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MedPAC says ambulatory surgical centers don't need a pay raise

9 Dec 2019 7:36 AM | Matt Zavadsky (Administrator)

An example of why accurate cost & revenue reporting is so important to the ambulance industry…  Many of the things highlighted in the MedPAC report could similarly be surmised by MedPAC about the ambulance industry…


MedPAC says ambulatory surgical centers don't need a pay raise


December 05, 2019


The Medicare Payment Advisory Commission is expected to vote against a pay increase for ambulatory surgical centers next month because they don't provide cost data.

Medicare payments to ambulatory surgical centers are probably high enough, MedPAC's staff said at a meeting on Thursday. They found that beneficiaries have reliable access to care and that quality is improving. In addition, ambulatory surgical centers have plenty of access to capital and have experienced strong growth in Medicare revenue—it grew 7.4% from 2017 to 2018.

Those trends led several MedPAC members to conclude that there's no need to increase the conversion factor for ambulatory surgical centers. The conversion factor is a base payment amount that's used to calculate how much Medicare pays providers. It's currently scheduled to go up by 2.8% for 2021, but it doesn't appear necessary based on the findings.

"For the calendar year 2021, Congress should eliminate the update," said Dan Zabinski, a senior analyst for MedPAC.

Eliminating the increase would produce cost savings for Medicare without hurting access to care or the willingness of ambulatory surgical centers to deliver services to Medicare beneficiaries, according to MedPAC's staff.

But there's no way to know for sure how much money ambulatory surgical centers earn from Medicare services. That's because MedPAC's staff couldn't calculate profit margins for ambulatory surgical centers because they don't report cost data to the CMS.

"If you won't show us your cost reports, we won't show you an update," said David Grabowski, professor of health care policy at Harvard Medical School.

The commission can't recommend an update without access to the data they would need to make an informed decision, said Dr. Francis J. Crosson, MedPAC chairman and founder of the Permanente Federation.

Ambulatory surgical centers should be able to submit cost data because other small providers such as hospices already do it, according to Zabinski.

"We remain concerned that (ambulatory surgical centers) don't submit cost data, even though the commission has recommended doing so since 2009," said he said.

HHS Secretary Alex Azar has the authority to require ambulatory surgical centers to submit cost data to the CMS, but he hasn't exercised that power yet, Zabinksi said.

Some members of the commission were skeptical of the value of ambulatory surgical centers in the absence of data. Ambulatory surgical centers are often physician-owned. That could give them greater financial incentives to perform additional, unnecessary surgeries.

"I'm really struck that we do not know whether (ambulatory surgical centers) have been a good development or not," said Dana Safran, head of measurement for Haven. "Paying a lower price for something you don't need isn't a bargain.

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