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ASCs vs. HOPDs: 4 Expected Unexpected Consequences of Rate Equalization

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We don't expect the OIG's recommendation to lower HOPD rates to take effect; CMS opposes them, and they would have a strongly negative impact on hospitals. Indeed, if the recommendations did take effect, there would be numerous unexpected consequences. Here are some of those potential consequences:

1. ASCs are the last bastion of physician ownership that enjoys fairly widespread congressional support from both Democrats and Republicans. Eliminating the price differential between the two types of healthcare organization would have a serious negative impact on this congressional support.

ASCs benefit politically because they are in nearly every small- to mid-size town, they involve more than 50,000 to 70,000 physicians nationally, they are well-represented by the Ambulatory Surgery Center Association's ASCAPAC and they have a clear direct benefit to sell to Congress: They save Medicare money on every single procedure.

This is in contrast to physician-owned hospitals, which could not make this argument and ultimately became a much easier target for Congress. Physician-owned hospitals were limited to certain states and didn't have comparable volumes of engaged physician stakeholders as ASCs do.

2. ASCs would not receive increased rates. Rather, the MedPAC proposal solely encourages reducing HOPD rates.

3. Decreased HOPD rates might slow both hospitals' physician employment and acquisition of ASCs.

4. HOPD rate decreases would also have a serious negative impact on hospitals of most sizes.    

More Articles on HOPD vs. ASC Rates:
ASC vs. HOPD Patients: 20 Statistics
Could ASCs Lose Their Competitive Pricing Advantage?
OIG Report: ASCs Save Medicare, Beneficiaries Billions

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