Image by cytis from PixabayFor ambulatory surgery center (ASC) operators, staying abreast of the regulatory and legislative changes that impact daily business and patient care is crucial.
And from workforce-related final rules, certificate of need (CON) developments, U.S. Centers for Medicare & Medicaid Services (CMS) changes and beyond, there has been no shortage of policy developments over the past several months.
The second half of 2024 is likely to present further shifts as well, ASC industry insiders forecast.
Ambulatory Surgery Center News explores the regulatory and legislation outlook for ASCs below, focusing on three key areas.
Noncompete bans
In April, the Federal Trade Commission (FTC) banned noncompete agreements with all workers, including senior executives, after the rule’s expected effective date of Sept. 4, 2024.
The final rule prohibits employers from entering into new noncompetes with workers on or after the effective date and from enforcing existing noncompetes with workers other than senior executives.
“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” FTC Chair Lina M. Khan said at the time. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”
The FTC estimated that banning noncompetes will increase new business formation by 2.7% each year, resulting in more than 8,500 additional new businesses created each year. The rule is expected to result in higher earnings for workers, with an estimated increase of an extra $524 per year for the average worker, and lower health care costs by up to $194 billion over the next 10 years.
This ruling aligns with the American College of Surgeons’ (ACS) 2023 letter highlighting that noncompete agreements can have a detrimental effect on patient care by affecting access to the best surgeons, as well as on the ability of surgeons to seek optimal work environments and for hospitals to complete for the employment of well-suited surgeons.
“The ACS applauds this vote. However, significant questions remain regarding the FTC’s jurisdiction over nonprofit entities, including nonprofit hospitals,” Dr. Patricia L. Turner, the organization’s executive director and CEO, in a statement issued to ACS members. “The ACS will continue to aggressively advocate for legislation banning noncompete clauses. We must limit the increasing control that large corporations have on the health care system and the resulting negative impact on our members and the physician/patient relationship.”
The American Medical Association (AMA) also announced support of this rule, citing its Code of Medical Ethics, which states that not-to-compete covenants “restrict competition,” “disrupt continuity of care” and “limit access to care.”
“Allowing physicians to work for multiple hospitals can enhance the availability of specialist coverage in a community, improving patient access to care, and reducing healthcare disparities,” AMA Trustee Ilse Levin, D.O., said in a statement at the 2023 AMA Annual Meeting.
Regarding nonprofit hospitals, the FTC intends to test entities claiming tax-exempt status by examining their source and income destination.
Therefore, hospitals and health care entities organized as nonprofits are outside the FTC’s jurisdiction and excluded from the final rule if they satisfy the two-part test. Issues may arise if the nonprofit hospital is contracted or partners with a for-profit entity to deliver health care services.
Opponents are appealing the rule, and it is unclear if it will remain in effect. The Ambulatory Surgery Center Association (ASCA) submitted formal comments opposing the rule but did not take a position on the appropriateness of noncompete agreements specifically.
ASCA noted: “Under this proposal, surgery centers and other tax-paying health care providers would be subject to restrictions that tax-exempt systems would not. Hospitals are more likely to employ physicians currently, and this rule would allow nonprofit providers to more aggressively engage in noncompete behavior that would impede a physician’s ability to eventually move to an ASC or other health care provider.”
The final rule was subject to legal challenges almost immediately, most notably by the U.S. Chamber of Commerce.
On April 24, the Chamber filed a lawsuit in a U.S. District Court in Texas challenging the rule and seeking an injunction to prevent its implementation. Additional legal challenges are expected.
In the meantime, hospitals are concerned about their ability to attract and retain physicians and how that may impact patient care.
Mandatory consumer assessment of healthcare providers and systems
In 2006, the ASC community began encouraging CMS to establish a uniform quality reporting system, allowing ASCs to publicly demonstrate their performance on quality issues. CMS agreed, and the first Ambulatory Surgical Center Quality Reporting (ASCQR) Program data was submitted beginning in 2012.
In 2024, 12 measures are required for eligible Medicare-certified facilities to avoid future Medicare payment reductions.
Beginning in 2025, to comply with ASC-15a-e in Medicare’s ASCQR, ASCs must conduct the Outpatient and Ambulatory Surgery Consumer Assessment of Healthcare Providers and Systems (OAS CAHPS) Survey or face reduced Medicare reimbursement rates beginning in 2027.
“ASCs and ASCA have long supported a Medicare quality reporting program for ASCs and hospital outpatient departments (HOPDs), especially one that would help patients make meaningful comparisons between providers and wise choices about where to receive the outpatient surgical care they need,” ASCA Chief Advocacy Officer Kara Newbury told ASC News.
“The OAS CAHPS survey has the potential to be an important part of that kind of program, but as ASCA has indicated in its feedback to the [CMS] about this survey many times, to be truly valuable and effective, the existing survey should be shorter and less costly to administer than it is today,” Newbury added.
The OAS CAHPS Survey includes 34 questions that evaluate patients’ experiences with the care they receive before, during, and after their surgery center visits.
ASCs must select a CMS-approved vendor to administer the survey. There are five modes that ASCs can choose from to offer the survey: mail only, phone only, mail with phone follow-up, electronic with mail follow-up, and electronic with phone follow-up.
Outpatient Surgery Quality and Access Act
ASCs have provided patients and health care payers high-quality care and cost savings for over 50 years.
From 2011 to 2018, ASCs saved Medicare $28.7 billion, and they are projected to save an additional $73 billion between 2019 and 2028, according to a recent study.
But those future savings are at risk due to problematic Medicare policies resulting in continually declining reimbursement and other factors that limit Medicare beneficiaries’ access to outpatient surgical care, sources told ASC News.
One possible solution from Congress: enacting the Outpatient Surgery Quality and Access Act.
Specifically, the bill requires the payment system for ASC services to feature positive annual adjustments equivalent to those made to hospital outpatient department services.
It also revises quality reporting requirements and requires CMS to cite specific reasons for excluding requested procedures from those approved to be performed in ASCs.
Eliminating facility fees
Another piece of legislation for ASC executives to watch is the Primary Care and Health Workforce Expansion Act.
If implemented, the act would prohibit hospitals from charging health plans and issuers a facility fee for services provided in off-campus hospital outpatient departments and for many services in on-campus HOPDs, including evaluation and management, telehealth and certain low-complexity services.
The American Hospital Association urges Congress to reject this Act, which could “severely jeopardize access to essential care for patients.”
Current payment policies consider that HOPDs and other outpatient care settings, such as ASCs, fundamentally differ from other care sites. Hospitals treat sicker patients with more chronic conditions and are more costly to care for than those treated in physician offices or ASCs.
However, the National Academy for State Health Policy (NASHP) states that restricting facility fees could help lower consumer costs and combat the drive for costly health system consolidation.
NASHP developed a model act – State Legislation to Prohibit Unwarranted Facility Fees – that states can use to prohibit specific facility fees from being charged to consumers accessing primary care and other routine services.
The Washington, D.C.-based NASHP provides nonpartisan support for developing policies promoting and sustaining health, people and communities, advancing high-quality and affordable health care, and addressing health equity.
“NASHP’s model act does not eliminate all facility fees, but it restricts their use by location and service,” Maureen Hensley-Quinn, senior program director, said in a statement. “This model law mirrors a similar Medicare provision and prohibits any health care facility located more than 250 yards from a hospital campus from charging a facility fee for services provided at that location. Therefore, services acquired physicians provide cannot include these additional fees simply because a health system purchased the doctor’s office. The model also prohibits providers from charging facility fees for certain outpatient services regardless of the location where that specific service was provided.”
While health care consolidation may be to blame for some of these fees, for ASCs, these facility fees are integral to providing communities with fair-cost, high-quality care.
The fees include nursing, technician and related services, diagnostic or therapeutic services, surgical dressings, supplies, and so on, according to the ASCA.
Eliminating these fees could force facilities to close their doors.
“Eliminating hospital facility fees very often means eliminating facility fees for ASCs because of the broad nature of the proposals. While restrictions on facility fees for telehealth services or CPT evaluation and management (E/M) codes may not impact ASCs, ASCA carefully reviews all proposals purporting to restrict only hospital facility fees because lawmakers have routinely failed to limit their proposals to only the hospital billing practices they take issue with,” Stephen Abresch, ASCA’s assistant director of government affairs, said.
“Without facility fees, ASCs cannot pay for the services (like nursing services) and supplies (like surgical dressings and surgical supplies) necessary to perform surgery, and they would be forced to close. Complete prohibitions on facility fees are shortsighted and would limit access to care, ultimately driving patients to higher-cost facilities. Proposals that prohibit ASCs from charging facility fees are, in effect, proposals that prohibit ASCs from operating,” NASHP continued.
