The Ambulatory Surgery Center Association (ASCA) recently submitted comments calling for significant changes to the Centers for Medicare & Medicaid Services (CMS) proposed 2025 payment rule for ASCs and hospital outpatient departments (HOPDs).
In a letter to CMS, ASCA said that CMS should consider updating payment rates, expanding the ASC Covered Procedures List (CPL) and changing new quality reporting measures.
Under the proposed rule, ASCs would receive an effective update of 2.6%, combining a 3% inflation update based on the hospital market basket and a 0.4% productivity reduction.
Yet ASCA said CMS should align ASC payments with those of HOPDs by using the hospital market basket. This trial, originally set for 2019–2023, was extended through 2025 due to the COVID-19 pandemic.
CMS should adopt this alignment permanently, citing rising costs in staffing, supplies and anesthesia, the organization said.
“ASCs already save Medicare more than $5.3 billion on an annual basis simply by existing as an alternative to hospitals. CMS should adopt policies that encourage migration of more procedures to the surgery center setting to generate even greater savings,” ASCA CEO William Prentice wrote.
CMS is expected to release the final rule in late October or early November, with the changes taking effect on Jan. 1, 2025.
Expanding covered procedures
CMS proposed adding 20 new procedures, including four medical and 16 dental codes, to the ASC-CPL for 2025. However, none of the codes ASCA submitted in response to CMS’s earlier recommendation request process were included.
“At the very least, CMS must exhibit greater transparency by publishing a rationale when declining to add procedures to the ASC-CPL that are requested by doctors performing these procedures on an outpatient basis safely every day,” ASCA wrote.
In particular, ASCA advocated for the addition of cardiac ablation and spine codes, which were absent from the proposed rule. ASCA cited studies demonstrating the safety and feasibility of performing these procedures in ASCs, particularly during the COVID-19 pandemic. Despite the evidence, CMS did not include these recommendations in the proposed rule.
“Unfortunately, we remain concerned that billing hurdles will impede access to care,” Prentice wrote.
Changes to the ASC Quality Reporting Program (ASCQR)
CMS also proposed the introduction of three new quality measures aimed at improving health equity and screening for social drivers of health (SDOH). However, ASCA opposed these measures, arguing that they have not been tested in the ASC setting and could impose significant reporting burdens on ASCs, especially with the mandatory implementation of the OAS CAHPS Survey in 2025.
ASCA said it is particularly concerned about the potential duplication of efforts between the ASCQR Program and physician reporting under the Quality Payment Program. The organization said it supports care coordination between settings, but cautions that additional reporting could lead to unnecessary overlap and administrative strain on surgery centers.
“The program only increases the burden on facilities without providing any benefit to patients or healthcare facilities,” ASCA wrote.
Addressing the ASC weight scalar
Another one of ASCA’s recommendations is the discontinuation of the ASC weight scalar, a policy that ASCA wrote has led to significant payment disparities between ASCs and HOPDs.
Despite the progress made in aligning the update factors for ASCs and HOPDs, the ASC weight scalar continues to hinder the ability of surgery centers to receive competitive reimbursement rates, ASCA wrote. In many cases, ASC reimbursement rates are less than 50% of the HOPD rates for identical procedures, according to CMS data from 2022.
ASCA argued that this payment differential is one of the reasons why many surgeries that could be performed in ASCs remain within hospital settings, where they are reimbursed at higher rates.
“CMS’ antiquated and reductive cost containment mechanisms – trying to maintain budget neutrality in silos for each payment system – penalize migration to a lower-cost setting because that shift ultimately leads to reductions in reimbursement rates for those providing the care,” ASCA wrote.
An example of this issue is seen in gastrointestinal (GI) endoscopies, which represent some of the highest-volume procedures performed in ASCs. In 2022, more than 1.5 million GI procedures were carried out in ASCs, yet nearly 50% of these procedures are still performed in HOPDs.
“If 10 percent of these four GI codes migrated from the HOPD to the ASC setting, CMS would realize $69 million in [new] savings annually,” ASCA wrote. “The total annual savings to the Medicare program would be more than $791 million for these four codes alone. However, since CMS tries to maintain the same level of spending year over year, only accounting for a small update for inflation, any increase in volume would lead to stagnation or a decrease in reimbursement rates within the ASC silo.”
CMS has the authority to eliminate the ASC weight scalar – which was originally introduced in 2008 to maintain budget neutrality – without statutory restrictions, ASCA wrote.
“ASCA contends that the time has come for CMS to discontinue this outdated policy, which suppresses ASC rates and traps procedure volume in the higher-cost HOPD setting,” the organization wrote.
