Some say proposed changes to ASC payments will be devastating
Some say proposed changes to ASC payments will be devastating
Centers report up to 27% decrease - hospitals will use similar system
Tough news. Disappointing. Devastating. Those are the words leaders in the same-day surgery field are using to describe a proposed rule from the Health Care Financing Administration (HCFA) to change the existing reimbursement system for ambulatory surgery centers (ASCs). The notice was published in the June 12 Federal Register. (For information on obtaining a copy, see "Where to go for more details," p. 104.) The proposal is scheduled to take effect Oct. 1, 1998.
"This is very difficult," says John Harries, MD, president of the American Association of Ambulatory Surgery Centers in Chicago. "There's a lot of work to be done to correct problems that arise because of it."
HCFA wants to replace the current eight-group procedure classification system with a 105-group system based on ambulatory payment classifications (APCs). Under the old system, procedures were placed in payment groups according to procedure costs. Under the proposed system, procedures will be assigned to APCs based on time, type of surgery, body system involved, and costs.
The overall effect will be to lower total Medi care payments to ASCs by 2%, according to HCFA. However, many surgery centers are predicting much larger decreases in reimbursement. Part of the reason is that the payment rates have been reduced for the two highest-volume same-day surgery procedures:
· Remove cataract, insert lens, CPT 66984. HCFA proposes decreasing reimbursement by 7%, from $928 to $863.
· After cataract laser surgery, e.g., Yag, CPT 66821. HCFA proposes decreasing reimbursement by 35%, from $422 to $274. (For losses and gains on other procedures, see chart, p. 103.)
Those two procedures alone account for 46% of ASC Medicare volume, says Michael Romansky, JD, partner in the health law practice at McDer mott, Will, and Emery in Washington, DC.
And the news only gets worse: HCFA may reduce the payment for the intraocular lens later this year. "We're feeling pressure to use cheaper and cheaper lenses," Harries says. "We want to provide the best lens - not the cheapest we can bargain for."
Nancy Kessler, BSN, MS, executive director of El Camino Surgery Center in Mountain View, CA, also expresses concern about the reimbursement for cataracts. "We do better than most centers in country in our benchmarking efforts, in terms of our cost for cataract, and we don't have a very wide margin," Kessler says. "If they reduce this by much, we won't have any margin, we won't make any money, and we will probably lose money unless we find a way to eke more out."
The rates don't cover the costs
The proposed rates don't meet the costs of doing same-day surgery procedures, Harries maintains. Administrators at Same Day Surgiclinic in Fall River, MA, where Harries is chief executive officer, took the proposed rates and recalculated what the center would have been paid under those rates in 1997.
"For our center, it would have resulted in 14% reduction," he says. "Some single-specialty centers are saying it would have resulted in a 27% reduction."
Some of the hardest hit areas are in endoscopy, he says, including:
· upper gastrointestinal endoscopy with biopsy, CPT 43239, from $422 to $327 (22% reduction);
· diagnostic colonoscopy, CPT 45378, from $422 to $354 (16% reduction);
· cystoscopy, CPT 52000, from $314 to $212 (32% reduction).
"These reductions are going to disseminate the number of centers offering these services," Harries maintains.
The impact on your center depends on your case mix, Kessler says. "Ours is looking like it will be reduced in the neighborhood of 10% - maybe higher," she says. (For details on how to determine the impact on your center, see story, p. 105.)
Some report reimbursement will go up
The news isn't bad for everyone, however. HCFA proposes increased reimbursement rates for arthroscopy, which is good news for centers that perform a large number of those procedures. On average, facility reimbursement for arthroscopic procedures would increase between 67% and 86% under the proposed rates, Romansky says.
Administrators at Washington Orthopedic Center in Centralia, WA, compared their center's reimbursement for 1997 procedures under the proposed APCs. "We're much happier with what we're seeing now than what we saw in past," says Kevin McHugh, CEO.
McHugh's center compared reimbursement for 94 procedures with the proposed APCs. His center's reimbursement was 22% higher under the new system. Knee arthroscopy/surgery, CPT 29881, is the center's No. 1 procedure. Under the current system, the reimbursement is $595. Under the proposed system, the center would receive $807, for a 36% increase.
"We can live with those kinds of rates," McHugh says.
Hospital rules to be published this summer
Other highlights of HCFA's proposed reimbursement changes include the following:
· For hospital outpatient surgery departments, new rules were to be published in July or August but were unavailable at press time. HCFA intends to keep APCs similar for surgery centers and hospital outpatient surgery departments. Different payment rates may be proposed, however.
· HCFA proposes to add 422 procedures to the approved ASC list and delete 203 procedures. (To learn which procedures HCFA didn't add, see list, above right.)
Additions to the ASC list include these:
· excision of benign lesion procedures, CPT 11403 and 11423;
· blepharoplasty of the upper eyelid, CPT 15822 and 15823;
· wrist arthroscopy, CPT 29848;
· cystourethroscopy, CPT 52265;
· extracorpeal shock wave lithotripsy, CPT 50590.
The 203 procedures targeted for deletion included many pain management procedures, Harries says.
· HCFA, under the proposed rules, will change its definition of an ASC and its rules for how procedures are added to or subtracted from the approved ASC list.
HCFA has proposed to do away with the criteria based on operating, anesthesia, and recovery time. The agency also is proposing to do away with the site-of-service rule as the primary criterion for which procedures are added to or deleted from the list. Under this current "20/50 rule," a procedure is considered for the ASC list if it is performed in a physician's office 50% or less of the time and in a hospital inpatient department 20% or more of the time.
Under the proposed change, practice patterns would be one consideration when deciding whether procedures should be added to the ASC list.
HCFA also has proposed changing its definition of an ASC. Surgery centers would be required to have their own national identifier under Medicare and be a "separate" entity in terms of licensure, accreditation, governance, professional supervision, administrative functions, clinical services, record keeping, financial and accounting systems, and national identifier or supplier number. The ASC may be located within another facility and be considered separate for Medicare purposes, Romansky says.
[Editor's note: Do you have questions for HCFA about this proposed rule or other reimbursement issues? Please send us your questions, and we'll have someone from HCFA address your question in an upcoming issue of Same-Day Surgery. Just use the reader question form inserted in this issue, or send your questions to: Joy Daughtery Dickinson, P.O. Box 740056, Atlanta, GA 30374. Fax: (912) 377-9144. E-mail: [email protected].]
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