State Update

Prior Authorization

The Senate Committee on Insurance, Housing, Rural Issues and Forestry held a hearing October 29 on Senate Bill 434. The bill’s main authors are State Assembly Representative Barb Dittrich (R-Oconomowoc) and State Senator Rachael Cabral-Guevara (R-Appleton).

The legislation suggests a series of reforms:

• Requiring timely replies from insurance companies when a physician makes a prior authorization request: within 72 hours after receiving all necessary information as part of a regular request, and within 24 hours of an urgent request.
• Establishing minimum time period durations for an approved request: one year from issuance for non-chronic conditions and for the duration of treatment for chronic or long-term conditions.
• When a patient switches to a new health plan, the insurance company must honor a prior authorization approved by the patient’s former insurance plan for at least 90 days.
• Insurers cannot deny payment for an authorized service after it has been provided (i.e., no retroactive denials).

Others, including the Wisconsin Medical Society, have asked for an additional provision to ensure that insurance company adverse determinations (denials or reduction in coverage) can only be made by an insurance company representative who has the requested drug or service as part of their scope of practice.

Surgical Tech Certification

At this time, WISCA is register in opposition to the bill based on overwhelming feedback from members about the lack of need for the bill, the current standards in place to assure patient safety and the potential impact on an already limited workforce.

Surgical Smoke

WI AB563 was introduced October 24 – a companion to SB442 which was previously introduced. The bills require hospitals and ASCs to adopt and implement policies to prevent exposure to surgical smoke in operating rooms by requiring the use of a smoke evacuation system in the operating room during any surgical procedure that is likely to generate surgical smoke. Also includes an exemption, providing that the requirement does not apply to a health care provider who concludes that using a smoke evacuation system in an operating room during a surgical procedure is not necessary or advisable under the circumstances.

At this time, WISCA is neutral on the bill.  Feedback from members has suggested the bill would have little impact as most centers at risk of surgical smoke already have equipment in place.

Federal Update

CMS Rulemaking Update

ASCA reported that CMS has not yet released the 2026 OPPS/ASC Final Rule. We anticipate publication at any time, but continue to face uncertainty due to irregular release schedules and the ongoing government shutdown.

• ASCA noted that, under normal circumstances, the statutory deadline for the rule’s release would fall 60 days before the January 1 effective date; however, that timeline has now passed. The Medicare Physician Fee Schedule (MPFS) Final Rule, which typically precedes the ASC rule, was released after business hours on Friday, November 1, signaling that CMS is releasing materials later than usual.
• ASCA will continue to monitor CMS’s regulatory dashboard and other agency sources closely. The organization will issue an immediate alert to members once the final rule becomes available.

Medicare Physician Fee Schedule (MPFS) Final Rule Overview

ASCA has begun a detailed review of the MPFS Final Rule, which totals nearly 2,400 pages. The rule governs clinician reimbursement rather than facility rates, but changes within it have downstream impacts on ASC volume and physician practice behavior.

• ASCA has identified two finalized policies with significant implications for ASC-based physicians and surgical specialists:
• • Reallocation of the Indirect Practice Expense: CMS finalized a reallocation that shifts the share of practice expense reimbursement from facility-based procedures toward non-facility services. This change will reduce overall reimbursement for physicians performing procedures in ASCs or hospitals. Based on CMS’s published impact tables, expected decreases include: ophthalmology (-12%), cardiology (-6%), and gastroenterology (-9%).
  • Implementation of an “Efficiency Adjustment” to Work RVUs: CMS introduced a policy assuming certain services become more efficient over time, resulting in an automatic downward adjustment to payment rates. Unlike the ASC payment system, which includes an inflationary offset, the MPFS lacks such a balancing factor. Consequently, this policy creates an annual, compounding reimbursement reduction without corresponding inflation updates.
• ASCA opposed both provisions in its formal comments, joining nearly all major physician organizations that submitted similar concerns. Despite widespread opposition—approximately 14,000 to 15,000 total comments—CMS finalized both policies largely unchanged.
• ASCA noted that, while clinicians will receive a temporary 2.5% increase to the conversion factor as part of the Big Beautiful Bill Act, the broader structural issues remain unresolved. The organization expects continued advocacy by specialty societies and will coordinate with them to support corrective legislative efforts.

Ambulatory Specialty Model Proposal

CMS finalized a framework for a new Ambulatory Specialty Model (ASM), intended to apply to cardiology, anesthesiology, pain management, and spine-related specialties. The program builds upon elements of the Merit-Based Incentive Payment System (MIPS) but introduces new quality reporting measures specific to these fields.

• The ASM is scheduled to begin on January 1, 2027, and will initially apply to approximately 25% of clinician specialties. CMS dedicated roughly 400 pages of the rule to outlining the model’s structure and data collection approach.
• ASCA will engage with specialty societies affected by this proposal to assess the administrative burden, reporting feasibility, and potential interaction with existing ASC quality measures. The organization plans to prepare a written analysis for publication in ASC Focus, Digital Debut, and the Government Affairs Update.

New Model Legislation: NASHP Site Neutrality Model

The National Academy for State Health Policy (NASHP), the same organization that helped fuel the facility fee prohibition trend with model legislation they published in 2021, has now released model state legislation on site neutral reimbursements, announced in a 10/27 blog post. Despite the blog post stating that, "the policy seeks to address the rising prices for care provided within hospital-owned or affiliated outpatient providers that can be safely and appropriately delivered at a lower price in an independent physician's office," the model legislation itself is written more broadly and would impact ASCs. See below for a brief summary:

• All health care providers that enter into a health care contract to be a participating provider with a health benefit plan must offer to accept as payment in full for all applicable services, rates that shall not exceed 150% of the amount paid as the Medicare non-hospital rate for those same services (NOTE: the percentage multiple of Medicare can be subject to change based on a state's objectives and projected savings estimates).
• No health care provider shall charge, bill or accept payment for an applicable services that exceeds the lesser of: 150% of the amount paid by Medicare non-hospital rate; or the negotiated rate agreed upon by the health care provider and the health benefit plan.
• No health care provider shall charge, bill, collect or otherwise demand payment for any applicable service on an institutional claim form such as a UB-04 or CMS-1450. A professional claim, such as CMS-1500 form shall be used exclusively to bill for any applicable service. In no circumstance should both a professional claim and an institutional claim be charged or billed for the same service.
• Definitions:
• • "Applicable services" defined as outpatient or ambulatory items or services that can be provided safely and appropriately across ambulatory care settings, including:
  • • the services, as identified by Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) codes, contained within the sixty-six ambulatory payment classifications (APCs) identified by the Medicare Payment Advisory Commission (MedPAC) in its June 2023 Report to Congress recommending a site-neutral payment policy, and any subsequent APCs or services so designated by MedPAC;
    • any outpatient or ambulatory item or service recommended or required to be paid on a site-neutral basis by federal or [state] statute, the U.S. Department of Health & Human Services, or the Medicare Payment Advisory Commission (MedPAC), including without limitation,  evaluation and management office visits, wellness visits, physical therapy, occupational therapy, speech language pathology, and mammography (screening and diagnostic); and
    • any other outpatient or ambulatory items or services as designated by the [Department/Commissioner/Secretary] as safe and appropriate to be provided in lower-cost settings.
  • "Health care provider" defined as an individual, entity, corporation, person, or organization, whether for profit or nonprofit, operating under [state licensing statute] that furnishes, bills or is paid for health care service delivery in the normal course of business, and includes hospitals, hospital extension clinics, diagnostic and treatment centers, physician offices, or urgent care clinics, as well any affiliated provider or entity billing for health care goods or services delivered at the health care provider’s facility as an employee, contractor, a clinical faculty member, or otherwise.
  • "Medicare non-hospital rate" defined as the amount paid by Medicare for those same services pursuant to the Medicare Physician Fee Schedule, set forth under 42 U.S.C. § 1395w-4, or the Ambulatory Surgical Center (ASC) Payment System, set forth under 42 U.S.C. § 1395l(i)(2)(D), according to the site of service recommended by MedPAC as the reference rate where applicable.