Texas Updates Ambulatory Surgery Center Fee Schedule.

Wednesday, December 26, 2007 | 0

By the Insurance Council of Texas

On Dec. 10 Commissioner of Workers' Compensation Albert Betts adopted amendments to Rule 134.402 (Ambulatory Surgical Center (ASC) Fee Guideline). The amended rule will freeze the ASC fee guideline at 2007 reimbursement levels and will take effect on Dec. 30.

The reasoned justification, set out in the rule adoption preamble, noted that the amendments are necessary to maintain the stability of ASC reimbursement rates during the period that the Texas Department of Insurance Division of Workers’ Compensation (DWC) develops a new ASC fee guideline in order to address new changes in Medicare’s ASC reimbursement methodology. The new Medicare ASC reimbursement methodology takes effect on Jan. 1.

The amended rule does not apply to political subdivisions with contractual relationships governed by Section 504.053(b)(2) of the Texas Labor Code.

The current version of Rule 134.402 was based on the Medicare ASC reimbursement methodology in place at the time. That methodology established a set payment amount for each type of facility service that the Centers for Medicare and Medicaid Services (CMS) determined would be reimbursed in an ASC setting. These services were divided into nine specific categories or ASC groups.

The reimbursement levels and fee guideline established in current Rule 134.402 use the Medicare reimbursement structure as a baseline, or reference point, for the maximum allowable reimbursement calculations for services provided in an ASC health care facility. However, the ASC fee guideline was not based solely on the Medicare reimbursements. Commercial market payments were also considered. The adoption of the ASC payment adjustment factor (PAF) of 213.3% was based upon due consideration of all of the statutory requirements for fee guidelines.

At the time of the adoption of the current ASC fee guideline, outpatient hospital and ASC payments were not standardized in the Medicare system, or in the market in general.

Beginning in January of 2008, Medicare’s new ASC fee schedule will move toward standardizing the reimbursement methodologies of outpatient hospital and ASC facilities by changing the ASC methodology to be more like that of the outpatient hospital reimbursement methodology.

Medicare’s new ASC fee schedule will incorporate relative payment weights for groups of procedures with similar resource and clinical characteristics, based on the Ambulatory Payment Classifications that are key elements of the Medicare Outpatient Prospective Payment System. The list of procedures eligible for payment under the Medicare ASC payment system will be greatly expanded. In the Medicare system, reimbursement for high cost devices and surgicallyimplanted devices will be included in the procedure reimbursement amount. This is a significant change and the current PAF in Rule134.402 is not compatible with this new methodology.

Currently, Rule134.402 provides for ASCs to be paid at 213.3% of the Medicare ASC reimbursement amount. In addition, Rule 134.402 requires surgically implanted devices to be reimbursed separately at the amount actually paid for the device by the ASC. The rule also currently provides that coding, billing, reporting, and reimbursement of ASC facility services covered by the rule are to be accomplished by applying the Medicare policies in effect on the date a service is provided. This provision was included to prevent the Texas workers’ compensation system from falling out of synchronization with Medicare and to achieve the standardization goals established in Section 413.011 of the Texas Labor Code. However, with the significant changes in Medicare’s ASC reimbursement system, if this provision of §134.402 remains in place, the result will be application of the 213.3% payment adjustment factor to the new Medicare ASC reimbursement system. In some instances this may result in unreasonable reimbursements. If the 213.3% PAF is applied to the new methodology, the reimbursement for some typical workers’ compensation ASC services would range between 199% to 362% of 2007 Medicare rates.

The rule adoption preamble included an example of how changing to the new CMS ASC fee guideline methodology would negatively impact the Texas workers’ compensation system. Reimbursement for CPT code 64476 (injection to the lumbar or sacral area, each additional level), could decrease from $710 to $663, or 199% of 2007 Medicare rates; and reimbursement for CPT code 29826 (shoulder arthroscopy), could increase from $1,088 to $1,848, or 362% of 2007 Medicare rates.

Some reimbursements for surgically implanted device intensive procedures would increase up to 5709% of the 2007 Medicare rates. For example, reimbursement for CPT code 61886 (implant of neurostimulator arrays), could increase from $1,088 to $29,114, or 5709% of 2007 Medicare rates. Additional separate reimbursement of implantables as currently required by §134.402 would push this rate even higher.

The new reimbursement differentials could lead to shifting sites of service for financial rather than clinical reasons to the detriment of injured employees and the Texas workers’ compensation system overall.
The rule adoption preamble noted that the DWC needs time to reevaluate all of the data and information, and to analyze the effects of the new Medicare ASC reimbursement methodology on workers’ compensation reimbursements prior to adopting the CMS changes that are effective January 1, 2008. This will allow the DWC to make the appropriate recommended transition to the new Medicare reimbursement methodology for ASCs. The ASC fee guideline can then be integrated into the Texas workers’ compensation system in a manner that provides reasonable reimbursement for all services in the system.

The rule amendments adopted by Commissioner Betts will continue the use of reimbursement structures and amounts at the Medicare ASC 2007 rates for services provided on January 1, 2008 through August 31, 2008. Commissioner Betts and his staff believe this will maintain the stability of the ASC reimbursement rates during the period a new ASC fee guideline utilizing the newMedicare ASC methodology is being developed and assure system participants of a timeline for implementation of the new Medicare methodologies.

The rule adoption preamble and amended rule can be found at the following DWC website link: http://www.tdi.state.tx.us/wc/rules/adopted/ascaorder1207.html.

This column was reprinted with permission from "Workers' Compensation Update" by the Insurance Council of Texas, which holds the copyright.