ASC Association President Kathy Bryant Discusses Healthcare Reform's Impact on ASCs

Kathy Bryant, president of the ASC Association, discusses the impact of recently passed healthcare reform on ASCs.

Productivity adjustment. The new law requires a productivity adjustment to be applied to annual inflation updates. This adjustment begins in 2011 and will reduce payment increases to ASCs for each year thereafter. Ms. Bryant says this provision will have the most direct impact of any on ASCs. "While the new overpayment requirements only affect you if you receive an overpayment, the productivity adjustment will affect every ASC," she says.

If it had been implemented in 2010, the productivity index would have resulted in a 1.3 percentage point lower update for ASC payments. "Essentially, the productivity index will cause payment updates beginning in 2011 and every year after to be lower," says Ms. Bryant.

The productivity adjustment is intended to encourage more efficient provision of services by a variety of providers, but Ms. Bryant says it has a disproportionate negative impact on ASCs. "Because of the ASC payment freeze and the method in which our inflation update is already factored, the productivity adjustment will have a disproportionate impact on ASCs," she says.

New fraud and abuse provisions. Ms. Bryant says there have also been significant changes in fraud and abuse requirements in the reform package. One of those changes includes the provision that providers who do not report overpayments in 60 days will be considered as having submitted a false claim.

"Obviously, providers have an obligation to return overpayments, but considering an overpaid claim a false claim after 60 days creates another burden on ASCs," she says. 

Waived patient co-insurance for some preventative services.
The new law includes a provision that would waive patient co-insurance and co-payments for certain preventative services, including colonoscopies. While this provision may provide some increased volume to ASCs performing these procedures, Ms. Bryant says this provision primarily benefits patients.

"I think certainly any provision that encourages people to get preventative services is obviously going to drive some new patients to receive these services. While there may be some increases in volume and eased efforts for collecting a co-pay, the direct benefit is to the beneficiary; it's more indirect for ASCs," she says.

Expanded health coverage. Healthcare reform is expected to expand coverage to 32 million uninsured Americans, which could benefit ASCs that treat those patients.

"While I don't see a lot of direct benefits to ASCs in the legislation, expanded coverage to uninsured individuals would perhaps reduce the costs of charity care provided by ASCs," says Ms. Bryant. "There is also some assumption on the part of healthcare economists that there will be more healthcare services provided as a result of reform, but only time will tell if that manifests."

Failure to encourage use of ASCs.
"I think it was a big loss to Medicare beneficiaries that the new law does not encourage the use of ASCs," says Ms. Bryant. "President Obama and his staff went through the budget looking for any way to save money, and they were certainly provided information on how ASCs could help do that. The role of ASCs was not addressed."

Ms. Bryant adds that the efforts of the ASCs industry and its advocates helped stop reform legislation from having an even greater negative impact on ASCs. "When it comes to this type of work, stopping certain provisions is equally important to achieving other things," she says. "Without the work of ASC advocates, it could have been a lot worse. For example, ASC cost reporting was not included in the final legislation and other health sectors, such as home health, have experienced huge reductions that we were largely able to avoid."

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