The payment approach used by Medicare to reimburse freestanding ambulatory surgical centers (ASCs) should be changed to match how the program pays for procedures in surgery centers attached to hospitals.
That finding, in a Government Accountability Office report released in late November, is consistent with payment revisions proposed by the Centers for Medicare and Medicaid Services this summer.
Surgery center trade groups, while finding the report positive in affirming the use of freestanding facilities for care, voiced concern about the levels of payment as compared with those paid to hospital outpatient centers.
Reimbursement for hospitals’ surgical centers is paid under the outpatient prospective pricing system (OPPS), which the report argues should apply to ASCs as well.
The new alignment is expected to incrementally lower the amounts paid to freestanding centers, which have lower costs than outpatient departments linked to hospitals.
Under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, CMS is required to implement a revised payment system for surgical services furnished in ambulatory surgery centers no later than Jan. 1, 2008.
“The proposed revisions more closely align payments in the ASC and OPPS payment systems, to encourage the more efficient and appropriate choices of outpatient settings for ambulatory surgical procedures,” said Leslie V. Norwalk, acting administrator for CMS.
While representatives from freestanding surgery center trade groups didn’t dispute the findings, they said the GAO study didn’t look at cost differences in centers that offer multiple specialties.
Craig Jefferies, executive director of the American Association of Ambulatory Surgery Centers, said the proposed payment rate – 62 percent of what’s paid to hospital outpatient centers – is just an average, and the methodology used in the GAO report didn’t differentiate ASCs based on size, specialty or number of years in operation.
Freestanding centers have traditionally received an all-inclusive amount per procedure, which are grouped into one of nine payment groups. In general, those rates are similar to those paid to hospital outpatient surgery centers, which are based on the appropriate ambulatory payment classification group.
But the GAO report found that the cost of procedures in ambulatory surgery centers is “substantially lower than the corresponding cost in hospital outpatient departments,” the report said.
As a result, the GAO is recommending CMS implement a payment system for freestanding ambulatory centers that is based on the outpatient system but reflects their lower relative costs.
In both settings, services performed by other providers are billed separately by those providers and are not included in payments to surgery centers, the GAO noted.
Other than noting the findings of the GAO report, CMS has not indicated when it would make a final proposal for revising the payment system for ambulatory surgery centers.
Jefferies said CMS is likely to publish a rule in the spring defining the parameters of an ASC payment system, to be followed by a payment rule late in 2007 matching the payment systems in each of the two kinds of surgical centers. n