De Novo Surgery Center FAQ: How Long Until We Get Paid by Medicare?
By Caryl Serbin, RN, BSN, LHRM
Developing a new ambulatory surgery center (ASC) requires many steps and a lot of upfront expenses. Investors want to know when they will begin receiving a return on their investment (ROI) after opening and treating patients. This is a difficult date to pinpoint as the average time for Medicare reimbursement typically varies between 3-6 months after opening, as exemplified by the following illustration:
If a surgery center will be treating Medicare and/or Medicaid patients, it "must be certified and approved to enter into a written agreement with CMS." Furthermore, it's important to understand that most managed care organizations require a Medicare certification number to complete contracts. Note: For full description and information about ambulatory surgery center regulations, click here.
As you can see in the timeline, ambulatory surgery center Medicare certification requires several steps and can take significant time to complete. As this process is complex, it needs to be started as soon as possible by a de novo ASC to help ensure completion in a timely fashion. In addition, other important facets of getting paid and growing profitability are dependent on Medicare certification.
The following are the necessary steps new ASCs must take to secure their Medicare certification and submit its first claims.
1.Obtain National Provider Identifier (NPI)
An NPI — the unique identification number for covered healthcare providers — is obtained from the National Plan and Provider Enumeration System (NPPES). The application and instructions for obtaining the NPI is found here.
2.Enroll in Medicare
PECOS is the online Medicare enrollment management which allows an ASC to enroll as a Medicare provider or supplier. Instructions on getting started with PECOS can be found here.
If you would prefer to enroll in Medicare by paper, complete the Medicare Enrollment Application (form 855b) available to download here. Mail the completed form to your state’s Medicare administrative contractor (MAC).
Note: CMS regulations require revalidation of enrollment for ASCs every five years.
3.Comply With Medicare’s Conditions for Coverage
CMS created Conditions for Coverage (CfCs) requirements that ASCs must follow to obtain certification. These requirements include all areas of an ASC (e.g., organization, operations, facility design, clinical care), and apply to all patients, not just Medicare patients. Learn about the requirements here.
4.Undergo Compliance Survey
This survey is to determine the new ASC’s compliance with Medicare’s CfCs. The following organizations have been approved by CMS to perform this survey:
Accreditation Association for Ambulatory Health Care (AAAHC)
The Joint Commission
American Association for Accreditation of Ambulatory Surgery Facilities (AAAASF)
Accreditation Commission for Health Care (ACHC)
Your state’s Medicare agency
Visit this webpage for CMS’ State Operations Manual which provides advice for the compliance survey.
Two other links that provide compliance advice needed for the Compliance Survey are life safety and determining immediate jeopardy.
5.Undergo Post-Compliance Survey
ASCs may choose to apply for “deemed status” through a CMS-approved accreditation organization. If a de novo surgery center chooses this route for its post-compliance survey, the ASC must perform procedures on at least 10 patients. The accrediting agency will review these cases for outcome and appropriate recordkeeping. If all CfC requirements are met, the accrediting agency will recommend to CMS that it issue a CMS certification number to the ASC. Note: In most cases, these 10 procedures are non-billable as the de novo ASC has not yet received their managed care contracts as most managed care organizations will not issue contracts until the center has received its Medicare number.
6.Receive CMS Certification Number (CCN)
Receiving the CMS certification number (CCN) indicates that the ASC has completed its Medicare enrollment process and passed the compliance survey.
7.Obtain Provider Transaction Access Number (PTAN)
The provider transaction access number is issued to a provider upon completion of Medicare enrollment. Although the national provider identifier is used to submit claims to Medicare, the PTAN is required to authenticate a provider's identity for all transactions relating to billing and enrollment (e.g., interactive voice response (IVR), surgical patient safety observation tool (SPOT), enrollment requests, provider contact center inquiries).
8.Enroll With Electronic Data Interchange (EDI) Carrier
The final step before an ASC can submit its first Medicare claims is to enroll with the EDI carrier of its choice immediately after receiving your PTAN from CMS. Medicare and many MCOs require electronic claim submission. Completing the following steps will allow your ASC to bill electronically.
Get set up by EDI carrier
Train employees on how to submit electronic claims
Initiate claim submission immediately after performing your first billable procedures
Learn more about EDI and its requirements here.
Managed Care Contracts
Although not included in the timeline above, negotiation of ASC managed care contracts should begin as soon as practical as they may take a long time to secure. As noted earlier, most managed care organizations (MCOs) require ASCs to receive final certification from CMS before issuing contracts. Follow these steps to put your de novo ASC in the best position to receive managed care coverage in a timely manner:
Start the negotiation phase early so it can hopefully be completed while you await CMS certification.
Upon receipt of CMS certification, immediately notify MCOs so that contracts may be issued.
First reach out to MCOs that are contracted with your physician providers as they are most likely to be receptive to contracting with your ASC because of their familiarity with the surgeons.
Consider contacting other organizations, such as local business employee plans and state workers' compensation, to discuss possible contracts.
Patience Pays Off
While it will take some time for a de novo ASC to get paid by Medicare and commercial payers, by carefully following the steps discussed above, a new facility can begin generating cash flow in a timely manner. It is imperative that each step be completed appropriately. Rushing through any of the steps will increase the likelihood of mistakes that will extend the timeline and delay submission of and payment for claims.
If you are looking for billing and revenue cycle services to support your new ambulatory surgery center, reach out to the experts at Serbin Medical Billing. We have decades of experience working with de novo ASCs. Our veteran ASC team helps new surgery centers move through their Medicare certification timeline efficiently and effectively and then provides ongoing, concierge-level services that maximize collections and minimizes day to pay.
