Michael Romansky is Washington counsel for the Outpatient Ophthalmic Surgery Society.
Q: How would the new deficit reduction super committee affect ambulatory surgery centers?
Michael Romansky: This unprecedented committee was the result of a last-minute compromise in the debt-ceiling negotiations between Congress and President Obama. Twelve members –– six Democrats and six Republicans from Congress –– will have to find at least $1.2 trillion in savings by Nov. 23. If they cannot agree, there would be automatic cuts. While Medicaid would not be affected, Medicare, which has a budget of $520 billion a year, could see automatic cuts in excess of $100 billion over 10 years. That's real money.
This committee's approach –– with legislators as the sole arbiters and an extremely short time frame for deliberations –– is unprecedented. We've seen commissions dealing with policy issues before. And, of course, the Independent Payment Advisory Board, established by the health reform legislation, will have great authority to set Medicare rates. But never has an entity been charged with such far-reaching, cross-agency power.
Q: What form might cuts in Medicare ASC reimbursements take?
MR: My crystal ball isn't that accurate. There are no details as yet and the committee's work has just begun. But if past deficit reduction activity is any guide, across-the-board cuts, focused on reductions in cost of living adjustments for providers, would appear to be a likely approach. Keep in mind, however, that recent COLAs for providers like ASCs have already been reduced by productivity adjustments to nearly zero. That means negative updates could occur –– hardly an equitable outcome for providers whose costs continue to rise and who haven't received updates commensurate with costs in the past. At this point, I don't contemplate any ASC-specific cutbacks because ASCs comprise such a miniscule portion of the budget.
Q: Since Medicare pays for a very high percentage of cataract surgeries, wouldn't a reduction in Medicare payments be particularly painful for cataract ASCs?
MR: Any reduction in payments would be painful for an ASC. But policy-makers should be careful about cutting ASC payments or they might end up actually increasing federal spending. Yes, most cataracts are now performed in ASCs, and that is a great boon for Medicare. Medicare pays 43 percent less for a procedure in an ASC than in a hospital outpatient department. But if ASC rates were seriously constrained, fewer ASCs would be developed at some point and the market would look for other ways to increase reimbursements. Indeed, we are now seeing hospitals purchasing ASCs and converting them into outpatient departments eligible for the higher Medicare reimbursements.
A more constructive approach would be adopting proposed legislation advocated by the ASC industry, which would mean paying ASCs a few dollars more per case and ensuring a healthy and more competitive alternative to hospitals. This would incentivize migration of more services into the more cost-effective, patient-friendly ASC –– generating real savings for the Medicare program.
Q: I assume you will be making that argument to the new super committee. But how easy would it be to gain access to just 12 people making a sweeping review of practically every part of the federal budget?
MR: Time will tell just how accessible this new deficit reduction panel will be for healthcare interests. But it's hard to imagine that these legislators would be wholly insulated from the forces that had a hand in putting them into office.
Learn more about the Outpatient Ophthalmic Surgery Society.
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