OIG Recommends Cutting Rates for Certain HOPD Services

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  • April 24, 2014
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According to a recent Office of Inspector General study conducted by the Office of Audit Services, the Centers for Medicare & Medicaid Services should reduce payments to hospital outpatient departments for services furnished to low-risk patients that could have been done in an ambulatory surgical center.
Services performed in an ASC are generally less expensive than similar services performed in a hospital outpatient department because of lower overhead.
In an April 17 podcast, Shirley Loos, an AOS senior auditor, said that Medicare could save an estimated $15 billion through 2017 by reducing rates for procedures performed on no- or low-risk patients in a hospital outpatient department that could have been performed in an ASC. Hospital outpatient departments are more suited for high-risk patients, Loos said.
“Medicare defines the surgical procedures provided by surgical centers as ASC-approved procedures. For most patients, those procedures do not pose a significant safety risk and do not require an overnight stay,” Loos explained further.
CMS does not track patient risk data; therefore, the study used data collected in an earlier study conducted by the Agency for Healthcare Research & Quality. From that data, the AOS study determined that 68 percent of patients are at low or no risk, and could be safely and more affordably treated in an ASC.
The study concluded that reducing hospital outpatient department rates for applicable services to that of ASC rates would save taxpayers approximately $4 billion through 2017.
The OAS is planning on conducting a nationwide survey of ASCs to collect cost data—something CMS does not do. The agency is also planning two more reviews: one to look at the appropriateness of the price index used to update ASC rates; and another to identify the most viable option for ASCs to submit cost data to CMS.

Ambulatory Surgical Center CASCC

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Renee Dustman, BS, AAPC MACRA Proficient, is managing editor - content & editorial at AAPC. She holds a Bachelor of Science degree in Media Communications - Journalism. Renee has more than 30 years' experience in journalistic reporting, print production, graphic design, and content management. Follow her on Twitter @dustman_aapc.

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