Welcome to the Advancing Surgical Care Podcast brought to you by ASCA, the Ambulatory Surgery Center Association. ASCA represents the interests of outpatient surgery centers of every specialty and provides advocacy and resources to assist them in delivering safe, high-quality, cost-effective patient care. As with all of ASCA’s communications, please check to make sure you are listening to or viewing our most up-to-date podcasts and announcements.
Bill Prentice: 0:37
Hello, and welcome. My name is Bill Prentice; I’m the CEO of the Ambulatory Surgery Center Association, or ASCA, and the host of this episode of the Advancing Surgical Care Podcast. My guest today is very well known in the ASC community, Naya Kehayes of ECG Management Consultants. She’s a partner and the ASC practice leader for ECG Management Consultants with more than 30 years of professional experience in the healthcare industry. She’s a trusted adviser to ASCA and a member of our Government Affairs Committee, and we rely on her advice and expertise on a wide range of issues. And I’ve invited Naya onto the podcast to talk with me about the process at the Centers for Medicare & Medicaid Services, or CMS, and the implications of moving surgical procedures from the agency’s hospital outpatient list, or the HOPD list, to the ASC Covered Procedures List, or ASC-CPL, as well as the implications of moving procedures from the ASC procedure list back to the HOPD list. So every year, ASCA makes submissions to CMS through our payment rule process to expand the scope of procedures that can be performed in the outpatient setting. And despite our success at gaining approval for several procedures over the years, we’ve also been frustrated by the unfortunate removal of a number of codes off of the ASC-CPL in 2022 and the lack of transparency associated with that reversal. There were actually 255 codes that came off that list, a subset of which we think really belong on our list and for which we have offered comments in this year’s payment rule. Now, thanks to our continued advocacy with CMS, we continue to make progress despite that setback in 2022, and I’m eager to hear Naya’s take on the implication for ASCs. I also want to ask Naya to gaze into her crystal ball and tell us what she sees in terms of future opportunity for migration and what that might mean for ASCs. Naya, welcome to the podcast.
Naya Kehayes: 2:36
Thank you, Bill. It’s great to be here.
Bill Prentice: 2:38
So Naya, as you know, there have been a number of instances where ASCA has submitted substantial data and traveled to CMS with clinical experts to make the case for safely moving certain procedures to our payable list, only to be frustrated by neither receiving an approval nor an explanation of why our submissions were rejected. Can you comment on this process and the factors you believe, other than clinical data, that underlie some of these decisions?
Naya Kehayes: 3:05
Sure, Bill. It’s often a mystery, as you know, as to why CMS does not approve codes that have been submitted by ASCA, despite the amount of research, the data that we’ve collected and analyzed and synthesized to support the approval of new codes. The deficiency with a transparency in the decision-making process is problematic, and without understanding the basis for the decision of both adding and deleting codes by CMS, it makes it difficult to aggregate and provide an appropriate response to negate these decisions, which often seem very arbitrary. While some of the concerns around transparency are expected to be addressed by the new regulations in the nominations process, these have now been delayed until 2025, which prolongs the concerns with transparency even further with respect to addressing denials of codes requested to be added to the CPL.
Bill Prentice: 3:56
Right. Can I interrupt you there just for our listeners to be aware of that. So, we for years have been telling CMS that they need a more transparent process for when we submit data to basically say they have to provide us feedback if they believe we’ve fallen short on some criteria in terms of getting a procedure put on our list, and they have not done that. Last year, they finally decided they were going to create this process. Unfortunately, kick that can down the road. We were hoping to have that new process in place for this year; it looks like really at the earliest, it’ll be affecting the 2025 payment year. So, just for our listeners to be aware of that, that we’ve been pushing for that transparent process.
Naya Kehayes: 4:37
Absolutely. I think that process is going to help quite a bit once it does get implemented. And we definitely are making progress—it’s just too bad and unfortunate that it’s being delayed. So, with respect to what are some of the reasons behind the codes being added and/or deleted and why we don’t get answers, I really feel that there are definitely considerations with respect to hospitals. In some of the concerns that hospitals may have with respect to ASCs getting approval for more codes, they definitely see things differently from both a clinical and a financial standpoint. And the risk of migration for high-value procedures can be detrimental sometimes to hospitals, and so I think that there’s a lot of sensitivity to that.
Bill Prentice: 5:24
Right. So, it’s not just a matter that we’re out there arguing and advocating for adding procedures, but there are other providers out there who are making a counterargument to their own interest to keep things off of our list and on the HOPD or the inpatient-only list.
Naya Kehayes: 5:42
Oh, yes, absolutely, that there are definitely concerns when that ASC list grows. And in fact, I work with a lot of hospitals and health systems and they quite often will ask me “is one of the lists going to be the same?” And they’re thinking about it. And they want to understand which procedures are at risk because they’re also very aware that not just CMS, but other payers are driving those cases into the right site of service, which they know is the ASC for many of them.
Bill Prentice: 6:10
Right. So, it’s a factor of sometimes is the commercial payer pushing ahead and allowing ASCs to do more. And that’s impacting potentially what CMS might decide to do. And the reverse also could be the case where if CMS is keeping things off of our list, that is making some commercial payers reticent to allow ASCs to perform those procedures on their beneficiaries.
Naya Kehayes: 6:33
Yes, they absolutely have implications both ways. And while CMS sometimes will set the precedent, commercial payers have also set precedents because they’re ahead of CMS in a lot of instances with respect to their approved covered procedure list.
Bill Prentice: 6:47
Right, right. So, Naya, can you comment on any proposed policy changes or policies that have been adopted by CMS that have been addressed by ASCA and their implications on surgery migration?
Naya Kehayes: 6:59
Oh, absolutely. I will have to say that, despite some of the setbacks that we’ve seen with deletion of codes, ASCA has made tremendous inroads for ASCs with respect to getting many of the total joint procedures approved hysterectomy is the cardiology procedures. And now I really believe with the new 47, you know, list that we’re going after, we hope to see things like total shoulders and total ankles get approved. And I think we have a lot of momentum for that with the data, we’ve been able to collect and demonstrate, you know, from commercial payer experience, and know how successful ASCs can be, and that the outcomes are good. Obviously, these ASCs are not having issues with these patients and that’s demonstrating that, you know, this is safe, and it can be performed in the ASC.
Bill Prentice: 7:42
Yeah, and very frustrated, of course, when this proposed payment rule came out this summer was the fact that they proposed to add only one new procedure and read quite honestly a nominal procedure at that, ENT procedure, and did not move any of the other 47 procedures that we think could safely be performed on appropriate Medicare patients. And the other issue that I think we find very troubling is the fact that they’ve also introduced into this process, this idea that a procedure has to be safe for the typical Medicare beneficiary, a term that is nowhere found in law regulation, and which is undefined. And which really runs counter to the whole concept of the ASC model, which is we don’t treat the typical patient, we treat the appropriate patient who has the few comorbidities and are healthy enough to be seen outpatient, right?
Naya Kehayes: 8:34
Yes, absolutely. And I think what they’re not recognizing is that the ASCs have a responsibility under policy to ensure that they have the correct patient selection process, and that physicians are, you know, enduring that in overseeing that process. So, it isn’t just like anybody can walk through the door and say, I want my surgery done at a surgery center, there’s absolutely a process for ensuring the patient selection is appropriate for that surgery center. I mean, even when we analyze and look at hospital-based business that’s ASC eligible, we spend a lot of time with clinical teams in the hospitals and anesthesia, right? Because they’re determining based upon the ASA levels and things like that whether or not a patient is appropriate for the ASC setting, and it’s vetted out very carefully. And now granted, ASCs can certainly do more since technology advances have occurred and you know, medication extended recovery care, protocols and things like that. But they still are responsible for making sure that there’s the appropriateness of the patient selection process.
Bill Prentice: 9:35
Safety, obviously, is the first element. Well, I want you to talk a little bit about complexity adjustment and device costs. Can you give us a little rundown for our listeners of some of those and how they impact the ability of ASCs to perform procedures?
Naya Kehayes: 9:49
Yes, absolutely. I think one of the some of the greatest areas that ASCA has contributed to enabling and I think these things do enable migration. First, I’ll talk a little bit about the device soft set percentage, the concept is complicated for a lot of folks. But over the years, starting from 2015 to 2022, we have taken the device offset percentage down from 50% to 30%. And so what that has done is it has enabled that device intensive code list to expand, which creates more opportunity for increased reimbursement for surgery centers for codes that are classified as device intensive, because it adds more value to the reimbursement rate. So that has been very instrumental for device intensive, costly procedures to get favorable impact on reimbursement, which allows cases to be done in the ASC I remember years ago, when ACL or rotator cuff, you couldn’t do them because they were so cost prohibitive, and some of these changes have had a lot of impact.
Bill Prentice: 10:51
Right? So, the Medicare program put them on our list, but because of the device cost and that barrier to getting the appropriate reimbursement for that, it made it impossible for ASCs to do it, and even capture their costs back.
Naya Kehayes: 11:03
Exactly. And I think that’s some of the issue that’s going on with spine right now and ASCA is being very progressive on spine, while spine has been approved. One of the problems with the payment policy with CMS is that most of the add-on codes that are performed with spine have an N1 status indicator, which means they’re packaged right, so they don’t get paid for any additional codes. And as you add more segments to a case, even within ACF, almost every code will tell you it indicates that there’s an allograft, or there’s instrumentation or there’s some kind of hardware used. And so the cost is actually getting bigger as you add more of those codes, yet there’s no additional reimbursement. So, this year, you know, with CMS introducing the complexity adjustment factor, which has a favorable potential impact on cardiology and some other codes, we have now, you know, in our response to CMS outlined some really concrete points about spine and talked about could spine be considered for a complexity adjustment factor to demonstrate these are bigger cases, they are more complex, and they’ve got from a cost standpoint, the attributes that would make sense to potentially have that occur if they’re not going to change that payment indicator.
Bill Prentice: 12:21
Yeah, because one of the things that you know, and I’m like a broken record on this point is that if CMS would at least find ways to incentivize migration to lower cost setting for appropriate patients, by doing things like dealing with the device costs and recognizing that you need a complexity adjustment because of these add on procedures, that you’ll be able to migrate care and save the program billions of dollars, that that would be freed up to be spent somewhere else. And the fact that they seem too agnostic about trying to do that we find very frustrating so we certainly appreciate all the data you produced to kind of help us make those arguments.
Naya Kehayes: 12:57
It is interesting, though, because with spine, right, there’s not only the opportunity to reduce the cost go into ASC, but also to reduce it going to HOPD, right, and they have the same issue, because they don’t get paid for any of the add on codes either. And so like we’ve talked about not every single case, is ASC eligible, but can it get to the outpatient setting, and then ultimately result in a cost savings, potentially billions of dollars of opportunity for cost saving?
Bill Prentice: 13:24
Right? So, looking beyond those changes in base, what you’re hearing and seeing in your practice, what do you think we’re most likely to see in terms of migration in the future? For example, we hear a lot of speculation about additional spine and cardiac procedures. What’s your prediction over the short horizon of the next few years.
Naya Kehayes: 13:43
I actually just recently did a study on spine and cardiology both and there’s a significant opportunity for both of those case types to move into the outpatient setting. I do think spine probably has a little bit more momentum than cardiology but one of the major components that stifling spine is the reimbursement for sure. And I think if some of those corrections are made, we’ll see more of the spine move. I think cardiology is definitely a hot topic, but it’s very carefully vetted out, right? Because of the comorbidities associated with those patients. One of the things that I think is really interesting about cardiology, though, is that hospitals are recognizing that they need that lower cost side of service. So they’re thinking more about how do I put an ASC inside my heart center like so inside the walls, which makes a whole lot of sense. So, you have the lower cost setting, but you’re also in the vicinity, you know, of the hospital so that they can monitor those patients and potentially have more access so to speak. So, I think that’s an interesting component.
Bill Prentice: 14:48
It makes it easier for a transfer.
Naya Kehayes: 14:50
Yes, if something were to happen, but that’s also you know all about the careful patient selection and screening process as well. Obviously, the states have different rules and you can’t do all of those codes in every state. But I do see hospitals looking at, we need to have this lower cost side of service. And I’ve seen a lot of you know, surgery centers looking at putting it in, but it’s usually these very specific cardiology ASCs, or OBL that wants to add an ASC component to do more. So it’s interesting to see what will happen with cardiology, but there’s definitely a lot of activity going on with cardiology as well.
Bill Prentice: 15:25
Fascinating. Well, before I let you go, I have one other question and that has to do we already kind of talked about the patient selection criteria that the Medicare program uses, but we clearly have a great value proposition that we’ve made to the government. You know, we’ve been talking about that. But are you seeing that value proposition starting to take greater hold among large employers and commercial payers as well?
Naya Kehayes: 15:46
Oh, absolutely. If you think about the level of self-insured employer groups, most people don’t realize that there’s some of these payers have 80 to 85% ASL lines of business. So that self-insured business, the employer is completely at risk for the dollars, and they’re paying attention to site a service and how much their spend is based upon site of service. There are some of the major employer groups that have designed, for example, total joint programs and I’ve seen them move patients actually over state lines to find ASCs, with providers that can do total joints, and then they direct contract with them. They’re also putting pressure and holding the payers accountable for their spend. So, the employer groups are putting pressure on the payers and now payers are developing some pretty strong side of service policies and United Healthcare has one of the biggest ones that is out there on the internet, and actually, last year, they actually added several codes to their Medicare Advantage product, which I thought was really interesting, because they started in 2015 and they only had like 24, 25 codes on this site of service policy. Now, you know, then it went over 1000, I might be getting close to 2000 and now there’s about I think 150 or so on the Medicare Advantage list. And so you’ve got a payer that’s basically saying, if an ASC is available in the physician’s credential, if there isn’t a clinical reason why they shouldn’t be there, the patient really has no benefits to have it be done in the hospital, Blue Cross of Minnesota, Empire Blue Cross of New York, and several other blues plans are adopting similar policies. I also have heard the Anthem of California is working on those policies as well. And so they are really putting the pressure on site to surface and that’s what’s making hospitals and health systems react as well, because they realize, if they don’t have an ASC in their portfolio of services that they provide, they’re losing that patient volume to those that have ASCs available because the patients don’t have benefits.
Bill Prentice: 17:52
Right. So, the dynamic that we’re looking to see the government embrace, which is not being agnostic, and trying to develop policies to try and drive cost down and drive care to the more appropriate setting. On the commercial side, they’re already ahead of that game, that the self-insured companies and payers are starting to try and build that out. Were here before they basically were just letting the hospitals take whatever the hospitals wanted.
Naya Kehayes: 18:18
Well, I also think that one of the things the hospitals are starting to realize, especially if they employ the physicians, or they have a surgery center, even if the physicians are not partners in it, they become more productive in the surgery center setting, and it’s a better place for the patients. And there’s a lot of hospitals and health systems that their ORs at capacity. So by moving that volume, it frees up capacity for them to do those bigger cases that need to be in the hospital. So, I do think there’s a lot more realization of that with hospitals and health systems and they’re much more aligned with the philosophy that I have got to have an ASC for that site of service because it’s needed.
Bill Prentice: 19:00
Great. That’s really good to hear. Well, Naya, thank you for this great discussion. I know there’s a lot more we could talk about. So we’ll have to have you back again on another day. But we’ve run out of our times any last words?
Naya Kehayes: 19:11
Just if ASCs are preparing for surging migration, because there’s a lot of momentum with both CMS and commercial payers, just make sure you’ve done your homework, collect your data, and make sure that you understand what your cost structure is and that you know, if you don’t have commercial contracts in place, talk to your payers because they’re probably willing to work with you.
Bill Prentice: 19:31
Well, thanks again for being on the podcast. And once again, if anyone listening has additional questions, please don’t hesitate to contact us. Or visit the ASCA website where more details on these and other important regulatory issues can be found. Until next time, please stay safe and thanks again for tuning in.