What are the Rules for Ambulatory Surgical Centers and Outpatient Hospital Care in Tennessee?

Compliance Corner

When it comes to care for workers' compensation injuries, across the country ambulatory surgical centers and outpatient treatment facilities have become the workhorses for delivering treatment. Not surprisingly, states, like Tennessee, have spelled out rules and definitions regarding such facilities. Thanks to Simply Research, some of the rules are highlighted here.

Outpatient Basics

In Tennessee, medically appropriate surgical procedures may be performed on an outpatient basis.

'Ambulatory Surgical Center'

For the purpose of the Medical Fee Schedule Rules, “ambulatory surgical center” means an establishment with an organized medical staff of physicians; with permanent facilities that are equipped and operated primarily for the purpose of performing surgical procedures, with continuous physicians and registered nurses on site or on call; which provides services and accommodations for patients to recover for a period not to exceed 23 hours after surgery. An ambulatory surgical center may be a free-standing facility or may be attached to a hospital facility. For purposes of workers’ compensation reimbursement to ASCs, the facility shall be a Medicare approved ASC.

CMS OPPS

CMS has implemented the Outpatient Prospective Payment System under Medicare for reimbursement for hospital outpatient services. All outpatient facility services paid under the OPPS are classified into Ambulatory Payment Classifications groups. Services in each APC are similar clinically and in terms of the resources they require. CMS has established a payment rate for each APC. The payment rate for each APC group is the basis for determining the maximum total payment to which an ASC or hospital outpatient center will be entitled, including addons, hospital outpatient procedures, multiple procedure discounts and status indicators, according to current CMS guidelines.

Under the Medical Fee Schedule Rules, the OPPS reimbursement system shall be used for reimbursement for all outpatient services, wherever they are performed, in a free-standing ASC or hospital setting. Medicare APC rates shall be used as the basis for facility fees charged for outpatient services and shall be reimbursed at a maximum of 150% of Medicare APC rates. APC groups and maximum allowable reimbursement amounts for facility services performed in an outpatient hospital or ASC setting are included in the rate tables on the same line as the professional fees. Depending on the services provided, ASCs and hospitals may be paid for more than one APC for an encounter. When multiple surgical procedures are performed during the same surgical session, Medicare OPPS guidelines shall be used in determining separate and distinct surgical procedures and the order of payment. Medicare status indicators which govern payment of facility bills are included in the rate tables.

Packaged Services

If a claim contains services that result in an APC payment but also contains packaged services, separate payment of the packaged services is not made since the payment is included in the APC. Outlier calculations are not applicable.

Maximum Allowable Rates

The maximum allowable reimbursement rates for outpatient hospitals and ASCs included in the rate tables apply to Acute Care and Critical Access Hospitals.

When no Outpatient Rates are in the Tables

Services for which no outpatient rates are included in the rate tables may be covered when preauthorized by the payer. The maximum allowable facility reimbursement is the usual & customary amount, which is 80% of the billed charges, as defined in the Bureau’s Rules for Medical Payments.

Medicare Reimbursement

All of the following services are to be reimbursed in accordance with the Medicare status indicators effective on the date of service. The Medicare “inpatient only” list does not apply if pre-authorization is obtained. Maximum allowable reimbursement amounts are included in the fee schedule:

1. Radiology services (technical components may only be separately reimbursed when not included in APC);

2. Diagnostic procedures not related to the surgical procedure;

3. Prosthetic devices;

4. Orthotics;

5. Implantables;

6. DME for use in the patient’s home;

7. Take home medications; and

8. Take home supplies.

Implantables

For cases involving implantation of medical devices (implantables), separate payment for the implant outside of the APC rate shall only be allowed in accordance with the Medicare status indicators and shall be made only to the facility. An invoice is required.

DME

For DME, orthotics and prosthetics used in the patient’s home that is supplied by the facility, payment shall be made only to the facility (at the rates specified in 0800-02-18-.10 and 0800-02-18-.11), and not to any other separate entity for these services. No extra payment shall be made for these services if according to CMS regulations and status indicators when those particular services are included in the APC payment.

Pre-admission Billing

Pre-admission lab and x-ray may be billed separately from the Ambulatory Surgery bill when performed 24 hours or more prior to admission, and will be reimbursed the lesser of billed charges or the fee listed in the rate tables. Pre-admission lab and radiology are not included in the facility fee.

Emergency Cases

There may be emergency cases or other occasions in which the patient was scheduled for outpatient surgery and it becomes necessary to admit the patient. All hospitals with ambulatory patients who stay longer than 23 hours past ambulatory surgery or other diagnostic procedures and are formally admitted to the hospital as an inpatient will be paid in accordance with the Inpatient Hospital Fee Schedule Rules, 0800-02-19. Medicare hospital criteria shall apply to these cases.

Composite, Comprehensive Observational Services

Services that qualify for composite or the comprehensive observational services APCs shall be reimbursed at 150% of the listed OPPS rate listed in the rate table.

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