An ambulatory surgery center (ASC) is a standalone facility, in contrast a hospital-based outpatient department (HOPD) is owned by and typically attached to a hospital.

For Calendar Year (CY) 2022, CMS is proposing to halt the elimination of the Inpatient only (IPO) list and, add the 298 services removed from the IPO list in CY 2021 back to the list in CY 2022.¹

In the CY 2021 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) final rule, CMS revised the safety criteria that were historically used to add covered surgical procedures to the ASC Covered Procedures List (ASC CPL), and added 267 surgical procedures to the ASC CPL for CY 2021. For CY 2022, CMS is proposing to reinstate the criteria for adding a procedure to the ASC CPL and to remove from the ASC CPL 258 of the 267 procedures that were added in CY 2021.¹

For CY 2022, CMS is proposing to update OPPS payment rates for hospitals by 2.3 percent. Using the proposed hospital market basket, CMS is also proposing to update the ASC rates for CY 2022 by 2.3 percent.¹

Although some of the workflows and services offered may appear similar between the two, the background operations are substantially different from business and regulatory perspectives. The cost differential between HOPDs and ASCs is partially due to the way payment rates were updated for inflation over time. HOPD payment rates were updated based on the hospital market basket, which is a fixed weight index of costs or services at a later time. ASC payment updates, in contrast, are subject to the Consumer Price Index for All Urban Consumers, which measures the rising costs of all goods, which are rising more slowly than the cost of medical care.²

Less procedures are performed in the ASC setting which allows for more specialized care and high patient satisfaction due to smaller and more personalized teams. In some ASCs, the option for physician ownership leads to increased autonomy and incentivization, which can translate into increased quality of care due to the effect of direct accountability and alignment of goals between the physician and the surgery center. Physicians who have ownership in an ASC may be more motivated to change or comply with cost-saving or quality-improvement measures that would increase the value of care. Conversely, there is potential for conflicts of interest in providing care at a facility where the surgeon can profit financially. ²

While the cost of care in a HOPD is generally more expensive, the benefits to care for a patient in this setting include:

• Ease of registration given that if a patient is already enrolled in a local hospital’s health system, their personal and insurance information may already be in the system.

• Access to information as it can also be easier to track your overall health by using that health system’s dedicated online portal. 

• Care within a hospital can be comforting given the possibility of complications³

For physicians, HOPDs allow for more predictable payments, however, they may be less than what they could earn in ASCs where they have ownership. 

In 2015 the U.S. Inspector General at the Department of Health and Human Services, estimated taxpayers would save $15 billion and patients would save $3 billion, for those enrolled on Medicare, if surgeries were paid for at ASC rates, with no impact on quality.⁴

In 2013, Medicare reimbursed ASCs 58% of the rate it reimbursed HOPDs.⁵

ASCs have been shown to have greater efficiency with no differences in complication rates compared to HOPDs.

1. CY 2022 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule (CMS-1753FC) | CMS. Cms.gov. https://www.cms.gov/newsroom/fact-sheets/cy-2022-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-0. Published 2021. 

2. Tanaka M. Ambulatory Surgery Centers Versus Hospital-based Outpatient Departments: What’s the Difference?. AAOS Now. 2019. https://www.aaos.org/aaosnow/2019/sep/managing/managing02/.

3. Outpatient Surgery Centers and Ambulatory Surgery Centers Explained. Blog. https://www.orthobethesda.com/blog/outpatient-surgery-centers-and-ambulatory-surgery-centers-explained/.

4. Archambault J. More Competition Better Value For Patients: How Surgery & Recovery Can Save Patients, Employers And Taxpayers Billions. Foundation for Government Accountability; 2015. https://thefga.org/wp-content/uploads/2015/06/More-Competition-Better-Value-for-Patients.pdf.

5. Fulton B, Kim S. Study: Medicare Cost Savings Tied To Ascs. Berkeley, California: Ambulatory Surgery Center Association; 2013. https://www.advancingsurgicalcare.com/reducinghealthcarecosts/costsavings/medicarecostsavingstiedtoascs.