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Takeaways From Medicare's 2021 Final Payment Rule

Focus on clinical discretion to select appropriate site of service for Medicare beneficiaries

BY KARA NEWBURY | DECEMBER 2020

The most significant change for ASCs in the 2021 final payment rule for ASCs and hospital outpatient departments (HOPD) is the addition of 267 codes to the ASC Covered Procedures List (ASC-CPL), including total hip arthroplasty (THA), and the changes made to the Code of Federal Regulations (CFR) section allowing for this change. The Centers for Medicare & Medicaid Services (CMS) released the 2021 final payment rule for ASCs and HOPDs on December 2, 2020. CMS also continued to align the ASC update factor with that used to update HOPD payments, using the hospital market basket to update ASC payments for calendar year (CY) 2021 through CY 2023 as the agency continues to assess this policy’s impact on volume migration.

2.4 Percent Average Rate Update

ASCs will see, on average across all covered procedures, an effective update of 2.4 percent. This is an average and updates might vary significantly by code and specialty.

While this update is less than the 2.6 percent that was proposed, the top 100 Medicare codes by volume see an increase between the proposed and final rules. This is due to a higher than proposed ASC weight scalar. The 2021 proposed ASC weight scalar was 0.8494 and the 2021 final ASC weight scalar is 0.8591. CMS uses the weight scalar to contain costs within each payment system, a siloed approach ASCA has raised concerns regarding in previous years. Since ASC payments are based off of HOPD payments, which has its own weight scalar, this is technically the second time ASC weights are scaled, which is why we also refer to it as the “secondary weight scalar.” ASCA will continue to advocate for CMS to remove the ASC or secondary weight scalar. Even though it was slightly better this year than last year—the 2020 weight scalar was 0.8550—over the past decade the ASC weight scalar has contributed greatly to the growing disparity in reimbursement between ASCs and HOPDs.

Hundreds of Codes Added to ASC Covered Procedures List

CMS is revising the ASC-CPL criteria under 42 CFR 416.166 and, under these revised criteria, CMS is greatly expanding the ASC-CPL. There were 11 codes that CMS identified for inclusion on the ASC-CPL under the current criteria, and 256 that will be added under the revised criteria, for a total of 267 new codes in 2021. The full list of codes added to the ASC-CPL for 2021 is included in ASCA’s Medicare Payment Resources.

Effective January 1, 2021, §416.166 will read as follows:

(2) Effective for services furnished on or after January 1, 2021, covered surgical procedures are surgical procedures specified by the Secretary and published in the Federal Register and/or via the Internet on the CMS Web site that:

(i) Are separately paid under the OPPS; and

(ii) Are not:

(A) Designated as requiring inpatient care under § 419.22(n) of this chapter as of December 31, 2020;

(B) Only able to be reported using a CPT unlisted surgical procedure code; or

(C) Otherwise excluded under § 411.15 of this chapter.

The inpatient-only (IPO) list language limits from future consideration codes that are currently on the IPO list, such as total shoulder arthroplasty. This is problematic and ASCA will continue to work with CMS to advocate for changes to this language.

Beginning January 1, 2021, CMS will shift the decision-making responsibility to clinicians. With regards to the current exclusionary criteria effective through December 31, 2020, for next year and beyond, CMS will allow physicians to determine on a case-by-case basis whether a Medicare beneficiary should have a procedure performed in an ASC. The section reads:

(d) Physician considerations beginning January 1, 2021. Physicians consider the following safety factors as to a specific beneficiary when determining whether to perform a covered surgical procedure. The covered procedure—(1) Is not expected to pose a significant safety risk when performed in an ASC; (2) Is one for which standard medical practice dictates the beneficiary would not typically be expected to require active medical monitoring and care at midnight following the procedure; (3) Generally results in extensive blood loss; (4) Requires major or prolonged invasion of body cavities; (5) Directly involves major blood vessels; (6) Is generally emergent or life-threatening in nature; and (7) Commonly requires systemic thrombolytic therapy.

CMS did not finalize its proposal for a formal process through which specialty societies and the public would nominate codes for inclusion on the ASC-CPL. Instead, CMS has added the following language to the CFR:

(e) Additions to the list of ASC covered surgical procedures beginning January 1, 2021. On or after January 1, 2021, CMS adds surgical procedures to the list of ASC covered surgical procedures as follows. (1) CMS identifies a surgical procedure that meets the requirements at paragraph (b)(2) of this section. (2) CMS is notified of a surgical procedure that could meet the requirements at paragraph (b)(2) of this section and CMS confirms that such surgical procedure meets those requirements.

Practically speaking, this is the same process CMS currently uses, they are simply spelling it out in the Code of Federal Regulations. ASCA will continue to work with CMS and advocate for codes that are requested by our members to be added to the ASC-CPL.

Elimination of the Inpatient-Only List by 2024

CMS is finalizing its proposal to transition codes off the IPO list, indicating in the final rule that the list will be eliminated by 2024. The agency is starting with 298 services for removal from the IPO list in 2021, primarily musculoskeletal services. In addition to the 266 musculoskeletal services that were proposed for removal, CMS is removing an additional 32 codes raised in comments to the proposed rule.

No Changes to the ASC Quality Reporting Program Measure Set

CMS will not remove any existing measures or adopting any new measures for the CY 2023 payment determinations. As a reminder, per the CMS memo March 27, 2020, regarding exceptions for quality reporting requirements due to the COVID-19 public health emergency, data submission was voluntary for web-based measures for the CY 2019 reporting period that affects the CY 2021 payment determinations. Therefore, 100 percent of ASCs will receive the full ASCQR payment update for CY 2021.

Since the May 15, 2021, deadline falls on a Saturday, CMS finalized its proposal to extend the deadline to the next workday, which is Monday, May 17, 2021.

ASCA Resources

Due to the COVID-19 pandemic, the rule—which is accompanied by the addenda with the reimbursement rates—was released approximately one month later than usual this year. This did not come as a surprise, as the proposed rule was released in August instead of July, but it puts more of a time crunch on ASCs trying to get ready for the new year. ASCA provides an ASC rate calculator for members to determine what ASCs will be paid locally beginning January 1, 2021. Please note that for the past several years CMS has released a correction notice in late December which impacts the reimbursement rates for some or all codes. We will update our Medicare Payment Resources page and notify members as soon as we are aware of any changes.