Blog Post September 9, 2020 Surgery Migration Is Accelerating. Do You Have an ASC Plan? Authors I. Naya Kehayes Sean Hartzell In the face of changing healthcare policy, evolving patient preferences, and pressure from payers, hospitals are increasingly recognizing the need to align and partner with ambulatory surgery centers (ASCs). Health system leaders who take a wait-and-see approach to developing a plan for outpatient surgery run the risk of losing lucrative surgery volume. Consider the facts: CMS regulatory and commercial payer policy changes are driving material changes to the approval of surgical procedures in the outpatient setting, allowing for and enabling migration. This has resulted in notable changes in the HOPD and the ASC approved lists over the past few years, in conjunction with the proposed CMS rules for 2021, which continue to indicate support for surgery migration. The years 2018 through 2020 saw material additions to the HOPD and ASC approved lists. In 2018, total knee arthroplasty (TKA) was removed from the inpatient only (IPO) list and added to the HOPD list; in 2020, it was added to the ASC approved list.In 2019 and 2020, diagnostic cardiac catheterization and coronary interventional procedures were added to the ASC approved list.In 2020, total hip arthroplasty (THA) was removed from the IPO list and added to the HOPD list; just one year later, in the 2021 proposed rules, THA is included for addition to the ASC approved list.In addition, in the 2021 proposed rules, CMS has proposed to eliminate the IPO list over three years,beginning with the removal of 266 musculoskeletal-related services in 2021. The codes slated for removal include total shoulder, several total joint revisions, and a magnitude of spine procedures, which would then be approved for the HOPD setting. The transition of these procedures to the ASC setting would require future adjustments to the rules, thereby providing a clear path for procedures to move from the IPO list to the HOPD list and finally to the ASC list. Commercial payers are steering patients away from hospitals. By developing benefit designs, educating patients, implementing policies that limit access to reimbursement in the hospital setting, and requiring pre-authorization in the hospital setting, commercial payers are driving surgery to ASCs to reduce the total cost of care and out-of-pocket spend. For example, many Blue Cross and Blue Shield companies, UnitedHealthcare (UHC), Cigna, and other payers nationwide have implemented policy changes that require hospitals to attain approval for specified outpatient surgical procedures. These policies are designed to lower the cost of care, increase awareness with providers and patients, and steer patients to ASCs. Click here and here for more information. Patients have a say in where they receive their care. Patients are becoming savvier shoppers. With payers such as Massachusetts Blue Cross Blue Shield, Cigna, UHC, and others creating site-of-service transparency tools and increasing education, patients are becoming better informed of their out-of-pocket spend and responsibility, motivating them to select outpatient settings to lower the cost of care. Patients also want enhanced efficiency and an environment with a lower incident rate for exposure to COVID-19. Hospitals and health systems are being forced to look at the progression to the outpatient setting. Organizations that have been proactive about surgical migration trends, which have been accelerated by COVID-19 in many markets, are looking at surgical and procedural services that can be moved from the inpatient setting to HOPDs to ASCs, and even office-based settings, in an effort to optimize capacity for higher-acuity cases that must be performed in the hospital. Any service line that has an office-based surgery site-of-service adjustment (POS 11), which is common with cardiology/vascular procedures, urology, GI, and pain management, represents an opportunity for accelerated migration. It is probably no coincidence that if you refer back to the UHC October 2015 list of codes that are subject to authorization in the hospital setting, the majority of the GI and urology codes have office-based site-of-service differentials. Overall, a litany of rules have enabled migration to the outpatient setting, coupled with payer policies, increased transparency, and pricing sensitivity that motivate consumers. While many of these examples are focused on surgery, there is similar momentum in other ancillary services. Finally, with the current environment, the implications of COVID-19 support the migration momentum, and we expect trends to continue and accelerate. Learn more about surgery migration and implications on cardiology procedures in the outpatient setting.If you have questions about current surgery migration trends or are ready to start developing your outpatient strategy, contact Naya Kehayes and Sean Hartzell.