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CMS Releases the Calendar Year 2020 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule

October 4, 2019


July 29, 2019 CMS published its highly anticipated OPPS Proposed Rule, sending the healthcare industry into a frenzy of analysis and dialogue of the potential impact. This rule was the second latest published in the history of OPPS rules which was largely acknowledged as due to changes within the current administration. However, as the weeks passed many began to postulate that this rule would contain significant changes and that we would begin to feel the crystallization of the administration’s healthcare policy efforts as we begin the long track toward the 2020 election.  

For Interventional Cardiovascular procedures this rule was full of significant and possibly industry shifting policies. 

PCIs added to Approved Ambulatory Surgery Center Payment List

It is important to note that CMS has been forecasting this policy change for years, in fact they have been pushing procedures out of the hospital inpatient setting as a key strategy to reduce overall healthcare costs. First published in 2013, CMS implemented the two-midnight rule, effectively driving significant portions of overnight stays into a hospital outpatient status. A large majority of PCI procedures do not meet clinical criteria for a two mid-night stay and thus facilities are being paid largely on an outpatient basis. Despite these reimbursement changes and recent expert consensus opinions from SCAI, the majority of PCI are still being kept overnight for observation. In rule’s commentary, CMS noted that it had reviewed both clinical characteristics and sought clinical advisor input to conclude that PCI procedures can be safely performed in ASCs and would not pose a significant safety risk to patients.  

It is also important to put this proposed rule in the context of state health department certificates of need (CON), which today roughly 33 states require a CON to construct an ASC. However, in the last month Florida has done away with its CON and there are currently legislative efforts active in several states across the country. If these proposed policy changes do go into effect, hospitals may be forced to contend with a shifting site of service in their market. Here is a back of the envelop economic analysis to help consider the financial impact of PCIs shifting to the ASC:

The U.S. performs approximately 700,000 PCIs annually and if we conservatively assume that 20% of these cases are non-emergent and that the patient’s procedure can safely be performed in an ASC, that would mean that CMS is targeting approximately 140,000 procedures to move out of the hospital. 

If CMS pays a blended average of roughly $12,000 for hospital outpatient PCI procedures and the estimated ASC payment in the 2020 proposed rule is $6,081 for CPT 92928 (PCI with bare metal intracoronary stent(s) and $6,203 for CPT C9600 (PCI with drug eluting intracoronary stent(s); if successful in moving 20% of the market, CMS is looking at greater than $811,000,000 in savings opportunities. While at the same time, at roughly $6,000 per procedure reimbursement across 140,000 procedures creates nearly a billion-dollar procedure market for ASCs to run after. 

Have you right sized your Same Day Discharge (SDD) Program for PCIs? 

Hospital based Cath Labs must begin to wrestle with changing care pathways in anticipation of this shift in care. Patients, payers and physicians may begin to look for and expect that unnecessary waste such as overnight stays that are not clinically necessary will be avoided. Terumo Business Edge has helped programs nationally develop and implement SDD programs. Don’t wait to see what happens or hope that your market won’t feel the impact of these shifts.

Have you developed an Ambulatory Strategy for your Cardiovascular Service Line?

Over the course of the last two years in anticipation of these proposed policy changes, hospitals across the country have begun developing ambulatory strategies and in a handful of cases programs have already opened ASCs and hybrid OBL/ASCs focused on Interventional Cardiology, Peripheral Vascular Disease and Electrophysiology. In some cases, these joint ventures have represented unique ways to engage physicians and to prepare for the anticipated policy change that CMS has announced. Terumo Business Edge TBE has the resources and knowledge of the landscape to help the CV service line prepare for this changing market.  Even if your program has no intention of evolving an ASC strategy, can your program afford a 20% loss of your current PCI volume? 

Contact: info@terumobusinessedge.com  

About the Author

RYAN GRAVER
VP Commercial Market Access & Development, Terumo Business Edge

Contact: ryan.graver@terumomedical.com

Ryan Graver brings more than two decades of diverse healthcare experience spanning multiple dimensions of care delivery, research, business development, consulting, market access, healthcare economics and med-tech related strategy. Prior to joining Terumo Ryan was leading Marketing, Professional Education, Clinical and Reimbursement for Acessa Health. Many of you also know Ryan from his time where he served as the President of MedAxiom Ventures, where he helped kick-off Terumo Business Edge and where he lead national strategic initiatives with more than forty industry partners spanning pharma, Medtech, health it and numerous health related service organizations. Ryan has held global leadership role with Zimmer building a Market Access function. Directing the U.S. healthcare economics & reimbursement function for St. Jude Medical and multiple positions with the University of Arizona and Minnesota the Tucson Orthopaedic Institute and the Park Nicollet Health Services. Ryan brings experience in working with commercial payers, CMS and has lead lobbying effort nationally and at a state level where he has passed several state laws related to healthcare services. Ryan received his MPH in Healthcare Administration and Pharmaceutical Economics and a BA in Communication and Health Policy from the University of Arizona.