REGULATORY REVIEW


departments (HOPDs) because CMS uses different update factors to anticipate annual cost changes. For HOPDs, CMS uses the hospital market basket to update payments, which takes into account medical supplies, equipment and other overhead affiliated with running an outpatient surgical facility. Unfortunately, CMS continues to update ASCs based on the Consumer Price Index for All Urban Consumers (CPI-U), which is based on the cost of consumer goods such as milk, bread and gasoline.


How Codes Are Grouped Each surgical code on the ASC payable list is classified into an ambulatory payment classification (APC) group based on clinical characteristics, typical resource use and costs associated with diagnoses and procedures performed. All services within the same APC have the same payment rate.


Impact of Local Wage Index CMS adjusts the national payment rate for ASCs according to the hospi- tal wage index, a set of numbers that is updated annually to reflect varied labor costs in all regions of the country. The agency indicated again in its 2015 final ASC payment rule that it is appropri- ate to use the hospital wage index to account for geographic variations in labor costs for ASCs because the labor costs are similar in hospitals and ASCs and the inpatient hospital wage index is also used by other Medicare pay- ment systems. Based on the results of a survey conducted by the US Gov- ernment Accountability Office, CMS determined that


labor accounts for


approximately half of an ASC’s costs. That is why CMS adjusts the labor por- tion of the national ASC rate (50 per- cent) by the hospital wage index but does not adjust the non-labor portion (the remaining 50 percent). An ASC’s actual payment rates can be higher or lower than the national rate depending on the cost of labor in its community.


Examples of Items and Services Not Included in ASC Payments for Covered Surgical Procedures or Covered Ancillary Services


Items or Services Not Included Who Receives Payment Where to Submit Bills Physician’s Services


Physician


Purchase or Rental of Non-Implantable Durable Medical Equipment (DME) to ASC Patients for Use in Their Homes


DME supplier


DME supplier must have a DME supplier number from the National Supplier Clearinghouse (NSC) and a separate National Provider Identifier (NPI)


*An ASC may not simultaneously be a DME supplier


Non-Implantable Prosthetic Devices


Ambulance Services


Leg, Arm, Back and Neck Braces


Services Furnished by Independent Laboratory


DME supplier


Certified ambulance supplier


DME supplier Artificial Legs, Arms and Eyes DME supplier


Certified laboratory (ASC can receive laboratory certification and a Clinical Laboratory Improvement Amendments [CLIA] number)


Facility Services for Surgical Procedures Excluded from the ASC List (listed in Addendum EE to the OPPS/ASC final rule with comment period)


Not covered by Medicare


DME MAC MAC DME MAC


DME MAC MAC


Medicare Administrative Contractor (MAC)


DME MAC


Patient is liable


Multiple Procedure Discounting ASC payment rates for individual pro- cedures are adjusted downward when multiple procedures are performed during the same patient encounter. The ASC receives full payment for the pro-


cedure with the highest payment rate, and payments for the other procedures are generally reduced by half of their usual rates. For a list of codes not sub- ject to multiple procedure discounting, visit “Multiple Procedure Discounting


ASC FOCUS MARCH 2015 19


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