Below link from the CMS site has the ASC CY 2014 final rule and addendum that have addendum BB which indicates which drugs and other ancillary service/supply receive separate reimbursement due to their designated status indicator are considered packaged and no separate payment is made. If you review the J codes for example J1040 common code for steroid Depo Medrol is a packaged. It sounds like the pain management group is providing the drugs/supplies for the anesthesia and pain management procedure. I think the concern is that when the ASC is being provided the facility fee---the drugs and supplies in order to perform the procedure and provide anesthesia are figured into the payment and the payment methodology is not set up for the professional entity to separately bill for these services. My interpretation is the ASC should purchase these directly from the distributor.
K2 Drugs and biologicals paid separately when provided integral to a surgical procedure on ASC list; payment based on OPPS rate.
N1 Packaged service/item; no separate payment made.
Addendum AA -- Final ASC Covered Surgical Procedures for CY 2014 (Including Surgical Procedures for Which Payment is Packaged)
Addendum BB -- Final ASC Covered Ancillary Services Integral to Covered Surgical Procedures for CY 2014 (Including Ancillary Services for Which Payment is Packaged)
Addendum DD1 -- Final ASC Payment Indicators for CY 2014
Addendum DD2 -- Final ASC Comment Indicators for CY 2014
Addendum EE -- Surgical Procedures Excluded from Payment in ASCs for CY 2014
http://www.cms.gov/Medicare/Medicar...egulations-and-Notices-Items/CMS-1601-FC.html
We assigned payment indicator “K2” (Drugs and biologicals paid separately when provided integral to a surgical procedure on the ASC list; payment based on OPPS rate) to the six new drug and biological Level II HCPCS codes that are separately paid when provided in ASCs. We assigned payment indicator “L1” (Influenza vaccine; pneumococcal vaccine; packaged item/service, no separate payment made) to the new vaccine Level II HCPCS code and payment indicator “G2” (Non-office-based surgical procedure added in CY 2008 or later; payment based on OPPS relative payment weight) to the two new surgical Level II HCPCS codes.
We solicited public comment on the proposed CY 2014 ASC payment indicators and payment rates for the covered surgical procedures and covered ancillary services listed in Tables 33 and 34 of the proposed rule, as corrected (78 FR 43630; Table 34 was corrected in the September 6, 2013 correcting document (78 FR 54845)). Those HCPCS codes became payable in ASCs beginning April 1, or July 1, 2013, and are paid at the ASC rates posted for the appropriate calendar quarter on the CMS Web site at:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/11_Addenda_Updates.html.
The HCPCS codes listed in Table 33 of the CY 2014 OPPS/ASC proposed rule (78 FR 43630) were included in Addenda AA or BB to the proposed rule, as corrected (which are available via the Internet on the CMS Web site). We note that all ASC addenda are only available via the Internet on the CMS Web site. Because the payment rates associated with the new Level II HCPCS codes that became effective July 1, 2013 (listed in Table 34 of the proposed rule, as corrected) were not available to us in time for incorporation into the Addenda to the OPPS/ASC proposed rule, our policy is to include these HCPCS codes and their proposed payment indicators and payment rates in the preamble to the proposed rule but not in the Addenda to the proposed rule. These codes and their final payment indicators and rates are included in the appropriate Addendum to this CY 2014 OPPS/ASC final rule with comment period. Thus, the codes implemented by the July 2013 ASC quarterly update CR and their proposed CY 2014 payment rates (based on July 2013 ASP data) that are displayed in Table 34 of the CY 2014 OPPS/ASC proposed rule as corrected (78 FR 43630; 78 FR 54845) were not included in Addenda AA or BB to the proposed rule, as corrected (which are available via the Internet on the CMS Web site). The final list of ASC covered surgical procedures and covered ancillary services and the associated payment weights and payment indicators are included in Addenda AA or BB to this CY 2014 OPPS/ASC final rule with comment period, consistent with our annual update policy.
We solicited public comment on these proposed payment indicators and the proposed payment rates for the new Level II HCPCS codes that were newly recognized as ASC covered surgical procedures or covered ancillary services in April 2013 and July 2013 through the quarterly update CRs, as listed in Tables33 and 34 of the CY 2014 OPPS/ASC proposed rule, as corrected (78 FR 43630; 78 FR 54845). We proposed to finalize their payment indicators and their payment rates in this CY 2014 OPPS/ASC final rule with comment period.
We did not receive any public comments regarding our proposals. We are adopting as final for CY 2014 the ASC payment indicators for the ASC covered surgical procedures and covered ancillary services described by the new Level II HCPCS codes implemented in April and July 2013 through the quarterly update CRs as shown below, in Tables 46 and 47, respectively. These new HCPCS codes are also displayed in Addenda AA and BB to this final rule with comment period
2. Payment for Covered Ancillary Services
a. Background
Our final payment policies under the revised ASC payment system for covered ancillary services vary according to the particular type of service and its payment policy under the OPPS. Our overall policy provides separate ASC payment for certain ancillary items and services integrally related to the provision of ASC covered surgical procedures that are paid separately under the OPPS and provides packaged ASC payment for other ancillary items and services that are packaged or conditionally packaged (status indicators “N,” “Q1,” and “Q2”) under the OPPS. In the CY 2013 OPPS/ASC proposed rule (77 FR 45169), we further clarified our policy regarding the payment indicator assignment of codes that are conditionally packaged in the OPPS (status indicators “Q1” and “Q2”). Under the OPPS, a conditionally packaged code describes a HCPCS code where the payment is packaged when it is provided with a significant procedure but is separately paid when the service appears on the claim without a significant procedure. Because ASC services always include a surgical procedure, HCPCS codes that are conditionally packaged under the OPPS are always packaged (payment indictor “N1”) under the ASC payment system. Thus, our final policy generally aligns ASC payment bundles with those under the OPPS (72 FR 42495). In all cases, in order for those ancillary services also to be paid, ancillary items and services must be provided integral to the performance of ASC covered surgical procedures for which the ASC bills Medicare.
Our ASC payment policies provide separate payment for drugs and biologicals that are separately paid under the OPPS at the OPPS rates. We generally pay for separately payable radiology services at the lower of the MPFS nonfacility PE RVU-based (or technical component) amount or the rate calculated according to the ASC standard ratesetting methodology (72 FR 42497). However, as finalized in the CY 2011 OPPS/ASC final rule with comment period (75 FR 72050), payment indicators for all nuclear medicine procedures (defined as CPT codes in the range of 78000 through 78999) that are designated as radiology services that are paid separately when provided integral to a surgical procedure on the ASC list are set to “Z2” so that payment is made based on the ASC standard ratesetting methodology rather than the MPFS nonfacility PE RVU amount, regardless of which is lower. This modification to the ASC payment methodology for ancillary services was finalized in response to a comment on the CY 2011 OPPS/ASC proposed rule that suggested it is inappropriate to use the MPFS-based payment methodology for nuclear medicine procedures because the associated diagnostic radiopharmaceutical, although packaged under the ASC payment system, is separately paid under the MPFS (42 CFR 416.171(d)(1)). We set the payment indicator to “Z2” for these nuclear medicine procedures in the ASC setting so that payment for these procedures would be based on the OPPS relative payment weight rather than the MPFS nonfacility PE RVU-based amount to ensure that the ASC will be compensated for the cost associated with the diagnostic radiopharmaceuticals.
In addition, because the same issue exists for radiology procedures that use contrast agents (the contrast agent is packaged under the ASC payment system but is separately paid under the MPFS), we finalized in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74429 through 74430) to set the payment indicator to “Z2” for radiology services that use contrast agents so that payment for these procedures will be based on the OPPS relative payment weight and will, therefore, include the cost for the contrast agent (42 CFR 416.171(d)(2)).
ASC payment policy for brachytherapy sources mirrors the payment policy under the OPPS. ASCs are paid for brachytherapy sources provided integral to ASC covered surgical procedures at prospective rates adopted under the OPPS or, if OPPS rates are unavailable, at contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs have been paid for brachytherapy sources provided integral to ASC covered surgical procedures at prospective rates adopted under the OPPS.
Other separately paid covered ancillary services in ASCs, specifically corneal tissue acquisition and device categories with OPPS pass-through status, do not have prospectively established ASC payment rates according to the final policies of the revised ASC payment system (72 FR 42502 and 42508 through 42509; 42 CFR 416.164(b)). Under the revised ASC payment system, corneal tissue acquisition is paid based on the invoiced costs for acquiring the corneal tissue for transplantation. Devices that are eligible for pass-through payment under the OPPS are separately paid under the ASC payment system. Currently, the four devices that are eligible for pass-through payment in the OPPS are described by HCPCS code C1830 (Powered bone marrow biopsy needle), HCPCS code C1840 (Lens, intraocular (telescopic)), HCPCS code C1841 (Retinal prosthesis, includes all internal and external components), and HCPCS code C1886 (Catheter, extravascular tissue ablation, any modality (insertable)). Payment amounts for HCPCS codes C1830, C1840, C1841, and C1886 under the ASC payment system are contractor priced. In the CY 2013 OPPS/ASC final rule with comment period, we finalized the expiration of pass-through payment for HCPCS codes C1830, C1840, and C1886, which will expire after December 31, 2013 (77 FR 68353). Therefore, after December 31, 2013, the costs for devices described by HCPCS codes C1830, C1840, and C1886 will be packaged into the costs of the procedures with which the devices are reported in the hospital claims data used in the development of the OPPS relative payment weights that are used to establish ASC payment rates for CY 2014. HCPCS code C1841 was approved for pass-through payment effective October 1, 2013, and will continue to be eligible for pass-through payment in CY 2014.
b. Payment for Covered Ancillary Services for CY 2014
In the CY 2014 OPPS/ASC proposed rule (78 FR 43638 through 43639), for CY 2014, we proposed to update the ASC payment rates and make changes to ASC payment indicators as necessary to maintain consistency between the OPPS and ASC payment system regarding the packaged or separately payable status of services and the proposed CY 2014 OPPS and ASC payment rates. We also proposed to set the CY 2014 ASC payment rates for brachytherapy sources and separately payable drugs and biologicals equal to the proposed CY 2014 OPPS rates.
Consistent with established ASC payment policy (72 FR 42497), the proposed CY 2014 payment for separately payable covered radiology services was based on a comparison of the proposed CY 2014 MPFS nonfacility PE RVU-based amounts (we refer readers to the CY 2014 MPFS proposed rule) and the proposed CY 2014 ASC payment rates calculated according to the ASC standard ratesetting methodology and then set at the lower of the two amounts (except as discussed below for nuclear medicine procedures and radiology services that use contrast agents). Alternatively, payment for a radiology service may be packaged intothe payment for the ASC covered surgical procedure if the radiology service is packaged or conditionally packaged under the OPPS. The payment indicators in Addendum BB to the proposed rule, as corrected, indicate whether the proposed payment rates for radiology services are based on the MPFS nonfacility PE RVU-based amount or the ASC standard ratesetting methodology, or whether payment for a radiology service is packaged into the payment for the covered surgical procedure (payment indicator “N1”). Radiology services that we proposed to pay based on the ASC standard ratesetting methodology were assigned payment indicator “Z2” (Radiology service paid separately when provided integral to a surgical procedure on ASC list; payment based on OPPS relative payment weight) and those for which the proposed payment is based on the MPFS nonfacility PE RVU-based amount were assigned payment indicator “Z3” (Radiology service paid separately when provided integral to a surgical procedure on ASC list; payment based on MPFS nonfacility PE RVUs).
As finalized in the CY 2011 OPPS/ASC final rule with comment period (75 FR 72050), payment indicators for all nuclear medicine procedures (defined as CPT codes in the range of 78000 through 78999) that are designated as radiology services that are paid separately when provided integral to a surgical procedure on the ASC list are set to “Z2” so that payment for these procedures will be based on the OPPS relative payment weight (rather than the MPFS nonfacility PE RVU-based amount, regardless of which is lower) and, therefore, will include the cost for the diagnostic radiopharmaceutical. We proposed to continue this modification to the payment methodology in CY 2014 and, therefore, set the payment indicator to “Z2” for nuclear medicine procedures.
As finalized in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74429 through 74430), payment indicators for radiology services that use contrast agents are set to “Z2” so that payment for these procedures will be based on the OPPS relative payment weight and, therefore, will include the cost for the contrast agent. We proposed to continue this modification to the payment methodology in CY 2014 and, therefore, set the payment indicator to “Z2” for radiology services that use contrast agents.
Most covered ancillary services and their proposed payment indicators were listed in Addendum BB to the proposed rule, as corrected (which is available via the Internet on the CMS Web site). We invited public comment on these proposals.
Comment: One commenter requested that the procedure described by CPT code 33225 (Insertion of pacing electrode, cardiac venous system, for left ventricular pacing, at time of insertion of pacing cardioverter-defibrillator or pacemaker pulse generator (e.g., for upgrade to dual chamber system) (list separately in addition to code for primary procedure)) be excluded from the OPPS policy to package add-on codes due to impact on the proposed CY 2014 ASC payment rates for cardiac resynchronization therapy implant procedures (CRT-P, which is identified by CPT codes 33206 (Insertion of new or replacement of permanent pacemaker with transvenous electrode(s); atrial) and 33207 (Insertion of new or replacement of permanent pacemaker with transvenous electrode(s); ventricular)) that include this add-on code. The commenter indicated that the proposed ASC payment rates for CRT-P services decrease by about 35 percent due to OPPS packaging of the add-on CPT code 33225.
Response: Our payment policies under the revised ASC payment system for covered ancillary services provide separate ASC payment for certain ancillary items and services integrally related to the provision of ASC covered surgical procedures that are paid separately under the OPPS and provide packaged ASC payment for other ancillary items and services that are packaged or conditionally packaged (status indicators “N,” “Q1,” and “Q2”) under the OPPS. As detailed in section II.A.3.c. of this final rule with comment period, we are finalizing our proposal to package procedures described by add-on codes under the OPPS for CY 2014. Therefore, in order to align the ASC payment bundles with those under the OPPS, the ASC payment for CPT code 33225 will be packaged into the payment for the associated procedures and will not be separately paid in CY 2014.
Comment: Commenters stated that hospitals perform more ancillary services than ASCs and, therefore, greater packaging is appropriate under the OPPS, but not under the ASC payment system. Commenters also suggested that, because laboratory tests associated with ASC procedures are paid under the Clinical Laboratory Fee Schedule, duplicate payment will occur if the OPPS relative weights that are used to calculate ASC payment rates include costs for laboratory tests.
Response: As detailed in section II.A.3. of this final rule with comment period, we are finalizing our proposal to package the following items and services under the OPPS for CY 2014: (1) Drugs, biologicals, and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure; (2) drugs and biologicals that function as supplies when used in a surgical procedure; (3) clinical diagnostic laboratory tests; (4) procedures described by add-on codes; and (5) device removal procedures. However, we are not finalizing our proposal to package ancillary services or diagnostic tests on the bypass list under the OPPS for CY 2014. Therefore, with respect to the commenters' concerns about the proposed packaging of ancillary services, ancillary services will continue to have separate payment in CY 2014 under the OPPS.
With respect to the concern raised by commenters regarding duplicate payment of laboratory tests, packaging laboratory services under the OPPS will increase the relative payment weights and, subsequently, the ASC payment rates for those surgical procedures that include laboratory tests when provided in the hospital outpatient department. However, because we uniformly scale the ASC relative payment weights each update year to make them budget neutral, the changes to the relative payment weights that are associated with laboratory packaging will not result in duplicate or additional Medicare payment in aggregate. In addition, because the packaged laboratory tests are spread over many APCs, we also believe that the impact on particular services is minor. Furthermore, fewer laboratory tests should be necessary in the ASC as diagnostic evaluations are not performed in the ASC.
After consideration of the public comments we received, we are providing CY 2014 payment for covered ancillary services in accordance with the policies finalized in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68458 through 68459). Covered ancillary services and their final CY 2014 payment indicators are listed in Addendum BB (which is available via the Internet on the CMS Web site) to this final rule with comment period.