2022 Final Medicare Payment Rule Released

November 2, 2021

2022 Final Medicare Payment Rule Released; Minor Improvements but Still Disappointing

The Centers for Medicare & Medicaid Services (CMS) released its 2022 final payment rule for ASCs and hospital outpatient departments (HOPD) on November 2, 2021.

Of note, CMS finalized its proposal to reverse policy changes from the previous administration that added a significant number of codes to the ASC Covered Procedures List (ASC-CPL) and began the process of eliminating the inpatient-only (IPO) list, with a few modifications. CMS also continued to use the hospital market basket to update ASC payments for calendar year (CY) 2022. This policy is currently slated to run through CY 2023 as the agency assesses its impact on volume migration.

“This final rule contains some modest improvements since the proposed rule, but we are disappointed that the agency finalized a decision to reduce beneficiary access to ASCs for a number of important procedures that were added just a year ago, despite CMS having little to no clinical data to use as a basis for removing them from our payable list. To that end, however, we were particularly pleased to see that our longstanding recommendation for a transparent process to add procedures to our payable list is included,” said ASCA Chief Executive Officer Bill Prentice. “We hope that we can work with the Biden administration in 2022 to make significant, constructive changes to the program so that more Medicare beneficiaries can get care in the ASC setting for the many additional procedures that can be safely performed in ASCs. Doing so will generate savings for both patients and the program.”

Download the final rule PDF.

Some other initial observations about the 1,394-page rule follow. ASCA will be providing additional analysis soon, including a rate calculator that allows users to determine what ASCs will be paid locally in 2022.

2.0% Average Rate Update

CMS finalized an effective update of 2.0 percent—a combination of a 2.7 percent inflation update based on the hospital market basket and a productivity reduction mandated by the Affordable Care Act of 0.7 percentage points. This is a decrease of 0.3 percent from the proposed rule. 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 2022 ASC and HOPD reimbursement updates:

ASC HOPD
Inflation update factor 2.7% 2.7%
Productivity reduction mandated by the ACA 0.7 percentage points 0.7 percentage points
Effective update 2.0% 2.0%
Conversion factor $49.916 $84.177

CMS Finalizes Positive Device-Intensive Procedure Policy for ASCs

CMS has finalized a policy change to calculate the device offset percentage to use ASC rates and not HOPD rates as was previous practice. This means that any procedure for which the device cost is 30 percent of the overall ASC procedure rate will receive device-intensive status. ASCA has long requested this change.

Additionally, if a device receives HOPD device-intensive status, the device will also be device-intensive in the ASC setting. For CY 2022 and subsequent years, if a procedure is assigned device-intensive status for HOPDs but has a device offset percentage below the device-intensive threshold under the standard ASC rate-setting methodology, the procedure will be assigned device-intensive status under the ASC payment system with a default device offset percentage of 31 percent.

Removal of Codes from the ASC Covered Procedures List

For 2022, CMS is removing 255 of the 258 codes that it had added to the ASC Covered Procedures List (ASC-CPL) in 2021. The three codes that will remain on the ASC-CPL are:

  • 0499T (Cysto f/urtl strix/stenosis)
  • 54650 (Orchiopexy (fowler-stephens))
  • 60512 (Autotransplant parathyroid)

CMS is also reversing recent changes to 42 CFR §416.166 by bringing back the general exclusion criteria in place during 2020 and previous years.

CMS also finalized its proposal to establish a new procedure nomination process for CY 2022. Using this process, external stakeholders, such as professional specialty societies, would nominate procedures for addition to the ASC-CPL. CMS will review and finalize procedures through annual rulemaking, beginning with the CY 2023 rule.

Reinstatement of the Inpatient-Only List

CMS is finalizing its proposal to halt the elimination of the inpatient-only (IPO) list over a three-year period, as finalized in 2021 rulemaking, and to add almost 300 codes back to the IPO list for 2022. ASCA provided research and data on the safety of several of these codes to be performed on an outpatient basis and was notably successful with keeping CPT codes 22630 (Lumbar spine fusion); 23472 (Reconstruct shoulder joint) and 27702 (Reconstruct ankle joint) from reverting back to the IPO list.

Changes to the ASC Quality Reporting Program

Regarding the ASC Quality Reporting (ASCQR) Program, CMS is finalizing the following:

  • Adopt ASC-20: COVID-19 Vaccination Coverage Among HCP measure beginning with 2022 data collection.
  • Require and resume data collection for ASC-1, ASC-2, ASC-3 and ASC-4 beginning with CY 2023 data collection for CY 2025 payment determination and subsequent years for web-based submissions. These measures will now apply to all ASC patients, not just Medicare beneficiaries.
  • Require that ASC-11: Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery be mandatory beginning with the CY 2025 reporting period/CY 2027 payment determination and for subsequent years. The dates in the proposed rule were CY 2023/CY 2025, respectively. ASCA will continue to oppose the inclusion of this measure.
  • Require the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-based measures (ASC-15a-e), with voluntary reporting in the CY 2024 reporting period and mandatory reporting beginning with the CY 2025 reporting period/CY 2027 payment determination and for subsequent years. The dates in the proposed rule were CY 2023/CY 2025, respectively.

With regard to the ASCQR Program, Prentice added, “We support the return of four key measures of patient care that had been suspended due to high performance but remain concerned about the addition of other measures that are either inappropriate for our setting or which have merit but require reporting that is needlessly complicated and burdensome.”

ASCA will continue to analyze the rule in detail and will soon provide more information to help ASC operators understand the impact of the final rule on their centers.