The Centers for Medicare & Medicaid Services (CMS) has finalized 2025 Medicare payment rates and quality reporting program updates for ambulatory surgery centers (ASCs).
ASC payment rates will increase 2.9% in CY 2025 for centers meeting relevant quality reporting requirements, according to a final rule that CMS issued Friday. The rule received backlash from industry stakeholders.
“This final rule is a step sideways in a time when millions of Medicare beneficiaries need CMS to advance policies that expand access to the safe, convenient and efficient care that surgery centers provide,” Ambulatory Surgery Center Association (ASCA) Chief Executive Officer Bill Prentice said in a press release. “CMS must recognize the enormous impact of rising employment and anesthesia costs, and reform outdated budget policies that shortchange ASC reimbursements so that surgery centers can better serve Medicare patients in their communities.”
In addition to the updated payment rules, CMS finalized the addition of 21 procedures to the ASC Covered Procedures List (ASC-CPL), including 19 dental codes that were included in the proposed rule. However, the agency did not include any of the surgical procedures requested by ASCA to the ASC-CPL, which included 16 cardiovascular codes and two spine codes.
The final rule did slightly increase the payment update from the 2.6% that CMS put forward in the proposed version of the rule.
And the ASC market – or at least large ASC providers – should fare well in the new year, with the finalized rule being “moderately positive” for the likes of Surgery Partners, Tao Qiu, senior healthcare equity research analyst at Macquarie, said in an investor note. Tennessee-based Surgery Partners operates more than 200 locations across 33 states.
“As a high-quality and low-cost care setting, ASCs enjoy a stable reimbursement environment and steadily expanding total addressable market as surgical site shift takes place,” he wrote.
Additions to Ambulatory Surgery Center Quality Reporting Program (ASCQR)
CMS finalized updates to the ASC Quality Reporting (ASCQR) Program, introducing new measures to address social drivers of health. Starting in the 2025 reporting period, facilities must report on their Commitment to Health Equity (FCHE), with this measure affecting payment determinations by 2027.
Additionally, facilities will begin voluntary reporting in 2025 on two new measures related to social drivers of health (SDOH), which had before been reserved for the hospital setting.
The Screening for Social Drivers of Health (SDOH-1) tracks the percentage of patients screened for five key social needs: food insecurity, housing instability, transportation needs, utility difficulties and interpersonal safety. The Screen Positive Rate for Social Drivers of Health (SDOH-2) measures the percentage of patients who test positive for any of these needs, with results calculated for each social factor individually.
These two measures will become mandatory in 2026, with payment implications, under which ASCs can lose 2% to their annual payment update for failure to meet requirements, beginning in 2028.
Yet Prentice said there is little infrastructure in the outpatient setting to collect data on SDOH.
“ASCA strongly supports health equity and access to care for all patients,” he said in a press release. “However, this rulemaking does not make clear how the measures will address the disparities that exist or how CMS will support the facilities required to collect this information. If these measures had been tested in the ASC setting before being proposed, let alone adopted, the Agency would have realized that the ASC setting is not the proper site of service to obtain this data.”
The additions to the ASCQR also received pushback from within the ASC industry after CMS floated them in the proposed version of the payment rule released earlier this year.
In the months leading up to the finalization of the legislation, ASCA protested that the burdens of participating in the quality reporting program might soon be greater than the 2% penalty for non-participation, causing more ASCs to opt out.
“ASCA recently surveyed its membership about the burden associated with ASCQR Program compliance, receiving 321 responses from 46 states,” the association stated in a comment letter to CMS. “One in six facilities indicated it takes them more than 20 hours a year to collect, summarize and submit the data for the ASCQR Program measures reported through the HQR portal.”
ASCA also blasted the “confounding” lack of transparency from CMS related to why the agency did not add requested codes to the ASC covered procedures list in the proposed payment rule.
Hospital market basket increase
CMS has extended its policy of using the hospital market basket update to adjust ASC payment rates through 2025.
For 2025, payment rates for ASCs meeting quality reporting requirements will increase by 2.9%, derived from a 3.4% hospital market basket update, offset by a 0.5% productivity adjustment. This update results in an estimated $7.4 billion in total ASC payments for 2025, marking a $308 million increase from the previous year’s payments, according to CMS.
The final rule quickly elicited criticism from the American Hospital Association (AHA).
“CMS’ payment updates for hospitals will exacerbate the already unsustainable negative or break-even margins many hospitals are already operating under as they care for their patients,” Molly Smith, AHA group vice president for public policy, stated. “The AHA is deeply concerned about the impact these inadequate payments will have on patient access to care, especially in rural and underserved communities.”
ASCA said that CMS will continue to use the hospital market basket as the ASC inflation update factor for 2025, though it is unclear whether that policy will continue further.
