ASC Compliance & Coding

Reimbursement Issues

ASC Compliance & Coding

Reimbursement Issues

By Riva Lee Asbell

The ASC setting has a unique set of coding and reimbursement requirements. This article will cover some of the common coding and compliance issues that appear in ophthalmic ASCs.

Compliance Issues

Chart Documentation. It behooves the ASC to maintain proper chart documentation for coding and related compliance issues as well as for medical matters. This review is based on Medicare guidelines. Here are some of the problems frequently encountered in audits:

ADL Forms. Activity of Daily Living forms are a good way to document medical necessity for cataract and YAG posterior capsulotomy surgeries. Audits of ASCs may focus on whether the surgery was medically necessary. A properly executed ADL form substantiates the medical necessity of the procedure. The physician's office should provide a copy to the ASC.

Complex Cataract Surgery. Be sure the indications and characteristics of the case that qualify it as complex are described clearly in the operative notes, preferably stated in a brief narrative at the beginning of the description of the procedure. There has been increased interest in the utilization and payment amount for complex cataract surgeries coded as such by physicians. The ASC usually does not question the physician's choice of code. CMS utilization statistic analysis revealed that there is a significant increase in utilization of the complex cataract code (CPT code 66982). Many cases are being coded as complex cataract extractions that do not qualify.

Blepharoplasty Surgery. This surgery is defined as functional or cosmetic. Some insurers will give prior approval for functional blepharoplasty surgery — Medicare will not. There are Local Coverage Determinations (LCDs) issued by many Medicare Administrative Contractors (MACs) that specify conditions for coverage of the procedure as functional. An example of one may be found at: It's recommended that the ASC maintain a copy of the ADL form from the office visit at the time surgery was scheduled. This should document any ADL problems.

Payment Issues. ASC reimbursement is usually straightforward once the CPT procedure codes are determined and drugs/biologicals paid separately are noted. Compliance problems, however, emerge when there is a duality, such as exists with blepharoplasty or lesion removal, wherein the case may be cosmetic or functional. There are two separate but related areas of concern in cosmetic surgery:

(1) whether the payment of the ASC facility fee should be billed to the insurer or the patient and (2) who is responsible for payment of the anesthesia fee. Some cases, such as bilateral functional upper eyelid blepharoplasty and bilateral cosmetic lower eyelid blepharoplasty, are mixed.

If a strictly cosmetic procedure is performed in an ASC, the ASC must bill the patient for the facility fee and the anesthesiologist is obliged to bill the patient for anesthesia fee. When a procedure is mixed cosmetic and functional, such as the combination referred to above, the ASC and the anesthesiologist need to bill the patient for the cosmetic portions. Failure to do so may raise issues of inducement and questions along this line should be directed to a healthcare attorney.

Coding Issues

Multiple Surgery Rules. The same rules that apply to physician coding for multiple procedures apply to ASC coding.

• Multiple surgeries are defined by Medicare as more than one procedure performed by the same surgeon during the same session.

• Payment is calculated as 100% of the allowable for the first (highest paying procedure) and a 50% reduction for the next four procedures. In physician coding, if more than five procedure codes are submitted, the claim is subjected to individual medical review in order to determine payment. Note that this review mechanism is not in place for ASC coding. It's best not to use more than five CPT codes on a given case.

• Be sure to list the procedures in descending payment order according to the ASC fee schedule. The order is often different from that used for physician coding.

• In 2011, blepharoplasty pays higher than blepharoptosis for ASC reimbursement, but the reverse is true for physician reimbursement.

ASC surgical services billed with either the 52 or 73 modifier are not subject to further reductions.

• Procedures billed with modifier 74 are subject to multiple procedure discounting.

National Correct Coding Initiative (NCCI). This document essentially lists sets of codes that cannot be used together for various reasons. It's also known as the NCCI, CCI, or “bundling lists.”

• Since Part B Medicare processes ASC claims, the Physician NCCI edits are the ones that apply.

• The edits with a modifier-indicator of 1 can be “broken” by applying modifier 59. Many billers, coders and physicians do this without understanding the ramifications. Unless there are extraordinary circumstances this should not be done.

Unlisted Codes. These codes should not be used for facility coding since they are not reimbursed in ASC billing. Unlisted codes are the ones ending in “99” such as “66999 Unlisted Code Anterior Segment.” Medicare contractors have no mechanism in place to have these claims evaluated and assigned a payment value.

Modifiers. The modifiers used in ASC coding are published in the CPT Appendix entitled “Modifiers Approved for Ambulatory Surgery Center (ASC) Hospital Outpatient Use.” Here are some tips:

The SG modifier is no longer necessary, per the new system set up in 2008.

Do not use modifier 50. Even though modifier 50 appears in the appendix, it should not be used. The Medicare contractors have issued instructions on how to fill out the billing forms for bilateral cases. Using modifier 50 will result in payment for only one side when bilateral surgery was performed.

The most queries as well as errors involving ASC modifier usage occur with application of modifiers 73 and 74. One good resource that explains them is Wisconsin Physician Services (

No Payment is allowed if a procedure is terminated before the patient is taken into the treatment or operating room, an example being surgery that is canceled or postponed due to patient complaints of a cold or the flu.

Modifier 73 is used when there is an elective cancellation of the procedure subsequent to surgical preparation, but before the administration of anesthesia. Payment is made at the rate of 50% of the fee schedule if a surgical procedure is terminated due to the onset of medical complications after the patient has been prepared for surgery and taken to the operating room but before anesthesia has been induced or the procedure initiated. Example: the patient develops an allergic reaction to a drug administered by the ASC prior to surgery or if, upon injection of a retrobulbar block, the patient experiences a retrobulbar hemorrhage that prevents continuation of the procedure. Although some supplies and resources are expended, they are not consumed to the same extent had anesthesia been fully induced and the surgery completed.

Modifier 74 is used after the procedure has commenced or after the anesthesia was administered. Payment is at 100 % of the allowable amount of the fee schedule for the procedure. Example: full payment is made if, after anesthesia has been accomplished and the surgeon has made a preliminary incision, the patient's blood pressure increases suddenly and the surgery is terminated to avoid increasing surgical risk to the patient. In this case, the resources of the facility are consumed in essentially the same manner and to the same extent as they would have been had the surgery been completed.

WPS Medicare states that an ASC claim for payment for terminated surgery must include an operative report kept on file by the ASC, and made available, if requested.

The operative report should specify the following:

1. Reason for termination of surgery;
2. Services that were actually performed;
3. Supplies that were actually provided;
4. The services not performed that would have been performed if surgery had not been terminated;
5. Supplies not provided that would have been provided if the surgery had not been terminated;
6. The time actually spent in each stage, e.g., preoperative, operative, and postoperative;
7. The time that would have been spent in each of these stages if the surgery had not been terminated; and
8. The HCPCS code for the procedure had the surgery been performed.

Riva Lee Asbell is principal of Riva Lee Asbell Associates, an ophthalmic reimbursement consulting firm. She may be reached at