Institutional Billing: How to Find Your Conversion Factor

Institutional Billing: How to Find Your Conversion Factor

For institutional billing, identifying the correct conversion factor is key to saving time and billing accurately.

The Hospital Outpatient Departments and Ambulatory Surgical Centers Fee Schedule is a testament to just how convoluted California workers’ comp billing can be — even the schedule’s title is long and messy. Among its many complications are the county and hospital-specific wage-adjusted conversion factors, which providers must include when calculating reimbursement amounts.

These conversion factors can be tough to identify, and are always subject to change.

Cringeworthy Calculations

The outpatient/ASC fee schedule spans California Code of Regulations (CCR) codes 9789.30 through 9789.39. To say the least, it’s a doozy.

Labor Code 5307.1 mandates that reimbursement for services provided in a hospital outpatient department cannot exceed 120% of the Medicare fee for the same services. Reimbursement for ASC services cannot exceed 80% of the Medicare Hospital outpatient fee schedule.

That’s the first major twist: ASC reimbursements are not calculated based on Medicare’s ASC fee schedule. Instead, ASC reimbursements derive from Medicare’s hospital outpatient fee schedule.

It’s a twist we’ve pointed out before, and one over which claims administrators and providers continue to stumble. Throw in Ambulatory Payment Classification (APC) relative weights, status indicators, and a hellish buffet of fee-affecting conditions, and outpatient/ASC reimbursement gets very hairy, very quickly.

Given all that intricacy, it’s par for the course that location-specific adjustments add yet another level of complexity to reimbursement calculations.

Finding Your Conversion Factor

For ASCs, the county in which the service is rendered determines the applicable conversion factor. For Hospital Outpatient Departments, the fee schedule assigns each specific hospital its own conversion factor — with an exception for unlisted hospitals.

ASC Conversion Factors

County-specific conversion factors are located in Table A of CCR § 9789.34. The table is downloadable as a PDF or CSV file from the Division of Workers’ Compensation (DWC) Official Medical Fee Schedule (OMFS) web page, and lists the county-specific wage index and wage-adjusted conversion factor for all 58 counties.

Hospital Outpatient Conversion Factors

For Hospital Outpatient Departments, Table B of CCR § 9789.35  lists 299 hospitals by their assigned provider number, along with the wage index and wage-adjusted conversion factor for each. Table B is also downloadable as a PDF or CSV file from the DWC website.

Importantly, § 9789.34 mandates that if a hospital is not listed in Table B, the provider must calculate reimbursement according to the ASC fee schedule (emphasis ours):

...the “adjusted conversion factor” and wage index values are incorporated by reference, for services rendered by hospital outpatient departments not listed in Section 9789.35 (Table B) and services rendered by ambulatory surgical centers on or after the date the Administrative Director Order becomes effective...

Be sure to refer to the correct tables, as the DWC web page maintains outdated and superseded update orders, including a mistaken version of the most recent update to Table A, since corrected.

Note also that per CCR § 9789.32, critical access hospitals, hospitals excluded from acute Prospective Payment System (PPS), and out-of-state hospital outpatient departments and ASCs are exempt from the OMFS.

It’s supremely complicated, but accurately calculating reimbursement for outpatient/ASC services depends on keeping up to date with the latest information and DWC orders. Of course, there is one way to drastically simplify these calculations: using dedicated software specifically designed for workers’ comp.

Need ASC billing? We’ve got you covered. Our Work Comp Wizard’s OMFS Calculator includes the ASC Fee schedule, so you can nail the correct reimbursement every time. Try the Wizard free today.


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