DEFINITION OF AN ASC

An ASC for Medicare purposes is a distinct entity that operates exclusively for the purpose of furnishing outpatient surgical services to patients. The ASC must enter into a participating provider agreement with CMS. An ASC is either independent (i.e., not a part of a provider of services or any other facility), or operated by a hospital (i.e., under the common ownership, licensure or control of a hospital). If an ASC is the latter type, it has the option either of being covered under Medicare as an ASC or continuing to be covered as a hospital-affiliated outpatient surgery department. To be covered as an ASC operated by a hospital, a facility:

• Elects to do so, and continues to be so covered unless CMS determines there is good cause to do otherwise;
• Is a separately identifiable entity, physically, administratively, and financially independent and distinct from other operations of the hospital, with costs for the ASC treated as a non-reimbursable cost center on the hospital’s cost report;
• Meets all the requirements with regard to health and safety, and agrees to the assignment, coverage and payment rules applied to independent ASCs; and
• Is surveyed and approved as complying with the conditions for coverage for ASCs.
If a facility meets the above requirements, it bills NHIC on Form CMS-1500 or the related electronic equivalent and is paid the ASC payment amount.

If a hospital based facility decides not to become a certified ASC it bills the fiscal intermediary (FI) on Form CMS-1450 or the related EDI equivalent and is subject to hospital outpatient billing and payment rules. It is also subject to hospital outpatient certification and participation requirements.