Issues & Advocacy

Issue:

Medicare and its beneficiaries generally pay twice as much for procedures performed in hospital outpatient departments (HOPD) instead of ASCs. This disparity exists, in part, because ASC payment rates were updated annually using the Consumer Price Index for All Urban Consumers (CPI-U), while HOPD payments were updated with the hospital market basket. In 2019, the Centers for Medicare & Medicaid Services (CMS) agreed to align the update factors and use the hospital market basket to update payments in ASCs for a five-year trial period.

Solution:

This provision of the bill makes permanent the alignment of update factors, helping to move to a more complete alignment of the ASC and HOPD payment systems.

Issue:

While price comparisons for ASCs and HOPDs are readily available to the public, quality data is not available in a consumer-friendly format.

Solution:

This provision of the bill directs the US Department of Health & Human Services (HHS) to publish a comparison of quality measures that apply to both ASCs and HOPDs.

Issue:

The Advisory Panel on Hospital Outpatient Payment makes recommendations to the HHS secretary on issues impacting the HOPD and ASC payment systems, but membership is comprised solely of hospital and health system representatives.

Solution:

This provision of the bill designates one seat on the panel for a representative from the ASC community.

Issue:

There is no formal process for stakeholders to request that codes be added to the ASC Covered Procedures List (ASC-CPL), and CMS is not required to be transparent as to its rationale for keeping a procedure off the ASC-CPL.

Solution:

This provision of the bill directs CMS to publish its rationale for declining to add any codes to the ASC-CPL that were formally requested by industry stakeholders.

Issue:

A beneficiary typically has a coinsurance responsibility of 20 percent of the procedure’s cost when that procedure is performed in an ASC. When a beneficiary receives the same procedure in an HOPD, the copay is capped at the inpatient deductible amount, which is $1,600 for 2023, and the hospital is made whole by the Medicare program. This copay penalty limits patients’ access to care in ASCs and ultimately increases costs to Medicare, its beneficiaries and taxpayers.

This issue primarily impacts those without supplemental coverage—an area where a racial disparity in access has been observed, with only 40 percent of black beneficiaries being covered by supplemental insurance in contrast to 72 percent of white beneficiaries.

Solution:

This provision of the bill applies the same framework that applies to HOPD services, capping a beneficiary’s copay and making the facility whole for the difference.

Issue:

The HOPD relative payment weights are scaled for budget neutrality. Then, CMS applies a second, ASC-specific weight scalar to maintain budget neutrality within the ASC payment system. While the legislation directing HHS to implement a revised ASC payment system required CMS to use this second weight scalar in the first year of implementation, the agency has continued to apply this calculation to ASC payment weights annually. The secondary weight scalar penalizes ASCs for shifting Medicare services from higher-cost settings, and in doing so, artificially limits what otherwise would be the natural migration to the lower-cost ASC setting.

Solution:

This provision of the legislation prohibits the agency from conducting the secondary scaling calculation. Instead, the legislation directs the agency to combine ASC and HOPD volume and calculate one outpatient weight scalar, making this provision budget neutral.