Section  3006(f) of the Affordable Care Act requires the Department of Health and Human Services to develop a plan to implement a Medicare value-based purchasing program for ambulatory surgery centers (ASCs). To gather data necessary to develop an implementation plan, CMS held an ASC Open Door Forum on October 14, 2010 in which 200 stakeholders participated.  In April, the agency submitted a report to Congress providing a basic outline of how it would implement such a program if it receives congressional authorization. The 33-page report is short on actual implementation details and instead discusses the challenges CMS needs to overcome. The report is available at:

Key Principles Considered by CMS

CMS, in an effort to align a potential ASC VBP program with other value-based payment initiatives, considered the following key principles as it developed the ASC VBP implementation plan:

  • Across all programs, CMS seeks to move as quickly as possible to the use of primarily outcome and patient experience measures that are adjusted for risk and other appropriate patient population or provider characteristics.
  • Measures should be aligned across Medicare's and Medicaid's public reporting and payment systems.
  • The collection of information should minimize the burden on providers to the extent possible. CMS will continuously seek to align its measures with the adoption of meaningful use standards for health information technology (HIT).
  • Measures should be aligned with best practices among other payers and the needs of the end users of the measures and endorsed by a nationally recognized multi-stakeholder organization.
  • Providers should be scored on their overall achievement relative to national or other appropriate benchmarks as well as their improvement.
  • Measures need not be given equal weight, but over time, scoring should be more weighted towards outcome, patient experience, and functional status measures.
  • Scoring methodologies should enable consumers, providers, and payers to make meaningful distinctions among providers' performance.

CMS Overview of Current State of ASC Quality Programs 

CMS proposed a quality reporting program for CY2011.  Similar to the Hospital Inpatient Quality Reporting program, ASCs that failed to report on a basket of quality metrics (as proposed below) would have had their market basket update reduced by two percentage points.

The following measures under consideration for ASC quality data reporting were:

  1. Patient fall in the ASC
  2. Patient burn
  3. Hospital transfer/admission
  4. Wrong site, side, patient, procedure, implant
  5. Prophylactic IV antibiotic timing
  6. Appropriate surgical site hair removal
  7. Surgical site infection
  8. Medication administration variance
  9. Medication reconciliation
  10. Venous thromboembolism measures: outcome/assessment/prophylaxis

While CMS ultimately decided that ASCs were not prepared for the administrative burden, the ASC quality reporting program will be included with the CY12 proposed rule. If an ASC VBP program moves forward, it is widely anticipated that these will be the initial metrics.

CMS's Key Options to Explore 

In developing the ASC VBP implementation plan, CMS must consider the following issues: 

 1) Development, Selection and Modification Process for Quality Measures: To the extent practicable, measures used by CMS should be nationally endorsed    by a multi-stakeholder organization. This framework among other features could contain new risk-adjusted quality metrics that capture multiple measure domains    (e.g., clinical, outcome, and patient experience) to expand the set now available.

Based on quality measures currently adopted by ASCs for internal evaluation and performance benchmarking, MedPAC, through its research, identified a list of    measures that would not have imposed an undue administrative burden on ASCs to begin quality data reporting in 2010. In addition, MedPAC concluded that    ASCs have the technical capacity to report on facility-level quality measures which the ASC Quality Collaboration supports and have the endorsement of the    National Quality Forum. The quality measures identified by MedPAC include:

  • Patient burn
  • Patient fall in the ASC
  • Wrong site, wrong side, wrong patient, wrong procedure, wrong implant
  • Prophylactic intravenous antibiotic timing
  • Hospital transfer/admission
  • Appropriate surgical site hair removal

CommentThe six measures above are likely to be the base set included in any ASC VBP program.  

2) Reporting, Collection, and Validation of Quality Data: A key concern with identifying quality metrics is the administrative complexity and compliance cost associated with reporting data. 

Recent ASC analysis recommended the use of Current Procedural Terminology (CPT) Category II codes or G-codes to implement a claims-based Quality Data Reporting Program (QDRP). Additionally, contractor analysis of ASC claims indicate that ASCs are capable of using the current claims submission process for Medicare data without imposing undue administrative burden, with an estimated 80 percent of ASCs submitting claims electronically. Accordingly, it appears that a claims-based electronic submission process would not impose an additional financial and resource burden for ASCs.

Comment: CMS appears to favor using CPT "G-codes" to collect quality data from claims submission initially.    

3) Structure of Value-Based Payment Adjustments: CMS's hospital VBP program is discussed as a template for calculating ASC VBP incentive payments. Each domain (Process, Outcome, and Patient Experience) would receive a score which would then be weighted to produce a total performance score (TPS). This would be translated into an incentive payment (or penalty) based on the ASC's relative performance.

4) Methods for the Public Disclosure of Information on ASC Performance: Once mandatory reporting begins, an "ASC Compare" website is discussed as an avenue to create transparency for beneficiaries. This program could publicly disclose the performance of the ASC with respect to each measure that applies to the ASC, the performance of the ASC with respect to each condition or procedure, and the ASC performance score assessing the total performance of the ASC.

In addition to standard reporting, The Joint Commission (TJC) recommended that publicly reported data could be stratified by type of ASC to reflect variation in the populations served and procedures performed. As an example described by TJC, endoscopic ASCs could have lower surgical site infection rates when compared to single specialties involving incisions, such as cataract centers, while cataract centers would have no surgical site hair removal variances to measure.

Comment: While CMS does not explicitly state this in the report to Congress, it's not hard to envision a "synching" of the applicable hospital and ASC surgery measures to provide a comparison of quality and cost in the future.

5)Other Issues and/or Relevant Demonstrations: In developing the plan for the ASC VBP program, the Affordable Care Act requires the Secretary to consider the experience with demonstrations and also to consider the ongoing development, selection, and modification process for measures under the ACA. The Hospital VBP program, which is under development in accordance with the provisions of section 3001 of the Affordable Care Act, and the Home Health Pay-for-Performance Demonstration (HHP4P) would both use incentives to encourage high-quality and cost-efficient care and provide options for CMS to explore in designing the ASC VBP program.

CMS Roadmap for ASC VBP Implementation 

CMS is facing a number of issues in developing an ASC VBP program. Below is a discussion of the key hurdles. CMS explicitly states that as with other VBP programs, it will consider a phased approach to bringing the program online.

  1. Measurement Development: In preparing a plan to implement VBP in ASCs, CMS will consider the challenges and length of time involved in developing new measures, soliciting multi-stakeholder input, seeking consensus endorsement (e.g., NQF), releasing a proposed and final rule, and accounting for differences in payment system maturity and statutory authorities across Medicare settings. In addition, consideration for when quality data could begin to be collected and displayed to the public, the proposed performance period for VBP, and when value-based payments could begin needs to be reflected in the timeframe and design prior to implementation.

    CMS and stakeholders can mitigate the complexity and uncertainty under each VBP component by considering the following examples that reflect the agency's experience with measure development in the hospital inpatient and outpatient settings:

    1.  For measure development, the process has historically taken up to one year for development of a new measure, and another year for NQF endorsement, if needed. CMS would also need to propose and finalize a new measure through the rulemaking process for a reporting program around the same time the measure is submitted for endorsement in order to minimize excess delay to the timeline.
    2. For claims-based measures under the current reporting cycle for the Hospital Inpatient Quality Reporting and Hospital Outpatient Quality Data Reporting Programs, measure calculation and public reporting can occur about 9 months after finalization of the reporting program. This allows sufficient time for claims run-out and to calculate measures using complete claims data. Under this assessment, it could take up to 2.5 years total for measure development, NQF endorsement, finalization through the rulemaking process, and calculation and publicly reporting.
    3.  For chart-abstracted measures, based on CMS's historical experience implementing hospital quality data reporting programs, the timeframe also requires up to an additional 12 months after a measure is finalized in a rule that the first quarter of data would be publicly reported. This entire process-including measure development, NQF endorsement and finalizing it in a regulation, infrastructure development, data submission, measure calculation by CMS, review of the measures, and public reporting of the measure data-requires up to three years. Public reporting of the chart-abstracted process of care measures occurs quarterly. CMS starts with one quarter of data, and continues adding quarters until the agency accumulates a single year aggregate. CMS continues updating the one-year rate on a quarterly basis, removing the oldest quarter from calculation.
  2. Statutory Authority: CMS's current authority extends only to reducing payment updates for ASCs that fail to report selected quality metrics; however, this program has not begun. Prior to implementing a performance-based VBP program, CMS would need congressional authority.
  3. CMS Continuous Quality Improvement Framework: CMS needs a framework for new quality measures that helps expand the set now available. To the extent practicable, measures used by CMS should be nationally endorsed by a multi-stakeholder organization. CMS will explore developing a continuous quality improvement framework for ASCs that promotes higher standards, improved health outcomes, and new measures development over time. This framework could feature new risk-adjusted quality metrics that capture multiple measure domains (e.g., clinical, outcome, and patient experience) and metrics with high incidence rates. To the extent practicable and appropriate, outcomes and patient experience measures should be adjusted for risk or other appropriate patient population or provider characteristics.

    To the extent possible and recognizing differences in payment system maturity and statutory authorities, ASC measures should align across Medicare's quality reporting and payment systems (e.g., Hospital Inpatient Quality Reporting Program, Physician Quality Reporting System, and Hospital Outpatient Quality Data Reporting Program). By aligning the ASC VBP program with other Medicare quality programs, this ensures the VBP program could coordinate incentives to improve quality and minimize provider burden across delivery systems.
  4.  Appropriate Data Abstraction and Submission Methods as Described by CMS: The methods should allow for maximum ASC participation and ensure that facilities submit data accurately and in a timely manner without imposing an undue administrative burden on them. The collection of information should minimize the burden on providers to the extent possible. As part of that effort, CMS will continuously seek to align its measures with the adoption of meaningful use standards for electronic health records, so the collection of performance information is part of care delivery. One of the challenges to this is the low adoption rates of EMRs in ASCs as a result of their exclusion from HITECH incentive payments and penalties.

    Data submission methods for measures should align across Medicare's public reporting systems (e.g., inpatient and outpatient settings). For example, three out of the ten measures that CMS proposed for CY11 (listed above) cross over to the inpatient setting. CMS tracks antibiotic timing, surgical site hair removal, and VTE prophylaxis measures as part of the inpatient SCIP measures. To the extent feasible and practicable, these three measures could leverage existing infrastructure in other Medicare public reporting systems to reduce the burden of data collection and ensure timely and accurate data submission for ASCs. As discussed above with respect to measure development, the length of time and costs resulting from building a completely new system for ASCs could be significantly reduced if CMS identifies proposed measures that rely on Medicare's existing data and reporting infrastructure.
  5. CMS Description of Enhanced Data Infrastructure and Validation Process: A VBP program should link payment to quality of care and ensure data oversight for CMS to appropriately calculate performance incentives, instead of simply linking payment to CMS's receipt of ASC quality data. CMS could introduce both a random and targeted audit of ASCs to focus on assessing the accuracy of performance measure rates.
  6. CMS Performance Scoring and Evaluation Model: The model should score an ASC's performance on a defined set of quality measures. Scoring methodologies should be reliable, as straightforward as possible, and stable over time. They should enable consumers, providers, and payers to make meaningful distinctions among providers' performance. The ASC VBP program could be designed both to reward high performing ASCs and encourage improvement in ASCs that may be initially low performers. The value-based incentive payment could be determined both on the level of quality attainment and improvement in performance over time. However, ASCs that fail to meet quality targets within a performance period could face payment reductions.

    The funding source for value-based payments could be generated from within current spending levels. For example, the availability of value-based payments could depend on whether the program achieves overall reduction in Medicare expenditures. Under budget neutrality, CMS could take existing ASC payments and subject a percentage of payments to risk.

    As an alternative to the hospital VBP program model, CMS could structure ASC value-based payments using a number of different options. Consistent with other Medicare quality demonstrations and proposed VBP programs, the ASC program could make bonus payments and collect penalties at the end of the year. A second option for distributing value-based incentive payments could rely on withholding a percentage of all payments and distributing accumulated funds to high performers. This would eliminate the need to collect payments from poor-performing ASCs and minimize the administrative burden for CMS.

  7. CMS's Comments on Transparency and Public Reporting: CMS needs to collect and validate data from ASCs and subsequently apply quality, efficiency, and cost measures for performance comparison. Public reporting should rely on a mix of standards, process, outcomes, and patient experience measures. CMS could publicly report quality measures in the early stages prior to being included in the financial incentive portion. Public disclosure and transparency encompass a broad-scale effort intended to provide consumers with facilities' performance scores in order to enhance their ability to make informed decisions about their healthcare consumption.

    Closing Thoughts:

    While CMS has a number of significant issues to resolve to establish an ASC VBP program, it is likely that one could be in place by CY14.  Moving approval for a VBP program through Congress could be difficult depending on which bill it's attached to; however, both parties support the development of value-based reimbursement. This can be done parallel to implementation of a pay-for-reporting program (for which CMS has statutory authority) that will serve as the basis of an ASC VBP. This first step is anticipated for CY12.

Publication Date: Monday, June 20, 2011

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