ASC Billing Guide: Facility Fees, Modifiers and Payment Rules (2026) 

Key Takeaways  

• An ASC sends a building fee, and the surgeon sends a separate professional fee. Medicare handles them on its own, with different fee plans. 

• ASCs are paid by Medicare through a method called future payment. The OPPS/ASC final rule changes the list of covered procedures, payment indicators, and rates every year. 

• Use modifier 73 when a procedure is canceled before anesthesia starts, and modifier 74 when the procedure or anesthesia has started. Incorrectly applying these modifiers can result in payment being delayed or denied. 

• Medicare doesn’t accept CMS code 50 for ASC claims. Put actions that happen on both sides on two lines and use RT and LT instead. 

Many skilled billers get stuck when they try to use ASC billing. Hospital outpatient billing follows a different set of rules than physician office billing. Ambulatory surgery center billing, by contrast, has its own rules, including payment indicators, packaged services, and modifier logic that don’t work the same way elsewhere. 

This guide covers the important details, such as how Medicare pays for ambulatory surgery center billing services and what kind of modifier table your billers need to hang on the wall. It’s useful if your surgery center is getting claims denied for reasons you can’t figure out or if your team is just starting to bill for ambulatory surgery centers. 

What Is ASC Billing? 

ASC billing is the process of submitting facility fee claims for surgeries performed in an ambulatory surgery center. The ASC charges for the use of the building, its tools, its nurses, and some of its goods. For their professional services, the surgeon or nurse sends a separate bill with a different claim. 

This is where new billers get lost: the separation. There are two claims that come from the same trip to the operating room. Medicare handles them separately and charges different fees for each. Denying one does not automatically deny the other. 

This works a lot like medical coding in hospital billing, which also splits fees between the building and the professional. But ASC billing has its own rules and list of processes that are covered, so the two can’t be used together. 

How Medicare Pays Ambulatory Surgery Centers 

Medicare pays ASCs through a system that is managed by CMS and is called prospective payment. The main idea is simple: CMS releases a list of covered surgical procedures, assigns each a payment indicator, and updates the rates each year through the CY 2026 OPPS/ASC final rule. 

Addendum AA lists the covered surgeries and their costs. Addendum BB talks about extra services that are covered. Payment signs show how Medicare pays for a service, for example, whether you pay for it separately, it’s included in the center fee, or it’s not covered at all in an ASC setting. 

Procedures that use a lot of devices work a little differently. When the cost of the implant is a big part of the total cost, CMS pays for the device part individually. The claim must include the cost of the gadget in a certain area, and proof of what was inserted must be given. 

Before any of this applies, the ASC has to be enrolled with Medicare. Surgical facility credentialing and enrollment has to be complete before Medicare will process a claim from your center. For surgery practices working through that enrollment, our guide on credentialing companies for surgery practices covers what the process involves and who handles it well. That step gets skipped over in billing guides, but it’s the foundation everything else sits on. 

How to Bill an ASC Claim, Step by Step 

Step 1: Verify Coverage and Prior Authorization 

Make sure the procedure is on Medicare’s list of covered surgical procedures before the patient goes under the knife. Some procedures are not paid for in an ASC setting. It does not matter how the claim is coded. 

Also, make sure you know if you need to get permission first. For some procedures, some commercial payers and Medicare Advantage plans need it. One of the main reasons ASC claims are turned down is that there isn’t enough authorization. 

Step 2: Capture Charges from the Operative Report 

The operational report is where the truth about the charges lies. You should look at the operational note, not the schedule system or the pre-op paperwork, to find out about the main treatment, any secondary operations that were done, devices that were used, and any other services that were paid for separately. 

This is the most important place for charge entry services. If you enter a charge from a scheduling note instead of a signed operative report, you are asking for an audit or a denial. 

Step 3: Code CPT and HCPCS 

Use the correct CPT codes for each procedure performed. You’ll need the right HCPCS Level II codes for implants and gadgets. Your medical coding services team should match codes to the surgical records, not to what was planned before the surgery. 

NCCI edits and MUEs work the same way for ASC claims as they do for physician claims. Make changes before sending in. If an NCCI conflict goes away in the scrubber, it doesn’t turn into a denial. 

Step 4: Add Modifiers 

Before you make the claim, make sure the variable table is correct. The next part goes into more depth about this. 

Step 5: Complete the Claim 

The ambulatory surgery center is named in Medicare ASC claims as “place of service 24.” The NCPI for the ASC should be in item 33a of the CMS-1500, not the NCPI for the surgery. Medicare says that ASCs have to agree to be assigned on all claims, so that box is always checked. 

Step 6: Submit and Follow Up 

Send electronically through the 837P and keep track of how it is being handled. Claims that haven’t been moved in 30 days need to be reviewed for payment posting and active follow-up needs to be done before the deadline for filing. 

ASC Modifiers You Need to Know 

The modifier table for ASC billing is shorter than what physician offices deal with, but every modifier on it carries real payment consequences. 

Modifier	When It Applies	Payment Effect
73	Procedure cancelled before anesthesia administered	50 percent of the ASC facility fee
74	Procedure cancelled after anesthesia begins or after procedure starts	100 percent of the ASC facility fee
52	Reduced services (procedure partially performed, not discontinued)	Reduced payment; not subject to the multiple-procedure discount
RT / LT	Right side/left side	Identifies laterality; used when billing bilateral procedures on two lines
FB / FC	Item furnished without cost/with partial cost	Required for no-cost or reduced-cost implants
PA / PB / PC	Wrong body part/wrong implant/wrong patient	Surgical error modifiers
TC	Technical component	Used for certain radiology services billed separately

Medicare ASC claims do not accept modifier 50, which doctors use for treatments that involve two people. Medicare will not pay for a treatment done on both sides when an ASC claims it with modifier 50. Report bilaterals on two different lines, one with the modifier RT and one with the modifier LT. 

When a service is different from another procedure on the same day but doesn’t meet the usual conditions for NCCI exceptions, modifier XU shows up in ASC billing. Use it carefully, and only when the instructions require it. 

Modifier 73 vs. 74 

The time the process stopped is what makes 73 different from 74. When a procedure is canceled before anesthesia is given, modifier 73 is used. Something changes before anesthesia is given to the patient after they arrive and are getting ready. Then, the ASC receives half of the facility fee to cover the work they did preparing the patient. 

Modifier 74 is used when the procedure is canceled after the anesthesia has been given or after it has already begun. The ASC is paid in full even if the procedure doesn’t finish because resources were used and the patient was asleep. 

Multiple and Bilateral Procedures 

A multiple procedure discount is given by Medicare when more than one covered surgical procedure is done at the same time. The operation that makes the most money is paid at the full ASC payment rate. For every other covered treatment done at the same time, 50% of the bill is paid. 

A few lines are not affected by the 50% discount. Modifier 73 lines are paid at the existing 50% rate; it is not reduced further. The extra multiple procedure decrease does not apply to modifier 52 lines, which show operations that are only partly done. 

This deal can be used for modifier 74 lines even if they’re not the highest-paying lines in the session. 

Do not use modifier 50 for Medicare treatments that are done on both sides. Write your report in two lines. The bilateral policy is different for each procedure code, and for some codes, the bilateral payment is already included in the ASC rate. Before assuming that both lines pay 100%, look at Addendum AA to find the exact payment indicator. 

Implants, Devices and Ancillary Services 

The cost of the implant makes up a big part of the total cost of a procedure that uses a lot of devices. Medicare pays the device part separately from the facility fee. However, the implant cost must be included in the claim in the correct field, and the surgical note must clearly state what was inserted. 

Implants that were given to the ASC for free are marked with the modifier FB. Modifier FC is used for partial-cost implants. Both have an effect on how Medicare figures out the separate payment for the device. 

Implants are often handled differently in business contracts. Some payers pay for implants at cost plus a set amount. Before thinking that private device payment is the same as Medicare, check the contract. 

Commercial, Workers’ Comp and Out-of-Network Claims 

Contracts have different rules for commercial payers. Some private plans pay ASCs based on a portion of Medicare’s rates. Others directly address the amount of facility fees. Different payers may prefer the UB-04 over CMS-1500 facility claims, and their documentation standards may also differ. 

Medicare’s ASC payment method is not used for workers’ compensation. Instead, state fee plans are used. It is up to each state to decide how much to pay for ASC treatments, and those plans are changed on their own timeframes, not on the same schedule as the annual Medicare OPPS/ASC final rule. 

Because payer networks change so quickly, out-of-network claims are becoming more common. Before you send out-of-network facility claims, make sure you know the balance billing rules in your state. Some states have limits on how much an ASC can charge a customer who is not in their network. If they bill more than that limit, they could break the law. 

Common ASC Billing Errors That Cause Denials 

Most ASC claim denials trace back to a short list of repeatable mistakes. Surgery that isn’t on the list of surgeries that Medicare covers: 

• The wrong modifier for a “discontinued procedure” is 73 when 74 should be used, or vice versa. 

• Not getting permission ahead of time for a commercial or Medicare Advantage plan 

• A procedure on both sides was billed with modifier 50 instead of two lines with RT and LT. 

• Implant costs aren’t shown on claims for medical devices. 

• Operative documentation is missing. 

• Ancillary services bundled together and billed separately 

If the cleaner changes are made right, most of them will be caught. The ones that get away are usually the ones where there isn’t enough evidence: the claim code is correct, but the relevant note doesn’t back it up. 

Read the guide on common medical billing denials and how to avoid them, along with this one, to get a better idea of how these patterns show up in different types of claims. 

In-House or Outsourced ASC Billing? 

When the volume is manageable and the team has real ASC experience, small surgery centers can handle billing on their own. The problem is that ASC billing knowledge doesn’t transfer easily from a doctor’s office. Staff trained in E/M coding need retraining on payment signs, processes that require many devices, and the differences between modifiers 73 and 74. 

ASCs that are bigger or have a lot of denials usually do better with a dedicated billing partner. When you mix specialty medical billing knowledge with targeted reject management, you can get more money back from old claims and keep new ones clean. 

Credex Healthcare handles all ASCs’ billing needs, from collecting charges from the operation report to handling denials. This is part of a full revenue cycle management process based on how surgery centers typically file claims. This post explains the difference between medical billing and RCM, so you can make an informed choice about how to set up your business office. 

If you’re comparing vendors, the ranked list of the best ASC billing companies covers the field with specific details on timelines, pricing structures, and what to ask before signing. 

FAQs 

What claim form does ASCs use for Medicare?

The CMS-1500, which maps to the 837P computer exchange, is how ASCs send Medicare bills. You can find the ASC setting in Place of Service (PoS) 24. The building NPI goes in Item 33a. All ASC claims must be assigned to Medicare.

Do ASCs use modifier 50 for bilateral procedures?

It’s not for Medicare. If you use modifier 50 on a Medicare ASC claim, it will be denied because Medicare doesn’t accept it. Instead, use two different lines, one with RT and one with LT.

What’s the difference between modifier 73 and 74?

Modifier 73 applies to treatments canceled before anesthesia is administered and is paid at half the facility fee. Modifier 74 is for treatments that are canceled after the anesthesia has been given or after the operation has begun and are paid for in full.

How does the ASC multiple procedure discount work?

Medicare pays 100% of the ASC rate for the most expensive covered treatment in a session. All other covered treatments done at the same time are paid for in full. The extra decrease does not include modifier 73 lines and modifier 52 lines.

Why are ASC claims denied?

Most ASC denials are caused by a procedure not being on the covered list, not having prior authorization, using the wrong discontinued-procedure modifier, billing twice with modifier 50, or having paperwork that doesn’t back up the claim. Detailed prevention strategies are in our guide on how to reduce claim denials.

Get Your ASC Paid Correctly 

Because ASC billing is so specific, general billing experience doesn’t cut it. Facility fees, payment signs, the difference between modifiers 73 and 74, and reporting procedures that use a lot of devices all need people who know the rules and can check them against up-to-date CMS sources, not old memories from last year. 

Credex Healthcare starts every ASC engagement with a medical billing audit services review: claim accuracy, modifier usage, packaged service compliance, and AR aging by payer. No commitment is required. You find out exactly what’s recoverable and what’s costing you before deciding anything else.