As we near the end of the year, let's look back at some of the biggest developments affecting the ASC industry in 2018. And there were many of them.
1. Medicare final rule delivers big wins. The Centers for Medicare & Medicaid Services (CMS) released the 2019 final payment rule for ASCs and hospital outpatient departments (HOPDs) in November. It was hailed as a huge success for surgery centers, with Ambulatory Surgery Center Association (ASCA) CEO Bill Prentice saying, in an ASCA press release, "We applaud CMS leadership for listening to the ASC community and adopting some long asked for policy changes … These changes are a strong signal that this Administration values the role ASCs can play in bending the Medicare cost curve while maintaining quality and safety for beneficiaries."
Highlights of the final rule include the following:
• CMS will now use the hospital market basket, which has long been the manner in which HOPD payments received updates, for ASCs as well. This change has been approved from calendar year (CY) 2019 through CY 2023. ASCs were receiving payment adjustments based on the Consumer Price Index for All Urban Consumers, or the CPI-U, which focuses on broad consumer price changes and tended to be lower than the hospital market basket.
• CMS reduced the threshold definition of device-intensive procedures in ASCs from 40% to 30%. What this means, as Prentice notes, is that "… if the device portion of the overall procedure equals 30% or more of the total cost of the procedure in the HOPD setting, the total device cost will be included in the reimbursement rate when the procedure is performed in an ASC." The decision effectively adds 124 device-intensive procedures to the 2019 ASC Medicare-approved procedures list.
• CMS added 12 cardiac catheterization procedures to the approved procedures list.
• CMS announced the removal of two measures — "ASC-8: Influenza Vaccination Coverage Among Healthcare Personnel," beginning with the CY 2020 payment determination, and "ASC-10: Endoscopy/Polyp Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polyps - Avoidance of Inappropriate Use," beginning with the CY 2021 payment determination.
• CMS suspended data collection for four measures from the ASC Quality Reporting Program: "ASC-1: Patient Burn," "ASC-2: Patient Fall," "ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant," and "ASC-4: All-Cause Hospital Transfer/Admission."
2. Costs remain a major patient concern. One in five: That's how many people said, over a three-month period, that they postponed, delayed, or canceled a healthcare service (e.g., surgical procedure) because of cost, according to a recent IBM Watson-NPR Health Poll. One in four people, over the three-month period, said they had difficulty paying for a healthcare service.
For the past several years, patients have increasingly struggled to cover their portion of healthcare services. As noted in a Becker's ASC Review article, the average out-of-pocket costs for patients increased 11% during 2017, rising from $1,630 in the fourth quarter of 2016 to $1,813 in the fourth quarter of 2017. Another eye-opening statistic from that article: from 2012 to 2016, outpatient surgery prices increased 19%, reaching an average cost per surgery of more than $4,700.
The challenge of patients paying for their care isn't going away, and it will probably get worse before it gets better. ASCs must be prepared to help patients cover their costs and receive the critical care they need. A new and effective way to do so is to offer healthcare installment loans.
3. Medicare compliance requirements on the chopping block. In September, CMS proposed a rule that, as CMS describes it, "… would reform Medicare regulations that are identified as unnecessary, obsolete, or excessively burdensome on healthcare providers and suppliers." Three proposed changes would impact ASCs, with two changes specifically aimed at surgery centers.
As ASCA notes, the changes specific to ASCs concern hospital transfer and comprehensive medical history and physical assessment agreements. The third, and a more universal healthcare change, concerns emergency preparedness. ASCA submitted comments on the proposed rule in November, essentially expressing the organization's support of the proposed changes and offering some recommendations to help with clarity and better ensure patient safety.
4. New price lookup tool compares patient Medicare costs for certain ASC and HOPD procedures. CMS announced in late November the availability of a Procedure Price Lookup tool intended to help Medicare patients consider potential cost differences between ASCs and HOPDs when choosing where to undergo certain procedures. The tool shows national averages for the amount Medicare pays the ASC or hospital and the national average copayment amount a beneficiary with no Medicare supplemental insurance would pay the provider.
While helpful for consumers, ASCs can leverage the availability of this tool to help prospective patients understand that surgery centers represent a lower-cost option — and one that often provides safer care and better outcomes — compared to hospitals.
5. More procedures making their way to ASCs. Consider 2018 the year when total joint replacements essentially cemented their place in ASCs and cardiac procedures began to follow the path of total joints. These procedures followed specialties such as gynecology and spine that have migrated away from the hospital setting in recent years.
While CMS chose not to add any total joint replacement codes to the 2019 Medicare-approved procedures list (as was expected), a rapidly growing number of ASCs are performing these procedures on non-Medicare patients (here's a list of more than 250 such ASCs). For some ASCs, total joints have become a significant area of focus and revenue. Other ASCs are dipping their toes into the offering, performing just a few of the procedures a month. But the evidence is clear that total joints are now commonplace in ASCs, and it's likely only a matter of time before CMS gives its blessing for surgery centers to perform the procedures on Medicare patients. After all, CMS removed total knee arthroplasty (TKA) from the Medicare inpatient-only list in 2017. Will 2020 be the year TKA is added to the ASC list of payable procedures?
Cardiac procedures, on the other hand, are making their way into ASCs with more frequency. A 2016 CardioSource WorldNews report noted that while the use of ASCs is not new to cardiologists and cardiovascular service lines, cardiac services in the ASC setting were traditionally diagnostic in nature. That's changed. As a Becker's ASC Review report notes, ASCs are now successfully performing cardiology procedures, such as angiograms, angioplasties, atherectomies, and placement and removal of loop recorders, pacemakers, and defibrillators. The decision by CMS this year to add the dozen cardiac catheterization procedures to the approved procedures list should only serve to give cardiology in ASCs a boost.
6. Joint ventures showing no signs of slowing down. Consolidation remains a hot buzzword in healthcare, and rightfully so. 2018 has seen some major deals announced, including CVS acquiring Aetna, Cigna acquiring Express Scripts, and Optum acquiring DaVita. On a smaller scale, ASCs are increasingly finding themselves the target of hospitals and health systems for many reasons, including hospitals desiring to recapture lost case volume, increase surgical capacity, grow their presence in a market, and solidify relationships with physicians.
Such hospital-physician ASC joint ventures have seen a rapid rise over the past several years. In fact, a national survey of senior executives and clinical leaders at health systems and hospitals, conducted by consulting firm Avanza Healthcare Strategies and law firm Clark Hill Strasburger, found that more than two out of five such organizations already own or are affiliated with a freestanding ASC, with two-thirds of those as joint ventures with physicians.
Furthermore, the survey showed that nearly half of the organizations plan to make additional ASC investments/affiliations in the coming years. We can expect joint ventures to remain in vogue for quite some time.
7. Leapfrog jumps into the ASC arena. In October, The Leapfrog Group announced it was expanding its public reporting to outpatient settings, including ASCs. Leapfrog will now collect safety data on ASCs through a new voluntary survey opening in April 2019 (Leapfrog will also start collecting such data from HOPDs at the same time). By fall 2019, a national report on the results is expected to be published. First year participation is limited to 250 ASCs.
Prentice shared some additional details in a Q&A. He noted that, "In January 2019, Leapfrog will pilot test the ASC survey with just 25 ASCs and work with those ASCs to review and refine it." Prentice said that while he had some initial concerns about the survey, he believes those concerns have been addressed for now. He states, "Involvement from the ASC community in the earliest stages of this reporting program will be critical in determining the usefulness of the data Leapfrog collects and shares in the future."
8. Opioid crisis remains in the spotlight. As the opioid epidemic claims the lives of more than 100 people every day, ASCs are taking it upon themselves to reduce their use of opioids for pain management. ASCA launched a resource center this year to further assist clinicians in moving away from opioid use and educating patients and caregivers about opioid risks.
While the opioid crisis will likely remain a challenge throughout 2019, hopefully the efforts undertaken by ASCs help play a part in eventually ending the epidemic.
9. OAS CAHPS still delayed. One of the most significant developments from last year was the delay of the mandatory implementation of the Consumer Assessment of Healthcare Providers and Systems Outpatient and Ambulatory Surgery Survey (OAS CAHPS). This year's Medicare final rule extended the delay, although CMS indicated that it still plans to eventually require ASCs to use a version of the survey.
10. New infection prevention credential for ASCs. In January, the Board of Ambulatory Surgery Certification (BASC) launched the Certified Ambulatory Infection Preventionist (CAIP) credential.
CAIP is the first certification designed specifically for infection preventionists working in ASCs. BASC says CAIP "… is for those with a comprehensive understanding of the skills and knowledge that the role of an ASC infection preventionist requires."
CAIP represents only the second certification program for the ASC industry. The other —Certified Administrator Surgery Center (CASC) — was first awarded in 2002.
Riding the Highs of 2018 into 2019
It was quite a year for the ASC industry, underscored by Medicare's final payment rule. Prentice noted, "The changes included in this year's rule are among the most significant I have seen in my eight years with ASCA. Overall, I would say they demonstrate greater recognition of the quality and value ASCs provide than we have seen in any previous rulemaking."
One can only hope that 2019 builds on this success, but there are many unanswered, complex questions that make predicting the likely outcome for the new year very difficult. Does consolidation make it more challenging for smaller, independent ASCs to remain solvent? Will growing cost challenges push patients to ASCs or keep patients away from healthcare facilities in general? Is this the year total joints are added to Medicare's ASC list of payable procedures (we asked this same question last year)? Do ASCs increasingly become acquisition targets for unusual buyers, such as payers, healthcare companies, and private equity firms? Does anything change with OAS CAHPS? What impact does Leapfrog have on the industry as a whole and participating ASCs? How does Amazon's foray into healthcare affect surgery centers?
Count on the Surgical Notes team to keep a close watch on these and all other developments so we can respond efficiently and effectively to changes that could affect our clients and their delivery of high-quality, cost-effective care. For the latest company and industry news, visit www.surgicalnotes.com and follow Surgical Notes on LinkedIn.
Randy Bishop (rbishop@surgicalnotes.com) is president/chief operating officer for Surgical Notes. Surgical Notes is a nationwide provider of revenue cycle solutions, including transcription, coding, revenue cycle management, and document management applications for the ASC and surgical hospital markets.