ASC billing Payment for Device-Intensive Procedure code

ASC Billing Guidelines

ASC Payment for Device-Intensive Procedures

A modified payment methodology will be used to establish the ASC payment rates for device-intensive procedures, defined as ASC-covered surgical procedures that, under the OPPS, are assigned to Ambulatory Payment Classifications (APCs) for which the device cost is greater than 50 percent of the APC’s median cost. Payment for the high-cost devices is packaged into the associated procedure payments under the revised ASC system, as it is under the OPPS. CMS pays the same amount for the device-related portion of the procedure cost under the revised ASC payment system as under the OPPS. However, payment for the service portion of the ASC rate will be calculated according to the standard rate-setting methodology using the ASC budget neutrality adjustment. Therefore, using the budget neutrality adjustment factor in the proposed rule, the service portion of the proposed ASC payment for the device-intensive procedure would be about 65 percent of the corresponding OPPS service payment, just like the payment for other surgical procedures under the revised ASC payment system. The sum of the ASC device and service portions constitutes the complete ASC device implantation procedure payment. ASCs will no longer bill separately for these devices.

The same policy related to full credit and no-cost implantable device replacement that applies to the OPPS will apply to ASC payments. That is, when a replacement device is supplied to the ASC at no cost or with full credit by the manufacturer, Medicare ASC payment for the procedure to implant the device will be reduced by the device portion of the ASC payment to account for the lower cost to the facility to furnish the procedure. Medicare provides the same amount of payment reduction based on the estimated device cost included in the ASC procedure payment that would apply under the OPPS for performance of those procedures under the same circumstances.

In the proposed rule, CMS proposes to reduce the ASC payment by one-half of the device offset amount for certain surgical procedures into which the device cost is packaged when an ASC receives a partial credit toward replacement of an implantable device. This partial payment reduction would apply to certain covered surgical procedures in which the amount of the device credit is greater than or equal to 20 percent of the cost of the new replacement device being implanted. The proposed policy mirrors the proposed policy under the OPPS for CY 2008.

Reporting Charges for Separately Payable Procedures and Services
Under the revised payment system, ASCs must report charges for all separately payable procedures and services to receive correct payment. Medicare contractors will make payment based on the lower of actual charges for separately payable procedures and services or the ASC payment rate. ASCs should not report separate line item HCPCS codes or charges for procedures, services, drugs, devices or supplies that are packaged into payment for covered surgical procedures and, therefore, not paid separately.

Because Section 1833(a)(1) of the Social Security Act, as amended by Section 626(c) of the Medicare Modernization Act (MMA), requires ASCs to be paid the lesser of 80 percent of actual charges or the amount that would be paid by Medicare for each separately payable procedure and service, Medicare contractors will compare billed charges to the ASC payment rate at the line-item level. Therefore, 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.

For example, the single charge reported for a device-intensive procedure should include not only the charges associated with the service such as operating room time and recovery room use, but also the charges associated with the implantable device. Unlike the current ASC payment system, the revised payment system packages device payment into the payment for the associated procedure (i.e., the device is not paid separately). If the ASC bills a procedure code for a device-intensive procedure and fails to include charges for the device in establishing the single line item charge for the covered surgical procedure, the procedure charge may be lower than the Medicare payment rate for that procedure code, which includes payment for the device. Medicare would make payment based on the provider’s charges, possibly resulting in underpayment.

Bilateral procedures should be reported as a single unit on two separate lines or with “2” in the Units field on one line for both procedures to be paid. While use of the 50 modifier is not prohibited specifically according to CMS billing instructions, the modifier will not be recognized for payment purposes and may result in incorrect payment to ASCs. The multiple procedure reduction of 50 percent will apply to all bilateral procedures subject to multiple procedure discounting.