Ambulatory Surgical Centers

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Ambulatory surgical centers (ASC) play an important role in the nation's healthcare delivery system by providing surgical services that do not require an overnight stay. The most prevalent surgical procedures performed in ASCs include cataract removal, upper gastrointestinal endoscopies, colonoscopies and epidural injections for back and bone pain. ASCs have experienced large growth in recent years, partially because they offer patients convenient locations, low out-of-pocket costs, the ability to schedule surgery quickly and with short wait times.

Since 1982, Medicare has paid for certain surgical procedures provided in ASCs. The Centers for Medicare and Medicaid Services (CMS) implemented the current ASC payment system in 1990. Payment rates are based on data from a 1986 survey of ASC's costs and charges, updated periodically using the consumer price index for all urban consumers. Because they are based on old cost data, these rates are no longer consistent with ASC's costs. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 mandated a new payment system for ASCs that incorporates a rational payment methodology. I am working with the Centers for Medicare and Medicaid Services to help shape the new payment system.

ASCs are also restricted in the variety of services they may offer to Medicare beneficiaries. Currently, CMS is required to establish and update a list of procedures that are appropriately performed in hospital outpatient settings but may also be safely performed in an ASC. Only those procedures on the list are eligible for Medicare payments. The current approach for deciding which procedures are eligible for Medicare payment often results in delays that keep innovative technology and services off the payment list. In addition, some of the criteria for adding procedures to the list may no longer be appropriate. A recent report by the Medicare Payment Advisory Commission suggests that reforming the current list would make it easier for beneficiaries to receive new surgical procedures in ASCs.

In the 109th Congress, I introduced S. 1884 in order to provide necessary guidance to CMS in developing a new payment system. S. 1884 would direct that the new ASC reimbursement program be modeled after the methodology and payment rates applicable to surgical services furnished in hospital outpatient departments (HOPD). The legislation would eliminate the current ASC payment list and allow ASCs, with certain exceptions, to perform and receive payment for any surgical service that is covered as an HOPD service. Payment rates would be adjusted to a rate established to be 75 percent of the HOPD fee schedule amount for each covered service, and ASCs would receive pass-through payments for the additional costs of innovative medical devices, drugs and biologicals. In addition these payment rates would be adjusted by the same annual updates, area wage indices and other relevant adjustments applicable to HOPD payment rates. Finally, the beneficiary's co-payment for services furnished in the ASCs would be 20 percent of the Medicare payment amount, as provided under current law.

I worked diligently to attach this legislation to S. 1932, the Deficit Reduction Omnibus Reconciliation Act. During recent negotiations on the Conference Report on this legislation, I won written assurance from Department of Health and Human Services (HHS) Secretary Michael Leavitt that the Department would perform two key steps concerning ASCs. First, HHS will update the ASC list by July 1, 2007, as required by law. Second, in 2008, concurrent with implementation of the new payment system as required by the MMA, Secretary Leavitt proposes to include all outpatient surgical procedures (except those that the Department finds would pose a significant safety risk when performed in an ASC, or would require an overnight stay) on the ASC list. These are positive steps forward. I am committed to ensuring that Medicare payment rates are accurate and fair, in order to ensure beneficiary access to convenient, quality services.

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