How to Handle the Updated ASC Payment Rates

I've heard that HCFA recently updated the eight ASC payment rates. What are the updated rates, and how will my Medicare carrier calculate the labor-adjusted payment rates to reflect the geographical location of my ambulatory surgerycenter?

A.

In accordance with the Social Security Act, the Health Care Financing Administration (HCFA) has increased the ASC facility payment rates to account for inflation. HCFA plans to publish the new rates in the Federal Register by October 1, 2000; however, even if they don't publish the rates by that date, the Social Security statute permits Medicare carriers to begin paying the updated rates for all services furnished on or after October 1.

As with the previous payment rates, HCFA established these rates using data that were adjusted to remove the effects of differences in wage levels from area to area. To make the rates applicable to your area, you need to first find out what your updated 2001 wage index is. You can do this by contacting your Medicare carrier or by referring to the Medicare Program Memorandum Intermediaries/Carriers Manual, Transmittal No. AB-00-82, September 1, 2000. You can obtain this on the web at http://www.outpatientsurgery.net/os08/os010insurance.htm. For more on wage indexes, see my column in the August 2000 issue of Outpatient Surgery; you can also reach it online at http://www.outpatientsurgery.net/os08/os08insurance.htm.

If a Medicare carrier or fiscal intermediary can't get its billing system updated by October 1, it does have some leeway. It can either hold the claims until the system is modified, or it can go ahead and process claims using the FY 2000 rates. However, it will have to go back and adjust those claims to reflect the updated rates and wage indexes.

On the previous page is a chart I created to assist ASCs in adjusting their ASC group payment rates for their geographiclocation.