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    OpenPayerPolicy UpdatesReimbursement/Payment PolicyDHA TRICARE ASC Reimbursement Update | OpenPayer
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    ModifiedDHAPolicy N/A

    Ambulatory Surgical Center Reimbursement

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    Governs TRICARE facility reimbursement for covered surgical procedures performed in qualifying freestanding, Department of Veterans Affairs, and pediatric ambulatory surgical centers by network and non-network providers.

    Policy Summary
    PayerDHA
    PolicyAmbulatory Surgical Center Reimbursement
    Policy CodePolicy N/A
    Change TypeModified
    Effective DateOctober 1, 2023
    Next Review DateN/A
    Key ActionVerify that the facility has the required TRICARE and, when applicable, Medicare participation agreements before submitting claims.
    SourceLink
    POLICY UPDATE CHANGES

    The Medicare ASC reimbursement system applies only to services that are otherwise covered by TRICARE.

    The Medicare ASC reimbursement system applies only to services that are otherwise covered by TRICARE.

    3Covered facility categories
    Medicare ASCReimbursement methodology
    CPT 41899Dental exception
    50%Labor share wage-adjusted
    21 daysCMS file implementation period
    Lower of twoPayment basis

    Qualifying Facilities, Services, and Reimbursement Rules

    Qualifying Facility and Covered Service Criteria

    Reimbursement applies when ALL of the following facility and service requirements are met:

    ALL of the following

    • Facility qualifies as an eligible ASC

      • The facility is a freestanding ambulatory surgical center (FASC) classified by CMS as an ASC under 42 CFR part 416 and has active participation agreements with both Medicare and TRICARE.

      • Pediatric-only exception

        • The facility specifically serves pediatric populations and does not have a Medicare participation agreement.
        • The facility is accredited by The Joint Commission or the Accreditation Association for Ambulatory Health Care, Inc. (AAAHC).
    Policy Summary
    PayerDHA
    PolicyAmbulatory Surgical Center Reimbursement
    Policy CodePolicy N/A
    Change TypeModified
    Effective DateOctober 1, 2023
    Next Review DateN/A
    Key ActionVerify that the facility has the required TRICARE and, when applicable, Medicare participation agreements before submitting claims.
    SourceLink
    On This Page
    Qualifying Facilities, Services, and Reimbursement RulesProcedure Codes, Payment Indicators, and Pricing OperationsProvider and Contractor RequirementsKey Reimbursement Terms

    OpenPayer is powered by Trek Health's payer performance platform. Trek continuously ingests, validates, and normalizes Transparency in Coverage data alongside payer policies and other commercial payer data to create a structured payer intelligence foundation. OpenPayer uses this foundation to deliver personalized search results, dynamically generated policy pages, and tailored policy monitoring based on each user's payers, specialties, billing codes, and areas of interest. The same intelligence powers broader payer performance workflows, including reimbursement benchmarking, contract evaluation, payer negotiations, and financial decision-making.

  1. The facility has a participation agreement with TRICARE.
  2. The service is a covered surgical procedure or covered ancillary service provided in a freestanding ASC, DVA ASC, or pediatric ASC.
  3. For FASCs in Maryland, the service is reimbursed under this ASC system; Maryland facilities are not exempt.
  4. The service is otherwise covered by TRICARE.

    5. ASC and Dental Procedure Payment Rules

    Payment treatment is determined as follows for covered ASC and dental services:

    ALL of the following

    • Procedure payment category

      • Medicare ASC-listed procedure

        • The procedure is on Medicare's ASC list of covered surgical procedures or is a covered ancillary service on the applicable Medicare ASC pricing files.
        • The facility charge is paid at the lower of the applicable ASC payment rate or the billed charge.

      • Covered dental procedure

        • The dental procedure is otherwise covered by TRICARE, including covered dental procedures such as CPT 41899.
        • The ASC facility is reimbursed at the applicable Outpatient Prospective Payment System (OPPS) rate.
        • Additional services not packaged into the OPPS payment, when provided on a claim with the covered dental procedure, are paid under the methodology in this section.

      • TRICARE-covered procedure not on Medicare's ASC list

        • The procedure is covered under TRICARE but is not on Medicare's ASC list of covered surgical procedures.
        • Related professional services are reimbursed to the rendering provider under the allowable charge method.
        • No separate facility payment is made to the ASC.
    • An FASC must not bill a TRICARE beneficiary for a non-covered procedure unless the beneficiary agreed in advance, in writing, to pay for the service.

    Eligibility for ASC Facility Reimbursement

    A facility is eligible for ASC facility reimbursement only when ALL applicable conditions are satisfied:

    ALL of the following

    • Eligible facility status

      • ALL of the following

        • The facility is a distinct entity classified by CMS as an ASC under 42 CFR part 416.
        • The facility has an active Medicare participation agreement.
        • The facility has an active TRICARE participation agreement.

      • Pediatric-only facility without Medicare participation

        • The facility specifically serves pediatric populations.
        • The facility is accredited by The Joint Commission or AAAHC.
        • The facility has a valid TRICARE participation agreement.
    • The facility has a valid TRICARE participation agreement; facilities without one are excluded.
    • Except for pediatric-only facilities, the facility has a valid Medicare participation agreement.
    • The service or item is on Medicare's ASC coverage list, unless it is a qualifying covered dental procedure under the dental exception.
    • The service is rendered in an eligible FASC, DVA ASC, or pediatric ASC setting and is otherwise covered by TRICARE.

    ASC Reimbursement Methodology

    For eligible covered services, apply ALL applicable Medicare ASC methodology requirements:

    ALL of the following

    • Use Medicare's ASC reimbursement system, including ASC fee-schedule rules, payment rates, payment indicators, covered procedure and ancillary-service lists, and wage indices, effective for dates of service on or after October 1, 2023 and only to the extent the service is covered by TRICARE.
    • Apply the facility rate only to FASC facility charges for ambulatory surgery. The rate includes nursing and technician services; facility use; drugs, biologicals, and radiology services for which separate OPPS payment is not allowed; surgical dressings, splints, casts, and procedure-related equipment; anesthesia materials; IOLs; and administrative, recordkeeping, and housekeeping services.
    • Do not include in the facility rate physicians' or other independently billable professional fees; separately payable laboratory, X-ray, or diagnostic services; orphan drugs; prosthetic devices other than IOLs; corneal acquisition tissue; brachytherapy services; OPPS pass-through implantable devices; ambulance services; leg, arm, or back braces; artificial limbs; or home-use DME.
    • Base covered-procedure reimbursement on Medicare's national ASC rates and apply the geographic wage adjustment to the labor-related portion of the national rate, currently 50%, using the applicable Core-Based Statistical Area (CBSA) value. Apply wage adjustments to covered dental procedures, including CPT 41899.
    • Do not apply geographic wage adjustments to corneal tissue acquisition; OPPS pass-through drugs and devices; brachytherapy sources; IOLs and new technology IOLs; or separately payable drugs and biologicals.
    • Implement future Medicare changes to the labor-related share, services subject to wage adjustment, and wage-adjustment methodology.
    • Follow Medicare rules for multiple-surgery and bilateral-procedure discounts in freestanding ASCs.
    • Follow Medicare payment-indicator guidance for covered, packaged, and separately payable services. Do not make separate payment for packaged or bundled items and services.
    • If complications of ambulatory surgery result in admission to a hospital subject to DRG-based payment, reimburse the ambulatory surgery separately from the inpatient hospital services; apply the same rule to emergency-room services.
    • Apply ASC cost-sharing levels to all surgical procedures performed in an FASC, including covered dental procedures such as CPT 41899.
    • Download and implement CMS ASC pricing files containing covered surgical procedures, covered ancillary services, payment indicators, unadjusted payment rates, wage-adjusted rates, and wage indices. Implement the latest files and correction files within 21 days after CMS publication.

    Procedure Codes, Payment Indicators, and Pricing Operations

    Dental procedure exceptionCPTCovered
    41899Unlisted dental procedure; covered dental procedures such as CPT 41899 are reimbursed at the OPPS rate when performed in an ASC
    Covered dental procedure exceptionCPTCovered
    41899Other dental procedure; covered dental procedures in an ASC are reimbursed at the OPPS rate
    Medicare ASC covered surgical procedure listmixedCovered
    No codes listed
    Packaged, bundled, and separately payable services identified by Medicare payment indicatorsmixed
    No codes listed
    Labor-Related Wage Adjustment
    Current labor-related share50% of the national ASC rate is subject to geographic wage adjustment.
    Wage adjustment basisThe adjustment uses the Core-Based Statistical Area (CBSA) value to account for geographic wage differences.
    Future updatesFuture Medicare changes to the labor-related share, wage-adjusted items and services, or wage-adjustment methodology must be implemented.
    CMS Pricing File Implementation
    Implementation deadlineImplement the latest ASC pricing files within 21 days of publication on the CMS website.
    Correction filesThe 21-day implementation period includes correction files.
    Pricing file sourceASC pricing files are posted on the CMS website.

    Provider and Contractor Requirements

    Billing Rule

    Use the approved reimbursement methodology

    Apply this reimbursement policy to services provided by both network and non-network providers. An alternative network reimbursement methodology may be used only when approved by DHA and specifically included in the network provider agreement.

    Documentation Required

    Verify ASC eligibility

    Confirm that the ASC qualifies for reimbursement before submitting facility charges. A FASC generally must be classified by CMS as an ASC under 42 CFR part 416 and have active Medicare and TRICARE participation agreements; a pediatric ASC without Medicare participation must be accredited by the Joint Commission or AAAHC and enter into a TRICARE participation agreement.

    Denial Risk

    Obtain advance written agreement for non-covered services

    Do not bill TRICARE beneficiaries for non-covered procedures unless the beneficiary agreed in advance in writing to pay for the services.

    Billing Rule

    Apply the applicable facility payment method

    Submit facility charges for covered ambulatory surgery under the applicable Medicare ASC reimbursement rules. Covered dental procedures, such as CPT 41899, are reimbursed at the OPPS rate, while additional services not packaged into the OPPS payment follow the methodology described in this policy.

    Billing Rule

    Follow the network reimbursement methodology

    Contractors must follow this reimbursement policy for network and non-network providers. An alternative network reimbursement methodology is permitted only when approved by DHA and specifically included in the network provider agreement.

    Documentation Required

    Confirm facility participation agreements

    Verify that the facility has a valid TRICARE participation agreement and, when required, a valid Medicare participation agreement. The Medicare participation requirement does not apply to facilities that only serve pediatric patients when they meet the stated accreditation and TRICARE participation conditions.

    Billing Rule

    Do not bill beneficiaries without written agreement

    Do not bill TRICARE beneficiaries for non-covered procedures unless the beneficiary agreed in advance in writing to pay for the services.

    Billing Rule

    Implement current CMS ASC pricing files

    Download and implement the full CMS ASC pricing files, including covered surgical procedures and ancillary services, payment indicators, payment rates before geographic wage adjustments, wage-adjusted payment rates, and wage indices. Implement the latest ASC pricing files, including correction files, within 21 days of publication on the CMS website.

    Key Reimbursement Terms

    Freestanding Ambulatory Surgical Center (FASC)
    CMS classificationA distinct entity classified by the Centers for Medicare and Medicaid Services as an ambulatory surgical center under 42 CFR part 416.
    Medicare participationThe entity has an active participation agreement with Medicare.
    TRICARE participationThe entity has an active participation agreement with TRICARE.
    Qualifying Pediatric ASC
    Pediatric facilityA pediatric ambulatory surgical center that does not have a Medicare participation agreement.
    AccreditationThe facility is accredited by the Joint Commission or the Accreditation Association for Ambulatory Health Care, Inc. (AAAHC).
    TRICARE participationThe facility enters into a participation agreement with TRICARE.
    Medicare ASC Reimbursement System
    Fee schedule and ratesThe system incorporates Medicare ASC fee schedule rules and payment rates.
    Payment indicators and listsThe system incorporates payment indicators and Medicare lists of covered procedures and ancillary services.
    Wage indicesThe system incorporates Medicare wage indices for applicable geographic wage adjustments.
    Freestanding Ambulatory Surgical Center (FASC)
    Distinct CMS-classified entityA distinct entity classified by CMS as an ambulatory surgical center under 42 CFR part 416.
    Required Medicare agreementThe entity has an active participation agreement with Medicare.
    Required TRICARE agreementThe entity has an active participation agreement with TRICARE.
    Pediatric FASC Eligibility
    Pediatric service focusThe facility serves pediatric patients and does not have a Medicare participation agreement.
    Accreditation requirementThe facility is accredited by the Joint Commission or AAAHC.
    Eligibility requirementThe facility enters into a participation agreement with TRICARE.
    ASC Facility Rate
    DefinitionThe ASC facility rate is the standard overhead amount for an ASC facility.
    Included clinical services and suppliesIt includes nursing and technician services; facility use; specified drugs, biologicals and radiology services; surgical dressings, splints, casts and equipment; anesthesia materials; and intraocular lenses.
    Included administrative servicesIt includes administrative, recordkeeping and housekeeping items and services.