Never a dull moment in healthcare, and 2015 was no exception. The Obama administration announced plans to make a dramatic shift away from Medicare fee-for-service reimbursement to alternative payment models, the Supreme Court upheld PPACA subsides in the King v. Burwell case, ICD-10 was officially implemented on Oct. 1 and the largest data breach in healthcare history took place. These stories have implications for all of healthcare; here are 10 of the biggest stories that broke in the ASC industry this year.
1. CMS payment and policy changes. In July CMS, released its proposed policy and payment changes for the CY 2016 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System. ASC payments are updated on an annual basis based on the Consumer Price Index for all urban consumers. For CY 2016, CMS proposes a 1.7 percent CPI-U update. With a multi-factor productivity adjustment of 0.6 percent, the update is expected to be 1.1 percent.
CMS also proposes restructuring, reorganizing and consolidating many OPPS Ambulatory Payment Classification groups. The proposal would result in fewer APCs for nine clinical APC families. There are nine new Comprehensive Ambulatory Payment Classifications proposed for CY 2016. There are currently 25 C-APCs.
CMS did not propose any new measures for the ASC Quality Reporting Program. The CY 2018 ASCQR Program includes 12 measures; 11 required and one voluntary. Though CMS did not propose any new ASCQR Program measures, the agency did request comment on two measures for future consideration: Normothermia Outcome and Unplanned Anterior Vitrectomy.
The final rule is expected to be issued on or around Nov. 1.
2. New procedure's on CMS' ASC payable list. CMS proposed adding 11 new procedures to its ASC payable list for next year. The procedure codes include:
• 07101T for "insertion of posterior spinous process distraction device including necessary removal of bone or ligament for insertion and image guidance, lumbar; single level."
• 0172T for "insertion of posterior spinous process distraction device including necessary removal of bone or ligament for insertion and image guidance, lumbar; each additional level."
• 57120 for "colpocleisis, Le Fort type."
• 57310 for "closure of urethrovaginal fistula."
• 58260 for "vaginal hysterectomy, for uterus 250 g or less J8."
• 58262 for "vaginal hysterectomy, for uterus 250 g or less; with removal of tube(s) and/or ovary(s)."
• 58543 for "laparoscopy, surgical, supracervical hysterectomy, for uterus greater than 250 g."
• 58544 for "laparoscopy, surgical, supracervical hysterectomy, for uterus greater than 250 g; with removal of tube(s) and/or ovary(s)."
• 58553 for "laparoscopy, surgical, with vaginal hysterectomy for uterus greater than 250 g.
• 58554 for "laparoscopy, surgical, with vaginal hysterectomy, for uterus greater than 250 g; with removal of tube(s) and/or ovary(s)."
• 58573 for "laparoscopy, surgical, with total hysterectomy for uterus greater than 250 g; with removal of tube(s) and/or ovary(s).
3. Key legislation. In June, the U.S. House of Representative passed the Electronic Health Fairness Act as part of broader legislation, HR 2570. The Electronic Health Fairness Act exempts surgery center procedures from counting toward meaningful use requirements until a certified EHR for ASCs is available. The legislation authorizes the U.S. Department of Health and Human Services to certify an EHR system for ASCs. In August, the Senate passed the legislation. Senators Johnny Isakson (R-Ga.) and Michael Bennet (D-Colo.) introduced the bill.
The Ambulatory Surgical Center Quality and Access Act of 2015 was also introduced in the Senate. The bill now has 43 cosponsors. The legislation fixes flaws in the current law allowing CMS to use different measures of inflation for ASCs and hospital outpatient departments when setting rates. The current measures penalize ASCs. The bill is designed to help prevent ASC procedures from migrating to the HOPD setting. The bill could also require CMS to add an ASC representative to its Advisory Panel on Hospital Outpatient Payment.
4. UnitedHealthcare service guidelines update. Some of the biggest payer news comes from CMS, but commercial payer UnitedHealthcare made a significant change to its site of service guidelines. The payer announced eight different outpatient procedures and service groups will require preauthorization in an outpatient hospital setting, but no prior authorization will be required if performed in an ASC. The new guidelines went into effect Oct. 1 for most states. The effective date is Nov. 1 for Colorado, and Dec. 1 for Illinois and Iowa. The guidelines apply to the following:
• Abdominal paracentesis (Code 49083)
• Carpal tunnel surgery (Code 64721)
• Cataract surgery (Codes 66821, 66982 and 66984)
• Hernia repair (Codes 49585, 49587, 49650, 49651, 49652, 49653, 49654 and 49655)
• Liver biopsy (Code 47000)
• Tonsillectomy and adenectomy (Codes 42821 and 42826)
• Upper and lower GI endoscopy: (Codes 43235, 43239, 43249, 45380, 45384, 45385 and 45378)
• Urologic procedures (Codes 50590, 52224, 52281, 52352, 52000, 52234, 52310, 52353, 52005, 52235, 52332, 52356, 52204, 52260, 52351 and 57288)
5. Tenet's acquisition of USPI. In May, Tenet Healthcare signed an agreement with Welsh, Carson, Anderson & Stowe to form a joint venture with United Surgical Partners. The joint venture combines the company's surgery center and imaging center businesses. Tenet now owns 50.1 percent of USPI, but is on the path to full ownership over the next five years through a put/call structure. Together, the companies own 244 ASCs, 20 imaging centers and 16 surgical hospitals in 29 states. The joint venture created the largest ASC company in the industry. Bill Wilcox and Brett Brodnax remain at the helm of USPI as CEO and CDO, respectively. Kyle Burnett, Tenet's senior vice president of outpatient services, joined the USPI leadership team as president of ambulatory services and chief integration officer.
6. Surgery Partners IPO. Surgical Care Affiliates filed its initial public offering in 2013. This year, Surgery Partners filed its IPO, just a year after its acquisition of Symbion. The company intends to list its common stock on the Nasdaq under the symbol "SGRY." Surgery Partners shares were priced at $23 to 26 per share, putting the company's value at approximately $1.25 billion. The company is selling 14.3 million common shares for its IPO.
7. Out-of-network lawsuits. The OON strategy is a source of contention in the ASC industry; some believe OON reimbursement is dead, while others believe it is alive and well. Regardless of the OON model's fate, this year there were a number of significant lawsuits involving the strategy. Hooper, Lundy and Bookman filed a motion for preliminary approval to settle a class action complaint filed more than six years ago on behalf of out-of-network California ambulatory surgery centers against United Healthcare Services and OptumInsight. The complaint alleges United and OptumInsight improperly calculated the reasonable and customary amounts for out-of-network ASCs, leading to millions of dollars in underpayments. United agreed to a $9.5 million settlement fund. There are an estimated 250 ASCs that could qualify to participate in the settlement, if the court preliminarily approves the settlement. Steps to participate in the settlement will be sent to all potential class members.
Cigna Health and Life Insurance Co., filed a billing fraud suit in federal court attempting to recoup millions paid to 11 Indiana-based surgical centers allegedly participating in a "fee forgiveness" model to attract Cigna's out-of-network patients. Cigna claims the surgery centers attracted out-of-network members by reducing the members' copays and other fees but charging Cigna inflated prices to recoup losses. Cigna allegedly paid the 11 surgery centers more than $6.5 million in claims before realizing the centers were allegedly using the "fee-forgiving" model for out-of-network patients. The insurance company stopped paying those ASCs and now requests the money returned and an injunction against attempts at similar "fee-forgiving" models in the future.
8. Medicare payment data. This summer, CMS released data on Medicare payments to healthcare organizations and providers. Approximately, 3,900 healthcare providers received at least $1 million each in 2013. The CMS data covered $90 billion in payments to 950,000 healthcare providers and organizations. Physicians received average reimbursement of $74,000. Just five physicians received more than $10 million in Medicare payments.
Earlier in the year, the Office of the Inspector General released the Incorrect place-of-service claims resulted in potential Medicare overpayments costing millions report. The report covers claims covering services provided from January 2010 to September 2012. During those years, Medicare contractors made $33.4 million in overpayments, due to physicians not correctly coding the place of service on physician claims.
9. HOPD vs. ASC reimbursement. ASC reimbursement as a percentage of HOPD reimbursement has been trending downward for years. In March, the OIG released a report on 25 unimplemented recommendations that could have saved HHS programs billions of dollars. The report, the Compendium of Unimplemented Recommendations, includes a section on an OIG recommendation issued in April 2014 that focused on reducing Hospital Outpatient Prospective Payment System rates for ambulatory surgery center-approved procedures. The OIG recommended that OPPS rates for ASC-approved procedures be determined in a non-budget neutral manner. The OIG recommended CMS seek legislation to achieve this goal. If such legislation were passed, Medicare could have generated $15 billion in savings from CY 2012 to 2017.
In other news, the Medicare Payment Advisory Commission recommended ASCs receive no updates to their facility fees in 2016. In addition to no facility fee increase, MedPAC staff recommended facilities be subject to "some form of Medicare cost reporting."MedPAC recommended a 3.25 percent payment increase for HOPDs, according to the Ambulatory Surgery Center Association.
10. Surgeon and hospital dispute over surgery center cases. The relationship between hospitals and ASCs can be hostile. In June, news broke a surgeon is suing McKenzie-Willamette Medical Center in Springfield, Ore. Kristian Ferry, MD, was employed by McKenzie-Willamette Medical Center, which he alleges fired him after he took cases to an ambulatory surgery center not owned by the hospital. Dr. Ferry is alleging breach of contract, interference with his medical practice, wrongful termination and defamation against McKenzie-Willamette and McKenzie Physician Services. Dr. Ferry is suing the center for $6 million in economic damages and an addition $3.8 million in non-economic damages citing emotional distress and damage to his reputation.