Archive January 2017 XVIII, No. 1

Legal Update: Double Dose of Good Regulatory News for ASCs

Medicare law promotes pricing transparency and removes EHR penalties.

Mark Weiss

Mark Weiss, JD

BIO

compare out-of-pocket costs CURES ACT Patients will be able to compare their out-of-pocket costs at a surgical center hospital vs. a hospital outpatient department, thanks to the 21st Century Cures Act.

Every ambulatory surgical center should bow down and give thanks to the 21st Century Cures Act, a law that promotes pricing transparency and protects physicians who perform cases in ASCs from EHR penalties. Here's how ASCs and their physician-owners could benefit.

  • Pricing transparency. In 2017, Medicare on average will pay surgical centers 50% of what hospital outpatient departments (HOPDs) receive for providing the same surgical services. This dramatic ASC-HOPD pricing disparity will now be somewhat of a good thing for surgical centers. That's because a provision in the Cures Act requires the Department of Health and Human Services to create a searchable website that will let consumers compare differences in their out-of-pocket costs (assuming no supplemental insurance) and in the Medicare beneficiary liability for various surgeries when those procedures are performed in HOPDs and ASCs. With few exceptions, HOPD charges for a procedure will exceed those at the ASC setting. It's a safe bet that Medicare patients especially will clamor for their procedures to be performed at ASCs. Even if they're not interested in curbing healthcare costs, they'll be motivated to reduce their own out-of-pocket expenditures.

    Private payers are likely to follow this transparency trend, accelerating the already existing flow of commercial cases from hospitals to ASCs. At the risk of losing patients, physicians wishing to retain an outpatient surgery caseload will be motivated to shift from the HOPD setting to ASCs. In addition to seeking privileges, some will seek ownership at an existing facility. Some might also consider forming their own ASCs, whether through their group or with other colleagues.
  • EHR penalties. The Cures Act also protects physicians who practice in ASCs from being penalized under the Medicare "meaningful use" program, which requires Medicare providers to use certified electronic health record technology (CEHRT) for a fixed percentage of their patients. Because no CEHRT is available for ASCs, those physicians had faced potential cuts in their professional fees. The Cures Act authorizes HHS to approve CEHRT for the ASC setting, meaning that physicians' incomes will no longer suffer as a result of performing cases in ASCs as opposed to at hospitals.

Ultimate bottom line
Finally, some welcome news for ASCs from Washington, D.C. Actually a double-dose of good news. Patients will have financial information that compels them to have outpatient procedures in ASCs, not HOPDs. And surgeons' incomes will not suffer as a result of performing cases in ASCs as opposed to at hospitals. OSM

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