Q&A: Charging set-up fees for multiple procedures
Q: Facilities often have two charges for services performed in an operating room (OR) suite. It’s common to charge a flat set-up fee (which includes the first 15 minutes of OR time) as well as a per-minute fee for each additional minute.
When multiple procedures are performed, is it appropriate to charge an additional set-up fee? For example, a facility performs a colonoscopy and an esophagogastroduodenoscopy, which took a total of 20 minutes in the procedure room. The facility charged two set-up fees plus an additional five minutes of OR time. Would this be considered a duplicate charge (two setup/initial 15 minute charges, plus five minutes)?
A: Facilities often have an initial and each subsequent charge for OR time/resources and these can be tiered by acuity/resource levels. For example:
- Level 1, first 15 minutes
- Level 1, each additional 15 minutes
- Level 2, first 15 minutes
- Level 2, each additional 15 minutes
A facility can have its own charging practices/rules as long as it meets the CMS requirements for charges in CMS’ Provider Reimbursement Manual.
It is atypical for two initial OR or endoscopy suite charges unless the patient has to return to the endoscopy suite for a second/subsequent procedure on the same day or during the same encounter. Refer to the following excerpts from the manual:
2202.4, Charges
Charges refer to the regular rates established by the provider for services rendered to both beneficiaries and to other paying patients. Charges should be related consistently to the cost of the services and uniformly applied to all patients whether inpatient or outpatient. All patients' charges used in the development of apportionment ratios should be recorded at the gross value; i.e., charges before the application of allowances and discounts deductions.
2203, Provider charge structure as basis for apportionment
To assure that Medicare's share of the provider's costs equitably reflects the costs of services received by Medicare beneficiaries, the intermediary, in determining reasonable cost reimbursement, evaluates the charging practice of the provider to ascertain whether it results in an equitable basis for apportioning costs. So that its charges may be allowable for use in apportioning costs under the program, each facility should have an established charge structure which is applied uniformly to each patient as services are furnished to the patient and which is reasonably and consistently related to the cost of providing the services. While the Medicare program cannot dictate to a provider what its charges or charge structure may be, the program may determine whether or not the charges are allowable for use in apportioning costs under the program. Hospitals which have subproviders and hospital-based SNFs must also maintain uniform charges across all payer categories, as well as like charges for like services across each provider setting, in order to properly apportion costs. If like charges for like services are not maintained across provider settings, the cost report must not combine charges when calculating cost-to-charge ratios but must report separately, by department, costs and charges for the hospital, subprovider, and skilled nursing facility. An exception to this requirement is if the provider has the ability to gross-up charges described in §2314.B.
Editor’s note: Valerie A. Rinkle, MPA, lead regulatory specialist and instructor for HCPro's Revenue Integrity and Chargemaster Boot Camp®, as well as an instructor for HCPro’s Medicare Boot Camp®—Hospital Version and Medicare Boot Camp®—Utilization Review Version, answered this question.
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