2021 Proposed Medicare Payment Rule Released

August 4, 2020

The Centers for Medicare & Medicaid Services (CMS) released the 2021 proposed payment rule for ASCs and hospital outpatient departments (HOPDs) today. Of note, CMS has proposed to add 11 codes to the ASC Covered Procedures List (ASC-CPL), including total hip arthroplasty (THA). CMS also proposed two alternative proposals regarding the CPL that are being considered for finalization in 2021. 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) 2021 through CY 2023 as the agency assesses this policy’s impact on volume migration.

“First, I want to acknowledge all the hard work that Administrator Verma and the staff at CMS have done this year in meeting the extraordinary challenges of the COVID-19 pandemic and working with the ASC community to assure that patients can still get the care they require,” said ASCA Chief Executive Officer Bill Prentice. "A positive thread running through this proposed rule is that physician decision-making is the best arbiter for determining the appropriate setting for beneficiary care, and we know that greater use of ASCs by patients can save the Medicare program billions of dollars over time. That said, we remain concerned that, while this proposal explains the negative impact that the use of weight scaling has on ASC rates, it does not take the needed step of addressing it.”

Download the proposed rule PDF.

Some other initial observations about the 785-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.

2.6% 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 2.6 percent—a combination of a 3.0 percent inflation update based on the hospital market basket 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.

The information below provides a comparison between the 2021 ASC and HOPD reimbursement proposals:

Inflation update factor 3.0% 3.0%
Productivity reduction mandated by the ACA 0.4 percentage points 0.4 percentage points
Effective update 2.6% 2.6%
Conversion factor $48.984 $83.697

Proposed Additions to the ASC Covered Procedures List

CMS is proposing to add 11 codes to the ASC-CPL list in 2021. These codes are:

  • 0266T (Implt/rpl crtd sns dev total)
  • 0268T (Implt/rpl crtd sns dev gen)
  • 0404T (Trnscrv uterin fibroid abltj)
  • 21365 (Opn tx complx malar fx)
  • 27130 (Total hip arthroplasty)
  • 27412 (Autochondrocyte implant knee)
  • 57282 (Colpopexy extraperitoneal)
  • 57283 (Colpopexy intraperitoneal)
  • 57425 (Laparoscopy surg colpopexy)
  • C9764 (Revasc intravasc lithotripsy)
  • C9766 (Revasc intra lithotrip-ather)

CMS is also proposing two alternatives for adding codes to the ASC-CPL.

  • Establish a nomination process for CY 2021, through which external stakeholders, such as professional specialty societies, would nominate procedures for addition to the ASC-CPL. CMS would review and finalize procedures through annual rulemaking, beginning with the CY 2022 rule.
  • Revise the ASC-CPL criteria under 42 CFR 416.166, retaining the general standard criteria and eliminating five of the general exclusion criteria. Using these revised criteria, CMS proposes to add approximately 270 potential surgery or surgery-like codes to the CPL that are not on the CY 2020 IPO list.

Proposal to Eliminate Inpatient-Only List Over Next Three Years

CMS is proposing to transition codes off the inpatient-only (IPO) list over a three-year period, with the list completely eliminated by 2024. For CY 2021, CMS is proposing to start with 300 musculoskeletal services for removal from the IPO list in 2021.

No New Measures Proposed for ASC Quality Reporting Program

CMS is not proposing to remove any existing measures or to adopt any new measures for the CY 2023 payment determination.

Comments are due October 5, 2020, through www.regulations.gov.

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.