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Study: Increased ASC use could save Medicare $1.6 billion annually

Ambulatory Surgery Reimbursement Update, April 12, 2005

Healthcare policy-makers searching for an answer to the escalating cost of Medicare might be overlooking a solution right under their collective noses, according to the results of a study released last week by the Federated Ambulatory Surgery Association (FASA).

FASA engaged The Moran Company to analyze 2003 Medicare claims that dealt with surgical procedures which can be performed in ambulatory surgery center (ASC) and hospital outpatient settings. The study re-priced the hospital outpatient department (HOPD) claims to 2005 Medicare rules and rates for HOPDs and ASCs and found that nearly $1.6 billion could be saved annually by performing more surgical procedures in ASCs.

Of the five million claims reviewed in the study, The Moran Company found that claims, on average, cost $320 less in an ASC compared to an HOPD ($891 to $571). The difference in claims was attributed to the variation between base payment rates for major procedures, with nearly 85% of the difference due to HOPD rates for major procedures being higher than equivalent ASC category rates.

"This study makes it clear that Medicare should be encouraging patient access to ASCs, not limiting it," said Kathy Bryant, FASA executive vice president. "These findings should be very useful to Congress and the administration as it considers Medicare policies affecting patient access to ASCs."

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