Summary: Medicare has opened up new locations for hundreds of procedures that had previously been relegated to the inpatient or hospital setting, generally. This will have an impact on anesthesia providers as there will be an increasing need for their services in alternate settings.
On the move—that’s the story of mankind, isn’t it? From primitive times to the digital age, people groups from around the world have gathered their possessions and hit the road, looking for new vistas and new opportunities. There were great movements of people arriving from Europe to the eastern shores of America in centuries past, and then their descendants migrated further west. It is an inevitability of human society, it seems, that we must eventually transition to new places. We just can’t sit still. The latest evidence of this compulsion can now be seen in the American healthcare sector.
For over a hundred years, anesthesiologists provided their services primarily in the hospital setting. When ambulatory surgery centers (ASCs) came along in 1970, a new venue for anesthesiology opened up. Since that time, anesthesia groups gradually increased their presence at these locations, while still maintaining their primary practice in the hospital setting. Today, some groups or individual anesthesia providers perform services exclusively in ASCs. With recent rule changes from the Centers for Medicare and Medicaid Services (CMS), anesthesia’s migration to the surgery center setting will only increase.
On December 2, 2020, CMS produced the 2021 OPPS/ASC Payment System (APS) Final Rule, which includes several changes affecting the nation’s healthcare facilities. The changes will act to increase anesthesia cases in both the hospital outpatient setting and ASCs.
Inpatient-Only List Eliminated
The Final Rule eliminates the so-called Inpatient Only (IPO) list over the course of a three-year transitional period, beginning with the removal of approximately 300 primarily musculoskeletal-related services in 2021. These procedures will thus become eligible for Medicare payment in the hospital outpatient setting when clinically appropriate, as well as continuing to be payable in the inpatient setting when performed there.
In addition, procedures removed from the IPO list may become subject to medical review based on the “2-midnight rule.” In the 2020 OPPS/APS Final Rule, CMS had finalized a two-year exemption from certain medical review activities related to the 2-midnight rule for procedures newly removed from the IPO list. In the 2021 Rule, CMS finalized a policy which provides the following:
P]rocedures removed from the IPO list beginning January 1, 2021 will be indefinitely exempted from site-of-service claim denials under Medicare Part A, eligibility for Beneficiary and Family-Centered Care-Quality Improvement Organization (BFCC-QIO) referrals to Recovery Audit Contractors (RACs) for noncompliance with the 2-midnight rule, and RAC reviews for “patient status” (that is, site-of-service). This exemption will last until we have Medicare claims data indicating that the procedure is more commonly performed in the outpatient setting than the inpatient setting.
This decision essentially paves the way for hundreds of procedures to be performed in the outpatient department that had previously been confined to the inpatient setting. Again, by 2024, the full list of 1,700 IPO procedures will be completely phased out and approved for Medicare payment in the outpatient setting, when clinically appropriate.
ASC Covered Procedures List
The 2021 OPPS/APS Final Rule made similar changes relative to procedures that can now be performed in surgery centers. The Rule added 11 procedures to the ASC covered procedures list (CPL), under the standard review process. Of these, the following six are case types that might have particular relevance for many of our readers:
- Total hip arthroplasty (THA)
- Open treatment of complicated fracture(s) of malar area, including zygomatic arch and malar tripod; with internal fixation and multiple surgical approaches
- Autologous chondrocyte implantation, knee
- Colpopexy, vaginal; extra-peritoneal approach (sacrospinous, iliococcygeus)
- Colpopexy, vaginal; intra-peritoneal approach (uterosacral, levator myorrhaphy)
- Laparoscopy, surgical, colpopexy (suspension of vaginal apex)
When reviewing our clients’ 2020 utilization of the first procedure on the above list, THA, we found that 60 percent of them were performed in the inpatient hospital setting. With the addition of this procedure to Medicare’s ASC CPL this year, that percentage may begin to drop.
In addition, CMS has added 267 surgical procedures to the ASC CPL, effective for CY 2021, using a revised set of criteria. To see the complete list of ASC CPL procedures, please go to the following CMS link: CMS-1736-FC | CMS. You will then need to click on Addendum BB. Interestingly, one commenter noted that the 2021 final rule indicates that procedures that were on the inpatient-only list as of 2020 will be precluded from future inclusion on the ASC CPL. This is something we will need to watch in future rule-making.
If this weren’t enough, some commercial payers are now incentivizing surgeons to move certain case types out of the hospital setting and into the ASC. For example, Blue Cross/Blue Shield (BCBS) of Illinois sent a letter to providers stating that it will increase reimbursement for “eligible surgeries” by 15 percent when performed in the ASC setting effective January 2021. What’s remarkable is that BCBS IL will concomitantly decrease payments to the surgeon by 15 percent for some of these same services if performed in the hospital!
Planning for the Inevitable
While ASCs are increasingly able to provide a safe alternative for certain types of surgery, it will ultimately be up to physicians to determine whether or not these newly available procedures are appropriate to perform outside of the hospital setting, on a patient-by-patient basis. Based on clinical outcomes and provider feedback, CMS may alter the approved list of ASC procedures in the years ahead. For now, however, the momentum seems to be swinging in the ASCs’ favor.
From a practice implication perspective, these changes will, no doubt, portend a continual movement of such procedures away from hospitals to ASCs. This will, in turn, lead to a greater presence of anesthesia providers in these free-standing locations. Groups will need to determine the extent to which they need to transition resources to these alternate settings. Since some groups are more traditionally bound to a particular set of surgeons, the anesthesia group may be forced to perform more cases in an ASC if their surgeons begin to shift their practice to these locations in light of the additional Medicare procedures that can now be performed there.
The great migration will not occur over night. Many surgeons may continue to perform these newly added CPL procedures in the hospital. That’s their comfort zone. Others may be anxious to shift their practice to an ASC because of some perceived level of convenience. Anesthesia groups who have surgery centers in their geographical area will need to closely monitor the way the wind is blowing over the next weeks and months. It doesn’t hurt to plan now for a greater presence in the ASC down the road.