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Price Increases for ASCs, But No Decrease in Hospital Outpatient Prices

The proliferation of ambulatory surgery centers (ASCs) has not led to a decrease in hospital outpatient surgery department prices, according to a new AHRQ-funded study examining ASC growth and revenues. Using a large national claims database that contains information on actual prices paid, the study found that for six common outpatient surgical procedures-cataract surgery with intraocular lenses, colonoscopy, knee arthroscopy with debridement, knee arthroscopy with meniscectomy, postcataract surgery and upper gastrointestinal endoscopy-prices paid to ASCs remained stable during 2007-2012. Conversely, prices paid to hospital outpatient surgery departments (HOPSDs) for the same procedures increased sharply over the same period.

The study also found that private insurers paid ASCs more than Medicare paid ASCs for the same procedures. Medicare currently pays ASCs a legislated percentage of what it pays HOPSDs for the same services, but there is a considerable discrepancy between this ratio and the ratio of payments by private insurers across provider types and procedures. Furthermore, the methodology behind annual increases in Medicare payments to ASCs leads to lower year-to-year increases relative to payments to HOSPDs. These findings question the use of a single ratio for ASC payments to HOPSD payments and suggest that ASCs and HOPSDs do not currently compete on price.

The findings support the argument for increased price transparency and legislative changes that make updates to ASC payments more equitable. ASPS supports a bill that would achieve this, the Ambulatory Surgery Center Quality and Access Act (H.R.1453/S.2017). The study, "Price Increases Were Much Lower In Ambulatory Surgery Centers Than Hospital Outpatient Departments In 2007-12," and abstract were published in the October issue of the journal Health Affairs.