Final Rules Provide Medicare Patients and Physicians Greater Flexibility and Lower Costs

On December 2, 2020, CMS announced new Outpatient Prospective Payment System (“OPPS”) and Ambulatory Surgical Center (“ASC”) final rules. Buried within are several provisions which will permit more surgeries to be performed in ASCs, thereby increasing patient choice and reducing the costs for Medicare beneficiaries needing surgery. CMS published the condensed final rule in the Federal Register on December 29, 2020 and the bulk of its provisions became effective January 1, 2021. This client advisory will highlight some of the changes of particular interest to ASCs, physicians, and health care organizations.

Changes to the Inpatient Only List

Currently, CMS maintains a list of procedures that are routinely provided in an inpatient setting only and thus, have not been paid by Medicare under the OPPS. CMS is eliminating this list over a three-year transitional period. For 2021, 266 musculoskeletal-related and 32 additional procedures have been removed from the list. CMS will eliminate the list by 2024. In lieu of the list, CMS expects physicians to select the appropriate surgical setting for individual patients. Medicare coverage of a procedure, regardless of the setting it is performed in, will still be subject to the “reasonable and necessary” standard.

Once fully implemented, the Final Rule will usher in a new approach to Medicare coverage of outpatient surgical services. Instead of consulting a list, physicians will need to consider the following criteria in determining whether to perform a covered procedure in an ASC:

  • Does the procedures pose significant safety risk when performed in an ASC?
  • Is the procedure one for which standard medical practice dictates the beneficiary would not typically be expected to require active medical monitoring and care at midnight following the procedure?
  • Will the procedure generally result in extensive blood loss?
  • Will the procedure require major or prolonged invasion of body cavities?
  • Does the procedure directly involve major blood vessels?
  • Is the procedure generally emergent or life-threatening in nature?
  • Does the procedure commonly require systemic thrombolytic therapy?

ASCs and physicians considering the expansion of new types of surgery in ASCs will need to remain mindful of state licensure and private accreditation requirements. State regulations and private accreditation requirements could impose additional limits or conditions on where and howe physicians perform specific surgeries.

ASC Payment Update and Changes to the List of ASC Covered Surgical Procedures

For 2021, CMS is increasing Medicare payments under the ASC payment system by 2.4% for all ASCs that meet the quality reporting requirements under the ASC Quality Reporting Program.

CMS annually reviews and updates the ASC Covered Procedures List (“ASC CPL”) based on the most recent volume and utilization data for individual procedure codes. Based on this review CMS qualified the following six procedures as permanently office-based: CPT Codes 11760 (repair of nail bed), 21208 (osteoplasty, facial bones; augmentation), 23077 (radical resection of tumor, soft tissue of shoulder area; less than 5 cm), 44408 (colonoscopy through stoma; with decompression, including placement of decompression tube, when performed), 53854 (transurethral destruction of prostate tissue; by radiofrequency generated water vapor thermotherapy), and 67500 (retrobulbar injection; medication).

In the corresponding CY 2020 rule, CMS designated 18 procedures as temporarily office-based. For 11 of those 18 procedures, CMS maintains that it does not have enough data to determine if such designation is appropriate; therefore, CMS will retain those designations in 2021. However, five of those procedures, CPT Codes 10007 (fine needle aspiration biopsy, including fluoroscopic guidance; first lesion), 10011 (fine needle aspiration biopsy, including mr guidance; first lesion), 11102 (tangential biopsy of skin; single lesion), 11104 (punch biopsy of skin; single lesion), and 11106 (incisional biopsy of skin; single lesion), have been permanently assigned to office-based payment indicators. The final two, CPT Codes 10005 (fine needle aspiration biopsy, including ultrasound guidance; first lesion) and 10009 (fine needle aspiration biopsy, including ct guidance; first lesion) have been assigned non office-based payment indicators. Further, CMS has assigned two new CPT Codes, 0596T (temporary female intraurethral valve-pump; initial insertion, including urethral measurement) and 0597T (temporary female intraurethral valve-pump; replacement), as temporarily office-based.

In recent years, stakeholders have commented that ASCs are increasingly able to safely handle more complicated procedures. CMS’s changes allow physicians to exercise clinical judgment in determining where a patient should undergo a procedure. To that end, CMS added eleven procedures to the ASC CPL: 0266T (implantation or replacement of carotid sinus baroreflex activation device; total system), 0268T (implantation or replacement of carotid sinus baroreflex activation device; pulse generator only), 0404T (transcervical uterine fibroid(s) ablation with ultrasound guidance, radiofrequency), 21365 (open treatment of complicated fracture(s) of malar area, including zygomatic arch and malar tripod; with internal fixation and multiple surgical approaches), 27130 (arthroplasty, acetabular and proximal femoral prosthetic replacement, with or without autograft or allograft), 27412 (autologous chondrocyte implantation, knee), 57282 (colpopexy, vaginal; extra-peritoneal approach), 57283 (colpopexy, vaginal; intra-peritoneal approach), 57425 (laparoscopy, surgical, colpopexy), C9764 (revascularization, endovascular, open or percutaneous, lower extremity artery(ies), except tibial/peroneal; with intravascular lithotripsy, includes angioplasty within the same vessel(s), when performed), and C9766 (revascularization, endovascular, open or percutaneous, lower extremity artery(ies), except tibial/peroneal; with intravascular lithotripsy and atherectomy, includes angioplasty within the same vessel(s), when performed).

CMS also revised the criteria for adding procedures to the ASC CPL. Effective for services rendered on or after January 1, 2021, covered surgical procedures are surgical procedures specified by the Secretary and published in the Federal Register and/or via the internet on the CMS website that are separately paid under the OPPS and are not:

  • Designated as requiring inpatient care under 42 CFR 419.22(n),
  • Only able to be reported using a CPT unlisted surgical procedure code, or
  • Otherwise excluded under 42 CFR 411.15.

These changes resulted in 267 additional procedures being added to the ASC CPL. Additionally, on and after January 1, 2021, CMS will add procedures to the ASC CPL when CMS identifies or confirms a procedure meets these requirements.


CMS’s OPPS changes will place more health care service location decisions back into the hands of Medicare beneficiaries and their treating physicians, presenting additional choices for patients and granting more discretion to health care providers. Physicians seeking to offer additional choices for Medicare beneficiaries will need to carefully navigate the phase-in of the new requirements as well as existing state licensure and accreditation requirements.

If you or your practice have any questions about any provisions of these final rules or their implementation, please contact Peter Mellette, Harrison Gibbs, or Elizabeth Dahl Coleman at Mellette PC.

This client advisory is for general educational purposes only. It is not intended to provide legal advice specific to any situation you may have and does not cover all provisions of the final rules. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice.

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