Understand Payment Rates and Basics of ASC Billing

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Basics of ASC Billing

An Ambulatory Surgical Center (ASC) is defined by CMS as a facility with the sole purpose of providing outpatient surgical services to patients. ASC is a facility that, very simply, specializes in outpatient procedures. Procedures done at an ASC are more extensive than those done at the typical provider’s office but are not so involved that they require a hospital stay. The basics of ASC billing (Ambulatory Surgery Center) are completely different than any other type of billing. For ASC services to be paid, the service must be determined to be medically necessary. Generally, there are two primary elements in the total cost of performing a surgical procedure:

• The cost of the physician’s professional services for performing the procedure
• The cost of services furnished by the facility where the procedure is performed (for example, surgical supplies and equipment, and nursing services).

In general, 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. Payment rates for most services are geographically adjusted using the pre-reclassification wage index values that CMS uses to pay non-acute providers. The adjustment for geographic wage variation will be made based on a 50 percent labor-related share.

Ambulatory surgical center claims are filed to Medicare, Medicare Advantage Plans, and Medicaid on an HCFA 1500 or the 837P. This is different from hospital outpatient surgery claims to the payers, which are filed on the UB-04 or the 837I. The CMS-1500 is the red-ink on white paper standard claim form used by physicians and suppliers for claim billing.