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4 policy decisions for ASC leaders to watch in 2017

There are a host of economic and healthcare decisions for public officials to consider in the coming year.

Here are four major federal policy areas for ambulatory surgery center industry leaders to watch.

1. The debt ceiling. This past winter, the U.S. national debt reached $19 trillion — meaning that Congress will continue to address the extension of the debt ceiling this year. While it's unclear what spending cuts the U.S. Senate and U.S. House of Representatives will enact, leaders in the outpatient industry should be mindful of the changes.

When Congress passed the "Bipartisan Budget Act of 2015" — which included a temporary extension of the public debt limit through March 15, 2017 — representatives included legislation on off-campus hospital outpatient departments. This provision shifted reimbursement for new off-campus HOPDs from CMS' Outpatient Prospective Payment System to either the Ambulatory Surgical Center Prospective Payment System or the Medicare Physician Fee Schedule.

While this Medicare payment policy did not impact the reimbursement rate for ASCs, it suggests outpatient procedures and healthcare reimbursement may be on policymakers' minds when drafting new cost-cutting legislation. "We know that saving healthcare dollars is a priority for both parties and will likely continue to consume a lot of oxygen in Congress next year," says Heather Falen Ashby, director of government affairs for the Ambulatory Surgery Center Association.

2. Healthcare reform. In the past few years, a growing concern about healthcare reform has focused on plans with low premiums, but high deductibles — a shortcoming many hope will be resolved after the 2016 U.S. presidential election.

"Consumers are paying more of their healthcare out of pocket, and that's going to impact anybody involved in elective healthcare," says Joan Dentler, CEO of the outpatient healthcare consultancy Avanza Healthcare Strategies. "Consumers are going to think twice about elective surgeries. If the high premiums don't change, the ASC industry will have to do a better job making it clear that some of these 'elective' surgeries are actually preventative medicine."

Still, given the recent emphasis on value-based care, some believe ASCs are well positioned in the market.

"As it currently exists, the Obamacare policies are not economically stable and will not be sustainable," says Robert J. Zasa, a managing partner at ASD Management. "I doubt it will be repealed — like Medicare, it will be fine-tuned over the course of a number of years, particularly with issues of coverage and the economics of financing the program. It's unclear the way it's going to be modified, but it will be, in some way, shape or form."

"But with higher deductibles, there is also a higher amount of buying power from consumers," he continues. "Consumers are looking for cost-effective services, and from this perspective, surgery centers are in good economic stead."

3. Quality-based incentives. Medicare's Ambulatory Surgical Center Quality Reporting Program began in 2014, and since then, additional payment determinations have been added by CMS each year. While many have raised concerns that increased reporting requirements strain already small surgery centers and physician practices, some believe this quality data will better situate ASCs.

"For the last 40 years, ASCs have been operating in the way everybody else is trying to figure out: receiving a flat fee, with lower costs, while still delivering excellent outcomes. It's so different than almost any other healthcare provider. If things keep going the way they are, ASCs should continue to shine as the model for the rest of the providers to follow," Ms. Dentler says.

Legislation like the ASC Quality and Access Act, which was introduced to the U.S. House of Representatives and the U.S. Senate in 2015, work to reduce disparities between ASCs and HOPDs, by making reimbursement by Medicare more equitable and data on quality more transparent. This bill is the primary piece of legislation that ASCA supports.

"Quality is a hard thing to measure, compare and legislate, but it's the No. 1 thing that we in the outpatient industry compete for," says Andrew T. King, CASC, president of the ASC management company Acumen Healthcare. "It can prove our value compared to hospitals, hospital outpatient departments and other competitors."

4. Medicare reimbursement. Payment rules for ASCs and HOPDs are updated each year for inflation; however, reimbursement for ASCs is based on the Consumer Price Index for All Urban Consumers, whereas reimbursement for HOPDs is based on the Hospital Market Basket. In 2015, Medicare paid ASCs 53 percent of the amount paid to HOPDs, according to ASCA.

"For the last 10 or more years, HOPDs have been getting healthcare reimbursement, while we've been getting the regular consumer market," Mr. King says. "Each year, their reimbursement has been going up 3, 4, 5 percent, and we've been going up 0.1, zero, 0.2 percent. The discrepancy in pay is a whole lot different."

The Bipartisan Budget Act of 2015 played a role in leveling the field, by categorizing new off-campus HOPDs in the Ambulatory Surgical Center Prospective Payment System for Medicare reimbursement. However, this site-neutral legislation did not affect all HOPDs — only those located more than 250 yards from the hospital's main campus and those that executed CMS provider agreements after the legislation was enacted.

"Future healthcare reform efforts must ensure adequate reimbursement for ASCs and implement smart policies that encourage the most appropriate setting of care for all patients and procedures," Ms. Ashby says. "ASCs are providing high quality care, innovating the field of outpatient surgery and transforming the patient experience, all while saving the healthcare system billions of dollars."

More articles on federal policy:
ASIPP members attend legislative session, advocate for MIPS changes: 4 notes
AGA encourages CMS to include GI specialty APMs under MACRA: 5 notes
AAOS objects to CMS' mandatory bundled payment model: 5 notes

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