Digital Debut
Analyzing CMS’ 2023 Final Medicare Rule
Positive developments for next year, but much work lies ahead for 2024
BY KARA NEWBURY | DECEMBER 2022
In its 2023 final payment rule for ASCs and hospital outpatient departments (HOPD), the Centers for Medicare & Medicaid Services (CMS) showed a willingness to advance policies that will drive volume to the ASC setting and save Medicare and its beneficiaries money. However, ASCs still face many hurdles under the final rule and will need to advocate strongly to advance their interests in 2024 and beyond. A November Digital Debut article on the rule touched on the basics.
Average Rate Update of 3.8 Percent
CMS finalized an effective update of 3.8 percent—a combination of a 4.1 percent inflation update based on the hospital market basket (HMB) and a productivity reduction of 0.3 percentage points mandated by the Affordable Care Act. This is an increase of 1.1 percent from the proposed rule. This is an average and updates might vary significantly by code and specialty.
Unfortunately, the COVID-19 pandemic arose during the second year of CMS’ five-year pilot for aligning the ASC and HOPD update factors, limiting both ASCA and the agency’s ability to fully assess the success of the policy. COVID-19 impacted volume so dramatically in 2020 that CMS decided not to use it in 2022 rulemaking. ASCA has been advocating for CMS to extend the policy into FY 2024 and beyond and will continue to do so next year.
Conversion Factor
The effective update factor for ASCs resulted in a conversion factor of $51.854; the conversion factor for HOPDs in 2023 is $85.585. The ratio of the ASC conversion factor to the HOPD conversion factor is 60.59 percent, which is better than the 59.13 percent ratio in the proposed rule and the 59.3 percent ratio in 2022. This is due to significant changes CMS had to make to its reimbursement policy for outpatient drugs provided in 340B hospitals in response to the US Supreme Court’s decision in AHA v. Becerra (June 2022) that deemed the CMS policy, first finalized in 2018, unconstitutional. To maintain budget neutrality in the Hospital Outpatient Prospective Payment System (OPPS) program, CMS reduced the conversion factor between the proposed and final rules. The policy does not impact the ASC conversion factor.
Impact of 340B Policy Changes to ASC Device-Intensive Codes
Unfortunately, the budget neutrality adjustments that CMS made to implement 340B policy changes impacted device-intensive codes. The agency included this explanation in the final rule: “because the device portion for device-intensive procedures is held constant with the OPPS and is not calculated with the ASC conversion factor, the revised OPPS conversion factor will lower the device portion for device-intensive procedures, including the payment rates for device-intensive procedures under the ASC payment system.” In all, 297 device-intensive procedures saw a decrease in reimbursement between the 2023 proposed and final rules due to the revised 340B outpatient drug policy implementation.
Updating the ASC Relative Payment Weights for CY 2023
CMS finalized an ASC weight scalar of 0.8594, which is higher than the 2023 proposed ASC weight scalar of 0.8474 and the 2022 final ASC weight scalar of 0.8552. This increase can be attributed to the 340B policy change, as CMS states in the rule: “the decline in expenditures for device portions under the ASC payment system is fully offset through the ASC weight scalar, which increases payment for the non-device portions of all covered surgical procedures and certain covered ancillary services.” While we know through our independent analysis that the OPPS conversion factor still had a negative impact on device-intensive codes in the final rule, the increase to the ASC weight scalar is a positive step for all procedures and did offset the decrease to the device portion of device-intensive codes.
ASCA has pointed out for several years that CMS is disincentivizing ASCs from bringing Medicare beneficiaries to their facilities through its attempts to achieve budget neutrality in each siloed payment system. While CMS broadly acknowledges this issue in the final rule, the agency has not shown any signs to fix it. ASCA will continue to advocate for changes that eliminate the impact of this weight scalar, using both regulatory and legislative options for potential change.
Additions to the ASC Covered Procedures List
Although ASCA provided a list of 47 procedures that are performed safely on non-Medicare populations in the ASC setting for consideration to be added to the ASC Covered Procedures List (ASC-CPL), CMS added only four of the requested codes: 19307 (Mast mod rad); 37193 (Rem endovas vena cava filter); 38531 (Open bx/exc inguinofem nodes) and 43774 (Lap rmvl gastr adj all parts).
While CMS acknowledged the research ASCA provided on total joint shoulder arthroplasty and total ankle replacement, the agency indicated the research had significant limitations, “including selection bias, an absence of age groups representative of the Medicare population, and a lack of generalizability to different types of ASCs around the country.” Advocating for these total joint codes will be a primary focus of ASCA meetings with CMS staff next year.
Name Change and Start Date of Nominations Process
In 2022, CMS finalized a nominations process that will provide stakeholders the opportunity to formally submit codes for consideration for the ASC-CPL. In the 2023 rule, CMS finalized a name change for this process from “Nominations” to the “Pre-Proposed Rule CPL Recommendation Process.” CMS believes the word “nominations” might suggest an unintended formality that implies the nominations process is the preferred means by which interested parties may submit recommendations.
In addition to changing the name, CMS finalized its proposal to delay the start date of the recommendation process a year. Interested parties may submit codes for consideration starting January 1, 2024, with a March 1, 2024, deadline for consideration for the 2025 ASC-CPL. CMS will continue to welcome all procedure submissions through the public comment process, as it has in previous years.
ASCA expressed disappointment in the delay, as the new process is more transparent and will give stakeholders a better understanding of why CMS refuses to add certain requested codes to the ASC-CPL. In the interim, ASCA will increase advocacy for additions to the ASC-CPL through meetings with CMS senior leadership.
New Dental Code for OPPS
ASCA has been working with national dental organizations to advance an appropriate code for billing dental procedures in the ASC setting. In the 2023 final rule, CMS added a new dental code, G0330, to the OPPS to describe facility services for dental rehabilitation procedure(s) offered to patients who require monitored anesthesia care (e.g., general, intravenous sedation) and use of an operating room. While CMS did not add this code to the ASC-CPL for 2023, the agency indicated it will consider this during future rulemaking, and ASCA will strongly advocate for its addition to the ASC-CPL.
ASCA Resources
ASCA prepares several resources annually to help its members understand Medicare’s final payment rule. Registration is still open for ASCA’s final webinar of the year, “Understanding Medicare’s 2023 Final Payment Rule,” which will take place Tuesday, December 6, at 1:00 pm ET.
In addition, ASCA has posted multiple new 2023 payment resources on its website to assist members with understanding Medicare reimbursement. Beginning in 2023, Medicare will provide a “complexity adjustment” for certain code combinations, creating 55 new C codes that better reflect the true cost of performing select add-on procedures in conjunction with certain primary procedures. ASCA has posted a 2023 Complex Codes spreadsheet that lists each new C code, the primary code and secondary add-on code that make up that C code combination, and the difference between the primary code rate and the C code rate.
A new 2023 Device-Intensive Codes spreadsheet lists all codes designated as device-intensive for 2023, as well as the difference between the proposed and finalized rates.
Finally, a 2023 ASC vs HOPD Rate Comparison spreadsheet shows the difference between national Medicare reimbursement rates for all separately payable procedures in ASCs and HOPDs.
These resources, as well as the Medicare Rate Calculator and Medicare Payment Resources document—both updated quarterly—can be found on ASCA’s Medicare Payment Resources webpage.
Please write Kara Newbury with any questions.