ASCs For 2008: Big Changes For Coders

Modeling ASCs on APC Elements Means New Approaches Needed

By A. Scott Freathy, MD, CPC
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 required the Department of Health and Human Services (HHS) to develop and implement a revised ambulatory surgery center (ASC) payment system by Jan. 1, 2008. The final rule was published in the Federal Register on Aug. 2, 2007, and will go into effect on Jan. 1, 2008. While the bulk of the changes affect the billing for ASC facility services, several changes affect coding for these services.
Up until 2008, ASC payments have been based on a tiered ASC “grouper” system, which lumped all ASC-approved procedures having similar overhead costs into payment groups. Except for certain specified facility services (prosthetic implants, implantable DME, new technology intra-ocular lenses, and the costs related to corneal tissue processing and transportation), all ancillary facility services that were directly related to performance of the procedure were packaged into the prospectively determined ASC group payment. Only procedures deemed by Medicare as appropriate for an ASC setting were payable.

Major Changes

As of 2008, the major changes to Medicare reimbursement of ASC facility services include: 1) significant expansion of the types of services that are deemed appropriate for an ASC setting; 2) conversion from use of the ASC grouper payment tiers to use of Outpatient Prospective Payment System (OPPS) ambulatory payment classification (APC) groups; 3) coverage for certain items and services for which separate payment has been allowed under OPPS; 4) separate coding and billing rules for procedures that include the use of high-cost devices, and; 5) modification of reporting of interrupted procedures.

Expansion of Covered ASC services

The current list of Medicare services approved for ASC setting will expand from 2,570 CPT^® codes in 2007 to 3,363 in 2008 for an additional 793 covered surgical procedures. The expansion of Medicare coverage of ASC services is primarily due to the switch from an inclusive listing method (paying only for surgical procedures that Medicare “allows”) to an exclusive listing method (paying for all surgical procedures unless explicitly excluded by Medicare).
The definition of a “surgical procedure” was expanded from “procedures described by CPT^® codes within the surgical range of 10000 through 69999” to include HCPCS Level II codes and CPT^® Category III codes that directly crosswalk or are similar to procedures in the CPT^® surgical range. Even services considered to be primarily office-based procedures are now allowed for payment to ASCs. Although the list was derived using this different method, it is still published as a list of services approved for the ASC setting.

Excluded Procedures

HHS has excluded from ASC reimbursement services deemed a significant safety risk, require an overnight recovery stay, or are not listed procedures in the CPT^® and HCPCS Level II coding systems.
Criteria for exclusion of procedures from payment to ASCs:

• Generally result in extensive blood loss
• Require major or prolonged invasion of body cavities
• Directly involve major blood vessels
• Are generally emergent or life-threatening in nature
• Commonly require systemic thrombolytic therapy
• Are designated as requiring inpatient care [under 42 CR 419.22(n)]
• Can only be reported using a CPT^® unlisted surgical procedure code
• Are otherwise specifically excluded

Packaging of ASC services

The reporting of supplies, devices, and ancillary services was expanded and more closely resembles reporting of these items under OPPS. Separate reporting and payment is allowed for brachytherapy sources; certain implantable items, drugs and biologicals, or radiology services that have pass-through status under the OPPS; and certain items and services that CMS designates as contractor-priced. Regarding ancillary services that are not surgical procedures, some are separately reportable if required for performance of an ASC-approved surgical procedure, but no non-surgical services are reportable as a stand-alone service.
For example, a chest X-ray might be separately reportable as part of removal of a central venous catheter but would not be reported as an independent radiology service as part of evaluation of a cough. Although an ancillary service might be listed by HHS as separately reportable from the surgical procedure, both CPT^® codes are still subject to Medicare CCI edits.
Separately reportable items and ancillary services:

• Brachytherapy sources
• Certain implantable items that have pass-through status under the OPPS
• Certain items and services that CMS designates as contractor-priced including, but not limited to, the procurement of corneal tissue
• Certain drugs and biologicals for which separate payment is allowed under the OPPS
• Certain radiology services for which separate payment is allowed under the OPPS

Use of High-Cost Devices

Certain procedures involve the use of high-cost devices, which by HHS definition represent more than 50 percent of the charge for the procedure (e.g., cochlear implants). The cost of the device is included in the payment rate for the facility in 2008 and not listed as having pass-through status under the OPPS.
Although this sounds like a billing issue, coders must be aware of whether the facility paid for the device or the device was furnished without cost. Medicare now requires the addition of modifier FB to CPT^® codes for procedures involving high-cost devices to indicate that the facility did not incur any cost for the device. Medicare then reduces the reimbursement for that CPT^® code to cover the ASC facility services alone.
Procedures Subject to Modifier FB

Reporting of Interrupted Procedures

Prior to 2008, ASC services that were discontinued or interrupted were reported using either modifier 73 (discontinued outpatient procedure prior to anesthesia administration) or modifier 74 (discontinued outpatient procedure after to anesthesia administration). Starting in 2008, discontinued ASC services must be reported to Medicare by appending modifier 73, 74 or 52.
The addition of modifier 52 to the list allows for reporting of discontinued procedures that do not require anesthesia.
Reporting Discontinued Services

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