Medicare’s 2022 Proposed ASC Payment Rule

ASCA Chief Executive Officer Bill Prentice and ASCA Regulatory Counsel and Director of Government Affairs Kara Newbury come together to discuss the 2022 proposed payment rule for ASCs and hospital outpatient departments released by the Centers for Medicare & Medicaid Services (CMS) on July 19, 2021. The proposal will be finalized later this year after CMS officials review comments submitted by interested parties. Once final, the rule will set Medicare reimbursement levels for procedures and quality reporting requirements for ASCs, determine which surgical procedures ASCs can perform for Medicare beneficiaries and more, effective January 1, 2022.

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:   0:37
Hi, I’m Bill Prentice and I’m 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. I’ve invited Kara on the podcast today to discuss the proposed 2022 ASC payment rule that was released by the Centers for Medicare & Medicaid Services (CMS) this week on July 19. As ASCA members know, but some may not, CMS is required by law to issue a rule each year to establish reimbursement amounts for the procedures the agency allows ASCs to perform on Medicare beneficiaries in the coming year. Since there’s a potential payment penalty if ASCs do not fully participate in the ASC Quality Reporting Program, any updates to the measures or process of reporting are also included in the payment rule. ASCA and other interested parties will now have until September 17 to submit comments on the proposals in this year’s rule. On balance, ASCA believes the proposed rule for 2022 is a proverbial mixed bag. On a positive note, the rule proposes to raise reimbursement rates for ASCs by 2.3 percent next year, on average. And additional allowances are also made for device-intensive procedures and the use of non-opioid pharmaceuticals. But the rule also contains some very disappointing proposals, including a very jarring reversal of the 2021 rule changes that added a significant number of codes to the ASC Covered Procedures List (ASC-CPL) and began the process of removing the inpatient-only list, also known as the IPO list. With every new administration one expects there to be changes, but these proposed across-the-board reversals are very troubling to say the least. There are also proposed changes to the Quality Reporting Program and more. But before I review any more the rule and bring Kara to the podcast, I need to raise just one caveat. The actual rule that we’re about to discuss runs some 863 pages in length. And accordingly, our analysis as well as today’s podcast discussion will only cover the highlights. In the weeks ahead as we develop our official comment letter, I’m sure additional insights will emerge, and we will of course continue to share that information with all of our members and listeners. And with that introduction, I’d like to welcome Kara Newbury back to the Advancing Surgical Care Podcast. Hi, Kara.

Kara Newbury:   2:50
Hi, Bill. Good to be here.

Bill Prentice:   2:52
Thank you for your quick review of this lengthy rule. We’ve obviously got a lot to unpack and discuss. So, to simplify our discussion and get right to the issues that matter most to our listeners, let’s focus on reimbursement, the ASC Covered Procedures List and ASC Quality Reporting Program. And as I mentioned a moment ago, the proposed rule calls for a 2.3 percent improvement in reimbursement rates, on average, for ASCs. Can you explain some of the nuances to that, including the application of the hospital market basket, and the additional adjustments that are incorporated in these proposed rate adjustments?

Kara Newbury:   3:27
Absolutely, Bill. So, the 2.3 percent update for ASCs is the same update that we’ll see for hospital outpatient departments next year; those update factors have been aligned. Since 2019, CMS back in 2019, decided to do a five-year pilot program where our payment updates were aligned with HOPDs. Now, of course, we used to be based on the Consumer Price Index for All Urban Consumers (CPI-U), which this year would probably have been better for us. But ASCA continues to believe that in the long term, it makes sense for continuity for us to be tied to the hospital outpatient departments and have the same update factor that they have. As you said, it varies greatly by specialty, by individual codes. So we get calls all the time from people saying, “Well, my rates weren’t updated 2.3 percent,” and this is on average across the thousands of codes for which ASCs are reimbursed. I will also point out that there is a troubling trend downward. So, our conversion factor, while it was 59.1 percent of hospital outpatient departments in 2021, it is proposed to be 58.09 percent in 2022, so one percentage lower, and that’s due to some other problematic payment policies that CMS continues to implement.

Bill Prentice:   4:53
So, long story short is that 2.3 percent is just a starting point, and then there’s a lot of math and budget machinations that happen at the code level that really changes things. And I know that’s something that we’ve been working on to try and address to create a fairer way for ASCs to get reimbursed. We obviously don’t have time to talk much about that today, but important for our listeners to know. Kara, we’re gonna take a short break to hear a quick message from our podcast sponsor. So, if you’ll stand by, we’ll be right back.

Narrator:   5:28
Funding for the Advancing Surgical Care Podcast is provided by HealthCare Appraisers, a national healthcare valuation and advisory firm recognized for its proven track record in ASC valuation. HealthCare Appraisers’ skilled team has valued thousands of ASCs for purchasers, investors and real estate transactions. Experience how HealthCare Appraisers thinks differently by visiting www.healthcareappraisers.com.

Bill Prentice:   6:03
Kara, before we paused our conversation, we were discussing the rate increases that were pretty much in line with our expectations, even if they fell short of what we would like to see. That said, the proposals that surprised us the most, and startled might be a better word, were the proposals to reverse course on the procedures approved last year, along with the phase out of the inpatient-only list. What, if any, rationale is CMS providing for this pretty dramatic reversal in the draft rule from what was in last year’s?

Kara Newbury:   6:33
Bill, you’re absolutely correct. While we did have some feeling that CMS might pause, under a new administration might pause, for instance, the complete elimination of the inpatient-only list, we were surprised to see this complete reversal. The rationale given was not something that I think any of us in the ASC community feel is adequate, and we will be commenting as such in our comment letter. CMS indicated that the medical officers for the agency have had a chance to review, for instance, the 258 codes that they are now proposing to remove from the ASC Covered Procedures List. And my question, and I think all of our questions, back to CMS would be, why were those not reviewed prior to adding them in 2021? So, there’s a lot more questions than answers in terms of rationale, but ASCA will be advocating hard for our facilities to continue to be able to perform any of those procedures that they are safely able to do, and we know that that is a lot of the 258 that are being proposed for removal.

Bill Prentice:   7:46
Yeah, I think that quite honestly, if I recall from last year, I think we were a bit surprised at the decisions they made to actually move all those procedures, both off of the IPO list to the hospital outpatient department and then that big batch of procedures off of the HOPD list to now allow them to also be performed in the ASC. And I think at that point, we were I think looking realistically that ASCs wouldn’t do a lot of those procedures anyway. So, I think where our concern comes from is less the fact that all these procedures have been moved one way and now potentially back the other way, but the fact that it doesn’t seem coherent from the agency’s perspective in terms of how they made these decisions. And what we I think were most appreciative of last year with a number of the changes they made, and particularly in terms of the process that they were going to use to make future decisions about which procedures to move into our space, is it seemed like they were going to place a greater reliance on the clinical judgment of physicians. And it seems to me a bit disappointing that it seems like they have retrenched in that perspective this year in this proposed rule. Am I getting that right?

Kara Newbury:   8:57
Absolutely, Bill, and also the lack of transparency. Transparency is of course a huge buzzword in healthcare, especially right now, and there’s really a lack of transparency in this decision. There is some transparency being proposed with a new nomination process through which CMS would allow stakeholders, such as ASCA, to submit codes that we would like to see added to the ASC Covered Procedures List by March 1 of every year, and then CMS would determine whether or not they were going to put them in the proposed rule for the following year. If CMS determines that they are not going to put them in the proposed rule, they would have to provide a rationale for that decision. So, I was happy to see that because that was something that was in the proposal last year but not finalized. So, the formal nomination process does at least give us a little bit of transparency moving forward, but that doesn’t satisfy us or really help us with the sweeping changes that were made this year to our ASC Covered Procedures List.

Bill Prentice:   10:00
And that’s an excellent point because for the entire time that you and I have been here working on behalf of our members, we have been asking for that sort of transparency because, again for our listeners’ benefit, Kara, you brought clinicians up to Baltimore to meet with the CMS medical directors in an effort to try and get additional procedures put on our payable list. And oftentimes, we get no feedback whatsoever. And those procedures aren’t added to the list and we’re never given any indication which criteria did they fail to meet to be eligible to be put on our list. So, this is something that is, if it’s put into the final rule, a great leap forward for us in terms of at least having a better sense of how to get these procedures approved so that the things that our members are doing safely on the non-Medicare population, we now have a greater chance to get them approved to be performed on Medicare beneficiaries as well. So, let’s hope that ends up in the final rule, and obviously we’ll be asking for that, and hopefully anyone else who’s listening who’s going to be submitting a comment will also push for that. I think I now want to turn to the Quality Reporting Program and the changes that are being proposed in the rule there. And again, we’re seeing significant changes after a year of really no new measures. It’s been a while since we’ve had any new measures put into our program. The first change is the resumption of ASC-1 through ASC-4, which are outcomes measures. And these are measures that are actually developed by the ASC Quality Collaboration, which ASCA participates in, and we advocated actually for keeping these measures that had been suspended a couple years ago. And they were suspended due to the higher performance because ASCs were performing so well on them that the agency at the time decided to suspend further reporting. But we think that information that’s contained in those four measures is really beneficial to prospective patients. So, we’re pleased to see those measures being returned to our program and I’ll let you provide a little more detail to those. However, we have some concerns with some of the other reporting requirements that have been proposed. So, why don’t you walk us through some of these proposed changes to the Quality Reporting Program?

Kara Newbury:   12:12
Absolutely, Bill. Besides the ASC Covered Procedures List, the Quality Reporting Program far and away was the most sweeping changes for ASCs. And as you indicated, last year there were really no major developments, so this was a very significant shift and, we believe, increase of burden in many ways on ASCs. So, as you mentioned, ASC-1 through ASC-4, which are the patient burn, fall, wrong event, and all-cause hospital transfer or admission measures, are being brought back after a few years suspension from our program. CMS is proposing to have those measures be reported through web-based submission as opposed to claims-based, which they were previously. We believe that that’s to allow for reporting on a greater patient population outside of just Medicare fee-for-service, but the rule itself was not clear on that. So, we’re going to need to get clarification from CMS quality reporting staff to see if there’s a facts manual that we missed that’s come out on that. But yes, in general, we are supportive of this and in fact, we would like to see HOPDs, hospital outpatient departments, report on any of these measures that are appropriate to have better comparisons across sites of service. Some of the new measures are the COVID healthcare personnel vaccination measure, which has been proposed in all of the sites of service that have had their payment rules introduced thus far this year. Our biggest concern is that it will be reported through NHSN and, for those of you who are having flashbacks to when you had to report on your influenza healthcare personnel vaccinations, that is not the easiest system always to enroll in or to enter data. And from the reading that we have of the rule, which this part in particular was written in a very confusing fashion, but it looks as if facilities would have to start reporting data the first quarter of 2022. And so, we do have some concerns about facilities needing to re-enroll. I have heard from one of our board members who has gone in, and they had not been on NHSN in quite some time, and she was easily able to get back on there, so that’s a good sign. But if you have had turnover in your facility in the past few years in terms of who was using NHSN or if you’re a new facility, we worry that there could be some hiccups there. So, we’ll be commenting on that. Probably the biggest surprise to me in the rule was ASC-11, that’s the Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery measure. You may know that that measure has been voluntary in our payment system for the past several years and that was due to actually a great coalition between ASC communities, ophthalmic communities and the hospital communities, because it’s a measure in their space as well, indicating that it’s not an appropriate measure for a facility. It is going to be a burden on facilities to have that to be mandatory. Right now, there are approximately 40 ASCs that are voluntarily reporting this information and there are over 2,000 ASCs that are performing ophthalmic procedures. So just about 2 percent of ASCs have tried this and, in the proposal, CMS says that facilities have had several years to practice. Well, nobody was practicing because nobody had any indication from prior rulemaking that this was even on the table to be made mandatory. So, we will certainly be pushing back on that, we will strongly oppose making ASC-11 mandatory for several reasons, many of which I just outlined. And then the final big change that we were anticipating is the eventual mandate for OAS CAHPS, the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems, which is of course quite a mouthful, as is the survey itself. So, this is a patient experience survey that will be given in the ASC and hospital outpatient department settings, and it will be responsible for five measures, but they’re all under the ASC-15 umbrella. So, ASC-15a-e will be based on results that come out of this survey. So, CMS is proposing a lengthier timeline for adoption, which is good, saying that in 2023 they’re encouraging facilities to voluntarily report and then 2024 they would start mandating. Now we’ve had problems in the past and concerns with the modes of the survey. So initially, we had three modes: a phone option, a mail option and then a mixed mode, which was phone and mail. And CMS has tested and approved two new options, which are mixed mode with phone and an electronic version or mixed mode with a mail and electronic version. ASCA has been advocating for and will continue to advocate for an electronic-only version because that is truly the means by which you would reduce the cost burden on our facilities.

Bill Prentice:   17:39
Well, there’s obviously a lot to unpack there and a lot of things that we’re going to have to spend some time thinking about and how we’re going to comment on back to the agency with regard to quality reporting. But that was a great overview of the major provisions in the rule. Kara, I’m just thinking now that it might be a good idea to maybe bring you back and do another podcast maybe in early September, once we’ve solicited comments from our membership, our board, our Government Affairs Committee and others in the development of our comment letter, and our final position and recommendations on all these different provisions, and maybe spend a few minutes giving our listeners an idea of where we’ve landed in terms of our responses on these things. So, I hope you’ll indulge me and be willing to come back to do that. Well, as I said, I think we’ve covered the high points and I know that you have more analysis to do with your team in the weeks ahead, but I want to thank you and our entire ASCA staff for the quick study of this very expansive proposal. And, of course, the work that you and the Government Affairs team do all year round to advocate for the interests of our members.

Kara Newbury:   18:47
Thanks, Bill.

Bill Prentice:   18:48
So, before signing off, I would once again like to acknowledge the support of HealthCare Appraisers, a national healthcare valuation and advisory firm recognized for its proven track record in ASC valuation. HealthCare Appraisers has valued thousands of ASCs for purchasers, investors and real estate transactions, and we welcome their support as an ASCA affiliate. So, until next time, please continue to follow your local public health guidance and we’ll talk to you again soon.