Payment for Ambulatory Surgery

Prior to January 1, 2008, the ASC payment rate was a standard overhead amount based on CMS’s estimate of a fair fee and the costs incurred by the ASCs providing the  procedure.

The HCPCS codes for procedures covered in the ASC were grouped into 9 groups and a rate was set for each group. In CY 2007, the ASC payment rate for each ASC covered procedure was based on the payment rates for the 9 groups, but capped at the OPPS payment rate for the procedure.

Beginning January 1, 2008, with implementation of the revised ASC payment system, the payment rates for most covered ASC surgical procedures and covered ancillary services are established prospectively based on a percentage of the OPPS payment rates. For more information on where to locate these prospective payment rates, see §30.1. There are a small number of covered ancillary services that are contractor-priced. These include OPPS pass-through devices, which are contractor-priced. Medicare pays the same amount for drugs and biologicals that are paid separately under the OPPS when those drugs and biologicals are provided integral to covered surgical procedures. New drugs and biologicals for which product-specific HCPCS codes do not exist and are billed by ASCs using HCPCS code C9399 (unclassified drug or biological), are also contractor-priced at 95% of the average wholesale price (AWP). Medicare pays the same amount for brachytherapy sources under the revised ASC payment system as it pays hospitals under the OPPS if prospective rates are available. If prospective rates for brachytherapy sources are not available under the OPPS, ASC payment for brachytherapy sources is made at contractor-priced rates.

Under the revised ASC payment system effective January 1, 2008, Medicare makes separate payment to ASCs for corneal tissue acquisition (which is billed using V2785). Contractors pay for corneal tissue acquisition based on acquisition cost or invoice. In addition, contractors make payment adjustments for new technology intraocular lenses (NTIOLs). The NTIOL payment adjustment is an unadjusted payment subject to beneficiary coinsurance but not subject to the wage index adjustments.

Beginning January 1, 2008, Medicare payment for implantable durable medical equipment is included in the payment for the covered surgical procedure. The ASC payment for the surgical procedure is a bundled payment which includes the payment for the implantable items previously paid separately under the DMEPOS fee schedule. The one exception to this is OPPS pass-through devices which are paid separately.

Medicare contractors calculate payment for each separately payable procedure and service based on the lower of 80 percent of actual charges or the ASC payment rate. The charge-to--payment rate comparison occurs at the line-item level. ASCs should not report separate line-item HCPCS codes or charges for items that are packaged into payment for covered surgical procedures and therefore, are not paid separately (e.g., nonpass-through implantable devices). Instead, it is important that ASCs incorporate charges for packaged services into the charges reported for the separately payable services with which they are provided.

Facilities may not be paid appropriately if they unbundle charges and report those charges for packaged codes as separate line-item charges.

Beginning January 1, 2008, covered ancillary items and services, such as pass-through devices, brachytherapy sources, separately payable drugs and biologicals, and radiology procedures, should be billed on the same claim as the related ASC surgical procedure(s). If an ASC bills for an ancillary service(s) separately (i.e., not on the same claim as the related surgical procedure) or a claim is split so that the ancillary service and related ASC surgical service(s) are on separate claims, the contractor checks claims history to determine if there is an approved surgical procedure for the same beneficiary, same provider, and same date. If there is no approved ASC surgical procedure on the same claim or in history for the same date, the ancillary service(s) shall be returned as unprocessable.


 Payment to Ambulatory Surgical Centers for Non-ASC Services 

ASCs may furnish and be paid under other parts of Medicare Part B for certain services that are not considered ASC facility services. The usual Part B coverage and payment rules apply to such services.