2023 Final Medicare Payment Rule Released

November 1, 2022

2023 Final Medicare Payment Rule Released; Results Are Mixed for Surgery Centers

The Centers for Medicare & Medicaid Services (CMS) released its 2023 final payment rule for ASCs and hospital outpatient departments (HOPD) today.

CMS finalized an effective update of 3.8 percent—a combination of a 4.1 percent inflation update based on the hospital market basket and a productivity reduction of 0.3 percentage points mandated by the Affordable Care Act. This is an increase of 1.1 percent from the proposed rule. Please note that this is an average and updates might vary significantly by code and specialty.

This update is based on CMS’ 2019 policy to align the ASC update factor with the one used to update HOPD payments, the hospital market basket, for a five-year trial period as the agency assesses this policy’s impact on volume migration. As 2023 is slated to be the last year of the trial, CMS indicates in this final rule that the agency intends to “update the public on our assessment of service migration and other factors in the CY 2024 OPPS/ASC proposed rule.”

“We are relieved that CMS has increased the inflation update from what was proposed initially, but it still falls far short of addressing the escalating costs that surgery centers are experiencing in staffing, services and supplies,” says ASCA Chief Executive Officer Bill Prentice. “CMS needs to do more to support ASCs in confronting the rising costs of providing care to beneficiaries or risk losing access to the outstanding care and significant cost savings ASCs provide.”

Other initial observations about the 1,764-page final rule follow. ASCA will provide additional analysis soon, including a rate calculator that allows users to determine what ASCs will be paid locally under this final rule.

Download the final rule PDF.

ASC Complexity Adjustments

On a positive note, CMS finalized a policy to provide complexity adjustments for combinations of certain service codes and add-on procedure codes that are eligible for a complexity adjustment under the hospital outpatient prospective payment system (OPPS). While add-on codes (N1) do not receive additional reimbursement when packaged into primary codes, the addition of the add-on codes to a primary procedure code often changes the complexity of the procedure, making it more costly to perform. As finalized in this rule, Medicare will now provide a “complexity adjustment” to adjust the payment rate for certain primary procedures to account for the cost of also performing certain add-on procedures.

“We support CMS in adopting complexity adjustments that will enable surgery centers to provide better access to beneficiaries and protect Medicare’s sustainability for years to come,” Prentice says.

The complexity adjustments adoption is a significant change for ASCs. ASCA will provide more educational materials on its implementation in the near future.

Additions to the ASC Covered Procedures List

Although ASCA provided a list of dozens of procedures that are performed safely on non-Medicare populations in the ASC setting for consideration to be added to the ASC Covered Procedures List (ASC-CPL), CMS added only four of the requested codes:

  • 19307 (Mast mod rad)
  • 37193 (Rem endovas vena cava filter)
  • 38531 (Open bx/exc inguinofem nodes)
  • 43774 (Lap rmvl gastr adj all parts)

“CMS’s decision to add only four new procedures to the ASC-CPL for 2023 after ASCA proposed 47 procedures that ASCs are performing safely and successfully for privately insured patients is a serious mistake and denies beneficiary access to high-value care,” Prentice says. “Forcing otherwise healthy Medicare beneficiaries to receive care in higher-cost settings for these procedures needlessly increases costs to the Medicare program and undercuts Medicare’s mission of serving as a responsible steward of public funds.”

Positive Change to ASC Quality Reporting Program

CMS finalized its proposal to suspend the mandatory adoption of ASC-11: Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery in the ASC Quality Reporting Program. ASCA has been strongly advocating for this measure to remain voluntary.

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