ASC leaders warn a proposed CMS rule aimed at rooting out Medicare fraud could have an unintended consequence, leading them to lose enrollment because of where they operate.
Tucked inside the CY 2027 Home Health Prospective Payment System proposed rule, issued July 1, CMS is proposing new authority to deny or revoke Medicare enrollment for physicians, ASCs and other providers and suppliers on grounds that include provider density in a given market, certain misdemeanor convictions and retroactive payment recoupment. The program integrity provisions would apply across every Medicare provider and supplier type, not just home health agencies.
CMS said the market-density standard is designed to protect against fraud, waste and abuse. Two ASC leaders say a blanket density rule doesn’t distinguish between bad actors and high-performing centers that happen to operate in competitive markets, and the consequences for surgeons and patients could be significant.
Editor’s note: These responses have been edited lightly for clarity and length.
Elisa Auguste. Administrator at Precision Care Surgery Center and vice president of the New York State Association of ASCs (East Setauket): This proposal is troubling. I understand the reasoning behind it — it’s meant to curb fraudulent behavior and protect taxpayers and Medicare beneficiaries — but market density alone is too blunt an instrument. It’s worth noting that this provision sits within the home health proposed rule and isn’t stated anywhere as intended for ASCs. My concern is that if it succeeds under home health, the same approach could be replicated across other areas of medicine, ASCs included. If that thought ever arises, I’d ask that we stop and consider the impact first, because a blanket density rule in any area of medicine can be detrimental to access and quality of care.
Consider a region with ten ASCs offering similar services: those centers don’t necessarily share surgeons, so excluding one on density grounds directly limits where surgeons can operate and where patients can go. And if the centers allowed to remain are simply the legacy providers who got there first, we have to ask what happens when one of those centers has infection or complication rates that are less than stellar. Would beneficiaries be forced into a lower standard of care because the region is considered “maxed out?” Patients should have a say in where they receive care, and quality of care should be paramount in any decision.
Regulation is necessary to deter fraud, but CMS needs a full understanding of the collateral damage a blanket density rule could cause before adopting it. Perhaps instead of focusing on density, the determining factor for maintaining in-network status should be the quality of care a provider delivers. I don’t claim to be an expert on these proposed rulings, this is simply my opinion.
David Carmichael. Administrator/CEO of Birmingham (Ala.) Obstetric Gynecology: Market saturation should not become a proxy for determining community need. In many regions, physician-owned ASCs have improved efficiency, lowered costs and expanded patient access despite operating in competitive markets. I would encourage CMS to evaluate demonstrated quality, outcomes, access and value, not simply the number of facilities in a geographic area. From the perspective of an independent physician practice, preserving competition while encouraging high-quality, efficient care will ultimately benefit both patients and the Medicare program.
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