ASC Billing vs. Hospital Billing: Coding, Compliance & Reimbursement Differences
Medical billing is a critical process in the healthcare industry
that ensures providers receive payment for the services they deliver. It
involves coding, submitting claims, and managing reimbursements from insurance
companies and patients. Though the basic goal of billing remains the same
across healthcare settings, the methods and rules can vary widely depending on
the type of facility. Ambulatory Surgical Center (ASC) and hospital billing are
two common billing types.
Although they might seem
similar, these billing systems have essential coding, reimbursement, and
compliance differences that impact providers and patients. In fact, many
healthcare facilities are outsourcing medical billing and coding services
providers in India to understand
the difference more clearly to avoid any denials.
This blog will explore those
differences in detail, helping you understand how ASCasc and hospital billing
work.
ASC Billing vs. Hospital
Billing:
Meaning
ASC billing is
the process of sending claims to insurance companies for surgeries done at
outpatient centers called Ambulatory Surgery Centers. These centers perform
surgical procedures that do not require an overnight hospital stay. ASCs handle
billing by submitting claims to the patient’s health insurance for healthcare
reimbursement. If necessary, they may also send a separate bill directly to the
patient. The healthcare provider, who typically owns or partners with the ASC,
then bills the center for the services provided based on a pre-agreed rate.
Hospital billing is the process
hospitals use to charge patients and insurance companies for medical services.
It includes billing for stays in the hospital, outpatient visits, tests,
surgeries, and use of equipment. When a patient is treated but not admitted to
the hospital, it is called outpatient billing. In this case, the hospital sends
a claim to the patient’s health insurance. Sometimes, these services are
provided by an ASC, and the ASC will handle the billing if no hospital claim is
made.
Coding
ASC billing reports services
using CPT and HCPCS Level II codes. The -SG modifier is required for all
surgical procedures billed by the ASC. Other commonly used modifiers include
-50 for bilateral procedures, -51 for multiple procedures, -73 for procedures
discontinued before anesthesia, and -74 for those discontinued after
anesthesia. ASCs often deal with bundled codes, which means some services are
grouped under one main procedure and are not billed separately. The payment for
these bundled services is included in the main procedure’s payment.
In hospital billing, ICD-10-PCS
codes are used for inpatient procedures, while CPT and HCPCS codes are used for
outpatient services. Hospitals use more modifiers to separate facility charges
from professional services. Bundling in hospital billing also combines related
services under one code, especially when procedures are typically done
together. However, hospitals may unbundle services depending on payer rules and
revenue codes, allowing some procedures to be billed separately when needed.
Compliance
ASCs are regulated under the
CMS ASC Conditions for Coverage to continue receiving payments from Medicare
and other payers. These rules focus on maintaining safety and quality patient
care during outpatient surgical procedures. ASCs are also required to follow
the ASC Quality Reporting Program (ASCQR), which tracks the quality of care
provided and ensures transparency in performance. This program includes
measures such as patient safety, infection rates, and patient outcomes. In
terms of documentation, ASCs maintain a streamlined approach. Their
documentation mainly includes procedure-specific data, such as the type of
surgery performed, the time it took, the equipment used, and the outcome. As
ASCs offer limited services compared to hospitals, their compliance workload is
generally lighter, but still essential to ensure accurate billing and patient
safety.
Hospitals are regulated under
the CMS Hospital Conditions of Participation, which are much broader and more
detailed than those for ASCs. These conditions cover every aspect of patient
care, from admission and treatment to discharge and follow-up. Hospitals must
comply with multiple quality reporting programs, including the Hospital Outpatient
Quality Reporting (OQR) for outpatient services and the Inpatient Quality
Reporting (IQR) for inpatient care. Hospital documentation is also far more
extensive, requiring detailed medical necessity records, nursing notes,
physician orders, medication administration, and care plans. Hospitals handle a
wider variety of services and more complex cases, so their compliance
responsibilities are much greater and more resource-intensive than those of
ASCs.
Reimbursement
ASCs are usually paid under the
Medicare ASC Payment System, which offers lower reimbursement rates than
hospitals. ASCs often receive only 50% to 60% of the hospitals’ pay for the
same procedure. Payment is usually based on negotiated rates between the ASC
and the hospital or insurer. These rates are often discounted from the full
hospital charges. Once the ASC receives payment, any remaining balance may be
billed to the hospital or the patient, depending on the agreement. ASCs are
also more affected by payer-specific rules, which means some procedures may not
be approved for payment in ASC settings. In terms of staffing costs, ASCs have
a lower wage index, as they typically pay lower wages than hospitals. Their
bargaining power is weaker, so they must offer lower prices to stay
competitive. ASCs also have limited participation in bundled payment programs,
meaning they are less likely to be reimbursed for a group of services under one
payment.
Hospitals are reimbursed using
the Outpatient Prospective Payment System (OPPS) for outpatient services and
the Inpatient Prospective Payment System (IPPS) for inpatient care. These
systems provide higher reimbursement rates than what ASCs receive. Hospitals
use a fee schedule set by each state, often discounted from retail prices to
encourage care access. Hospitals also have a higher wage index as they pay more
for staff and provide more complex care. Their relative weight is stronger,
meaning they have more bargaining power when dealing with insurers. Hospitals
can also participate in Bundled Payments for Care Improvement (BPCI), which
allows them to be paid for a group of related services as a package. This can
increase efficiency and revenue. Unlike ASCs, hospitals usually get
reimbursement for a broader range of procedures, even complex ones, regardless
of payer restrictions. The conversion factor used to determine how much the
patient pays after insurance is usually based on the fee schedule and can vary
by hospital and state.
Conclusion
Undoubtedly, the ASC and
Hospital Billing are crucial in ensuring healthcare facilities receive proper
reimbursement for services rendered. However, there is an interdependent
relationship between both, which means that ASC billing is often a key
component of hospital outpatient billing. In fact, both act as last resort
payers to cover medical costs.
Given
the complexities and close coordination required between these two billing
systems, outsourcing offshore medical billing and coding services in India can
be a wise choice. Being the reliable medical billing and coding services
provider in India, ICS can help streamline billing processes, improve accuracy,
and maximize reimbursements, allowing healthcare providers to focus more on
patient care and less on administrative burdens.
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