Title: Trends in ASC Reimbursement
1Trends in ASC Reimbursement
- Gregory Cunniff
- Chief Financial Officer
2Welcome to the Evolution of ASC Reimbursement
- To summarize the trend
- Youve come a long way baby!
- And the best is yet to comeif youre ready
- Enjoy the meeting!
3In the beginning
- Medicare approved ASC reimbursement for 200
procedures in1982. - Medicare pays a predetermined and inclusive
amount per procedure to the facility (and
remember this for later, not the prospective
system based on a cost to charge ratio like
HOPDs). - Procedures in ONE payment group are ALL paid the
same rate - Initial reimbursement was based on ASC cost and
charge data from 1979 and 1980 from 40 ASCs. - The Grouper Methodology was born!!
- 1982 4 groups
- 1990 revised cost data and the DHHS increased
to 8 groups - 1991 added a 9th group to carve-out certain
procedures - 2008 220 payment groups.
1GAO-07-86 Medicare Payment for Ambulatory
Surgical Centers, 11-30-06. 2Omnibus
Reconciliation Act of 1980 (ORA), Pub. L. No.
96-499, 934(b), 94 Stat. 2599, 2637 (codified, as
amended, at 42, U.S.C. 13951(i)).
4The Origin of the Trend
- The then known as the MMA directed the GAO to
perform a comparative study of costs of
procedures performed in ASCs versus outpatient
departments of the hospital to establish the base
rates. - The previously known as DHHS last revised ASC
payment rates in 1990 using cost to charge data
(remember this too) was collected in 1986. - The now known as CMS, after certain arm
twisting and legislation known as the DRA, was
required to institute a new payment system in
2008. - Do you realize CMS has changed its NAME more
often than ASC rates?
5The Trend of ASC Reimbursement
6The New ASC System
- The proposed rule was issued in August 2006
followed by the comment period - Its purpose
- Revising the payment system for services
furnished to people with Medicare in ASCs to
better align payments for similar services
furnished in a HOPD or a physicians office (on
a prospective basis)
3Department of Health Human Services, July 16,
2007 CMS Revised Payment Structure For
Ambulatory Surgical Centers And Proposed Policy
And Payment Changes For Hospital Outpatient And
ASC Services
7The New ASC System
- The 2006 proposal
- Establish ASC rates at 62 of 2007 HOPD rates
- Two year transition period
- Add 740 new procedures for ASCs beginning in CY
2008 - Budget neutral. In DC, this jargon means no
net effect on gross Medicare payments - 450 of the new codes are mostly office procedures
(remember this)
8The New ASC System
- The Final Methodology for 2008
- Amended the August 2006 language
- Rates set at 65 of 2008 HOPD rates
- The Transition Period was extended to FOUR years
- The FINAL rates are expected by December 2007
when the HOPD rates are final Key Items
waiting - Set Inflation Update for HOPD
- The final rates
- The final approved procedure list
3Department of Health Human Services, July 16,
2007 CMS Revised Payment Structure For
Ambulatory Surgical Centers And Proposed Policy
And Payment Changes For Hospital Outpatient And
ASC Services
9The New ASC System other items to note
- ASC payments will be adjusted each year
(prospectively) to reflect changes in technology
and resources used in performing procedures. - No annual inflation update for 2009 (back to
62?) - Beginning in 2010 the ASC conversion factor will
be adjusted for inflation based on the Consumer
Price Index for urban consumers not the
healthcare market basket. - Newly added procedures will be paid at 65 of
OPPS, unless capped at physician office
rateRECALL most likely 450 of the 790
procedures will be capped in 2008. Very likely
many others will be capped in the coming years.
RVUs!
10The New ASC System other items to note
- Radiology is reimbursedPlease bill your
Fluro!!!! - RECALL the Cost to Charge ratio. If you dont
bill it, they dont know you need it!!!
Some/Most and NOW Medicare will reimburse for
fluoroscopy. - Another oneDid you know you can bill for
injections for control of pain post-op provided
it is done specifically for pain mgt and not
anesthesia? - Drugs Biologicals
- Devices Technology pass-throughs under OPPS
system. - Implants are now included within the facility
fee.
11The New ASC System The Winners
- Orthopedics
- ENT
- General Surgery
- Gynecology
12The New ASC System The Losers
13The New ASC System You win some, you lose some
- Urology wins cystoscopies lose.
- Ophthalmology wins yags lose
- Podiatry wins plantar fasciotomies lose
14The Winners and Losers Ophthalmology
15The Winners and Losers Orthopedics
16The Winners and Losers Pain Management
17The Winners and Losers Gastroenterology
18The Winners and Losers - ENT
19The Winners and Losers General Surgery
20The Winners and Losers Gynecology
21The Winners and Losers Podiatry
22The Winners and Losers Urology
23The New ASC System Whats the take away?
- The new system offers ASCs many new procedure
opportunities and pitfalls do your homework. - The TREND for reimbursement ASCs are indexed
and track HOPDs (sort of). - Three reasons this system is great for ASCs
- Baby-boomers
- Technology
- Cost-savings
24What About the Commercial Payors?
- Groupings based off Medicare provided the
commercial payors a means to save money. - It was easy to base reimbursement on a
percentage of Medicares rates. - The private market knew many surgeries did not
fit in the Medicare ASC system (ortho for
example), thus carve-outs were born so that
further savings would be realized. - Payors forced the Medicare grouper system and
drove centers toward another trend -- dropping
contracts and going Out-of-Network
25What Drives Commercial Payors?
- Commercial payers are typically public companies.
- Public companies are motivated to be more
efficient. - Thus, ASCs solved two issues facing payers
- Physician Compensation
- Facility fee reimbursement
26Commercial Payors In the beginning
- Most large commercial payors utilized a grouper
system based off Medicare groupers. - Some followed the Medicare groupings closer than
others. - Carve out procedures were not just necessary.
Carve-outs became a necessity.
27Commercial Payers - Carve-outs
-
- Carve-outs were a necessity as Medicare groupings
could not account for the new procedures which
could be performed in an ASC. - But how many cases can you really carve-out?
28Commercial Payers Implants and Disposables
-
- Medical equipment technology improves every day.
- Physicians have never met a drug or device rep
they didnt like (marketing 101) - But how many implants and disposables can you
carve-out? - What about over-utilization?
29Commercial Payers The Recent Trend
-
- Those payers with large market share forced
compression Did HMOs drive any volume? - Large payers with small market share leased
others networks Silent PPOs. - Constant compression forced ASCs to abandon
contracts and go Out-of-Network - Commercial payers created their own grouping
systems to re-capture providers. - Commercial payers began aggregating implants
within their facility fee.
30ASC Technology used to be SOOOO behind the
times!
- ASCs are the provider of choice because we
provide a superior quality experience (for
doctors, patients and payors) at a superior
price. - Patient accounting systems used to be pretty
simple. - Technology has improved and demands for flexible
systems are crucial. - Contract Management Scott? Remember we spoke
about this 15 years ago? - (My hair should not be this grey)
31So what is the Trend?
- Commercial payers are typically public
companies. - Public companies are motivated to be more
efficient. - Carve-outs, Implants and Disposables are an
administrative nightmare for ASCs, Payers and
Doctors. - ASCs will have to HELP solve three issues facing
payers - Dont tell my docs how to practice
- Aggregating implants within reimbursement
- Aggregating disposables within reimbursement and
- Insert shameless plug here.
32Shameless Plug.
- Advancing information systems to be able to
handle the changing landscape of healthcare
information and reimbursement. - Companies like Source Medical can get you there
- Patient Accounting
- Contract Management
- Materials Management
- Third party affiliations
33What trends do I see
- Are surgical hospitals really a threat to good
healthcare? - Further use of scope technology
laparoscopes/endoscopes/etc. - Semi-invasive techniques becoming more prevalent
- Spines
- Total joints
- General, GYN, ENT, name your specialty
- Case rates
- EMRs
34What You Have to Know (and Prepare For) Now!
- Prepare for the new CMS methodology
- Learn what opportunities your ASC may have
- Understand and study your ASCs contracts
- Understand the contract methodology
- Know your costs, and Trend them