On Nov. 31, 2014, the Centers for Medicare and Medicaid Services (CMS) announced the final payment and policy changes for 2015 for Ambulatory Surgical Center (ASC).

Payment Changes

Each year, CMS adjusts the ASC rates based on the Consumer Price Index for all urban consumers (CPI-U). For calendar year 2015, the CPI-U estimate is 1.9 percent. Deducting the Multifactor Productivity (MFP) projected at 0.5 percent from the CPI-U, the update factor for calendar year 2015 is 1.4 percent.

nutshellFour Things to Know About The Increase

According to Becker’s ASC review, the original ASC payment rule proposed by Medicare was .02 percent less that the announced final payment change. The reason for this was the first calculation used a lower inflation rate, 1.7 percent instead of 1.9 percent less the 0.5 percent adjustment.

In prior years, the CMS definition of a device-intensive procedure targeted devices that cost more than 50 percent of the total procedure cost. With the announcement of the 2015 payment rules, CMS changed the definition of device-intensive procedures to start when the cost of the device is greater than 40 percent of the procedure cost. When the threshold was at 50 percent, there were 163 procedures prohibited in the ASC setting. Beginning in 2015, that number drops to 48 codes prohibited in an ASC due to device costs.

Follow-up examinations and reports for Improvements in Patients Visual Function with 90 days of cataract surgery, ASC-11, is now a voluntary measure under the ASC Quality Reporting Program. At the same time, CMS finalized the proposed quality measure ASC-12 known as Facility Seven-Day Risk-Standardized Hospital Visit Rate After Outpatient Colonoscopy.

Finally, contained in the final rules is the final rules for ASC:8 – Influenza Vaccination Coverage Among health care Personnel is May 15, 2015. Facilities report this quality measure using the National Healthcare Safety Network.

Issues Surrounding the Final Rule

The final rule increases the disparity for procedures done in an ASC and those performed in a Hospital Outpatient Department. While ASCs got a 1.4 percent under the new rules, HOPD’s payments increased by 2.1 percent. This growing disparity between payment schedules encourages the use of higher cost settings.

Pressure continues on ASC margins, especially if private insurance follows the CMS payment change of only 1.4 percent. And since recruiting younger physicians to come work for them continues to elude ASCs, operating costs will need to be more carefully managed. These issues may cause ongoing consolidation within the ASC industry since investors want risk reduction by liquidation or a management partner experienced in managing during difficult times.

CMS is aware and concerned about the number of practice and ACS acquisitions by hospitals who then switch the entity from a lower reimbursement payment to the higher fee schedule called the Hospital Outpatient Prospective Payment Systems (OPPS). Though the service and the setting remain unchanged, the reimbursement cost to payers rise.

Accordingly, CMS requires a special modifier for every procedure billed using the OPPS and physician fee schedule when the service was not given on the facility campus. Closing this loophole will not help in stopping or slowing the acquisition mania demonstrated by hospitals. They will simply exercise more selectivity and greater due diligence before making an acquisition.

Sources

http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2014-Fact-sheets-items/2014-10-31.html

http://www.argentaadvisors.com/OPPS_Summary_2015.pdf

http://hctadvisor.com/2014/07/3-thoughts-cms-proposed-2015-opps-asc-payment-changes/

http://www.beckersasc.com/asc-coding-billing-and-collections/asc-payments-officially-to-increase-1-4-in-2015-5-things-to-know-about-the-final-medicare-2015-payment-rule.html

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abeo Management Corporation (abeo) serves as a leading source of revenue cycle management and practice management with a specialization in anesthesia. The company leverages its people, processes, and software to serve independent practices, surgery centers, hospitals and healthcare systems with a scope of services that include billing, coding, transcription, practice management, and business consulting.

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