Transcript Provider Based - Lessons Learned from the Land of Cheeseheads
Provider Based – Lessons Learned from the Land of Cheeseheads
By David H. Snow Hall, Render, Killian, Heath & Lyman, PC Oregon HFMA February 17, 2011
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Provider Based – Basics
Debunking the myth of: "Provider based clinics" "Provider based billing" There is no rabbit in the hat THIS IS JUST HOSPITAL BILLING Facility fee on a UB-04 Professional on 1500 (unless CAH elects all-inclusive) Just like traditional hospital based doctors in ER, radiology, anesthesiology etc…
Provider Based - Basics
3 Duck Rule: Looks like a duck, Walks like a duck, Sounds like a duck, then...
IT’S A DUCK And…. They will probably beat the Beavers
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Provider Based - Basics
Provider Based = Reverse Duck Rule: Provider Based - If you want to get paid like a HOSPITAL, then …..
Look like a hospital Walk like a hospital Sound like a hospital PB Status is NOT a special payment status - except for certain RHCs
The Various Meanings of "Hospital"
Hospital = the "building" Hospital = the "Provider" – Operations certified by Medicare as "hospital" 5 Hospital = the "Corporation"
Articles of Incorporation
Provider Based - Basics
6 Regulation 42 C.F.R. 413.65 defines what operations are part of a Medicare certified provider (vs. supplier) It determines what services can be billed under the Medicare provider number Provider = hospital, CAH, SNF, HHA, Hospice, CORFs, RHC, FQHC, CMHC Originally 413.65 applied to ALL providers, but was amended in 2002 to effectively limit to hospitals/CAHs
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Provider Based - Exclusions
413.65 Not applicable to PB status of: ASCs, CORFs, HHAs, SNFs, Hospices Inpatient rehab units IDTF’s and labs paid only on fee schedule PT/OT/ST Unless at a CAH or caps suspended ESRD - see 413.174
Ambulance Non-revenue producing departments With exclusions, 413.65 effectively only applies to hospital o/p departments and RHCs
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Provider Based - Exclusions
BUT….
Exclusions based on “No harm ($) no foul” theory - Look Carefully Apply 413.65 even if excepted, or not addressed, if PB status for some reason affects Medicare payments Beneficiary deductible/coinsurance
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Provider Based - Definitions
Main provider - provider that creates or acquires another entity to deliver additional services in its name, etc.
Campus - physical area of main buildings and others within 250 yards Department of a provider - facility or organization that is created or acquired by main provider to provide services in its name etc.
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Provider Based - Definitions
Provider based entity - separately certified provider owned by main provider (traditional “hospital based” concept) SNF, RHC, etc.
Remote location of a hospital another site that furnishes I/P services Freestanding facility - entity that is not provider based
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Provider Based Requirements
Universal PB requirements - all facilities or organizations: Common licensure - if allowed by state law Financial Integration – must be included in hospital trial balance & allowable cost centers on cost report, same as any other hospital department
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Provider Based Requirements
Universal PB requirements - all facilities or organizations: Clinical Integration – Same clinical oversight as any hospital dept: Medical director, QA, UR, etc.
Medical records – unified retrieval system or cross reference Medical staff of hospital have clinical privileges at site/facility
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Provider Based Requirements
Universal PB requirements - all facilities or organizations: Public Awareness – patients must be aware when they enter facility that they are being treated as hospital patients signage, registration forms, phone listings, internet, marketing materials, etc must all use hospital name
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Provider Based Requirements
OFF CAMPUS sites must also meet: Common ownership - same legal entity & governing body Administration and supervision same supervision as any other provider department HR, billing, payroll, benefits, records, purchasing, salary structure done by same employees Location - within 35 miles of main provider or meet market share test Management contract rules apply Joint venture prohibited
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Provider Based Requirements
Required management contract terms - OFF CAMPUS SITES: provider’s control is clear provider employs all non-management employees providing patient care (excluding those that can separately bill – physicians/midlevels) management personnel must follow provider policies manager’s policies must be approved by provider periodic written reports required on-site personnel subject to provider’s approval
Provider Based - Hospital Department Obligations
16 Site of service indicator- professional component must be billed at facility RVUs All terms of provider agreement - deficiencies at any site jeopardize entire hospital provider status Non-discrimination provisions applicable to physicians EMTALA obligations On campus – apply as part of hospital off campus – apply only if held out as urgent care or >1/3 patient visits are unscheduled
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Provider Based - Hospital Department Obligations
Treat all Medicare patients as hospital patients (facility/tech.on UB-04) DRG 3 day payment window applies Off campus sites must provide notice of dual coinsurance (facility/technical & professional components) to each Medicare patient before services provided (unless emergent) Meet all applicable Medicare hospital conditions of participation includes hospital building code!
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Provider Based Requirements
A facility or organization cannot be provider based if all patient care services are furnished under
arrangement
Facility and organization not defined used in definition of department UA defined elsewhere as any contract that prohibits “vendor” from billing Medicare directly
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Provider Based Requirements
Joint Venture Rules ON CAMPUS provider based joint venture allowed if: On campus of provider/owner Can be PB to that owner only No minimum ownership % required Meets universal requirements and obligations (when applicable) Complicated conundrum… Bill by hospital corp, but belongs to JV Requires UA type contract terms OFF CAMPUS site cannot be provider based if operated by a joint venture
Provider Based - In Practice
20 Common Questions/misperceptions Have to employ the docs?
Have to employ all staff?
Must own the real estate?
Don't understand that professional component HAS to be billed as place of service 22 – hospital outpatient (very essence of PB'd) Have to split bill ALL patients on UB/1500 Have to get advance CMS approval Wholly owned subsidiary meets ownership requirement Can you pick & choose PB'd sites?
Only applies to ancillaries Always increases Medicare revenue
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Provider Based - In Practice
Legal/business structure Clinic operations in same corporate entity?
On campus – technically NO, but beware of under arrangement limit – practically Yes Off campus - YES Don’t need to employ physicians - OK to contract for (just like ER/UC) Non-physician patient care staff: On campus - don’t need to employ Off campus - must employ, or contract for, from same source as hospital contracts from if there is a management contract
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Provider Based Attestations
Application to &/or pre-approval by CMS NOT REQUIRED Eliminated by 8/1/02 PPS regulations for FFY 2003 413.65 now says may submit “attestation”: Notify CMS of PB locations State that applicable requirements met Attest to meeting Obligations May notify CMS of material changes Voluntary - self monitoring process
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Provider Based Attestations
No official form published Use CMS "Sample Format" outline from Transmittal A-03-030, April 18, 2003 Send to FI & copy to Regional Office On campus – supporting documentation not required (recommend sending anyway) Off campus - required FI may make determination RO should either approve or disapprove
Provider Based Attestations
Benefits of Attestation: CMS only recoups excess payment Triggers self-review of criteria Supports compliance process Educates staff on requirements 413.65 says - not provider based because believed to be!!!!
STRONGLY RECOMMEND FILING BUT BE PATIENT – FI/RO may be slow We have had non-responses and lost attestations 24
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Financial Impact
Amount of, or even any, increased revenue is not automatic, varies by: specialty payor mix volume rural vs. urban Must do case specific analysis Compare current physician payment to: Hospital based payment: Cost for technical component Physician professional component only “Facility” RVUs
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Financial Impact
Financial Impact - general observations APCs Usually more vs. PFS VERY ROUGH Rule of thumb - $20 30,000 per physician More for procedure based specialists Reflects historical reliance on cost built into APC system – 24/7/365 etc make hospital more costly Can be bigger for CAH PB'd sites Even bigger for CAH based RHCs
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Financial Impact
Significant portion of increase can be in co-pay 20% of hospital technical charge> 20% of physician fee schedule allowed charge for facility/technical Consider PR impact of two co-pays Often covered by Medigap policies
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Provider Based Billing Payment Example #1 - How it Works
Chest X-ray Charge Medicare Allowable* APC* Medicare Reimburses Coins.
Freestanding clinic - 71020 Provider-based clinic - Professional fee - Facility fee Total Payment - PB clinic
Increase in reimbursement/visit
$ 140.00
$ 31.34
$ 63.00
$ 10.79
$ 77.00
$ 8.63
$ 2.16
$ 48.19
$ 39.18
$ 9.01
$ 47.81
$ 11.17
$ 22.74
$ 4.90
Increase %
*Portland, Oregon 2011 Medicare fee schedule; Portland 2011 APC payment rate.
$ 25.07
90.70% $ 6.27
78.10%
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Provider Based Billing Payment Example #2 - How it Works
MRI - lower extremity Charge Allowable* APC* Reimburses Coins.
Freestanding clinic - 73721 Provider-based clinic - Professional fee - Facility fee Total Payment - PB clinic
Increase in reimbursement/visit
$ 1,517.00
$ 415.67
$ 332.54
$ 260.00
$ 67.18
$ 1,257.00
$ 53.74
$ 13.44
$ 366.94
$ 213.81
$ 135.13
$ 285.55
$ 148.57
$ (46.99) $ 65.44
Increase %
*Portland, Oregon 2011 Medicare fee schedule; Portland 2011 APC payment rate. + Capped TC amount based on DRA 2005.
(14.10%) $ 83.13
78.70%
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Provider Based Billing Payment Example #3 - How it Works
CV Stress Test (tracing only) Charge Medicare Allowable* APC* Medicare Reimburses Coins.
Freestanding clinic - 93017 Provider-based clinic - Professional fee - Facility fee Total Payment - PB clinic
Increase in reimbursement/visit
$ $ $ 242.00
242.00
$ 54.73
$ Increase %
*Portland, Oregon 2011 Medicare fee schedule; Portland 2011 APC payment rate.
$ 43.78
$ 10.95
$ $ $ 190.91
$ 149.47
$ 41.44
$ 149.47
$ 41.44
$ 105.69
$ 30.49
241% 278.40%
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Provider Based Billing Payment Example #4 - How it Works
Office/Outpatient Visit - New Patient - Level 1
Freestanding clinic - 99201 Provider-based clinic - Professional fee - Facility fee Total Payment - PB clinic
Increase in reimbursement/visit Charge Medicare Allowable*
$ 185.00
$ 40.91
$ 100.00
$ 25.38
$ 85.00
$ 20.30
$ 5.08
$ 56.03
$ 45.55
$ 10.48
$ 65.85
$ 15.56
$ 33.12
$ 7.38
Increase %
*Portland, Oregon 2011 Medicare fee schedule; Portland 2011 APC payment rate.
APC* Medicare Reimburses Coins.
$ 32.73
$ 8.18
101.20% 90.20%
Conditions of Participation
Come full circle? Yes - no approval required NO, there are now consequences Where rubber meets the road JCAHO survey Hospital selected for State Survey Survey finds that all is NOT well - LSC issues, signage, ???
Used to be - Fix or go free standing Now - recoup prior $$ Jeopardizes entire hospital not just site 32
Conditions of Participation
33 Hospital Facility/Life Safety Code Requirements 3 Levels: application depends on services w/i space Health Care Occupancy – inpatient Ambulatory Health Care Occupancy – "outpatient" 4 or more patients receiving treatment that renders them incapable of taking action for self-preservation under emergency conditions…..
Distance to exits, backup generator, 1 hour firewalls, sprinklers? Etc….
Business Occupancy – everything else including patient services Mixed use buildings: PB'd and FS'g portions LSC applies only to PB'd portion, but May affect other portions – firewalls, etc.
Direct Employment
34 Direct Employment by Hospital ?
Off campus site, AND Management contract (no definition) Applies to workers directly involved in patient care not billable under fee schedule RNs, LPNs, aides, techs, etc.
NOT docs, M/Ls, PTs ?
NOT registration, reception, billing, coders, etc.
Workaround?
Instead of moving patient care workers Move managers – so no management contract Who - site administrator, right to hire/fire?
Public Awareness - Branding
35 Public Awareness – Naming/Branding/Signage THE Hospital name is required – a must Multiple tag lines are fine Community Hospital Mayberry Clinic Spectacular Medical Group Spectacular Health System Hospital does not need to be first or biggest But, avoid fine print " Community Hospital " Not just signage: marketing materials, registration, phone listings, websites…….
Public Awareness - Branding
Public Awareness – Naming/Branding/Signage Multi-hospital example: 4 system hospitals in region – flagship & 3 outlying CAHs 200+ employed docs @ 15 clinic locations All locations provider based to 1 of 4 hospitals Some on campus, some off System going through corporate branding & wanted all 4 hospitals to have the same name We asked CMS regional office No prohibition on hospitals having same name, but….
Won't work here: patients at off campus PB'd clinics won't know which hospital the site is based to…..
Patient needs to know which hospital 36
Public Awareness - Branding
37 Public Awareness – Naming/Branding/Signage PBC of Hospital A in/on campus of Hospital B?
Technically can do – but don't get too cute – inside hospital B too "confusing" for patients Example: Urban System Regional Cancer Program Inner city flagship – DSH/340B eligible Multiple suburban hospitals Put Flagship Cancer Centers at each Suburban Campus, but in separate buildings and be PB'd?
CMS said YES
Mixed Use Sites
38 Mixed Use Sites: Part PB'd – Part FS'g Surveyors don't like comingling – be careful Patient care areas need to be dedicated to one or other for at least block time periods Shared waiting/reception ok?
As long as meet public awareness – signed as hospital There is no public awareness standard for FS'g space Follow Stark exclusive use standards even when N/A because of System Medical Group Don't forget cost reporting allocations Off Campus: >12/31/10 must meet immediately available supervision standard for that site <1/1/11 had to meet NFL Catch rule @ site
Bill All Patients as PB'd?
39 Private pay: to bill or not to bill (as provider based)?
All Medicare patients must be billed as hospital patients – 413.65(g)(5) Have obtained CMS regional office confirmation that this N/A to: Medicare Advantage patients and Medicare secondary Private Pay point of service payment by patient may be significantly higher than FS'g - tread carefully: has lead to bad press – see Wisconsin example, and LAWSUITS – see Washington/Seattle consumer class action example
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Bill All Patients as PB'd?
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Bill All Patients as PB'd?
System Medical Group Scenario
42 Physicians wanted their own entity w/i system Created as wholly controlled subsidiary or sibling of hospital corporation Multiple sites on and off campus operating/billing as FS'g As group evolved/grew - ancillaries tend to be consolidated into hospitals to minimize duplication Medical group "losing" money and being subsidized by hospitals – practice support payments or intra-system transfers
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Current Structure
System, Inc.
Hospital Inc.
Medical Group Inc.
(Various Clinic Sites) Employed Physicians Patients & Payors
System Medical Group
44 Solution ???? – Provider Based Conversion Increases revenue from office services Puts clinic financial operations in same corporation as hospital operations If structured properly makes Medical Group a break even operation, by definition Subjects clinics to same operational requirements as hospital – accreditation/survey Works best with RVU based or similar comp method for physicians, revenue not so much
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A Typical Transaction
(to achieve provider based)
System , Inc.
Hospital Inc.
Clinic Depart ment Business Transfer •Sell or lease assets •Professional Service Agreement •Non-physician staff?
Medical Group Inc.
Employed Physicians
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Typical Provider Based Structure: System MG
System, Inc.
Hospital Inc.
Clinic Depart ment Facility Billing* & PC?
Service Agreement(s) Physicians Staffing?
Management?
Medical Group Inc.
Patients & Payors Employed Physicians * - Facility billing must shift to Hospital – (essence of Provider Based) - Professional component billing does not have to shift, but: •Revenue will go down due to Medicare site of service impact •Medicare revenue would increase if billed by CAH (115%)
Medical Group/PSA Structure
47 Medical group does not have to reassign PC But – then MG may not be breakeven due to POS reduction in Medicare payment PSA comp method will be more complicated – revenue guaranty Think about placing non-PB'd sites in hospital too Does not have to be commonly controlled MG Can and does work with independent MG PSA Comp method is everything to MG Only source of revenue Do Not forget DRG payment window
Provider Based - In Practice
48 Miscellaneous benefits/detriments 340B follows PB'd – drugs used at PB'd departments are eligible for 340B discounts Residents in PB'd site count for IME/DME FTE count Docs in O/P departments POS 22 but not I/P or ER (POS 21 & 23) count for EHR incentives Cannot use Stark group practice comp methodology for ancillary bonus pools If docs employed by hospital, by definition not GP Medical Group Inc is GP, BUT ancillaries will not be part of its business – will be in hospital Services in PB'd site covered by DRG payment window
Provider Based - In Practice
49 Choice of Hospital to be Based to: Sites w/i 35 miles of >1 hospital in a system?
PPS Rural sole community? Extra 7% DSH/340B eligible FTE count for IME/DME <50 beds – HB'd RHC = cost for professional component CAH Facility component cost based Professional component - Method II -115% HB'd RHC = cost for professional component IRF/Psych/LTCH - paid APCs for O/P too
THE END Thank you!
David H. Snow Hall, Render, Killian, Heath & Lyman, PC [email protected]
414-721-0447 #1043923