ASC Billing & Hospital Outpatient Billing - Understanding the Differences
Medical
billing consists of hundreds of pages of updated rules, regulations, and
legislation, not to mention thousands of billing codes. And, navigating them is
already a challenge for practices.
Over
the last few years, patients and insurers have continued to pressure the health
system and hospitals to move towards ambulatory surgery centre (ASC)
billing from hospital outpatient
department billing (HOPD). The reason is ASCs billing can be a cost-saving
procedure. But to understand how it can be cost-saving, one needs to understand
the difference between ASC and HOPD.
The Difference between
ASC & HOPD
The
primary difference between ASC and HOPD is based on the regulations that apply
to the centres. For instance, a stand-alone surgery centre can still be termed
as HOPD when it falls under the same administrative and financial contracts as
a hospital that is within a 35-mile radius.
On
the other hand, a facility can have the ASC status despite being operated by a
hospital facility if it has an independent administrative and financial
standing and its own agreement with Medicare.
Adding
to this, ASC needs to comply with the ASC Covered Procedure List. It is a
mandatory rule to follow to ensure that any procedures performed can meet the
recommended level of risks being a stand-alone centre.
The
other difference that must be taken into account between ASC and HOPD is that
while the former is considered a freestanding facility, HOPD is attached to a
hospital.
How Is Payment Different
Between ASC & HOPD?
There
is a difference in the methodology between ASC and HOPD operations, which leads
to the payment difference.
Both
use Medicare; however, when a surgery shifts to ASC from HOPD, the Medicare
payment method changes to the ASC fee schedule from Outpatient Perspective
Payment System (OPPS).
Despite
the ASC fee schedule being connected with the OPPS payments, the calculations,
inputs, and adjustment changes, making it less expensive than HOPD.
While
several payment mythology differences result in ASC being cheaper than HOPD,
three main factors contribute to the differences.
1. The Value System –
Relative weight
The
critical factor that differs between ASC and HOPD is the numerical value linked
to the service provided, known as relative weight. The figures are defined by
the Centre for Medicare and Medicaid Services (CMS).
The
CMS uses it to reach the national allowable rate for Medicare by multiplying
the value with the conversion rate.
This
results in lower relative weight for the ASC due to the OPPS’s proportional adjustments
for budget neutrality.
2. Change in Conversion
Factor
As
mentioned in the previous point, the conversion rate is the factor that leads
to the change in the pricing between the procedures done by ASC and HOPD.
The
conversion factor for ASC was earlier based on the Consumer Price Index, but
now it uses the hospital market basket. In addition, due to site neutrality,
the change pushes for the migration of services to ASC settings from hospitals.
3. The Wage Index
Irrespective
of whether it is HOPD or ASC, the national Medicare allowable rate is
determined for the procedure based on the geographical wage index. It is done
by calculating the average hourly wage of the labor market of a geographic
location to the national average hourly wage. As a result, the wage index
adjustments based on the geographic location vary between the services provided
for ASC and HOPD.
Generally,
the ASC’s allowable rate is adjusted by 50% compared to HOPDs by 60%. The
difference in the weightage and the methodology thus impacts the payment rates
between the two.
How To Handle the
Differences?
We
understand that you are already neck-deep in keeping up with all the coding and
billing changes while attending to the patients. However, understanding and
calculating the difference between ASC and HOPD can be challenging for
practice. Moreover, frequent changes in the rules and regulations can add to
the woes.
Let
24/7 Medical Billing Services help you with the ASC and HOPD billings.
Our team of experts has in-depth knowledge of both ASC medical billing services
and Hospital medical billing services and understand the difference between the
two to ensure you have a regular flow of revenue for the procedures done. In
addition, we can assure you that you will have little to no claim rejections,
thus helping you focus on providing better services to the patients.
About
24/7 Medical Billing Services:
We
are a medical billing company that offers ‘24/7
Medical Billing Services’ and support physicians, hospitals, medical
institutions and group practices with our end to end medical billing solutions.
We help you earn more revenue with our quick and affordable services. Our
customized Revenue Cycle Management (RCM) solutions allow physicians to attract
additional revenue and reduce administrative burden or losses.
Contact:
24/7
Medical Billing Services
Tel:
+1 888-502-0537
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