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ASCA Opposes Proposed ASC Prior Authorization Demonstration
Sixteen organizations and 27 state associations also counter the project
BY KARA NEWBURY | APRIL 26, 2024
ASCA submitted comments in response to the Centers for Medicare & Medicaid Services’ (CMS) proposed prior authorization demonstration project for ASCs, last week. ASCA also spearheaded a state association sign-on letter that included 27 state associations, and a specialty organization sign-on letter that included 16 organizations. In these letters, the organizations opposed the demonstration project, as it would place undue burden on facilities with no clear benefit to Medicare or its beneficiaries.
Background
CMS already has a prior authorization program for certain services when provided in hospital outpatient departments (OPD) that “serves as a method for controlling unnecessary increases in the volume of these services.”
In February, CMS announced that it “seeks to develop and implement a Medicare demonstration project, which CMS believes will assist in developing improved procedures for the identification, investigation, and prosecution of Medicare fraud occurring in ambulatory surgical centers providing services to Medicare beneficiaries.”
While both programs center around prior authorization, the punitive language referenced in the ASC program is troubling. Instead of simply questioning medical necessity, CMS uses words like “prosecution” and “fraud” even though there is no evidence of widespread fraud in the ASC setting.
Program Specifics
After announcing the proposed demonstration, CMS released, Supporting Statement Part B. This document includes more information on the proposed prior authorization demonstration project for ASCs, including the states impacted: Arizona, California, Florida, Georgia, Maryland, New York, Ohio, Pennsylvania, Tennessee and Texas. It also includes the 40 codes that would be subject to prior authorization in the demonstration project. The codes fall within the following categories:
- Blepharoplasty, Blepharoptosis Repair, and Brow Ptosis Repair
- Botulinum Toxin Injection
- Panniculectomy, Excision of Excess Skin and Subcutaneous Tissue (Including Lipectomy), and related services
- Rhinoplasty, and related services
- Vein Ablation, and related services
CMS indicated that data “from 2019 to 2021 shows these services have experienced significant increases in utilization in the ASC setting” and that it “selected the targeted services for inclusion in this demonstration, based upon problematic events, data, trends, and potential billing behavior impacts of the OPD Prior Authorization Program which requires prior authorization as a condition of payment for these services.”
ASCA’s analysis of the codes, however, determined that only one of the 40 codes, J0585, saw any increase from 2019 to 2021, and only a modest 1.5 percent increase during that time frame. In addition, five of the codes—15847, 36474, 36476, 36479 and 36483—have the payment indicator N1, meaning they are not separately payable in the ASC setting. Since ASCs do not receive reimbursement, it does not make sense to include them in a prior authorization demonstration.
“When imposing new burdens on well-regulated healthcare providers,” ASCA commented, “CMS should show that there is a clear gain to taxpayers and the Medicare program. As presented, this demonstration misses the mark.”
Next Steps
If prior authorization is implemented, ASC providers would have to submit documentation to their Medicare Administrative Contractors (MAC) that shows a service meets applicable Medicare coverage, coding and payment rules prior to rendering the service.
Trained clinical reviewers at the MACs will determine if the requested services are medically necessary and meet Medicare requirements. However, if an ASC provider does not submit a prior authorization request before rendering the service and submitting a claim to Medicare for payment, the ASC could still possibly be reimbursed. The MAC will just request the required information from the ASC provider to determine if the service meets applicable Medicare coverage, coding and payment rules before the claim is paid.
ASCA expects more information regarding the proposed demonstration project will be released soon, potentially in the 2025 proposed payment rule for ASCs in early July.
Write Kara Newbury with any questions.