Rule Expands List of ASC Procedures and Proposes New Stark Exception
On July 16, 2007 CMS released its final ambulatory surgery center payment rule. The new payment rule, which will be effective for services rendered on or after January 1, 2008, significantly expands the list of ASC procedures for which Medicare payment may be made. The new rule also adopts a new payment methodology and proposes a significant new Stark exception that will be available to physician-owned surgery centers. Key provisions of the new rule include:
- Expansion of Number of ASC Procedures . The rule allows ASCs to be paid for any surgical procedure that CMS determines does not pose a significant safety risk to Medicare beneficiaries if performed in an outpatient setting. The new rule still contains a list of ASC qualifying procedures, but the list adds approximately 790 additional surgical procedures for 2008.
- New OPPS-Based Payment Methodology. The rule contains a new payment methodology under which CMS will pay ASCs for Medicare services. The new payment methodology is part of CMS' broad plan to refine payment rates for many provider types to eliminate or at least greatly reduce some of the payment inequities and inconsistencies that favor one care setting over another. The new payment methodology bases ASC payment rates on the ambulatory payment classifications (APCs) used to group surgical procedures under the hospital outpatient prospective payment system (OPPS). For the most part, the new ASC procedure rates are approximately 67 percent of the corresponding APCs for the same procedures performed in a hospital outpatient surgery department. CMS chose this percentage because ASCs typically have lower costs than hospital outpatient departments. CMS believes that the new methodology will create greater payment parity between hospitals and ASCs, with neither setting providing significant financial advantages over the other.
- Lower Payment for Procedures That Can Be Performed in Physician's Office. The new rule also provides financial disincentives to discourage ASCs from performing procedures of the type that can safely be performed in an office setting. Payment to surgery centers for procedures that are commonly performed in physicians' offices will be limited to the payment that CMS would have made if the procedure were performed in a physician's office.
- ASCs allowed to Bill Separately for Ancillary Services; New Stark Exception to Cover ASC Ancillaries. The new rule, for the first time, allows ASCs to bill separately for certain ancillary procedures such as imaging services and drugs and biologicals. To be eligible for separate payment, the ancillary service must be integral to a covered surgical procedure and must be provided either during or immediately before or after the covered surgical procedure. CMS realizes that physician owned surgery centers currently will not be able to take advantage of billing ancillaries separately if the ancillary service is an imaging service or other designated health service under Stark. If a physician-owned ASC bills separately, the ancillary service will not qualify for the Stark "composite rate" exception that usually protects physician-owned surgery centers from Stark. CMS proposes to remedy this potential Stark problem by revising the Stark definition of "radiology and certain other imaging services" and "outpatient prescription drugs" to exclude those imaging services or drugs that are covered ancillary services under the ASC payment rule. This will allow physician owned surgery centers to bill Medicare separately for those ancillary services without fear of violating Stark.
The new rule can be found at the attached link.
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