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ASC Legislation to Help Level the Playing Field for Outpatient Surgery

Write your members of Congress and ask them to support the Outpatient Surgery Quality and Access Act of 2021

BY KARA NEWBURY | DECEMBER 2021

In early November, elected officials in both the US House of Representatives and the US Senate introduced the Outpatient Surgery Quality and Access Act of 2021 (H.R. 5818 and S. 3132). Representatives John Larson (D-CT) and Devin Nunes (R-CA) introduced the legislation in the House and Senators Richard Blumenthal (D-CT) and Bill Cassidy, MD, (R-LA) introduced it in the Senate.

Larson and Nunes, longtime lead sponsors, serve on the House Ways and Means Committee, which is one of two committees of jurisdiction for the bill; the other being Energy and Commerce. While Blumenthal has served as a lead sponsor in the past, Cassidy is a new lead sponsor. He is a physician and a member of the Senate Committee on Finance, the committee of jurisdiction for this legislation. Senator Mike Crapo (R-ID), our Senate Republican lead in the past, now serves as the ranking member on the Senate Finance Committee, meaning he is the most senior member of the committee from the minority party. Senator Ron Wyden (D-OR), also a former lead sponsor of our legislation, serves as the chairman of the Senate Finance Committee. ASCA is proud of these relationships cultivated over the years, and excited to work with our bipartisan supporters in Congress once again to ensure Medicare beneficiaries’ continued access to high-quality outpatient surgery.

The Outpatient Surgery Quality and Access Act of 2021 aims to better align the ASC and hospital outpatient department (HOPD) payment systems. The major provisions of the legislation are listed below. The first four are consistent with legislation ASCA has supported in the past, and the final two provisions are new this session.

Align the Reimbursement Update Factor

Issue: Medicare and its beneficiaries generally pay twice as much for procedures when performed in HOPDs 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, providing consistency to the annual update process and creating a more complete alignment of the ASC and HOPD payment systems.

Provide Beneficiaries with Outpatient Surgery Quality Information

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.

Add an ASC Representative to the Advisory Panel on Hospital Outpatient Payment

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 comprises solely of hospital and health system representatives.

Solution: This provision of the bill would designate one seat on the panel for a representative from the ASC community.

Create a Review Process for Potential Outpatient Procedures

Issue: Prior to 2022, no formal process existed for stakeholders to request codes be added to the ASC Covered Procedures List (ASC-CPL), and CMS was not required to disclose its rationale for keeping procedures off the ASC-CPL. While CMS did finalize a more formal and transparent nomination process set to begin with the 2023 rulemaking cycle, as we have seen the past two years, the agency could easily decide to reverse course on this decision in the future.

Solution: This provision of the bill directs CMS to publish its rationale for declining to add codes to the ASC-CPL that were formally requested by industry stakeholders. Codifying this language requires CMS to remain transparent with its rationale for putting procedures on the ASC-CPL, regardless of if the nomination process remains in effect in the future.

Eliminate the Copay Penalty for Part B Services

Issue: Medicare beneficiaries who receive treatment in ASCs and HOPDs are typically responsible for 20 percent of the reimbursement rate. However, there is a cap on the patient responsibility in the HOPD at the hospital inpatient deductible amount ($1,556 for 2022), but there is no cap in the ASC, so Medicare beneficiaries are responsible for the entire 20 percent, making it more expensive for them to receive care in an ASC for certain procedures.

Moreover, HOPDs are made whole, meaning the Medicare program makes up the difference between 20 percent of the reimbursement rate and $1,556. Since HOPDs typically receive higher Medicare reimbursement than ASCs, this flawed policy incentivizes beneficiaries to choose the higher-cost site of care, adding unnecessary costs to the Medicare program. This issue arises for 147 codes on the ASC-CPL using the national reimbursement rate, but far more procedures in communities with higher reimbursement rates that result from a higher cost of living.

This issue primarily impacts those without supplemental coverage, an area where a racial disparity exists, with only 40 percent of black beneficiaries having 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.

Allow ASC Services to Grow Naturally

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 would prohibit 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.

You can help ASCA garner support for the bill by way of additional cosponsors by writing to your members of Congress and asking for their support. Please visit our Grassroots Advocacy page for more opportunities to advocate for the ASC community.

Write Kara Newbury with questions.