Medicare to Pay ASCs for Broader Range of Surgeries

In 2021, ambulatory surgical centers (ASCs) will be able to charge Medicare for total hip replacements and other musculoskeletal procedures that in the past would be reimbursed only if done in a hospital, according to a new final rule from the Centers for Medicare & Medicaid Services (CMS).

CMS also said it plans to keep its payment cuts for drugs that hospitals acquire through the 340B Drug Pricing Program following a July appeals court decision upholding the policy. Under a plan announced in 2018, CMS began paying 340B hospitals a covered drug’s average sales price minus 22%; previously the discount was 6%.

“This policy lowers out-of-pocket drug costs for Medicare beneficiaries by letting them share in the discount that hospitals receive under the 340B program,” the agency explained in a press release.

Since CMS’s 340B pricing policy took effect, CMS said it has saved Medicare beneficiaries almost $1 billion in drug costs and anticipates an additional $300 million in beneficiary savings in 2021.

With regard to the changes around surgical procedures in the Outpatient Prospective Payment System and Ambulatory Surgical Center final rule, CMS argued that by eliminating a list of 1,700 inpatient-only procedures over a 3-year period, it is providing Medicare beneficiaries with higher value, lower-cost options for care.

CMS Administrator Seema Verma said in a press release that the new rule is another sign of the Trump administration’s commitment to “level the playing field and boost competition at every turn,” and that it “allows doctors and patients to make decisions about the most appropriate site of care, based on what makes the most sense for the course of treatment and the patient without micromanagement from Washington.”

On January 1, CMS will add 11 procedures to the covered procedure list (CPL) for ASCs, and overhaul the criteria the agency uses to determine what surgical procedures can be added to that list. Instead of requiring procedures to meet certain criteria, the agency will give physicians leeway to use what would be criteria as guiding factors to decide whether a particular procedure can be done in an ASC or whether it should be done in an inpatient setting.

In overhauling those criteria, CMS plans to add an additional 267 surgical procedures to the ASCs’ covered list.

While removing certain procedures from the inpatient-only list allows ASCs to perform and charge for those services, CMS will continue to reimburse those services when they are done in an inpatient setting if a physician deems that the most appropriate setting.

One procedure that would be cheaper in an outpatient rather than an inpatient environment is thromboendarterectomy, a procedure for eliminating blood clots in the lung, the agency explained in a press release.

Medicare beneficiaries would pay a deductible of about $1,500, if they had not had other significant health expenses. Or the same patient with the same procedure could have a copayment of about $1,150 in an outpatient setting, such as an ASC.

CMS also argued that in the midst of a pandemic the rule gives non-COVID-19 patients another venue to receive needed care.

Hospital Leadership Not Happy

Neither of the Wednesday announcements sat well with hospitals.

Hospitals have long been opposed to shifting more surgical procedures to outpatient settings, and have argued in the past that such policies could have “devastating and life-threatening” consequences for patients.

The American Hospital Association has also panned CMS’s plan to scrap requirements meant to ensure patient safety — having a written transfer agreement with a nearby hospital and mandating that ASC’s physicians have admitting privileges at a hospital.

Hospitals are also miffed about the continued 340B cuts.

Carl Graziano, president and CEO of America’s Essential Hospitals, an industry trade group, said the new rule “takes a bad policy on Part B drug payments and makes it worse by digging an even deeper financial hole for essential hospitals and their vulnerable patients. There is no reasonable basis to further reduce payments to hospitals in the 340B Drug Pricing Program — the same hospitals that are now straining under the heavy costs of responding to COVID-19. This ill-conceived payment policy flouts congressional intent for the 340B program, undermines program savings for hospitals that operate with little or no margin, and ultimately jeopardizes access to care in underserved communities.”

Tom Nickels, the American Hospital Association’s executive vice president for government relations and public policy, called the rule “a blow to America’s hospitals and health systems.” He added that for nearly 30 years, “the 340B program has helped hospitals stretch scarce federal resources to reach more patients and provide more comprehensive services to vulnerable communities. Continued cuts will result in the further loss of resources for 340B hospitals at the very worst possible time as COVID-19 cases and hospitalizations continue to climb across the country,” he said.

Maureen Testoni, president and CEO of 340B Health, a nonprofit organization of approximately 1,400 hospitals and health systems participating in the federal 340B program, also voiced frustration: “These cuts undermine the 340B program’s purpose and do nothing to lower overall costs for Medicare patients,” she said in a press release. “The result of this years-long regulatory offensive against the health care safety net will be hospitals that struggle harder to care for patients with low incomes during a public health emergency when they are needed the most.”

Contributing Writer Cheryl Clark contributed to this story.

  • Shannon Firth has been reporting on health policy as MedPage Today’s Washington correspondent since 2014. She is also a member of the site’s Enterprise & Investigative Reporting team. Follow

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