Ambulatory Surgical Services Provided Under California Workers' Compensation

An Assessment of the Feasibility and Advisability of Expanding Coverage

by Barbara O. Wynn, John P. Caloyeras, Nelson F. SooHoo

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Research Questions

  1. What policy considerations should be addressed in allowing services that are typically performed in an inpatient setting to be performed in ASCs?
  2. Which common inpatient procedures can be safely performed in the ASC setting for WC patients?
  3. If an OMFS allowance were set for "inpatient only" services performed in an ASC, what multiplier to the Medicare inpatient rate or other fee schedule methodology should be considered?
  4. How applicable are ASC findings to the hospital outpatient department setting? What are potential implications regarding services that would be allowed and the fee schedule that would be used?

The California Department of Industrial Relations asked RAND to examine the feasibility and appropriateness of including procedures that are typically performed only in an inpatient setting on the workers' compensation Official Medical Fee Schedule for ambulatory surgical center facility fees. The authors used interviews, literature review, and data analysis to assemble information on the requirements applicable to ASCs, assess how the criteria that Medicare uses to assess whether procedures can be safely performed in an outpatient setting apply to the workers' compensation patient population, and to examine alternative methods for establishing fee schedule amounts. The study focused on 23 high-volume workers' compensation inpatient procedures with relatively short average lengths of stay. The report finds that most ASCs that are currently eligible for facility fees are equipped to provide services that do not require a one-night stay. However, the data analyses and literature review did not provide strong support for adding any procedures to the fee schedule with the possible exception of procedures related to cervical spinal fusions. Other than instrumentation used in conjunction with spinal fusions, relatively few of the study procedures are being performed in an ambulatory setting on either WC or privately insured patients ages 18–64. The literature suggests that two-level anterior cervical fusions and the use of instrumentation for one- or two-level fusions can be performed safely on an outpatient basis but does not include evidenced-based selection criteria to suggest which patients are appropriate candidates for having the procedures in an outpatient setting.

Key Findings

Common Outpatient Workers' Compensation Procedures Should Be Done in Hospitals

  • Most ambulatory surgical centers eligible for a California Official Medical Fee Schedule facility fee, or alternatively, a particular class of ASCs, are generally equipped to provide services to the workers' compensation population that do not require a one-night stay.
  • Some such procedures may be more appropriately performed as a hospital outpatient procedure than as an ASC procedure because hospitals have the ready availability of emergency and observation services for overnight stays that go beyond ASC services.

Cervical Spinal Fusions Might Be Added to ASC Fee Schedule, with Candidate Criteria

  • Data analyses and literature review did not provide strong support for adding any procedures to the ASC fee schedule with the possible exception of procedures related to cervical spinal fusions.
  • While the literature suggests that two-level anterior cervical fusions and the use of instrumentation for one- or two-level fusions can be performed safely on an outpatient basis, it lacks evidence-based selection criteria to suggest which patients are candidates for the procedures in an outpatient setting.

A Fee Schedule Allowance for Inpatient ASC Procedures Cannot Now Be Set

  • Data are not readily available to establish an appropriate fee schedule allowance for "inpatient only" procedures in an ASC setting.
  • A single multiplier applied to the inpatient rate is not suitable for the full range of common inpatient procedures because of differences in the average costs for the average inpatient relative to the average cost for patients most likely to be candidates for ambulatory surgery.

Recommendations

  • Procedures that are treated under the California Official Medical Fee Schedule as inpatient procedures should not be added to the OMFS for ASC facility fees. Instead, the current policy should be retained that allows decisions regarding whether a procedure can be performed in an ASC to be made on a case-by-case basis with payer approval required for both the medical necessity of the procedure and the setting in which it occurs.
  • Patient protections when services are performed in an ASC should be strengthened so that only ASCs that have established prospective patient selection criteria needed to assure patient safety and have appropriate informed consent procedures should be allowed to perform procedures that are treated under the OMFS as inpatient procedures.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Overview of ASC Regulatory Framework and Facilities

  • Chapter Three

    Coverage Policies for Surgeries Performed in ASCs

  • Chapter Four

    Analyses Using Administrative Data

  • Chapter Five

    Evidence from the Literature

  • Chapter Six

    Payment Policies for "Inpatient Only" Procedures

  • Chapter Seven

    Discussion of Findings and Recommendations

The research described in this report was sponsored by the California Department of Industrial Relations and was conducted in the RAND Center for Health and Safety in the Workplace within RAND Justice, Infrastructure, and Environment.

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