Previously, the cost of the device had to be 50% or more of the total
cost of the procedure in the hospital outpatient setting in order for the
ASC to get paid separately for the device. That was a huge burden.
For example, if the cost of the device used in a knee arthroscopy
was 45% of the cost of the total procedure in the HOPD space, ASCs
would not get reimbursed for the full cost of the device. That was a big
disincentive to performing those procedures in an ASC. The ASC liter-
ally could not afford to do that procedure because the device cost ate
up nearly the entire reimbursement of the procedure.
ASCA went to CMS a few years ago and asked them to address this.
They agreed to move the device-intensive threshold down to 40%, and
ASCs were able to do some device-intensive procedures for the first
time.
This year, we got that threshold down to 30%, which opens up prob-
ably 100 or more different procedures that were previously cost-pro-
hibitive. That means some of those device-intensive procedures that
were stuck in the HOPD space because ASCs couldn't afford to pro-
vide them are now going to be able to migrate to ASCs.
The knee arthroscopy code CPT 29888 was impacted by this policy
change. In 2018, the national reimbursement rate was approximately
$2,700. Since Medicare estimates the device cost at almost $2,000, that
left only $700 to pay for everything else the facility is supposed to
cover (nursing, other staff, equipment, supplies, operating room use).
In 2019, Medicare reimburses ASCs $3,700 for this code, providing
more adequate reimbursement to cover all the costs that are covered
under the facility fee.
Medicare is taking the approach to reduce the threshold gradually
and seeing what moves. I think the volume of procedures that move
will dictate what Medicare does going forward with this policy.
Legal Update
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