Provider-Based Strategies
Provider-Based Opportunities
The Medicare “provider-based” status allows hospitals to extend hospital-level reimbursement, quality, and integration to sites of care not located within the four walls of the main hospital buildings. These locations are commonly referred to as hospital outpatient departments (“HOPDs”) or provider-based departments (“PBDs”), among other variations.
Although Section 603 of the Bipartisan Budget Act of 2015 introduced “site neutral” principles, hospitals can continue to develop and benefit from provider-based departments, both on and off of the main hospital campus.
Provider-based status often results in an increase in reimbursement from commercial and government payers, however, the benefits reach further than financial gains.
- Commercial Reimbursement: Favorable reimbursement is obtained in part through utilization of hospital contracts, as opposed to freestanding or other entity contracting, with commercial payers. Commercial payers will extend hospital-level reimbursement to newly established provider-based departments, both on and off the hospital’s main campus, when the process is navigated correctly.
- On-Campus HOPDs: Government payers such as Medicare continue to provide historical hospital-level reimbursement for services rendered within on-campus HOPDs (those generally located within 250 yards of the main buildings or otherwise qualified). Continued development of these locations may benefit your health system.
- “Grandfathered” Off-campus HOPDs: Government payers also provide this favorable reimbursement to “grandfathered” off-campus HOPDs (those established prior to November 2, 2015 and generally located within 35 miles of the main buildings or otherwise qualified). Additionally, providers may alter the services rendered within these practice locations, to optimize offerings and/or reimbursement, so long as the practice location address does not change.
- “Newly Established” Off-campus HOPDs: Although any newly established off-campus HOPDs receive “site neutral” reimbursement from Medicare, there continue to be several benefits for developing new sites. For example, 340B providers can qualify drug administrations and scripts from new off-campus HOPDs, a strategy which Advis’ clients leverage frequently, and commercial / other payers may extend more favorable reimbursement.
- Benefits of Hospital Integration: Under provider-based status, the hospital may take advantage of economies of scale, by operating an ambulatory services network under the parent hospital license/certification. This increases 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 due to centralization under the hospital of the various facilities.
Regulatory criteria to become a HOPD
Under 42 C.F.R. 413.65, there are seven regulatory criteria an entity must abide by in order to qualify as a provider-based entity:
- Licensure of the parent organization
- Ownership and control of the subordinate facilities by the parent hospital
- Administration and supervision of subordinate facilities
- Clinical services must be integrated
- Financial integration between parent and subordinate facilities
- Public awareness such that the provider-based facility holds itself out as part of the main hospital, and does not comingle with non-hospital service providers (i.e., freestanding physician offices)
- Physical location (generally must be within 250 yards of main hospital buildings to be considered “on campus” or within 35 miles of the same to be considered “off campus”)
Let us help you get a provider-based attestation.
A provider-based determination is acquired from CMS through a self-attestation process (commonly referred to as a “provider-based attestation”). Submitting an attestation and receiving the subsequent determination from CMS will assure providers that they are meeting the necessary requirements to protect the benefits described above.
Carefully navigating the process is very important to ensure a positive determination from CMS. This process also serves as a tool to ensure optimum compliance actually exists and is not just a lot of talk or assumptions.
Advis has a great deal of experience with the provider-based determination processes and has always received positive determinations on behalf of our clients.
With the increase in CMS scrutiny on provider-based compliance, and potential for Congressional action to require attestation filings in the future, it is now more important than ever to ensure optimal compliance and operations at provider-based locations.
Our consultants are well versed in provider-based strategies and compliance, contact us today.
