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Background

Although ambulatory surgical centers (ASCs) perform surgeries that could also be performed in a hospital outpatient department, how they bill Medicare for these surgeries and the amount they are reimbursed for these surgeries differs from those that are performed in a hospital outpatient department. 

There are two types of providers that are allowed to bill Medicare for outpatient-based surgeries:

  • Hospitals
  • Ambulatory surgical centers (ASCs)

Medicare defines an ambulatory surgical center (ASC) as "...a distinct entity that operates exclusively to furnish surgical services to patients who do not require hospitalization..."1 An ASC can be independent or operated by a hospital.

Some outpatient surgeries may be billed by hospitals only. "...only those procedures that pose a significant safety risk to patients or are expected to require active medical monitoring at midnight on the day of the procedure when furnished in an ASC2" are not billable by ASCs.

Facility payments to both ASCs and hospitals are reimbursed on a PPS:

  • The hospital Outpatient PPS (OPPS), established in 2000, is based on APCs (Ambulatory Payment Classifications).
  • ASC PPS payments, established in 2008, are also based on APCs, but the ASC payment is approximately 60% of the OPPS payment3.

Currently, all ASCs, even those operated by hospitals, bill Medicare using the 837P / CMS-1500. Since 2008, these bills have resided only in the Carrier file. Prior to that, some were found in the Outpatient file, too. Hospitals bill for outpatient surgeries using the 837I / CMS-1450 (aka UB-04). These bills are found in the Outpatient file. Please see the Medicare Claims Processing Manual (Chapter 14, Section 50) for details regarding how to identify ASC claims in the Medicare claims data using a combination of place of service, type of service and speciality codes.

ASC and OPPS Surgery Claim Counts
Chart 1. ASC and OPPS Surgery Claim Counts: January & June 2001-2016