HealthCare News

Outpatient Surgery Update

Issue: #397 NOV2017

Topic: Reimbursement

The reimbursement process for outpatient surgical claims is described by a surgical roll-up. The roll-up applies to claims with surgical procedures that initiate the remainder of the roll-up process. All surgical procedures that initiate the surgical roll-up are specified on the outpatient fee schedule by attribute indicators of 7, 11 or 13.

If one or more of the surgical codes specified by attribute indicators 7, 11 or 13 are billed on an outpatient claim, charges on specific revenue codes associated with the surgery will be added together and the surgical roll-up will apply. The total of all covered charges, including packaged services related to the surgery and the revenue codes shown below, is compared to the fee schedule rate for the surgical procedure(s) present on the claim.

Packaged services are identified with attribute indicators 10 or 16 on the outpatient fee schedule. These procedures or items related to surgery are considered packaged according to the Medicare Outpatient Prospective Payment System (OPPS) status indicator “N.” Surgical procedures are reimbursed based on the full/half/half payment methodology. Reimbursement is the lesser of the total surgical charges or the total fee schedule amount. Any additional services not included in the surgical roll-up are reimbursed at their appropriate fee schedule rate. Examples of services not included in the surgical roll-up are lab, radiology, home medical equipment and therapy. These services require appropriate HCPCS and revenue code(s).

The following revenue codes apply the surgical roll-up (this list is reviewed and updated annually):



*See specific Level II HCPCS, as specified on the outpatient fee schedule by attribute indicators 9 and 15, which will be allowed for separate payment and will not be included in the surgical allowance when billed with revenue code 0278.

**See specific Level II HCPCS, as specified on the outpatient fee schedule by attribute indicators 8 and 14, which will roll into the total surgical charges when billed with revenue code 0636 and will not receive separate payment. An exception to this rule is when heparin is billed with a procedure in which it’s included; in this case, the heparin wouldn’t roll with the surgical procedure, it would deny as inclusive of the other procedure. A list of procedures that include heparin is available on CMS’s Practice Expense (PE) Supplies list.

***Revenue code 0258 requires specific HCPCS when billed on all surgical and medical claims. This revenue code is part of the surgical roll-up for surgical claims.

Surgical codes should be submitted on the same claim for the same stay. Units for surgical procedure codes must always be one (1). Modifiers should be used if different sites need to be identified; however, surgical procedures performed bilaterally must be submitted as two separate line items to receive the correct reimbursement. Modifier 50 may be appended to one of the lines, but a bilateral procedure cannot be billed as only one line with modifier 50. Use of modifier 73 (discontinued procedure prior to anesthesia) will result in a 50 percent reduction to the fee schedule amount for the procedure.

The presence of a code on the listing of surgical procedures does not indicate coverage. Medical policies and benefit plan variations continue to apply.

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