Sunday, March 13, 2011

ASC billing payment and reimbursement rules and speciification

Payment Calculation

Payments for ASC facility services are calculated utilizing the following formula:

Medicare ASC rate X Current OPPS/ASC reduction factor = Medicaid ASC Rate

The MDHHS payment is the lesser of:

* the Medicaid fee screen/allowable amount, minus any Medicare or other insurance payments, and any applicable Medicaid copayment, patient-pay, and/or deductible; or

* (for fee schedule items) the provider's charge, reduced by any contractual adjustments, and minus any Medicare or other insurance payments, and any applicable Medicaid copayment,patient-pay, or deductible amount; or

* the beneficiary's liability for coinsurance, copayments, and/or deductibles.

 Packaged Services

MDHHS follows Medicare guidelines for packaged/bundled service costs. ASC services having a status indicator of "N1" are considered a packaged service/item and do not receive separate payment.

 Bilateral Procedures

MDHHS follows Medicare payment rules for bilateral procedures. The multiple procedure reduction of 50 percent applies to all bilateral procedures subject to multiple procedure discounting.

Application of Statewide Outpatient Cost-to-Charge Ratio

Services paid by Medicare at reasonable cost and contractor-priced items are paid by applying the Medicaid statewide outpatient hospital cost-to-charge ratio to the Medicare ASC rate. The OPPS/ASC reduction factor is not applied. Updates of hospital cost-to-charge ratios are done in conjunction with updates to the inpatient operating ratios.

Ambulatory Surgical Centers Wraparound Code List Fee Schedule

Services listed in the MDHHS Ambulatory Surgical Centers (ASC) Wraparound Code List are paid based on a MDHHS-specific fee schedule. CMS updates are published quarterly on the MDHHS website (revisions are made to align with Medicare). The OPPS/ASC reduction factor is not applied to MDHHS Ambulatory Surgical Centers Wraparound Code List services. (Refer to the Directory Appendix for website information.)


Medicaid-enrolled ASCs are required to bill using the ASC X12 837 5010 professional claim format when submitting electronic claims. Paper claims must be billed on the CMS 1500 paper claim form. Providers are encouraged to bill electronically.

Payment and Reimbursement
Effective January 1, 2008

The standard ASC payment for most ASC covered surgical procedures is calculated as the product of the estimated ASC conversion factor and the ASC relative payment weight (set based on the OPPS relative payment weight) for each separately payable procedure. Per Section 626 of the MMA, contractors will pay ASCs based on the lesser of the actual charge or the standard ASC payment rate. Payment rates for surgical procedures that are commonly performed in physicians’ offices and the technical component of covered ancillary radiology procedures cannot exceed the MPFS non-facility Practice Expense (PE) amount. Payments to ASCs for covered surgical procedures and certain covered ancillary services are geographically adjusted using the Inpatient Prospective Payment System (IPPS) pre-reclassification wage index values, with 50 percent as the labor-related factor. There is an annual adjustment of the payment rates for inflation. The update for inflation begins with the CY 2010 ASC payment rates when the statutory requirement for a zero update no longer applies.

CMS adjusts for geographic differences in wages using the Core-Based Statistical Area (CBSA) geographic locality definitions established in 2003 by the Office of Management and Budget (OMB). CBSA is a statistical geographic unit consisting of a county or counties associated with at least one core (urbanized area or urban cluster) of at least 10,000 in population, plus adjacent counties having a high degree of social and economic integration with the core as measured through ties with counties containing the core. Metropolitan and micropolitan statistical areas are the two categories of CBSAs.

The calculation adjusts the national ASC rate to a rate that applies to the ASC location. TrailBlazer Health Enterprises® will make necessary calculation adjustments based on various CBSAs and post the ASC fee schedule to the TrailBlazerSM Web site.

Payment is made to ASCs under Part B for all surgical procedures except those that CMS determines may pose a significant safety risk to beneficiaries or that are expected to require an overnight stay when furnished in an ASC.

Each January 1, CMS publishes updates to the list of procedures for which an ASC may be paid for that year. In addition, CMS publishes quarterly updates to the lists of covered surgical procedures and covered ancillary services to establish payment indicators and payment rates for newly created Level II HCPCS and Category III CPT codes. The complete lists of ASC-covered surgical procedures and ASC-covered ancillary services, applicable payment indicators, payment rates for each covered surgical procedure and ancillary service before adjustments for regional wage variations, the wage adjusted payment rates, and wage indices are available on the CMS Web site at

To be paid under this provision, a facility must be certified as meeting the requirements for an ASC and must enter into a written agreement with CMS. The certification process is described in the State Operations Manual.

ASCs must accept Medicare’s payment for such procedures as payment in full for the facility service with respect to those services defined as ASC facility services. The physician and anesthesiologist may bill and be paid for the professional component of the service also.

ASC facility services are subject to the usual Medicare Part B deductible and coinsurance requirements. The Medicare program pays ASCs 80 percent of the lesser of the actual charge or the ASC facility payment rate for the covered services performed. The beneficiary pays 20 percent of the lesser of the submitted charge or the ASC facility payment rate for the covered services performed.

Reminder: After January 1, 2007, colorectal cancer screening colonoscopies (G0105 and G0121) do not apply to the patient’s annual deductible and Medicare pays 75 percent and the patient pays 25 percent coinsurance.

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