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2. Definitions

 
(Rev. 95, Issued: 12-12-13, Effective: 06-07-13, Implementation: 06-07-13)
 
§416.2 Definitions
 
As used in this part:
Ambulatory surgical center or ASC means any distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed 24 hours following an admission. The entity must have an agreement with CMS to participate in Medicare as an ASC and must meet the conditions set forth in Subpart B and C of this part.
 
Interpretive Guidelines: §416.2
 
According to the definition of an Ambulatory Surgical Center, or ASC, its key characteristics are that it:
 
• Is a distinct entity;
 
• Operates exclusively for the provision of surgical services to patients not requiring hospitalization, with the ASC’s services expected not to exceed 24 hours in duration following an admission;
 
• Has an agreement with Medicare to participate as an ASC; and
 
• Complies with the Conditions for Coverage (CfCs) in Subparts B and C, i.e., 42 CFR 416.25-52.
 
Distinct Entity
 
An ASC satisfies the criterion of being a “distinct” entity when it is wholly separate and clearly distinguishable from any other healthcare facility or office-based physician practice. The ASC is not required to be housed in a separate building from other healthcare facilities or physician practices, but, in accordance with National Fire Protection Association (NFPA) Life Safety Code requirements (incorporated by cross-reference at §416.44(b)), it must be separated from other facilities or operations within the same building by walls with at least a one-hour separation. If there are State licensure requirements for more permanent separations, the ASC must comply with the more stringent requirement.
An ASC does not have to be completely separate and distinct physically from another entity, if, and only if, it is temporally distinct. In other words, the same physical premises may be used by the ASC and other entities, so long as they are separated in their usage by time. For example:
 
Adjacent physician office: Some ASCs may be adjacent to the office(s) of the physicians who practice in the ASC. Where permitted under State law, CMS permits certain common, non-clinical spaces, such as a reception area, waiting room, or restrooms to be shared between an ASC and another entity, as long as they are never used by more than one of the entities at any given time, and as long as this practice does not conflict with State licensure or other State law requirements. In other words, if a physician owns an ASC that is located adjacent to the physician’s office, the physician’s office may, for example, use the same waiting area, as long as the physician’s office is closed while the ASC is open and vice-versa. The common space may not be used during concurrent or overlapping hours of operation of the ASC and the physician office. Furthermore, care must be taken when such an arrangement is in use to ensure that the ASC’s medical and administrative records are physically separate.
 
 
During the hours that the ASC is closed, its records must be secure and not accessible by non-ASC personnel.
 
Permitting use of common, non-clinical space by distinct entities separated temporally does not mean that the ASC is relieved of the obligation to comply with the NFPA Life Safety Code standards for ASCs, in accordance with §416.44(b), that require, among other things, a one-hour separation around all physical space that is used by the ASC and fire alarms in the ASC.
It is not permissible for an ASC during its hours of operation to “rent out” or otherwise make available an OR or procedure room, or other clinical space, to another provider or supplier, including a physician with an adjacent office.
 
Facilities with Diagnostic Imaging and Surgery Capability: Some facilities are equipped to perform both ambulatory surgeries and diagnostic imaging. However, Medicare regulations do not recognize a non-hospital institutional healthcare entity that performs both types of services, and actually requires an ASC to operate exclusively for the purpose of providing surgical services. However, the Medicare Independent Diagnostic Testing Facility (IDTF) payment regulations at 42 CFR 410.33(g) prohibit IDTFs that are not hospital-based or mobile from sharing a practice location with another Medicare-enrolled individual or organization. As a result, ASCs may not share space, even when temporally separated, with a Medicare-participating IDTF.
 
NOTE: Certain radiology services integral to surgical procedures may be provided when the facility is operating as an ASC.
 
Separately Certified ASCs Sharing Space: Where permitted under State law, several different ASCs, including ones that participate in Medicare and ones that do not, may use the same physical space, including the same operating rooms, so long as they are temporally distinct, i.e., they do not have concurrent or overlapping hours of operation. However, an ASC and a hospital or CAH outpatient surgery department, including a provider-based department that is either on or off the hospital’s or CAH’s main campus, may not share the same physical space, since the regulations at 42 CFR 413.65(d)(4) require that the provider-based department be held out to the public as a part of the main hospital, and that patients entering the provider-based facility are aware that they are entering the hospital.
 
Each of the different ASCs that utilize the same space is separately and individually responsible for compliance with all ASC Conditions for Coverage (CfCs). So, for example, each ASC must have its own policies and procedures and its own medical records. Likewise, although there is no prohibition against each ASC using the same nursing and other staff under an arrangement with the employer of the staff, each is nevertheless required to separately comply with all requirements governing the utilization of staff in the ASC.
 
At the same time, each Medicare-certified ASC that shares the same space as another Medicare-certified ASC should be aware, when entering into such an arrangement, that identification of certain deficient practices may result in citation of deficiencies for all ASCs occupying the same premises. For example, building features that violate the Life Safety Code would not vary according to which ASC happened to be operating on the premises at the time of a survey, and all ASCs at that location would be cited for the deficiency.
 
If there are multiple ASCs utilizing the same space, but at different times, it may be prudent to consider organizing recertification surveys in order to use the time on-site to conduct multiple surveys allowing assessment of each ASC that utilizes the space.
 
Exclusive Provision of Limited Surgical Services
 
The ASC must offer only surgical services. Separate ancillary services that are integral to the surgical services, i.e., those furnished immediately before, during or immediately after a surgical procedure, may be provided. The ASC may not, however, offer services unrelated to the surgeries it performs.
 
What constitutes “surgery”?
 
For the purposes of determining compliance with the ASC definition, CMS relies, with minor modification, upon the definition of surgery developed by the American College of Surgeons (www.facs.org/fellows_info/statements/st-11.html.) Accordingly, the following definition is used to determine whether or not a procedure constitutes surgery:
 
Surgery is performed for the purpose of structurally altering the human body by the incision or destruction of tissues and is part of the practice of medicine. Surgery also is the diagnostic or therapeutic treatment of conditions or disease processes by any instruments causing localized alteration or transposition of live human tissue which include lasers, ultrasound, ionizing radiation, scalpels, probes, and needles. The tissue can be cut, burned, vaporized, frozen, sutured, probed, or manipulated by closed reductions for major dislocations or fractures, or otherwise altered by mechanical, thermal, light-based, electromagnetic, or chemical means. Injection of diagnostic or therapeutic substances into body cavities, internal organs, joints, sensory organs, and the central nervous system, is also considered to be surgery. (This does not include the administration by nursing personnel of some injections, subcutaneous, intramuscular, and intravenous, when ordered by a physician.) All of these surgical procedures are invasive, including those that are performed with lasers, and the risks of any surgical procedure are not eliminated by using a light knife or laser in place of a metal knife, or scalpel.
 
An ASC is further limited to providing surgical services only to patients who do not require hospitalization after the surgery. Further, the ASC’s surgical services must be
ones that ordinarily would not take more than 24 hours, including not just the time for the surgical procedure but also pre-op preparation and recovery time, following the admission of an ASC patient. These limitations apply to all of the ASC’s surgical services, not just to surgeries on Medicare beneficiaries who use the ASC.
 
• The term “hospitalization” means that a patient needs a supervised recovery period in a facility that provides hospital inpatient care. Whether a patient “requires” hospitalization after a surgical procedure is a function both of the characteristics of the patient and of the nature of the surgery. In other words, an ASC might be an appropriate setting for a particular surgical procedure for patients under the age of 65 without significant co-morbidities, but might be a very risky, inappropriate setting for that same procedure when performed on a 75-year old patient with significant co-morbidities. ASCs must consider patient-specific characteristics that might make hospitalization more likely to be required when determining their criteria for patient selection.
 
Any surgery for which a patient must be routinely transferred to a hospital after the surgery is not appropriate for the ASC setting.
Some States permit the operation of “recovery centers” that are neither Medicare-certified healthcare facilities nor licensed hospitals, but which provide post-operative care to non-Medicare ASC patients. If such recovery centers would be considered hospitals if they participated in the Medicare program, then it is doubtful that an ASC that transfers patients to such centers meets the Medicare definition of an ASC. However, surveyors are not expected to make determinations about the nature of such recovery centers. If a SA is concerned that a recovery center is providing hospital inpatient care, it should discuss this matter further with the CMS Regional Office.
 
• Expected duration of services. ASCs may not provide services that, under ordinary circumstances, would be expected to exceed 24 hours following an admission. Patients admitted to an ASC will be permitted to stay 23 hours and 59 minutes, starting from the time of admission (see 73 FR at 68714 (November 18, 2008)). The time calculation begins with the admission and ends with the discharge of the patient from the ASC after the surgical procedure. While the time of admission normally would be the time of registration or check-in of the patient at the ASC’s reception area, for the purposes of compliance with this requirement ASCs may use the time when the patient moves from the waiting/reception area into another part of the ASC. This time must be documented in the patient’s medical record. The discharge occurs when the physician has signed the discharge order and the patient has left the recovery room. Other starting or end points, e.g., time of administration of anesthesia, or time the patient leaves the OR, may not be used to calculate compliance with the 24-hour requirement.
 
This requirement applies to all ASC surgical services. For services to Medicare beneficiaries there are additional payment regulations that further limit the surgical services that Medicare will pay for. For example, payment regulations at §416.166(b) state, among other criteria, that Medicare will generally pay for surgical procedures for which standard medical practice dictates that the beneficiary would not typically require active medical monitoring and care after midnight of the day of the procedure. This more restrictive Medicare payment requirement is enforced through the claims payment and audit processes. The SA surveyors may not cite an ASC for failing to meet the definition of an ASC if instances of Medicare beneficiaries who remain in the ASC are identified, so long as they meet the 24-hour requirement.
 
Rare instances of patients whose length of stay in the ASC exceeds 24 hours do not automatically mean that the ASC fails to meet the regulatory definition of an ASC and must be cited as out of compliance with this requirement. The regulatory language refers to surgical services whose “expected duration” does not exceed 24 hours. It is possible for an individual case to take longer than expected, due to unforeseen complications or other unforeseen circumstances. In such rare cases the ASC continues to be responsible for the care of the patient until the patient is stable and able to be discharged in accordance with the regulatory requirements governing discharge, as well as the ASC’s policy. However, if an ASC has cases exceeding 24 hours more than occasionally, this might suggest that the facility is not in compliance with the definition of an ASC.
 
Cases that surveyors identify which exceed 24 hours must be reviewed further to determine whether the expected duration of services for the procedure in question, when performed on a patient with key clinical characteristics similar to those of the patient in the case, would routinely exceed 24 hours. Key clinical characteristics include, but are not limited to, age and co-morbidities. If the procedure is one that Medicare pays for in an ASC setting, then it can be assumed that the expected duration of services related to that procedure would not exceed 24 hours. If the procedure is not one that Medicare pays for in an ASC, then the ASC must provide evidence supporting its expectation that the services to the patient would not exceed 24 hours. Such evidence could include other cases in the ASC where similar patients (in terms of condition prior to surgery) undergoing the same procedure were discharged in 24 hours or less after admission.
 
In summary, exceeding the 24-hour time frame is expected to be a rare occurrence, and each rare occurrence is expected to be demonstrated to have been something which ordinarily could not have been foreseen. Not meeting this requirement constitutes condition-level noncompliance with §416.25. In addition, review of the cases that exceed the time frame may also reveal noncompliance with CfCs related to surgical services, patient admission and assessment, and quality assurance/performance improvement.
ASCs should be aware that, to the extent that patients remain within the ASC for 24 hours or longer, for purposes of Life Safety Code requirements the ASC would be considered a “healthcare” rather than an “ambulatory” occupancy under the NFPA Life Safety Code.
 
Has a Medicare Supplier Agreement
 
An entity cannot be an ASC, as that term is defined in Medicare’s regulations, if it does not have an agreement to participate in Medicare as an ASC. Since ASCs are suppliers, the ASC agreement is a supplier agreement. Thus, while Medicare regulations recognize, for example, non-participating hospitals and will pay them for emergency services under certain circumstances, in the case of an ASC, the term “ASC” has a meaning exclusive to the entity’s participation in the Medicare program. Applicants to participate as an ASC are not considered “ASCs” until they actually have a Medicare agreement in place.
 
In the case of a prospective ASC undergoing an initial survey to determine whether it may be certified for Medicare participation, the SA may not conduct the survey until the Medicare Administrative Contractor/legacy Carrier has reviewed the ASC’s Form 855B enrollment application and made a recommendation for approval of the ASC’s participation in Medicare.
 
Compliance with Subparts B and C
 
Finally, an ASC must comply with each of the requirements found in Subparts B and C, i.e., the provisions found at 42 CFR 416.25 – 35 for Subpart B, and 42 CFR 416.40 – 52 for Subpart C.
Subpart B contains the supplier agreement requirements for an ASC. Enforcement of these provisions generally follows the same process as that outlined in SOM §3030. Although §3030 specifically addresses failures of providers to comply with the statutory provider agreement requirements, noncompliance of an ASC supplier with the provisions of Subpart B may be handled by CMS Regional Offices in the same way.
Subpart C contains the health and safety standards for ASCs, i.e., the Conditions for Coverage. State Survey Agencies survey ASCs for their compliance with the ASC definition and the CfCs. If an ASC has condition-level noncompliance with numerous CfCs, then condition-level noncompliance with §416.25 may also be cited.
 
Survey Procedures: §416.2
 
• Determine through interview and observation and consultation with the LSC surveyor whether the ASC facility is physically separated by at least a 1 hour separation from any other healthcare facility or physician office.
 
• Determine whether it is permissible under State licensure requirements for an ASC to share its physical space with another entity from which it is temporally separated. If sharing physical space that is temporally separate is not permitted under State law, then it is also not permitted under Medicare.
 
• Where permitted under State law, if the ASC shares common administrative space with an adjoining or contiguous physician’s office or clinic, ask the ASC for evidence that use of this common space by the ASC and the other entity(ies) is not concurrent or overlapping in time. Look for signs or schedules that would confirm that the entities do not use the space at the same time.
 
• If an ASC complies with all other elements of the ASC definition but has permitted concurrent use by an adjacent physician’s office or clinic of common administrative space, this would constitute a standard-level violation. However, co-mingling of services may also result in related deficiencies in the areas of medical records, patients’ rights, medical staff, nursing staff, etc. that would be cited under the applicable CfCs, and which together might result in a condition-level violation of §416.25 and possibly the other CfCs.
 
• Where sharing of space by multiple healthcare entities is permitted under State law, determine through interview, observation and review of facility documents whether the ASC shares the same space, including clinical space, such as ORs, procedure rooms, recovery rooms, etc., with another entity.
 
• If it does share space with other healthcare entities, ask the ASC for evidence that the two entities never operate concurrently or have overlapping hours. Look for signs or schedules that would confirm that the entities do not use the same space at the same time.
 
• If there are multiple ASCs utilizing the same space and there are deficiencies that are common to more than one ASC, citations must be issued to each ASC.
 
• If there is evidence that ASC and another entity that provides services other than surgery share the same space, including clinical space, concurrently or have overlapping hours of operation, this would constitute a condition-level violation of §416.25 because the ASC would not be a distinct entity and it would not be operating exclusively to provide surgical services. In addition, co-mingling of services may also result in related deficiencies in the areas of medical records, patients’ rights, medical staff, nursing staff, etc. that would be cited under the applicable CfCs, and which together might result in additional condition-level violations.
 
• If there is evidence that ASC and another entity that provides surgical services share the same space, including clinical space, concurrently or have overlapping hours of operation, this would constitute a standard-level violation. However, this co-mingling of services may also result in related deficiencies in the areas of medical records, patients’ rights, medical staff, nursing staff, etc. that would be cited under the applicable CfCs, and which together might result in condition-level violation of §416.25 and possibly the other CfCs.
 
• Review all closed medical records in the survey sample to determine whether the time elapsed between the patient’s admission or registration and discharge does not exceed 23 hours and 59 minutes. The calculation of the timeframe begins with the time documented in the medical record indicating when the patient moved from the reception or waiting area into another part of the ASC, if the ASC records this separate from the time of admission in the medical record.
 
• Determine whether the medical records note the patient’s admission and discharge time.
 
• Observe whether the ASC correctly notes the time of admission for patients checking in and being discharged.
 
• For cases reviewed that exceed the permitted expected time frame, ask the ASC to provide documentation indicating why it was reasonable to have expected that the time from admission to discharge would not exceed 24 hours. Acceptable evidence could include, but is not limited to, documentation that the procedure is one that Medicare has previously paid the ASC for, or other cases in the ASC involving the same procedure on similar patients that did not exceed the timeframe. ASCs may produce other evidence for surveyors to assess. Surveyors are not expected to know all of the surgical procedures covered by Medicare in an ASC, although they may obtain more information about this if they choose at http://www.cms.hhs.gov/apps/ama/license.asp?file=/ascpayment/downloads/CMS_1404_FC_ASC_AddAA_BB_DD1_DD2_EE.zip (This link requires a consent to use policies and then leads to a series of spreadsheets; the pertinent one is the ASC Addendum AA.) It is the responsibility of the ASC to demonstrate that the procedure is covered by Medicare when performed in an ASC.
 
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