1. Workers’ compensation reimbursement. According to Bryce Docherty, the California Ambulatory Surgery Association is currently working to change legislation that would decrease the ASC workers’ compensation reimbursement from 120 percent of the CMS HOPD fee schedule to 100 percent.
In 2003, there was a major workers’ comp reform push that led to the development of a fee schedule for ASC reimbursement in workers’ comp, something that had never existed before. The fee schedule established in 2003 applied to ASCs and hospital outpatient departments, and both entities were pegged at 120 percent of the Medicare HOPD rate. “ASCs and HOPDs were treated the same in terms of their fee schedule for maximum reimbursement of workers’ comp,” Mr. Docherty says. “By and large, this was because [both facilities were] for outpatient surgery, and conventional wisdom was that the outpatient procedures were being done by the same doctors and on the same patients in the same types of venues.”
Until last summer, this was the rubric the ASC association had been dealing with. Then Gov. Schwarzenegger’s administration proposed regulations that would retool that schedule and ratchet down reimbursement to 120 percent of the Medicare ASC rate (as opposed to the HOPD rate). By decoupling ASCs from the HOPD fee schedule, the legislature effectively reduced ASC workers’ comp reimbursement by 40-50 percent. In response, CASA “went on the offensive,” holding informal public hearings and speaking with incoming Gov. Jerry Brown. Currently CASA, along with the rest of California, is in a state of “political purgatory,” Mr. Docherty says, as the governor’s office transitions from Gov. Schwarzenegger to Gov. Brown. The future is uncertain, but before Gov. Schwarzenegger left office, his administration proposed a revised version of the fee schedule that tied ASCs to 100 percent of the HOPD rate.
Instead of a 40-50 percent cut, the revised version offers a 20 percent cut — better, but not ideal, Mr. Docherty says. For the many ASCs that perform a majority of orthopedic procedures, the 20 percent cut would mean significant losses. CASA is currently working to amend the revised fee schedule, a task Mr. Docherty calls “a significant priority” for the association over the next few months.
2. State licensure for California ASCs. Since 2005, CASA has sponsored annual legislation that would establish licensure criteria for California ASCs. Under existing law, Mr. Docherty says, there is no state requirement or criteria for ASC licensure like there is for acute-care hospitals. “There is a requirement in existing law that if you are using general anesthesia and you’re putting somebody under, you have to meet one of three criteria: You have to be Medicare-certified, nationally accredited or state-licensed,” he says. “However, if you were to choose the state licensure pathway, there’s no benchmark from a quality or structural standpoint that you would have to meet.” In response to this existing law, CASA has spent significant time developing criteria for ASCs that would mirror Medicare Conditions for Coverage and national accreditation standards. The proposed legislation met opposition from Gov. Schwarzenegger’s administration, and many of CASA’s attempts were vetoed by the governor because of disagreement on whether licensure should be mandatory or optional for ASCs.
“We would prefer [licensure] was mandatory, but there are a lot of physician-owned ASCs or office-based ASCs that did not want mandatory state licensure,” he says. “So we had some major political hurdles. At the same time, the state was going through a lawsuit that was moving through the appellate court system on whether or not certain surgery centers can enjoy exemptions.” At the end of the day, the court ruled that the state of California did not have authority over physician-owned ASCs and therefore could not require that they be state-licensed. As a result, the state stopped licensing surgery centers owned at least partly by a licensed physician in 2007. Current data shows that 45 surgery centers are state-licensed, 715 are certified to bill Medicare and others are accredited by national accreditation bodies.
Mr. Docherty says CASA has “been working to try and rectify that issue.” Legislation introduced last year and this year would provide a licensure pathway for ASCs. In order to be licensed by the state, ASCs could pursue accreditation from a national body or meet Medicare conditions of coverage. While attempts to standardize state licensure have been blocked in the past, Mr. Docherty says the association is “guardedly optimistic.”
3. Requirements for ASC pharmacy permits. Another issue accompanies the state licensure debate: the attainment of pharmacy permits. In California, in order for an ASC to purchase drugs at wholesale or comingle drugs within the facility, the center needs a pharmacy permit. The permit only applies to medications administered at the facility or prescriptions filled within 72 hours of discharge from the facility. Unfortunately, ASCs must be state-licensed to obtain a pharmacy permit — and, as explained earlier, physician-owned ASCs are unable to attain state licensure. “For any center that wasn’t grandfathered into the pharmacy permit, you basically have to have the medical director of the facility purchase those medications and be responsible for those under their DEA number,” Mr. Docherty says. “If you’re talking about a larger center with 200 physicians on staff doing 10,000 cases a year, that’s a lot of medications.” CASA’s proposed changes would allow ASCs to obtain a pharmacy permit if they were either Medicare-certified or accredited, saving a lot of operational hassle for physician-owned centers.
Read more insight from CASA:
–California Ambulatory Surgery Association Responds to Criticism of ASC Oversight
–Practical Guidance on Strengthening California ASCs’ Infection Control Programs
–California Surgery Centers Face 20% Reduction in Workers’ Compensation
