Notification of Outpatient Ambulatory Surgical Center/Hospital-based Ambulatory Surgical Center Reimbursement Policy

Date: August 30, 2024
Attention: Surgical Facilities and Hospitals
Effective Date: November 30, 2024

Call to action: The purpose of this communication is to make providers aware of a new reimbursement policy for Texas Children’s Health Plan (TCHP), which outlines and standardizes reimbursement for outpatient surgery. This policy is for general freestanding Ambulatory Surgical Centers (ASCs) and acute care hospitals, and applies to CHIP and Medicaid lines of business. Non-contracted providers will be reimbursed according to Texas Medicaid guidelines via Third Party Pricing.

How this impacts providers: Policy guidelines are as follows: 

Day surgery, otherwise known as outpatient surgery, is surgery provided in a freestanding ASC, hospital-based ASC, or outpatient hospital setting. Day surgery is further defined as an inclusive/global service, a scheduled or unscheduled/emergency surgery, and as type of service (TOS) F.

• At the time of enrollment, all general acute hospitals are given a HASC provider number.
• TOS F represents ASC/hospital-based ambulatory surgical center (HASC) type of service. Procedures codes considered TOS F can be found on the ASC/HASC Static Fee Schedule located on TMHP.

Scheduled day surgery is considered an ASC/HASC procedure and should be billed as follows:

• Freestanding ASCs should bill on a CMS-1500 claim form using their ASC NPI and taxonomy code.
• Hospitals should submit as an outpatient procedure with TOB 131 using their HASC NPI and taxonomy code.
• All services provided in conjunction with the day surgery are inclusive charges, and should not be itemized or submitted on separate claims.
• Complications following scheduled day surgery should be billed as follows:
  • If the member requires additional care beyond the normal recovery period and the member is placed in observation, the day surgery must be submitted under the HASC NPI and taxonomy code, and the observation period must be billed on an outpatient claim with TOB 131 and using the hospital NPI and taxonomy code.
  • If the member requires inpatient admission, the day surgery must be submitted under the HASC NPI and taxonomy code, and the inpatient service must be submitted as an inpatient claim with TOB 111 and using the hospital NPI and taxonomy code. The principal diagnosis billed on the claim must indicate complication of surgery.
  • If the member was admitted after observation stay, the observation charges must be included on the inpatient claim.

Unscheduled or emergency day surgery performed in a hospital should be billed as follows:

• Unscheduled procedures must be billed as an outpatient procedure under the hospital NPI and taxonomy code with TOB 131.
• Emergency procedures where the member was first treated in the emergency room must be billed with the emergency services and unscheduled surgery on the same claim using the hospital NPI and taxonomy code with TOB 131. 
• If the member is placed in observation, the observation period must be included on the same claim as the emergency services and unscheduled surgery.
• Complications following unscheduled or emergency day surgery should be billed as follows:
  • If the member requires inpatient admission following observation, charges from the observation period must be included on the inpatient claim with TOB 111 and billed using the hospital NPI and taxonomy code. The principal diagnosis included on the claim must indicate complication of surgery.
    • The day surgery and emergency services must not be included on the inpatient claim.

Day surgery/procedures labeled as TOS F are considered global procedures, and will be reimbursed as outlined below:

• Claim with day surgery/procedures will be reimbursed at a global rate. All services provided in conjunction with the procedure are considered included in the payment for the surgery.
• When multiple procedures are rendered on the same day, only the procedure with the highest reimbursement rate on the fee schedule will be reimbursed.
• There are certain medical devices or implants that can be reimbursed separately from the ASC/HASC procedure when billed on the same claim. These services are listed below:

Implant devices: 

Neurostimulators: 

For all contracted facilities, day surgeries (TOS F) should be billed and reimbursed as follows:

Facilities must bill with either one of the diagnosis codes or modifiers below, and submit the documentation as outlined in the TMPPM:

Incomplete or canceled surgery will be reimbursed depending on the extent of the anesthesia or surgery that has been completed prior to the procedure cancellation:

Facilities will be reimbursed as follows:

• TOS F procedures will be reimbursed as a global procedure at a percentage of billed charges using the facility’s contracted outpatient percentage.
• If there are multiple procedures billed on the claim, only the highest billed surgery will be reimbursed on the claim.
• All exceptions outlined in the TMPPM (and listed above) will apply.
• If carve outs apply, they will be paid according to contracted terms.

This policy is prospective only and will not impact any claims prior to the date.

Next step for Providers: Providers should follow the guidance as outlined in the policy. 

References:

Texas Medicaid Provider Procedure Manual: Inpatient and Outpatient Hospital Services Handbook

Texas Administrative Code RULE §355.8121 Reimbursement to Ambulatory Surgical Centers

Texas Administrative Code RULE §355.8061 Outpatient Hospital Reimbursement

If you have any questions, please email Provider Relations at: providerrelations@texaschildrens.org. 

For access to all provider alerts,log into:
www.thecheckup.org or www.texaschildrenshealthplan.org/for-providers.