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Facility Fees

Jared Posted Tue 22nd of October, 2013 14:55:07 PM

Our pain management DO just started doing some IVPM procedures such as spinal chord stimulators and epidurals in our office-based surgery room. According to our state laws, this is acceptable without any ASC accreditation because of the level of sedation that is being performed. Are we allowed to bill any facility fees to insurance along with these procedures?

SuperCoder Answered Wed 23rd of October, 2013 08:41:01 AM

Office Based Surgery

Many State Departments of Health have regulations regarding what procedures they consider to be safe and appropriate to be performed in a physician’s office. Typically, these regulations have to do with performing procedures that carry a high infection risk and/or with the use of certain levels of anesthesia.
This gives the individual State Department of Health jurisdiction over what they allow in their State. The States that have currently adopted standards for office based procedures with certain levels of anesthesia are as follows:

Connecticut, Pennsylvania, Rhode Island, California, Florida, Texas, New Jersey, Arizona, Ohio,Colorado, Washington DC, New York, Oklahoma, South Carolina and Oregon. The regulations vary from the requirement that the office is State Licensed, State Registered and/or Office Based Accredited. State specific summaries on jurisdiction can be found on the Accreditation Association of Health Care website(

Accreditation For Office Based Practices

The value of accreditation has become a benchmark of quality not only to those involved in health care delivery and management, but to the general public and is a measure of professional achievement and quality of care. In office based settings, even in States that do not require accreditation, this status may prove to expedite third-party payment and favorably influence managed care contract decisions.Accreditation may also favorably influence liability insurance premiums.

Rules for office accreditation include: no more than four surgeons and two operating suites and have been
in business for at least six months prior to the accreditation survey. Note: early option is available to
satisfy State requirements. The practice must also be a formally organized, legal entity in compliance with
applicable federal, state and local regulations and provide medical care under the direction or supervision
of a single physician or a group of physicians, dentists, or podiatrists accepting responsibility.

Accreditation is available through American Association of Ambulatory HealthCare (AAHC), The Joint
Commission (JCAHO) and American Association for Accreditation of Ambulatory Surgery Facilities
(AAAASF). For office based practices they will differ in survey style, but use common guidelines aimed
to ensure a high quality of care for patients.

When billing for procedures done in the office setting, it is important to understand the payment rules of
different payors. In fact, it is a given that only Medicare recognizes the site of service rule; commercial
payors’ that allow a higher payment for office services vary by region. Step one in this process is to
ascertain the fee schedule for all the practice’s payors. If the payor does not recognize a site of service
differential, negotiations should include some form of added reimbursement for procedures performed in
the office. In addition to payment for the procedure, whether it has a site of service “enhancement” or not,ensure that payment will be made for both the professional and technical components (global) on the use of the C’arm for needle localization under fluoroscopic guidance or for the provision of supervision and interpretation study as applicable. Medicare and other payors will reimburse for this global as well as injected drugs. Although Medicare considers payment for the procedure inclusive of supplies, other payors may pay a supply or tray fee for office based procedures.

With Commercial and Workers Compensation payors, it is important to recognize that some office based
practices may be able to negotiate a global fee to include the professional fee and all incidentals for the use of the procedure room. Bear in mind, however, that this is not a facility fee. Local and state law as well as third party payor policies including, Commercial and Workers Compensation, typically require the facility to be licensed and Certified in order for facility fees to be paid. Although there is no law prohibiting a practice from billing facility fees (Medicare excepted), prosecutors could use the mail fraud or wire fraud statutes to allege a general "scheme to defraud" and allege that the MD billed as if he were a facility when the industry standard is that a facility must be licensed as such.

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