Ambulatory surgery centers (ASCs), as well as the national ASC associations, will undergo major changes in 2008. Both the new payment system and the streamlined association will prove valuable to ASCs in the long term. Industry analysts have focused much attention on which ASC procedures and physician specialties will be “winners” and “losers” under the new payment system. The new payment system, however, is just one of many factors that will influence the ASC industry in the coming years. This fall, the Centers for Medicare & Medicaid Services (CMS) proposed significant revisions to the ASC Conditions for Coverage. Lastly, Congress also mandated that ASCs and hospital outpatient departments begin reporting the results of quality measures to CMS in 2009.

Revised ASC Conditions for Coverage

CMS proposed a rule to revise the ASC Conditions for Coverage — the criteria CMS uses to determine whether a facility can participate in the Medicare program as an ASC. The conditions for coverage (CfCs) form the basis for accreditation by the Joint Commission (JCAHO) and the Accreditation Association for Ambulatory Health Care (AAAHC). Unlike the ASC payment rule that defines what procedures an ASC can perform on Medicare patients, the CfCs define when and how an ASC can operate and apply to both Medicare and non-Medicare patients.

The ASC CfCs have not been substantially revised since the early 1980s, and CMS is proposing several significant changes. In total, CMS expanded the number of standards under the conditions from 16 standards under the existing 10 conditions to 32 standards under 13 proposed conditions. The proposed new conditions for coverage incorporate standards for infection control, patient assessment and discharge, and patients’ rights.

Most notably, CMS proposed to change the definition of an ASC from a facility providing surgical services not requiring hospitalization to one whose services do not require an overnight stay. Overnight stay is further defined as a patient staying past midnight — a criterion far more restrictive than the limits defined in at least 14 state laws or regulations. The ASC community has argued vociferously against the adoption of this new standard that would affect both Medicare and privately insured patients.

The Final Outpatient Rule for 2008

On November 1, CMS released the final rules for physician payments as well as the combined ASC and hospital outpatient prospective payment system (OPPS). In the ASC/OPPS rule, the agency confirmed the rates to be paid to surgery centers, the procedures to be covered under the new payment system, and declined to make any substantial changes to the structure of the new payment system in response to comments from the ASC industry on the proposed rule.

The conversion factor for ASCs was nearly identical to the rate in the proposed rule, and will be $41.401 for 2008. In addition, CMS added several new procedures to the list:

Required Quality Reporting in 2009

Congress directed the Secretary to collect ASC and hospital outpatient quality data beginning in 2009. The two big questions in play now are: 1.) what will the measures be, and 2.) how will ASCs report the data? We will not see the agency’s proposal until next summer, but CMS is already soliciting comments from the industry.

The American Association of Ambulatory Surgery Centers (AAASC) worked diligently with our ASC partners and stakeholders through the ASC Quality Collaborative. The Collaborative convened to develop ASCspecific quality measures. To date, five of the measures developed by the group have been reviewed by the National Quality Forum (the entity CMS defers to in identifying quality measures) and recommended by their steering committee for adoption.

Of the five measures, four are outcome measures that have applicability to all outpatient surgical facilities and thereby ensure broad facility participation regardless of case mix. These measures focus on 1.) patient falls, 2.) patient burns, 3.) hospital transfer/admission and 4.) wrong site/wrong side/wrong patient/wrong procedure/wrong implant. The fifth measure is a process measure which evaluates the timing of the administration of intravenous antibiotics for prophylaxis of surgical site infection. This prophylactic antibiotic timing measure has been specifically designed to harmonize with, and be complementary to, similar measures developed to evaluate physician performance in this area.

How ASCs will report the data to CMS can have huge implications for the administrative burden on the facilities and their employees. Under the Physician’s Quality Reporting Initiative (PQRI), physicians report patientlevel quality data using administrative claims. Using either HCPCS Level II G codes or AMA Category II CPT codes adopted specifically for quality reporting, the physician is able to submit quality data in conjunction with codes for services rendered on the CMS-1500. The ASC Quality Collaborative has recommended that CMS adopt a similar approach for reporting information in the ASC setting.

There is a tremendous amount of change on the horizon for ASCs in the coming years, but tremendous opportunity as well. The collective resources of the AAASC and FASA (now merged and named the Ambulatory Surgery Center Association [ASC Association]) will be working overtime to arm surgery centers across the nation with the tools and resources to respond to these changes. 

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