Coding is coding and submitting a claim form for payment is an easy process, right? Not quite. Especially not today, as we're still trying to get comfortable with Medicare's new ASC payment system. Understanding these seven subtleties of the system should help you adapt quicker.

You're not the only one adjusting. Just as you're trying to adjust to the new ASC payment system, so too are third-party payors. Remember this is new to them as well, and there will be glitches and snags to work out before all is said and done. In a recent audio teleconference Medicare provided for ASCs, Medicare staff had a hard time answering questions from ASC billing and coding staff. Sometimes they had no answer at all. Develop a good line of communication with your Medicare provider representative. Know the name of who's in charge of ASC claims and who her supervisor is. Write it down. If you don't understand a ruling, call and find out specific details from the payor.

CMS will pay for some items separately. Don't forget to research the addendums to the CMS payment system. Some of the items for which CMS will pay separately include brachytherapy sources; implantable items that have pass-through status under OPPS (outpatient prospective payment system); certain items that CMS has designated as contractor-priced such as procurement of corneal tissue (see "How to Get Paid for Corneal Tissue," March, page 26); drugs and biologicals for which separate payment is allowed under OPPS; and radiology services for which separate payment is allowed under OPPS.

Pass-through status. CMS has granted pass-through status to new devices that will lead to substantial clinical improvement for the patient. These devices may be paid for a period of two to three years and then will be incorporated into the bundled package payment. Currently, only two devices have pass-through status under OPPS as of January 2008:

• C1821. Interspinous process distraction device (X-Stop for the treatment of lumbar spinal stenosis).
• L8690. Auditory osseointegrated device, including internal and external components.

Stay tuned for updates. CMS will publish quarterly updates about covered services in ASCs and any related payment changes and coding issues at www.cms.hhs.gov/ascpayment. Here are some key reimbursement issues of which you're probably already aware:

• ambulatory surgery centers are subject to deductibles and coinsurance.
• Payable codes will be updated on an annual basis, but drugs will be updated every three months.
• Payment will be based on a certain percentage of the OPPS payment rate.
• Other services such as ancillary items will be contractor-priced and based on invoice cost. CMS has instructed that drugs and biologicals are billed with HCPCS code C9399 and payment will be priced at 95 percent of the average wholesale price (AWP).
• Payment rates are adjusted for geographic wage index.
• Labor-related portion of the service is now 50 percent and non-labor-related portion is 50 percent.
• There's a four-year transition period to implement rates. ASC reimbursements in 2008 are based on 25 percent of 2008's revised rate and 75 percent of the 2007 ASC rate. In 2009, payments will be split evenly between the 2007 and 2008 rates; in 2010 payments will be based on 75 percent of the 2008 rates and 25 percent of the 2007 values; beginning in 2011, payments will be based entirely on the new payment system's rates. Procedures newly added to the ASC payment list aren't subject to the blended payment structure; they'll immediately be paid at the plan's fully implemented rates. Here's an example, using CPT 64483 (Injection, anesthetic agent and/or steroid, transforaminal epidural; lumbar or sacral, single level).

The 2008 first transition year payment for CPT 64483 equals 75 percent of the 2007 payment rate + 25 percent of the 2008 fully implemented payment rate.

CY 2007 payment = $249.75 ($333.00 x 75%)
CY 2008 payment = $73.02 ($292.07 x 25%)
$249.75 + $73.02 = $322.77

Quandaries with CMS-1500 claim form. There are many:

• The SG modifier is no longer required to be listed after the procedure code for proper reimbursement. CMS won't deny claims with the SG modifier, but it's no longer necessary due to NPI.
• You must report bilateral procedures on two separate lines to receive proper reimbursement. Payment will be the same as multiple procedures, 150 percent. CMS says it will deny the claim if you use the -50 modifier rather than billing on two lines or two units. Physician claims, on the other hand, require a one-line item with the -50 modifier and double price, one unit. Here's an example:

Because the provider reports the bilateral procedure correctly on two separate lines, the provider will receive 100 percent of the first procedure and 50 percent of the second procedure. Remember, CMS will deny the claim if reported as a one line item with a -50 modifier.

Full and partial credit reporting. -FC and -FB modifiers were established for reporting partial or full credit ASCs received from manufacturers for specific device procedures. For ASC services furnished on or after Jan. 1, 2008, the partial credit policy applies to the same device and procedure pairs to which the no-cost or full-credit policy applies. Medicare payment will be reduced by 50 percent of the estimated cost of the device included in the procedure payment in cases in which the ASC reports that it received a credit of 50 percent or more of the cost of the new replacement device by appending the -FC modifier to the device implantation procedure HCPCS code. Submit modifier -FB when a device is furnished without cost or when full credit is received from the manufacturer. Submit modifier -FC when partial credit is received. CMS also instructs never to report -FB and -FC on the same service. Here are examples of reporting:

Don't report the C1721 as a separate line item. The device is included in the CPT procedure code of 33240 and if reported as such will cause potential underpayment.

Terminated and discontinued cases. ASCs now have clearly defined modifiers for services that were terminated either before anesthesia, after anesthesia or for procedures not requiring anesthesia but discontinued.

• Report modifier -73 for services terminated before anesthesia. The ASC facility will receive a 50 percent payment.
• Report modifier -74 for services terminated before anesthesia. The ASC facility will receive 100 percent of payment.
• Report modifier -52 for services discontinued that are services not requiring anesthesia.
• Remember, the physician will report a different modifier of -53 for these circumstances.
• The -52 or -73 modifier are not subject to multiple procedure discounts.
• The -74 modifier may be subject to the multiple procedure discount.

A work in progress
Like all things, it will take time for you and your staff to fully understand and get comfortable with the new ASC payment system. More quirks will surely develop as this year progresses, but by year's end, you and your payors should have all processes streamlined for correct reimbursement.