TMPPM 2007 >25.3.2.1 Day Surgery

Reimbursement for outpatient hospital surgery is limited to the lesser of the amount reimbursed to an ambulatory surgical center (ASC) for similar services, the hospital's actual charge, or the allowable cost determined by HHSC. Hospitals must bill all scheduled day surgeries under their provider identifier using TOB 131.

To avoid delays in claims processing payment, file scheduled outpatient surgical procedures using the hospital's provider identifier and appropriate type of service (TOS) F-Healthcare Common Procedure Coding System (HCPCS) procedure code. ASC/HASC providers indicate the appropriate TOS F-HCPCS facility procedure code in Block 44 of the UB-04 CMS-1450 claim form, instead of the International Classification of Diseases Ninth Revision Clinical Modification (ICD-9-CM) procedure code in Block 74 of the UB-04 CMS-1450 claim form.

File claims for emergency, unscheduled outpatient surgical procedures with separate charges (lab, radiology, anesthesia, and emergency room [ER]) for all services using TOB 131 and the hospital's provider identifier.

Reimbursement of ASC/HASC procedures is based on the CMS-approved Ambulatory Surgical Code Groupings (1 through 9 per CMS and Group 10 per HHSC) payment schedule. Providers are sent a list of these codes and payment categories after enrollment with the Texas Medicaid Program and when periodic updates occur. The rates implemented by the Texas Medicaid Program on April 1, 1995, remain in effect. To acquire a list of approved procedures, call the TMHP Contact Center at 1-800-925-9126. This information is also available on the TMHP website at www.tmhp.com. Click on Fee Schedules.

Refer to: "Day Surgery" for more information on day surgery and outpatient observation.

The ASC/HASC payment represents a global payment and includes room charges and supplies. Covered services provided are billed as one inclusive charge. All facility services provided in conjunction with the surgery (for example, laboratory, radiology, anesthesia supplies, medical supplies) are considered part of the global payment and cannot be itemized or billed separately.

Routine X-ray and laboratory services, directly related to the surgical procedure being performed, are not reimbursed separately. All nonroutine laboratory and X-ray services, provided with emergency conditions, may be billed separately with documentation that the complicating condition arose after the initiation of the surgery.

No separate payment outside of the ASC/HASC reimbursement rate will be made for prosthetic devices. Medical and prosthetic devices such as implantable pumps and intraocular lenses, may be supplied by the ASC/HASC and implanted, inserted or otherwise applied during a covered surgical procedure.

When multiple surgical procedures are performed on the same day, only the procedure with the highest surgical code grouping is reimbursed. Surgical procedures performed in the hospital's outpatient departments (emergency or treatment rooms) are to be billed under the hospital's provider identifier, using TOB 131 (outpatient claim).

These procedures are for clients who are scheduled for a day surgery procedure and are not inpatient at the time the day surgery is performed. Providers must bill (TOB 131) the scheduled day surgery as an outpatient procedure using the provider identifier.

If a condition of the scheduled day surgery requires additional care beyond the recovery period, the client may be placed in outpatient observation (stay less than 24 hours). The observation period must be billed on an outpatient claim (TOB 131) using the hospital's provider identifier. If the client requires inpatient admission following the observation stay, the admission date for the inpatient claim is the date the client was placed in observation. All charges for services provided from the time of observation placement (excluding the surgical procedure) should be included on the inpatient claim (TOB 111) using the hospital's provider identifier. The principal diagnosis to be used on the inpatient claim is the complication of the surgery that necessitated the extended stay. The day surgery procedure should still be billed as an outpatient procedure under the provider identifier. Specific guidelines for billing observation placement as an outpatient claim are found under "Hospital Outpatient Observation Room Services" .

If a complication occurs for which the client requires inpatient admission immediately following the day surgery (no observation period), the day surgery must be billed as an outpatient procedure (TOB 131), using the hospital's provider identifier. The inpatient admission is to be billed as an inpatient claim (TOB 111), using the hospital's provider identifier. The principal diagnosis to be used on the inpatient claim is the complication of the surgery that necessitated the extended stay. The day surgery procedure should not be included on the inpatient claim. The inpatient admission must be medically necessary and is subject to retrospective review.

These procedures are for clients who require an unscheduled (emergency) day surgery procedure and are not inpatient at the time the day surgery is performed.

If a client is first treated in the ER and then requires emergency surgery as an outpatient, claims for emergency, unscheduled outpatient surgical procedures should be filed itemizing each service, such as room charge, laboratory, radiology, anesthesia, and supplies. Providers must bill unscheduled day surgery procedures and emergency services as outpatient procedures. If a condition of the unscheduled day surgery requires additional care beyond the recovery period, the client may be placed on outpatient observation status. The observation period must be billed on the same outpatient claim.

Providers must bill the unscheduled day surgery procedures and emergency services as outpatient procedures (TOB 131) using the hospital's provider identifier. If a condition of the unscheduled day surgery requires additional care beyond the recovery period, the client may be placed on outpatient observation status (stay less than 24 hours). The observation period must be billed on the same outpatient claim (TOB 131) using the hospital's provider identifier. Specific guidelines for billing observation placement as an outpatient claim are found under "Hospital Outpatient Observation Room Services" .

If the client requires inpatient admission following the observation stay, the admission date for the inpatient claim is the date the client was placed in observation. All charges for services provided from the time of observation status (excluding surgical procedures and emergency services) should be included on the inpatient claim (TOB 111) using the hospital's provider identifier. The principal diagnosis to be used on the inpatient claim is the complication of the surgery that necessitated the extended stay. The day surgery and emergency services should not be included on the inpatient claim since they are to be billed (TOB 131) as outpatient procedures under the hospital's provider identifier. Specific guidelines for billing observation placement as an outpatient claim are found under "Hospital Outpatient Observation Room Services" .

If a client is admitted for a day surgery procedure-whether scheduled or emergency-and has either an American Society of Anesthesiologists (ASA) Classification of Physical Status of III, IV, or V or Classification of Heart Disease III or IV (refer to Texas Medicaid Hospital Screening Criteria), the procedure may be considered an inpatient procedure and billed on an inpatient claim (TOB 111) using the hospital's provider identifier. The reason for the surgery (principal diagnosis), any additional substantiated conditions, and the procedure must be included on one inpatient claim.

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Class I. A patient who has no organic disease or in whom the disease is localized and causes no systemic disturbance.

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Class II. A patient exhibiting mild to moderate systemic disturbance that may or may not be associated with the surgical complaint and that interferes only moderately with the patient's regular activities and general physiologic equilibrium.

Example: Non- or only slightly-limiting organic heart disease, mild diabetes, hypoglycemia, essential hypertension, or anemia; extreme obesity; chronic bronchitis.

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Class III. A patient exhibiting severe systemic disturbance that may or may not be associated with the surgical complaint and that seriously interferes with the patient's activities.

Example: Severely limiting organic heart disease, severe diabetes with vascular complications; moderate to severe degrees of pulmonary insufficiency; angina pectoris or healed myocardial infarction.

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Class IV. A patient exhibiting extreme systemic disturbance that may or may not be associated with the surgical complaint, that interferes with the patient's regular activities, and that has already become life-threatening.

Example: Organic heart disease with marked signs of cardiac insufficiency present (for example, cardiac decompensation); persistent anginal syndrome, or active myocarditis; advanced degrees of pulmonary, hepatic, renal, or endocrine insufficiency present.

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Class V. The rare person who is moribund (in a dying state) before operation, whose preoperative condition is such that he or she is expected to die within 24 hours even though not subjected to the additional strain of operation.

Example: Burst abdominal aneurysm with profound shock; major cerebral trauma with rapidly increasing intracranial pressure; massive embolus.

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Class I. No limitation of physical activity. Ordinary physical activity does not cause undue fatigue, palpitation, dyspnea, or anginal pain.

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Class II. Slight limitation of physical activity. Comfortable at rest, but ordinary physical activity results in fatigue, palpitation, dyspnea, or anginal pain.

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Class III. Marked limitation of physical activity. Comfortable at rest, but less than ordinary activity causes fatigue, palpitation, dyspnea, or anginal pain.

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Class IV. Unable to carry on any physical activity without discomfort. Symptoms of cardiac insufficiency, or of the anginal syndrome, may be present even at rest. If any physical activity is undertaken, discomfort occurs.

Inpatients may occasionally require a surgery that has been designated as an outpatient procedure. The physician must document the need for this surgery as an inpatient procedure before the procedure is performed. These claims are subject to retrospective review.

When ASC/HASC providers bill the Texas Medicaid Program for an incomplete surgical procedure, the following information must be included on the claim:

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Facilities must use either the following diagnosis codes or modifier to indicate an incomplete surgical procedure, TOS F:


Diagnosis Code	Description
V641	Surgical or other procedure not carried out because of contraindication
V642	Surgical or other procedure not carried out because of patient's decision
V643	Procedure not carried out for other reasons

Claims billed with diagnosis codes V641, V642, V643 and modifier 73 and 74 suspend for review of the medical documentation submitted with the claim. Providers must submit the operative report, the anesthesia report, and state why the operation was not completed.

Reimbursement to ASC/HASC facilities for canceled or incomplete surgeries because of patient complications, is made according to the following criteria, depending on the extent to which the anesthesia or surgery proceeded:

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Reimburse at 0 percent of ASC group payment schedule for a procedure that is terminated for nonmedical or medical reasons before the facility has expended substantial resources.

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Reimburse at 33 percent of ASC group payment schedule up to the administration of anesthesia.

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Reimburse at 50 percent of ASC group payment schedule after the administration of anesthesia but before incision.

Surgeries canceled because of incomplete preoperative procedures are not reimbursed.