DATE:

June 28, 2005

TO:

All Payers of Medical Services for Michigan Injured

Workers

FROM:

Sheila Wilkinson, Health Care Services

Division

It has been brought to our attention that many carriers are denying payment to the freestanding outpatient surgery facilities because the services were billed on the CMS 1500 claim form. Effective February 10, 2005 our rules contained a new billing and payment methodology for the freestanding surgical outpatient facility (FSOF), licensed under part 208 of the public health code.

The method adopted by the Health Care Services Rules requires submission of the charges on the CMS 1500 claim form.  The rules require using modifier-SG to designate the bill as a facility bill and site of service code 24 to identify the service performed in a freestanding surgical outpatient facility (FSOF).  When the freestanding surgical outpatient facility submits the charges on the 1500 claim form, the services must not be returned or denied for the incorrect claim form.  This is a standard billing requirement for freestanding surgical facilities. Please have your computer systems updated to recognize this billing requirement so that the bills may be correctly processed.

The Health Care Services Rules outlining the billing and payment of these services are R 418.10923B and R 418.101023.  Information may also be found in Chapter 15 of the manual. Please review the information and contact Health Care Services at 517-322-5433 should you have any questions.