An ambulatory surgical center (ASC) is a healthcare facility that is dedicated to providing medically necessary surgical services to a patient in the outpatient setting. ASCs are paid according to a unique set of regulations and standards under the Medicare program, under Medicaid, and under contractual agreements with private commercial health insurers. This article focuses on medical billing and medical coding in the ASC setting as it relates to Medicare, which is the template which other third-party payers follow.

Certified medical coders review a patient’s medical record and assign codes in the Healthcare Common Procedural Coding System (HCPCS) to describe the services performed. They also assign diagnosis codes from the International Classification of Diseases, 9th Edition, Clinical Modification (ICD-9-CM) to describe the reason for which the patient received surgery in an outpatient setting. They do not use ICD-9-CM codes from Volume 3 that describe procedures, because these codes are only used in the inpatient setting.

Professional medical billers assemble the codes on a CMS-1500 claim form, which is the universal standard for billing outpatient services, as established by the Health Insurance Portability and Accountability Act of 1997 (HIPAA).

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How Ambulatory Surgical Centers are Paid

Since January 1, 2008, ASCs are paid for their services under Medicare Part B for covered services, as well as for ancillary services that are not considered a part of the surgical package assigned to a given HCPCS code. ASCs are reimbursed according to the Outpatient Payment System (OPPS) which provides a set payment for each surgical procedure and the incidental costs associated with them. Anything above and beyond the surgical package, as defined by the OPPS fee schedule, are billed to Medicare Part B on the same healthcare claim for separate payment.

The OPPS that governs ASC reimbursement is updated annually by the Centers for Medicare and Medicaid Services (CMS). The payments are determined by an weighted formula that considers average costs for each covered code listed in the HCPCS code books. Certified medical coders assign these codes based on relevant documentation after the services are performed. These payments are made to cover the technical costs incurred by providing pre-operative care, support in the operating suite, and recovery time spent in the facility. Professional services provided by surgeons and anesthesiologists are coded and billed by their own staffs, independent of the claims filed by an ASC.

OPPS payments for covered services include payment for nursing, technician, and support staff, as well as for the use of the ASC’s physical plant. Any laboratory tests related to the surgery that do not have to be performed in a certified laboratory, drugs, medical and surgical supplies, equipment and dressings, many implantable devices, radiology services performed in the operating suite, administrative costs, recordkeeping, and housekeeping are all considerations when CMS determines the appropriate fees for each applicable HCPCS code.

All these items are packaged together under a single HCPCS code for a single procedure, and each HCPCS code is assigned a set rate of payment to cover all these expenses. They final payment is the average cost of a given procedure. If a medically necessary surgical procedure is performed, no other considerations influence the final payment received.

Ambulatory Surgical Center Services

Not every surgical service that is assigned a HCPCS code is payable under the OPPS that governs ASC reimbursement. Medicare, as well as most other third-party payers, does not cover procedures provided in the ASC setting that will most probably result in an inpatient hospital admission for recovery. Nor does the ASC fee schedule contain procedures that are expected to be performed in a physician’s office. If performed in an ASC, the institution will not be paid for excluded procedures that CMS has determined should be performed in other settings.

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Professional medical billers are conversant with the applicable regulations and contractual obligations that govern the reimbursement of services provided by ASCs. As with the rest of the healthcare industry, new covered procedures are added and deleted on a regular basis, as well as the services that are considered a part of the surgical package. As experts in the financial aspects of healthcare delivery, professional medical billers provide advice on which services can and cannot be provided by an ASC. They do this in conjunction with certified medical coders, who advise on the documentation requirements needed to report specific covered HCPCS codes to make sure procedures are being performed in the appropriate venue.

Everything provided to a patient in order to provide a surgical service in an ASC is assigned an appropriate code, and an associated charge, to report the actual cost implied by a HCPCS code under the OPPS. While the sum of the codes and charges do not affect final reimbursement, which is solely determined by the fee allotted to the primary HCPCS code, this information is tabulated by CMS to adjust the payment formulas, by either increasing or decreasing future reimbursement rates on the OPPS fee schedule.

Medical Coding and Medical Billing in an ASC

ASCs generally employ only trained and certified medical coders and medical billers. The legal compliance issues that govern ASC reimbursement are complex and nuanced. ASCs prefer to give these responsibilities to professionals who have graduated from an accredited program of study. As the complexity of healthcare administration increases, of which medical billing and medical coding are a part, formal education is an increasingly important requirement to entering this challenging and ever-expanding field. Universities, community colleges, and private schools have expanded their course offerings to meet this need in the industry. There are also online programs that provide training in medical coding and medical billing, that lead to eventual certification as a professional.

With a foundation in the basics of medical coding and billing, professional medical coders and medical billers are expected to understand not only the language of medicine, but also the language in which legal statues, regulations, and contracts are written. Medical billers and medical coders who practice their profession in the ASC setting specialize in a distinct set of codes that are reported in the billing environment different from that of other billers and coders. Published rules that govern ASC reimbursement are distinct from those that are followed in inpatient hospitals, in physician offices, in skilled nursing facilities (SNFs), and by Durable Medical Equipment (DME) suppliers.

In 2012, the Secretary of Health and Human Services is presenting a plan to Congress to implement value-based purchasing (VBP) when paying for ASC services through Medicare Part B. VBP may require ASCs to report additional codes in order to receive payment, and it may change the sequence and rationale that directs HCPCS coding in the ASC setting. Even if VBP does not become the standard in 2013, all indications are that it will be implemented at some time in the future. This is just one of the ongoing changes that affect ASC reimbursement, and it will not be the last.

Professional medical billers and certified medical coders are expected to be aware of the flux and requirements that influence ASC coding and billing. They are expected to adapt when the regulatory and contractual environment changes. They are able to do this because their education, training, and experience has prepared them to be able to do so. This is why an accredited program is a benefit for people looking to enter this dynamic field, and this is why employers look for that when they interview applicants to determine if they will add value to fiscal operations from the date-of-hire.