CMS Releases 2022 Proposed Medicare Payment Rule

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CMS Releases 2022 Proposed Medicare Payment Rule

Mixed bag for ASCs

The Centers for Medicare & Medicaid Services (CMS) released the 2022 proposed payment rule for ASCs and hospital outpatient departments (HOPD) on July 19, 2021.

Of note, CMS proposed to reverse policy changes from the previous administration that added a significant number of codes to the ASC Covered Procedures List (ASC-CPL) and began the process of removing the inpatient-only (IPO) list. CMS did propose to continue to align the ASC update factor with that used to update HOPD payments. Under the proposal, CMS would continue to use the hospital market basket to update ASC payments for calendar year (CY) 2021 through CY 2023 as the agency assesses this policy’s impact on volume migration.

Other observations about the 863-page proposal follow.

2.3 Percent Average Rate Update

If the proposed rule were to be finalized as drafted, ASCs would see, on average over all covered procedures, an effective update of 2.3 percent—a combination of a 2.5 percent inflation update based on the hospital market basket and a productivity reduction mandated by the Affordable Care Act of 0.2 percentage points. This is an average and updates might vary significantly by code and specialty.

Below is a comparison between the 2022 ASC and HOPD reimbursement proposals:

Inflation update factor 2.5% 2.5%
Productivity reduction mandated by the ACA 0.2 percentage points 0.2 percentage points
Effective update 2.3% 2.3%
Conversion factor $49.064 $84.457

CMS Proposes Positive Device-Intensive Procedure Policy for ASCs

Under this proposal, the device offset percentage will be calculated using ASC rates and not HOPD rates as is current practice. This means that any procedure in which the device cost is 30 percent of the overall ASC procedure rate will receive device-intensive status.

Additionally, if a device receives HOPD device-intensive status, it also will be device-intensive in the ASC setting. For CY 2022 and subsequent years, CMS proposed that if a procedure is assigned device-intensive status for HOPDs but has a device offset percentage below the device-intensive threshold under the standard ASC rate-setting methodology, the procedure will be assigned device-intensive status under the ASC payment system with a default device offset percentage of 31 percent.

Currently, there are 381 device-intensive codes in 2021. If these changes are finalized as proposed, there would be 444 device-intensive codes in 2022.

Proposed Removal of Codes from the ASC-CPL

For 2022, CMS proposed to remove 258 of the codes that were added to the ASC-CPL in 2021. CMS also reversed recent changes to 42 CFR 416.166 by bringing back the general exclusion criteria in place during 2020 and previous years. The agency added total knee arthroplasty (TKA) to the ASC-CPL in 2019, and while it added total hip arthroplasty (THA) in 2020, its addition was based on meeting the exclusionary criteria in place during 2020 and previous years. While these codes are set to remain on the ASC-CPL already, ASCA will work to save many of the 258 codes. Be on the lookout for a survey in the coming weeks to help ASCA with these efforts.

Nomination Process for Codes Added to ASC-CPL in 2023 and Beyond

CMS also proposed a nomination process for CY 2023 rulemaking and beyond through which external stakeholders, such as professional specialty societies, would nominate procedures for addition to the ASC-CPL. Nominations would be due to CMS by March 1 to be considered for the rulemaking for the following calendar year. CMS would address in rulemaking nominated procedures for which stakeholders have provided sufficient information for the agency to evaluate the procedure. In the applicable proposed rule, CMS would include a summary of the justification for proposing to add or not add each nominated procedure, which would allow members of the public to assess and comment on nominated procedures during the public comment period. After reviewing comments provided during the public comment period, CMS would indicate whether it would add the procedures to the ASC-CPL in the final rule.

Proposal to Reinstate the IPO List

CMS proposed to halt the elimination of the IPO list over a three-year period, as finalized in 2021 rulemaking, and to add 298 codes back to the IPO list for 2022. Of particular interest to ASCs, this proposal would move total shoulder arthroplasty back to the IPO list in 2022.

New Measures Proposed for the ASC Quality Reporting Program

Regarding the ASC Quality Reporting (ASCQR) Program, CMS proposed the following:

  • Add a COVID-19 Vaccination Coverage Among Health Care Personnel (HCP) measure beginning with 2022 data collection. This measure has been included in all previously released proposed payment rules this year, including home health, hospice and inpatient hospitals.
  • Require and resume data collection for ASC-1, ASC-2, ASC-3 and ASC-4 beginning with the CY 2023 reporting period/CY 2025 payment determination and subsequent years for web-based submissions. ASCA has supported resuming these measures in the ASC setting and supports similar measures to be added to the HOPD quality reporting program.
  • Require that ASC-11 Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery be mandatory beginning with the CY 2023 reporting period/CY 2025 payment determination and for subsequent years. ASCA has opposed this as a mandatory measure in the past and will continue to do so this year.
  • Require the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey-based measures (ASC-15a-e), with voluntary reporting in the CY 2023 reporting period and mandatory reporting beginning with the CY 2024 reporting period/CY 2026 payment determination and for subsequent years. Although CMS added two mixed modes that include an electronic option—electronic with mail follow-up and electronic with phone follow-up—ASCA will continue to advocate for an electronic-only option to reduce the financial burden on facilities.

Proposed Rule Resources

For its members, ASCA staff has created a detailed Proposed Rule Analysis that identifies and briefly summarizes the provisions of greatest interest in the proposed rule.

The 2022 proposed rule version of the Medicare Rate Calculator also is now available. The Coronavirus Aid, Relief, and Economic Security (CARES) Act suspended the sequester between May 1, 2020, and December 31, 2020. Subsequently, the Consolidated Appropriations Act, 2021 extended the suspension period to March 31, 2021. An Act to Prevent Across-the-Board Direct Spending Cuts, and for Other Purposes, signed into law on April 14, 2021, extended the suspension period to December 31, 2021. However, at this time there is no indication that the suspension of the 2 percent cuts will continue beyond December 31, 2021, so members should take the 2 percent reduction into account when considering proposed CY 2022 rates. To remove the sequester reduction at this time, use the dropdown menu at the top.

Last but not least, tune in to the latest episode of ASCA’s Advancing Surgical Care Podcast to hear ASCA Chief Executive Officer Bill Prentice and ASCA Regulatory Counsel and Director of Government Affairs Kara Newbury discuss the changes Medicare is proposing to ASC payment policy, quality reporting and more.

Submit your comments in response to the rule through September 17, 2021. ASCA will submit comments on behalf of its members and encourages others in the ASC community to submit comments as well. ASCA will release template letters in the coming weeks to assist with the letter writing process and publish a notice in its Government Affairs Update newsletter when the templates are available.