REGULATORY REVIEW: Medicare Payment Policy Gains from the Past Decade


Medicare Payment Policy Gains from the Past Decade

ASCA advocacy bears fruit

ASCA works with all federal regulators that have an impact on ASC operations, but its recent efforts have focused primarily on the Centers for Medicare & Medicaid Services (CMS). Payment policy is often at the top of the priority list. Private payers often follow Medicare’s lead when determining which procedures are reimbursed and how to reimburse for devices, and these payers often use Medicare rates as a basis for negotiating rates. As a result, Medicare payment policies that support ASCs are critical to the viability of the ASC industry, and ASCA has achieved important progress in this area over the past decade.

Procedure List

As part of its advocacy program, ASCA spends a lot of time urging CMS to add procedures to the ASC Covered Procedures List (ASC-CPL). Since 2013, CMS has added 360 procedures that were previously reimbursed only in hospitals to the ASC-CPL.

CMS has no set process for submitting codes for approval, no form to fill out and no set meeting to attend. The agency has been responsive to ASCA and various specialty groups, industry leaders and organizations when they proactively brought individual procedures to it for review on a piecemeal basis. ASCA uses trends found in the annual procedure list survey it sends to members to determine the codes to pursue and brings surgeons to the CMS medical officers to present on the safety of specific codes. Although this process is time-consuming, it has been the most successful way to get codes added to the ASC-CPL.

“Since 2013, CMS has added 360 procedures that were previously reimbursed only in hospitals to the ASC-CPL.”

Kara Newbury, ASCA

Eight Years of ASCA Advocacy
2013 and 2014: ASCA held two meetings with CMS staff specifically to discuss the addition of spine codes to the ASC-CPL. The meeting in 2013 took place after the proposed rule was released. Adding codes between the proposed and final rules is typically more difficult than adding them when CMS proposes them for addition from the beginning. In 2014, ASCA met with CMS staff earlier in the spring, and its efforts were rewarded with spine codes being included in the 2015 proposed rule. ASCA called upon its members to provide positive feedback to CMS regarding the volume and outcomes of these spine codes being done in their facilities. As a result, CMS finalized nine spine codes in the 2015 Hospital Outpatient Prospective Payment System (OPPS)/ASC Payment System final rule.

2015: Although ASCA’s efforts were fruitful in 2014, it did not get all the requested spine codes added to the ASC-CPL. In 2015, ASCA went back to CMS to discuss other spine codes that should be payable in ASCs. Due in large part to ASCA advocacy, CMS added 17 codes to the ASC-CPL for 2016, mostly spine codes.

2016: In 2016, ASCA focused its efforts on total joints, starting with total knee arthroplasty (TKA) since CMS previously showed an interest in moving that code off the inpatient-only (IPO) list. In January 2016, an ASCA orthopedic surgeon met with CMS to present outcomes data for TKA and total hip arthroplasty (THA). In August 2016, an ASCA member surgeon presented to the Advisory Panel on Hospital Outpatient Payment (HOP Panel) on the safety and efficacy of TKA being done in the ASC setting. The HOP Panel advises the secretary of the US Department of Health & Human Services (HHS) and the CMS administrator on strategies for addressing issues related to the clinical integrity of procedures within the OPPS, including “removing procedures from the inpatient list for payment under the OPPS payment system.” After that presentation, the HOP Panel unanimously recommended that CMS remove TKA from its IPO list. While the HOP Panel’s recommendations are not binding, it is helpful to have this body support the movement of this code to the outpatient setting. In the 2017 proposed rule, released in July 2016, CMS sought public comments on whether TKA should be removed from the IPO list. While CMS did not take any action on this proposal, the agency indicated in the final rule that the majority of the feedback received was positive.

Medicare Payment Policy Gains from the Past Decade

2017: In the 2018 proposed rule, CMS proposed the removal of TKA from the IPO list, citing support from the previous year’s comments in addition to acknowledging it had “taken into account the recommendation from the summer 2016 HOP Panel meeting to remove the TKA procedure from the IPO list.” CMS also requested more information from the public on potentially removing THA from the IPO list, but no further action was taken on that procedure. CMS received mainly positive comments, many from ASCA members as part of the association’s grassroots comment writing campaign. CMS finalized the removal of TKA from the IPO list.

CMS also requested public comments on “surgery-like” procedures, or services that are described by codes outside the typical surgical range (CPT 10000–69999), that might be appropriate to include as covered surgical procedures payable when furnished in the ASC setting. CMS expressed particular interest in additional criteria that the agency might be able to use when considering whether a procedure is surgery-like and could be included on the ASC payable list. ASCA agreed that strict adherence to the CPT surgical code groupings does not properly account for advances in treatment and the dynamic nature of ambulatory surgery and requested the inclusion of 38 cardiology codes to the payable list under a revised definition of surgery. For 2018, CMS decided to maintain its existing definition of surgical procedures but indicated the agency would consider the feedback received in future rulemaking.

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2018: ASCA partnered with a large cardiology practice to present to CMS medical officers cardiology codes that could be considered surgical under a revised definition and are safely performed in ASCs. As a result, CMS finalized its proposal to revise the definition of “surgery” in the ASC payment system to account for certain “surgery-like” procedures that are assigned codes outside the surgical range and added 17 cardiac catheterization codes to the ASC-CPL for 2019.

2019: While happy with the cardiology codes that were added for 2019, ASCA had requested many other codes that had not been finalized. In the 2020 rulemaking cycle, CMS did propose and finalize the addition of several more cardiology codes to the ASC-CPL.

ASCA also continued to push CMS for the addition of TKA to the ASC-CPL, and in the summer of 2019, the agency did just that. CMS received mostly positive feedback on the addition of TKA to the ASC-CPL and finalized its addition for 2020. In addition, THA and six spine codes were removed from the IPO list, setting up their potential migration to the ASC setting in future years.

Medicare Payment Policy Gains from the Past Decade

2020: The largest change to the ASC-CPL since the payment systems were aligned came in the fall of 2020, when CMS finalized the addition of 267 codes to the ASC-CPL for 2021. Of note, CMS added THA to the ASC-CPL for 2021. Most of these codes—256—were added due to a revision of the ASC-CPL criteria under 42 CFR 416.166, which retained the general standard criteria but eliminated five of the general exclusion criteria.

Device-Intensive Status

Since the payment systems were aligned, devices have been packaged in the surgical reimbursement rate. If the device cost represented 50 percent of the entire procedure cost when performed in a hospital outpatient department (HOPD), the procedure was designated as device-intensive and the device cost was fully contemplated in the reimbursement rate. In 2008, the first year of the revised payment system, there were 45 device-intensive codes in the ASC payment system.

Impact of the New Payment System on Device-Intensive Codes

By 2012, ASCs, on average, were receiving 56 percent of the HOPD reimbursement for the same code. So, if there is a code that is $1,000 when performed in an HOPD but the device costs are $499, since the code does not meet the device offset threshold, the ASC would only receive approximately $560. The device itself was covered, but not much else. ASCA ramped up its efforts on this issue, arguing that the agency should lower the threshold to encourage migration of these procedures with high device costs.

2015 Payment Rule
In the 2015 proposed payment rule, CMS proposed to lower the device offset percentage from 50 to 40 percent. ASCA asked CMS to lower the proposed 40 percent threshold to 30 percent since the ASC conversion factor at the time was approximately 60 percent of the HOPD conversion factor (30/50 = 60 percent). CMS ignored ASCA’s proposal at the time and finalized the 40 percent device offset. Still, the number of device-intensive codes increased from 75 in 2014 to 137 in 2015 under this policy change.

2019 Payment Rule
ASCA continued to advocate for the 30 percent threshold, and in 2019, CMS obliged. This increased the number of device-intensive codes from 154 in 2018 to 264 in 2019. ASCA commended CMS for making this change and provided data from the 50 to 40 percent threshold change to indicate the type of impact CMS might see with this new policy. In the first year following the effective date of that policy—2015—there was a clear migration of services from the HOPD to the ASC setting among the procedures affected by the changed device-intensive threshold, so ASCA anticipates a further reduction in the device-intensive threshold will lead to migration of services from HOPDs to ASCs.


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Conversion Factor

One of the biggest achievements for ASCA and the ASC community came in the 2019 OPPS/ASC Payment rule. For the first time since the OPPS and ASC payment systems were aligned in 2009, CMS indicated it would use the same update factor for the ASC setting as it uses for hospitals, updating the ASC conversion factor using the hospital market basket instead of the Consumer Price Index for All Urban Consumers (CPI-U). ASCA had been advocating for this change for years, and it has been a key part of the ASC Quality & Access Act that ASCA supports.

CMS is using the hospital market basket to update ASC payments for CY 2019 through CY 2023. During this time, the agency will monitor volume to see if this policy leads to migration to the lower-cost ASC setting. While the long-term goal is to have this change be made permanent, a five-year trial period was far beyond what ASCA had seen in the decade preceding this policy change.

ASCA will continue to work with its member facilities and industry stakeholders to advocate for the expansion of the ASC-CPL, a lower device-intensive threshold and permanent alignment of the ASC conversion factor with that used for the OPPS. While change often happens slowly when dealing with the federal government, ASCA is making progress and providing more access than ever to Medicare beneficiaries who will benefit from the high-quality surgical experience ASCs provide.