Health Reform's Impact on ASCs: Commentary From Marian Lowe of ASCAC

As the new health reform law, the Patient Protection and Affordable Care Act, was debated and passed by Congress, the Ambulatory Surgery Center Advocacy Committee was working hard to make sure surgery centers' interests were included. The group, representing national and state ASC associations and all types of ASC operators and physicians, has been spreading the message that ASCs can provide the most cost-effective surgery – both for patients and payors— and thus help contain the tremendous costs of health reform for U.S. taxpayers.

"The ASCAC is committed to educating agency and Congressional leaders about the innovative model of patient care that ASCs provide as a cost-effective solution for patients, as well as the health care system as a whole," says ASCAC Executive Director Marian Lowe. Ms. Lowe provided the following summary of how the new reform law will affect the industry.

Closing the payment gap. Thanks to efforts by industry leaders and activists, ASCs were protected from the inflation update in 2010. Congress had imposed six years of Medicare rate freezes up to 2010, pushing down ASC reimbursements from 86 to 58 percent of pay for hospital outpatient departments for identical services. Moving from the Consumer Price Index, an update factor unrelated to ASC costs, to the hospital market basket will provide ASCs a higher level of resources each year than they would have received under the CPI.

"This is the first payment update for ASCs in six years and an important victory for the industry," Ms. Lowe says. "ASCs need to have the resources to keep pace with new technology, implement reporting systems, and continue to provide superior patient care."

Providing access to care. The reform bill will expand coverage to 32 million more Americans.  As financial barriers to benefits and services are removed, ASCs will likely experience an increase in volume of patients treated, particularly for services like screening colonoscopies, which insured patients are more likely to use. A key provision of the bill waives patients’ coinsurance for important preventive services recommended by the U.S. Preventive Services Task Force, such as colorectal cancer screenings. Currently, ASCs perform almost half of all Medicare colonoscopies. With increased access to coverage and no co-pay for this service, ASCs are expected to see a higher demand for these procedures.

About half of people getting access to care under health reform will be in Medicaid. ASCs will need to work closely with their state associations to understand their own state Medicaid program, ensure adequate reimbursement, work for inclusion in provider networks and help beneficiaries access care in ASCs.

Supporting pay-for-performance. The new law directs CMS to report to Congress on how Medicare could incorporate value-based purchasing strategies in ASCs. The ASCAC will work with CMS to ensure that the agency’s recommendations are appropriate for the industry and provide plenty of time for ASCs to implement reporting before payments are at risk for performance.  As with other value-based systems, the program for ASCs will likely be designed to reward health care providers and facilities achieving performance measures and demonstrating quality improvements.

Working with a new payment board. The reform law creates an Independent Payment Advisory Board charged with reducing Medicare costs. Beginning in 2014, if the Medicare growth rate surpasses its target, the board will recommend ways for CMS could to Medicare payments to ASCs and other providers, but hospitals will be exempt from board reductions until 2020. (The reform law already imposes cuts on hospitals' Medicare payment updates and funding for uncompensated care.)

"ASCs want to be part of the solution to rising costs by providing high-quality, patient-centered care at a savings for both the patients and payors," Ms. Lowe says. "Given the impact that the review board could have on ASC payment rates, we are very focused on highlighting how improving the use of ASCs can bend the cost curve and save the government money."

"In a short amount of time the ASCAC has become a leading voice for the industry," Ms. Lowe adds. She says the committee will continue to increase ASCs' visibility as the Obama administration moves forward with the complex task of health reform implementation. The group wants to make sure ASCs provide healthcare to newly insured patients at rates that keep the industry economically viable.  

Learn more about the ASCAC.

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