45CFR INAs 416 and 488
Medicare Program; Update of Ratesetting Methodology, Payment Rates, Payment Policies, and the List of Covered Surgical Procedures for Ambulatory Surgical Centers
Effective October 1, 1998; Proposed Rule
(Federal Register Vol. 63, No. 113/Friday, June 12, 1998)
The American Society of General Surgeons (ASGS), on behalf of its members and the more than 30,000 practicing General Surgeon Specialists in the U. S., appreciates the opportunity to comment on the above-captioned Notice of Proposed Rule Making (NPRM). Our organization represents only General Surgeon Specialists. Our members regularly provide ambulatory health care in their offices, in ambulatory surgery centers (ASCs) and in hospital outpatient departments.
We applaud your efforts, in concept to study and correct the many payment inequities known to exist for procedures performed in ASCs. We further support your willingness to replace the eight-category AS C fee schedule, which has been in effect for the past decade, with an entirely new approach. While we have a number of concerns regarding the methodology used to develop this new fee schedule, we are much more concerned that, by focusing on payment rates for ASCs, HCFA has chosen to deal with a relatively minor problem and has ignored the huge problems which exist because of current reimbursement policies.
We believe that current HCFA policy has created a number of counter-productive and sometimes perverse incentives which have driven up the cost of heath care, blocked innovation in ambulatory surgery, and forced patients to be treated in the least comfortable environment. We implore you to (1) delay implementation of your new lie schedule until you are prepared to (2) deal with the larger issue: appropriate reimbursement for ASCs, hospital outpatient department and physician offices. We also urge you to (3) make payment site-independent, and to (4) eliminate restriction on procedures allowed in ASCs. It is time to level the playing field by creating an ambulatory payment schedule that includes all procedure, has fair rates of reimbursement based on sound actuarial methodologies, and which is applicable to all hospitals, ASCs and physician’s offices that wish to provide ambulatory care.
Until recently, physicians shunned cost of care issues, preferring to focus on curing new diseases at any cost. Many physicians now recognize the need to lower the cost of health care if we hope to afford to care for our ever-growing aging population. Ironically, HCFA has become one of the major obstacles preventing innovation in health care delivery. Consider that research in ambulatory anesthesia, using newer anesthetic agents (Propofol, Desflourane and now Sevofluoranee), has made if possible to “fast-track” patients, (i.e., allowing patients to leave the operating room table after general anesthesia, eat and go home without ever needing to stop in a recovery room). Such an approach is universally preferred by patients and could potentially lower the overall cost of health care for society, but there is little incentive for its adoption because recovery rooms are part of the fixed overhead of a hospital, and ASCs are not adequately compensated to justify upgrading to newer drugs. In fact, your current proposal to update reimbursement for ASCs is based on the cost of drugs used more than five years ago.
We agree that it is less expensive to provide care in a doctor’s office than in an ASC, and less expensive in an ASC than in a hospital setting. We also believe that much of the healthcare currently delivered in hospitals could be provided for less if HCFA would align incentives so that physicians and patients benefited from choosing the most cost-effective location for treatment. We prefer co-payments and deductibles that are site-independent, along with reimbursement that is site-independent. To properly align incentives at the current rates of reimbursement, however, patient copayments and deductibles should be lowest for treatment in a doctor’s office, higher in ASCs and highest in a hospital setting. And there should be similar incentives for physicians to utilize their office instead of an ASC, and to chose an ASCI over a hospital. Based on numerous surveys, patients universally prefer ASCs to hospital, and we similarly believe patients would chose to receive treatment in their doctor’s office, rather than an ASC or hospital, if possible. Were HCFA to eliminate its counter-productive financial incentives, ASCs (and eventually physicians offices) would begin to offer a wider selection of procedures, and patients and physicians would be more likely to chose the lowest-cost and most appropriate site for care.
To illustrate the consequences of current counter-productive incentives, consider that nearly all breast biopsies could safely and effectively be performed in ASCs. Physicians would perform many in their offices, if they could be assured of receiving adequate reimbursement. Yet HCFA has encouraged physicians and patients to go to hospital Outpatient departments where Medicare expenditure for this service is higher. ASCs have been traditionally under-reimbursed for breast procedures, and this NPRM proposes to reduce reimbursement further. HCFA has also excluded radiologic procedures from the ASC list, further discouraging ASCs from providing these services. Many breast biopsies require radiologic localization, and only hospitals can cover this cost. In addition, newer technology (using computers to successfully guide biopsy needles based on x-rays) has made it possible to do many breast biopsies without an incision. This approach has the same efficacy as a standard surgical biopsy, is less expensive and is preferred by many patients. Yet HCFA reimbursement policy has discouraged adoption of this technology anywhere but in a hospital.
We recognize that when HCFA first agreed to pay for surgery in ASCs, it was over the objections of many (most of whom were employed by the hospital industry) who felt that lowering the cost of health care meant lowering the quality of care provided. Justifiably concerned about risk, HCFA developed policy to strictly limit the procedures allowed in an ASC. Over time, however, ASCs have been proved unequivocally safe. Standards have been established to assure safety, as a result of Medicare certification and the JCAHO and AAAHC accreditation programs, but we do not believe that HCFA restrictions on allowable procedures have been of any benefit. The procedures that were initially restricted, but later allowed, have proven to be more danger our than those initially allowed. And in light of current anesthesia capabilities, we question how a 90-minute operating time limitation can be justified? While the list of allowed procedures has gradually expanded, this has occurred only in response to constant pressure from individuals and organizations that provide ambulatory care. We support the intent to regulate healthcare as needed to protect public health, but believe that regulations which proved arbitrary and ineffectual should be eliminated. We therefore believe that current restrictions on procedures allowed in ASCs should be eliminated.
The American Society of General Surgeons appreciates the opportunity to comment on this proposed regulatory change and stands ready to assist HCFA in whatever way it can. We also strongly support comments submitted by the American Medical Association. We expect that there may be many other organizations commenting on the proposed levels of reimbursement, but we hope that you will also take into consideration the many other issues involved, as outlined in the above comments and those of the AMA.