Low-risk procedures performed in a hospital outpatient setting are reimbursed at a higher level than the same procedures performed in an ambulatory surgery center (ASC), but is there value in the higer payments for procedures done in hospital outpatient surgical departments? In proposed quality measure changes, the Centers for Medicare and Medicaid Services (CMS) aims to make it easier to compare quality between the two types of surgical settings.

CMS is well aware that it could save money if payments for procedures done at both hospital outpatient surgery centers and ASCs were made site neutral, meaning the same procedure earns the same reimbursement regardless of where it is done. The Office of Inspector General (OIG) wrote to it once again in May of this year urging such a cost-saving measure, which the OIG thinks could save the government as much as $15 billion.

However, to get it done, CMS will need payment policy changes that can only be done through Congress. Specifically, it said in its response to the OIG that it will need Congress to end the requirement that Outpatient Prospective Payment System (OPPS) changes be budget neutral, meaning that a reduction in the reimbursement of some procedures must be balanced by increases in reimbursement elsewhere. In addition, it will need to change all the ASC payment rates that are tied to the OPPS rate to allow reducing the OPPS rate while keeping the ASC rate the same.

To accomplish such major structural changes to the current payment system, CMS needs solid evidence on its side that there is nothing particularly different about the two settings that would justify a higher payment for one over the other. If quality of care and outcomes are better in the hospital outpatient surgery setting, then the higher payments for these procedures would be justified.

In the 2015 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Policy Changes and Payment Rates proposed rule [CMS-1613-P] that is being published in the Federal Register on July 14, 2014, CMS continues to lay the groundwork for head-to-head quality comparisons between hospital outpatient procedures and ASC procedures. The goal is measure alignment across the Hospital OQR and Ambulatory Surgical Center Quality Reporting (ASCQR) Programs. 

The latest proposed changes are the addition of one outcome measure (Facility Seven-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy) and the transition of one outcome measure (Cataracts — Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery) to voluntary reporting for both the Hospital OQR and ASCQR programs.

CMS also proposes dropping three measures from the Hospital OQR program that are essentially meaningless because practically every hospital has almost perfect performance on these measures and there is really no difference in the high measures across hospitals. These are

• OP-4: Aspirin at Arrival (NQF #0286) for cardiac care
• OP-6: Timing of Prophylaxis Antibiotics, a surgery measure
• OP-7: Prophylactic Antibiotic Selection for Surgical Patients (NQF #0528)

Finally, CMS proposes to add OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy (a claims-based measure) starting in 2017, as well as making the OP-31: Cataracts — Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (NQF #1536) measure voluntary instead of required.

According to CMS, the quality changes would impact the more than 4,000 hospitals that are paid under the OPPS and the approximately 5,300 Medicare-participating ASCs paid under the ASC payment system.

CMS stated on its website that it will accept comments on the proposed rule until September 2, 2014 and will respond to comments in a final rule to be issued on or around November 1, 2014. The proposed quality changes can be viewed online here.