2022 ASC Legislative Update: SIS Q&A with ASCA Representatives

Surgical Information Systems spoke with ASCA representatives about several recent developments for the ASC industry, issues to watch during 2022, and opportunities for individual ASCs to play a greater role in advocacy for the industry.

The Ambulatory Surgery Center Association (ASCA) continues its work lobbying for the interests of ASCs nationwide and working to ensure that federal and state legislative, regulatory, and executive agencies understand and consider the needs of surgery centers when they are developing laws and policies. We spoke with ASCA regulatory and government affairs representatives about several recent developments for the ASC industry, issues to watch during 2022, and opportunities for individual ASCs to play a greater role in advocacy for the industry.

Q: The Medicare 2022 ASC Payment Final Rule was released in the last quarter of 2021. What are some of the key takeaways for Medicare-certified ASCs?

A: Some of the provisions in the final 2022 payment rule that got the most attention when it was first released were changes to what procedures could be performed in the ASC and hospital outpatient department (HOPD) settings. For ASCs, the Centers for Medicare & Medicaid Services (CMS) removed 255 codes from the ASC Covered Procedures List (ASC-CPL) that had just been added in 2021. For HOPDs, CMS reinstated the hospital inpatient-only (IPO) list, and as part of that process, put almost 300 codes back on the IPO list that had just been made payable in the HOPD setting in 2021. In the end, due to a lack of volume in the ASC setting for many of the 255 ASC-CPL codes affected and the fact that the IPO list does not govern which procedures ASCs can perform, with a few exceptions, these reversals had less immediate impact on ASCs than many expected.

At the same time, CMS responded in meaningful ways to numerous requests ASCA made to Medicare officials both before and after the proposed rule was released. Those responses included the following:

- Medicare continued to update ASC and HOPD rates using the same update factor: the hospital market basket. This decision represents an important step toward creating greater parity between the two payment systems.
- CMS finalized a policy change providing device-intensive status to any procedure for which the device cost is 30% of the overall ASC procedure rate. Previously, procedures were deemed device-intensive if the device accounted for 30% of the HOPD costs — a higher bar to meet. This change significantly increased the number of device-intensive codes on the ASC-CPL, providing more appropriate reimbursement for those procedures that require significant device costs.
- CMS finalized its proposal to establish a new procedure nomination process for future rulemaking. Once the steps are identified, external stakeholders, such as professional specialty societies and ASCA, will have a formal process in place they can use to nominate procedures for addition to the ASC-CPL.
- After ASCA provided research and data on the safety of CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), and 27702 (Reconstruct ankle joint), Medicare opted not to place those procedures, or the anesthesia codes associated with them, back on the IPO list. That decision should expedite the process of adding those procedures to the ASC-CPL in the future.
- This rule reinstated data collection for quality measures ASC-1, ASC-2, ASC-3, and ASC-4. Data collection for these measures is slated to begin during calendar year (CY) 2023 and will impact CY 2025 payment determinations. ASCA supported inclusion of these outcome measures in Medicare's ASC Quality Reporting (ASCQR) Program and will continue to advocate for HOPDs to report these same measures to allow for better comparisons across settings.

These decisions and several conversations ASCA had with CMS staff as this rule was being prepared give us reason to remain optimistic about working with Medicare and the Biden administration in the future.

Q: The final rule announced that CMS will implement the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS-CAHPS) as a mandatory measure in the ASCQR Program beginning in January 2025. What timeline should ASCs follow leading up to this implementation date?

A: Originally, CMS proposed requiring OAS-CAHPS survey-based measures (ASC-15a-e) with mandatory reporting beginning in the CY 2024 reporting period affecting the CY 2026 payment determination and subsequent years. ASCA asked for a delay, and the final rule moved the enforcement dates to CY 2025/CY 2027, respectively. ASCs that want to conduct a trial run of the survey can begin using the survey now.

ASCA has long raised concerns with the number of completed surveys required, and CMS listened by dropping the required number of completed surveys from 300 to 200. ASCA is continuing to talk with CMS about other ways to encourage greater participation in these surveys, including the use of a shorter survey and use of an electronic-only option that would also reduce the cost burden for ASCs.

While CMS did implement two new modes — electronic with phone and electronic with mail — to accompany the three previously approved modes — phone only, mail only, and phone/mail mixed-mode — an electronic-only option would significantly reduce the cost burden.

Q: On January 1, new requirements stemming from the No Surprises Act went into effect. What is the impact of these new provisions on ASCs?

A: ASCs will be impacted significantly by this new law and need to understand what is required of them, primarily regarding disclosures and good faith estimates that now must be provided to patients, and how disputes will be settled. While CMS has released resources to help all affected providers comply with this new law, ASCA has released several resources specifically for ASCs. These include a free, publicly available episode of our Advancing Surgical Care Podcast that provides a broad overview of the new requirements, a more in-depth webinar that ASCA members can view for free and nonmembers can view for $50, and a more extensive set of resources we make available to ASCA members only on our website.

Note: You can also learn more about the No Surprises Act in this Q&A with SIS's Director of ASC Solutions Daren Smith.

Q: In November 2021, the Outpatient Surgery Quality and Access Act (H.R. 5818/S. 3132), was introduced. What are the key elements in this bill?

A: Key elements include the following:

- Align the Reimbursement Update Factor for Identical Outpatient Procedures — In 2019, CMS agreed to use the same update factor — the hospital market basket — to determine the annual inflation updates ASCs and HOPDs receive over a five-year trial period. This provision would make that arrangement permanent and help support improved alignment of the two payment systems into the future.
- Provide Beneficiaries With Outpatient Surgery Quality Information — While price comparisons for ASCs and HOPDs are readily available to the public, quality data is not available in a consumer-friendly format. This provision of the bill directs the U.S. Department of Health & Human Services (HHS) to publish a comparison of quality measures that apply equally to both ASCs and HOPDs.
- Add an ASC Representative to the Advisory Panel on Hospital Outpatient Payment — This panel makes recommendations regarding HOPD and ASC payments to the secretary of HHS, but its members currently include only representatives familiar with hospitals and health systems. This provision of the legislation would designate a seat on this panel for a representative of the ASC community.
- Create a Review Process for Potential Outpatient Procedures — Although Medicare's 2022 final ASC payment rule confirms that CMS plans to define a clear process for nominating new procedures to the ASC-CPL, this piece of the bill would back up that regulatory intent with a statutory requirement that would remain in place unless the law changes. This element of the bill also requires CMS to be transparent about the rationale behind the decisions it makes.
- Eliminate the Copay Penalty for Part B Services — A Medicare beneficiary typically has a coinsurance responsibility of 20% of a procedure's cost when that procedure is performed in an ASC. When a beneficiary receives the same procedure in an HOPD, the copay is capped at the inpatient deductible amount, which is $1,556 for 2022, and the hospital is made whole by the Medicare program. This provision of the bill would implement a comparable copay cap in ASCs, offering improved access to care in the ASC setting for patients who are without supplemental coverage (about 60% of Black and 28% of white beneficiaries) and significant savings to the Medicare program and taxpayers.
- Allow ASC Services to Grow Naturally — 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. 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. 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.

Q: How can ASC professionals get involved in supporting this bill and ASCA's other ASC advocacy activities?

A: Although COVID-19-related restrictions have mostly eliminated in-person visits with members of Congress and their staff on Capitol Hill for the last two years, ASCA and its members have continued to reach out through letters, virtual facility tours, video teleconferencing calls, and other means. Last year, ASCA targeted new members of Congress, providing them with information about ASCs. This year, our focus is on enlisting additional congressional cosponsors for the Outpatient Surgery Quality and Access Act. When we meet with congressional staff, they want to hear from their constituents before supporting legislation. That's where our members come in.

Individual ASC professionals can get involved in all these activities by contacting ASCA Manager, Legislative and Political Affairs David Opong-Wadee. He can be reached at 703.636.0673 or dopongwadee@ascassociation.org. David can also provide information about ASCAPAC, ASCA's nonpartisan political action committee that is dedicated to electing and supporting strong ASC advocates in Congress.

Q: What other regulatory issues and industry trends should ASCs monitor throughout 2022?

A: At CMS, ASCA will continue to oppose the adoption of ASC-11: Cataracts: Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery as a mandatory quality reporting measure for ASCs. This measure is also facing opposition from hospital groups; ophthalmic groups that include the American Academy of Ophthalmology, which was the measure steward; and others. While it might be a valid quality measure for other care providers, it is not an appropriate indicator of quality for ASCs.

ASCA will also continue to advocate for the addition of new procedures to the ASC-CPL and policies that support the continued migration of procedures into ASCs when those procedures can be performed safely in the ASC setting. We encourage anyone with suggestions for additions to the ASC-CPL list to send those suggestions to ASCA Director of Government Affairs and Regulatory Counsel Kara Newbury at knewbury@ascassociation.org. We are most successful when we have volume and outcomes data we can share with CMS, so ASCA will prioritize codes for which we have that information.

Apart from Medicare, ASCA will continue to study the impact on ASCs of the No Surprises Act. We will also continue to monitor private payer policies that encourage the migration of procedures into ASCs and work to continue to provide any tools and resources ASCs need to be able to provide the safest and highest quality care to their patients.

In the states, ASCs should continue to be on the lookout for proposals that would impose burdensome reporting requirements or fees that are less about promoting top-quality patient care and more about creating new barriers to owning or operating an ASC. These proposals come in many disguises, so ASCA continues to work closely with ASC state associations across the country to monitor and react to new proposals and longstanding concerns. We recommend that, in addition to being a member of ASCA, every ASC join their state ASC association.

For information about getting involved in your state, please contact ASCA Assistant Director, Government Affairs Stephen Abresch at 703.636.0622 or sabresch@ascassociation.org. He can help you make the connections you need.