The new payment system is intended to more logically align payment rates across Medicare payment systems to eliminate payment systems favoring one setting of care over another. Payments under the new system cover only the ASC’s facility costs; physicians are reimbursed separately for their professional services under the Medicare physician fee schedule. The ASC payment information provided in this reimbursement guide applies specifically to Medicare; the reimbursement systems used by private insurers and state Medicaid programs may vary.

Payment under the new system is based on the ambulatory payment classifications (APCs) used for the Medicare hospital outpatient prospective payment system (OPPS). Separately payable procedures and items are assigned to APC groups based on the CPT and HCPCS codes included on the CMS-1500 claim form.

In contrast to Medicare’s previous ASC payment system, under which there were only nine payment groupings, the new system involves hundreds of APC groups.

Each APC group has a fixed payment amount that is intended specifically to reflect the relative costs of the procedures or items assigned to the APC, which means that payments under the new system should better account for cost differences among different types of procedures and items. The new system will be phased in over a 4-year period, which means that for the next 3 years, payments for surgical procedures will be based on a blend of the new payment rates and the rates under the previous system.

The new payment system allows ASCs to be paid for any surgical procedure that CMS determines does not pose a significant safety risk to Medicare beneficiaries when performed in an ASC and that is not expected to involve an overnight stay. This payment policy change has resulted in approximately 790 newly payable procedures, in addition to the more than 2,500 surgical procedures that historically have been approved for ASC payment, such as cataract surgery. Many of the surgical procedures that are newly payable in ASCs are commonly performed in physicians’ offices.

Under the new payment system, Medicare will pay ASCs separately for all drugs and biologicals that are paid separately in the hospital outpatient department. In order to qualify for payment in the ASC setting, a drug must be integral to the performance of the covered surgical procedure and must be administered immediately before, during, or following a procedure that is approved for payment in the ASC, such as cataract surgery. Payment for drugs and biologicals will be equal to the payment rate for the product under OPPS. This means that in 2008, drugs that have “pass-through status” (like hylenex recombinant) will be paid at average sales price (ASP) plus 6%, while most other separately payable drugs will be paid at ASP plus 5%.

CMS issued a unique HCPCS J-code for hylenex recombinant

	HCPCS Descriptor
	J3473 Injection, hyaluronidase, recombinant, 1 USP Unit

Beginning on January 1, 2008, hylenex recombinant is eligible for separate Medicare payment in the ASC setting.

• Under the new ASC payment system, Medicare reimburses ASCs for separately payable drugs using the ASP methodology.
• CMS calculates an ASP-based payment amount for most separately payable drugs based on manufacturer-submitted sales data.
• Payment amounts under the ASP methodology are updated quarterly and may differ from one quarter to the next based on sales, discounts, and rebates that are reported to CMS.
• The latest Medicare payment amounts for drugs and biologicals in the ASC are listed in Addendum B (updated quarterly) on the CMS Web site: http://www.cms.hhs.gov/HospitalOutpatientPPS/AU/list.asp#TopOfPage.

The Medicare payment amount for hylenex recombinant is set at ASP plus 6% for 2008.

	HCPCS Descriptor Q1 2008 Medicare Payment
	J3473 1 USP Unit $0.412 (ASP + 6%)

Like other drugs and biologicals, hylenex recombinant must be provided integral to an ASC-covered surgical procedure in order to qualify for separate Medicare payment in the ASC.

ASC-covered surgical procedures that may be relevant to the administration of hylenex recombinant include the following:

	CPT Descriptor
	67500 Retrobulbar injection; medication (separate procedure, does not include supply of medication)
	67515   Injection of medication or other substance into Tenon’s capsule

In some cases, Correct Coding Initiative (CCI) edits may prevent these injection services from being billed with certain other procedures that have been approved for payment in the ASC, such as CPT 66984 [Extracapsular cataract removal with insertion of intraocular lens prosthesis (one stage procedure), manual or mechanical technique (eg, irrigation and aspiration or phacoemulsification)] or other cataract surgery codes. However, only one ASC-covered surgical procedure CPT code is needed to trigger payment for separately payable drugs like hylenex recombinant. A complete list of ASC-covered surgical procedures can be found by downloading Addendum AA from the CMS Web site: http://www.cms.hhs.gov/ASCPayment/04f_CMS-1392-FC(ASC).asp#TopOfPage. Providers should consult a current CPT manual and always select the CPT code that accurately identifies the service provided.

	Medicare CMS-1500 claims for hylenex recombinant in the ASC should include the following*:
	HCPCS Code for hylenex recombinant Report hylenex recombinant with J3473 per 1 USP Unit. In Form Locator 24D, enter HCPCS code J3473 In Form Locator 24G, enter appropriate number of HCPCS Units (for example, 150 Units of J3473 for a 150 USP Unit vial)
	CPT Code(s) Only ASC-covered surgical procedures will trigger separate payment for hylenex recombinant. In Form Locator 24D, enter appropriate CPT code(s) In Form Locator 24G, enter appropriate number of Units
	ICD-9-CM          Diagnosis Code(s) Clinicians should document the proper ICD-9-CM diagnosis code(s) that reflects the particular patient's condition. Medicare contractors may limit coverage of hylenex recombinant to FDA-approved indications. In Form Locator 21, enter appropriate ICD-9-CM diagnosis code(s)

*The information in this section applies only to ASC facility services; physicians bill separately for their professional services.

hylenex recombinant reimbursement by non-Medicare payers will vary; please check with your specific payers to determine whether they accept HCPCS codes and how they reimburse for hylenex recombinant.

Click here to see full Prescribing Information.

This section is intended solely for use as an informational tool to assist ambulatory surgical center billing staff with reimbursement issues. The coverage, coding, and payment information included in this section has been compiled from various resources and is current as of January 10, 2008; however, this information is subject to change and should not be construed as legal advice. Providers should exercise independent clinical judgment when selecting codes and submitting claims to reflect accurately the services rendered to individual patients. Baxter Healthcare Corporation does not guarantee success in obtaining insurance payments. Third-party payment for medical products and services is affected by numerous factors, not all of which can be anticipated or resolved by Baxter Healthcare Corporation. Providers are encouraged to contact third-party payers for specific information on their coverage, coding, and payment policies.