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July 8, 2011

Medicare’s 2012 Payment Proposal: Three Key Points

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The following is from ASCA Government Affairs Update, Volume 1, Issue 18, July 7, 2011


Medicare’s 2012 Payment Proposal: Three Key Points

ASC Bill Garners New Support


Medicare’s 2012 Payment Proposal: Three Key Points

Last Friday, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule outlining its 2012 payment policies for ASCs and HOPDs. A final version of the proposal is expected in late October or early November. The following are three key points the proposal raises. 


Continued Divergence between ASC and HOPD Payments
In its proposal, CMS continues to employ policies that have the troubling effect of causing a disparity between what ASCs and HOPDs are paid for providing the same services. CMS proposes to use the Consumer Price Index for All Urban Consumers (CPI-U) to update next year’s ASC rates to account for inflation. In contrast, CMS proposes to use the typically higher hospital market basket measure to update HOPD rates in 2012. Further, CMS has provided an extremely conservative estimate of what the change in CPI-U will be next year, projecting it to increase only by 2.3%. In addition, in the proposed payment rule CMS is measuring the health care reform law’s mandated productivity adjustment differently for ASCs and HOPDs, leading to a 0.2 percentage point larger productivity reduction for ASCs. All told, these disparate policies lead to HOPDs receiving a 1.5% across-the-board increase for 2012 while ASCs receive just 0.9%. The difference between ASC and HOPD rates is further exacerbated by CMS’ decision to continue its secondary rescaling policy of reducing ASC payment rates relative to HOPD payment rates for surgical procedures in an attempt to maintain budget neutrality in the ASC setting. Unfortunately, the growing divergence between what ASCs and HOPDs are paid sets up a perverse incentive for surgical procedures to move to the more expensive HOPD setting, costing both Medicare and its beneficiaries excess money.


No New Procedures Added to the List for 2012
CMS has proposed to add no new procedures to the list of ASC payable procedures for 2012. In contrast, CMS has proposed to add three procedures that have been removed from the inpatient-only list to the list of HOPD payable procedures in 2012. ASCA will continue to advocate that CMS improve its process for evaluating which procedures should be added to the ASC list so that Medicare patients can take advantage of the convenience and cost savings ASCs provide.


ASCs that Don’t Report Quality Data to Face Payment Reductions Beginning in 2014
CMS has proposed that ASCs that fail to report quality measures will face payment reductions beginning in 2014. CMS has proposed to include all six measures developed by the industry-led ASC Quality Collaboration in the eight measures ASCs will be expected to report on in order to receive full payment in 2014. The eight measures are (1) Patient Burn, (2) Patient Fall, (3) Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant (4) Hospital Transfer/Admission, (5) Prophylactic Intravenous (IV) Antibiotic Timing, (6) Ambulatory Surgery Patients with Appropriate Method of Hair Removal, (7) Selection of Prophylactic Antibiotic First OR Second Generation Cephalosporin and (8) Surgical Site Infection Rate.


Many details regarding the ASC quality reporting program, including exactly how ASCs will be expected to report quality data, the precise timeframe for reporting data and how much the payment to ASCs that fail to report will be reduced, remain unclear. ASCA is working closely with CMS to clarify the proposed requirements, assure that quality reporting is implemented in a way that does not place unreasonable burdens on ASCs and make certain that the reports produce information that is meaningful to patients.


Resources to help ASC operators understand the impact of the 2012 Medicare payment proposal are now available on ASCA’s web site. ASCA will be conducting a webinar on Medicare’s 2012 proposal on August 23 at 1PM ET. To register, go to


For more information, contact Jonathan Beal at

ASC Bill Garners New Support

The American Society for Gastrointestinal Endoscopy (ASGE) and the Outpatient Ophthalmic Surgery Society (OOSS) have endorsed the ASC Quality and Access Act of 2011 (H.R. 2108, S. 1173). Both organizations sent letters to Congress expressing the need for and importance of this legislation. ASCA is grateful for the support these respected organizations have provided toward achieving the passage of this important legislation and is looking forward to working together with those organizations over time. 


Four new members of Congress have recently cosponsored the ASC bill, which brings the total number of cosponsors in the House of Representatives to 11.


Rep. Berkley, Shelley (D-NV)
Rep. Burgess, Michael (R-TX)
Rep. Cassidy, Bill (R-LA)
Rep. Griffin, Tim (R-AZ)
Rep. Kissell, Larry (D-NC)
Rep. Larson, John B. (D-CT)
Rep. Marchant, Kenny (R-TX)
Rep. McMorris Rodgers, Cathy (R-WA)
Rep. Nugent, Richard (R-FL)
Rep. Roe, David P. (R-TN)
Rep. Whitfield, Ed (R-KY)


ASCA is continuing to work to gather support in the House and Senate, but we need the assistance of all ASCA members to help advance our advocacy efforts with strong grassroots support from back home. Please consider reaching out to your member of Congress through our Capwiz system or contact Morgan Hanson ( or 703.836.8808) for more information about ways you can get involved.


For more information on the ASC Quality and Access Act of 2011, contact Steve Miller at

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