the confidence that CMS has in the ability of physicians to use well-established patient selection criteria to move appropriate patients to the lower-cost ASC setting."

Download the proposed rule PDF.

Some other initial observations about the 819-page proposal follow. ASCA will provide additional analysis soon, including a rate calculator that allows users to determine what ASCs will be paid locally if the proposal is adopted.

2.7% 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 2.7 percent—a combination of a 3.2 percent inflation update based on the hospital market basket and a productivity reduction mandated by the Affordable Care Act of 0.5 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 2020 ASC and HOPD reimbursement proposals:

Inflation update factor 3.2% 3.2%
Productivity reduction mandated by the ACA 0.5 percentage points 0.5 percentage points
Effective update 2.7% 2.7%
Conversion factor $47.827 $81.398

Proposed Additions to the ASC-Payable List

CMS is proposing to add eight codes to the ASC-payable list in 2020. These codes are:

  • 27447 (Total knee arthroplasty)
  • 29867 (Allgrft implnt knee w/scope)
  • 92920 (Prq cardiac angioplast 1 art)
  • 92921 (Prq cardiac angio addl art)
  • 92928 (Prq card stent w/angio 1 vsl)
  • 92929 (Prq card stent w/angio addl)
  • C9600 (Perc drug-el cor stent sing)
  • C9601 (Perc drug-el cor stent bran)

Total Hip Arthroplasty (THA) Proposed for Hospital Outpatient Payment List

CMS also proposed that 27130 (total hip arthroplasty) be moved off of the inpatient-only (IPO) list for 2020. If finalized, this proposal would allow this procedure to be performed in the hospital outpatient setting.

In addition, the agency is soliciting public comments on the potential removal of the following spine codes from the IPO list: 22633, 22634, 63265, 63266, 63267 and 63268.

Changes to the ASC Quality Reporting Program

CMS proposed to adopt ASC-19: Facility-Level 7-Day Hospital Visits after General Surgery Procedures Performed at Ambulatory Surgical Centers for 2024 payment determinations and beyond.

In addition, CMS is requesting comments on the potential future online data submission of suspended measures: ASC-1: Patient Burn; ASC-2: Patient Fall; ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; and ASC-4: All-Cause Hospital Transfer/Admission.

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.

Comments are due September 27, 2019, through

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