100-04 Medicare Claims Processing Manual: Chapter 14 - Ambulatory Surgical Centers

Medicare Claims Processing Manual
Chapter 14 - Ambulatory Surgical Centers
Table of Contents
(Rev. 13836; Issued: 06-24-26)
Transmittals for Chapter 14
10 - General
10.1 - Definition of Ambulatory Surgical Center (ASC)
10.2 - Ambulatory Surgical Center Services on the ASC Covered Procedures List
10.3 - Services Furnished in ASCs Which Are Not ASC Facility Services or
Covered Ancillary Services
10.4 - Coverage of Services in ASCs That Are Not ASC Facility Services or
Covered Ancillary Services
20 - List of Covered Ambulatory Surgical Center Procedures
20.1 - Nature and Applicability of ASC Covered Procedures List
20.2 - Types of Services Included on the ASC Covered Procedures List
20.3 - Rebundling of CPT Codes
30 - Rate-Setting Policies
30.1 - Where to Obtain Current Rates and Lists of Covered Services
40 - Payment for Ambulatory Surgery
40.1 - Payment to Ambulatory Surgical Centers for Non-ASC Services
40.2 - Wage Adjustment of Base Payment Rates
40.3 - Payment for Intraocular Lens (IOL)
40.4 - Payment for Terminated Procedures
40.5 - Payment for Multiple Procedures
40.6 - Payment for Extracorporeal Shock Wave Lithotripsy (ESWL)
40.7 - Payment and Offset for Pass-Through Devices Beginning January 1, 2008
40.8 - Payment When a Device is Furnished With No Cost or With Full or Partial
Credit Beginning January 1, 2008
40.9 - Payment and Coding for Presbyopia Correcting IOLs (P-C IOLs) and
Astigmatism Correcting IOLs (A-C IOLs)
40.10 - Removal of Device Portion from Certain Discounted Device-Intensive
Ambulatory Surgical Center (ASC) Procedures Prior to the Administration of
Anesthesia
50 - ASC Procedures for Completing the ASC X12 837 Professional Claim Format or the
Form CMS-1500
60 - Medicare Summary Notices (MSN) Claim Adjustment Reason Codes, Remittance
Advice Remark Codes (RAs)

60.1 - Applicable messages for NTIOLs
60.2 - Applicable Messages for ASC 2008 Payment Changes Effective January 1,
2008
60.3 - Applicable Messages for Certain Payment Status Indicators on the ASCFS
Effective for Services on or after January 1, 2009
60.3.1 – Applicable ASC Messages for Certain Payment Indicators Effective
for Services Performed on or after January 1, 2021
70 - Ambulatory Surgical Center (ASC) HCPCS Additions, Deletions, and Master
Listing

10 - General
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
Prior to January 1, 2008, payment was made under Part B for certain surgical procedures
that were furnished in ASCs and were approved for being furnished in an ASC. These
procedures were those that generally did not exceed 90 minutes in length and did not
require more than 4 hours of recovery or convalescent time. Prior to January 1, 2008,
Medicare did not pay an ASC for those procedures that required more than an ASC level
of care, or for minor procedures that were normally performed in a physician’s office.
CMS published updates to the list of covered surgical procedures for which an ASC may
be paid each year.
Beginning January 1, 2008, payment is made to ASCs under Part B for all surgical
procedures except those that CMS determines may pose a significant safety risk to
beneficiaries or that are expected to require an overnight stay when furnished in an ASC.
Also, beginning January 1, 2008, separate payment is made to ASCs under Part B for
certain ancillary services, such as certain drugs and biologicals, OPPS pass-through
devices, brachytherapy sources, and radiology procedures. Medicare does not pay an
ASC for procedures that are excluded from the list of covered surgical procedures.
Medicare continues to pay ASCs for new technology intraocular lenses and corneal tissue
acquisition as it did prior to January 1, 2008.
CMS publishes updates to the list of covered surgical procedures for which an ASC may
be paid each year. In addition, CMS publishes quarterly updates to the lists of covered
surgical procedures and covered ancillary services to establish payment indicators and
payment rates for newly created Level II HCPCS and Category III CPT codes. The
complete lists of ASC covered surgical procedures and ASC covered ancillary services,
the applicable payment indicators, payment rates for each covered surgical procedure and
ancillary service before adjustments for regional wage variations, the wage adjusted
payment rates, and wage indices are accessible on the CMS Web site at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/ASCPayment/index.html .
To be paid under this provision, a facility must be certified as meeting the requirements
for an ASC and must enter into a written agreement with CMS. The certification process
is described in the State Operations Manual.
ASCs must accept Medicare’s payment as payment in full for services with respect to
those services defined as ASC services. The physician and anesthesiologist may bill and
be paid for the professional component of the service also.
Certain other services such as lab services or non-implantable DME may be performed
when billed using the appropriate certified provider/supplier UPIN/NPI.
10.1 - Definition of Ambulatory Surgical Center (ASC)
(Rev. 3031, Issued: 08-22-14, Effective: 01-01-12, Implementation: 09-23-14)

An ASC for Medicare purposes is a distinct entity that operates exclusively for the
purpose of furnishing outpatient surgical services to patients. The ASC must have in
effect an agreement with CMS obtained in accordance with 42 CFR 416 subpart B
(General Conditions and Requirements). An ASC is either independent (i.e., not a part of
a provider of services or any other facility), or operated by a hospital (i.e., under the
common ownership, licensure or control of a hospital). A hospital-operated facility has
the option of being considered by Medicare either to be an ASC or to be a provider-based
department of the hospital as defined in 42 CFR 413.65.
To participate in Medicare as an ASC operated by a hospital, a facility:
• 	Elects to do so.
• 	Is a separately identifiable entity, physically, administratively, and financially
independent and distinct from other operations of the hospital with costs for the
ASC treated as a non-reimbursable cost center on the hospital’s cost report;
• 	Meets all the requirements with regard to health and safety, and agrees to the
assignment, coverage and payment rules applied to independent ASCs; and
• 	Is surveyed and approved as complying with the conditions for coverage for
ASCs in 42 CFR 416.25-49.
Related survey requirements are published in the State Operations Manual, Pub. 100-07,
Appendix L.
If a facility meets the above requirements, it bills the Medicare contractor using the ASC
X12 837 professional claim format or, in rare cases, on Form CMS-1500 and is paid the
ASC payment amount.
A hospital-operated facility that decides to discontinue participation in Medicare as an
ASC must terminate its ASC agreement with CMS. Guidance regarding the termination
of ASC agreements with CMS is provided in 42 CFR 416.35. Voluntary terminations are
those initiated by an ASC and, as specified in 42 CFR 416.35, an ASC may terminate its
agreement either by sending written notice to CMS or by ceasing to furnish services to
the community.
To participate in Medicare as a provider-based department of the hospital, the hospital
must comply with CMS requirements to certify the hospital-operated facility as a
provider-based department of the hospital as described in 42 CFR 413.65, including
meeting all of the hospital conditions of participation specified in 42 CFR 482. See Pub
100-07, State Operations Manual, Appendix A, “Survey Protocol, Regulations and
Interpretive Guidelines for Hospitals,” for information on survey requirements.
Certain Indian Health Service (IHS) and Tribal hospital outpatient departments may elect
to enroll and be paid as ASCs. See Pub. 100-04, chapter 19 for more information.

10.2 - Ambulatory Surgical Center Services on the ASC Covered
Procedures List
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
Covered ASC services are those surgical procedures that are identified by CMS on a
listing that is updated at least annually. Some surgical procedures are covered by
Medicare but are not on the list of ASC covered surgical procedures. For surgical
procedures that are performed but not covered in ASCs, the related professional services
may be billed by the rendering provider as Part B services and the beneficiary is liable for
the facility charges, which are non-covered by Medicare.
Under the ASC payment system, Medicare makes facility payments to ASCs only for the
specific ASC covered surgical procedures on the ASC list of covered surgical procedures.
In addition, Medicare makes separate payment to ASCs for certain covered ancillary
services that are provided integral to a covered ASC surgical procedure. All other non-
ASC services, such as physician services and prosthetic devices may be covered and
separately billable under other provisions of Medicare Part B. The Medicare definition of
covered ASC facility services for a covered surgical procedure includes services that
would be covered if furnished on an inpatient or outpatient basis in connection with a
covered surgical procedure. This includes operating and recovery rooms, patient
preparation areas, waiting rooms, and other areas used by the patient or offered for use to
patients needing surgical procedures. It includes all services and procedures provided in
connection with covered surgical procedures furnished by nurses, technical personnel and
others involved in patient care. These do not include physician services or medical and
other health services for which payment may be made under other Medicare provisions
(e.g., services of an independent laboratory located on the same site as the ASC,
anesthetist professional services, non-implantable DME).
ASC services for which payment is included in the ASC payment for a covered surgical
procedure under 42 CFR 416.166 include, but are not limited to-
(a) Included facility services:
(1) Nursing, technician, and related services;
(2) Use of the facility where the surgical procedures are performed;
(3) Any laboratory testing performed under a Clinical Laboratory
Improvement Amendments of 1988 (CLIA) certificate of waiver;
(4) Drugs and biologicals for which separate payment is not allowed under
the hospital outpatient prospective payment system (OPPS);

(5) Medical and surgical supplies not on pass-through status under Subpart
G of Part 419 of 42 CFR;
(6) Equipment;
(7) Surgical dressings;
(8) Implanted prosthetic devices, including intraocular lenses (IOLs), and
related accessories and supplies not on pass-through status under Subpart
G of Part 419 of 42 CFR;
(9) Implanted DME and related accessories and supplies not on pass-
through status under Subpart G of Part 419 of 42 CFR;
(10) Splints and casts and related devices;
(11) Radiology services for which separate payment is not allowed under
the OPPS, and other diagnostic tests or interpretive services that are
integral to a surgical procedure;
(12) Administrative, recordkeeping and housekeeping items and services;
(13) Materials, including supplies and equipment for the administration
and monitoring of anesthesia; and
(14) Supervision of the services of an anesthetist by the operating surgeon.
Under the revised ASC payment system, the above items and services fall within the
scope of ASC facility services, and payment for them is packaged into the ASC payment
for the covered surgical procedure. ASCs must incorporate charges for packaged
services into the charges reported for the separately payable services with which they are
provided. Because contractors price ASC services based on the lower of submitted
charges or the ASC payment rate for the separately payable procedure, and because this
comparison is made at the claim line-item level, facilities may not be paid appropriately
if they unbundle charges and report those charges for packaged codes as separate line-
item charges.
There is a payment adjustment for insertion of an IOL approved as belonging to a class of
NTIOLs, for the 5-year period of time established for that class, as set forth at 42 CFR
416.200
.
Covered ancillary items and services that are integral to a covered surgical procedure, as
defined in 42 CFR 416.61, and for which separate payment to the ASC is allowed
include:
(b) Covered ancillary services

(1) Brachytherapy sources;
(2) Certain implantable items that have pass-through status under the
OPPS;
(3) Certain items and services that CMS designates as contractor-priced,
including, but not limited to, the procurement of corneal tissue;
(4) Certain drugs and biologicals for which separate payment is allowed
under the OPPS;
(5) Certain radiology services for which separate payment is allowed
under the OPPS.
NOTE: Effective for dates of service on or after January 1, 2009, for allowed ASC claims, if
modifier = TC, contractors must ensure that either:
• 	ordering physician name and NPI or
• 	referring physician name and NPI
are present on electronic or paper claims.
If this information is missing, contractors shall return as unprocessable.
The contractor shall use the following remittance advice messages and associated codes
when returning claims under this policy. This CARC/RARC combination is compliant
with CAQH CORE Business Scenario Two.
Group Code: CO
CARC: 16
RARC: N264, N265, N285 or N286 as appropriate
MSN: N/A
Definitions of ASC Facility Services:
Nursing Services, Services of Technical Personnel, and Other Related Services
These include all services in connection with covered procedures furnished by nurses and
technical personnel who are employees of the ASC. In addition to the nursing staff, this
category includes orderlies, technical personnel, and others involved in patient care.
Use by the Patient of the ASC Facilities
This category includes operating and recovery rooms, patient preparation areas, waiting
rooms, and other areas used by the patient or offered for use by the patient’s relatives in
connection with surgical services.

Drugs, Biologicals, Surgical Dressings, Supplies, Splints, Casts, Appliances, and
Equipment
This category includes all supplies and equipment commonly furnished by the ASC in
connection with surgical procedures. See the following paragraphs for certain
exceptions. Drugs and biologicals are limited to those which cannot be self-administered.
See the Medicare Benefit Policy Manual, Chapter 15, §50.2, for a description of how to
determine whether drugs can be self-administered.
Under Part B, coverage for surgical dressings is limited to primary dressings, i.e.,
therapeutic and protective coverings applied directly to lesions on the skin or on openings
to the skin required as the result of surgical procedures. (Items such as Ace bandages,
elastic stockings and support hose, Spence boots and other foot coverings, leotards, knee
supports, surgical leggings, gauntlets and pressure garments for the arms and hands are
used as secondary coverings and therefore are not covered as surgical dressings.)
Although surgical dressings usually are covered as “incident to” a physician’s service in a
physician’s office setting, in the ASC setting, such dressings are included in the facility’s
services.
However, surgical dressings may be reapplied later by others, including the patient or a
member of his family. When surgical dressings are obtained by the patient on a
physician’s order from a supplier, e.g., a drugstore, the surgical dressing is covered under
Part B. The same policy applies in the case of dressings obtained by the patient on a
physician’s order following surgery in an ASC; the dressings are covered and paid as a
Part B service by the DME MAC.
Similarly, “other supplies, splints, and casts” include only those furnished by the ASC at
the time of the surgery. Additional covered supplies and materials furnished later are
generally furnished as “incident to” a physician’s service, not as an ASC facility service.
The term “supplies” includes those required for both the patient and ASC personnel, e.g.,
gowns, masks, drapes, hoses, and scalpels, whether disposable or reusable. Payment for
these is included in the rate for the surgical procedure.
Beginning January 1, 2008, the ASC facility payment for a surgical procedure includes
payment for drugs and biologicals that are not usually self-administered and that are
considered to be packaged into the payment for the surgical procedure under the OPPS.
Also, beginning January 1, 2008, Medicare makes separate payment to ASCs for drugs
and biologicals that are furnished integral to an ASC covered surgical procedure and that
are separately payable under the OPPS.
Diagnostic or Therapeutic Items and Services
These are items and services furnished by ASC staff in connection with covered surgical
procedures. Many ASCs perform diagnostic tests prior to surgery that are generally
included in the facility charges, such as urinalysis, blood hemoglobin, hematocrit levels,

etc. To the extent that such simple tests are included in the ASC facility charges, they are
considered facility services. However, under the Medicare program, diagnostic tests are
not covered in laboratories independent of a physician’s office, rural health clinic, or
hospital unless the laboratories meet the regulatory requirements for the conditions for
coverage of services of independent laboratories. (See 42 CFR 416.49) Therefore,
diagnostic tests performed by the ASC other than those generally included in the
facility’s charge are not covered under Part B and are not to be billed as diagnostic tests.
If the ASC has its laboratory certified, the laboratory itself may bill for the tests
performed.
The ASC may make arrangements with an independent laboratory or other laboratory,
such as a hospital laboratory, to perform diagnostic tests it requires prior to surgery. In
general, however, the necessary laboratory tests are done outside the ASC prior to
scheduling of surgery, since the test results often determine whether the beneficiary
should have the surgery done on an outpatient basis in the first place.
Administrative, Recordkeeping and Housekeeping Items and Services
These include the general administrative functions necessary to run the facility e.g.,
scheduling, cleaning, utilities, and rent.
Blood, Blood Plasma, Platelets, etc., Except Those to Which Blood Deductible Applies
While covered procedures are not expected to result in extensive loss of blood, in some
cases, blood or blood products are required. Usually the blood deductible results in no
expenses for blood or blood products being included under this provision. However,
where there is a need for blood or blood products beyond the deductible, they are
considered ASC facility services and no separate charge is permitted to the beneficiary or
the program.
Materials for Anesthesia
These include the anesthetic agents that are not paid separately under the OPPS, and any
materials, whether disposable or re-usable, necessary for its administration.
Intraocular Lenses (IOLs) and New Technology IOLs (NTIOLs)
The ASC facility services include IOLs (effective for services furnished on or after
March 12, 1990), and NTIOLs (effective for services furnished on or after May 18,
2000), approved by the Food and Drug Administration (FDA) for insertion during or
subsequent to cataract surgery.
FDA has classified IOLs into the following categories, any of which are included:
1. 	Anterior chamber angle fixation lenses;

2. 	Iris fixation lenses;
3. 	Irido-capsular fixation lenses; and
4. 	Posterior chamber lenses.
5. 	NTIOL Category 1 (as defined in “Federal Register” Notice, VOL 65, dated
May 3, 2000). Note: This category expired May 18, 2005
6. 	NTIOL Category 2 (as defined in “Federal Register” Notice, VOL 65, dated
May 3, 2000). Note: This category expired May 18, 2005
7. 	NTIOL Category 3 (as defined in Federal Register Notice, 71 FR 4586, dated
January 27, 2006): This category will expire on February 26, 2011.
Note that while generally no separate charges for intraocular lenses (IOLs) are allowed,
approved NTIOLS may be billed separately and an adjustment to the facility payment
will be made for those lenses that are eligible. (See §40.3.)
10.3 - Services Furnished in ASCs Which Are Not ASC Facility Services
or Covered Ancillary Services
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
A single payment is made to an ASC for facility services furnished by the ASC in
connection with a covered surgical procedure. Additional payments may be made to the
ASC for covered ancillary services, specifically brachytherapy sources, certain
implantable devices with pass-through status under the OPPS, corneal tissue acquisition,
drugs and biologicals for which separate payment is allowed under the OPPS, radiology
services for which separate payment is allowed under the OPPS, and certain other
integral services not included in the primary procedure payment. To be covered ancillary
services for which separate payment is made, these items and services must be provided
integral to covered surgical procedures, that is, immediately before, during, or
immediately after the covered surgical procedure.
However, a number of items and services covered under Medicare may be furnished in an
ASC that are not considered ASC services, and which payment for ASC services does not
include. These non-ASC services are covered and paid for under the applicable
provisions of Part B. In addition, the ASC may be part of a medical complex that
includes other entities, such as an independent laboratory, supplier of durable medical
equipment, or a physician’s office, which are covered as separate entities under Part B.
In general, an item or service provided in a separate part of the complex is not considered
an ASC service, except as defined above.
Examples of payment and billing for items or services that are not ASC services:

Items not included in
payment for ASC services
Who may receive payment 	Submit bills to:
Physicians’ services
(including surgical
procedures excluded from
ASC payment)
Physician 	A/B MAC (B)
The purchase or rental of
non-implantable durable
medical equipment (DME)
to ASC patients for use in
their homes
Supplier- An ASC can be a
supplier of DME if it has a
supplier number from the
National Supplier
Clearinghouse.
DME MAC, or A/B
MAC (B) as directed by
the current DME
jurisdiction list
Non-implantable prosthetic
devices
Supplier. An ASC can be a
supplier of non-implantable
prosthetics if it has a supplier
number from the National
Supplier Clearinghouse.
DME MAC, or A/B
MAC (B), as directed
by the current DME
jurisdiction list
Ambulance services 	Certified Ambulance supplier 	A/B MAC (B)
Leg, arm, back and neck
braces
Supplier 	DME MAC, or A/B
MAC (B), as directed
by the current DME
jurisdiction list
Artificial legs, arms, and
eyes
Supplier 	DME MAC, or A/B
MAC (B), as directed
by the current DME
jurisdiction list
Services furnished by an
independent laboratory
Certified lab. ASCs can
receive lab certification and a
CLIA number.
A/B MAC (B)
Facility services for surgical
procedures excluded from
the ASC list
ASC 	ASC bills beneficiary
for facility charges
associated with the non-
covered procedure
Examples of payment and billing for items or services that are included in payment for
ASC facility services beginning January 1, 2008

Items included in payment for ASC facility
services beginning January 1, 2008
Who may receive
payment beginning
January 1, 2008
Submit bills
to:
Implantable DME and accessories without
OPPS pass-through status
ASC 	A/B MAC
(B)
Implantable nonpass-through prosthetic
devices (except NTIOLs), and accessories
without OPPS pass-through status
ASC 	A/B MAC
(B)
Radiology services for which there is no
separate OPPS payment
ASC 	A/B MAC
(B)
Drugs and biologicals for which there is no
separate OPPS payment
ASC 	A/B MAC
(B)
10.4 - Coverage of Services in ASCs That Are Not ASC Facility Services
or Covered Ancillary Services
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
Physicians’ Services - This category includes most covered services performed in ASCs
that are not considered ASC services. Physicians who furnish services in ASCs may bill
for and receive separate payment under Part B. Physicians’ services include the services
of anesthesiologists administering or supervising the administration of anesthesia to
beneficiaries in ASCs and the beneficiaries’ recovery from the anesthesia. The term
physicians’ services also includes any routine pre- or post- operative services, such as
office visits, consultations, diagnostic tests, removal of stitches, changing of dressings,
and other services which the individual physician usually includes in the fee for a given
surgical procedure.
Implantable Durable Medical Equipment (DME) - If the ASC furnishes items of
implantable DME to patients, the ASC bills and receives a single payment from the local
contractor for the covered surgical procedure and the implantable device, as long as the
implantable device does not have pass-through status under the OPPS. When the surgical
procedure is not on the ASC list, the physician bills for his or her professional services
and the ASC may bill the beneficiary for the facility charges associated with the
procedure.
Non-implantable Durable Medical Equipment - If the ASC furnishes items of non-
implantable DME to beneficiaries, it is treated as a DME supplier, and all the rules and
conditions ordinarily applicable to DME are applicable, including obtaining a supplier
number and billing the DME MAC where applicable.
Prosthetic Devices – Prior to January 1, 2008, an ASC was allowed to bill and receive
separate payment for implantable prosthetic devices, other than intraocular lenses (IOLs)

that were implanted, inserted, or otherwise applied by surgical procedures on the ASC list
of approved procedures. The ASC billed the A/B MAC (B) and received payment
according to the DMEPOS fee schedule. However, an intraocular lens (IOL) inserted
during or subsequent to cataract surgery in an ASC was included in the facility payment
rate.
Beginning January 1, 2008, payment for implantable prosthetic devices without OPPS
pass-through status is included in the ASC payment for the covered surgical procedure.
ASCs may not bill separately for implantable devices without OPPS pass-through status.
If the ASC furnishes non-implantable prosthetic devices to beneficiaries, the ASC is
treated as a supplier, and all the rules and conditions ordinarily applicable to suppliers are
applicable, including obtaining a supplier number and billing as directed by the
jurisdiction list.
Ambulance Services - If the ASC furnishes ambulance services, the facility may obtain
approval as an ambulance supplier to bill covered ambulance services.
Leg, Arm, Back and Neck Braces - These items of equipment, like non-implantable
prosthetic devices, are covered under Part B, but are not included in ASC payment for
ASC services. If the ASC furnishes these to beneficiaries, it is treated as a supplier, and
all the rules and conditions ordinarily applicable to suppliers are applicable, including
obtaining a supplier number and billing the DME MAC where applicable.
Artificial Legs, Arms and Eyes - Like non-implantable prosthetic devices and braces, this
equipment is not considered part of an ASC facility service and so is not included in ASC
payment for ASC services. If the ASC furnishes these items to beneficiaries, it is treated
as a supplier, and all the rules and conditions ordinarily applicable to suppliers are
applicable, including obtaining a supplier number and billing the DME MAC where
applicable.
Services of Independent Laboratory - As noted in §10.2, only a very limited number and
type of diagnostic tests are considered ASC facility services and these are included in the
ASC payment for covered surgical procedures. In most cases, diagnostic tests performed
directly by an ASC are not considered ASC facility services and are not covered under
Medicare. Section 1861(s) of the Act limits coverage of diagnostic lab tests in facilities
other than physicians’ offices, rural health clinics, or hospitals to facilities that meet the
statutory definition of an independent laboratory. In order to bill for diagnostic tests as a
laboratory, an ASC’s laboratory must be CLIA certified and enrolled with the A/B MAC
(B) as a laboratory and the certified clinical laboratory must bill for the services provided
to the beneficiary in the ASC. Otherwise, the ASC makes arrangements with a covered
laboratory or laboratories for laboratory services, as provided in 42 CFR 416.49.
20 - List of Covered Ambulatory Surgical Center Procedures
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)

The complete lists of ASC covered surgical procedures and ASC covered ancillary
services, the applicable payment indicators, payment rates for each covered surgical
procedure and ancillary service before adjustments for regional wage variations, and
wage indices are available on the CMS Web-site at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-
Regulations-and-Notices.html.
.
20.1 - Nature and Applicability of ASC Covered Procedures List
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
The ASC list of covered procedures merely indicates procedures which are covered and
paid for if performed in the ASC setting. It does not require the covered surgical
procedures to be performed only in ASCs. The decision regarding the most appropriate
care setting for a given surgical procedure is made by the physician based on the
beneficiary’s individual clinical needs and preferences. Also, all the general coverage
rules requiring that any procedure be reasonable and necessary for the beneficiary are
applicable to ASC services in the same manner as all other covered services.
20.2 - Types of Services Included on the ASC Covered Procedures List
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
The ASC list of covered surgical procedures is comprised of surgical procedures that
CMS determines do not pose a significant safety risk and are not expected to require an
overnight stay following the surgical procedure.
Surgical procedures are defined as Category I CPT codes within the surgical range of
CPT codes, 10000 through 69999. Also considered to be included within that code range
are procedures that are described by Level II HCPCS, Category I CPT codes, or Category
III CPT codes that directly crosswalk to or are clinically similar to the Category I CPT
codes in the surgical range that we have determined do not pose a significant safety risk,
would not expect to require an overnight stay when performed in an ASC, and are
separately paid under the OPPS.
The surgical codes that are included on the ASC list of covered surgical procedures are
separately paid under the OPPS, have been determined to pose no significant safety risk
to Medicare beneficiaries when furnished in ASCs, and for which standard medical
practice dictated that the beneficiary would not typically be expected to require active
medical monitoring and care at midnight following the procedure (overnight stay).
Additionally, covered surgical procedures do not include those surgical procedures
that: (1) generally result in extensive blood loss; (2) require major or prolonged
invasion of body cavities; (3) directly involve major blood vessels; (4) are
generally emergent or life threatening in nature; (5) commonly require systemic
thrombolytic therapy; (6) are designated as requiring inpatient care under
§ 419.22(n); (7) can only be reported using a CPT unlisted surgical procedure
code; or (8) are otherwise excluded under § 411.15.

Procedures that are included on the inpatient list used under Medicare’s hospital
outpatient prospective payment system are deemed to pose significant safety risk to
beneficiaries in ASCs and are not eligible for designation and coverage as ASC covered
surgical procedures. Procedures that can only be reported by using an unlisted Category I
CPT code are excluded from consideration because there are no specifically descriptive
codes that can be evaluated for safety risk.
20.3 - Rebundling of CPT Codes
(Rev. 1, 10-01-03)
The general CCI rebundling instructions apply to processing claims from ASC facilities
services. In general, if an ASC bills a CPT code that is considered to be part of another
more comprehensive code that is also billed for the same beneficiary on the same date of
service, only the more comprehensive code is covered, provided that code is on the list of
ASC approved codes.
Refer to Chapter 23 for a description of these instructions.
30 - Rate-Setting Policies
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
Generally, there are two primary elements in the total cost of performing a surgical
procedure:
• 	The cost of the physician’s professional services for the performing the
procedure; and
• 	The cost of services furnished by the facility where the procedure is performed
(for example, surgical supplies and equipment and nursing services).
For ASC covered surgical procedures, the professional fee is paid to the physician;
payments for facility costs are paid to the ASC.
Prior to the revised ASC payment system implemented January 1, 2008, the ASC
payment rate was a standard overhead amount based on CMS’s estimate of a fair fee and
the costs incurred by the ASCs providing the procedure. To estimate this cost, CMS
surveyed audit costs incurred by a sample of ASCs. There is an annual adjustment for
inflation based on the percentage increase in the consumer price index for urban
consumers in years when the ASC payment rates are not updated by a survey or
otherwise. Over a number of years, there have been statutory requirements reducing or
eliminating the inflation adjustment on a year by year basis. For example, the statute
requires that the CPI adjustment factor be zero percent in FY 2005, the last quarter of CY
2005, and each CY from 2006 through 2009.

Beginning January 1, 2008, the revised ASC payment system includes the following
features:
ASC payment rates for most services are based on a percentage of the hospital outpatient
prospective payment system (OPPS) rates. Unless statutorily prohibited, there is annual
adjustment of the payment rates for inflation based on the CPI-U. The update for
inflation begins with the CY 2010 ASC payment rates when the statutory requirement for
a zero update no longer applies. For CYs 2019 through 2023, the annual adjustment of
ASC payment rates for inflation is based on the hospital market basket update.
In general, the Medicare program pays ASCs 80 percent of the lesser of the actual charge
or the ASC facility payment rate for the covered services performed. The beneficiary
pays 20 percent of the lesser of the submitted charge or the ASC facility payment rate for
the covered services performed. An exception to this is screening flexible
sigmoidoscopies and screening colonoscopies, regardless of the code that is billed for the
establishment of a diagnosis as a result of the test, or for the removal of tissue or other
matter or other procedure, that is furnished in connection with, as a result of, and in the
same clinical encounter as the colorectal cancer screening test. The coinsurance will be
gradually reduced until it is completely waived for dates of service on or after January 1,
2030.
Beginning with the implementation of the 2008 revised payment system, the labor related
adjustments to the ASC payment rates are based on the Core-Based Statistical Area
(CBSA) methodology. Payment rates for most services are geographically adjusted using
the pre-reclassification wage index values that CMS uses to pay non-acute providers.
The adjustment for geographic wage variation will be made based on a 50 percent labor
related share.
Detailed information on both the OPPS and ASC payment methodologies is available in
the hospital outpatient and ASC final rules.
30.1 - Where to Obtain Current Rates and Lists of Covered Services
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
CMS performs the functions and calculations described above and publishes a list of
covered surgical procedures and covered ancillary services for which an ASC may be
paid each year, as well as quarterly updates via Medicare contractor instructions.
Regulations pertaining to Medicare rates for ASC facility services are contained in Part
416 of the Code of Federal Regulations, at http://www.ecfr.gov/cgi-bin/text-
idx?tpl=/ecfrbrowse/Title42/42tab_02.tpl
ASC services are subject to the usual Medicare Part B deductible and coinsurance
requirements. An exception to this is screening flexible sigmoidoscopies and screening
colonoscopies, regardless of the code that is billed for the establishment of a diagnosis as
a result of the test, or for the removal of tissue or other matter or other procedure, that is
furnished in connection with, as a result of, and in the same clinical encounter as the
colorectal cancer screening test. There is no deductible and the coinsurance will be

gradually reduced until it is completely waived for dates of service on or after January 1,
2030.
Prior to the revised ASC payment system implemented January 1, 2008, the ASC facility
payment rate was a standard overhead amount based on CMS’s estimate of a fair fee and
the costs incurred by the ASCs providing the procedures. HCPCS codes for procedures
covered in the ASC were compiled into 9 groups with a separate rate set for each group.
Beginning January 1, 2008, CMS updates payment rates and codes for covered surgical
procedures and covered ancillary services on a calendar year basis. Payable services are
updated on a quarterly basis. Also, CMS calculates and makes available to the claims
processing contractors CBSA-specific wage-adjusted payment rates for each of the ASC
payable codes to which geographic adjustment applies. The complete lists of ASC
covered surgical procedures and ASC covered ancillary services, the applicable payment
indicators, payment rates for each covered surgical procedure and ancillary service before
adjustments for regional wage variations, and wage indices are available on the CMS
Web-site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/ASCPayment/11_Addenda_Updates.html and available to contractors on the
CMS mainframe.
40 - Payment for Ambulatory Surgery
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
Prior to January 1, 2008, the ASC payment rate was a standard overhead amount based
on CMS’s estimate of a fair fee and the costs incurred by the ASCs providing the
procedure. The HCPCS codes for procedures covered in the ASC were grouped into 9
groups and a rate was set for each group. In CY 2007, the ASC payment rate for each
ASC covered procedure was based on the payment rates for the 9 groups, but capped at
the OPPS payment rate for the procedure.
Beginning January 1, 2008, with implementation of the revised ASC payment system, the
payment rates for most covered ASC surgical procedures and covered ancillary services
are established prospectively, based on a percentage of the OPPS payment rates. For
more information on where to locate these prospective payment rates, see §30.1. There
are a small number of covered ancillary services that are contractor-priced. These
include OPPS pass-through devices, which are paid separately and are contractor-priced
based on acquisition cost or invoice. Medicare pays the same amount for drugs and
biologicals that are paid separately under the OPPS when those drugs and biologicals are
provided integral to covered surgical procedures. New drugs and biologicals for which
product-specific HCPCS codes do not exist and are billed by ASCs using HCPCS code
C9399 (unclassified drug or biological), are also contractor-priced at 95 percent of the
average wholesale price (AWP). Medicare pays the same amount for brachytherapy
sources under the revised ASC payment system as it pays hospitals under the OPPS if
prospective rates are available. If prospective rates for brachytherapy sources are not

available under the OPPS, ASC payment for brachytherapy sources is made at contractor-
priced rates.
Under the revised ASC payment system effective January 1, 2008, Medicare makes
separate payment to ASCs for corneal tissue acquisition (which is billed using V2785).
Contractors pay for corneal tissue acquisition based on acquisition cost or invoice. In
addition, contractors make payment adjustments for new technology intraocular lenses
(NTIOLs). The NTIOL payment adjustment is an unadjusted payment subject to
beneficiary coinsurance but not subject to the wage index adjustments.
Beginning January 1, 2008, Medicare payment for implantable durable medical
equipment is included in the payment for the covered surgical procedure. The ASC
payment for the surgical procedure is a bundled payment which includes the payment for
the implantable items previously paid separately under the DMEPOS fee schedule. The
one exception to this is OPPS pass-through devices, which are paid separately.
Medicare contractors calculate payment for each separately payable procedure and
service based on the lower of 80 percent of actual charges or the ASC payment rate. The
charge-to-payment rate comparison occurs at the line-item level. ASCs should not report
separate line-item HCPCS codes or charges for items that are packaged into payment for
covered surgical procedures and therefore, are not paid separately (e.g., nonpass-through
implantable devices). Instead, it is important that ASCs incorporate charges for packaged
services into the charges reported for the separately payable services with which they are
provided. Facilities may not be paid appropriately if they unbundle charges and report
those charges for packaged codes as separate line-item charges.
Beginning January 1, 2008, covered ancillary items and services, such as pass-through
devices, brachytherapy sources, separately payable drugs and biologicals, and radiology
procedures, should be billed on the same claim as the related ASC surgical procedure(s).
If an ASC bills for an ancillary service(s) separately (i.e., not on the same claim as the
related surgical procedure) or a claim is split so that the ancillary service and related ASC
surgical service(s) are on separate claims, the contractor checks claims history to
determine if there is an approved surgical procedure for the same beneficiary, same
provider, and same date. If there is no approved ASC surgical procedure on the same
claim or in history for the same date, the ancillary service(s) shall be returned as
unprocessable.
40.1 - Payment to Ambulatory Surgical Centers for Non-ASC Services
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
ASCs may furnish and be paid under other parts of Medicare Part B for certain services
that are not considered ASC facility services. The usual Part B coverage and payment
rules apply to such services. For more information, see §10.3.
40.2 - Wage Adjustment of Base Payment Rates
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)

Prior to January 1, 2008, the payment rates established for ASC procedures (see §30) are
standard base rates that have been adjusted to remove the effects of regional wage
variations. When contractors process claims for ASC services, they adjust the base rates
for services subject to geographic adjustment to reflect the wage index value applicable
to the area in which the ASC is located. The Medicare payment for ASC services is
equal to 80 percent of the wage-adjusted standard payment rate. Beneficiaries are
responsible for a 20 percent coinsurance payment for ASC services once their deductible
is satisfied. An exception to this is screening flexible sigmoidoscopies and screening
colonoscopies, regardless of the code that is billed for the establishment of a diagnosis as
a result of the test, or for the removal of tissue or other matter or other procedure, that is
furnished in connection with, as a result of, and in the same clinical encounter as the
colorectal cancer screening test. There is no deductible and the coinsurance will be
gradually reduced until it is completely waived for dates of service on or after January 1,
2030.
The wage index includes the wage and salary levels of certain health care professionals in
both urban and nonurban locations, compared to a national norm 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 below l.0.
Each Core-Based Statistical Area (CBSA) within a State has a separate index. If a
specific city or county does not have a CBSA value, the default is to the overall state
wage index.
For dates of service on or after January 1, 2008, the ASC payment rates are
geographically wage adjusted based on the wage index for the CBSA. Beginning January
1, 2008, CMS calculates and makes available to the contractors CBSA-specific ASC
payment rates for services subject to geographic adjustment. The wage index values for
urban and rural areas that CMS applies to all non-acute providers are used in the
calculation of the ASC wage adjusted payment rates. With the implementation of the
ASC revised payment system, the labor related portion of the payment rate is 50 percent
and the remaining non-labor related portion is 50 percent.
There is no adjustment for geographic wage differences for the following:
• 	Corneal tissue acquisition;
• 	Drugs and devices that have pass-through status under the OPPS;
• 	Brachytherapy sources;
• 	Payment adjustment for NTIOLs; or
• 	Separately payable drugs and biologicals.
40.3 - Payment for Intraocular Lens (IOL)
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)

Prior to January 1, 2008, payment for facility services furnished by an ASC for IOL
insertion during or subsequent to cataract surgery includes an allowance for the lens. The
procedures that include insertion of an IOL are:
Payment Group 6: CPT-4 Codes 66985 and 66986
Payment Group 8: CPT-4 Codes 66982, 66983 and 66984
Physicians or suppliers are not paid for an IOL furnished to a beneficiary in an ASC after
July 1, 1988. Separate claims for IOLs furnished to ASC patients beginning March 12,
1990, are denied. Also, effective March 12, 1990, procedures 66983 and 66984 are
treated as single procedures for payment purposes.
Beginning January 1, 2008, the Medicare payment for the IOL is included in the
Medicare ASC payment for the associated surgical procedure. Consequently, no separate
payment for the IOL is made, except for a payment adjustment for NTIOLs established
according to the process outlined in 42 CFR 416.185. ASCs should not report separate
charges for conventional IOLs because their payment is included in the Medicare
payment for the associated surgical procedure. The ASC payment system logic that
excluded $150 for IOLs for purposes of the multiple surgery reduction in cases of
cataract surgery prior to January 1, 2008, no longer applies, effective for dates of service
on or after January 1, 2008.
Effective for dates of service on and after February 27, 2006, through February 26, 2011,
Medicare pays an additional $50 for specified Category 3 NTIOLs that are provided in
association with a covered ASC surgical procedure. The list of Category 3 NTIOLS is
available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/ASCPayment/NTIOLs.html
ASCs should use HCPCS code Q1003 to bill for a Category 3 NTIOL. HCPCS code
Q1003, along with one of the approved surgical procedure codes (CPT codes 66982,
66983, 66984, 66985, 66986) are to be used on all NTIOL Category 3 claims associated
with reduced spherical aberration from February 27, 2006, through February 26, 2011.
The payment adjustment for the NTIOL is subject to beneficiary coinsurance but is not
wage-adjusted.
Any subsequent IOL recognized by CMS as having the same characteristics as the first
NTIOL recognized by CMS for a payment adjustment as a Category III NTIOL (those of
reduced spherical aberration) will receive the same adjustment for the remainder of the 5-
year period established by the first recognized IOL.
40.4 - Payment for Terminated Procedures
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)

The following criteria determine the appropriate ASC facility payment for a scheduled
surgical procedure that is terminated due to medical complications which increase the
surgical risk to the patient
A. Contractors deny payment when an ASC submits a claim for a procedure that is
terminated before the patient is taken into the treatment or operating room. For example,
payment is denied if scheduled surgery is canceled or postponed because the patient on
intake complains of a cold or flu.
B. Contractors pay 50 percent of the rate 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
(use modifier 73). For example, 50 percent is paid if 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 which 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. Facilities use a 73 modifier to indicate that the procedure was terminated
prior to induction of anesthesia or initiation of the procedure.
C. Contractors make full payment of the surgical procedure if a medical complication
arises that causes the procedure to be terminated after anesthesia has been induced or the
procedure initiated (use modifier -74). For example, A/B MACs (B) make full payment
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. Facilities use a 74 modifier to indicate that the
procedure was terminated after administration of anesthesia or initiation of the procedure.
An ASC claim for payment for terminated surgery must include an operative report kept
on file by the ASC, and made available, if requested by the contractor. The operative
report should specify the following:
• 	Reason for termination of surgery;
• 	Services actually performed;
• 	Supplies actually provided;
• 	Services not performed that would have been performed if surgery had not been
terminated;
• 	Supplies not provided that would have been provided if the surgery had not been
terminated;
• 	Time actually spent in each stage, e.g., pre-operative, operative, and post-
operative;
• 	Time that would have been spent in each of these stages if the surgery had not
been terminated; and
• 	HCPCS code for procedure had the surgery been performed.

D. Prior to January 1, 2008, contractors deducted the allowance for an unused IOL prior
to calculating payment for a terminated IOL insertion procedure.
E. Beginning January 1, 2008, payment for the IOL is included in payment for the
surgical procedure to implant the lens.
F. Beginning January 1, 2008, contractors apply a 50 percent payment reduction for
discontinued radiology procedures and other procedures that do not require anesthesia.
Facilities use the -52 modifier to indicate the discontinuance of these applicable
procedures.
G. Beginning January 1, 2008, ASC surgical services billed with the -52 or- 73 modifier
are not subject to the multiple procedure discount.
40.5 - Payment for Multiple Procedures
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
When more than one surgical procedure is performed in the same operative session,
special payment rules apply, even if the procedures have the same HCPCS code.
When the ASC performs multiple surgical procedures in the same operative session that
are subject to the multiple procedure discount, contractors pay 100 percent of the highest
paying surgical procedure on the claim, plus 50 percent of the applicable payment rate(s)
for the other ASC covered surgical procedures subject to the multiple procedure discount
that are furnished in the same session. The OPPS/ASC final rule for the relevant
payment year specifies whether or not a surgical procedure is subject to multiple
procedure discounting for that year. Final payment is subject to the usual copayment and
deductible provisions.
The multiple procedure payment reduction is the last pricing routine applied to applicable
ASC procedure codes. In determining the ranking of procedures for application of the
multiple procedure reduction, contractors shall use the lower of the billed charge or the
ASC payment amount. The ASC surgical services billed with modifier -73 and -52 shall
not be subjected to further pricing reductions. (i.e., the multiple procedure price reduction
rules do not apply). Payment for an ASC surgical procedure billed with modifier -74
may be subject to the multiple procedure discount if that surgical procedure is subject to
the multiple procedure discount.
A procedure performed bilaterally in one operative session is reported as two procedures,
either as a single unit on two separate lines or with “2” in the units field on one claim
line. The multiple procedure reduction of 50 percent applies to all bilateral procedures
subject to multiple procedure discounting. For example, if lavage by cannulation;
maxillary sinus (antrum puncture by natural ostium) (CPT code 31020) is performed
bilaterally in one operative session, report 31020 on two separate lines or with “2” in the
units field. Depending on whether the claim includes other services to which the multiple

procedure discount applies, the contractor applies the multiple procedure reduction of 50
percent to the payment for at least one of the CPT code 31020 payment rates.
40.6 - Payment for Extracorporeal Shock Wave Lithotripsy (ESWL)
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
A ninth ASC payment group was established in a “Federal Register” notice (56 FR
67666) published December 31, 1991. The ninth payment group amount ($1,150) was
assigned to only one procedure, CPT code 50590, extracorporeal shock wave lithotripsy
(ESWL). However, a court order issued March 12, 1992, has stayed the Group 9
payment rate until the Secretary publishes all information relevant to the setting of the
ESWL rate, receives comments, and publishes a subsequent final notice. This has not yet
been completed.
CMS advised contractors to make payment to ASCs for ESWL services furnished after
January 29, 1992, and through the date when the ASC received notice from the contractor
of the court order staying the Group 9 payment rate. This was a temporary measure to
avoid penalizing ASCs that furnished ESWL services in accordance with the December
31, 1991, “Federal Register” notice and that could not have been expected to know that
the March 12, 1992, court order set aside the ESWL provisions of that notice.
Contractors did not make Medicare payment for ESWL as an ASC procedure when such
services were furnished after the date that the carrier advised an ASC of the court order.
However, contractors were instructed to retain all ASC claims for ESWL with a service
date after January 29, 1992, and before the date when they were notified about the court
order. It may be necessary to retrieve these clams for further action at some later date.
Beginning January 1, 2008, with the revised ASC payment system, contractors may pay
for any of the ESWL services that are included on the ASC list of covered surgical
procedures.
40.7 - Payment and Offset for Pass-Through Devices Beginning January
1, 2008
(Rev. 11927; Issued: 03-24-23; Effective: 04-01-23; Implementation: 04-03-23)
Under the revised payment system, there can be situations where contractors must reduce
(cut back) the approved payment amount for specifically identified procedures when
provided in conjunction with a specific pass-through device. This reduction would only
be applicable when services for specific pairs of codes are provided on the same day by
the same provider. The device offset amount is the device portion included in Addendum
FF of the quarterly addenda file. To determine the payment rate for the approved surgical
procedure that is billed with an OPPS pass-through device, subtract the device portion
from the ASC payment rate in Addendum AA. The ASC addenda are accessible on the
CMS website at: https://www.cms.gov/medicare/medicare-fee-for-service-
payment/ascpayment

Code pairs subject to this policy would be updated on a quarterly basis. CMS will inform
contractors of the code pairs and the percent reduction removed from the procedure
payment rate through a “look-up” table. As an example, contractors would perform the
procedure percent reduction as follows: If the example code pair Cxxxx (device) and
2xxxx (procedure) were on the code pair file with a procedure percent reduction of 0.008,
contractors would remove 0.008 device offset amount from the payment rate assigned to
the ASC’s jurisdictional CBSA, and therefore effectively pay 0.992 of the payment rate.
Paying 0.992 of the payment rate, in this example, is equivalent to implementing the
0.008 procedure percent reduction. The contractors would then pay Cxxxx according to
the ASCFS, including current payment and claims processing instructions. No code pair
file related calculation or offset is performed on the device. Calculations to implement
the code pair file procedure percent reductions, impact only the CBSA procedure
payment rate.
To process a claim in the unlikely event that two procedures appearing on the ASC code
pair file with the same device are billed in the same encounter, contractors should check
the claim and history for each code pair on the ASC code pair file or look-up table, in the
order they are listed in the file. If one pass through device could pair with multiple
procedures on the look-up table, the contractor should apply the offset to the first code
pair it identifies by going through the look-up table sequentially, in the order that they
appear. If there is more than 1 unit of a pass-through device on the claim, the contractor
should take an offset for each code pair. No code pair should be offset more than once
and the number of code pairs receiving an offset should be no more than the units of a
pass-through device.
40.8 - Payment When a Device is Furnished With No Cost or With Full
or Partial Credit Beginning January 1, 2008
(Rev. 13836; Issued: 06-24-26; Effective: 07-01-26; Implementation:07-06-26)
Contractors pay ASCs a reduced amount for certain specified procedures when a
specified device is furnished without cost or for which either a partial or full credit is
received (e.g., device recall). For specified procedure codes that include payment for a
device, ASCs are required to include modifier –FB on the procedure code when a
specified device is furnished without cost or for which full credit is received. If the ASC
receives a partial credit of 50 percent or more of the cost of a specified device, the ASC is
required to include modifier –FC on the procedure code if the procedure is on the list of
specified procedures to which the -FC reduction applies. A single procedure code should
not be submitted with both modifiers –FB and -FC. The pricing determination related to
modifiers –FB and -FC is made prior to the application of multiple procedure payment
reductions. Contractors adjust beneficiary coinsurance to reflect the reduced payment
amount. Tables listing the procedures and devices to which the payment adjustments
apply, and the full and partial adjustment amounts, are available on the CMS Web-site.

In order to report the receipt of a partial credit of 50 percent or more of the cost of a
device, ASCs have the option of either: 1) Submitting the claim for the procedure to
their Medicare contractor after the procedure’s performance but prior to manufacturer
acknowledgement of credit for a specified device, and subsequently contacting the
contractor regarding a claims adjustment once the credit determination is made; or 2)
holding the claim for the procedure until a determination is made by the manufacturer on
the partial credit and submitting the claim with modifier –FC appended to the
implantation procedure HCPCS code if the partial credit is 50 percent or more of the cost
of the device. If choosing the first billing option, to request a claims adjustment once the
credit determination is made, ASCs should keep in mind that the initial Medicare
payment for the procedure involving the device is conditional and subject to adjustment.
For separately payable pass-through devices (ASC payment indicator = J7), modifier -
FB or -FC should not be reported with the associated procedure when the device was
received at no cost/full credit or with partial credit. The associated procedure codes do
not include payment for separately payable devices; therefore, no –FB or –FC modifier is
warranted. If applicable, ASCs should report the amount of the credit along with the
invoice price of the separately payable device on the claim. The line-item charge for the
separately payable device must reflect the amount of the credit received.
40.9 - Payment and Coding for Presbyopia Correcting IOLs (P-C IOLs)
and Astigmatism Correcting IOLs (A-C IOLs)
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
CMS payment policies and recognition of P-C IOLs and A-C IOLs are contained in
Transmittal 636 (CR3927) and Transmittal 1228 (CR5527) respectively.
Effective for dates of service on and after January 1, 2008, when inserting an approved
A-C IOL in an ASC concurrent with cataract extraction, HCPCS code V2787
(Astigmatism-correcting function of intraocular lens) should be billed to report the non-
covered charges for the A-C IOL functionality of the inserted intraocular lens.
Additionally, note that HCPCS code V2788 (Presbyopia-correcting function of
intraocular lens) is no longer valid to report non-covered charges associated with the A-C
IOL. However, this code continues to be valid to report non-covered charges for a P-C
IOL. The payment for the conventional lens portion of the A-C IOL and P-C IOL
continues to be bundled with the ASC procedure payment.
Effective for services on and after January 1, 2010, ASCs are to bill for insertion of a
Category 3 new technology intraocular lens (NTIOL) that is also an approved A-C IOL
or P-C IOL, concurrent with cataract extraction, using three separate codes. ASCs shall
use HCPCS code V2787 or V2788, as appropriate, to report charges associated with the
non-covered functionality of the A-C IOL or P-C IOL, the appropriate HCPCS code
66982 (Extracapsular cataract removal with insertion of intraocular lens prosthesis (one
stage procedure), manual or mechanical technique (e.g., irrigation and aspiration or
phacoemulsification), complex, requiring devices or techniques not generally used in
routine cataract surgery (e.g., iris expansion device, suture support for intraocular lens, or
primary posterior capsulorrhexis) or performed on patients in the amblyogenic

developmental stage); 66983 (Intracapsular cataract extraction with insertion of
intraocular lens prosthesis (1 stage procedure)); or 66984 (Extracapsular cataract removal
with insertion of intraocular lens prosthesis (1 stage procedure), manual or mechanical
technique (e.g., irrigation and aspiration or phacoemulsification)), to report the covered
cataract extraction and insertion procedure; and Q1003 (New technology, intraocular
lens, category 3 (reduced spherical aberration) as defined in Federal Register notice, Vol.
65, dated May 3, 2000) to report the covered NTIOL aspect of the lens on claims for
insertion of an A-C IOL or P-C IOL that is also designated as an NTIOL. Listings of the
CMS-approved Category 3 NTIOLs, A-C IOLs, and P-C IOLs are available on the CMS
Web-site.
40.10 - Removal of Device Portion from Certain Discounted Device-
Intensive Ambulatory Surgical Center (ASC) Procedures Prior to the
Administration of Anesthesia
(Rev.11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
Effective for claims with dates of service beginning January 1, 2016, contractors will
identify and process device intensive procedures and services billed with the 73 modifier,
by utilizing the program payment amount appearing in the FB Mod Reduced Price field
on the ASCFS record layout as the full program payment, with the device portion
removed, prior to processing the 73 modifier payment calculations. If there is no
payment amount in the FB Mod Reduced Price field of the ASCFS, then the procedure is
not device intensive and this new policy would not apply.
To process claims correctly, when device intensive procedures and services are billed
with the 73 and FB/FC modifiers, the FB/FC modifier is ignored for this line item unused
device, and the line item would continue to be processed as stated above.
For ASCs subject to the Ambulatory Surgical Center Quality Reporting (ASCQR)
Program payment reduction, contractors shall utilize the procedure payment amount
located in the respective Penalty FB Mod Reduced Price field on the ASCFS in place of
the payment amount in the FB Mod Reduced Price field or the Penalty Price field on the
ASCFS in place of the payment amount in the Price field, as appropriate.
50 - ASC Procedures for Completing the ASC X12 837 Professional
Claim Format or the Form CMS-1500
(Rev.11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
The Place of Service (POS) code is 24 for procedures performed in an ASC.
Prior to January 1, 2008, Type of Service (TOS) code is “F” (ASC Facility Usage for
Surgical Services) is appropriate when modifier SG appears on an ASC claim. Otherwise
TOS “2” (surgery) for professional services rendered in an ASC is appropriate.

Beginning January 1, 2008, ASCs no longer are required to include the SG modifier on
facility claims in Medicare. The contractors shall assign TOS code “F” to codes billed by
specialty 49 for Place of Service 24.
60 - Medicare Summary Notices (MSN), Claim Adjustment Reason
Codes, Remittance Advice Remark Codes (RAs)
(Rev. 1325; Issued: 08-29-07; Effective: 01-01-08; Implementation: 01-07-08)
60.1 - Applicable Messages for NTIOLs
(Rev. 3650, Issued: 11-10-16, Effective: 02-10-17, Implementation: 02-10-17)
Contractors shall return as unprocessable any claims for NTIOLs containing Q1003 alone
or with a code other than one of the procedure codes listed in 40.3.
The contractor shall use the following remittance advice messages and associated codes
when returning claims under this policy. This CARC/RARC combination is compliant
with CAQH CORE Business Scenario Three.
Group Code: CO
CARC: 16
RARC: M67
MSN: N/A
Contractors shall deny payment for Q1003 if services are furnished in a facility other than
a Medicare-approved ASC.
The contractor shall use the following remittance advice messages and associated codes
when denying claims under this policy. This CARC/RARC combination is compliant
with CAQH CORE Business Scenario Three.
Group Code: CO
CARC: 58
RARC: N/A
MSN: 16.2
Contractors shall deny payment for Q1003 if billed by an entity other than a Medicare-
approved ASC.
The contractor shall use the following remittance advice messages and associated codes
when denying claims under this policy. This CARC/RARC combination is compliant
with CAQH CORE Business Scenario Three.
Group Code: CO
CARC: 170
RARC: N/A
MSN: 33.1

Contractors shall deny payment for Q1003 if submitted for payment past the discontinued
date (after the 5-year period, or after February 26, 2011).
The contractor shall use the following remittance advice messages and associated codes
when rejecting/denying claims under this policy. This CARC/RARC combination is
compliant with CAQH CORE Business Scenario Three.
Group Code: CO
CARC: 27
RARC: N/A
MSN: 21.11
A/B MACs (B) shall deny payment for Q1003 if services are furnished in a facility other
than a Medicare-approved ASC.
The contractor shall use the following remittance advice messages and associated codes
when denying claims under this policy. This CARC/RARC combination is compliant
with CAQH CORE Business Scenario Three.
Group Code: CO
CARC: 58
RARC: N/A
MSN: 16.2
60.2 - Applicable Messages for ASC 2008 Payment Changes Effective
January 1, 2008
(Rev. 3650, Issued: 11-10-16, Effective: 02-10-17, Implementation: 02-10-17)
Contractors shall deny services not included on the ASC facility payment files (ASCFS
and ASC DRUG files) when billed by ASCs (specialty 49).
The contractor shall use the following remittance advice messages and associated codes
when rejecting/denying claims under this policy. This CARC/RARC combination is
compliant with CAQH CORE Business Scenario Three.
Group Code: CO
CARC: 8
RARC: N95
MSN: 26.4
If there is no approved ASC surgical procedure on the same date for the billing ASC in
history, contractors shall return pass-through device claims/line items, brachytherapy
claims/line items, drug code (including C9399) claims/line items, and any other ancillary
service claims/line items such as radiology procedure claim/line items on the ASCFS list
or ASCDRUG list as unprocessable.

The contractor shall use the following remittance advice messages and associated codes
when returning claims under this policy. This CARC/RARC combination is compliant
with CAQH CORE Business Scenario Three.
Group Code: CO
CARC: 16
RARC: M51
MSN: N/A
Contractors shall deny the technical component for all ancillary services on the ASCFS
list billed by specialties other than 49 provided in an ASC setting (POS 24).
The contractor shall use the following remittance advice messages and associated codes
when denying claims under this policy. This CARC/RARC combination is compliant
with CAQH CORE Business Scenario Three.
Group Code: CO
CARC: 171
RARC: N/A
MSN: 16.2
Contractors shall deny globally billed ancillary services on the ASCFS list if billed by
specialties other than 49 provided in an ASC setting (POS 24).
The contractor shall use the following remittance advice messages and associated codes
when rejecting/denying claims under this policy. This CARC/RARC combination is
compliant with CAQH CORE Business Scenario Two.
Group Code: CO
CARC: 4
RARC: N/A
MSN: 16.2
Contractors shall deny separately billed implantable devices.
The contractor shall use the following remittance advice messages and associated codes
when rejecting/denying claims under this policy. This CARC/RARC combination is
compliant with CAQH CORE Business Scenario Four.
Group Code: CO
CARC: 97
RARC: M97
MSN: 16.32

If there is a related, approved surgical procedure for the billing ASC for the same date of
service, also include the following MSN message: 16.8.
60.3 – Applicable ASC Messages for Certain Payment Indicators
Effective for Services Performed on or after January 1, 2009
(Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
Contractors shall deny services for HCPCS codes with payment indicators C5 (Inpatient
surgical procedure under the OPPS; no payment made.), M6 (No payment made; paid
under another fee schedule), U5 (Surgical unlisted service excluded from ASC payment.
No payment made.), or X5 (Unsafe surgical procedure in ASC. No payment made).
The contractor shall use the following remittance advice messages and associated codes
when rejecting/denying claims under this policy. This CARC/RARC combination is
compliant with CAQH CORE Business Scenario Four.
Group Code: CO
CARC: 5
RARC: N/A
MSN: 16.32
Contractors shall deny services for CPT codes with payment indicators E5 (Surgical
procedure/item not valid for Medicare purposes because of coverage, regulation and/or
statute; no payment made), or Y5 (Non-surgical procedure/item not valid for Medicare
purposes because of coverage, regulation and/or statute; no payment made).
The contractor shall use the following remittance advice messages and associated codes
when rejecting/denying claims under this policy. This CARC/RARC combination is
compliant with CAQH CORE Business Scenario Three.
Group Code: PR
CARC: 96
RARC: N425
MSN: 16.10
NOTE: Contractors shall assign beneficiary liability for facility charges HCPCS codes
billed with ASC payment indicators C5, E5, U5 and X5.
Contractors return as unprocessable services for HCPCS codes with payment indicator
D5 (Deleted/discontinued code; no payment made).
The contractor shall use the following remittance advice messages and associated codes
when rejecting/denying claims under this policy. This CARC/RARC combination is
compliant with CAQH CORE Business Scenario Two.
Group Code: CO

CARC: 181
RARC: N56
MSN: N/A
Contractors shall deny services for HCPCS with payment indicators L1 (Influenza
vaccine; pneumococcal vaccine, Covid-19 Vaccine, monoclonal antibody therapy
product. Packaged item/service; no separate payment made), NI (Packaged service/item;
no separate payment made) or S1 (Service not surgical in nature; and not a radiology
service payable under the OPPS, drug/biological, or brachytherapy source. Packaged
item/service; no separate payment made).
The contractor shall use the following remittance advice messages and associated codes
when rejecting/denying claims under this policy. This CARC/RARC combination is
compliant with CAQH CORE Business Scenario Four.
Group Code: CO
CARC: 97
RARC: N390
MSN: 16.32
Contractors shall return as unprocessable services for HCPCS with payment indicators
B5 (Alternative code may be available; no payment made).
The contractor shall use the following remittance advice messages and associated codes
when rejecting/denying claims under this policy. This CARC/RARC combination is
compliant with CAQH CORE Business Scenario Two.
Group Code: CO
CARC: 16
RARC: M51
MSN: N/A
70 - Ambulatory Surgical Center (ASC) HCPCS Additions, Deletions,
and Master Listing
(Rev.11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23)
Prior to January 1, 2018, the CMS Division of Data Systems (DDS) releases the ASC
HCPCS, additions, deletions, and master listing files of ASC codes on a periodic basis.
Instructions on how to retrieve these files from the CMS mainframe telecommunications
system are also published on the same periodic basis. The Office of Information Services
(OIS) announces the dates that the files are available.
Beginning January 1, 2008, the CMS Division of Data Systems (DDS) releases the
ASCFS, ASC Drug File, ASC Restated Drug Files, ASC PI file, and the ASC Code Pair
file, as appropriate. Instructions on how to retrieve these files from the CMS mainframe
are communicated at the time that the files are released. The ASC payment system

quarterly recurring update notifications also identify the files that are applicable to that
quarter’s update of the payment system.

Transmittals Issued for this Chapter
Rev # 	Issue Date 	Subject 	Impl Date CR#
R13836CP 06/24/2026 July 2026 Update of the Ambulatory Surgical
Center (ASC) Payment System 07/06/2026 14522
R11927CP 03/24/2023 April 2023 Update of the Ambulatory Surgical
Center [ASC] Payment System 04/03/2023 13143
R11903CP 03/16/2023 April 2023 Update of the Ambulatory Surgical
Center [ASC] Payment System-- Rescinded
and replaced by Transmittal 11927
04/03/2023 13143
R11793CP 01/19/2023 Internet-Only Manual [IOM] Updates for
Ambulatory Surgical Centers [ASCs] 02/21/2023 13067
R3939CP 	12/22/2017 January 2018 Update of the Ambulatory
Surgical Center (ASC) Payment System
01/02/2018 10441
R3650CP 	11/10/2016 Updates to Pub. 100-04, Chapters 8, 13 and 14
to Correct Remittance Advice Messages
02/10/2016 9841
R3430CP 	12/29/2015 January 2016 Update of the Ambulatory
Surgical Center (ASC) Payment System
01/04/2016 9484
R3031CP 	08/22/2014 Update to Pub. 100-04, Chapter 14 to Provide
Language-Only Changes for Updating ASC
X12
09/23/2014 8768
R2020CP 	08/06/2010 Clarification of Billing Requirement for
Ancillary Services Performed in the
Ambulatory Surgical Center (ASC) by Entities
Other Than ASCs
09/07/2010 7078
R1865CP 	12/01/2009 January 2010 Update of the Ambulatory
Surgical Center (ASC) Payment System
01/04/2010 6746
R1698CP 	03/13/2009 April 2009 Update to the ASC Payment
System; Summary of Payment Policy
Changes/Manual Revisions
04/06/2009 6424
R1669CP 	01/13/2009 January 2009 Update of the Ambulatory
Surgical Center (ASC) Payment System
01/05/2009 6323

Rev # 	Issue Date 	Subject 	Impl Date CR#
R1616CP 	10/17/2008 Implementation of an ASC HCPCS Payment
Indicator File
01/05/2009 6184
R1572CP 	08/08/2008 New Requirement for Ordering/Referring
Information on Ambulatory Surgical Center
(ASC) Claims for Diagnostic Services
01/05/2009 6129
R1514CP 	05/23/2008 ASC Manualization 	06/23/2008 6031
R1325CP 	08/29/2007 Testing and Implementation of 2008
Ambulatory Surgical Center (ASC) Payment
System Changes
01/07/2008 5680
R1308CP 	07/20/2007 Testing and Implementation of 2008
Ambulatory Surgical Center (ASC) Payment
System Changes (Sensitive and
Controversial)– Replaced by Transmittal 1325
01/07/2008 5680
R1160CP 	01/19/2007 Colorectal Cancer Screening Flexible
Sigmoidoscopy and Colonoscopy Coinsurance
Payment Change
07/02/2007 5387
R975CP 	06/09/2006 Ambulatory Surgical Center (ASC) Claims
Processing Manual Clarification
06/05/2006 5026
R942CP 	05/05/2006 Ambulatory Surgical Center (ASC) Claims
Processing Manual Clarification
10/02/2006 5026
R914CP 	04/21/2006 Additional $50 Payment for New Technology
Intraocular Lenses Furnished In Ambulatory
Surgical Centers
05/22/2006 4361
R639CP 	08/05/2005 Cessation of Additional $50 Payment for New
Technology Intraocular Lenses (NTIOLs)
10/03/2005 3901
R001CP 	10/01/2003 Initial Publication of Manual 	NA 	NA
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