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	Archive > October, 2002	Vol. III, No. 10

Coding and Billing

Inside the New Payment Rates

Lolita M. Jones, RHIA, CCS

Although the recent CMS update of the national ASC payment rates associated with the Medicare list of covered ambulatory surgery procedures does not include the long-awaited re-basing of the ASC rates, a few of the revisions are noteworthy:

Cost of living adjustment. For the first time in five years, ASCs will receive a "cost of living" adjustment of about 3 percent.
Ninth payment group. CMS added a ninth payment group to the fee schedule. Although Group 9 was created in the early 1990s, it has never been used because payment for the lone code that existed in this group (CPT 50590 for lithotripsy) has not been made, subject to a court stay (American Lithotripsy Society v. Sullivan, 785, F. Supp. 1035 [D.D.C. 1992]). The "new" group will have several procedures added to it, to be published in November. The other groupings have not changed in terms of the procedures listed.
Revised wage indexes. The new payment schedule, which applies for services rendered on and after Oct. 1, features revised wage indexes, which are used to adjust the final payment your facility receives.

New Payment
Group 1:	$333
Group 2:	$446
Group 3:	$510
Group 4:	$630
Group 5:	$717
Group 6:	$826*
Group 7:	$995
Group 8:	$973*
Group 9:	$1,339
*Includes a $150 IOL allowance.

Complying with the new schedule
Now that the parameters for payment have been set, here's how to calculate and submit your claims for the new schedule.

The payment group rate for procedures at your facility depends on the location of your facility as well as the actual payment group for the procedure's CPT code. The specific payment is determined by the Prospective Payment System (PPS) wage index assigned to your area. The wage index is divided into urban and non-urban locations and it relates to the average wage levels of healthcare workers in a certain area. The national average is assigned a value of 1.0. Areas with above average wage levels have index numbers greater than 1.0, while areas with below average wage levels have index numbers less than 1.0. Each Metropolitan Statistical Area (MSA) within a state has a separate index, and there is one index for all rural areas within a state. The index exists to remove the effects of differences in wage levels from one area to another. For example, in Maryland, the wage index for the Baltimore area is 0.9929. The wage index for all non-urban Maryland counties is 0.8946. To adjust payment rates to your geographic location, see the table on the next page.

When multiple ASC-covered procedures are performed in the same operative session, bill based on the full wage-adjusted rate of the procedure classified in the highest payment group and on 50 percent of the applicable wage-adjusted rate for any other ASC-covered procedure(s) furnished in the same session. For example, if you do a podiatry procedure that involves two bunion repairs - one with an implant (CPT 28293) and one with a small excision (CPT 28299) - the first procedure will be based on the full wage-adjusted group level (group 3) and the second will be calculated at 50 percent.

If you can't update your software to reflect the adjusted rates before they take effect, you can:

Hold the claims until the updated rates and wage indexes are installed in your claim production system. Simply split ASC claims that are for facility services performed before Oct. 1 from those after Sept. 30.
Process the claims for services based on last year's group rates and wage indexes, then go back and adjust your claims for all under-reimbursed procedures performed on or after Oct. 1.

Choosing which option is more cost-effective for your facility depends on whether you can get back on track quickly if you hold the claims until your systems are updated.

Steps for Computing Labor-Adjusted ASC Payment Rates*

Payment Group 1

Payment Group 2

Payment Group 3

Payment Group 4

Payment Group 5

Payment Group 6

Payment Group 7

Payment Group 8

Payment Group 9

Step 1: (Adjusted Labor Component or Rate)

National ASC payment rate for group

$333

$446

$510

$630

$717

$826

$995

$973

$1,339

Subtract the IOL allowance ($150)

N/A

N/A

N/A

N/A

N/A

-$150

N/A

-$150

N/A

National ASC payment rate for group (net IOL allowance)

$333

$446

$510

$630

$717

$676

$995

$823

$1,339

Standardized labor-

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