National State of Affairs Update

1. National State of Affairs Update Kara Marshall Newbury Assistant Director, Health Policy New Hampshire Ambulatory Surgery Association’s Mid-Winter Updates Concord, NH February 12, 2014

3. ASCA Federal Legislative Agenda Actively Lobbying: • ASC Quality & Access Act • Removing Barriers to Colorectal Cancer Screening Act • Electronic Health Records Improvement Act Closely Monitoring: • Site Neutrality (MedPAC proposal) • Sustainable Growth Rate

4. ASC Quality & Access Act of 2013(H.R. 2500/S. 1137) • CPI-U to Hospital Market Basket • Authorizes Value Based Purchasing for ASCs • Transparency in Procedures List • ASC Rep on Advisory Panel on Hospital Outpatient Payment • Introduced in May by Lead Sponsors: • Senate: Ron Wyden (D-OR) and Mike Crapo (R-ID) • House: Devin Nunes (R-CA-11) and John Larson (D-CT-1) • Representative Ann Kuster (D-NH)

5. ACA Guidance: Colonoscopies • If a colonoscopy is scheduled and performed as a screening procedure pursuant to the USPSTF recommendation, is it permissible for a plan or issuer to impose cost-sharing for the cost of a polyp removal during the colonoscopy? • No. Based on clinical practice and comments received, polyp removal is an integral part of a colonoscopy. Accordingly, the plan or issuer may not impose cost-sharing with respect to a polyp removal during a colonoscopy performed as a screening procedure. • While a colonoscopy itself is preventive care, many insurance companies have been asserting that if a polyp is removed during the procedure it can be reclassified as "diagnostic," and the patient could be liable for part or all of the cost. • This change does not apply to Medicare patients.

6. H.R. 1070 – Removing Barriers to Colorectal Cancer Screening Act • Rep. Charlie Dent (R-PA) • Medicare preventive screening colonoscopy • Waives co-pays if polyps discovered during the procedure

7. H.R. 1331 – Electronic Health Records Improvement Act • Rep. Diane Black (R-TN) • ASCs: Physician “Meaningful Use” program • 2015 – 50 percent threshold problematic; particularly for ASC physician owners • Legislation provides a three year exemption for patient encounters in ASCs

8. Medicare Payment Advisory Commission - MedPAC • Recommends 0% increase for ASC payments in 2015 • Recommends 3.25% increase for HOPDs; 5.25% if sequestration remains in effect • CPI-U not an accurate update for ASCs • Cost reporting for ASCs

9. MedPACSite Neutrality ProposalsAddressing Medicare Payment Differences Across Settings: Ambulatory Care Services • Proposal: Equal Pay Rates Across Settings • Frequently performed in physician offices (more than 50%) • Similar unit of payment • Infrequently provided with an emergency department (ED) visit • Minimal difference in patient severity across settings

10. MedPAC Site Neutrality Proposals • MedPAC staff proposed 12 ambulatory payment classification (APC) groups for which payments could be equalized between HOPDs and ASCs. • Equalization would reduce Medicare spending and cost sharing by $590 million a year, and save beneficiaries $40–220 million, depending on how HOPD copayments are determined.

11. Your Participation Critical • National ASC Day: August 13, 2014 • Host a Facility Tour • Fly-ins • June 17-18 • September 9-10 Contact Blake McDonald at bmcdonald@ascassociation.org for more information.

12. ASCA Regulatory Agenda • Payment Policy • CPI-U vs. Hospital Market Basket • Procedure List • Implant Reimbursement • Quality Reporting • ASC-9, ASC-10 & ASC-11 • ASC-8 • Office of the National Coordinator (EHR) • Survey & Certification • Conditions for Coverage • Radiologist on Staff • Emergency Preparedness • Physician Discharge • Interpretive Guidelines: Recent Changes • Emergency Equipment • Temperature & Humidity • Patient Rights

13. Final Rule Recap • 1.2% rate update for ASCs, 1.7% rate update for HOPDs • Gap between ASC and HOPD payments widens, with ASCs being paid 55% of what HOPDs receive for the same procedures • Significant expansion of bundled payments for HOPDs and ASCs • No change in problematic device reimbursement policies • Four additional procedures added • Three of the four proposed quality measuresfinalized

14. Payment Methodology • RVU x Conversion Factor = National Rate x wage index = Local Rate • [Quality reporting adjustment begins in 2014] RVU Annual Update: hospital cost reports, secondary rescaling Conversion Factor Annual Update: inflation – productivity adjustment • *Special rules for device intensive and office based procedures • ASCA’s Rate Calculator

15. Rate Change Inputs  Change in the HOPD Relative Weights  Secondary Rescaling Inflation minus Productivity Adjustment  Changes in Device Costs ?Physician Payment Changes  orWage Index changes

16. Rate Change Process --------------------------------------------------------------------------------------- 2013 Hospital RVUs Updated based on hospital cost reporting 2014 Hospital RVUs Secondary rescaling 2014 ASC RVUs --------------------------------------------------------------------------------------- 2013 ASC conversion factor Update based on CPI-U – productivity 2014 ASC conversion factor --------------------------------------------------------------------------------------- Wage index update --------------------------------------------------------------------------------------- Physician rate update and device cost update --------------------------------------------------------------------------------------- Quarterly ancillary update, mid-year surgical code additions ---------------------------------------------------------------------------------------

17. ASC Payable Procedures • CMS pays for surgical procedures CPT 1,000-6,999 (unless excluded) • Ancillary Services • List updated annually • Mid-year coding changes

18. Reasons for Exclusions • Pays for unless meets one or more of the following: • ASC List Exclusion Criteria • Is on the inpatient only list • Poses a significant safety risk to the beneficiary • Typically requires active medical monitoring and care past midnight • Directly involves major blood vessels • Requires major or prolonged invasion of body cavities • Generally results in extensive blood loss • Is emergent in nature • Is life-threatening in nature • Commonly requires systemic thrombolytic therapy • Can only be reported using an unlisted surgical procedure code

19. Annual Evaluation Process • CMS evaluates the excluded procedures & procedures newly removed from inpatient list • Four codes were added in the final rule: • 27415 (Osteochondral knee allograft) • 27524 (Treat kneecap fracture) • 60240 (Removal of thyroid) • 60500 (Explore parathyroid glands) • Significant number of newly packaged codes

20. Bundling Codes • Expanded bundling of codes for outpatient services payments • Supporting items and services associated with a procedure are bundled into a single payment • Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure; drugs and biologicals that function as supplies when used in a surgical procedure, including skin substitutes; certain clinical diagnostic lab services; certain procedures never done without a primary procedure, and device removal procedures

21. Implant Reimbursement • Currently: device must represent at least 50% of the total cost in an HOPD to be considered “device intensive” procedure eligible for reimbursement • For all other ASC services involving device costs, conversion factor is applied to the entire relative weight for the service • ASCA recommendation: CMS should not adjust device portion of payment by the wage index • ASCA recommendation: CMS should not apply ASC conversion factor to the device-related portion of the procedure for devices which CMS can determine a median device cost

22. Quality Reporting Update • 2% reduction begins in 2014 • 98% of ASCs reported successfully for 2012 • 8 previously announced measures • 3 new measures with reporting slated to begin in 2015 for data collected in 2014 • 50% claims threshold remains for ASC 1-ASC-5 • Low Medicare volume exemption (240 claims)

23. ASC-8 • Data collection will take place for the influenza season between October 1, 2014, and March 31, 2015 • Other providers who currently report this information must do so by May 15 every year. They anticipate the initial reporting deadline for ASCs will be May 15, 2015; however, that deadline will not be finalized until the 2015 ASC final payment rule. • The data will be reported in 2015 through the CDC’s National Healthcare Safety Network (NHSN). • Operational Guidance Document for this measure should be released this month.

24. ASC Medicare Quality Reporting Program • $917 billion in savings - $350 from defense • Debt ceiling increase $900 billion - $400 immediate • Vote on BBA – Sept. 30 to Dec. 31st • Joint Select Committee on Deficit Reduction

25. New Measures Finalized • Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (NQF #1536) • Endoscopy/Poly Surveillance: Appropriate follow-up interval for normal colonoscopy in average risk patients (NQF #0658) • Endoscopy/Poly Surveillance: Colonoscopy Interval for Patients with a History of Adenomatous Polys – Avoidance of Inappropriate Use (NQF #0659)

26. Quality Measure Summary

27. HITECH The Health Information Technology for Economic and Clinical Health (HITECH) Act, passed as part of the American Recovery and Reinvestment Act of 2009 (PL 211-5), authorized incentive payments to eligible professionals (EPs) and eligible hospitals to promote the “adoption and meaningful use of certified electronic health record technology (CEHRT).”

28. Main Components of Meaningful Use HITECH specifies the following three components: • Use of certified EHR in a meaningful manner (e.g., e-prescribing) • Use of certified EHR technology for electronic exchange of health information to improve quality of health care; and • Use of certified EHR technology to submit clinical quality measures (CQM) and other such measures selected by the Secretary

29. Requirements of Stage 1 Meaningful Use • 90-day reporting period the first year; annually thereafter; • Reporting through attestation; • Objectives and Clinical Quality Measures; • Reporting may be yes/no or numerator/denominator attestation; • To meet certain objectives/measures, 80% of patients must have records in CEHRT

30. Requirements of Stage 1 Meaningful Use • Stage 1 Objective and Measures Reporting • Eligible Professionals (EP) Must Complete: • 15 core objectives • 5 objectives out of 10 from menu set • 6 total clinical quality measures (3 core or alternate core and 3 of 38 from additional set) • Hospitals Must Complete: • 14 core objectives • 5 objectives out of 10 from menu set • 15 clinical quality measures

31. Applicability of MU Objectives and Measures • Some MU objectives are not applicable to every practice. Exclusions do not count against the 5 deferred measures, and EP is excluded from having to meet that measures • Examples would be: dentists who do not perform immunizations; chiropractors do not e-prescribe

32. Payment Adjustments and Exceptions • Statutory Requirement to Take Effect in 2015 • Must demonstrate meaningful use at least three months prior to the end of the calendar year (EPs) or fiscal year (hospitals) and meet registration and attestation requirement by July 1, 2014 (hospitals) or October 1, 2014 (EPs)

33. Four Categories of Exceptions • Lack of availability of internet access or barriers to obtaining IT infrastructure; • Time-limited exception for newly practicing EPs or new hospitals who will not otherwise be able to avoid penalties; • Unforeseen circumstances such as natural disasters (handled on case-by-case basis); • (EP only) exceptions dues to a combination of clinical features limiting a provider’s interaction with patients, or if EP practices at multiple locations, lack of control over availability of CHERT

34. EP Exception • EPs whose primary specialty is listed in PECOS as anesthesiology, radiology or pathology 6 months prior to the first day of the year which penalties would be imposed • Five year limit applies to all exceptions • EP must have lack of control over availability of CEHRT at practice locations

35. Office of the National Coordinator for Health Information Technology (ONC)Electronic Health Records in the ASC setting • Advancing Interoperability and Health Information Exchange: sought comments on how to expand beyond what is currently being done through ONC programs and the EHR incentive program • ASCA met with ONC and ASC submitted comments in response to public request • EHR stakeholder group

36. Conditions for Coverage • Radiologist on Staff (Proposed) • Emergency Preparedness (Proposed; in comment period) • Physician Discharge (ASCA Workgroup)

37. §416.49 (b) Radiologic ServicesASCA Comment Letter • Option A: 416.49(b)(2) The ASC’s governing body must oversee the provision of radiologic services in keeping with state law and in accordance with approved policies and procedures of the ASC. • Option B: Supervision of the provision of radiologic services shall be performed by a physician or other credentialed practitioner, in accordance with State law and the individual ASC’s radiology policies.

38. Emergency Preparedness § 416.41(c),adopted in November 2008, currently requires ASCs to have a disaster preparedness plan. ASCs must: (1) have a written disaster plan that provides for the emergency care of its patients, staff and others in the facility; (2) coordinate the plan with state and local authorities; and (3) conduct drills, annually and complete a written evaluation of each drill, promptly implementing any correction to the plan.

39. Emergency PlanProposed Rule • §416.54(a) – (d) • Must include a facility-based and community-based risk assessment, utilizing an all-hazards approach; • Strategies for addressing emergency events identified by the risk assessment; • Address patient population, including, but not limited to the type of services the ASC has the ability to provide in an emergency; and continuity of operations, including delegations of authority and succession plans; • Include a process for ensuring cooperation and collaboration with local, tribal, regional, State, and Federal emergency preparedness officials’ efforts to ensure an integrated response during a disaster or emergency situation, including documentation of the ASC’s efforts to contact such officials, and when applicable, of its participation in collaborative and cooperative planning efforts.

40. Policies and ProceduresProposed Rule (b) Based on the emergency plan, risk assessment and communications plan; updated at least annually. • System to track location of staff and patients in the ASC’s care both during and after the emergency; • Safe evacuation from the ASC; • Means to shelter in place: patients, staff, and volunteers who remain in ASC; • System to preserve patient information, protect confidentiality of patient information and ensure records are secure and readily available; • Use of volunteers and other staffing strategies, including the process and role for integration of State and Federally designed health care professionals to address surgery needs during an emergency; • Arrangements with providers to receive patients in the event of limitations or cessation of operations to ensure the continuity of services to patients; • The role of the ASC in the provision of care and treatment by an alternate care site identified by emergency management officials

41. Communication Plan Proposed Rule • Names and contact information for staff, entities providing services under arrangement, patients’ physicians, other ASCs, volunteers; • Contact information for Federal, State, tribal, regional, and local emergency preparedness staff and other sources of assistance; • Primary and alternate means for communicating with staff, government agencies; • Method for sharing information and medical documentation for patients under the ASC’s care, as necessary, with other health care providers to ensure continuity of care; • A means, in the event of evacuation, to release patient information; • Means of providing information about the general condition and location of patients under the facility’s care; • Means of providing information about the ASC’s needs and the ability to provide assistance to the authority having jurisdiction.

42. Training & TestingProposed Rule Training: • initial training for all staff, individuals providing on-site services under arrangement, and volunteers; • emergency preparedness training at least annually, • document training, • ensure staff can demonstrate knowledge of procedures. Testing: • Conduct exercises to test the emergency plan, including: • Participation in community mock disaster drill annually. If one is not available, conduct an individual facility-based mock disaster drill at least annually; • If actual disaster, one year exemption from drill; • Paper-based, tabletop exercise: group discussion led by a facilitator, using a narrated, clinically-relevant emergency scenario, and a set of problem statements, directed messages, or prepared questions designed to challenge an emergency plan; • AnalyseASC’s response to and maintain documentation of drills, exercises and emergency events and revise the ASC’s emergency plan, as needed.

43. §416.52 Physician Discharge • Discharge order, signed by the operating physician • Expected Duration of Services: ASCs may not provide services that, under ordinary circumstances, would be expected to exceed 24 hours following an admission. Patients admitted to an ASC will be permitted to stay 23 hours and 59 minutes, starting from the time of admission. (See 73 FR at 68714 (November 18, 2008)). • The time calculation begins with the admission and ends with the discharge of the patient from the ASC after the surgical procedure. The discharge occurs when the physician has signed the discharge order and the patient has left the recovery room. Other starting or end points, e.g. time of administration of anesthesia, or time the patient leaves the OR, may not be used to calculate compliance with the 24-hour requirement.

44. Interpretive Guidelines Recent Changes • §416.44 (c) Emergency Equipment • §416.44 (a) Physical Environment(Temperature and Humidity) • §416.50 Patient Rights • Patient Notification Requirements • (c) Advance Directives

45. §416.44 (c) Emergency Equipment ASC medical staff and governing body of the ASC coordinates, develops and revises ASC policies and procedures to specify the types of emergency equipment required for use in the ASC’s operating room. The equipment must meet the following requirements: (1) Be immediately available for use during emergency situations. (2) Be appropriate for the facility’s patient population. (3) Be maintained by appropriate personnel.

46. §416.44 (a) Physical Environment: Temperature and Humidity Temperature, humidity and airflow in ORs must be maintained within acceptable standards to inhibit microbial growth, reduce risk of infection, control odor, and promote patient comfort. ASCs must maintain records that demonstrate they have maintained acceptable standards.

47. §416.44 (a) Physical Environment: Temperature & Humidity • Acceptable standards for OR temperature, such as those recommended by the Association of Operating Room Nurses (AORN) or the Facility Guidelines Institute (FGI), should be incorporated into the ASC’s policy. • RH in ORs to be maintained between 20 - 60 percent.American Society for Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE), which was also incorporated into FGI 2010 Guidelines and approved by American Society for Healthcare Engineering of the American Hospital Association and the American National Standards Institute.

48. §416.50 Patient Rights • The ASC must inform the patient or the patient’s representative or surrogate of the patient’s rights, and must protect and promote the exercise of theserights, as set forth in this section. • The ASC must also post the written notice of patient rights in a place or places within the ASC likely to be noticed by patients waiting for treatment or by the patient’s representative or surrogate, if applicable.

49. §416.50 (a) Notice of Rights:Same-Day Notification • AnASC must, prior to the start of the surgical procedure, provide the patient, or the patient’s representative, or the patient’s surrogatewith verbal and written notice of the patient’s rights in a language and manner that ensuresthe patient, the representative, or the surrogate understand all of the patient’s rights as set forth in this section. The ASC’s notice of rights must include the address and telephone number of the State agency to which patients may report complaints, as well as the Web site for the Office of the Medicare Beneficiary Ombudsman.

50. Interpretive Guidelines: Information on Advance Directives An advance directive is a written instruction, such as a living will or durable power of attorney for healthcare, recognized under State law (whether statutory or as recognized by the courts of the State), relating to the provision of healthcare when the individual who has issued the directive is incapacitated. (See 42 CFR 489.100.)