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9 Things to Know: Workers Compensation Research Institute "Payments to Ambulatory Surgery Centers" Report

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1. The Payments to Ambulatory Surgery Centers report by the Workers Compensation Research Institute examines the variation in ASC fee schedules and payment by state. The sense from reading the report is that the authors of the report perceive that ASCs should be paid less in certain states.

2. Given how much money the Medicare Program saves through ASCs and how much pressure ASCs are under from both a case volume and reimbursement perspective, we believe any payment reduction to ASCs would ultimately harm consumers, Medicare, Medicaid and physicians. Thus, we think the report's apparent bias is misplaced.

3 The WCRI study includes freestanding ASCs in 23 states. These states represented more than two-thirds of the workers' compensation benefits paid in 2011.
 
4. Of the states included in the study, they were split between states with no fee schedules, states with a fixed-amount fee schedule and states with a percent-of-charge-based fee schedule.

5.  The payments varied from state to state. The average payment for knee arthroscopy was less than $2,000 in Pennsylvania, Michigan, Maryland and New York. The average payment for the procedure was more than $6,000 in Indiana, New Jersey, Virginia, Missouri, Illinois, Connecticut and Louisiana. The average payment for shoulder arthroscopy was less than $3,000 in Pennsylvania, New York and Michigan, but more than $10,000 in Indiana, Wisconsin, North Carolina, Louisiana, Illinois and Connecticut.
 
6.  Average ASC facility payments, of little surprise, in states with no fee schedules exceeded facility payments in states with fixed-rate fee schedules.

•         Knee arthroscopy facility payments were 33 percent to 124 percent higher.
•         Rotator cuff surgery facility payments were 45 percent to 127 percent higher.
•         Shoulder arthroscopy facility payments were 63 percent to 166 percent higher.
 
 
7. Average ASC facility payments to states with percent-of-charge-based fee schedules exceeded facility payments in states with fixed-rate fee schedules by 33 percent to 144 percent:
 
•         Knee arthroscopy facility payments were 33 percent to 130 percent higher.
•         Rotator cuff surgery facility payments were 73 percent to 96 percent higher.
•         Shoulder arthroscopy facility payments were 62 percent to 144 percent higher.
 
States with fixed-amount fee schedules generally had lower payments:

•         Group median payment was 45 percent to 48 percent lower than the median payment of states without fee schedules.
•         Group median payment was 46 percent to 52 percent lower than the median payment of states with percent-of-charge-based fee schedules.
 
8. The interstate payment differences did not reflect the differences in Medicare fee schedule rates for ASCs. Difference in Medicare fee schedule rates are designed to take into account state variances in issues such as cost of care and staff salary. The average Medicare ASC facility fee ranged from $1,075 to $1,347 for knee arthroscopy and from $1,738 to $2,178 for shoulder arthroscopy.

9. The study authors concluded that the variation in ASC payments is not tied to difference in underlying costs of the procedures.

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3 Notable Trends in Medicare and Medicaid Reimbursement for ASCs

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