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MedPAC recommends ASCs submit cost data, against updating conversion factor: 3 key points

In MedPAC's 2019 commission report to Congress, the commission made several recommendations related to ASCs.

Here are the key recommendations:

1. Although CMS has decided to use the hospital MB index to update the ASC conversion factor from 2019 to 2023, the commission recommended CMS not update its conversion factor for ASCs in 2020. Dating back to 2010, the commission's report recognized the CPI-U doesn't reflect the input costs of ASCs, but the commission doesn't support using the hospital MB index to update the ASC conversion factor "because evidence indicates that the hospital MB index does not accurately reflect the costs of ASCs."

While assessing the need to update the conversion factor for 2020, the commission maintained objectives including continuing access to ASCs, providing adequate physician pay, and keeping the financial pressure on physicians to control costs.

The projected hospital MB index update would have a 2.6 percent increase in 2020. The commission estimates that following its recommendation would decrease federal spending by $50 million to $250 million in the first year.

"Because of the growth in the number of ASCs and the increase in ASCs' revenue from Medicare, we do not anticipate that this recommendation will diminish beneficiaries' access to ASC services or providers' willingness or ability to provide those services," states the report.

2. CMS should require ASCs to submit cost data. "Cost data would enable CMS and the Commission to examine the growth of ASCs' costs over time and evaluate Medicare payments relative to the cost of an efficient provider, which would help inform decisions about the ASC payment update. Cost data are also needed to evaluate whether an alternative input price index would be and appropriate proxy for ASC costs," the commission states in the report.

The commission believes ASCs should be able to compile and submit cost data, especially if CMS limits the scope of the cost reporting. However, the commission recognized ASCs could incur "minimal administrative costs" associated with tracking and submitting cost data. "We believe accounting is standard practice in the ASC industry, and ASCs should be able to draw cost data from that source," the report states.

3. Instead of taking a long assessment period, CMS should seek ASC cost data quickly. The commission recommended against CMS taking a five-year period to assess ASC cost reporting feasibility and instead gather ASC cost data quickly. "ASCs are profitable organizations and the number of ASCs and the volume of services continue to grow. Therefore, we believe it is unnecessary for CMS to spend five years assessing the feasibility of collecting cost data from ASCs," the report states.

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