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8 things to know about ASC reimbursement

Reimbursement for procedures is an ASC's bread and butter. Here are eight things to know about surgery center reimbursement.

1. Surgery center reimbursement comes from several sources, according to the VMG Health 2012 Intellimarker Ambulatory Surgical Center Financial & Operational Benchmarking Study. Surgery center payer mix as a percentage of gross charges includes:

•    Commercial: 57 percent
•    Medicare: 24 percent
•    Other pay: 8 percent
•    Medicaid: 6 percent
•    Worker's compensation: 5 percent
•    Self pay: 3 percent

2. CMS bases its reimbursement for outpatient procedures on its Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System. CMS released its proposed OPPS/ASC CY 2016 proposed changes in July. CMS proposes to update OPPS rates by -0.1 percent, based on a hospital market basket increase of 2.7 percent with a -0.6 percent adjustment for multi-factor productivity and a -0.2 percent point adjustment requirement by law.

3. ASC payments are updated on an annual basis based on the Consumer Price Index for all urban consumers. For CY 2016, CMS proposes a 1.7 percent CPI-U update. With a multi-factor productivity adjustment of 0.6 percent, the update is expected to be 1.1 percent.

4. ASC reimbursement as a percentage of hospital outpatient department reimbursement has been steadily declining since 2003, according to Medicare Payment Advisory Commission data.

•    2003: 87 percent
•    2008: 63 percent
•    2009: 59 percent
•    2010: 58 percent
•    2011: 56 percent

5. CMS reimbursement is affected by quality reporting requirements. Ambulatory Surgical Center Quality Reporting Program measures for CY 2016 payment determination include:

•    ASC-1 Patient burn
•    ASC-2 Patient fall
•    ASC-3 Wrong site, wrong side, wrong patient, wrong procedure, wrong implant
•    ASC-4 Hospital transfer/admission
•    ASC-5 Prophylactic intravenous antibiotic timing
•    ASC-6 Safe surgery checklist use
•    ASC-7 ASC facility volume data on selected ASC surgical procedures
•    ASC-8 Influenza vaccination coverage among healthcare personnel

Surgery centers who do not meet reporting requirements may incur a 2 percentage point reduction to any annual increase provided under the ASC payment system for that year.

6. In July, CMS also proposed adding 11 new procedures to its ASC payable list next year. The new procedures and codes include:

•    07101T for "insertion of posterior spinous process distraction device including necessary removal of bone or ligament for insertion and image guidance, lumbar; single level."
•    0172T for "insertion of posterior spinous process distraction device including necessary removal of bone or ligament for insertion and image guidance, lumbar; each additional level."
•    57120 for "colpocleisis, Le Fort type."
•    57310 for "closure of urethrovaginal fistula."
•    58260 for "vaginal hysterectomy, for uterus 250 g or less J8."
•    58262 for "vaginal hysterectomy, for uterus 250 g or less; with removal of tube(s) and/or ovary(s)."
•    58543 for "laparoscopy, surgical, supracervical hysterectomy, for uterus greater than 250 g."
•    58544 for "laparoscopy, surgical, supracervical hysterectomy, for uterus greater than 250 g; with removal of tube(s) and/or ovary(s)."
•    58553 for "laparoscopy, surgical, with vaginal hysterectomy for uterus greater than 250 g.
•    58554 for "laparoscopy, surgical, with vaginal hysterectomy, for uterus greater than 250 g; with removal of tube(s) and/or ovary(s)."
•    58573 for "laparoscopy, surgical, with total hysterectomy for uterus greater than 250 g; with removal of tube(s) and/or ovary(s)."

7. GI/endoscopy procedures account for 27 percent of overall ASC case volume, according to the VMG report. As part of its 2016 Medicare Physician Fee Schedule proposed rule, CMS proposed reimbursement cuts to colonoscopy and other lower GI/endoscopy procedures. Proposed changes for 11 lower GI/endoscopy procedures, by RVU percent change, include:

•    Colonoscopy with biopsy (45380): -19 percent
•    Colonoscopy with snare polypectomy (45385): -12 percent
•    Colonoscopy (45378): -11 percent
•    Colorectal cancer screen, high risk (G0105): -2 percent
•    Colorectal cancer screen, low risk (G0121): -2 percen
•    Colonoscopy with hot biopsy (45384): -11 percent
•    Colonoscopy with submucosal injection (45381): -14 percent
•    Colonoscopy, flexible with ablation (45388): -15 percent
•    Flexible sigmoidoscopy with biopsy (45331): -7 percent
•    Flexible sigmoidoscopy (45330): -20 percent
•    Colonoscopy with control of bleeding (45382): -16 percent

8. Out-of-network reimbursement, once a major source of ASC revenue, is becoming a less common strategy, though ability to successfully leverage OON strategy varies by market. "At one point, surgery centers made a disproportionate percentage of profits from workers' compensation cases and out-of-network cases.  Many states have implemented fee schedules for workers' compensation. In addition, payers have become increasingly reluctant to provide out-of-network reimbursement at higher billed rates," according to a Becker's Hospital Review article.

More articles on ASC issues:
ASC single specialty vs. multispecialty – Which is best?
8 things to know about self-insured employers
The ASC infection control manifesto: 4 essentials for survey readiness

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