Revised Payment Methodology For ASCs

The final rule allows ASCs to be paid for any surgical procedure that CMS determines does not pose a significant safety risk to Medicare beneficiaries when performed in an ASC and that is not expected to require an overnight stay. As a result, the final rule adds about 790 procedures for ASC payment beginning in CY 2008. The proposed OPPS/ASC rule would add several additional procedures, which would result in approximately 3,300 covered surgical procedures under the revised ASC payment system. CMS expects that as a result of the significant expansion of surgical procedures paid in ASCs, beneficiaries will experience greater access to surgical services in appropriate settings.


The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) required CMS to revise the ASC payment system no later than January 1, 2008. Consistent with the recommendations of the November 2006 Government Accountability Office Report (GAO Report) on ASC costs and payment, CMS is implementing the revised ASC payment system using hospital OPPS relative payment weights as a guide.

The revised ASC payment rates are based on the ambulatory payment classifications (APCs) used to group procedures under the OPPS. As required by the MMA, the revised ASC payment system is budget neutral; that is, it is estimated to have no net effect on Medicare expenditures in CY 2008 compared to the level of expenditures that would have occurred in the absence of the revised payment system. Consistent with the GAO Report, which found that procedures performed in ASCs are generally less costly than those performed in the HOPD, the proposed ASC payment rates for CY 2008 are estimated to be set at 65 percent of the OPPS rates for the corresponding procedures.

Many of the surgical procedures that are included as covered surgical procedures eligible for payment in ASCs under the revised system are procedures that have been performed predominantly in physicians' offices. To avoid creating payment incentives to perform those services in ASCs when they could be safely performed at less cost to Medicare and the beneficiary in a physician's office, payment for surgical procedures identified as 'office-based' is capped at the nonfacility practice expense component of Medicare's Physician Fee Schedule (MPFS) payment rate in the physician office setting. A separate payment to the physician performing these surgical procedures would be made for their professional services provided in the ASC facility.

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