2019 Final Medicare Payment Rule Released; ASCA Advocacy Produces Successes


November 2, 2018

The Centers for Medicare & Medicaid Services (CMS) released the 2019 final payment rule for ASCs and hospital outpatient departments (HOPDs) today. Of note, CMS has finalized its proposal to align update factors, moving ASCs to the hospital market basket which has long been used to update HOPD payments. Under the final rule, CMS will use the hospital market basket to update ASC payments for the five-year period of calendar year (CY) 2019 through CY 2023.

“We applaud CMS leadership for listening to the ASC community and adopting some long asked for policy changes, including measuring inflation in ASCs by using the hospital market basket,” said ASCA CEO Bill Prentice. “These changes are a strong signal that this Administration values the role ASCs can play in bending the Medicare cost curve while maintaining quality and safety for beneficiaries.”

Some other initial observations about the 1182-page rule follow. ASCA will be providing additional analysis soon, including a rate calculator that allows users to determine what ASCs will be paid locally. You can download a copy here.

2.1% Average Rate Update

ASCs’ reimbursements, on average over all covered procedures, received an effective update of 2.1 percent—a combination of a 2.9 percent inflation update based on the hospital market basket and a productivity reduction mandated by the Affordable Care Act of 0.8 percentage point. Please note that this is an average, and that updates may vary significantly by code and specialty. It is also important to note that CMS does not consider sequestration in its final rule. This statutory 2 percent reduction remains in effect until at least 2024 unless Congress acts.

The information below provides a comparison between the 2019 ASC and HOPD reimbursement:

ASC HOPD
Inflation update factor 2.9% 2.9%
Productivity reduction mandated by the ACA 0.8 percentage points 0.8 percentage points
Additional reduction mandated by the ACA n/a 0.75 percentage points
Effective update 2.1% 1.35%
Conversion factor $46.551 $79.490

Lower Device Intensive Procedure Threshold Finalized

CMS has finalized its proposal to define ASC device-intensive procedures as those procedures with a device offset percentage greater than 30 percent based on the standard OPPS APC rate-setting methodology. The current threshold is 40 percent, and ASCA has advocated strongly for a lower threshold.

New Procedures Added to ASC-Payable List Under Revised Definition of Surgery

CMS has finalized its proposal to revise the definition of “surgery” in the ASC payment system to account for certain “surgery-like” procedures that are assigned codes outside the Current Procedural Terminology (CPT) surgical range. In addition to finalizing the addition of the 12 cardiac catheterization procedures that were in the proposed rule, CMS is also adding five additional procedures performed during cardiac catherization procedures to the list of ASC covered surgical procedures. These codes can be found in Table 60 of the rule, beginning on page 746 of 1182.

Recently Added Procedures Remain on ASC Covered Procedures List After Review

After review of all procedures that were added to the ASC-payable list within the three calendar years prior to the year in which they are engaging in rulemaking (2015–2017), CMS decided, as ASCA expected, to keep these codes on the ASC covered procedure list. The purpose of this exercise was to “assess the safety, effectiveness, and beneficiary experience of these newly-added procedures when performed in the ASC setting.” The list of codes evaluated included many spine codes being done in ASCs, and ASCA appreciates that the review revealed these codes are safely performed in ASCs.

Payment for Non-Opioid Pain Management Therapy

CMS finalized its proposal to provide separate payment for non-opioid pain management drugs that function as a supply when used in a surgical procedure when the procedure is performed in an ASC. Currently, HCPCS code C9290, Exparel, is the code that meets the criteria, and will receive separate payment when used in a surgical procedure when the procedure is performed in an ASC. CMS recognized other drugs may meet these criteria in the future.

Changes to the ASC Quality Reporting Program

While there were eight measures that had been proposed for removal from the ASC Quality Reporting (ASCQR) Program, only two were finalized for removal. Beginning with the CY 2020 payment determination, CMS has removed: ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel, and beginning with the CY 2021 payment determination, ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps - Avoidance of Inappropriate Use will be removed.

In addition, while ASC-1: Patient Burn; ASC-2: Patient Fall; ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; ASC-4: All-Cause Hospital Transfer/Admission; ASC-1: Patient Burn; ASC-2: Patient Fall; ASC-3: Wrong Site, will remain in the ASCQR Program, data collection will be suspended for these measures until further action in rulemaking with the goal of revising the measures.

ASC-9: Endoscopy/Polyp Surveillance Follow-up Interval for Normal Colonoscopy in Average Risk Patients;and voluntary measure ASC-11: Cataracts - Improvement in Patient's Visual Function within 90 Days Following Cataract Surgery will remain in the ASCQR Program.

With regards to quality, Prentice added, “The reduction of measures in the ASC Quality Reporting Program demonstrates the outstanding performance of ASCs in preventing serious adverse events. We look forward to working with CMS staff to identify actionable quality data that can be used by patients, providers and regulators.”

ASCA will continue to analyze the rule in detail and will soon provide more information to help ASC operators understand the impact on their centers.