[Federal Register: August 2, 2007 (Volume 72, Number 148)]
[Rules and Regulations]
[Page 42469-42626]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02au07-17]
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Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 410 and 416
Medicare Program; Revised Payment System Policies for Services
Furnished in Ambulatory Surgical Centers (ASCs) Beginning in CY 2008;
Final Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 410 and 416
[CMS-1517-F]
RIN 0938-AO73
Medicare Program; Revised Payment System Policies for Services
Furnished in Ambulatory Surgical Centers (ASCs) Beginning in CY 2008
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule revises the Medicare ambulatory surgical
center (ASC) payment system to implement certain related provisions of
the Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (MMA). This final rule establishes the ASC list of covered
surgical procedures, identifies covered ancillary services under the
revised ASC payment system, and sets forth the amounts and factors that
will be used to determine the ASC payment rates for calendar year (CY)
2008. The changes to the ASC payment system and ratesetting methodology
in this final rule are applicable to services furnished on or after
January 1, 2008.
DATES: Effective Date: This final rule is effective on January 1, 2008.
FOR FURTHER INFORMATION, CONTACT: Alberta Dwivedi, (410) 786-0378. Dana
Burley, (410) 786-0378.
SUPPLEMENTARY INFORMATION:
Electronic Access
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Alphabetical List of Acronyms Appearing in This Final Rule
AHA American Hospital Association
AMA American Medical Association
APC Ambulatory payment classification
ASC Ambulatory surgical center
BESS [Medicare] Part B Extract Summary System
CAH Critical access hospital
CBSA Core-Based Statistical Area
CMS Centers for Medicare & Medicaid Services
CPI-U Consumer Price Index for All Urban Consumers
CPT [Physicians'] Current Procedural Terminology, Fourth Edition,
2007, copyrighted by the American Medical Association. CPT[supreg]
is a trademark of the American Medical Association.
CY Calendar year
DRA Deficit Reduction Act of 2005, Public Law 109-171
FY Federal fiscal year
GAO Government Accountability Office
HCPCS Healthcare Common Procedure Coding System
HOPD Hospital outpatient department
HQA Hospital Quality Alliance
IOL Intraocular lens
IPPS [Hospital] Inpatient prospective payment system
MAC Medicare administrative contractor
MedPAC Medicare Payment Advisory Commission
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, Public Law 108-173
MPFS Medicare Physician Fee Schedule
MSA Metropolitan Statistical Area
NTIOL New technology intraocular lens
OCE Outpatient Code Editor
OMB Office of Management and Budget
OPPS [Hospital] Outpatient prospective payment system
PM Program memorandum
PPAC Practicing Physicians Advisory Council
PPS Prospective payment system
PRA Paperwork Reduction Act of 1995
RFA Regulatory Flexibility Act
RVU Relative value unit
To assist readers in referencing sections contained in this
document, we are providing the following table of contents:
Table of Contents
I. Background
A. Legislative and Regulatory History
B. ASC Payment Method
C. Provisions of Public Law 108-173 (MMA)
D. Issuance of Proposed Rule
E. Changes to the ASC List for CY 2007
II. Revisions to the ASC Payment System Effective January 1, 2008
A. General
B. Factors Considered in the Development of the Revised ASC
Payment System
C. Rulemaking for the Revised ASC Payment System in CY 2008
III. Covered Surgical Procedures Paid in ASCs On or After January 1,
2008
A. Payable Procedures
1. Definition of Surgical Procedure
2. Procedures Excluded From Payment Under the Revised ASC
Payment System
a. Significant Safety Risk
b. Overnight Stay
B. Treatment of Unlisted Procedure Codes and Procedures That Are
Not Paid Separately Under the OPPS
C. Treatment of Office-Based Procedures
D. Specific Surgical Procedures Excluded From Payment Under the
Revised ASC Payment System
IV. Ratesetting Methodology for the Revised ASC Payment System
A. Overview of Current ASC Payment System
B. ASC Relative Payment Weights Based on APC Groups and Relative
Payment Weights Established Under the OPPS
C. Packaging Policy
1. General Policy
2. Policies for Specific Items and Services
a. Radiology Services
b. Brachytherapy Sources
c. Drugs and Biologicals
d. Implantable Devices With Pass-Through Status Under the OPPS
e. Implantable Devices Without Pass-Through Status Under the
OPPS
D. Payment for Corneal Tissue Under the Revised ASC Payment
System
E. Payment for Office-Based Procedures
F. Payment Policies for Multiple and Interrupted Procedures
1. Multiple Procedure Discounting Policy
2. Interrupted Procedure Policies
G. Geographic Adjustment
H. Adjustment for Inflation
I. Beneficiary Coinsurance
J. Phase-In of Full Implementation of Payment Rates Calculated
Under the Revised ASC Payment System Methodology
V. Calculation of ASC Conversion Factor and ASC Payment Rates for CY
2008
A. Overview
B. Budget Neutrality Requirement
C. Calculation of the ASC Payment Rates for CY 2008
1. Proposed Method for Calculation of the ASC Payment Rates for
CY 2008 in the August 2006 Proposed Rule
a. Estimated Medicare Program Payments (Excluding Beneficiary
Coinsurnace) Under the Current ASC Payment System in the August 2006
Proposed Rule
b. Estimated Medicare Program Payments (Excluding Beneficiary
Coinsurance) Under the Proposed Revised ASC Payment System in the
August 2006 Proposed Rule
c. Calculation of the Proposed CY 2008 Budget Neutrality
Adjustment in the August 2006 Proposed Rule
d. Application of the Budget Neutrality Adjustment To Determine
the Proposed CY 2008 ASC Conversion Factor in the August 2006
Proposed Rule
e. Calculation of the Proposed CY 2008 ASC Payment Rates Under
the Revised ASC Payment System in the August 2006 Proposed Rule
f. Calculation of the Proposed CY 2008 ASC Payment Rates Under
the Transition in the August 2006 Proposed Rule
2. Alternative Option for Calculating the Proposed Budget
Neutrality Adjustment in the August 2006 Proposed Rule
a. Estimated Medicare Program Payments (Excluding Beneficiary
Coinsurance)
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Under the Existing ASC Payment System in the August 2006 Proposed
Rule
b. Estimated Medicare Program Payments (Excluding Beneficiary
Coinsurance) Under the Proposed Revised ASC Payment System in the
August 2006 Proposed Rule
c. Calculation of the Proposed CY 2008 Budget Neutrality
Adjustment in the August 2006 Proposed Rule
d. Discussion of the Alternative Calculation of the Budget
Neutrality Adjustment
3. Calculation of the Estimated CY 2008 Budget Neutrality
Adjustment According to the Final Policy
4. Final Calculation of the Estimated ASC Payment Rates for CY
2008
a. Estimated CY 2008 Medicare Program Payments (Excluding
Beneficiary Coinsurance) Under the Existing ASC Payment System
b. Estimated Medicare Program Payments (Excluding Beneficiary
Coinsurance) Under the Revised ASC Payment System
c. Calculation of the Final Estimated CY 2008 Budget Neutrality
Adjustment
d. Calculation of the Final Estimated CY 2008 ASC Payment Rates
D. Calculation of the ASC Payment Rates for CY 2009 and Future
Years
1. Updating the ASC Relative Payment Weights
2. Updating the ASC Conversion Factor
E. Annual Updates
VI. Information in Addenda Related to the Revised CY 2008 ASC
Payment System
VII. ASC Regulatory Changes
A. Regulatory Changes That Were Finalized in the CY 2007 OPPS/
ASC Final Rule With Comment Period
B. Regulatory Changes Included in This Final Rule
VIII. Files Available to the Public Via the Internet
IX. Collection of Information Requirements
X. Regulatory Impact Analysis
A. Overall Impact
1. Executive Order 12866
2. Regulatory Flexibility Act
3. Small Rural Hospitals
4. Unfunded Mandates
5. Federalism
B. Effects of the Revisions to the ASC Payment System for CY
2008
1. Alternatives Considered
2. Limitations of Our Analysis
3. Estimated Effects of This Final Rule on ASCs
4. Estimated Effects of This Final Rule on Beneficiaries
5. Conclusion
6. Accounting Statement
C. Executive Order 12866
Regulation Text
Addendum AA.--Illustrative ASC Covered Surgical Procedures for CY
2008 (Including Surgical Procedures for Which Payment Is Packaged)
Addendum BB.--Illustrative ASC Covered Ancillary Services Integral
to Covered Surgical Procedures for CY 2008 (Including Ancillary
Services for Which Payment Is Packaged)
Addendum DD1.--Illustrative ASC Payment Indicators
I. Background
A. Legislative and Regulatory History
Section 1832(a)(2)(F)(i) of the Social Security Act (the Act)
provides that benefits under the Medicare Supplementary Medical
Insurance program (Part B) include payment for facility services
furnished in connection with surgical procedures specified by the
Secretary that are performed in an ambulatory surgical center (ASC). To
participate in the Medicare program as an ASC, a facility must meet the
standards specified in section 1832(a)(2)(F)(i) of the Act, which are
implemented in 42 CFR Part 416, Subpart B and Subpart C of our
regulations. The regulations at 42 CFR 416, Subpart B set forth general
conditions and requirements for ASCs, and the regulations at Subpart C
provide specific conditions for coverage for ASCs.
The ASC services benefit was enacted by Congress through the
Omnibus Reconciliation Act of 1980 (Pub. L. 96-499). For a detailed
discussion of the legislative history related to ASCs, we refer readers
to the June 12, 1998 proposed rule (63 FR 32291).
Section 1833(i)(1)(A) of the Act requires the Secretary to specify
surgical procedures that, although appropriately performed in an
inpatient hospital setting, also can be performed safely on an
ambulatory basis in an ASC, critical access hospital (CAH), or a
hospital outpatient department (HOPD). The report accompanying the
legislation explained that Congress intended procedures currently
performed on an ambulatory basis in a physician's office that do not
generally require the more elaborate facilities of an ASC not be
included in the list of ASC covered procedures (H.R. Rep. No. 96-1167,
at 390-91, reprinted in 1980 U.S.C.C.A.N. 5526, 5753-54). In a final
rule published on August 5, 1982, in the Federal Register (47 FR
34082), we established regulations that included criteria for
specifying which surgical procedures were to be included for purposes
of implementing the ASC facility benefit. Medicare only allows payment
to ASCs for procedures that are specified on the ASC list.
Section 626(b) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, Public Law 108-173, repealed the requirement
formerly found in section 1833(i)(2)(A) of the Act that the Secretary
conduct a survey of ASC costs for purposes of updating ASC payment
rates and, instead, requires the Secretary to implement a revised ASC
payment system, to be effective not later than January 1, 2008. Section
5103 of the Deficit Reduction Act of 2005 (DRA), Public Law 109-171,
amended section 1833(i)(2) of the Act by adding a new subparagraph (E)
to place a limitation on payments for surgical procedures in ASCs.
Section 1833(i)(2) of the Act provides that if the standard overhead
amount under section 1833(i)(2)(A) of the Act for a facility service
for such procedure, without application of any geographic adjustment,
exceeds the Medicare payment amount under the hospital outpatient
prospective payment system (OPPS) for the service for that year,
without application of any geographic adjustment, the Secretary shall
substitute the OPPS payment amount for the ASC standard overhead
amount. This provision applies to surgical procedures furnished in ASCs
on or after January 1, 2007, and before the effective date of the
revised ASC payment system implemented in this final rule.
In the November 24, 2006 final rule with comment period for the CY
2007 OPPS and ASC payment systems (71 FR 67960), we addressed the
changes in payment to ASCs mandated by section 5103 of Public Law 109-
171 and finalized Sec. 416.1(a)(5) of the regulations to implement
this provision. (Hereinafter, the November 24, 2006 final rule with
comment period is referred to as the CY 2007 OPPS/ASC final rule with
comment period.) We also addressed additions to and deletions from the
ASC list of covered surgical procedures that were implemented on
January 1, 2007. In addition, we made changes in the process to review
payment adjustments for insertion of new technology intraocular lenses
(NTIOLs) under section 1833(i)(2)(A)(iii) of the Act.
Section 416.65(a) of the regulations specifies general standards
for procedures on the ASC list. ASC procedures are those surgical and
other medical procedures that are--
Commonly performed on an inpatient basis but may be safely
performed in an ASC;
Not of a type that are commonly performed or that may be
safely performed in physicians' offices;
Limited to procedures requiring a dedicated operating room
or suite and generally requiring a postoperative recovery room or
short-term (not overnight) convalescent room; and
Not otherwise excluded from Medicare coverage.
Specific standards in Sec. 416.65(b) limit covered ASC procedures
to those that do not generally exceed 90 minutes operating time and a
total of 4 hours recovery or convalescent time. If
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anesthesia is required, the anesthesia must be local or regional
anesthesia, or general anesthesia of not more than 90 minutes duration.
Section 416.65(b)(3) of the regulations excludes from the ASC list
procedures that generally result in extensive blood loss, that require
major or prolonged invasion of body cavities, that directly involve
major blood vessels, or that are generally emergency or life-
threatening in nature.
A detailed history of published changes to the ASC list and ASC
payment rates can be found in the June 12, 1998 proposed rule (63 FR
32291). Subsequently, in accordance with Sec. 416.65(c), we published
updates of the ASC list in the Federal Register on March 28, 2003 (68
FR 15268), May 4, 2005 (70 FR 23690), and in the CY 2007 OPPS/ASC final
rule with comment period (71 FR 67960).
During years when we have not updated the ASC list in the Federal
Register, we have revised the list to be consistent with annual
calendar year changes to the Healthcare Common Procedure Coding System
(HCPCS) and Current Procedural Terminology (CPT) codes. These annual
coding updates have been implemented through program instructions to
the carriers that process ASC claims. (We note that Medicare Part B
carriers are transitioning to Medicare Administrative Contractors
(MACs) through 2011, as described in a final rule with comment period
published in the Federal Register on November 24, 2006 (71 FR 68229).)
We last issued program instructions to update the list only to conform
to CPT and HCPCS coding changes on December 20, 2006, via Transmittal
1134, Change Request 5211. This transmittal can be found on the CMS Web
site at: http://www.cms.hhs.gov/Transmittals/).
B. ASC Payment Method
On August 23, 2006, we proposed in the Federal Register (71 FR
49635) a revised payment system for ASCs to be implemented effective
January 1, 2008, in accordance with section 626(b) of Public Law 108-
173, including revisions to the ratesetting methodology and the
applicable ASC regulations to incorporate the requirements and payments
for ASC services under the revised ASC payment system. We also proposed
a new ``exclusionary'' approach for revising the ASC list of covered
surgical procedures beginning CY 2008. We proposed to evaluate surgical
procedures to identify those that could pose a significant safety risk
or that would be expected to require an overnight stay when performed
in ASCs, and that would, therefore, be excluded from Medicare payment
under the revised ASC payment system. Using that exclusionary method,
we developed a list of surgical procedures that we believed were safe
for Medicare beneficiaries in ASCs and that were appropriate for
Medicare payment. We proposed to adopt an exclusionary approach for
identifying surgical procedures that were appropriate for payment under
the revised ASC payment system, and the result of that process was a
proposed list of surgical procedures for which separate payment would
be made. We refer to that list of payable procedures hereinafter as the
ASC ``list of covered surgical procedures.''
There are two primary elements in the total cost of performing a
surgical procedure: (a) The cost of the physician's professional
services to perform the procedure; and (b) the cost of items and
services furnished by the facility where the procedure is performed
(for example, surgical supplies, equipment, and nursing services).
Payment for the first element is made under the Medicare Physician Fee
Schedule (MPFS). The August 2006 OPPS/ASC proposed rule addressed the
second element, payment for the cost of items and services furnished by
the facility.
Under the current ASC payment system, the ASC payment rate is a
standard overhead amount established on the basis of our estimate of a
fee that takes into account the costs incurred by ASCs generally in
providing facility services in connection with performing a specific
procedure. The report of the Conference Committee accompanying section
934 of the Omnibus Reconciliation Act of 1980 states that this overhead
amount is expected to be calculated on a prospective basis using sample
survey data and similar techniques to establish reasonable estimated
overhead allowances, which take into account volume (within reasonable
limits), for each of the listed procedures (H.R. Rept. No. 96-1479, at
134-35 (1980)).
As stated earlier, to establish those reasonable estimated
allowances for services furnished prior to implementation of the
revised ASC payment system, section 626(b)(1) of Public Law 108-73
amended section 1833(i)(2)(A)(i) of the Act that required us to take
into account the audited costs incurred by ASCs to perform a procedure
in accordance with a survey. Further, beginning January 1, 2007, and
prior to implementation of a revised ASC payment system, in accordance
with section 5103 of Pub. L. 109-171, no ASC standard overhead amount
may be greater than the OPPS payment rate for a given service for that
year. Except for screening colonoscopies and flexible sigmoidoscopies,
payment for ASC services is subject to the usual Medicare Part B
deductible and coinsurance requirements, and the amounts paid by
Medicare must be 80 percent of the standard overhead amount. As
required by section 1834(d) of the Act and implemented in regulations
at 42 CFR 410.152(i), the amount paid by Medicare must be 75 percent of
the fee schedule payment amount for screening colonoscopies and
flexible sigmoidoscopies.
Section 1833(i)(1) of the Act requires us to specify, in
consultation with appropriate medical organizations, surgical
procedures that are appropriately performed on an inpatient basis in a
hospital but that can be safely performed in an ASC, a CAH, or an HOPD
and to review and update the list of ASC procedures at least every 2
years.
Section 141(b) of the Social Security Act Amendments of 1994,
Public Law 103-432, requires us to establish a process for reviewing
the appropriateness of the payment amount provided under section
1833(i)(2)(A)(iii) of the Act for intraocular lenses (IOLs) that belong
to a class of NTIOLs. That process was the subject of a separate final
rule entitled ``Adjustment in Payment Amounts for New Technology
Intraocular Lenses Furnished by Ambulatory Surgical Centers,''
published on June 16, 1999, in the Federal Register (64 FR 32198). We
proposed changes to the NTIOL request for review process in the CY 2007
OPPS/ASC proposed rule published in the Federal Register on August 23,
2006 (71 FR 49631 through 49635) and finalized changes to that process
in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68175
through 68181).
C. Provisions of Public Law 108-173 (MMA)
Section 626(a) of Public Law 108-173 (MMA) amended section
1833(i)(2)(C) of the Act, which requires the Secretary to update ASC
payment rates using the Consumer Price Index for All Urban Consumers
(CPI-U) (U.S. city average) if the Secretary has not otherwise updated
the amounts under the revised ASC payment system. As amended by Pub. L.
108-173, section 1833(i)(2)(C) of the Act requires that, if the
Secretary is required to apply the CPI-U increase, the CPI-U percentage
increase is to be applied on a fiscal year (FY) basis beginning with FY
1986 through FY 2005 and on a
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calendar year (CY) basis beginning with CY 2006.
Section 626(a) of Public Law 108-173 further amended section
1833(i)(2)(C) of the Act to require us in FY 2004, beginning April 1,
2004, to increase the ASC payment rates using the CPI-U as estimated
for the 12-month period ending March 31, 2003, minus 3.0 percentage
points. Section 626(a) of Public Law 108-173 also requires that the
CPI-U adjustment factor equal zero percent in FY 2005, the last quarter
of CY 2005, and each calendar year from CY 2006 through CY 2009.
Section 626(b) of Public Law 108-173 repealed the requirement that
CMS conduct a survey of ASC costs upon which to base a standard
overhead payment amount for surgical services performed in ASCs, and
added section 1833(i)(2)(D) of the Act. Section 1833(i)(2)(D)(iii) of
the Act requires us to implement by no earlier than January 1, 2006,
and not later than January 1, 2008, a revised ASC payment system. The
revised payment system under section 1833(i)(2)(D)(i) of the Act is to
take into account the recommendations contained in a Report to Congress
that the Government Accountability Office (GAO) was required to submit
by January 1, 2005. Section 1833(i)(2)(D)(ii) of the Act requires that
the revised ASC payment system be designed to result in the same
aggregate amount of expenditures for surgical services furnished in
ASCs the year the system is implemented as would be made if the new
system did not apply as estimated by the Secretary. This requirement is
to take into account the limitation in ASC expenditures resulting from
implementation of section 5103 of Public Law 109-171 beginning January
1, 2007, as we described in sections XVII.A.1. and XVII.E. of the
preamble to the CY 2007 OPPS/ASC final rule with comment period (71 FR
68165 and 68174, respectively).
Section 1833(i)(2)(D)(iv) of the Act exempts the classification
system, relative weights, payment amounts, and geographic adjustment
factor (if any) under the revised ASC payment system from
administrative and judicial review.
Section 626(c) of Public Law 108-173 added a conforming amendment
to section 1833(a)(1) of the Act, which provides that the amounts paid
under the revised ASC payment system shall equal 80 percent of the
lesser of the actual charge for the services or the payment amount that
we determine under the revised ASC payment system.
D. Issuance of Proposed Rule
As stated earlier, in the August 23, 2006 Federal Register (71 FR
49635), we proposed to implement revisions to the ASC payment system so
that the revised system is first effective on January 1, 2008.
In addition, we set forth an analysis of the impact that the
proposed revised ASC payment system would have on affected entities and
Medicare beneficiaries.
We received over 8,900 pieces of correspondence in response to our
August 23, 2006 proposal for the revised ASC payment system, which
included some comments recommending various changes to how CMS pays for
ASC services and processes ASC claims that we did not propose in the
August 23, 2006 Federal Register. While we read those comments with
interest, we generally do not address them, nor have we made any
changes in this final rule based on them. We summarize the numerous
comments and recommendations that are pertinent to what we proposed,
and we respond to them in the appropriate sections of this final rule.
E. Changes to the ASC List for CY 2007
As part of the CY 2007 OPPS/ASC final rule with comment period, we
finalized additions to and deletions from the ASC list of covered
surgical procedures, effective January 1, 2007 (71 FR 68166). We did
not change the criteria for adding or deleting items from the ASC list
effective January 1, 2007. However, in the August 2006 proposed rule
(71 FR 49628), we discussed changes to the criteria in the context of
developing the proposed revised ASC payment system to be effective
January 1, 2008. The changes to the criteria that we proposed resulted
in the proposed addition for CY 2008 of many procedures that do not
meet the current criteria for addition to the list.
II. Revisions to the ASC Payment System Effective January 1, 2008
A. General
As we discussed earlier, generally, there are two primary elements
in the total cost of performing a surgical procedure: (a) The cost of
the physician's professional services for performing the procedure; and
(b) the cost of services furnished by the facility where the procedure
is performed (for example, surgical supplies, equipment, nursing
services, and overhead). The former is covered by the MPFS. The latter
is covered by a Medicare benefit enacted in 1980 that authorized
payment of a fee to ASCs for services furnished in connection with
performing certain surgical procedures.
Section 1833(i)(1) of the Act requires us to specify surgical
procedures that are appropriately and safely performed on an ambulatory
basis in an ASC. Moreover, we are required to review and update the
list of these procedures not less often than every 2 years, in
consultation with appropriate trade and professional associations. The
ASC list of covered surgical procedures was limited in 1982 to
approximately 100 procedures. Currently, the list consists of more than
2,500 CPT codes encompassing a cross-section of surgical services,
although 150 of these codes account for more than 90 percent of the
approximately 4.5 million procedures paid for each year under the ASC
Part B benefit. Eye, pain management, and gastrointestinal endoscopic
procedures are the highest volume ASC surgeries performed under the
present ASC payment system.
In CY 2007, Medicare only allows payment to ASCs for procedures on
the ASC list of covered surgical procedures. Except for screening
colonoscopy services, payment for ASC facility services is subject to
the usual Medicare Part B deductible and coinsurance requirements, and
the amounts paid by Medicare must be 80 percent of the standard
overhead amount. As discussed earlier, under section 626(b) of Public
Law 108-173, Congress mandated implementation of a revised payment
system for ASC surgical services by no later than January 1, 2008.
Public Law 108-173 set forth several requirements for the revised
payment system, but did not amend those provisions of the statute
pertaining to the ASC list.
As we proposed in the August 2006 proposed rule (71 FR 49635), in
this final rule, we address two components of the ASC payment system
that will go into effect January 1, 2008. First, we are establishing
the ASC list of covered surgical procedures for which an ASC may
receive Medicare payment for facility services under the revised ASC
payment system, as well as those covered ancillary services that may be
separately paid if they are provided integral to a covered surgical
procedure. Second, we are specifying the method we will use to set
payment rates for ASC services furnished in association with covered
surgical procedures. In this final rule, we also specify the regulatory
changes that we are making to 42 CFR Parts 410 and 416 to incorporate
the rules governing ASC payments that will be applicable beginning in
CY 2008.
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B. Factors Considered in the Development of the Revised ASC Payment
System
On August 2, 2005, we convened a listening session teleconference
on revising the Medicare ASC payment system. Over 450 callers
participated, including ASC staff, physicians, and representatives of
industry trade associations. The listening session provided an
opportunity for participants to identify the issues and concerns that
they wanted us to address as we developed the revised ASC payment
system.
Callers encouraged us to foster beneficiary access to ASCs by
creating incentives for physicians to use ASCs. The issues raised by
participants included suggestions to expand or eliminate altogether the
ASC list, recommendations to model payment on the OPPS, and concerns
about how we would propose to treat the geographic wage index
adjustment and the annual ASC payment rate update. Several callers also
raised concerns about ensuring adequate payment for supplies, ancillary
services, and implantable devices under the revised payment system, as
well as developing a process to allow special payment for new
technology.
We also met with representatives of the ASC industry over the past
several years to discuss options for ratesetting other than conducting
a survey, to discuss timely updates to the ASC list, and to listen to
industry concerns related to the implementation of a revised payment
system. We appreciate the thoughtful suggestions that were presented.
We considered the concerns and issues brought to our attention, the
proposals for revising the ASC list of covered surgical procedures, and
the suggested methods by which we could set ASC payment rates in
developing the policies in this final rule.
In the August 23, 2006 Federal Register (71 FR 49506), we proposed
the policies for the revised ASC payment system to be effective
beginning in CY 2008. In response to those proposed policies, we
received over 8,900 pieces of correspondence from the public that we
are addressing in this final rule.
Subsequent to publication of the August 2006 proposed rule for the
revised ASC payment system, the GAO published the statutorily mandated
report entitled, ``Medicare: Payment for Ambulatory Surgical Centers
Should Be Based on the Hospital Outpatient Payment System'' (GAO-07-86)
on November 30, 2006. We considered the report's methodology, findings,
and recommendations in the development of this CY 2008 final rule for
the revised ASC payment system. The GAO methodology, results, and
recommendations are summarized below.
The GAO was directed to conduct a study comparing the relative
costs of procedures furnished in ASCs to those furnished in HOPDs paid
under the OPPS, including examining the accuracy of the ambulatory
payment classifications (APC) with respect to surgical procedures
furnished in ASCs. Section 626(d) of Pub. L. 108-173 indicated that the
report should include recommendations on the following matters:
1. Appropriateness of using groups of covered services and relative
weights established for the OPPS as the basis of payment for ASCs.
2. If the OPPS relative weights are appropriate for this purpose,
whether the ASC payments should be based on a uniform percentage of the
payment rates or weights under the OPPS, or should vary, or the weights
should be revised based on specific procedures or types of services.
3. Whether a geographic adjustment should be used for ASC payment
and, if so, the labor and nonlabor shares of such payment.
To compare the relative costs of procedures performed in ASCs and
HOPDs, the GAO first compiled information on ASCs' costs and the
surgical procedures performed. It conducted a survey of 600 randomly
selected ASCs from the universe of all ASCs to obtain their CY 2004
cost and procedure data. The GAO received 397 responses from facilities
and, through data reliability testing, determined that data from 290
responding facilities were sufficiently reliable and geographically
representative of ASCs. Furthermore, to compare the delivery of
surgical procedures and their relative costs between ASC and HOPD
settings, the GAO analyzed OPPS claims data from CY 2003. It also
interviewed officials at CMS, representatives from ASC industry
organizations and physician specialty societies, and representatives
from nine ASCs.
In order to allocate ASCs' total costs among the individual
procedures they performed, the GAO developed a specific methodology to
allocate the portion of an ASC's costs accounted for by each procedure.
It constructed a relative weight scale for Medicare's covered ASC
procedures that captured the general variation in resources associated
with performing different procedures. Primarily, it used data that CMS
collects for the purpose of setting the practice expense component of
physician payment rates, supplemented by information from specialty
societies and physicians who work for CMS for those procedures for
which CMS had no data on the resources used.
To calculate per-procedure costs based upon data gathered through
its survey of ASCs, the GAO deducted costs that Medicare considers
unallowable, that is, advertising and entertainment costs. In addition,
it also removed costs for services that Medicare pays for separately,
such as physician and nonphysician practitioner services. The remaining
facility costs were then divided into direct and indirect costs. The
GAO defined direct costs as those associated with the clinical staff,
equipment, and supplies utilized during the procedure. Indirect costs
included all remaining costs. Next, to allocate each facility's direct
costs across the procedures it performed, the GAO applied its relative
weight scale. It allocated indirect costs equally across all procedures
performed by the facility. For each procedure performed by a responding
ASC facility, it summed the allocated direct and indirect costs to
determine a total cost for the procedure. To obtain a per-procedure
cost across all ASCs, the GAO arrayed the calculated costs for all ASCs
performing that procedure and identified the median cost.
To compare per-procedure costs for ASCs and HOPDs, the GAO obtained
the list of OPPS APCs and their assigned procedures, along with the
OPPS median cost of each procedure and its related APC group. It then
calculated a ratio between each procedure's ASC median cost as
determined by the survey and the median cost of the procedure's
corresponding APC group under the OPPS, referred to as the ASC-to-APC
cost ratio. It calculated a corresponding ratio between each ASC
procedure's median cost under the OPPS and the median cost of the
procedure's APC group using CMS data, referred to as the OPPS-to-APC
cost ratio. In order to evaluate the difference in procedure costs
between the two settings, the GAO compared the ASC-to-APC cost ratio to
the OPPS-to-APC cost ratio. Next, to assess how well the relative costs
of procedures in the OPPS, defined by their assignment to APC groups,
reflect the relative costs of procedures in the ASC setting, it
evaluated the distribution of both the ASC-to-APC cost ratios and the
OPPS-to-APC cost ratios.
The GAO also analyzed Medicare claims data for the top 20
procedures with the highest Medicare ASC claims volume in CY 2004 to
examine the delivery of additional services with
[[Page 42475]]
surgical procedures in ASCs and HOPDs. Last, to calculate the
percentage of labor-related costs among the responding ASCs, for each
ASC, the GAO divided total labor costs by total costs and then
determined the range of the percentage of labor-related costs among all
of the ASCs between the 25th and the 75th percentile, as well as the
mean and median percentage of labor-related costs.
Based on its extensive analyses, the GAO determined that the APC
groups in the OPPS accurately reflect the relative costs of the
procedures performed in ASCs. GAO's analysis of the cost ratios showed
that the ASC-to-APC cost ratios were more tightly distributed around
their median cost ratio than were the OPPS-to-APC cost ratios. These
patterns demonstrated that the APC groups reflect the relative costs of
procedures performed by ASCs and, therefore, that the APC groups could
be used as the basis for an ASC payment system. The GAO determined, in
fact, that there was less variation in the ASC setting between
individual procedures' costs and the costs of their assigned APC groups
than there is in the HOPD setting. It concluded that, as a group, the
costs of procedures performed in ASCs have a relatively consistent
relationship with the costs of the APC groups to which they would be
assigned under the OPPS. The GAO's analysis also found that procedures
in the ASC setting had substantially lower costs than those same
procedures in the HOPD. While ASC costs for individual procedures
varied, in general, the median costs for procedures were lower in ASCs,
relative to the median costs of their APC groups, than the median costs
for the same procedures in the HOPD setting. The median cost ratio
among all ASC procedures was 0.39 (0.84 when weighted by Medicare
volume based on CY 2004 claims), whereas the median cost ratio among
all OPPS procedures was 1.04.
The GAO found many similarities in the additional items and
services provided by ASCs and HOPDs for the top 20 ASC procedures.
However, of these additional items and services, few resulted in
additional payment in one setting but not the other. HOPDs were paid
for some of the related services separately, while in the ASC setting,
other Part B suppliers billed Medicare and received payment for many of
the related services.
Finally, in its analysis of labor-related costs, the GAO determined
that the mean labor-related proportion of costs was 50 percent. The
range of the labor-related costs for the middle 50 percent of
responding ASCs was 43 percent to 57 percent of total costs.
Based on its findings from the study, the GAO recommended that CMS
implement a payment system for procedures performed in ASCs based on
the OPPS, taking into account the lower relative costs of procedures
performed in ASCs compared to HOPDs in determining ASC payment rates.
Comment: A number of commenters noted that, by the close of the
public comment period for the August 2006 proposed rule for the revised
ASC payment system, the GAO had not yet provided recommendations
regarding ASC payment in a report to Congress that it was required to
submit by January 1, 2005. Some commenters recommended that, although
CMS was directed to take into account these recommendations in
implementing the revised ASC payment system, should the GAO's
recommendations be provided before publication of the final rule
establishing the policies of the revised ASC payment system, CMS should
not take them into consideration, given the public's inability to
provide input to CMS during the comment period regarding the GAO's
methodology, findings, and recommendations. Other commenters
recommended that, if the GAO Report was forthcoming shortly, CMS should
provide another opportunity for public comment prior to finalizing the
policies of the revised ASC payment system in order to allow the public
to provide CMS with their perspectives on those recommendations.
Response: As described earlier, the GAO published its report (GAO-
07-86) on November 30, 2006. In accordance with section
1833(i)(2)(D)(i) of the Act, we did take into account the
recommendations made in the GAO Report in developing the final policies
for the revised ASC payment system. The GAO's findings and
recommendations are summarized above, and its specific recommendations
are further discussed in the particular sections of this final rule
that address the related topics. We appreciate the public's interest in
providing us with detailed input regarding the revised ASC payment
system from a variety of perspectives. In regard to the commenters'
recommendation for a second opportunity for public comment prior to
finalizing the policies of the revised ASC payment system after the GAO
Report was published, we note that the GAO's recommendations are in
complete accord with our August 2006 proposal for the revised ASC
payment system. Therefore, we are not providing another opportunity for
public comment prior to finalizing the policies of the revised ASC
payment system, because the proposed revised system is fully consistent
with the recommendations of the GAO Report and we already provided a
90-day comment period regarding our proposal for CY 2008. We believe
that the comment period for the August 2006 proposed rule provided the
public with ample opportunity to comment on the policies that were
recommended by the GAO. The considerable operational changes required
to implement the revised ASC payment system necessitate significant
lead time that would not be possible if we were to provide another
comment period prior to finalizing the policies. We also believe that
our consideration of the recent GAO study, as well as other available
information regarding HOPD and ASC costs and payments, in addition to
our prior discussions with stakeholders and the many public comments on
the proposed rule, provide us with the necessary breadth and depth of
information and viewpoints to finalize our payment policies for the
revised ASC payment system in this final rule.
At its December 2006 meeting, the Practicing Physicians Advisory
Council (PPAC) made two recommendations to CMS regarding the final rule
for the revised ASC payment system. First, the PPAC recommended that
CMS establish a process to consult with national medical specialty
societies and the ASC community to develop and adopt a systematic and
adaptable means of fairly reimbursing ASCs for all safe and appropriate
services, allowing for changes in technology and current day practice.
Second, the PPAC recommended that CMS apply any payment policies
uniformly to both ASCs and HOPDs, as appropriate.
We have considered the GAO Report, in addition to the
recommendations of the PPAC, all public comments received on the
proposed rule, and other concerns and issues brought to our attention
by interested parties over the past several years, in developing this
final rule for the CY 2008 revised ASC payment system. Specific
policies are discussed, comments summarized and responses provided, and
policies finalized in subsequent sections of this final rule.
C. Rulemaking for the Revised ASC Payment System in CY 2008
In response to comments submitted timely regarding the proposals
set forth in the proposed rule for the revised ASC payment system
published on August 23, 2006, this final rule establishes the final
policies and regulations of the
[[Page 42476]]
revised ASC payment system for initial implementation in CY 2008. All
tables included in this final rule listing HCPCS codes subject to
pertinent final policies of the revised ASC payment system, as well as
estimated payment rates, are illustrative only, based on CY 2007 HCPCS
codes and final CY 2007 OPPS and MPFS information, with application of
the most current update estimates for CY 2008. The information in the
Addenda to this final rule is also only illustrative, to provide
examples of the results of applying the final policies of the revised
ASC payment system, based on the most recent information available for
CY 2007. As further discussed in sections V.E. and VI. of this final
rule, we will propose the CY 2008 relative payment weights, payment
amounts, specific HCPCS codes to which the final policies of the
revised ASC payment system would apply, and other pertinent ratesetting
information for the CY 2008 revised ASC payment system in the proposed
OPPS/ASC rule to update the payment systems for CY 2008 to be issued in
mid-summer of CY 2007. We will then publish final relative payment
weights, payment amounts, specific CY 2008 HCPCS codes to which the
final policies will apply, and other pertinent ratesetting information
for the CY 2008 revised ASC payment system in the final OPPS/ASC rule
to update the payment systems for CY 2008. The ASC payment system
treatment of new CY 2008 HCPCS codes published in the CY 2008 OPPS/ASC
final rule will provide interim determinations, open to public comment
on that final rule, and we will respond to comments about those
determinations in the OPPS/ASC final rule for CY 2009.
III. Covered Surgical Procedures Paid in ASCs On or After January 1,
2008
A. Payable Procedures
In its March 2004 Report to the Congress, the Medicare Payment
Advisory Commission (MedPAC) recommended replacing the current
``inclusive'' list of procedures, which are the only surgical
procedures for which Medicare allows payment to an ASC, with an
``exclusionary'' list. That is, rather than limiting payment to ASCs to
a list of procedures that CMS specifies, Medicare would allow payment
to ASCs for any surgical procedure except those that CMS explicitly
excludes from payment. MedPAC further recommended that clinical safety
standards and the need for an overnight stay be the only criteria for
excluding a procedure from eligibility for Medicare ASC payment. MedPAC
suggested that some of the criteria, such as site-of-service volume and
time limits, which we have used in the past to identify procedures for
the ASC list of covered surgical procedures, are probably no longer
clinically relevant.
In the August 2006 proposed rule for the revised ASC payment
system, we noted that we had given careful consideration to MedPAC's
recommendations and participated in considerable discussion and
consultation with members of ASC trade associations and physicians, who
represent a variety of surgical specialties, regarding the criteria
that we would use to identify procedures for payment under the revised
ASC payment system. We agreed that adoption of a policy similar to that
recommended by MedPAC would serve both to protect beneficiary safety
and increase beneficiary access to procedures in appropriate clinical
settings, recognizing the ASC industry's interest in obtaining Medicare
payment for a much wider spectrum of services than is now allowed.
Therefore, in the August 2006 proposed rule (71 FR 49636), we proposed
that, under the revised ASC payment system for services furnished on or
after January 1, 2008, Medicare would allow payment to ASCs for any
surgical procedure performed in an ASC, except those surgical
procedures that we determine are not payable under the ASC benefit.
Further, we proposed to establish beneficiary safety and the
expected need for an overnight stay as the principal clinical
considerations and decisive factors in determining whether ASC payment
would be allowed for a particular surgical procedure. As discussed in
section XVIII.B.2. of the preamble of the proposed rule, we also
proposed to exclude from separate payment under the revised ASC payment
system those surgical procedures that are on the OPPS inpatient list,
that are not eligible for separate payment under the OPPS, and that are
CPT surgical unlisted procedure codes.
We discuss below the criteria that we proposed as the basis for
identifying procedures that would pose a significant safety risk to a
Medicare beneficiary when performed in an ASC, or procedures following
which we would expect a Medicare beneficiary to require overnight care.
1. Definition of Surgical Procedure
In order to delineate the scope of procedures that constitute
``outpatient surgical procedures'' in the August 2006 proposed rule, we
first proposed to clarify what we considered to be a ``surgical''
procedure. Under the existing ASC payment system, we define a surgical
procedure as any procedure described within the range of Category I CPT
codes that the CPT Editorial Panel of the American Medical Association
(AMA) defines as ``surgery'' (CPT codes 10000 through 69999). Under the
revised payment system, we proposed to continue to define surgery using
that standard. The CPT Editorial Panel is responsible for maintaining
the CPT nomenclature, with authority to revise, update, or modify the
CPT codes. A larger body of CPT advisors, the CPT Advisory Committee,
supports the work of the CPT Editorial Panel. Members of the CPT
Editorial Panel include individuals nominated by physician and hospital
associations and insurers, providing for diverse specialty input.
In addition, in the August 2006 proposed rule for the revised ASC
payment system, we proposed to include within the scope of surgical
procedures payable in an ASC those procedures that are described by
Level II HCPCS codes or by Category III CPT codes that directly
crosswalk to or are clinically similar to procedures in the CPT
surgical range. We proposed to include all three types of codes in our
definition of surgical procedures because they all may be eligible for
separate payment under the OPPS and, to the extent it is reasonable to
do so, we proposed that the revised ASC payment system parallel the
OPPS in its policies.
In the August 2006 proposed rule, we provided an example of a Level
II HCPCS code that we believe represents a procedure that could be
safely and appropriately performed in an ASC, specifically HCPCS code
G0297 (Insertion of single chamber pacing cardioverter-defibrillator
pulse generator). We developed this Level II HCPCS code for use in the
OPPS because CPT code 33240 (Insertion of single or dual chamber pacing
cardioverter-defibrillator pulse generator), which describes the
surgical insertion of a cardioverter-defibrillator pulse generator,
does not distinguish insertion of a single chamber cardioverter-
defibrillator generator from insertion of a dual chamber cardioverter-
defibrillator generator. Under the OPPS, we were concerned that
different facility resources could be required for the insertion of
these two types of cardioverter-defibrillator pulse generators, so we
developed Level II HCPCS codes to permit HOPDs to more accurately
report the resources required when these surgical procedures are
performed. In instances such as this, when a Level II HCPCS code is
[[Page 42477]]
established as a substitute for a CPT surgical procedure code which
does not adequately describe, from a facility perspective, the nature
of a surgical service, we proposed to allow payment for the Level II
HCPCS code under the proposed revised ASC payment system. We proposed
not to allow ASC payment for Level II HCPCS codes or Category III CPT
codes that describe services that fall outside the scope of, that is,
that do not correspond to, surgical procedures described by CPT codes
10000 through 69999.
We recognized in the proposed rule that continuing to use this
definition of surgery would exclude from ASC payment certain invasive,
``surgery-like'' procedures, such as cardiac catheterization or certain
radiation treatment services which are assigned codes outside the CPT
surgical range. However, we believed that continuing to rely on the CPT
definition of surgery would be administratively straightforward,
logically related to the categorization of services by physician
experts who both establish the codes and perform the procedures, and
consistent with our proposal to allow ASC payment for all outpatient
surgical procedures. Given the number of other changes that we expected
to implement as part of the revised payment system, along with the
significant expansion of ASC covered surgical procedures that we
proposed, we explained that we believed it would be prudent at the
outset to continue to define surgery as it is defined by the CPT code
set, which is used to report services for payment under both the MPFS
and the OPPS. During the development of the August 2006 proposed rule,
we reviewed thousands of CPT codes in the surgical range (CPT codes
10000 through 69999), and we proposed to not exclude from payment over
750 surgical procedures previously excluded, in addition to providing
ASC payment for the more than 2,500 CPT codes on the CY 2007 ASC list
of covered surgical procedures.
However, we are cognizant of the dynamic nature of ambulatory
surgery, which has resulted in a dramatic shift of services from the
inpatient setting to the outpatient setting over the past two decades.
Therefore, in the proposed rule, we solicited comments regarding other
services that are invasive and ``surgery-like,'' which could safely and
appropriately be performed in an ASC, and which require the resources
typical of an ASC, even though the procedures are described by codes
that fall outside the range of CPT surgical codes. In particular, we
were interested in considering commenters' views regarding what
constitutes a ``surgical'' procedure.
We received many public comments about our August 2006 proposal to
define the surgical procedures for which we would make payment to ASCs
as those falling within the surgical code range specified by the CPT
Editorial Panel.
Comment: While, in general, hospital associations and device
manufacturers supported the proposal to maintain the definition of a
surgical procedure used under the existing ASC payment system, many ASC
industry representatives provided a broad range of suggestions about
how the definition should be expanded. Some of the commenters requested
that CMS place no limit on the procedures that would be payable in ASCs
because there is no such limit on Medicare payments to HOPDs. Other
commenters suggested a more limited expansion of procedures eligible
for payment under the revised ASC payment system. These commenters
specifically recommended that CMS expand its definition of a surgical
procedure to include:
(a) Medical procedures that are invasive and require general
anesthesia or that are specifically designated as intraoperative
procedures;
(b) X-ray, fluoroscopy, and ultrasound procedures that require
insertion of a needle, catheter, tube, or probe via a natural orifice
or through the skin;
(c) Radiology procedures integral to performance of nonradiologic
procedures, performed either during or immediately following the
surgical procedure; and
(d) Level II HCPCS and Category III CPT codes that describe
procedures that crosswalk directly or are clinically similar to those
listed in suggestions (a) through (c) above.
Response: We have given consideration to the many recommendations
of the commenters. In general, we continue to believe it is appropriate
to provide payments to ASCs for the resources associated with
performing those services that are surgical procedures as defined by
the CPT Editorial Panel. From the Panel's broad experience in regularly
addressing the complex issues associated with new and emerging health
care technologies, as well as the difficulties encountered with
obsolete procedures, we believe its members are well-positioned to
maintain and refine the existing coding taxonomy, which defines certain
procedures as surgery, to appropriately reflect medical practice in an
evolving health care delivery system. In addition, we believe that our
proposal to pay for surgical procedures in ASCs that are reported by
Level II HCPCS and Category III CPT codes that directly crosswalk or
are clinically similar to procedures in the surgical range of CPT codes
that are payable in ASCs is consistent with our definition of surgery
according to the CPT surgical code range, while providing ASC payment
for some procedures that have not yet been categorized by the CPT
Editorial Panel or for which Medicare recognizes alternative HCPCS
codes for payment.
Although we are not changing our definition of surgery as suggested
by commenters, we did review procedures that are coded by specific
Level II HCPCS or Category III CPT codes that were identified by
commenters as surgical procedures that should be payable in ASCs. We
assessed those procedures using the same final criteria discussed in
section III.A.2. of this final rule that we used to evaluate all
surgical procedures for their safety or the expected need for an
overnight stay in making decisions about their exclusion from ASC
payment. As we proposed, we also evaluated the codes in the context of
whether they directly crosswalk or are clinically similar to procedures
in the CPT surgical range that we have determined do not pose a
significant safety risk or for which an overnight stay is not expected
when performed in ASCs. As a result of that review, 14 additional Level
II HCPCS codes and 15 Category III CPT codes beyond those we proposed
for CY 2008 payment will be payable as covered surgical procedures when
performed in ASCs beginning in CY 2008.
Furthermore, as discussed in section IV. of this final rule,
although we are not expanding our definition of surgical procedures, we
will provide separate ASC payment for a number of covered ancillary
services when they are furnished on the same day as a covered surgical
procedure and are integral to the performance of that procedure in the
ASC setting. Those services include certain radiology procedures, such
as some fluoroscopy and ultrasound services, that some commenters
recommended we define as surgical procedures for addition to the ASC
list of covered surgical procedures.
Comment: Several commenters expressed concern regarding CMS'
proposed exclusion from ASC payment of all procedures described within
the range of Category I CPT codes defined as ``radiology'' in
accordance with the CPT Editorial Panel designation. The commenters
asserted that regulations regarding the Federal physician self-referral
prohibition (section 1877 of the Act) exclude interventional and
[[Page 42478]]
intraoperative radiology services from the definition of ``radiology''
services subject to the law's self-referral prohibition, and that CMS
should, therefore, treat those services as surgical services that are
eligible for payment as covered surgical procedures under the revised
ASC payment system. They believed that interventional radiology and
intraoperative radiology services that require insertion of a needle,
catheter, tube, probe, or similar device are appropriately considered
surgical in nature for purposes of ASC payment.
Response: The commenters' statements with respect to the treatment
of interventional radiology procedures under the physician self-
referral regulations seem overly broad. The physician self-referral
regulations provide that the following services (which may include
some, but not all, interventional radiology procedures) are not
``radiology and certain other imaging services'' for purposes of
section 1877 of the Act: (i) X-ray, fluoroscopy, or ultrasound
procedures that require the insertion of a needle, catheter, tube, or
probe through the skin or into a body orifice; and (ii) radiology
procedures that are integral to the performance of a nonradiological
medical procedure and performed either during the nonradiological
medical procedure or immediately following the nonradiological medical
procedure when necessary to confirm placement of an item inserted
during the nonradiological medical procedure. We do not believe that
Medicare's exclusion of specific services from the definition of
``radiology and certain other imaging services'' for purposes of the
physician self-referral prohibition should result in such services
being considered ``surgical services'' for purposes of the revised ASC
payment system.
Further, as we explain above, we believe that the characterization
of procedures as surgery for purposes of their performance in ASCs is
best left to the expertise of the CPT Editorial Panel. We do not
believe that services designated as radiology services by the CPT
Editorial Panel are appropriately classified as covered surgical
procedures in ASCs, facilities that specialize in the delivery of
ambulatory surgical services. However, as discussed further in section
IV.C.2. of this final rule, we do believe that it is appropriate to
provide separate ASC payment for certain ancillary services that are
integral to the covered surgical procedures. Thus, we will provide
separate payment to ASCs under the revised payment system for radiology
services that are integral to the performance of an ASC covered
surgical procedure when that radiology procedure is one of those for
which separate payment is made under the OPPS. That is, separate
payment will be made for covered ancillary radiology services integral
to covered surgical procedures that are provided in the ASC immediately
before, during, or immediately following the surgical procedure.
After consideration of the public comments we received, we are
finalizing our proposal to define surgery as those procedures described
by CPT codes within the surgical range of 10000 through 69999, without
modification. In addition, we are including within our definition of a
covered surgical procedure payable in the ASC setting those Level II
HCPCS codes or Category III CPT codes that directly crosswalk or are
clinically similar to procedures in the CPT surgical range that we have
determined do not pose a significant safety risk, that we would not
expect to require an overnight stay when performed in ASCs, and that
are separately paid under the OPPS. An illustrative list of covered
surgical procedures under the revised ASC payment system, including
Category I and Category III CPT codes and Level II HCPCS codes, can be
found in Addendum AA to this final rule. An illustrative list of
radiology services and other covered ancillary services that are
eligible for separate ASC payment when provided integral to an ASC
covered surgical procedure on the same day is located in Addendum BB to
this final rule.
2. Procedures Excluded From Payment Under the Revised ASC Payment
System
As stated above, in the August 2006 proposed rule for the revised
ASC payment system, we proposed to allow payment to ASCs for all
procedures described by CPT codes within the surgical range of 10000
through 69999, or by Level II HCPCS codes or Category III CPT codes
that directly crosswalk or are clinically similar to procedures in the
CPT surgical range, that do not pose a significant safety risk to
Medicare beneficiaries and that are not expected to require an
overnight stay. Having established what we consider to be a ``surgical
procedure,'' we next considered criteria that would enable us to
identify procedures that could pose a significant safety risk when
performed in an ASC or that we expect would require an overnight stay
within the bounds of prevailing medical practice. We discuss in the
next section how we proposed to identify procedures that could pose a
significant safety risk.
a. Significant Safety Risk
First, we proposed to exclude from ASC payment any procedure that
is included on the current OPPS inpatient list, that is, those
procedures designated as requiring inpatient care under Sec.
419.22(n). (See Addendum E to the CY 2007 OPPS/ASC final rule with
comment period (71 FR 68385 through 68398).) The procedures included on
that list are typically performed in the hospital inpatient setting due
to the nature of the procedure, the need for at least 24 hours of
postoperative recovery time or monitoring before the patient can be
safely discharged, or the underlying physical condition of the patient.
We believed that any procedure for which we did not allow payment in
the hospital outpatient setting due to safety concerns would not be
safe to perform in an ASC.
Second, we proposed to exclude from ASC payment procedures that the
CY 2005 Part B Extract Summary System (BESS) data indicated were
performed 80 percent or more of the time in the hospital inpatient
setting, even if those procedures were not included on the OPPS
inpatient list. We selected an 80-percent threshold because we believed
that an 80-percent level of inpatient performance was a fair indicator
that a procedure is most appropriately performed on an inpatient basis
and, as such, would pose a significant safety risk for Medicare
beneficiaries if performed in an ASC. We believed that procedures with
inpatient utilization frequencies above the proposed threshold were
complex and were likely to require a longer and more intensive level of
care postoperatively than what is provided in a typical ASC. We also
believed that performing these procedures in an ASC, where immediate
access to the full resources of an acute care hospital is not the norm,
would pose a significant safety risk for beneficiaries.
Third, we proposed to retain some of the specific criteria for
evaluating safety risks that are listed in Sec. 416.65(b)(3) of our
existing regulations. Procedures that involve major blood vessels,
major or prolonged invasion of body cavities, extensive blood loss, or
are emergent or life-threatening in nature could, by definition, pose a
significant safety risk. Therefore, we proposed to exclude from ASC
payment surgical procedures that may be expected to involve any of
these characteristics, based on evaluation by our medical advisors. We
noted that most of the procedures that our medical advisors identified
as involving any of the characteristics listed in Sec. 416.65(b)(3)
also require overnight or
[[Page 42479]]
inpatient stays, reinforcing our belief that they should be excluded
from ASC payment.
Finally, we proposed not to continue applying under the proposed
revised system the current time-based, prescriptive criteria at
Sec. Sec. 416.65(b)(1) and (b)(2), which exclude from the ASC list
procedures that exceed 90 minutes of operating time or 4 hours of
recovery time or 90 minutes of anesthesia. We believed these criteria
were no longer clinically appropriate for purposes of defining a
significant safety risk for surgical procedures.
We indicated that, in light of the proposed changes for evaluating
procedures to identify those that pose a significant safety risk for
beneficiaries when performed in ASCs, we believed that it would not be
appropriate to apply the existing standard at Sec. 416.65(a)(1), which
states that covered surgical procedures are those that are commonly
performed on an inpatient basis but may be safely performed in an ASC,
because this standard is no longer relevant to prevailing medical
practice in the realm of ambulatory or outpatient surgery. Similarly,
we believed that it would not be appropriate to continue applying the
existing standard at Sec. 416.65(a)(2), which states that procedures
performed in an ASC are not of a type that are commonly performed, or
that may be performed, in a physician's office. This standard did not
seem relevant within the context of the proposal only to exclude from
ASC payment under the revised payment system those surgical procedures
that pose a safety risk or are expected to require an overnight stay.
We would expect the types of surgical procedures that are commonly
performed or that may be performed in a physician's office to pose no
significant safety risk and to require no overnight stay.
We proposed to add new Subpart F to 42 CFR Part 416 to reflect
coverage, scope, and payment for ASC services under the revised payment
system. Included in the changes would be new Sec. 416.166 to reflect
the changes that we proposed to our current policy for evaluating and
identifying those procedures that would pose a significant safety risk
for beneficiaries and would be excluded from our list of ASC covered
surgical procedures beginning January 1, 2008. To set the provisions
that are applicable to our existing ASC payment system apart from those
that would apply to the revised ASC payment system, as we proposed, in
the CY 2007 OPPS/ASC final rule with comment period, we revised the
section headings of Subparts D and E of Part 416 to clearly denote the
provisions that govern covered surgical procedures furnished before
January 1, 2008. We also added Sec. Sec. 416.76 and 416.121 to clearly
denote the effective dates of Subparts D and E (71 FR 68226).
Comment: Commenters provided many recommendations regarding the
proposed criteria for evaluating which procedures should be excluded
from the ASC list of covered surgical procedures that varied greatly.
At one end of the spectrum, some commenters recommended that CMS only
exclude from ASC payment those procedures that are included on the
``inpatient list'' used under the OPPS. They believed that all
procedures not on the OPPS inpatient list are safe for performance in
ASCs and that, by the specification of their payable status under the
OPPS, they do not require an overnight stay.
Some commenters suggested that CMS create the ASC exclusionary list
by individually reviewing surgical procedures based upon data that
demonstrate the risks, complications, and overall safety of a given
procedure, rather than attempting to specifically apply the standards
of the proposed criteria. They believed that health outcomes databases,
including the National Surgical Quality Improvement Project and patient
and device registries, could provide further information to refine an
initial safety assessment based on the proposed criteria when certain
procedures were identified as needing further consideration and
evaluation. The commenters recommended this flexible and specific
approach to allow for full consideration of the surgical aspects of
each procedure, in order to make an appropriate determination regarding
its safety for ASC performance. The commenters believed CMS could work
with surgical professional associations and external surgical experts
to facilitate a smooth and efficient clinical review process.
In contrast, other commenters recommended that CMS implement more
stringent review criteria than our criteria under the existing payment
system for evaluating which procedures are unsafe for performance in
ASCs. They believed that beneficiary safety could be better protected
if CMS would adopt review criteria that would exclude more procedures
from ASC performance than those criteria currently in place, while
maintaining the existing limitations on operating and recovery room
times.
Response: We believe that both ends of the spectrum of public
comments are inconsistent with our goal of only excluding those
procedures from ASC payment that are unsafe for performance in ASCs or
are expected to require an overnight stay. We agree with the
perspective of most commenters that procedures on the OPPS inpatient
list should also be excluded from ASC payment. However, while we
strongly disagree with the contention by some commenters that all
procedures performed in HOPDs are appropriate for performance in ASCs,
we also believe that instituting criteria that are more restrictive
than those currently in place would be inappropriate, because we do not
have safety concerns regarding procedures that are already included on
the ASC list of covered surgical procedures.
Typically, HOPDs are able to provide much higher acuity care than
ASCs. ASCs have neither patient safety standards consistent with those
in place for hospitals, nor are they required to have the trained staff
and equipment needed to provide the breadth and intensity of care that
hospitals are required to maintain. According to current CMS standards,
hospitals must meet numerous documentation, infection prevention, and
patient assessment requirements that are not applied to ASCs.
Therefore, there are some procedures that we believe may be
appropriately provided in the HOPD setting that are unsafe for
performance in ASCs. Thus, we are not adopting a final policy to
exclude only those surgical procedures on the OPPS inpatient list from
ASC payment under the revised payment system.
Nonetheless, as stated in our August 2006 proposal and consistent
with MedPAC recommendations, we are committed to revising the ASC list
of covered surgical procedures so that it excludes only those surgical
procedures that pose significant safety risks to beneficiaries or that
are expected to require an overnight stay. We believe that adoption of
a policy similar to that recommended by MedPAC would serve both to
protect beneficiary safety and increase beneficiary access to surgical
procedures in appropriate clinical settings. We also believe that this
approach is most consistent with the PPAC's recommendation that we
provide payment under the revised ASC payment system for all safe and
appropriate services. Thus, we do not believe that it would be
appropriate to implement more restrictive criteria for evaluating
procedures for exclusion from ASC payment or even to maintain all of
the current criteria that we use under the existing payment system to
evaluate the appropriateness of including procedures on the ASC list.
We continue to believe the current limitations on operating room and
recovery room times for ASC procedures
[[Page 42480]]
are no longer clinically relevant to assessing the safety risk of
surgical procedures. Our comprehensive review of all surgical
procedures has convinced us that there are procedures in addition to
those included on the CY 2007 ASC list of covered surgical procedures
that may be safely performed in ASCs, and that increasing the number
and types of procedures for which Medicare provides ASC payment is
appropriate.
Regarding our proposed overall approach to evaluating procedures
for exclusion from the ASC list of covered surgical procedures, we
believe that our evaluation process is generally consistent with the
approach advised by some commenters that we apply the proposed criteria
as part of an initial safety assessment, and then conduct procedure-
specific analyses of possible risks and complications of individual
procedures based on available data. In preparing the proposal for the
revised ASC payment system, we reviewed each surgical procedure that is
separately payable under the OPPS and not already on the CY 2007 ASC
list and with inpatient utilization of less than 80 percent against the
proposed safety and overnight stay criteria and identified a subset of
procedures for further assessment if we had concerns about their
potential safety risk. We then used all of the information available to
us to arrive at a preliminary determination regarding each procedure's
suitability for payment in the ASC setting. These preliminary
determinations constituted our proposed treatment of the procedures
under the revised ASC payment system, and the status of the codes was
open to public comment in the August 2006 proposed rule. We received
detailed information and recommendations from many commenters,
including hospitals, ASCs, device manufacturers, and physician
specialty organizations, as well as physician experts, regarding the
proposed treatment of many surgical procedure codes. Summaries of these
comments and our responses follow later in this section of this final
rule.
Comment: A number of commenters expressed concerns about the safety
implications of a greatly expanded list of surgical procedures to be
performed in ASCs. They advocated implementation of specific additional
measures for tightening and strengthening the criteria we proposed to
use to evaluate the potential for beneficiary risk associated with
surgical procedures. Included in the commenters' numerous
recommendations were the following comments:
(1) Make no changes to the current criteria until the ASC
Conditions for Coverage are revised to ensure that patient protections
comparable to those in place in hospitals are in place in ASCs.
(2) Apply the existing and proposed criterion to exclude procedures
from the ASC list that involve major blood vessels, by adopting a
specific list of blood vessels that CMS defines as major blood vessels,
in order to provide more certainty about which procedures would be
excluded. Some commenters recommended that CMS adopt the definition of
a major blood vessel advanced in a medical textbook, Essentials of
Anatomy & Physiology, 6th Edition, by Seeley, Stephens and Tate. For
procedures that involve blood vessels defined by Seeley, et al., as
major, but that are already being performed safely in ASCs (for
example, CPT code 36870, Thrombectomy, percutaneous, arteriovenous
fistula, autogenous or nonautogenous graft (includes mechanical
thrombus extraction and intra-graft thrombolysis)), the commenters
suggested that CMS retain them as ASC covered surgical procedures,
thereby allowing their continued payment when performed in ASCs.
(3) Apply the existing and proposed criterion to exclude from ASC
payment those procedures requiring major or prolonged invasion of body
cavities, by defining ``prolonged'' invasion as referring to any
procedure in which the patient is under anesthesia for 90 minutes or
longer, and expand the definition of body cavity to include major blood
vessels.
(4) Exclude from ASC payment procedures that commonly require
systemic thrombolytic therapy. Some commenters recommended that CMS
exclude procedures that involve blood vessels that, if occluded, would
require inpatient lytic therapy, while other commenters recommended
more generally that CMS exclude procedures that may result in a
patient's need for lytic therapy. Lytic or inpatient thrombolytic
therapy as used in this context both refer to systemic thrombolytic
therapy.
(5) Disallow procedures that require puncturing of the femoral
vessels for access. Some commenters recommended that this exclusion be
for procedures accessing either the femoral artery or the femoral vein,
while other commenters would have limited the exclusion to only those
procedures requiring femoral arterial access.
(6) Implement a quantitative measure (greater than or equal to 15
percent of total blood volume) to define the existing and proposed
criterion to exclude from the list procedures that generally result in
extensive blood loss.
(7) Use a 50-percent inpatient threshold for excluding procedures
from the ASC list instead of the proposed 80-percent threshold. While
some commenters recommended lowering the proposed threshold for
exclusion of procedures from the ASC list from 80 percent to 50
percent, several other commenters suggested that CMS should not apply a
specific numerical threshold of inpatient utilization at all to its
evaluation of procedure safety. They noted that this could have the
unintended effect of automatically excluding some procedures from ASC
payment simply because of limited data indicating their performance
slightly more than 80 percent of the time in the inpatient setting,
while data for clinically similar codes reflected inpatient performance
slightly less than the 80-percent threshold. Instead, these commenters
recommended that we evaluate each surgical procedure with respect to
the other proposed criteria, based on the clinical characteristics of
the procedure itself. The group of commenters recommending
establishment of a lower threshold of 50 percent believed that this
modified standard would better enable us to identify procedures that
are typically clinically complex and have a higher risk of
complications and extensive postoperative care. They suggested that
setting the threshold at 50 percent would ensure that procedures
performed the majority of time in the inpatient setting would be
excluded from ASC payment.
(8) Require that patients be assessed for comorbidities and
anesthesia risk using the American Society of Anesthesiologists' tool,
and those patients who are high risk, such as patients over age 85 or
with morbid obesity, should be required to go to hospital settings for
surgical procedures.
(9) Identify and implement outcome and process measures to assess
aspects of quality across care settings, including ASCs. To develop
those measures, some commenters suggested that CMS work closely with
the Hospital Quality Alliance (HQA) and the Ambulatory Quality Alliance
(AQA) (formerly both organizations were known as the AQA). The HQA has
already begun to include the measures of care used in the Surgical Care
Improvement Project, and some commenters believed that the goal of
preventing complications in the care of surgical patients provides an
appropriate starting point for determining the correct measures for
assessing important aspects of the safety
[[Page 42481]]
and quality of all types of ambulatory surgery.
Response: We appreciate the commenters' concerns regarding
beneficiary safety and gave consideration to each of the individual
recommendations listed above. We respond to each of these individually
as follows:
(1) Maintain the current procedure review criteria until after the
ASC Conditions for Coverage are revised.
We do not believe that postponing revisions to our review criteria
until after the ASC Conditions for Coverage are revised is warranted.
We cannot predict when those revisions will be issued, and we are
confident that the criteria we will use to evaluate procedures for
exclusion from the list of covered surgical procedures under the
revised ASC payment system are appropriate and serve to protect
beneficiary safety in the current environment.
(2) Specifically adopt a defined list of ``major blood vessels.''
As we stated earlier, we believe it is important to maintain
flexibility in our review of procedures for safe performance in the ASC
setting, consistent with our past practice regarding this criterion. As
noted by commenters requesting a specific definition of this criterion,
there are some procedures already on the ASC list that are being safely
performed in ASCs and that involve vessels that would be defined as
major according to the recommendations of some commenters. We do not
agree with these commenters that it would be logical or clinically
consistent for us to adopt a specific definition of major blood vessels
to evaluate procedures for exclusion from ASC payment, yet still
continue to provide ASC payment for procedures that would otherwise be
excluded, except for their history of safe performance in ASCs. We
believe the involvement of major blood vessels is best considered in
the context of the clinical characteristics of individual procedures,
as recommended by other commenters, and see no need to adopt a defined
list of major blood vessels.
(3) Define prolonged invasion of a body cavity as any procedure in
which the patient is under anesthesia for 90 minutes or longer, and
expand the definition of body cavity to include major blood vessels.
We do not believe that considering major blood vessels to be
included in the definition of a body cavity is clinically sensible,
based on the general medical understanding of the terms. In addition,
we already have a separate safety review criterion regarding major
blood vessels, and we believe that evaluation of the safety of
procedures involving major blood vessels will continue to be
appropriately assessed using that criterion. We also do not believe
that prolonged invasion should be defined as anesthesia for 90 minutes
or longer. There are surgical procedures that require more than 90
minutes that do not invade a major body cavity at all, and maintaining
that time-based restriction would be contrary to the recommendations of
MedPAC and current clinical practice. We believe the criterion
regarding major or prolonged invasion of body cavities is most
appropriately evaluated through a flexible review approach, consistent
with our past practice, in which we consider the criterion and its
relationship to each specific surgical procedure. Therefore, we are not
expanding the current criterion regarding invasion of a body cavity to
include the length of time the beneficiary will be under anesthesia or
to incorporate major blood vessels.
(4) Exclude from ASC payment procedures that commonly require
systemic thrombolytic therapy.
We agree with the commenters that systemic thrombolytic therapy is
unsafe for performance in ASCs. Systemic thrombolytic therapy involves
significant clinical risks and is not an appropriate procedure for
initiation in ASCs if its use is anticipated. We have historically
considered in our clinical evaluation of the safety of procedures for
performance in ASCs the likely need for systemic thrombolytic therapy
in association with a surgical procedure, but we have never previously
made that an explicit safety review criterion. We agree with the
commenters that it should be a specific criterion for evaluation of
procedure safety. Therefore, we are making it explicit that the final
criteria used to evaluate the safety of procedures for performance in
ASCs at Sec. 416.166(c)(5) include the criterion that covered surgical
procedures may not be of a type where systemic thrombolytic therapy
would commonly be required.
(5) Exclude procedures that require use of the femoral vessels for
access.
We do not agree with some commenters' position that excluding all
procedures that involve the femoral vessels is reasonable or necessary
to ensure the patient safety of surgical procedures performed in ASCs.
Other commenters stated that there are instances in which the
performance of procedures may require use of femoral vessels due to the
beneficiary's particular physical condition. For example, a beneficiary
who has experienced prolonged exposure to vascular sclerosing agents
(such as chemotherapy) or has been on hemodialysis for many years may
not have upper body peripheral blood vessels that are adequate even to
support the basic intravenous access required during any surgical
procedure performed under general anesthesia. In such a case, the
surgeon may need to use the femoral vein just to provide routine
intravenous access during surgery. In other cases, the use of the
femoral vessels may be required for certain surgical procedures. For
instance, the femoral blood vessels may be accessed to create an
arteriovenous fistula for hemodialysis using a graft, as described by
CPT code 36825 (Creation of arteriovenous fistula by other than direct
arteriovenous anastomosis (separate procedure); autogenous graft) or
CPT code 36830 (Creation of arteriovenous fistula by other than direct
arteriovenous anastomosis (separate procedure); nonautogenous graft
(e.g., biological collagen, thermoplastic graft)). Both of these
procedures that may directly involve the femoral vessels have been on
the list of covered ASC procedures since before July 2000, and we have
no concerns about their safe performance in ASCs. We do not believe
that it makes clinical sense to prohibit use of the femoral vessels in
ASC procedures, knowing that they may be needed in any number of
situations and that femoral access has been safely achieved in ASCs for
years. We believe that our process for clinical review of individual
procedures, during which our medical advisors consider the specific
performance characteristics of a particular surgical procedure, is the
most appropriate method for ensuring that procedures that pose a
significant safety risk are excluded from ASC payment. As evidenced by
the history of safe performance in ASCs of some procedures that utilize
femoral access, we agree with the commenters who believe that it is the
specific surgical procedure, rather than the method of vascular access,
that must be fully evaluated to assess a procedure's safety in ASCs.
(6) Adopt a quantitative definition of ``extensive blood loss.''
We do not believe that the recommendation by some commenters that
we revise the criteria used to evaluate procedures for exclusion from
the ASC list by quantifying extensive blood loss is necessary or
advisable. The existing and proposed criterion related to blood loss
requires exclusion of procedures that ``generally result in extensive
blood loss'' (42 CFR 416.65(b)(3)(i) and 42 CFR 416.166(c)(1),
[[Page 42482]]
respectively), and we have historically evaluated this criterion in
considering surgical procedures for ASC payment. We do not believe that
identifying a specific amount of blood loss that is considered by some
to be ``extensive'' would improve our clinical review regarding
procedural safety. For most surgical procedures, specific estimates of
expected blood loss are not available, and we do not believe that a
discussion of whether or not a procedure generally results in a loss of
14 percent versus 16 percent of a beneficiary's blood volume would be
clinically meaningful and contribute to our ability to evaluate a
surgical procedure's potential for safe performance in ASCs.
(7) Adopt a 50-percent inpatient utilization threshold for
exclusion of procedures from the ASC list.
We reexamined our proposal to exclude all procedures from ASC
payment that are performed in the inpatient setting 80 percent or more
of the time. Although the recommendations of some commenters advocated
using a lower threshold to exclude more procedures from ASC payment, we
confirmed that using any relatively arbitrary threshold resulted in
unintended inconsistencies in the treatment of clinically similar
procedures. There were several instances in which one procedure in a
clinical family would be excluded from ASC payment based on its
inpatient utilization of just slightly over 80 percent, whereas our
clinical review of other members of the family indicated that those
procedures were safe for performance in ASCs, with inpatient
utilization of slightly less than 80 percent. For example, we proposed
to exclude CPT codes 33207 (Insertion or replacement of permanent
pacemaker with transvenous electrode(s); ventricular) and 33208
(Insertion or replacement of permanent pacemaker with transvenous
electrode(s); atrial and ventricular) from ASC payment under the
revised payment system because the inpatient utilization for those
procedures was higher than 80 percent and, therefore, we did not
specifically review the procedures to assess their clinical safety or
need for an overnight stay before proposing to exclude them. We did not
propose to exclude CPT code 33206 (Insertion or replacement of
permanent pacemaker with transvenous electrode(s); atrial), the other
procedure in the same family of codes as CPT codes 33207 and 33208,
because the inpatient utilization for that procedure was somewhat lower
than 80 percent, and our clinical review, based on the other safety and
overnight stay criteria proposed for the revised ASC payment system,
led to our belief that it was appropriate for performance in ASCs. When
we performed a clinical review of CPT codes 33207 and 33208 in order to
respond to public comments, we determined that CPT codes 33207 and
33208 do not pose a significant risk to beneficiary safety and are not
expected to require an overnight stay, so they are appropriate for
performance in ASCs, along with CPT code 33206. Therefore, we have
removed both CPT codes 33207 and 33208 from the list of excluded
procedures for the revised ASC payment system. We are also, as
proposed, not excluding CPT code 33206 from eligibility for ASC
payment. This more flexible approach, without application of a specific
inpatient utilization threshold, allows us to treat the individual
members of the same family of procedures consistently as a clinically
coherent group, while considering them in the context of our final
safety and overnight stay criteria for the revised ASC payment system.
We also identified a number of surgical procedures with high
Medicare inpatient utilization because, most of the time, the
procedures are performed with other surgical procedures for
beneficiaries who are hospital inpatients. Thus, although the data
reflect high inpatient utilization, the procedures themselves are not
unsafe for ASC performance, nor do they typically require an overnight
stay. Specifically, commenters argued that the high inpatient
utilization of CPT code 64447 (Injection, anesthetic agent; femoral
nerve, single) was due to its frequent use during inpatient surgical
procedures, whereas the injection may also be performed safely in ASCs
on its own as an ambulatory pain management intervention. They believed
that using the inpatient utilization as the basis for the exclusion of
this procedure from ASC payment was unfair because we should evaluate
the procedure itself specifically based upon its clinical
characteristics, rather than based upon utilization data which could be
misleading with respect to the procedure's potential for safe
performance in the ASC setting. Our clinical review of CPT code 64447,
in response to comments, convinced us that it would clearly not pose a
significant safety risk or be expected to require an overnight stay
when performed in ASCs and should not be excluded from the list of
covered surgical procedures under the revised ASC payment system.
Therefore, we concluded that, in the cases of CPT codes 33207,
33208, and 64447, the utilization data alone could not be relied upon
to support a decision to exclude these procedures from ASC payment and,
as evidenced by our proposed list of excluded procedures, there were
many procedures paid under the OPPS that were not performed more than
80 percent of the time on an inpatient basis but that were proposed for
exclusion from ASC payment because of their safety risk or expected
need for an overnight stay. Therefore, for this final rule, we
evaluated each of the procedures that we had proposed for exclusion
from ASC payment based on inpatient utilization of 80 percent or more
and made separate determinations about the safety and need for an
overnight stay for each of those procedures using all available
information, as we did for all other procedures in the surgical range
of the CPT code set.
Thus, while we proposed an 80-percent inpatient utilization
threshold as one criterion for excluding surgical procedures from ASC
payment, we now believe that we will reach more appropriate, clinically
consistent decisions regarding procedures for exclusion from ASC
payment by not adopting any specific numerical threshold for inpatient
utilization that would automatically exclude surgical procedures from
ASC payment. Rather than institute a definite threshold for inpatient
utilization, we will examine all the clinical information regarding a
surgical procedure, including its inpatient utilization, to determine
whether or not a procedure would pose a significant risk to beneficiary
safety or would be expected to require an overnight stay if performed
in an ASC. We will not make final our proposal to exclude procedures
from the ASC list of covered surgical procedures based solely on their
inpatient utilization of 80 percent or more.
(8) Require beneficiary assessment of individual surgical risk and
do not permit high risk patients to receive ASC services.
We do not believe that it would be appropriate to accept the
commenters' recommendation that patients with certain specified
demographic characteristics or comorbidities be automatically excluded
from being considered for surgery within an ASC. The recommendation
would require ASCs to deny services to individual beneficiaries who are
found, based on an appraisal through a specific assessment tool, to
have a high level of risk. Section 416.2 defines an ASC as providing
surgical services to patients not requiring hospitalization. Thus, ASCs
must ensure that each patient is assessed for relevant risk factors by
the physician prior to performing the
[[Page 42483]]
surgical procedure, in order to screen out patients who are likely to
require hospitalization in connection with the planned procedure. We
require physicians to make these assessments as a part of their
decisions regarding where to perform a surgical procedure for specific
Medicare beneficiaries, prior to referring them to facilities for those
surgical procedures. The ASC Conditions for Coverage specifically state
in Sec. 416.42(a) that ``a physician must examine the patient
immediately before surgery to evaluate the risk of anesthesia and of
the procedure to be performed.'' In addition, we protect Medicare
beneficiary safety through our process of excluding procedures from ASC
payment that pose a significant safety risk for the typical Medicare
patient. In summary, we do not believe that it is necessary or
appropriate for CMS to mandate that ASCs use a specific assessment tool
in conducting these required beneficiary assessments.
(9) Identify and implement outcome and process measures in ASCs to
assess quality of care.
We will take into consideration for future action the
recommendation by some commenters that we identify and implement
outcome and process measures to assess aspects of quality of care
across settings, including ASCs, taking into consideration our final
policy for the CY 2009 OPPS that will require hospitals to meet quality
reporting standards to receive the full OPPS update (71 FR 68189). We
agree that this could be an appropriate next step and is consistent
with CMS'' policies being implemented in other beneficiary care
settings. In fact, section 109(b) of the Medicare Improvements and
Extension Act under Division B of the Tax Relief and Health Care Act of
2006, Public Law 109-432, enacted on December 20, 2006, specifies that
the Secretary may require that in order to receive the full annual
payment update, ASCs must report data on selected measures of quality.
The provisions for ASC services are to apply in a manner similar to
which they apply to hospital outpatient services, effective January 1,
2009.
After considering the public comments received, we are finalizing
our proposal, with modification, to exclude from ASC payment all
surgical procedures that could pose a significant safety risk to
Medicare beneficiaries or are expected to require an overnight stay.
The criteria to be used to identify procedures that could pose a
significant safety risk when performed in an ASC include those surgical
procedures that: generally result in extensive blood loss; require
major or prolonged invasion of body cavities; directly involve major
blood vessels; are emergent or life-threatening in nature; commonly
require systemic thrombolytic therapy; are designated as requiring
inpatient care under Sec. 419.22(n); can only be reported using a CPT
unlisted surgical procedure code (see section III.B. of this final rule
for further discussion); or are otherwise excluded under Sec. 411.15.
We are not adopting the specific 80-percent inpatient utilization
threshold that we proposed for exclusion of surgical procedures from
ASC payment. The final revised policy regarding covered surgical
procedures is set forth in Sec. 416.166 of this final rule, effective
January 1, 2008.
b. Overnight Stay
A longstanding criterion for determining which procedures are
appropriate for inclusion on the ASC list of covered surgical
procedures has been that the procedures on the list do not require an
extended recovery time. Section 416.65(a)(3) of the regulations
provides that ASC procedures ``[a]re limited to those requiring a
dedicated operating room (or suite), and generally requiring a
postoperative recovery room or short-term (not overnight) convalescent
room.'' Under Sec. 416.65(b)(1)(ii), we have historically considered
procedures that require more than 4 hours of recovery or convalescent
time to be inappropriately performed in the ASC.
We have heard many differing opinions of what constitutes an
``overnight'' stay, ranging from ``more than 24 hours'' to time spent
in recovery after sunset. After deliberation and consideration of
several options, in the August 2006 proposed rule for the revised ASC
payment system, we proposed to exclude from ASC payment any procedure
for which prevailing medical practice dictates that the beneficiary
would typically be expected to require active medical monitoring and
care at midnight following the procedure (hereinafter ``overnight
stay''). During the development of the August 2006 proposed rule, our
clinical staff evaluated each surgical procedure using available claims
and physician pricing data, as well as their clinical judgment, to
determine which procedures would be expected to require monitoring at
midnight of the day on which the surgical procedure was performed.
We proposed to use midnight as the defining measure of an overnight
stay for several reasons. First, a patient's location at midnight is a
generally accepted standard for determining his or her status as a
hospital inpatient or skilled nursing facility patient and as such, it
seems reasonable to apply the same standard in the ASC setting. Second,
overnight care is not within the scope of ASC services for which
Medicare makes payment. The expectation is that surgical procedures
performed in an ASC are ambulatory in nature; that is, patients
undergoing a procedure in an ASC will recover from anesthesia and
return home on the same day that they report to the ASC for a scheduled
procedure. Finally, the expected need for monitoring at midnight is a
straightforward and easily understood defining measure of ``overnight
stay.'' We proposed to add the requirement that procedures will
typically not be expected to require active medical monitoring and care
at midnight following the procedure to proposed new Sec.
416.166(c)(5).
Comment: Some commenters recommended that CMS use ``less than 24
hours'' as the definition of an overnight stay. Several of the
commenters stated that the same 24-hour postoperative recovery standard
that applies in HOPDs should apply in ASCs. One commenter stated that
CMS' definition of overnight stay related to survey and certification
for ASCs is a planned stay of over 24 hours and, that conversely, when
the ``length of stay is less than 24 hours, it is not considered an
overnight stay.'' Further, several commenters noted that a number of
States allow ASCs to perform procedures that require stays of up to 23
or 24 hours.
One commenter group argued that the terms ``ambulatory'' and
``outpatient'' surgery describe the same kind of care, and that the
same 24-hour postoperative recovery standard should apply in both ASC
and HOPD settings. Some commenters suggested that, if CMS allowed all
procedures that are performed in HOPDs to be performed in ASCs, no
specific definition of overnight stay would be required because any
procedure paid under the OPPS would be presumed to require no overnight
stay and that the same assumption should be applied to ASCs.
A number of other commenters agreed with our proposal that
procedures requiring an overnight stay should not be performed in an
ASC and specifically endorsed our definition of overnight stay. They
also believed that the proposed definition is consistent with other
accepted definitions and standards of the term.
Several commenters believed that our proposal, if adopted, would
require ASCs performing and billing covered surgical procedures to
transfer patients to other facilities if the recovery of
[[Page 42484]]
individual patients extended beyond midnight on the day of the
procedure, in order to receive payment under the revised ASC payment
system. Other commenters expressed concern that procedures performed
later in the day in ASCs would be treated differently for purposes of
ASC payment than those procedures that were performed in the morning,
in terms of allowing for adequate recovery time.
Response: We want to clarify our proposal to use the expected need
for medical monitoring at midnight following the performance of a
procedure as a consideration in determining whether a surgical
procedure should be excluded from ASC payment. Our proposal does not
affect the distinct care ASCs may provide in individual cases at
various times of the day, nor does it alter the ASC payment for covered
surgical procedures and covered ancillary services. As we explained in
the August 2006 proposed rule, we proposed to exclude surgical
procedures from ASC payment only based on their expected need for an
overnight stay or the risk they pose to beneficiary safety. We
identified the need for medical monitoring at midnight as a clinical
measure that was meaningful to our clinical staff and advisors in their
assessment, on a procedure-by-procedure basis, of the expected
postoperative needs of the typical Medicare beneficiary, in order to
determine whether a procedure was likely to require an overnight stay.
We agree with some commenters that the criteria currently in place
under the existing ASC payment system that limit covered surgical
services to those that do not generally exceed a total of 90 minutes
operating time and a total of 4 hours of recovery or convalescent time
are both outdated and inconsistent with the proposed policy to base
exclusion on the need for an overnight stay. We also agree with the
commenters who recognized that the proposed revised measure to
facilitate identification of those procedures requiring an overnight
stay is considerably less restrictive than the current criteria and, at
the same time, the use of midnight as a reference point is clinically
meaningful and adequate to ensure beneficiary safety.
As stated above, a beneficiary's location at midnight is a
generally accepted standard for determining his or her status as a
hospital inpatient or skilled nursing facility patient and, as such, it
seems reasonable to apply the same standard in the ASC setting. Second,
as defined at Sec. 416.2, ASC means ``any distinct entity that
operates exclusively for the purpose of providing surgical services to
patients not requiring hospitalization.'' Thus, ASCs are not certified
by Medicare to provide overnight care, and there is longstanding policy
to exclude from coverage in ASCs those surgical procedures that require
overnight stays, as evidenced by our existing criterion at Sec.
416.65(b)(1)(ii) that requires CMS to limit covered surgical procedures
to those that do not generally exceed a total of 4 hours of recovery
time following surgery. The expectation is that a beneficiary
undergoing a procedure in an ASC will recover from anesthesia and
return home on the same day that he or she reported to the ASC for a
scheduled procedure. This expectation is inconsistent with a 24-hour
postoperative recovery period as recommended by some commenters.
The commenters' comparisons of ASCs to HOPDs are not persuasive for
many reasons. Most importantly among these is the fact that HOPDs,
unlike ASCs, have medical and nursing staff on duty 24 hours a day and
all of the resources of the hospital to support the care requirements
of beneficiaries in that setting.
After consideration of the public comments we received, we continue
to believe that it is appropriate to exclude from ASC payment any
procedure for which standard medical practice dictates that the
beneficiary would typically be expected to require active medical
monitoring and care at midnight following the procedure. Therefore, we
are finalizing, with editorial modification to include this requirement
in the general standards for covered surgical procedures at Sec.
416.166(b), our proposal to exclude these surgical procedures from ASC
payment.
B. Treatment of Unlisted Procedure Codes and Procedures That Are Not
Paid Separately Under the OPPS
Unlisted procedure CPT codes are used to report services and
procedures that are not accurately described by any other, more
specific CPT codes. An example of an unlisted CPT code is 33999
(Unlisted procedure, cardiac surgery). Within the surgical range of CPT
codes, there are 91 such codes. None of the unlisted CPT codes in the
surgical range is on the current ASC list of covered surgical
procedures. Under the OPPS, we assign unlisted CPT codes to the lowest
weighted APC in the relevant clinical group, regardless of the median
cost for the unlisted procedure code, and we do not include the highly
variable claims-based cost information for unlisted services in
calculating APC median costs for purposes of establishing APC relative
payment weights. Payment for procedures reported by unlisted CPT codes
is made only at the discretion of the contractor under the MPFS.
Because of concerns about the potential for safety risks when
procedures that may only be reported with unlisted procedure CPT codes
are performed, in the August 2006 proposed rule for the revised ASC
payment system, we proposed to continue excluding CPT unlisted surgical
procedure codes from ASC payment. For example, when CPT code 33999 is
reported on a claim, we know only that some kind of cardiac surgery was
performed. We have no other information about the procedure, and we
have no way of knowing whether the procedure involved major blood
vessels, major or prolonged invasion of body cavities, or extensive
blood loss, or was emergent or life-threatening in nature.
Prior to our evaluation of surgical procedure codes for their
safety risk, we decided to propose that we would not make separate
payment under the revised ASC payment system for CPT codes in the
surgical range whose payments are packaged under the OPPS. Packaged CPT
codes under the OPPS are identified by status indicator ``N'' in
Addendum B of the CY 2007 OPPS/ASC final rule with comment period (71
FR 68283 through 68384), and their OPPS payment is provided through
payment for other separately payable services. We made this proposal
for two reasons. First, we would not be able to establish an ASC
payment rate for packaged surgical procedures using the same method we
proposed for all other ASC procedures because packaged surgical codes
have no relative payment weights under the OPPS upon which to base an
ASC payment rate. Second, ASCs, just like hospitals, would receive
payment for these packaged surgical procedures because their costs
would already be included in the APC relative payment weights upon
which the ASC payment rates would be based.
Comment: A few commenters recommended that CMS not exclude all
unlisted CPT codes from ASC payment as proposed. Some commenters
believed that, because Medicare makes facility payments for unlisted
CPT codes under the OPPS, CMS should provide the same treatment in
ASCs. Other commenters suggested that, for groups of related CPT codes
in which all codes but the related unlisted code are provided payment
in ASCs, CMS should also include the unlisted code on the ASC list of
covered surgical procedures. For example, all of the specific CPT codes
in the surgical hysteroscopy
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subsection of CPT (CPT codes 58558 through 58578) are currently on the
ASC list. One commenter contended that because CMS had already
determined that all of those specific hysteroscopy procedures are safe
for performance in ASCs, the related unlisted hysteroscopy procedure
(CPT code 58579, Unlisted hysteroscopy procedure, uterus) should also
be deemed to pose no significant safety risk or require an overnight
stay.
Response: We appreciate the commenters' examples of unlisted codes
in families where all of the other procedures in the CPT subsection are
not excluded from ASC payment, in support of their recommendation that
the related unlisted procedure code should be treated comparably.
However, the fact remains that we do not know what specific procedure
would be represented by an unlisted code. Our charge requires us to
evaluate each surgical procedure for potential safety risk and the
expected need for overnight monitoring and to exclude such procedures
from ASC payment. It is not possible to evaluate procedures that would
be reported by unlisted CPT codes according to these criteria.
We continue to believe that because our final policy under the
revised ASC payment system excludes from ASC payment those procedures
that pose a significant safety risk in ASCs or would be expected to
require an overnight stay, it would not be appropriate to provide ASC
payment for unlisted CPT codes in the surgical range, even if payment
may be provided under the OPPS. As discussed earlier, ASCs do not
possess the breadth and intensity of services that hospitals must
maintain to care for patients of higher acuity, and we would have no
way of knowing what specific procedures reported by unlisted CPT codes
were provided to patients, in order to ensure that they are safe for
ASC performance. Therefore, we are finalizing in Sec. 416.166(c)(7)
our proposal, without modification, to exclude from ASC payment under
the revised ASC payment system all procedures reported by unlisted
surgical procedure codes.
Comment: A few commenters expressed concern that payments for
certain surgical services that are packaged under the OPPS are
frequently paid through the OPPS payments for more comprehensive
services that we had proposed to define as nonsurgical because they are
not classified by CPT within the surgical range of codes. Therefore,
these packaged surgical services would not be paid under the revised
ASC payment system. They pointed out that when ASCs perform these
packaged surgical services as part of providing a more comprehensive
nonsurgical service, the ASC would receive no payment for the surgical
service. To illustrate the problem, commenters provided examples of the
surgical codes that typically receive packaged payment under the OPPS
through payment for radiology services. The minor packaged surgical
procedures included numerous injection and catheter placement
procedures in the surgical range of CPT codes that generally accompany
radiology services for purposes of injecting contrast or facilitating
another nonsurgical intervention. These commenters recommended that CMS
expand the definition of surgical procedures to include invasive
radiology services that have a surgical component, including those
radiology procedures that are performed in association with a surgical
procedure proposed for packaged payment under the revised ASC payment
system, to enable ASCs to receive payment for the comprehensive
service, including both the radiology service and the minor surgical
procedure. Alternatively, several other commenters supported our
proposal to package payment under the revised ASC payment system for
the minor surgical procedures for which payment is also packaged under
the OPPS, rather than paying for them separately.
Response: We continue to believe that packaging payment for those
surgical services that are packaged under the OPPS is appropriate under
the revised ASC payment system. This policy is aligned with the
recommendation of the PPAC to apply payment policies uniformly in the
ASC and HOPD settings. It also maintains comparable payment bundles
under the OPPS and the revised ASC payment system for these services,
consistent with the recommendation of MedPAC to maintain consistent
payment bundles under both payment systems.
Packaged surgical services are minor procedures and are usually
reported with a more comprehensive procedure that may itself be
nonsurgical and, therefore, excluded from payment under the revised ASC
payment system. See section III.A.1. of this final rule for a further
discussion of the definition of surgical procedure under the revised
ASC payment system. We believe that payment for these minor surgical
procedures would be appropriately packaged into payment for
comprehensive surgical procedures that are separately paid in the ASC
setting, when those minor surgical procedures are provided in support
of the comprehensive surgical procedures. In the circumstances referred
to by the commenters, the minor surgical procedures are performed in
support of comprehensive nonsurgical services and payment for the minor
surgical procedures is packaged into payment for the nonsurgical
services under the OPPS. Although the packaged procedures are surgical
according to our definition for the revised ASC payment system, we do
not believe it is reasonable or appropriate to assign a different
packaging status for these procedures under the revised ASC payment
system than is assigned under the OPPS. The minor surgical procedures
are not separately paid in the OPPS and, thus, are not eligible for
separate payment under the revised ASC payment system. In addition, if
the procedures are only performed in conjunction with major services
not payable in ASCs, Medicare also will make no packaged payment for
these minor surgical procedures. As we discuss further in section
III.A. of this final rule, Medicare pays ASCs for the performance of
ambulatory surgical procedures, not for providing nonsurgical services.
We do not agree that we should define surgical procedures under the
revised ASC payment system to include other types of services, such as
radiology services, just because they are provided in association with
a minor surgical procedure in the CPT surgical range of codes. Instead,
we continue to believe that the other types of services, including
radiology services, are not appropriate for performance in ASCs unless
they are integral to covered surgical procedures. We see no rationale
for considering comprehensive radiology services to be integral to the
minor surgical procedures.
After considering all public comments received, we are finalizing,
without modification, our proposal to provide packaged payment under
the revised ASC payment system for all surgical procedures packaged
under the OPPS for the same calendar year. Therefore, we will exclude
these surgical procedures from separate payment in the ASC setting
under the revised payment system, and they will not be included on the
ASC list of covered surgical procedures. We believe that this approach
will provide appropriate packaged payment for minor surgical procedures
provided in association with significant ASC covered surgical
procedures. When these minor surgical procedures are performed in
support of comprehensive nonsurgical procedures, they are not
appropriate for ASC payment because the more comprehensive service is
not a surgical
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procedure paid under the revised ASC payment system. HCPCS codes for
surgical procedures for which payment will be packaged under the
revised ASC payment system are identified in Addendum AA to this final
rule with payment indicator ``N1'' (Packaged service/item; no separate
payment made).
C. Treatment of Office-Based Procedures
According to the general standard in Sec. 416.65(a)(2) of the
existing regulations, procedures that ``are commonly performed, or that
may be safely performed, in physicians' offices'' are excluded from the
ASC list of covered surgical procedures. We did not propose to continue
to apply this provision under the revised ASC payment system. Rather,
in the August 2006 proposed rule for the revised ASC payment system, we
proposed to allow ASC payment for surgical procedures that are commonly
and safely performed in the office setting. We reasoned that the types
of procedures performed in physicians' offices would neither pose a
significant safety risk nor require an overnight stay when performed in
an ASC. However, we expressed concerns that allowing payment for
office-based procedures under the ASC benefit could create an incentive
for physicians inappropriately to convert their offices into ASCs or to
move all their office surgery to an ASC.
To address this concern, we proposed to limit payment for office-
based procedures to neutralize any such incentive (see section IV.E. of
this final rule). We also proposed in new Sec. 416.171(d) to set forth
rules governing the payment of office-based procedures in ASCs. We
specifically invited comment regarding the effect on the Medicare
program, and on practice patterns for ambulatory surgery generally, of
our proposal to allow ASC payment for office-based procedures that
historically have been excluded from the ASC list of covered surgical
procedures.
As we discussed in the August 2006 proposed rule, we proposed to
limit payment for office-based procedures in ASCs in an attempt to
mitigate potentially inappropriate migration of services from the
physician office setting to the ASC. Alternatively, we acknowledged
that we could entirely exclude office-based procedures or procedures
that require relatively inexpensive resources to perform from the ASC
list of covered surgical procedures.
Comment: Many commenters supported our proposal to not exclude from
ASC payment those procedures that are performed most of the time in the
physician's office setting. Numerous commenters requested that the
payment rate for those procedures be set at a percentage of the OPPS
amount, applying the same payment methodology under the revised ASC
payment system as for all other surgical procedures not excluded from
ASC payment. The commenters believed that the proposed treatment of
office-based procedures is unfair because, when any of those procedures
would be performed in the ASC setting, that facility site would be
necessary due to an individual beneficiary's need for the higher acuity
care setting. Therefore, the commenters concluded that the same level
of payment, in relationship to OPPS payment for those procedures,
should be made for office-based procedures as for other covered ASC
procedures that are not office-based. Furthermore, commenters contended
that there would be very little change in surgical practice patterns
under the revised ASC payment system, and that procedures currently
performed predominantly in physicians' offices would not move to ASC
settings as a result of our proposal to provide payment for those
procedures in ASCs.
Response: We appreciate the commenters' support for our proposal to
not exclude office-based surgical procedures from ASC payment under the
revised ASC payment system. Based on both our final definition of
surgical procedures and our final safety and overnight stay criteria to
be used in evaluating procedures for exclusion from ASC payment, we see
no reason to exclude surgical procedures that are currently commonly
performed in physicians' offices from payment under the revised ASC
payment system. We believe there are a variety of reasons that may
contribute to the choice of a particular care setting for the treatment
of an individual beneficiary, including the patient's surgical risk,
the geographic location of the beneficiary and physician, individual
physician practice patterns and preferences, the availability of
specialty ASCs, and others. We do not believe that individuals
receiving surgical procedures in ASCs routinely require care that is of
such greater acuity than care provided in the office-based setting that
the facility resources are significantly and systematically increased
when those procedures that are primarily office-based are performed
occasionally in ASCs. While it may be true that some more acute cases
are treated in ASCs rather than in physicians' offices, we continue to
believe that the structure of payments should not provide a financial
incentive for treatment in the ASC facility setting. Furthermore, this
policy is consistent with the averaging principle that is common to all
prospective payment systems; payment is based on the resources that are
required to treat the typical case, and payment for the treatment of a
specific Medicare beneficiary may, therefore, be higher than the costs
of treating less severe cases but lower than the costs of treating more
acute cases.
We believe that including these office-based procedures on the ASC
list of covered surgical procedures will ensure Medicare beneficiary
access to these services in the most appropriate ambulatory or
outpatient setting. Our final payment policy for these procedures,
along with public comments and our responses, is discussed in section
IV.E. of this final rule, and the related payment rules are set forth
in Sec. 416.171(d).
After considering the public comments received, we are finalizing
our proposal, without modification, to provide payment under the
revised ASC payment system for surgical procedures that are currently
performed predominantly in physicians' offices and that may be safety
performed in ASCs, without requiring an overnight stay.
D. Specific Surgical Procedures Excluded From Payment under the Revised
ASC Payment System
In Tables 44 and 45 of the August 2006 proposed rule (71 FR 49640
through 49646), we listed the HCPCS codes and short descriptors for
surgical procedures that, in addition to those that comprised the OPPS
inpatient list in Addendum E to the August 2006 proposed rule, we
proposed to exclude from ASC payment on or after January 1, 2008,
because they pose a significant safety risk or are expected to require
an overnight stay. Table 44 included those surgical procedures proposed
for exclusion from payment because at least 80 percent of Medicare
cases are performed on an inpatient basis, while Table 45 listed those
surgical procedures proposed for exclusion from payment because they
require an overnight stay. In section III.A.2. of this final rule, we
discuss our final rationale for excluding surgical procedures from ASC
payment. We note that because our final policy, as discussed above, for
the revised ASC payment system does not automatically exclude from
payment those procedures for which at least 8