Basics of Medicare Payment for Ambulatory Surgical Services (ASCs)

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Medicare covers surgical procedures provided in freestanding or hospital-operated ambulatory surgical services centers (ASCs). In January 2008, Medicare began paying for facility services provided in ASCs— such as nursing, recovery care, anesthetics, drugs, and other supplies—using a new payment system that is primarily linked to the hospital outpatient prospective payment system (OPPS). (Medicare pays for the related physician services—surgery and anesthesia—under the physician fee schedule.) Like the OPPS, the ASC payment system sets payments for procedures using a set of relative weights, a conversion factor (or base payment amount), and adjustments for geographic differences in input prices. Beneficiaries are responsible for paying the Part B deductible and 20 percent of the ASC payment rate

Approved Procedures of Ambulatory Surgical Services

The unit of payment in the ASC payment system is the individual surgical procedure. Each of the approximately 3,600 procedures approved for payment in an ASC is classified into an ambulatory payment classification (APC) group on the basis of clinical and cost similarity.

• There are several hundred APCs. All services within an APC have the same payment rate. The ASC system largely uses the same APCs as the OPPS Within each APC, CMS packages most ancillary items and services with the primary service.
• CMS pays separately for certain ancillary items and services when they are integral to surgical procedures. For example, CMS pays separately for corneal tissue acquisition; brachytherapy sources; certain radiology services, and many drugs.
• In addition, ASCs can receive separate payments for implantable devices that are eligible for pass-through payments under the OPPS. Pass-through payments are for specific, new technology items that are used in the delivery of services. The purpose of these payments is to help ensure beneficiaries’ access to technologies that are too new to be well represented in the data that CMS uses to set OPPS rates.