Definition of Ambulatory Surgical Center (ASC) - Recap

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 have in effect an agreement with CMS obtained in accordance with 42 CFR 416 subpart B (General Conditions and Requirements). 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). A hospital-operated facility has the option of being considered by Medicare either to be an ASC or to be a provider-based department of the hospital as defined in 42 CFR 413.65.

To participate in Medicare as an ASC operated by a hospital, a facility:

• Elects to do so.

• 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 in 42 CFR 416.25-49.

Related survey requirements are published in the State Operations Manual, Pub. 100-07, Appendix L.

If a facility meets the above requirements, it bills the Medicare contractor using the ASC X12 837 professional claim format or, in rare cases, on Form CMS-1500 and is paid the ASC payment amount.

A hospital-operated facility that decides to discontinue participation in Medicare as an ASC must terminate its ASC agreement with CMS. Guidance regarding the termination of ASC agreements with CMS is provided in 42 CFR 416.35. Voluntary terminations are those initiated by an ASC and, as specified in 42 CFR 416.35, an ASC may terminate its agreement either by sending written notice to CMS or by ceasing to furnish services to the community.


To participate in Medicare as a provider-based department of the hospital, the hospital must comply with CMS requirements to certify the hospital-operated facility as a provider-based department of the hospital as described in 42 CFR 413.65, including  meeting all of the hospital conditions of participation specified in 42 CFR 482. See Pub 100-07, State Operations Manual, Appendix A, “Survey Protocol, Regulations and Interpretive Guidelines for Hospitals,” for information on survey requirements.