August 30, Dear Dr. Berwick:

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1 August 30, 2011 Donald Berwick, MD, MPP, FRCP Administrator Centers for Medicare & Medicaid Services Department of Health and Human Services Attention: CMS-1525-P P.O. Box 8013 Baltimore, MD CMS 1525-P Medicare Program; Proposed Changes to the Hospital Outpatient Prospective Payment System and CY 2012 Payment Rates; Proposed Changes to the Ambulatory Surgical Center Payment System and CY 2012 Payment Rates Dear Dr. Berwick: On behalf of the American College of Gastroenterology (ACG), the American Gastroenterological Association (AGA), the American Society for Gastrointestinal Endoscopy (ASGE) and our 18,000 physician members specializing in digestive diseases, we are pleased to comment on CMS proposed rule CMS-1525-P, published on July 16, 2011 in the Federal Register, regarding proposed changes to the hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) payment system for CY The ASC is an important part of the practice of gastroenterology, providing a safe, patient friendly and cost effective environment for the provision of medical services, such as colorectal cancer screening, for patients of all ages. The majority of ASCs in which gastroenterologists practice are single specialty centers. According to a 2009 study prepared by KNG Health Consulting, LLC, of the more than 5,000 ASCs in the United States, 24 percent specialize in just gastrointestinal (GI) procedures. Because of their single specialty structure, GI ASCs are particularly sensitive to changes in Medicare payments. There are a number of provisions in the proposed rule that impact the practice of gastroenterology, particularly in the ASC setting. Our comments focus on the following issues: QUALITY IMPROVEMENT ASC Quality Reporting Program o Measure Selection for CY 2014 Payment Determination o Measure Selection for CY 2015 Payment Determination o Measure Selection for CY 2016 Payment Determination o Incorporation of Measures Relevant to Gastrointestinal ASCs o Appeals Process for Payment Determination 1

2 o o o Data Publication Reporting Requirements for CY 2014 Payment Determination Reporting Period and Payment Penalty PAYMENT POLICY New Upper Level GI Procedure APC Passthrough Code (C1749) Clarification ASC Payment Update Productivity Adjustment Scaling of ASC Weights Wage Index ASC Quality Reporting Program QUALITY IMPROVEMENT Measure Selection for CY 2014 Payment Determination Our societies support quality measures that are both actionable and meaningful to GI ASCs, and we want to be involved with the development of those measures. We believe that by suggesting eight non-specialty specific measures as starter measures for ASC quality reporting, CMS recognizes the importance of a gradual and step-wise approach to ASC quality reporting. However, to apply all eight measures, many of which are surgical measures, to endoscopy services provided in the ASC setting is not only burdensome but unlikely to reflect quality or correlate with outcomes. Our societies have experienced frustrating limitations with the Physician Quality Reporting System (PQRS) regarding the relevancy of measures to gastroenterology. We hope that ASC quality reporting doesn t become limiting for GI ASCs as CMS attempts to identify measures that are widely applicable to all ASCs. In the sections below, we will share our ideas for future measures that are more relevant to services provided in GI ASCs, as well as comment on the reporting criteria for the CY 2014 payment determination. CMS is proposing the following eight measures for the CY 2014 payment determination: ASC-1: Patient Burn ASC-2: Patient Fall ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant ASC-4: Hospital Transfer/Admission ASC-5: Prophylactic Intravenous (IV) Antibiotic Timing ASC-6: Ambulatory Surgery Patients with Appropriate Method of Hair Removal ASC-7: Selection of Prophylactic Antibiotic First OR Second Generation ASC-8: Surgical Site Infection Rate We believe that of the eight measures, the two that are most applicable to GI ASCs are: ASC-2: Patient Fall ASC-4: Hospital Transfer/Admission We also believe that ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant could be used as a GI ASC measure for the rare instances when there is confusion over an upper GI endoscopy versus colonoscopy, or a single procedure in one encounter versus both an upper endoscopy and colonoscopy in the same encounter. ASC-1: Patient Burn could also be used for reporting by GI ASCs; however, the risk of a burn in conjunction with endoscopic procedures is miniscule. The other four proposed measures are not relevant for endoscopy centers and, therefore, 2

3 reporting on those measures should not be required for GI ASCs for the CY 2014 payment determination, as well as for future payment years. Measure Selection for CY 2015 Payment Determination For the CY 2015 payment determination, CMS proposes to incorporate two structural measures for ASC reporting, which would be in addition to the eight measures being proposed for the CY 2014 payment determination: Safe Surgery Checklist Use; and ASC Facility Volume Data on Selected ASC Surgical Procedures. Safe Surgery Checklist Use CMS is seeking comment on its proposal to add Safe Surgery Checklist Use as a structural measure to the ASC quality measurement set. We believe that while simple in concept, this may be an unnecessary reporting requirement because all ASCs that are CMS compliant or accredited by an accrediting organization should already be compliant with use of a safe surgery checklist. As a Condition for Coverage for ASCs, Surgical procedures must be performed in a safe manner by qualified physicians who have been granted clinical privileges by the governing body of the ASC in accordance with approved policies and procedures of the ASC ( ). The interpretive guidelines for found in Appendix L of the State Operations Manual Guidance for Surveyors: Ambulatory Surgical Centers (Rev. 71, ) describes safe manner, in part, as: In addition, acceptable standards of practice include the use of standard procedures to ensure proper identification of the patient and surgical site, in order to avoid wrong site/wrong person/wrong procedure errors. Generally accepted procedures to avoid such surgical errors require: A pre-procedure verification process to make sure all relevant documents (including the patient's signed informed consent) and related information are available, correctly identified, match the patient, and are consistent with the procedure the patient and the ASC s clinical staff expect to be performed; Marking of the intended procedure site by the physician who will perform the procedure or another member of the surgical team so that it is unambiguously clear; and A time out before starting the procedure to confirm that the correct patient, site and procedure have been identified, and that all required documents and equipment are available and ready for use. We suggest that the requirements for a safe surgery checklist as currently included in the Conditions for Coverage are applicable across ASCs, and, therefore, do not require expansion or redefinition. As such, the measure requirements should allow ASCs to use any checklist that, as CMS states, covers effective communication and helps ensure that safe practices are being performed at three critical perioperative periods: prior to administration of anesthesia, prior to incision, and prior to the patient leaving the operating room. Regarding the proposed performance period of this measure, we believe that Jan. 1, 2012 through Dec. 31, 2012 does not allow sufficient advance notice to ASCs following publication pf the CY 2012 OPPS/ASC final rule. We ask that CMS modify the performance period to Jan. 1, 2013-Dec. 31, 2013 and delay the data submission period until Furthermore, we believe that this measure could be easily reported via a claims-based submission method rather than via CMS QualityNet Website. We 3

4 believe that a claims-based submission method will streamline reporting for ASCs, thus reducing the reporting burden. ASC Facility Volume Data The proposed rule states, there is substantial evidence in recent peerreviewed literature that volume of surgical procedures, particularly of high-risk surgical procedures, is related to better patient outcomes, including decreased surgical errors and mortality. While we believe this is a valid statement, we believe that volume is ambiguous in the context of this measure. Does volume refer to number of patients, the number of cases, or the number of procedures for the category? We seriously question how volume data reported at the ASC facility level as proposed will be meaningful to patients and not confusing or misleading. We suggest that CMS desire to collect allpayer volume data should align with the fundamental questions of what does the average patient gain from having this information and is it useful and meaningful? We believe further consideration by CMS, in conjunction with the ASC stakeholder community, is needed on how to make publication of volume data meaningful to patients before a volume measure is integrated into the ASC Quality Reporting Program. Additionally, we believe reporting of volume data by ASCs should not occur until CMS has integrated specialty-specific quality measures into the ASC Quality Reporting Program. Volume data alone simply implies over-utilization unless there is an overlay of quality data that allows for an analysis of the appropriateness of procedures and services and outcomes. To this point, the proposed rule states, many consumer-oriented Web sites reporting health care quality information sponsored by States and private organizations are reporting procedure volume, in addition to provider performance on surgical process and outcome measures, because it provides beneficial performance information to consumers choosing a health care provider. Among the four principles that CMS is applying for the development and use of ASC measures is: Collection of information should minimize the burden on providers. We agree with this principle and caution that CMS proposal to collect volume data may duplicate state data reporting requirements, thus adding to, not minimizing, the administrative burden on ASCs. For example, in North Carolina all ASCs are required to send to the state, via a vendor, data on every patient encounter which includes: Insurance ID Group number, Date of Birth, Gender, Zip Code, Payer Class, Payer Carrier Code, Diagnosis Code 01, Diagnosis Code 02, Diagnosis Code 03, Diagnosis Code 04, Ethnicity, Date of Service, Admit, Date of Service Discharge, Place of Service, Service Type, CPT01, CPT02, CPT03 Data pulls are onerous due to constantly changing file formats within the practice management system. Because ASCs are fined for errors, staff time ensuring data completeness is time consuming. Our societies suggest that there should be a single national reporting system, rather than a national reporting requirement overlaid on a patchwork of state reporting requirements. Measure Selection for CY 2016 Payment Determination For the CY 2016 payment determination, CMS proposes to incorporate one additional structural measure in addition to the 10 measures being proposed for the CY 2015 payment determination: Influenza Vaccination Coverage among Healthcare Personnel. Our societies do not oppose the addition of this structural measure for the ASC Quality Reporting Program. However, we have concerns with the magnitude of the data collection and submission burden that would be imposed if the measure is implemented as currently specified. Currently, the National Healthcare Safety Network (NHSN) protocol requires detailed data on every health care worker, which is defined as an individual who works in the facility, whether paid or unpaid, and includes all employees, contractors, students, trainees, volunteers and physicians. The broad scope of this definition adds significantly to the data collection and 4

5 submission burden. We ask that CMS explore ways in which the burden of reporting this measure could be lessened, as it has for reporting in the hospital setting. Incorporation of Measures Relevant to Gastrointestinal ASCs In the proposed rule, CMS states that its goal for the future is to expand any measure set adopted for the ASC quality reporting to address CMS priorities (improved health outcomes, quality, and safety) and to align ASC quality measure requirements with other reporting programs. CMS also notes that it is interested in Patient Experience of Care Measures and procedure-specific measures for future payment determinations. We support process and outcomes measures that are both actionable and meaningful to GI ASCs, and, as already stated, our organizations want to lead the development of those measures. With the few exceptions noted above, the majority of the measures being proposed for the CY payment determinations lack relevancy to endoscopic procedures because, while invasive, they are not surgical in nature and are generally not associated with hair removal, skin incisions, burn risk, device implantation, prophylactic antibiotics, or venous thromboembolism. As part of an incremental approach to quality reporting for ASCs, initial GI ASC-specific measures should be process-oriented measures that require annual or quarterly reporting, rather than reporting at each relevant patient encounter. For example, such measures could include safe injection practices, whether a GI ASC has obtained accreditation by a qualified accreditation body, whether an ASC has an acceptable endoscope reprocessing plan in place, or whether the ASC participates in a systematic registry for gastroenterology. These simple attestation measures would be a less burdensome start to ASC quality data collection and reporting and would probably correlate with ASC quality better than measures reported at the individual patient level, particularly at a time when patient-outcome measures for GI endoscopy have not yet been validated. Another more meaningful and relevant measure for GI ASCs could be one pertaining to sedation safety, such as rescue required through use of reversal agents. We also believe that patient experience/satisfaction measurement is important in assessing the overall quality of care delivered in the ASC setting and should be compared with patient experience/satisfaction of care in other settings. When presented in this manner, the information will be most useful to Medicare beneficiaries when deciding where to receive outpatient endoscopic services. The proposed rule lists measures and measurement topics under consideration for future payment determinations. We offer comments on a few of those measures: Anesthesia Related Complications o Patient Intraoperative Awareness - This is a complication associated with general anesthesia and is not appropriate for moderate sedation as is often used during gastrointestinal endoscopy. Moderate sedation may be associated with an amnestic response, but patients by definition should still be arousable. Therefore, if measured in GI ASCs, this could yield results suggesting very poor performance. Such outcomes could encourage providers to increase their use of clinically unnecessary anesthesia services simply to improve results of a publicly reported quality measure. o Other possible anesthesia-related measures could include: Use of reversal agents Type of anesthesia and credentials of the professional administering anesthesia when a complication is reported. Additional Future Measurement Topics 5

6 o o Presence of Physician During Entire Recovery Period Recovery and presence would need to be carefully defined. For GI ASCs, providers are present in the facility and able to respond to unanticipated problems until the patient is deemed stable for discharge, but are not typically at the patient s bedside until discharge. Post-Discharge ED Visit within 72 Hours This is something that most GI ASCs currently track, and therefore constitutes a reasonable future measure for GI ASCs. Appeals Process for Payment Determination CMS explains in the proposed rule, We intend to propose administrative requirements, data validation and data completeness requirements, reconsideration and appeals processes, and 2015 payment determination reporting requirements in the CY 2013 OPPS/ASC proposed rule with comment period. We appreciate that CMS recognizes the importance of an appeals process and has proposed to include an appeals process for ASCs that participate in the quality reporting program. Many of our members own and operate independent ASCs and already have experience with CMS quality reporting programs, including the PQRS. Our members faced significant obstacles in the early years of the PQRS program, and, until recently, were not afforded an opportunity to receive early feedback about their reporting habits or file an appeal if they believed CMS made an incorrect determination about their success in the program. Recently, as required by Congress, the agency developed an appeals process for the PQRS program. Despite the perceived ease of the quality reporting program, there are many instances where quality reporting processes do not operate as expected. These processes can fail on the provider side, as well as on the agency side. Providers must be assured that they have an opportunity to file an appeal, particularly if they have documentation to support such an appeal. As CMS works to develop and finalize an appeals process, we ask CMS to collaborate with physicians who own and operate ASCs to develop a fair appeals process. This will be particularly important as ASCs are penalized based on their participation and success in the quality reporting program and as the data reported becomes publicly available through CMS compare Web sites. Data Publication While our organizations support increased transparency as it relates to ASC quality, we believe that the value to patients will not just be the ability to make meaningful quality comparisons across ASCs, but across all settings where endoscopic care is provided, including hospital outpatient departments (HOPDs). In this regard, alignment of quality measures across settings of care will be important. We believe that public reporting should be multi-dimensional. Along with reporting the quality of endoscopic procedures, we believe that CMS should make available to beneficiaries the Medicare rates and patients out-of-pocket costs for services provided in both the HOPD and the ASC settings. Additionally, public reporting through an ASC Compare or similar Web site should distinguish those ASCs where only gastrointestinal procedures are done, those where gastrointestinal procedures are also done, and where gastrointestinal procedures are not done. Because endoscopy is not surgical in nature, it is important that GI ASCs do not appear to be deficient in meeting standards that may not be applicable to them. We also believe that like the initial phases of physician and hospital quality reporting initiatives, the first phase of public reporting should provide at least one full year of confidential feedback on quality data while providers become accustomed to the measures and reporting process. Finally, there needs to be proper explanation of publicly reported data so it is meaningful and useful to patients. For example, patients should not be led to correlate data reporting with patient care and 6

7 quality. Our societies welcome the opportunity to work with CMS on how reported data can be presented and explained to patients so that it is understandable and useful. We also request that CMS establish a system that would allow an ASC to file a complaint regarding the accuracy and completeness of its data before the data becomes publicly available. In fact, we believe that CMS should clarify in future rulemaking that it will not publish an ASC's quality data until CMS has responded to the concern in writing. Reporting Requirements for CY 2014 Payment Determination We support CMS proposal to collect data on quality measures through a claims-based reporting mechanism by requiring ASCs to submit appropriate quality data codes (QDCs) on Medicare claims. We support this vehicle of submission of quality data. Like hospitals and physicians, ASCs should be given more than one way to report quality data in the future, including registry- and EHR-based reporting. However, claims-based reporting will likely remain an important option for the foreseeable future, especially since ASCs are still limited in their use of EHRs. For the CY 2014 payment determination, CMS is proposing that data completeness would be determined by comparing the number of claims meeting measure specifications that contain the appropriate QDCs with the number of claims that would meet measure specifications, but did not have the appropriate QDCs on the submitted claim. We believe that CMS should establish a low threshold for data completeness in 2012 recognizing that providers will not know the rules by which they are being judged until A reporting threshold less than 100 percent for initial reporting periods is consistent with other CMS reporting programs. Additionally, because the full complement of measures are not applicable to all ASCs, CMS should develop a G-code that ASCs can submit to CMS once during a performance period that indicates the measure is not applicable to the ASC, thereby exempting the ASC from data submission for the measure. Finally, we ask that CMS specify in an interim rule in the first quarter of 2012 the rules for data validation and completeness, as well as the proposed process for reconsideration and appeals. Reporting Period and Payment Penalty We believe that because the proposed rule lacks sufficient detail regarding the reporting requirements for the 2012 performance period, it does not provide a reasonable means of rapid implementation for most ASCs by Jan. 1, It will be difficult for our societies to promote participation in the program without knowing the detailed requirements for successful participation. Furthermore, the expected 60 days between publication of the final rule and implementation does not provide our societies the time needed to fully conduct outreach and education to our members. Therefore, we believe that CMS should delay the performance period for the 2014 payment determination until dates of service on or after Oct. 1, ASCs should have an opportunity to voluntarily report the ASC measures between Jan. 1 Sept. 30, 2012 to gain reporting experience, as has been allowed with other CMS quality reporting programs. Furthermore, we believe that CMS should use its discretion to lower the payment penalty for nonreporting for at least the initial payment penalty year while ASCs, as well as CMS, build experience with a new reporting program. Specifically, we recommend starting with a 0.4 percent reduction for CY 2014, which is consistent with the initial inpatient hospital reporting program, rather than a 2 percent reduction. 7

8 PAYMENT POLICY New Upper Level GI Procedure APC We applaud CMS for conducting the analysis and accepting our societies recommendations to create a new upper level gastroenterology procedure APC (0419). Creating this new APC level will allow for more equitable payment across gastroenterology procedures and enable procedures to be placed into groups that will more accurately reflect shared clinical and resource homogeneity. Establishing this APC 0419 also enables services with higher median costs to be reimbursed at a more equitable rate, thereby removing what we believe was an unintended financial barrier to facilities that otherwise would not be able to cover the cost of the devices used to perform radiofrequency ablation of the esophagus in patients with Barrett s esophagus. Specifically this will address the financial barriers for CPT code (esophagoscopy, rigid or flexible; with ablation of tumor(s), polyp(s), or other lesion(s)). By establishing the new APC level and moving code into that payment level, facilities will be able to cover the cost of the device and patients will have access to important and lifesaving procedures. Passthrough Code (C1749) Clarification We are pleased that CMS includes information about code C1749 (Endoscope, retrograde imagining/illumination colonoscope device (implantable)), specifically noting that it became effective on Oct. 1, 2010, was eligible for payment in CY 2011 and will continue to be eligible for payment in CY 2012, with proposed estimated expenditures of approximately $35 million. Despite this, physicians are upset because facilities, particularly ASCs, are experiencing problems with obtaining reimbursement from several of the Medicare Administrative Contractors (MACs). While issues vary among the MACs, the identified problems include: (1) failure to assign an appropriate ASC payment level despite being provided with invoice pricing; (2) failure of the MACs to understand how to add the code to their systems, process claims or to provide clear guidance to their claim managers who do not understand how to process claims; (3) misunderstanding that code C1749 is subject to statutory limitations of colon cancer screening and whether the pass-through code will be recognized for payment as a screening service ; and (4) a belief that reimbursement for the device is already included in reimbursement for colonoscopy procedures and, therefore, is not eligible for additional payment. We believe that these issues are a result of CMS establishing code C1749 as carrier priced. While we understand that CMS wants to give MACs flexibility to review the device and the authority to assess appropriate payment, the result is tremendous confusion among the MACs. If ASCs cannot cover the cost of the device, access to the device is jeopardized for both Medicare providers and beneficiaries. Based on the experience of our members from October 2010 through August 2011, we request that CMS provide further guidance in the final rule as to the ASC pricing level for the device used to estimate the 2012 expenditures. By publishing the price used to calculate the approximate expenditure, we believe it will help the MACs to develop appropriate pricing, despite being provided with documentation regarding the cost of the device and specific inputs. It will also enable CMS to determine if the proposed estimated expenditure of $35 million is sufficient. By allocating funds for code C1749, it was apparent that CMS intended for claims to be processed and paid, but unfortunately not all of the MACs have the information necessary to appropriately process claims. We request that clearer guidance be provided to MACs to avoid the confusion, backlog, delay of claims processing, and provider and beneficiary access issues that have resulted. 8

9 ASC Payment Update CMS has the discretion to use an alternative update factor to the default adjustment based on estimates of the Consumer Price Index for All Urban Consumers (CPI-U). We have repeatedly called upon CMS to use an alternative update factor. Specifically, we have recommended that ASC payments be updated annually using the hospital market basket. In 2011, CMS relied on using CPI-U to update ASC payments and applied a statutorily mandated measure of the 10-year rolling average of economy-wide multifactor productivity gains. CPI-U is highly volatile, making it difficult for the government to accurately forecast. For 2011, CMS estimated CPI-U to be 1.5 percent. The Bureau of Labor Statistics (BLS), however, recently reported inflation from July 2010-June 2011 to be 3.6 percent a 2.1 percent difference. ASCs are being unfairly penalized by CMS continued use of CPI-U, and, as a result, the gap between ASC and HOPD payments is widening. For example, the CY 2012 proposed ASC payment rate for a diagnostic colonoscopy (43578) is $370. Comparatively, the reimbursement for the same procedure in the HOPD is $647. We believe because the CPI-U forecast error was significant, CMS should make a prospective adjustment in ASC payment rates to account for this forecast error. CMS has established the hospital market basket at 3.0 for 2012, while the proposed CPI-U is 2.3 percent. Because ACA requires the ASC update to be reduced by a multifactor economy-wide productivity (MFP), estimated to be 1.4 percent, the ASC update for CY 2012 will be 0.9 percent. As the agency is aware, ASCs have been provided annual updates on only a sporadic basis and facilities received no adjustments for inflation for the period , notwithstanding the fact that ASC costs have risen at levels that are commensurate with those of HOPDs. In fact, it could be argued that CMS payment policies reward HOPD inefficiencies while penalizing cost-conscious behaviors of ASCs. It is expected that ASC payments will fall this year to 57 percent of HOPD rates. We believe that this growing disparity results in distorted market behavior. In its March 2011 report to Congress, the Medicare Payment Advisory Commission (MedPAC) noted its concern that significant payment disparities among Medicare s ambulatory care settings for similar services are fostering undesirable financial incentives. The report stated that ASCs are being reorganized as hospital outpatient entities, in part, to receive higher reimbursements. We believe there is a compelling need for CMS to revisit the use of CPI-U and other aspects of the ASC payment system that are contributing to the ASC-HOPD payment disparity. In its March 2011 report, MedPAC also referred readers to its March 2010 report, which raised concern that the CPI-U may not reflect ASCs cost structure. Although the CPI U is a widely used measure of price inflation that is updated on a regular basis by the Bureau of Labor Statistics (BLS), the mix of goods and services in this price index probably does not reflect ASC inputs. The CPI U is based on a sample of prices for a broad mix of goods and services, including food, housing, apparel, transportation, medical care, recreation, personal care, education, and energy (IHS Global Insight 2009). The weight of each item is based on spending for that item by a sample of urban consumers during the survey period. Although some of these items are probably used by ASCs, their share of spending on each item is likely very different from the CPI U weight. For example, housing accounts for 43.4 percent of the entire CPI U (Bureau of Labor Statistics 2009). We also wish to note that CPI-U is an output price index that accounts for productivity gains. When the MFP is applied to an ASC update that is calculated using CPI-U, ASCs are unfairly penalized because the MFP adjustment is designed to limit the amount provider output prices (what providers charge for services) can be raised. 9

10 Because ASCs are being penalized when the MFP is applied to an update calculated using CPI-U and because CPI-U is an unreliable indicator of ASC costs, with inputs unrelated to medical inflation or the delivery of surgical services, we recommend that CMS replace the use of CPI-U with the hospital market basket as the index for updating ASC payments beginning with CY Productivity Adjustment As required by the ACA, CMS proposed to reduce ASC rates by a measure of economy-wide productivity gains (a 10-year rolling average calculated by the BLS). The proposed productivity adjustment will be 1.4 percent in CY 2012, according to the draft rule. In addition, CMS proposes a new policy to use a separate estimate of productivity for the outpatient and ASC setting, meaning that the assumption of productivity gains for the ASC setting is higher than the assumed productivity gains for hospitals. While recognizing that CMS is mandated to apply a productivity adjustment, we continue to have a number of concerns regarding CMS method for making this application. We maintain that the ASC productivity adjustment should be consistent with that of the HOPD. However, due to CMS proposed decision to calculate the productivity adjustments for the ASC and HOPD using different timeframes, the rule describes a 0.4 percent disparity between the two. We urge CMS to employ consistency in which the timeframe the MFP is calculated for both the ASC and HOPD, which would eliminate the disparity of the MFP between the two settings. We also find that consistent estimates of productivity are difficult to attain and are subject to much volatility. While we recognize that CMS uses a 10-year rolling average to alleviate some of this volatility, CMS use of quarterly time series data, which is not utilized by the BLS, injects unnecessary variation into the adjustment factor. Finally, it is important to note, ASCs cannot achieve the same level of productivity as the rest of the economy because, in part, the majority of an ASC s input prices are related to labor, which cannot be replaced with advances in technology. Scaling of ASC Weights CMS updates the ASC relative payment weights each year using the national OPPS relative payment weights. CMS had adopted a policy whereby the ASC relative payment weights are scaled to achieve year-to-year budget neutrality in the ASC payment system. The OPPS relative weights reflect real growth in the relative cost of services performed in the HOPD. Conceptually, the annual change in relative weights should move in the same direction in both the ASC and HOPD settings. However, the secondary rescaling process applied in the ASC payment system is not working appropriately and is causing an ongoing divergence in the ASC weights. The result is the further erosion of any logical link in the relationship of HOPD and ASC payments for the same set of services. As our societies have commented in the past, we ask that CMS exercise its authority to make annual adjustments in the relative payment weights. The application of the separate ASC scaling factor as proposed produces payment differentials that are neither sensible nor good policy. We offer the following supporting rationale for our recommendation: As CMS has noted in past rulemakings, the scaling factor would be negative when changes in the relative weights raised ASC spending, but it would be positive and increase the ASC relative weights in years in which weights for procedures grew faster than the non-procedural volume. 10

11 Conceptually, if the relative weights for the most common ASC procedures decreased in the HOPD, the ASC scaler would be positive to offset that difference. Codes that make up most of ASC volume have relative weights that fell in the OPPS for 2012 relative to the 2011 OPPS weights. This should have triggered a positive scaler for CY Because the scaler applied to the 2011 relative weights was nearly 10, the starting point for the comparison between 2011 and 2012 spending continues to produce a negative scaler. Wage Index We are disappointed that CMS continues to propose using the most recent available raw pre-floor and pre-reclassified hospital wage indices to adjust the labor portion of ASC costs. Because ASCs and HOPDs provide the same types of services and compete in any given locality for the same nursing and professional staff, they should be paid using the same adjustment for geographic differences in costs. As has been requested in the past by the gastrointestinal community and other ASC stakeholders, we ask that CMS use the same adjusted hospital wage indices for calculating ASC payments as it uses for the HOPPS payments. Furthermore, we understand CMS is interested in pursuing a proposal to limit application in the outpatient setting of all the inpatient adjustments for which it has discretion. We ask CMS to move forward with a policy to either eliminate the application of the following policies to the hospital outpatient or apply them equitably to the ASC setting as well. By doing so, CMS would level the playing field in markets across the country where the wage index is otherwise distorting the price differential between the ASC and HOPD settings without any relationship to underlying wage costs. application of the frontier states wage index floor of 1.0 for providers in Montana, Nevada, Wyoming, North Dakota, and South Dakota; imputing a statewide rural area wage index for states with no counties outside of an urban area; preventing the wage index of any urban area from falling below the statewide rural area wage index (including an imputed floor); preventing the wage index of an urban area crossing state lines from falling below the state-specific rural floor; and applying an adjustment to the wage index for certain counties where a significant proportion of residents commute to other high wage index counties for work. CONCLUSION Many of the issues raised in these comments have been stated by our societies and other organizations since the beginning of the new ASC payment system. In the case of the gastrointestinal single specialty ASC, we fear there may be misconceptions about the structure, function and regulation of single specialty GI ASCs. In the past, it has been suggested that ASCs experiencing a decline in revenue in one area could simply expand services in another area. This may be an option for multispecialty centers, but this statement ignores the reality that state licensure and certificate of need regulations often define a limit on the services that a GI ASC can provide. In fact, despite significant reductions in ASC payments, a number of GI procedures actually experienced a decline in volume from 2009 to We believe policies of this proposed rule will accelerate the migration of Medicare patients back into the HOPD, increase costs to patients and the Medicare program, decrease patient satisfaction, and delay or deny needed medical services, including life-saving colorectal cancer screening. These results are 11

12 unnecessary since CMS has ample authority to make decisions that will continue to make GI ASCs viable and a choice for Medicare beneficiaries. The ASC has been one of the most positive developments in the cost-effective delivery of services to Medicare beneficiaries in the last 20 years. We are deeply concerned that CMS continues to make policy choices that clearly undermine the ability of ASCs to serve Medicare beneficiaries, particularly given strong patient preference for these centers and the compelling need to manage Medicare expenses more effectively. Congress granted CMS broad authority to establish a new and better payment system for all services provided in the ASC. We hope that CMS will utilize its authority in a way that enhances the ability of ASCs to provide services to Medicare beneficiaries. The ACG, AGA, and ASGE appreciate the opportunity to offer these comments. If we may provide any additional information, please contact Brad Conway, Vice President of Public Policy, ACG, at , or bconway@acg.gi.org; Michael Roberts, Vice President of Public Policy, AGA, at , or mroberts@gastro.org; or Camille Bonta, consultant to ASGE, at or cbonta@summithealthconsulting.com. Sincerely, Delbert Chumley, MD, FACG President American College of Gastroenterology Gregory Ginsberg, MD, FASGE President American Society for Gastrointestinal Endoscopy Ian L. Taylor, MD, PhD, AGAF President American Gastroenterological Association 12