CMS Releases 2024 Proposed Payment Rule

July 13, 2023

The Centers for Medicare & Medicaid Services (CMS) released the 2024 proposed payment rule for ASCs and hospital outpatient departments (HOPD) today. Of note, CMS concurred with ASCA’s request and proposed to continue to align the ASC update factor with the one used to update HOPD payments, extending the five-year interim period an additional two calendar years (CY) through 2025.

CMS believes hospital outpatient and ASC utilization data from CYs 2023 and 2024 will enable the agency to “more accurately analyze whether the application of the hospital market basket update to the ASC payment system had an effect on the migration of services from the hospital setting to the ASC setting.”

Download the proposed rule PDF.

Other initial observations about the 963-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.

2.8 Percent 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 2.8 percent, which is 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 0.2 percentage points. This is an average and the updates might vary significantly by code and specialty.

The information below provides a comparison between the 2024 ASC and HOPD reimbursement proposals:

Inflation update factor 3.0% 3.0%
Productivity reduction mandated by the ACA 0.2 percentage points 0.2 percentage points
Effective update 2.8% 2.8%
Conversion factor $53.397 $87.488

Changes to the ASC Covered Procedures List

ASCA has been working with national dental organizations on getting dental procedures added to the ASC Covered Procedures List (ASC-CPL), and CMS did propose to add 26 dental surgical codes for 2024.

Unfortunately, although ASCA provided a list of 62 other surgical codes that are being performed safely in ASCs on non-Medicare populations to be added to the ASC-CPL, including total shoulder arthroplasty, CMS declined to add these codes.

“It is mystifying that CMS allows off-campus hospital outpatient departments to perform total shoulder joint surgeries yet prohibits similarly regulated surgery centers—served by identically trained surgeons, nurses and other staff—from performing them on even the otherwise healthiest beneficiaries,” said Bill Prentice, chief executive officer of ASCA.

“By refusing to rely on the clinical expertise of surgeons, who are clearly the best positioned to determine the appropriate site of care for each patient, CMS is wasting millions of dollars each year by trapping care in higher-cost settings. As an example, in 2021 the migration of a small percentage of total knee procedures from hospital outpatient departments to surgery centers reduced costs to the Medicare program by $75 million.”

Changes to ASC Quality Reporting Program

Regarding the ASC Quality Reporting (ASCQR) Program, CMS is proposing to readopt with modification ASC-7: ASC Facility Volume Data on Selected ASC Surgical Procedures, with voluntary reporting in the CY 2025 reporting period followed by mandatory reporting beginning with the CY 2026 reporting period.

CMS is also proposing to adopt ASC-21: Risk-Standardized Patient Reported Outcome-Based Performance Measure (PRO-PM) Following Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) in the ASC Setting (THA/TKA PRO-PM), with voluntary reporting beginning with the CY 2025 and 2026 reporting periods followed by mandatory reporting beginning with the CY 2027 reporting period.

CMS proposes modifications to ASC-11: Cataracts Visual Function (previously referred to as Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery), but the measure remains voluntary at this time.

Unfortunately, ASC-20: COVID-19 Vaccination Coverage Among Health Care Personnel is proposed to remain in the ASCQR Program, with some modification. ASCA will continue to oppose this burdensome measure.

Comments are due September 11, 2023.

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