Outpatient facilities to see financial hit as CMS reworks inpatient-only list
The Facilities for Medicare and Medicaid Providers is strolling again its push to pay for extra complicated providers with out inpatient stays, a transfer that can dent revenues for well being methods which have boosted funding in outpatient amenities.
The company introduced through the Trump administration that it will part out its listing of round 1,700 providers Medicare would solely pay for on an inpatient foundation as a result of complexity of the process, the underlying bodily situation of the affected person or the necessity for no less than 24 hours of postoperative restoration time. CMS started that phase-out in 2021 by eradicating 298 providers from the listing.
However after heavy lobbying from hospital and doctor associations over security issues, the Biden administration’s CMS stated it will pause the phase-out plans and add again virtually all of the providers it faraway from the inpatient-only listing final 12 months. CMS additionally eliminated a lot of the greater than 260 procedures that had been added to a separate ambulatory surgical center-covered procedures listing within the 2021 rule.
The delay, as outlined within the Outpatient Prospective Payment System final rule issued final week, represents a stark change from CMS’ typical messaging. The company has largely been proposing laws that might transfer care from high-cost inpatient remedy to ambulatory surgical procedure facilities and different outpatient amenities.
CMS stated within the 2022 remaining rule that it realized the three-year timeframe for phasing out the listing was too brief and that it wants extra time to judge whether or not the providers eliminated in 2021 ought to truly be taken off the listing.
“It looks as if a whole 180,” stated Susan Maupin, vp on the healthcare consultancy Advis. “However every time there are security issues expressed by suppliers, CMS ought to rightfully take a step again and reevaluate if there are any reputable issues.”
That earlier push to maneuver away from inpatient care, partly, has prompted well being methods to increase investment in outpatient facilities. However these new surgical procedure facilities will doubtless take a monetary hit as CMS reworks its method.
“Enterprise plans for these attempting to construct an ASC might be blown out of the water for a little bit little bit of time, however I do not suppose will probably be a everlasting change,” stated Monica Hon, vp at Advis, who was supportive of regulators taking a step again.
Whereas the Ambulatory Surgical Middle Affiliation strongly opposed CMS’ removing of most providers added to the ASC-covered procedures listing in 2021, the group was on board with the company’s introduced pause. In feedback on the proposed rule, the group expressed issues with fully altering course on the coverage. Though ASCs cannot at all times instantly carry out procedures faraway from the inpatient-only listing, permitting a service to be carried out at a hospital outpatient division may very well be a precursor to including it to the ASC listing.
ASCA requested CMS to maintain three providers which have been carried out in ASCs on different affected person teams off the inpatient-only listing in 2022, which the company agreed to do within the remaining rule.
However CMS additionally stated 131 of the 298 providers taken off the inpatient-only listing in 2021 appeared in a single or no OPPS claims by Might 21, 2021, indicating that the prior 12 months’s coverage did not change medical practices a lot.
“One of many limitations is that for those who do not incent care to be achieved in an outpatient setting, there isn’t any incentive to make it a high-quality place,” stated Dr. Sricharan Chalikonda, Allegheny Well being Community’s chief medical operations officer.
Allegheny Well being is keeping its plans to maneuver much more procedures into its rising ambulatory surgical procedure middle community. Surgical procedures had been up round 10% in 2020 on the Pittsburgh-based built-in well being system’s 11 ASCs, Chalikonda stated.
“Each market perhaps is not prepared to maneuver to outpatient, however we are able to solely converse to what we’re doing. In how we’re designing our ASCs, it will be a step again for us to maneuver extra issues to the inpatient setting,” he stated. “If something, I feel what impacts high quality probably the most is quantity.”
Many well being methods, just like Allegheny, is not going to sluggish their funding in outpatient care regardless of CMS’ pause. No matter Medicare reimbursement, business insurers will nonetheless attempt to incentivize care exterior of the hospital, the place acceptable, trade observers stated.
“Numerous procedures will nonetheless be pushed within the outpatient path, particularly orthopedic providers,” stated Lynn Collins, senior supervisor at consultancy LBMC. “It would simply transfer at a slower tempo now, which might be a problem initially for newer ASCs.”
Federal regulators have taken goal at hospital and hospital outpatient division facility fees, which they cost Medicare for sure emergency division overhead and staffing prices. They’ve battled the American Hospital Association in court over a federal site-neutral coverage, which eliminates the cost differential for analysis and administration providers supplied at hospital-owned outpatient departments and impartial doctor workplaces.
Whereas shifting extra care exterior of the hospital would scale back healthcare prices, hospitals’ and medical associations’ warnings that high quality would undergo appeared to trump price issues.
Eliminating the inpatient-only listing would create “inappropriate security dangers for Medicare beneficiaries, impose administrative burdens on physicians and hospitals, improve the monetary burden for beneficiaries and erode the worth of Half A protection,” the Texas Hospital Affiliation wrote in a remark to CMS final 12 months.
Whereas Dartmouth-Hitchcock Well being typically supported eliminating the inpatient-only listing, it instructed CMS it will be complicated to have a surgical procedure off the inpatient-only listing whereas having anesthesia for a similar process on the listing.
The New Hampshire-based supplier famous cost differentials between inpatient DRG and outpatient codes can fluctuate by no less than $10,000. Additionally, the bundled cost applications that can transfer from inpatient to outpatient surgical procedure will upset physicians who’ve honed remedy protocol and stand to lose their shared financial savings, it wrote in a remark to the company.
However apart from administrative ambiguity, the protection argument would not maintain a lot water, trade observers stated. The COVID-19 pandemic strengthened that ambulatory and home-based care generally is a protected substitute for a lot of inpatient procedures, they stated.
“I do not perceive the protection argument,” stated Jeff Goldsmith, founder and president of healthcare consultancy Well being Futures. “There’s a additional downward lurch in inpatient utilization and persons are attempting to postpone the inevitable. As a affected person, I am not persuaded that outpatient care is much less protected.”
Allegheny Well being has been enhancing its preoperative and postoperative care to shorten inpatient stays or keep away from hospitalization altogether. Rehabilitation begins instantly within the post-anesthesia care unit and clinicians repeatedly test in with sufferers at house by way of digital visits, Chalikonda stated.
“We predict it’s best for sufferers. Supplied that you simply put an excellent help system by digital well being and different assets, I feel it’s the future,” he stated. “If something got here out of COVID-19, we discovered that transitioning from prolonged inpatient restoration to ambulatory care did not change high quality.”