Medicare’s 2021 Final ASC Payment Rule

ASCA Chief Executive Officer Bill Prentice is joined by ASCA Regulatory Counsel and Director of Government Affairs Kara Newbury for a discussion of Medicare’s 2021 final ASC payment rule that was released by the Centers for Medicare & Medicaid Services (CMS) on December 2, 2020. The rule sets new reimbursement rates for ASCs in 2021, maintains all of the existing measures currently included in Medicare’s ASC Quality Reporting Program, adds a number of new surgical procedures to the ASC-payable list and more. 

Transcript

Narrator:   0:06
Welcome to the Advancing Surgical Care Podcast brought to you by ASCA, the Ambulatory Surgery Center Association. ASCA represents the interests of outpatient surgery centers of every specialty and provides advocacy and resources to assist them in delivering safe, high-quality, cost-effective patient care. As with all of ASCA’s communications, please check to make sure you are listening to or viewing our most up-to-date podcasts and announcements.

Bill Prentice:   0:36
Hi, I'm Bill Prentice, ASCA’s CEO and host of this episode. On this ASC podcast, I'm pleased to welcome back Kara Newbury, ASCA’s regulatory counsel and director of Government Affairs. And I've invited Kara onto the podcast today to discuss the final 2021 Medicare payment rule, which was released this past Wednesday on December 2. As all ASCA members know, but others may not, CMS is required by law to issue a rule each year that sets reimbursement amounts, quality reporting requirements, surgical procedural, and medical device codes and more for ambulatory surgery centers for the coming year. And the drafting of this rule and soliciting comments from interested parties is actually a process that goes on throughout the year. And ASCA works as closely as they'll let us with CMS officials on the development of these proposals, while we're also advocating for the interest of ASCs and the patients they serve. And on balance, ASCA believes the final payment rule for 2021 represents continued steady progress for ASCs with CMS and the Medicare program. For one thing, it clearly recognizes and incentivizes the safety, quality and value that ASCs provide and we're pleased to see that. Probably the best example of that progress is the very positive thread that runs throughout this year's rule that shows new appreciation for physician decision-making, and recognizes our medical professionals as the best arbiters for determining the best setting for beneficiary care and delivering savings to the Medicare program. That said, I'd be remiss if I did not also acknowledge our disappointment with the budgetary policies that continue to unfairly disadvantage ASCs relative to hospital outpatient departments, or HOPDs, and we'll have a little bit more to say about that later in the podcast. But before I bring Kara into the discussion, I do want to acknowledge the hard work that the staff at CMS has done this year in meeting the extraordinary challenges of the COVID-19 pandemic and working with the ASC community to assure that patients can still get the care they require. In just the past couple of weeks alone, we've had several very productive discussions with CMS leaders about how ASCs can assist in the pandemic as it continues to spike around the country. In fact, you can expect a podcast in the coming days that will focus on the pandemic and some changes to the Hospitals Without Walls program that permits ASCs to actually become Part A providers and see patients they otherwise couldn't in areas where the local hospitals are overcapacity due to COVID-19 patients. So with that introduction, I'd like to welcome Kara Newbury back to the Advancing Surgical Care Podcast. 

Hi, Kara. 

Kara Newbury:   3:14
Hi, Bill. It's good to be here.

Bill Prentice:   3:17
Great. Always happy to have you. So Kara, there's a lot to unpack from the final rule, and at 2,165 pages, this year is no exception. I know you and your team have only had a couple of days to digest it all, so let's start with the big picture. How have we fared in terms of an inflation adjustment for the services and medical supplies and medical devices we provide to patients? Where did CMS land on the inflation adjustment for 2021 and how does that compare to years past?

Kara Newbury:   3:47
Well, overall, the update is in line with previous years. The proposed update was approximately 2.6% over all codes. And the final update is 2.4%, so slightly lower. However, as I was analyzing the top 100 codes that are performed in the ASC setting, I noticed a trend that our rates are slightly higher than what was in the proposed rule, particularly for those higher-volume codes, and a higher percentage as compared to hospital outpatient departments. And that is because although the ASC weight scalar remains my top priority and has a negative impact on ASCs, the final weight scalar was 0.8591, which is almost an entire percentage point higher than the proposal for 0.8494. So, I think overall it was a positive rule. Overall, it is going to be something that our members see as a positive update. As a reminder, every specialty is going to see different numbers; every code is different. So it's not gonna be a standard 2.4% update across all codes.

Bill Prentice:   5:04
That's a good thing to remind people about and we'll touch on the weight scalar again later in the podcast. First, let's move on to the new procedure codes. As many of our listeners know, ASCA’s advocacy to expand the list of approved procedures for ASCs is actually a year-round effort in bringing data, clinical studies and medical experts to CMS to demonstrate our ability to safely and efficiently perform a wide range of surgery and procedures that we're currently doing on commercial patients, but for which Medicare doesn't currently reimburse us. And since some commercial payers actually follow rather than lead CMS on the types of procedures that they'll allow an ASC to do, it's really important that we continue to make real progress on this front. Can you tell us about the additional procedures that CMS approved? Because it is a striking number compared to previous years.

Kara Newbury:   5:54
Absolutely, Bill. And the reason that such a large number of codes was added to the ASC Covered Procedures List for 2021 is because CMS decided to make significant changes to the Code of Federal Regulations in terms of what may be performed in an ASC setting. So, right now, effective 2021, the only criteria that CMS will be looking at when determining whether to add a code to the ASC Covered Procedures List are: Number one: is it payable under the OPPS? So is it payable in a hospital outpatient department? Number two: was it not on the inpatient-only list as of December 31 of this year 2020? We'll get to why that one is a problem in a minute. Number three: it's not an unlisted code; so unfortunately, unlisted codes are still excluded from consideration for ASC payment. And number four: not otherwise excluded, just kind of a general catchall. So the reason this is so important is it takes out many of the exclusionary criteria that had previously been part of the consideration, including two that were not even in the proposed rule but that ASCA had asked for CMS to take out, including: would not be expected to pose a significant safety risk to a Medicare beneficiary when performed in an ASC, and then the one that we talk about all the time, medical monitoring and care past midnight. So those are no longer going to be factors that CMS considers. Please don't panic—it's not a free-for-all. This just means that the clinician has to determine whether those factors exist on an individual basis for each Medicare beneficiary. So, clinicians are still supposed to look at those factors—excessive blood loss was one that was previously in the Code of Federal Regulation section, and then of course, as I said, medical care monitoring past midnight. All of the exclusionary criteria that are currently there but will no longer be January 1 are still factors that CMS believes that surgeons will be considering; CMS is just not going to make the determination for all Medicare beneficiaries based on those criteria.

Bill Prentice:   8:11
So, in other words, Kara, what CMS has done is rather than put themselves in place of the physician, they're gonna let the physician actually make those decisions. Still, with those criteria now not going to be used by CMS, there's still an expectation that the physician will use those criteria to determine patient selection and whether or not that patient can be safely seen in the ASC versus another setting.

Kara Newbury:   8:37
Correct. And what ASCA had requested in our comment letter was that CMS just remove all of the exclusionary criteria and give full discretion to the clinicians, particularly because the ones that were left in don't necessarily all speak to quality or patient safety. So, and then as I was mentioning about the inpatient-only criteria, that is extremely problematic because basically it says that anything that is currently on the inpatient-only list will not be considered for inclusion on the ASC Covered Procedures List. One example of a procedure that is currently on the inpatient-only list is total shoulder replacement. So total shoulder and some of the other total joint replacements that have not already moved off the inpatient-only list—we're really going to have to go back to CMS, convince them that this language was a mistake, and get them to change it moving forward. The reason that they put that in there was they wanted to make sure that there wasn't this feeling that every code was going off of the inpatient-only list and becoming immediately accessible in an ASC. But I think inadvertently they made it a lot harder moving forward for 2022 and beyond for some of those codes to be considered for the ASC setting.

Bill Prentice:   9:53
Well, it's good that we have you there to explain that to CMS so we can get that changed for next year because, clearly, that does seem inadvertent and unwise. Well, Kara, we're gonna take a very short break to hear a few words from our podcast sponsor. Stand by and we'll be back talking with you shortly.

Narrator:   10:12
Underwriting for the Advancing Surgical Care Podcast is brought to you by The Joint Commission, an independent, nonprofit, standard-setting and accrediting body for ambulatory care organizations nationwide. For 45 years, The Joint Commission has helped ambulatory care organizations meet and exceed rigorous performance standards for improved patient safety and enhanced quality outcomes. Begin your journey today. Go to jointcommission.org.

Bill Prentice:   10:44
Kara, just before the break when we were talking about procedure codes for ASCs, another part of the final rule that I know is of considerable interest to ASCs as well as the patients we serve is the ASC Quality Reporting Program. Let's just recall that just in the recent past, CMS proposed eliminating and did eliminate the need to report several adverse events because they were occurring so infrequently that CMS didn't see any value in continuing to disclose this data. What, if any, changes has CMS made this year relative to the ASC Quality Reporting Program?

Kara Newbury:   11:16
Well, not a lot, Bill. There were no changes to the ASC Quality Reporting Program measure set and I think that is due in large part to the COVID-19 pandemic. CMS didn't want to add an additional burden to facilities for 2021 and beyond at this point. CMS did make a change: when the quality reporting deadline falls on a weekend or holiday, they will allow ASCs to report on the following workday. So, it just so happens that in 2021, May 15 falls on a weekend and so you will be able to report on the next workday.

Bill Prentice:   11:57
Oh, interesting. You know, one would expect that next year with the new administration, we may see some changes to that quality reporting program, and something that I know that we'll be looking very closely at, something that I know is a regulatory burden having to comply with this program. But I can tell you, and, Kara, I'm sure you'll echo, having somewhere we can point to to policymakers and the media that shows the quality of care that ASCs are providing has been of immeasurable importance to us in accomplishing things like getting these additional procedures onto our list and, again, speaks to that thread that we're seeing through this rule where they're acknowledging the clinical judgment of physicians and seeing that the care that's being provided outpatient, whether in the HOPD or the ASC, is allowing CMS to make these really significant changes in terms of inpatient care as well. And so I actually want to get back to that because you were talking about the inpatient-only list before. That was a pretty big change that they made in the proposed rule and now have finalized, and clearly regulators have concluded that outpatient care is evolving and can safely treat many more patients requiring complex surgery and procedures that were traditionally limited to only the inpatient hospital and, of course, then the inpatient hospital cost. Perhaps the current pandemic and the strain it has placed on hospitals and hospital beds had some impact on that, but either way, it's a big vote of confidence for the clinical judgment of physicians. Do you have any insights as to the decision-making that led to that change?

Kara Newbury:   13:31
I think you covered a lot of it, Bill. I think that CMS is just recognizing, as you indicated, that surgery is evolving, and it is becoming much more of an outpatient game. And I think that during the public health emergency, CMS has recognized that ASCs are essentially the same as a hospital outpatient department, and so that we can shift our cases over with regards to getting rid of the inpatient-only list. I think that, once again, this is something that some within the healthcare community have been requesting for a long time just because it's unclear why certain codes remain on the inpatient-only list at all or it has taken some codes a lot longer to be removed from the inpatient-only list than certain surgical specialties would like. And that's one of the reasons I think that a lot of the musculoskeletal were the first to be removed. You know, clinicians are still going to have to document that the procedure was medically necessary, they're still going to obviously be responsible for the outcomes of those cases. And I think it's just showing that CMS is placing a lot of trust and responsibility on the providers of the care in our country.

Bill Prentice:   14:56
That last point is a really important one because I think it does speak to a maturing in the thinking of our policymakers in realizing that you can provide that flexibility, in the rule, in the law, to allow something without expecting that it means everything's going to be done that way. And I think particularly as we start performing more complicated procedures, I think there's going to be even a greater reliance on patient selection and the protocols that have been in place for a long time in ASCs to make sure that we're only seeing patients we safely can. So, that was an excellent point. Well, I hate to end on a negative note, but let's say just a future challenge which is the thing that we're most disappointed about in the rule, and that relates to the budgetary policies that continue to drag down ASC reimbursements relative to hospital reimbursements. Can you quickly, and I know it's a complicated topic, but can you give our listeners just an understanding of the weight scalar and the impact it is having on our reimbursements and what we would like to do to address that?

Kara Newbury:   16:06
CMS is unfortunately maintaining budget neutrality in silos. We saw this in the Medicare Physician Fee Schedule this year. It really negatively impacted surgical specialties as CMS sought to spend more money on telehealth and primary care for 2021 and moving forward, which obviously makes sense, but surgical specialties shouldn't be negatively impacted because of that. Same thing happens on the ASC side of things. The hospital outpatient department has their budget neutrality, and then ASCs are adjusted after that. And so we have what we call a secondary weight scalar to try to maintain budget neutrality and the ASC payment system, and what it does is it causes this growing disparity in payments between hospital outpatient departments and ASCs. And we have asked for a couple of different changes. CMS indicates to us that they cannot do one without a statutory change, and so our team will be pursuing a statutory change for 2021 and beyond.

Bill Prentice:   17:11
And by statutory change, that means we need to go to Congress and get them to pass a law that allows CMS to make that change.

Kara Newbury:   17:19
No easy feat, but yes, that is what we are trying to do.

Bill Prentice:   17:22
Great. Well listen, Kara, I know that your head is still spinning and your eyes are still tired from reading that rule over the last two days and so I very much appreciate this quick turnaround and getting your first thoughts on the major provisions in the rule. And I know we'll be doing a webinar soon with you for the membership to go through the rule in greater detail, and we look forward to that. So this will conclude our discussion for today. And overall, I believe ASCs and the patients that they see should come away from this year's final rule with a sense of progress and accomplishment on several fronts. And I think our members can and should take a lot of pride in the recognition that this rule shows, more than any even previous rule, about the quality of care they provide each day and the recognition of that and of the good clinical judgment that our physicians are making in terms of the care that they're bringing to ASCs. I'd like to thank Kara, particularly, and our staff at ASCA for the exceptional advocacy and expertise they provide to our members on the rulemaking process, on a score of other issues throughout the year, and both in front of Congress and all the federal agencies that touch on ASCs. They've done an amazing job under really difficult circumstances this year. Finally, I'd also like to thank the sponsor of our Advancing Surgical Care Podcast, The Joint Commission, a leading accreditation organization helping to keep outpatient surgery as safe as possible for both patients and the healthcare professionals who care for them. So until next time, please wear a mask, practice social distancing and wash your hands frequently so we can all stay safe and healthy.