Digital Debut

Medicare Payment Policy Advocacy for 2022 and Beyond

ASCA advocates for policies that improve beneficiary access and ensure industry stability

BY KARA NEWBURY | MARCH 2021

On March 1, ASCA Board President Michael Patterson and ASCA staff met virtually with the Centers for Medicare & Medicaid Services (CMS) staff responsible for payment policies in ASCs. During this quick, 30-minute meeting, ASCA representatives discussed payment policy changes needed to increase access to ASCs for Medicare beneficiaries and to stop the divergence in payments between ASCs and hospital outpatient departments (HOPD). ASCA meets with these career staff at least annually. While it helps lay the groundwork for our advocacy efforts, achieving needed policy changes for our members requires much more than one meeting.

New Administration, New Priorities

President Joe Biden was sworn in less than two months ago on January 20 and, as of today, March 11, the President’s nominees for the secretary of the US Department of Health and Human Services (HHS) and the administrator of CMS have not yet been confirmed. However, career payment policy staff have been working for months on the payment rule that will impact ASC payments in 2022. To meet statutory deadlines for implementation of the final rates, the proposed rule is typically drafted during the winter months before multiple levels of career and political appointees, including HHS leadership, and the Office of Management and Budget (OMB) and the Office of Information and Regulatory Affairs (OIRA) within the White House review the proposed rule prior to its public release during the summer.

The new administration may want to put its imprint on payment rules this year, but due to the timing, significant policy changes in the 2022 rulemaking cycle are unlikely. Medicare payment rules for several other providers are already under review at HHS. We expect the ASC payment rule to be there shortly and, as such, it is unlikely we will see significant policy shifts between the 2021 and 2022 rules. ASCA has prioritized the following regulatory policies in 2022 and beyond to ensure ASCs remain an integral part of the US healthcare market.

ASCA encourages CMS to discontinue the ASC weight scalar.

Fixing the ASC weight scalar remains ASCA’s top Medicare payment policy priority. CMS currently tries to contain costs to the Medicare system within silos instead of doing so across all settings offering the same outpatient surgical services. This means that if ASCs were to increase their Medicare volume, the rates would remain stagnant and, in many cases, be cut to maintain budget neutrality within the ASC payment system year after year. This is clearly untenable with more surgical volume being driven to the outpatient setting in general and CMS’ stated desire for procedures to move to the lower-cost ASC setting.

2022 Outlook: As previously mentioned, it is unlikely that major policy changes will occur in 2022 and we do not anticipate this policy change. However, we are working on the long game, which is why we spent time during our short March 1 meeting with payment policy staff to make sure they knew this would be a priority moving forward. We also are planning on adding an ASC weight scalar fix to our ASC Quality and Access Act this session. Absent passage of the act, this strategy provides us legislation we can try to get inserted in other larger bills that are moving, and it also ensures our supporters on the Hill understand the issue, and can help communicate to CMS their support for this change.

ASCA supports CMS’ continued use of the hospital market basket as the annual update mechanism for ASC payments.

When CMS implemented the revised ASC payment system in 2008, the agency’s stated goal was to encourage high-quality, efficient care in the most appropriate outpatient setting and align payment policies to eliminate payment incentives favoring one care setting over another. Since 2008, the ASC community has urged CMS to adopt the same update factor for both the ASC and HOPD payments. In the 2019 final payment rule, CMS announced a plan to align the ASC update factor with that used to update HOPD payments, the hospital market basket, for calendar year (CY) 2019 through CY 2023. According to CMS, this trial period will give the agency time to assess this policy’s impact on volume migration.

2022 Outlook: ASCA staff is cautiously optimistic that CMS staff will continue with the five-year pilot, even though there are some concerns that the new administration could reverse this policy. Due to data lag, information on the ASC volume from the first year of the five-year pilot, 2019, has just recently become publicly available, so there is limited information available to CMS staff as to the impact of the policy thus far. By keeping the pilot in place, CMS staff will have the opportunity to work with the new political appointees and evaluate at least two years of volume data to determine whether this policy change has positively impacted a shift in migration to the lower-cost ASC setting. We also will continue to pursue a more permanent fix through legislation, especially since we believe the ASC weight scalar is such a disincentive for shifting volume that CMS will not truly see migration until they fix that problem as well.

ASCA supports expansion of the ASC-CPL.

ASCA has long advocated that procedures that can safely be performed in HOPDs also are safe for the ASC setting and should be added to the ASC Covered Procedures List (ASC-CPL). While ASCA was pleased to see the addition of 267 codes to the ASC-CPL for 2021, our clinicians have indicated , there are more codes that they would like to see added to the ASC-CPL, but a recent policy change will preclude their future consideration.

Inpatient-only List

In 2021 rulemaking, CMS began the process of eliminating the inpatient-only (IPO) list over the next few years. Presumably, as a safeguard to ensure procedures were not immediately added to the ASC-CPL, CMS modified the ASC Code of Federal Regulation (CFR) language to exclude from ASC-CPL consideration “procedures designated as requiring inpatient care under 419.22(n) as of December 31, 2020.” As worded, this prohibits CMS from adding codes to the ASC-CPL that were on the IPO list as of 2020 for as long as this language is in the CFR. We highlighted this problem in our 2021 comment letter but the language was finalized as written.

Unlisted Codes

The CFR also precludes from consideration on the ASC-CPL procedures that are “only able to be reported using a CPT unlisted surgical procedure code.” There is no clear safety rationale for this provision, and commercial payers commonly provide ASCs the flexibility to use unlisted CPT codes to report procedures. Facilities must document why they need to use the unlisted code and receive approval from the payer to be reimbursed. This also is a practice CMS permits for HOPDs and physician offices but not for ASCs.

One unlisted code that is requested by our members annually is 41899 (dental surgery procedure), as it is the only CPT code available for dental surgery. While it is not significant for the Medicare population, this procedure is frequently performed on pediatric dental patients, many of whom are covered by Medicaid. Some state Medicaid plans only reimburse ASCs for codes found on the ASC-CPL, which causes access issues. ASCA is supporting the American Dental Association (ADA) efforts on this issue. The ADA has requested a new HCPCS Level II Code for dental rehabilitation surgery, but there appear to be some roadblocks that may require statutory change, as CMS does not typically cover dental procedures.

At our March 1 meeting with CMS staff, we raised both of these issues, with the problematic IPO-list language taking priority. Michael Patterson used total shoulder arthroplasty, a procedure his ASC has been performing for years, as a code that will be precluded from addition on the ASC-CPL due to the CFR language. We were asked by staff what codes we think should be added that will be excluded from consideration. ASCA plans to provide CMS staff with data supporting codes that should be added to the ASC-CPL.

2022 Outlook: Changes to the IPO-list language are more likely than the prohibition on adding unlisted codes to the ASC-CPL, although neither are likely to happen for 2022. ASCA staff would like to at least see language in the 2022 rule indicating CMS’ willingness to consider codes that were on the IPO list as of December 31, 2020, in the future.