CMS has clarified physician supervision for hospital based clinics. This expert CMS training articles gives you a rundown on the provider based status. First of all, RHCs, FQHCs are special. Some of this applies to them. Some of it doesn’t, okay? Freestanding is the opposite of being provider based. And you can think in terms of a very simple example, a freestanding physician run clinic not associated with anybody else with any hospital or anything, just out there by itself.
And then of course provider based is that basically we sometimes use the word “hospital based”. But you can have provider based clinics with other entities that have provider agreements with Medicare. In other words, in theory, we've not seen this yet but in theory, a skilled nursing facility could establish a provider based clinic
When we use the word freestanding, this is an organizational concept. It is not a physical structure concept as per healthcare guidelines laid down by CMS . A hospital literally has a freestanding clinic inside the hospital. It's not organized as provider based. It's not run as provider based. It is probably renting space from the hospital. It is freestanding. Remember that's an organizational concept, all right?
Transmittal 87: Now Transmittal 87 was issued and within about two weeks, it was withdrawn. If you're going to be studying the provider based rule and you're going to have anything to do with the provider based clinics and freestanding and all of these other stuff, we want you to get Transmittal 87. Now, keep in mind, it has been withdrawn. But the tanner and tone and direction in that particular Transmittal is very revealing of where CMS wants to go and eventually where they will go and that's going to herald some major changes as well.
But what about the Office of the Inspector General, what do they think about these provider based clinics? Well, their stance is very simple. We shouldn't have these things, our expert suggested in a medical compliance conference. They shouldn't even exist. There shouldn't be any payment differential if a service is provided in the freestanding clinic or provider based clinic or wherever it's provided, the payment should be the same.
So the OIG certainly has their opinion about this. CMS hasn’t caved in yet. But a lot of this economic advantage would go away years ago. But it hasn’t. And it doesn’t appear that it is going to go away.
Medical Billing for freestanding medical clinics
You just do it on the 1500, place of service generally is 11 which is for office. If you're doing it in a provider based setting, you will file the 1500, UB04 for technical. The place of service will be 22 hospital of patient.
Now, here, we have to be a little bit careful everyone because there are into situations where hospitals will have specialty clinics. And we discover that the doctors are doing their own medical billings. They're doing their own 1500s. Hospital doesn’t do it for them. And we discover after the fact that they're using place of service 11 instead of place of service 22.
Now, of course the hospitals first thought is, “Well, that's not our problem. That's the doctor’s problem. The doctor has been overpaid.” Well, true. It is the doctor’s problem. CMS made it quite clear that if the doctor is not reporting place of service correctly, it's the hospital’s fault. It's the hospital’s fault. They say it right in the Federal Register because you hospital have control over that doctor because they're on your medical staff.
Medicare site of service differential, this is the reduction in payment that a physician receives when he or she the physician provides services in a facility setting because the facility setting or the facility is filing the UB04. So they get technical component payment.
So since the doctor’s overhead has been decreased, it makes sense. It makes sense that there would be a decrease in payment to the doctor. And this is called the site of service differential.
Now, if you want to see this and calculate how much it is, go to RBRVS. Or better yet, go out and get the fee schedule off the Medicare website. And you'll see that they have RVUs for facility, RVUs for non-facility as per Medicare guidelines. And you can go ahead and go in and subtract things out and see how much the doctor actually loses in these cases.
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