ASCRS Alert 08-06

TO: All ASCRS/ASOA Members

Date: July 16, 2007

REVISED AMBULATORY SURGERY CENTER (ASC)
PAYMENT SYSTEM FINAL RULE RELEASED

COMBINED ASC AND HOSPITAL OUTPATIENT PROSPECTIVE PAYMENT SYSTEM (OPPS) PROPOSED RULE RELEASED

This evening, ASCRS reviewed an advance copy of the final rule establishing the policies for the revised payment system for ASCs, as well as a combined proposed rule for the calendar year (CY) 2008 hospital outpatient prospective payment system and 2008 ASC conversion factor and payment rates. The Centers for Medicare and Medicaid Services (CMS) will publish the rulings in the Federal Register on August 2, 2007.

As reported previously, CMS was mandated by Congress (via the Medicare Modernization Act (MMA) of 2003) to implement a new ASC payment system no later than January 1, 2008. The following represents major changes to the ASC payment system outlined in the final and proposed rulings:

Expanded List of ASC Procedures

As requested by the ASC community, including ASCRS and OOSS, CMS will expand the list of services that may be performed in an ASC setting. A CMS Fact Sheet notes that ASC payment will be made for an additional 790 surgical procedures beginning in 2008 as a result of the final rule. Only those services that impose a significant risk or require an overnight stay will be excluded.
The combined OPPS/ASC proposed rule proposes to add several more procedures (in addition to the 790 procedures added under the final rule) and to update the ASC list of covered services in coordination with the proposed OPPS update.

Revised ASC payment system beginning January 1, 2008

Under the ASC payment system final rule, the revised ASC payment rates will be based on the Ambulatory Payment Classification (APC) groups, used in the OPPS. For 2008, CMS states that, with certain exceptions, the revised ASC rates would be 67 percent of the corresponding OPPS payment rate. However, under the combined OPPS/ASC proposed rule, CMS estimates that the CY 2008 ASC rates will be about 65 percent of the OPPS rates.
According to CMS’ Fact Sheet on the rulings, “The proposed rates are based on the final methodology established in the ASC final rule but use more recent data and are affected by the updated OPPS rates and policies proposed for CY 2008. The ASC payment rates for many procedures estimated in the proposed rule change little compared with the illustrative rates in the final ASC payment system rule. This is because the proposed CY 2008 ASC payment rates in the proposed rule reflect the proposed increased payment rates for many OPPS services in CY 2008 compared with CY 2007 that are largely offset by the slightly lower budget neutrality adjustment factor in the proposed OPPS/ASC rule compared with the final ASC payment system rule.”
Because of the significant changes to payment for some services under the new ASC payment system, CMS is implementing a 4-year transition beginning in 2008. Therefore, in 2008, the ASC payment rate would be a blended amount equal to 75% of the applicable calendar year 2007 payment rate and 25% of the applicable calendar year 2008 payment rate. Beginning in 2011, the new ASC payment system will be fully implemented.
Beginning in 2008, payment to ASCs under the revised ASC payment system for procedures commonly performed in a physician’s office will be made at the lesser of the ASC rate or the Medicare Physician Fee Schedule (MPFS) non-facility practice expense amount.
Also, as a result of the MMA, ASC payment rates were frozen until 2009. Beginning with 2010 the ASC conversion factor will be updated by the Consumer Price Index for Urban Consumers (CPI-U).
The revisions to the ASC payment system are budget-neutral in 2008.

Copies of the proposed and final rules are available on the ASCRS and ASOA web sites. Additional analysis and a table reflecting the changes will be made available shortly.

We will keep you updated. For more information, please contact Nancey K. McCann, ASCRS Director of Government Relations, at nmccann@ascrs.org, or Emily L. Graham, RHIT, CCS-P, CPC, ASCRS Manager of Regulatory Affairs, at egraham@ascrs.org or 703-591-2220.


		URGENT REGULATORY ALERT
		TO: All ASCRS/ASOA Members Date: July 16, 2007 REVISED AMBULATORY SURGERY CENTER (ASC) PAYMENT SYSTEM FINAL RULE RELEASED COMBINED ASC AND HOSPITAL OUTPATIENT PROSPECTIVE PAYMENT SYSTEM (OPPS) PROPOSED RULE RELEASED This evening, ASCRS reviewed an advance copy of the final rule establishing the policies for the revised payment system for ASCs, as well as a combined proposed rule for the calendar year (CY) 2008 hospital outpatient prospective payment system and 2008 ASC conversion factor and payment rates. The Centers for Medicare and Medicaid Services (CMS) will publish the rulings in the Federal Register on August 2, 2007. As reported previously, CMS was mandated by Congress (via the Medicare Modernization Act (MMA) of 2003) to implement a new ASC payment system no later than January 1, 2008. The following represents major changes to the ASC payment system outlined in the final and proposed rulings: Expanded List of ASC Procedures As requested by the ASC community, including ASCRS and OOSS, CMS will expand the list of services that may be performed in an ASC setting. A CMS Fact Sheet notes that ASC payment will be made for an additional 790 surgical procedures beginning in 2008 as a result of the final rule. Only those services that impose a significant risk or require an overnight stay will be excluded. The combined OPPS/ASC proposed rule proposes to add several more procedures (in addition to the 790 procedures added under the final rule) and to update the ASC list of covered services in coordination with the proposed OPPS update. Revised ASC payment system beginning January 1, 2008 Under the ASC payment system final rule, the revised ASC payment rates will be based on the Ambulatory Payment Classification (APC) groups, used in the OPPS. For 2008, CMS states that, with certain exceptions, the revised ASC rates would be 67 percent of the corresponding OPPS payment rate. However, under the combined OPPS/ASC proposed rule, CMS estimates that the CY 2008 ASC rates will be about 65 percent of the OPPS rates. According to CMS’ Fact Sheet on the rulings, “The proposed rates are based on the final methodology established in the ASC final rule but use more recent data and are affected by the updated OPPS rates and policies proposed for CY 2008. The ASC payment rates for many procedures estimated in the proposed rule change little compared with the illustrative rates in the final ASC payment system rule. This is because the proposed CY 2008 ASC payment rates in the proposed rule reflect the proposed increased payment rates for many OPPS services in CY 2008 compared with CY 2007 that are largely offset by the slightly lower budget neutrality adjustment factor in the proposed OPPS/ASC rule compared with the final ASC payment system rule.” Because of the significant changes to payment for some services under the new ASC payment system, CMS is implementing a 4-year transition beginning in 2008. Therefore, in 2008, the ASC payment rate would be a blended amount equal to 75% of the applicable calendar year 2007 payment rate and 25% of the applicable calendar year 2008 payment rate. Beginning in 2011, the new ASC payment system will be fully implemented. Beginning in 2008, payment to ASCs under the revised ASC payment system for procedures commonly performed in a physician’s office will be made at the lesser of the ASC rate or the Medicare Physician Fee Schedule (MPFS) non-facility practice expense amount. Also, as a result of the MMA, ASC payment rates were frozen until 2009. Beginning with 2010 the ASC conversion factor will be updated by the Consumer Price Index for Urban Consumers (CPI-U). The revisions to the ASC payment system are budget-neutral in 2008. Copies of the proposed and final rules are available on the ASCRS and ASOA web sites. Additional analysis and a table reflecting the changes will be made available shortly. We will keep you updated. For more information, please contact Nancey K. McCann, ASCRS Director of Government Relations, at nmccann@ascrs.org, or Emily L. Graham, RHIT, CCS-P, CPC, ASCRS Manager of Regulatory Affairs, at egraham@ascrs.org or 703-591-2220.