A Closer Look at Hospitals Without Walls (September 8, 2021)




ASCA Regulatory Counsel and Director of Government Affairs Kara Newbury joins podcast host and ASCA Chief Executive Officer Bill Prentice for a discussion about the Hospitals Without Walls program, the regulatory framework put in place by the Centers for Medicare & Medicaid Services (CMS) in the early days of the COVID-19 pandemic to allow nonhospital healthcare facilities, including ASCs, to achieve a hospital status under Medicare for certain outpatient treatments and procedures. In this episode, Prentice and Newbury look back over the first year of the program’s implementation, discuss what worked and what didn’t and conclude with their outlook for this nascent CMS initiative.

Narrator: 0:06
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
Hi, I’m Bill Prentice and I'm ASCA’s CEO and host of this episode. On this ASC podcast, I’m pleased to welcome back Kara Newbury, ASCA’s regulatory counsel and director of Government Affairs. And I’ve invited Kara back to the podcast to discuss the Hospitals Without Walls program that was put in place by the Centers for Medicare & Medicaid Services, or CMS, back in March of 2020, during the first months of the COVID-19 pandemic. For those not familiar with the program, it's essentially a regulatory framework that allows nonhospital healthcare facilities, including ambulatory surgery centers, to provide care and be reimbursed by Medicare as an inpatient hospital for both inpatient and outpatient treatments and procedures. The program permits eligible ASCs to either partner with a hospital or apply for hospital status on a standalone basis. The intent of the program was to enable alternative sites of care, so long as they met certain conditions, to care for non-COVID-related patients, freeing up hospital capacity to treat the surging number of COVID-19 hospitalizations. ASCA was an early advocate and supporter of the concept, in large part because it recognized that thousands of ASCs are set up to essentially provide the same level of care as hospital outpatient departments. Initially, there were some practical impediments, such as a requirement that participating ASCs maintain 24-hour nursing staff, even when they had no patients in the facility. Fortunately, working with CMS leadership we were able to get relief from that requirement last November. From a big picture perspective, participation in the program has been modest at best and that's largely due to the fact, gratefully, that some of our worst fears about hospitals being overwhelmed with COVID patients never really materialized. That said, with many areas of the country experiencing another surge of new infections, it’s probably too soon to write off that final chapter on the need for a program like this. So for those reasons and because we have both some additional insights and some additional guidance for ASCs still looking at the program, we thought a quick chat with Kara on the podcast might be helpful. So Kara, welcome back.

Kara Newbury: 2:43
Thanks, Bill. Good to be here.

Bill Prentice: 2:45
So, a moment ago, I mentioned that participation in the program has been modest, due in part to that many areas of the country really never experienced the worst-case scenario of hospitals being overwhelmed with pandemic patients. And while that's true, I think it's also fair to say that very few hospitals showed any interest in the program. Can you tell us how many ASCs are in the program today? And how many partnered with hospitals versus those that have applied for standalone basis?

Kara Newbury: 3:12
I can give you part of that answer, Bill. So, I actually just looked, and as of today, there are 137 ASCs that took the steps to enroll as a hospital. That means that they are billing Medicare Part A and they are considered a hospital by Medicare standards. Of course, it's very difficult to try to figure out how many ASCs have partnered with their local hospital to provide services because that is being billed through the hospital, not through the ASC. And so, it is difficult to tell. We have heard anecdotally that lately some hospital and health systems, particularly those in areas where there are surges and particularly hospitals that already have a relationship with and probably an ownership interest in an ASC, are reaching out to their ASCs with whom they have that ownership interest to talk about maybe sending some more cases right now.

Bill Prentice: 4:16
Interesting. Well, I'm going to ask you and our listeners to pause for a moment and stand by while we take a short break to hear a message from our podcast sponsor. We'll be right back.

Narrator: 4:31
Funding for the Advancing Surgical Care Podcast is provided by HealthCare Appraisers, a national healthcare valuation and advisory firm recognized for its proven track record in ASC valuation. HealthCare Appraisers’ skilled team has valued thousands of ASCs for purchasers, investors and real estate transactions. Experience how HealthCare Appraisers thinks differently by visiting www.healthcareappraisers.com.

Bill Prentice: 5:04
Kara, before the break, we were discussing the low level of hospital participation in the Hospitals Without Walls program, despite the guidance issued in many states and cities to suspend elective surgeries in hospitals at different times during the pandemic. And the suspensions were based upon a fear of lack of staff or capacity in hospitals, as well as an abundance of concern about exposing surgical patients to other patients being treated for COVID-19. In the early part of the pandemic, of course, much of that guidance also applied to other facilities like ASCs as well. Of course, as we now know, “elective” surgery doesn't mean that surgery is not essential, and we've been working really hard to educate policymakers and state government officials about that and that elective surgery can be really important to the life and quality of life of patients. And we also are obviously making them aware that ASCs both have the staffing capacity to take additional surgical referrals from hospitals and that we have the right infection control measures. And because we're not seeing COVID-19 patients, we're an optimal site for people to get outpatient care. Kara, do you think that these messages are getting through to policymakers and regulators or that there's more work to be done by both us and our members?

Kara Newbury: 6:19
Bill, there's always more work to be done. But yes, I do think that the messages are getting through. And as you alluded to, we haven't seen some of these restrictions be placed upon ASCs lately as we did at the beginning of the pandemic. What we're seeing now is more local health systems deciding on their own that they're going to need to cancel surgeries, particularly in their inpatient hospital settings, because they are once again at or near capacity with COVID and other patients. But yes, I do think that the message is definitely getting through. And there's been a fair amount of research now over the past year and a half since the pandemic really started just showing the impact that some of the delays on care have been causing. There was a recent one out of Rush Medical Center in Chicago showing that with two months of basically no or limited access to colonoscopies, 24,650 diagnoses were probably delayed, and of those almost 10,000 of cancers at an advanced stage. So, that's just one medical center that was studying that. So that is a huge argument for ensuring that ASCs can continue to provide these services. Now, as you know, we had a conversation, our first formal conversation, with Dr. Meena Seshamani, who is heading up Medicare under the umbrella of the Centers for Medicare & Medicaid Services; she's essentially second in command to the administrator of CMS. And we were raising with her some of the concerns that we have with delaying some of these life-saving screenings as well. And I remember on that call, Bill, you raised the fact that we're currently only doing about 50 percent of the colonoscopies between the different outpatient sites of service. So clearly, even just as ASCs we could be taking on more of that volume. It wouldn't really necessarily need to be in the form of ASCs enrolling as or continuing as hospitals at this point, but I think just ASCs themselves have a huge value proposition that we can offer to Medicare right now.

Bill Prentice: 8:44
You raise some really important facts about that, and it's really disheartening to hear about the devastating impact of delaying those colonoscopies and those screenings during those few short months of the pandemic. And then when you think about, as you mentioned, the fact that we're only doing 50 percent of Medicare colonoscopies, even though we're far and away the lower-cost provider of those services, it makes you wonder how many patients aren’t getting those screenings in the first place because of the price barrier and not being aware that they could be getting them in an ASC at a much more reasonable rate. But I think that's probably a topic for another podcast.

Kara Newbury: 9:19
We'll have to get back together for another podcast, Bill. I'm sure we will at some point.

Bill Prentice: 9:24
So, Kara, let's talk about the reimbursement for care provided by the Hospitals Without Walls program. So in recognizing that an ASC would incur additional time and expense to fulfill the conditions of that program, CMS announced that they would reimburse ASCs at the hospital rate for care provided to patients who otherwise would have been treated in the hospital setting. So, at the time this was announced, ASCA was very clear in our guidance that we believe that this was fair and equitable as a way of providing care to patients that we wouldn't ordinarily see. At the same time, we were also abundantly clear that this new reimbursement policy should not be misconstrued as a way to simply obtain higher reimbursement for an ASC’s regular mix of patients. Can you speak to that important distinction?

Kara Newbury: 10:08
Absolutely, Bill. So, we mentioned two different options that ASCs could take advantage of if they wanted to participate in Hospitals Without Walls, one being working with their local hospital to take on additional cases, probably additional types of cases, than they could have already performed as an ASC. They could have done potentially anything on the hospital outpatient department list of covered procedures, and then they would be getting reimbursed at that outpatient rate, but they would have to work with the hospital to get the payment, as I said. And then if the ASC enrolls as a hospital, certainly they are enrolled as a hospital, they are expected to be functioning as a hospital, and they should be reimbursed as a hospital. Just a couple of key points. Obviously, this program was initiated under a different administration. So, anytime you have a change in administration, you never know how the incoming White House is going to feel about things. And so, I would just caution, anyone who's thinking about doing the program and participating solely to obtain higher reimbursement that, after the pandemic is over, if it ever ends, there might be kind of a review process and an audit done of the facilities that participated, ensuring that they did participate and meet the requirements of the program. And in addition to it being a different administration, I think the program, just like a lot of things, at the beginning of the pandemic was kind of hurried, there was not a lot of detail provided. And so, I always just want people to be aware that you have to recognize that and going back to kind of the sense of there may be an audit or some sort of follow-up. Even if, as we heard with the Provider Relief Fund, no strings attached—well, as we saw, there were strings attached. There were reporting requirements, there were different requirements for how that money had to be spent. So, just to remember that sometimes with programs that are created in haste, there might be then, regardless of a change in administration, an effort by the government to go back and look at how things were rolled out and really what transpired.

Bill Prentice: 12:27
I think that's well stated. As I often say that the government giveth, but it also taketh. And I think that this is a program that was established, obviously, during a really tough time for the nation, and was done in a relatively short order. So, it would not be surprising at all if additional reporting requirements and audits and other things don't end up turning up after the fact. So, well stated. And a question we're also asked about this, of course, is whether we think this program will be continued, either in the short term for the remainder of the public health emergency, or beyond. My own belief is, I think we've talked about this, is that I think a program like this should always be available to CMS for either another public health emergency, like a pandemic, or for maybe something more localized, like a weather emergency that overwhelms the hospital and requires care that otherwise would be provided there to be provided in an outpatient facility like an ASC. So, we actually, in our call the other day with the deputy administrator, we actually talked about maybe getting together and going through some lessons learned and figuring out how a program like this could be kept on the shelf for use, whether later in this pandemic, the next pandemic, God forbid, or some other emergency that might happen on a more localized level. Kara, what do you think in terms of the outlook of this program based upon both your own thoughts and things you're hearing from folks on Capitol Hill or elsewhere?

Kara Newbury: 14:05
Sure, Bill. That's a great question, and I've spoken with staff at the Centers for Medicare & Medicaid Services, I've spoken with some offices on the Hill, because there is definitely some momentum and a desire to keep some of what has been implemented during the pandemic in place. So, for instance, more of a focus on telehealth and there's also a program called Hospital at Home. And the Hospital at Home program is one that there's been a lot of discussion, including on the Hill, for keeping longer term, and that allows the hospital to send staff to the patient's house to receive services that they would normally have to go to a physical hospital for. With regards to the Hospitals Without Walls program itself, I think that, as we were talking about, it was not really used as widely as CMS thought originally, with that only 137 facilities and we're now over 6,000 CMS-certified ASCs nationally. So, clearly not a huge portion of ASCs decided to participate. And we have heard rumblings that right now the administration is evaluating a lot of different programs that were put in place when the pandemic first started, and viewing them through the lens of “do these need to continue, either short term or longer term?” If I had a guess, I would say that there is definitely a possibility that CMS would stop the Hospitals Without Walls program for right now. Originally, I thought maybe they would just let it go through the pandemic, through the public health emergency, but we're now hearing that the public health emergency itself might be extended even past 2021, which was initially the cut off that we were told back about eight months ago. So, I like to hedge my bets and I like to be conservative with what I tell people, Bill. And I think my conservative thinking would be that, yes, there is a chance that CMS would wind down this program at some point in the next several months. Partially, like I said, just due to lack of participation, and from their perception, potentially a lack of nationwide need at this point.

Bill Prentice: 16:31
That's all very interesting. And as I alluded to earlier, we had some very frank discussions with the previous CMS leadership about some of the market forces that interfere with the proper working of a program like Hospitals Without Walls, that hospitals did not want to concede giving up those patients and reimbursements to a competitor in their healthcare marketplace. And that's something that I hope this administration will give some thought to, about how that might have been a barrier to more ASCs participating in this program and providing more care to patients off the campus of a hospital that was treating a significant number of COVID-19 patients. Again, I think that it's a program that has merits, I think it was conceived quickly and hurriedly, and there were some clear pitfalls in some of the way it was established and how facilities signed up, how they got reimbursed. I think we still have some questions about how quickly and easy it will be for ASCs to return to ASC licensure and status once they stop participating in the program. Again, I think we'll probably have more to say about that in the coming months. But I want to thank you and your Government Affairs team for all the help you've provided to members over the last year and a half, on dealing with the pandemic and talking to them about things like how to participate in the Hospitals Without Walls program. And I hope that our members found this update helpful and informative, and I think they can rest assured that we will continue to keep them apprised of future developments. So, Kara, thank you again for being on this podcast.

Kara Newbury: 18:09
Thanks, Bill. Always great chatting with you.

Bill Prentice: 18:13
Our listeners should know we do this about every day, we just don't do it on a podcast. But before I sign off, I'd also like to thank and acknowledge the support of HealthCare Appraisers, a national healthcare valuation and advisory firm recognized for its proven track record in ASC valuation. HealthCare Appraisers has valued thousands of ASCs for purchasers, investors and real estate transactions, and we welcome their support as an ASCA affiliate. So, until next time, please stay safe.