CMS Pub. 100-02, ch. 15, § 260.1

An ASC for purposes of this benefit is a distinct entity that operates exclusively for the

purpose of furnishing outpatient surgical services to patients. It enters into an agreement

with CMS to do so. An ASC is either independent (i.e., not a part of a provider of

services or any other facility), or operated by a hospital (i.e., under the common

ownership, licensure, or control of a hospital). To be covered as an ASC operated by a

hospital, a facility elects to do so, and continues to be so covered unless CMS determines

there is good cause to do otherwise. This provision is intended to prohibit such an entity

from switching from one payment method to another to maximize its revenues (47 FR

34082, 34099, Aug. 5, 1982). For other general conditions and requirements, see 42 CFR

416.25-416.49. If the hospital based surgery center is certified as an ASC it is considered

an ASC and is subject to rules for ASCs. Related survey requirements are published in

the State Operations Manual, Pub. 100-07, Appendix L. Claims processing and payment

requirements for ASCs are published in Pub. 100-04, the Medicare Claims Processing

Manual, chapter 14.

If a hospital based surgery center is not certified as an ASC it continues under the

program as part of the hospital. In that case the applicable hospital outpatient payment

rules apply. This is the outpatient prospective payment system (OPPS), for most

hospitals, or may be provisions for hospitals excluded from OPPS. See Pub.100-04, the

Medicare Claims Processing Manual, chapter 4, for billing and payment requirements for

hospital outpatient services.

Indian Health Service (IHS) hospital outpatient departments are not certified as separate

ASC entities. The ASC indication merely means that CMS approved them to bill for

ASC services and be paid based on the ASC rates for services on the ASC list. In order

to bill for ASC services, the hospital outpatient department must meet the conditions of

participation for hospitals defined at 42 CFR, Part 482. See Pub. 100-04, the Medicare

Claims Processing Manual, chapter 19, sections 40.2.1, and 80.9 for more information on

IHS hospital outpatient departments billing for ASC services.