Currentpriority healthPolicy NO. 91651

Sites of Service

Defines medical necessity criteria for performing procedures in a hospital outpatient department (HOPD) instead of an ambulatory surgery center (ASC) or physician office; excludes emergency and inpatient services and does not address medical necessity for individual procedures.

Policy Summary

Payerpriority health

PolicySites of Service

Policy CodePolicy NO. 91651

Change TypeNew policy

Effective DateJun 1, 2026

Next Review Date

Key ActionWhen requesting HOPD site, providers must document the presence of one or more listed medical necessity criteria or applicable exemptions, including historical documentation when prior poor outcomes exist.

SourceLink

POLICY UPDATE CHANGES

New policy

1Policy created

2POS codes referenced

12Criteria categories

Coverage Summary

This policy (Policy No. 91651) defines medical necessity criteria used to determine when a procedure should be performed in a Hospital Outpatient Department (HOPD) rather than an Ambulatory Surgical Center (ASC) or physician office. It applies to site-of-service determinations only and does not set medical necessity for individual procedures. The policy excludes emergency services and inpatient procedures. Status: CURRENT. Effective date: 2026-06-01. Last review: 2026-05-13. (Criteria themselves are presented in the Medical Necessity section of the policy.)

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Medical-Necessity Criteria

Exemptions from site of service consideration

Member will be exempt from site of service consideration if ANY of the following apply:

ANY of the following

Pediatric age <18< 18
Those unsafe to discharge home post procedure
Those who previously did poorly post procedure - historical documentation required
Previous attempt to perform the same procedure at a lower level of care

Provider Actions

Prior Authorization

Prior authorization for certain services

Prior authorization may be required for certain drugs, devices, services and procedures; providers must submit requests demonstrating medical necessity when PA is required and refer to the Priority Health Provider Manual for details.

Submit requests demonstrating medical necessity
Refer to Provider Manual

Documentation Required

Document reasons for HOPD necessity

When requesting HOPD site, providers must document the presence of one or more listed medical necessity criteria or an applicable exemption. Include historical documentation when prior poor outcomes exist (for example prior poor post‑procedure outcomes).

Poor respiratory reserve (e.g., severe COPD, restrictive lung disease)
Severe cardiovascular compromise (e.g., CHF NYHA 3-4, recent MI/CVA ≤90 days)
High anesthesia risk (e.g., ASA class 3-4)
Pediatric exemption (age <18) — include historical documentation when prior poor outcomes exist

Denial Risk

Risk of non-coverage if criteria not met

If Priority Health determines performance of the procedure in an outpatient hospital department is not medically necessary based on the site-of-service criteria, services provided in that setting will be considered not medically necessary.

Background & Evidence

Background: 'Site of Care' or 'Site of Service' (also used interchangeably with terms such as 'Setting,' 'Place of Service,' or 'Level of Care') refers to the location where care is provided and may be specified in benefit plans or provider agreements. Federal regulations define an Ambulatory Surgical Center (ASC) as a distinct entity operating exclusively to provide surgical services to patients not requiring hospitalization with expected duration of services ≤24 hours and require an agreement with CMS to participate as an ASC.

Regulatory context: Federal statutes and regulations (including 42 U.S.C. §1833(i)(1)(A) and 42 CFR part 416 definitions) address appropriate sites of service and ASC definitions; CMS National and Local Coverage Determinations may address site of service for specific services but there is no single global NCD/LCD governing site of service across all services.

Anesthesia risk assessment: The American Society of Anesthesiologists (ASA) Physical Status Classification System is used to assess and communicate pre-anesthesia comorbidities; patients with ASA Physical Status III or higher generally require more extensive pre-anesthesia evaluation and more intensive anesthesia care, and this classification is relevant when assessing site-of-service risk and need for HOPD-level resources.