Wage Adjustment of Base Payment Rates

40.2 - Wage Adjustment of Base Payment Rates (Rev. 11793; Issued:01-19-23; Effective: 02-21-23; Implementation: 02-21-23) Prior to January 1, 2008, the payment rates established for ASC procedures (see §30) are standard base rates that have been adjusted to remove the effects of regional wage variations. When contractors process claims for ASC services, they adjust the base rates for services subject to geographic adjustment to reflect the wage index value applicable to the area in which the ASC is located. The Medicare payment for ASC services is equal to 80 percent of the wage-adjusted standard payment rate. Beneficiaries are responsible for a 20 percent coinsurance payment for ASC services once their deductible is satisfied. An exception to this is screening flexible sigmoidoscopies and screening colonoscopies, regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure, that is furnished in connection with, as a result of, and in the same clinical encounter as the colorectal cancer screening test. There is no deductible and the coinsurance will be gradually reduced until it is completely waived for dates of service on or after January 1, 2030. The wage index includes the wage and salary levels of certain health care professionals in both urban and nonurban locations, compared to a national norm of 1.0. Areas with above average wage levels have index numbers greater than 1.0, while areas with below average wage levels have index numbers below l.0. Each Core-Based Statistical Area (CBSA) within a State has a separate index. If a specific city or county does not have a CBSA value, the default is to the overall state wage index. For dates of service on or after January 1, 2008, the ASC payment rates are geographically wage adjusted based on the wage index for the CBSA. Beginning January 1, 2008, CMS calculates and makes available to the contractors CBSA-specific ASC payment rates for services subject to geographic adjustment. The wage index values for urban and rural areas that CMS applies to all non-acute providers are used in the calculation of the ASC wage adjusted payment rates. With the implementation of the ASC revised payment system, the labor related portion of the payment rate is 50 percent and the remaining non-labor related portion is 50 percent. There is no adjustment for geographic wage differences for the following: • Corneal tissue acquisition; • Drugs and devices that have pass-through status under the OPPS; • Brachytherapy sources; • Payment adjustment for NTIOLs; or • Separately payable drugs and biologicals.