CMS Pub. 100-04, ch. 14, § 10.1

An ASC for Medicare purposes is a distinct entity that operates exclusively for the

purpose of furnishing outpatient surgical services to patients. The ASC must have in

effect an agreement with CMS obtained in accordance with 42 CFR 416 subpart B

(General Conditions and Requirements). 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). A hospital-operated facility has

the option of being considered by Medicare either to be an ASC or to be a provider-based

department of the hospital as defined in 42 CFR 413.65.

To participate in Medicare as an ASC operated by a hospital, a facility:

• Elects to do so.

• Is a separately identifiable entity, physically, administratively, and financially

independent and distinct from other operations of the hospital with costs for the

ASC treated as a non-reimbursable cost center on the hospital’s cost report;

• Meets all the requirements with regard to health and safety, and agrees to the

assignment, coverage and payment rules applied to independent ASCs; and

• Is surveyed and approved as complying with the conditions for coverage for

ASCs in 42 CFR 416.25-49.

Related survey requirements are published in the State Operations Manual, Pub. 100-07,

Appendix L.

If a facility meets the above requirements, it bills the Medicare contractor using the ASC

X12 837 professional claim format or, in rare cases, on Form CMS-1500 and is paid the

ASC payment amount.

A hospital-operated facility that decides to discontinue participation in Medicare as an

ASC must terminate its ASC agreement with CMS. Guidance regarding the termination

of ASC agreements with CMS is provided in 42 CFR 416.35. Voluntary terminations are

those initiated by an ASC and, as specified in 42 CFR 416.35, an ASC may terminate its

agreement either by sending written notice to CMS or by ceasing to furnish services to

the community.

To participate in Medicare as a provider-based department of the hospital, the hospital

must comply with CMS requirements to certify the hospital-operated facility as a

provider-based department of the hospital as described in 42 CFR 413.65, including

meeting all of the hospital conditions of participation specified in 42 CFR 482. See Pub

100-07, State Operations Manual, Appendix A, “Survey Protocol, Regulations and

Interpretive Guidelines for Hospitals,” for information on survey requirements.

Certain Indian Health Service (IHS) and Tribal hospital outpatient departments may elect

to enroll and be paid as ASCs. See Pub. 100-04, chapter 19 for more information.