So CMS finally issued the final ASC payment system ruling July 19 (along with a companion proposed rule, just to keep the industry on its toes). Based on some of the fallout, it’s easy to think the end is nigh. The American College of Gastroenterology, for example, immediately hit back, pronouncing the final rule a “death blow” for GI ASCs. “These unfair and arbitrary cuts to reimbursement for endoscopic procedures performed in the ambulatory setting … creates a profound and disproportionate negative impact on GI ASCs,” the ACG says.
Now it’s true that the national average payment for diagnostic colonoscopy in a GI ASC will gradually drop from $446 in 2007 to $373.04 in 2011, when the payment system is fully implemented. And more power to the ACG for promising to “explore all possible avenues, both regulatory and legislative,” to further improve the rule. Quite a few aspects of the rule could use remedying, after all. But the situation need not be – and, indeed, it is not – dire. To take a phrase on loan from the terrific (and, regrettably, late) Douglas Adams, don’t panic.
“You really need to look at all your payers and not just Medicare in determining what will be the real impact on your center,” says John Poisson, the executive vice president at Physicians Endoscopy, which works with the same GI facilities seemingly doomed by the ACG. “When we do that calculation, not taking into account payment increases from non-governmental payers over the next couple years, we’re seeing an impact of only about 1 percent per year average reimbursement per procedure.”
Mr. Poisson says, that, for a center that does 11,000 procedures (34 percent of them being Medicare and commercial Medicare patients), the bottom-line impact is only $60,000. “That’s only three endoscopes in the grand scheme of things,” he notes. “Reimbursement is clearly going down. But you can’t look at it in a vacuum; if you integrate Medicare payments with the rest of your payer mix, the situation is not
nearly as Draconian as has been broadcasted.”
On the micro-level, then, things might not be so terrible. So what about the big picture? “If you had asked people, ‘If you get 3 percent beyond what CMS proposed, would you be happy?’ most would have said yes,” says Kathy Bryant, JD, the executive director of FASA. “We shouldn’t underestimate what an achievement it was for the industry to go from 62 to 65 percent of HOPD rates. In most cases, where CMS made a change [between last fall’s proposed rule and the final rule], it made a change in the right direction, which says to me that the ASC industry was doing a great job of getting its message out there. “In no case did it go backward from what was initially proposed.”
Further, CMS expanded the list of procedures that may be performed in the ASC setting, and mandated a four-year phase-in for the new system, giving everyone enough time to adjust. “Other good things that are coming out of this final rule are the stability and predictability of payment that should improve over the relative uncertainty of inflation updates and coverage changes over the past decade,” says Craig Jeffries, Esq., the executive director of AAASC. “In that respect, [this is] very positive.” Again, that’s not to say some aspects of the rule weren’t disappointing or aren’t in need of improvement.
“The absolute biggest disappointment is the percentage,” says Ms. Bryant. “We showed them how they could be budget-neutral at 73. I’ve spent nine years of my life on this; driving home [the night after the rule was announced], that was my reaction: For this huge portion of my life, I’ve accomplished 3 percentage points. “And in terms of the savings and providing access, 65 just doesn’t cut it.”
Further, ASCs’ inflation updates will be based on a different price index than HOPDs’, a move that Ms. Bryant succinctly and accurately says “makes no sense.” Essentially, in the first year, ASCs will get 65 percent of hospital rates for procedures performed on Medicare patients — but a different percentage in ensuing years because different data was used to calculate the inflation updates. AAASC and FASA intend to address this in their comments on the proposed rule.
“Nothing’s set in stone yet,” says Nancy McCann, the director of government relations for the American Society of Cataract and Refractive Surgery. “It’s going to be an interesting couple of months.”
Regardless of how it all turns out, there’s no time to panic; you’ve got to start preparing for best- and worst-case scenarios. “You have to ask, ‘What’s the potential business opportunity?'” says Bill Southwick, the president and CEO of HealthMark Partners. “You’ll be able to do more orthopedic Medicare patients; the new procedure list no longer hamstrings the ability to work with general surgeons; urology is expanding a little bit; and we’re pleased to see the expansion and increase in GYN procedures. You can make an interesting discussion now for vascular and retina work as well.
“Basically, it’s going to double your work, but life in the surgery center business gets more complicated every year.”
You’re in it for the long haul – where “some changes are inevitably going to be right, and some are going to be wrong,” says Mr. Southwick – and that necessitates looking at the big picture, as cliché as it is, as much as possible. “They always say, and this is perhaps hard for ASCs right now: Politics is the art of the possible, not the perfect,” says Ms. Bryant. “And rarely does anyone get what they think is the appropriate result.”
For an in-depth take, see the analysis by Scott Becker, Ron Lundeen and Gretchen Heinze, “CMS Issues a Revised Proposed Payment System for Services in Ambulatory Surgery Centers,” on p. 1. Get even more – payment calculations, final and proposed rule analysis, conference information, ways to make your voice heard – at www.AAASC.org and www.FASA.org.
