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Medicare Reimbursement - Clinic Settings Essay

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Medicare Reimbursement for Clinic Settings

Hospitals often look to physician clinics as opportunities to expand services, grow market share and protect referral sources. For several reasons, it is often difficult to integrate physician clinics and successfully operate them. To potentially improve operations, hospitals should analyze the structure of physician clinics to verify they are receiving all eligible Medicare reimbursement.

Each arrangement for a clinic operation has its advantages and disadvantages, different requirements and varying degrees of effort to transition (training, operational changes, etc). Some arrangements are:

Provider-based status—Operations with a large population of Medicare beneficiaries should be considering provider-based status. Provider-based arrangements allow two Medicare payments, a professional fee and ambulatory payment classification (APC) payment, which is usually greater than the global professional fee payment under a freestanding clinic arrangement. Additional advantages may include reduced operational costs because of more access to hospital resources.

A change to provider-based status requires adjustments to existing operations. Two bills (CMS1500 and UB04) will be submitted. The clinic will need to function as a department of the hospital. The clinic manager will need to report to hospital management; benefit structures must generally be the same as for other hospital employees and the clinic must present itself to the public as a part of the hospital. Recognize that Medicaid and payers other than Medicare may not provide additional reimbursement for provider-based clinics compared to freestanding clinics.

Rural Health Clinic (RHC) status —To become an RHC, you must be located in a federally designated Health Professional Shortage Area (HPSA) or medically under-served area, or in an area designated as under-served by the governor and approved by the Department of Health and Human Services (HHS). HHS...

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