Medicare provider-based status allows providers to treat a site of care not located within the four walls of its hospital as part of the main provider entity under its Medicare certification. These facilities are commonly referred to as off-site hospital outpatient departments, or HOPDs. Provider-based status often results in an increase in reimbursement from commercial and government payors, such as Medicare however, the benefits reach further than financial gains.
Under provider-based status, the hospital may take advantage of economies of scale, by operating an ambulatory services network under the parent hospital license, and increase its reimbursement, efficiency, and quality. Capital costs can also be spread among the various subordinate facilities, operating costs will be lower as a result of increased integration, and administrative efficiency will be increased as the administrative processes of the various facilities will be centralized.