On August 10, 2020, CMS released proposed rule changes to revise the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgery center (ASC) payment system for CY 2021. While these are only proposed rule changes and subject to commentary and modifications, CMS has signaled its desire to continue the effort to incorporate and permit more surgeries in an ambulatory setting. On the other hand, CMS has also proposed the elimination of the inpatient only (IPO) list, which would potentially limit future procedural migration from hospital campuses to ambulatory surgery settings.
The following list provides key facts and trends to consider pertaining to the proposed 2021 CMS rules and potential implications for ASCs:
- The ASC conversion factor will continue to be updated based on the hospital market basket through 2023. In 2021, the conversion factor is proposed to increase by 2.6% and is set at $48.984 for ASCs and $83.697 for HOPDs. The increase would be favorable for ASCs.
- ASCs continue to be burdened by the application of a weight rescalar to their CMS payments. Therefore, even if there is an equitable adjustment factor between the ASC and HOPD payment, the ASC reimbursement increase for the same procedure in the HOPD will be at a lower rate than the HOPD payment rates as a result of the rescalar. The rescalar would be unfavorable for ASCs.
- The proposed rules would add 11 new surgical procedure codes to the ASC covered procedures list (ASC-CPL), including total hip arthroplasty (THA), osteochondral knee grafts, atherectomy, head fracture, uterine fibroid ablation, revascularization with intravascular lithotripsy, and colpopexy procedures (i.e., HCPCS/CPT codes 0266T, 0268T, 404T, 21365, 27130, 27412, 57282, 57283, 57425, C9764, and C9766). This would be favorable to ASCs.
- CMS has provided two options for consideration for making adjustments to the process of approving procedures on the ASC-CPL.
- One option focuses on a nomination process whereby key stakeholders can recommend procedures that should be added to the ASC-CPL.
- The second option revises exclusionary criteria, with the revisions allowing CMS to add another 267 surgery or surgery-like codes to the ASC-CPL.
- CMS is proposing to eliminate the IPO list over a period of three years, which would remove 266 musculoskeletal procedures in 2021, including total shoulder, total joint revisions, and additional lumbar fusions. With the elimination of the IPO list, this could potentially also limit future opportunity for ASCs to be completely consistent and aligned with the HOPD approved list. This would be unfavorable for ASCs.
- CMS is proposing to add prior authorization requirements for specified procedures in HOPDs to control unnecessary increases in volume. Two categories of surgery are being proposed:
- Cervical fusion with disc removal
- Implantable spine generators
With consideration of these two options, the provisions to revise exclusionary clinical criteria under 42 CFR 416.166 (c) encompass the exclusion of procedures that require inpatient care as of December 31, 2020, under 419.22 (n). Therefore, procedures on the IPO list as of December 31, 2020, would not be eligible for the ASC setting and only eligible for HOPDs.
If a surgical procedure is on the IPO list as of December 31, 2020, this proposed rule change would prevent the code from being approved for the ASC-CPL in the future because any code on the IPO list as of that date would be ineligible for nomination to the ASC list. The potential result of the proposed rule change is that it would effectively limit ASC access, and these codes would not be eligible for addition to the ASC-CPL. Passage of this proposed rule would be unfavorable for ASCs.
This proposed rule appears to align with rules implemented by several national payers that are now requiring preauthorization for certain procedures (e.g., UnitedHealthcare, which recently implemented a policy requiring preauthorization for musculoskeletal procedures). The CMS prior authorization requirements under the proposed 2021 rules may reduce the potential volume done in the HOPD and may increase the volume performed in an ASC. This would be favorable for ASCs.
As indicated by the 2021 proposed rules that expand the ASC list by 11 new codes including THA, the potential to add 267 more surgery-like procedures, the increase in payment rates by 2.6% overall, and the increased momentum for CMS to require prior authorization for specified procedures in the HOPD, the potential to further promote surgery migration to the ASC setting is imminent. This is expected to have implications for commercial payers as well.
Published September 25, 2020