MLN Matters Number: MM6323
Related Change Request (CR) #: 6323
Related CR Release Date: January 13, 2009
Effective Date: January 1, 2009
Related CR Transmittal #: R1669CP
Implementation Date: January 5, 2009

Provider Types Affected
ASCs that submit claims to Medicare Administrative Contractors (MACs) or carriers for services provided to Medicare beneficiaries.

Provider Action Needed
This article is based on Change Request (CR) 6323 and is a recurring update that describes changes to and billing instructions for various payment policies implemented in the January 2009 ASC update. Make sure billing staff are aware of the changes.

Background
This notification includes updates to the Healthcare Common Procedure Coding System (HCPCS) for ASCs and updated payment rates for selected separately payable drugs and biologicals, long descriptors for newly created Level II Healthcare Common Procedure Coding System (HCPCS) codes for drugs and biologicals (ASC DRUG files), and the calendar year (CY) 2009 ASC payment rates for covered surgical and ancillary services (ASCFS file).

Key Points of CR 6323

• Table 1 below shows updates to four Core Based Statistical Areas (CBSAs) recognized by the Centers for Medicare & Medicaid Services (CMS) for ASC claims with dates of service on and after January 1, 2009.

• Drugs and Biologicals with Payment Based on Average Sales Price (ASP) Effective January 1, 2009
  • In the CY 2009 OPPS/ASC final rule with comment period, it was stated that payments for separately payable drugs and biologicals based on the ASPs will be updated on a quarterly basis as later quarter ASP submissions become available.
  • Effective January 1, 2009, payment rates for many covered ancillary drugs and biologicals have changed from the values published in the CY 2009 Outpatient Prospective Payment System//Ambulatory Surgical Center (OPPS/ASC) final rule with comment period as a result of ASP calculations based on sales price submissions from the third quarter of CY 2008. In cases where the payment rates are different from those published in Addendum BB to the OPPS/ASC final rule with comment period in the Federal Register, the correct, updated payment rates have been incorporated into the January 2009 release of the ASC DRUG file. The updated payment rates effective January 1, 2009 for covered ancillary drugs and biologicals can be found in the January 2009 update of the ASC Addendum BB.
• New HCPCS Codes for Drugs and Biologicals that are Separately Payable under the ASC Payment System as of January 1, 2009.
  • For CY 2009, new Level II HCPCS codes have been created for reporting specific drugs and biologicals for which no previous payable HCPCS code existed.
  • Thirty of the new Level II HCPCS codes for reporting drugs and biologicals are separately payable to ASCs for dates of service on or after January 1, 2009. The new Level II HCPCS codes, their payment indicators, and long descriptors are displayed in Table 2 below. The CY 2009 ASC payment rates for the drugs and biologicals are in the January 2009 ASC DRUG file.

• Updated Payment Rates for Certain HCPCS Codes Effective April 1, 2008 through June 30, 2008.
  • The payment rates for six drugs and biologicals (Table 3) were incorrect in the April 2008 ASC DRUG file. The corrected payment rates are listed below and have been corrected in the revised April 2008 ASC DRUG file. The corrected rates are effective for services furnished on April 1, 2008 through June 30, 2008. If your claims were processed with the incorrect rates and you make your carrier/MAC aware of such claims, the carrier/MAC will adjust the claims.

• Updated Payment Rates for Certain Drugs and Biologicals Effective July 1, 2008 through September 30, 2008
  • The payment rates for nine drugs and biologicals (Table 4) were incorrect in the July 2008 ASC DRUG file. The corrected payment rates are listed below and have been corrected in the revised July 2008 ASC DRUG file.
  • The corrected rates are effective for services furnished on July 1, 2008 through September 30, 2008. If your claims were processed with the incorrect rates and you make your carrier/MAC aware of such claims, the carrier/MAC will adjust the claims.

• Updated Payment Rates for Certain Drugs and Biologicals Effective October 1, 2008 through December 31, 2008
  • The payment rates for two drugs and biologicals (Table 5) were incorrect in the October 2008 ASC DRUG file. The corrected payment rates are listed below and have been corrected in the revised October 2008 ASC DRUG file.
  • The corrected rates are effective for services furnished on October 1, 2008 through December 31, 2008. If your claims were processed with the incorrect rates and you make your carrier/MAC aware of such claims, the

• Correct Reporting of Drugs and Biologicals When Used As Implantable Devices
  • When billing for a biological for which the HCPCS code describes a product that is solely surgically implanted or inserted, and that is separately payable under the ASC payment system, the ASC should report the HCPCS code for the product.
  • If the implanted biological is packaged, that is, not eligible for separate payment under the ASC payment system, the ASC should not report the biological product HCPCS code.
  • When billing for a biological for which the HCPCS code describes a product that may be either surgically implanted or inserted or otherwise applied in the care of a patient, ASCs should not report the HCPCS code for the product when the biological is used as an implantable device (including as a scaffold or an alternative to human or nonhuman connective tissue or mesh used in a graft) during surgical procedures.
  • Under the ASC payment system, ASCs are provided a packaged payment for surgical procedures that includes the cost of supportive items. When using biologicals during surgical procedures as implantable devices, ASCs may include the charges for these items in their charges for the procedure.
• Correct Reporting of Units for Drugs
  • ASCs are reminded to ensure that units of drugs administered to patients are accurately reported in terms of the dosage specified in the HCPCS long code descriptor. That is, units should be reported in multiples of the units included in the HCPCS descriptor. For example, if the description for the drug code is 6 mg, and 6 mg of the drug was administered to the patient, the units billed should be 1. If the description for the drug code is 50 mg, but 200 mg of the drug was administered to the patient, the units billed should be 4.
  • ASCs should not bill the units based on the way the drug is packaged, stored, or stocked. That is, if the HCPCS descriptor for the drug code specifies 1 mg and a 10 mg vial of the drug was administered to the patient, bill 10 units, even though only one vial was administered.
  • The HCPCS short descriptors are limited to 28 characters, including spaces, so short descriptors do not always capture the complete description of the drug. Therefore, before submitting Medicare claims for drugs and biologicals, it is extremely important to review the complete long descriptors for the applicable HCPCS codes.
• Attachment A to CR 6323 lists the surgical procedures that are newly payable in the ASC setting as of January 1, 2009. Those procedures are displayed here in Table 6 as follows.  

• Attachment B to CR 6323 lists the procedures to which the no cost/full credit and partial credit device adjustment policy applies. Those procedures are displayed here in Table 7 as follows.

• Attachment C to CR 6323 lists the devices for which the “FB” or “FC” HCPCS modifier must be reported with the procedure code when furnished at no cost or with full or partial credit. That list of devices is displayed here as Table 8.

• The official instruction CR 6323 issued to your MAC or carrier is available at www.cms.hhs.gov/Transmittals/downloads/R1669CP.pdf (PDF, 510 KB)
• For a Special Edition article that provides an overview of the ASC payment system, see www.cms.hhs.gov/MLNMattersArticles/downloads/SE0742.pdf (PDF, 136 KB)
• If you have any questions, please contact our Provider Contact Center, at our toll-free number, (866) 332-7025

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