Payment Stability for Ambulatory Surgery Centers

AGA POSITION: ASCs are convenient, cost-effective settings for outpatient procedures and should receive equitable and stable payments.


ASC Reimbursement Should be Equitable

Ambulatory surgery centers (ASCs) offer patients a high-quality, convenient and cost-effective setting for outpatient surgical services. More than 40 percent of all Medicare colonoscopies are performed in ASCs. However, the reimbursement of these services in ASCs is threatened due to the declining reimbursements that ASCs have sustained over the past decade.

Currently, ASCs are paid at only 56 percent of the amount paid to a hospital outpatient department (HOPD) for the same service. The difference in payment rates between the ASC and the HOPD has grown significantly over the past decade. On average, Medicare pays hospitals about 75 percent more than the ASC for outpatient surgery, whereas the payment difference in 2003 was about 16 percent. Without changes to the ASC payment system, rates for HOPD and ASC surgeries could continue to widen leading to a migration of services to the hospitals, which would mean higher costs to the health-care system and higher cost-sharing for patients.

One reason for the disparity in payment rates — the formula used to update Medicare ASCs is different from the Medicare HOPD update for the same services. ASC payment rates are updated using the consumer price index-urban (CPI-U), which is more volatile and does not accurately measure health-care costs associated with operating an ASC.  HOPDs are updated on the hospital market basket, which specifically measures changes in the costs of providing health care.

The ASC Quality and Access Act

AGA supports H.R. 1453, the ASC Quality and Access Act, legislation that establishes equity and stability in ASC payments by updating their inflationary adjustment with the same market basket update that is used to update HOPDs instead of the CPI-U. The legislation will implement a quality reporting program for ASCs and a value-based purchasing program to create incentives for ASCs to demonstrate savings to the Medicare program. 
AGA believes H.R. 1453 is important in preserving and strengthening the viability of ASCs that provide a convenient, cost-effective alternative setting for patients requiring outpatient procedures such as colorectal cancer screenings.

March 2015