Meyer provider based status lha health law symposium 11-5-14

11/6/2014 Conrad Meyer JD MHA FACHE 1

Physician Integration: Provider Based Practices and the OIG

A PRIMER FOR NAVIGATING POTENTIAL ISSUES FOR BRINGING DOCS TO YOUR FACILITY.

Conrad Meyer JD MHA FACHE

Health Care Sections

Chehardy Sherman Law Firm

[email protected]

(504) 830-4141

mailto:[email protected]

Issues for discussion

Provider Based status? Why is it a big deal?

OIG 2014 Work plan and provider based status (PBS)

Issues dealing with compliance

Operations for provider based

Billing issues – Split v. Global

42 CFR 413.65 – Definitions for PBS

How to comply with PBS for integration?

Obligations for providers/facilities relating to PBS

Attestation?

Review of increased PBS revenue

Compliance, compliance, compliance

11/6/2014 2Conrad Meyer JD MHA FACHE

What’s all the fuss about PBS?

Continued push for integration between physicians/facilities

Hospitals can consider their physician practices “provider based” or

freestanding; however, payment implications for PBS compared to

freestanding are significant.

Hospitals prefer PBS due to higher reimbursement

Usually higher reimbursement than MPFS

Compliance requires cost report to include PB cost

CMS – concerned about failure of hospitals to meet PBS requirements

OIG work plan focusing on PBS status – compliance 2014

Use of audits to recoup overpayments will continue to increase


Provider Based Practices

As a department of the hospital, the practice may be paid for services from

Medicare and Medicaid based upon this PBS

The hospital will generate a charge on a UB-04 and the physician professional

charge on a separate CMS 1500 claim form. Because billing is under PBS –

professional fees are reduced.


PBS Issues

TJC has provided some feedback regarding PBS issues from some of its

surveys including issues related to lack of medical record integration between

hospital and provider based clinics.

Place of Service (POS) coding errors dealing with processing Part A and Part

B claims

If hospital operates provider based clinic and CMS determines hospital/PB

Clinic is not in compliance – fines and repayment of claims will result.


PBS Requirements

42 CFR 413.65 dictates the requirements that a facility or an organization

must meet to be considered PBS.

Reg defines what operations are part of a Medicare certified provider

Providers include: Hospital, Critical Access Hospital (CAH), SNF, Home

Health Agencies (HHA), ASCs, Comprehensive Outpatient Rehab Facilities

(CORF), Hospices, ESRD facilities, IDFTs with some limitations, Rural

Health Clinics (RHCs), FQHC, Certified Mental Health Center (CMHC).

CMS defines the provider as the hospital and provider based to mean hospital

based.

Provider based status means – the relationship between the main provider

(Hospital) and a PB entity or department of the provider (Hospital), remote

location of a hospital, or satellite facility – essentially a department of the

hospital providing outpatient services


42 CFR 413.65

42 CFR 413.65 does not apply to determine PB status of the following

providers:

ASCs, CORFs, Hospices, HHA, SNFs,

Inpatient Rehab Units,

ESRD facilities,

IDFTs with some limitations (Labs paid only on fee schedule),

PT, OT, ST – unless in CAH,

Ambulance,

Non-revenue producing depts.

Reg only applies to HOPD and RHCs


42 CFR 413.65 Definitions:

Main provider: a provider that either creates, or acquires ownership of,

another entity to deliver additional health care services under its name,

ownership, and finical and administrative control.

Campus: physical area immediately adjacent to a provider’s main buildings,

other areas and structures that are not strictly contiguous but located within

250 yards.

Department of a provider: a facility or organization that is either created by,

or acquired by, a main provider for the purpose of furnishing health care

services of the same type as those furnished by the main provider under the

name, ownership, and financial and administrative control of the main

provider.

The department is not licensed in its own right and by itself cant participate in Medicare;

COPS does not apply to department as an independent entity.

Must be identified by signage and/or communication efforts as owned by the main provider

using marketing, websites, etc.


42 CFR 413.65

Definitions:

PB entity: separately certified provider created by, or acquired by, a main

provider for the purpose of furnishing health care services of a different type

from those of the main provider under the ownership and administrative and

financial control of the main provider.

Remote location of Hospital: another site for inpatient services.

Free Standing Facility: entity that is not integrated with a main provider, a

department of a provider, a remote location of a hospital, satellite facility, or a

provider based entity


CMS Requirements

Universal Provider Based Department requirements that applies to all

facilities or organizations seeking PB Status:

Common licensure for both main provider and dept – if allowed by State Law

Financial integration:

Operations are integrated between facility and main provider – shared income/expenses,

Must be included in allowable cost centers on Cost Report – just as any other hospital dept,

and

Must be included in main provider’s trial balance.

Clinical integration:

Same clinical oversight as any other hospital dept.

Medical records should have a consistent retrieval system for charts to be readily available at

all locations – See TJC comments

Medical Staff of hospital have clinical privileges at site/facility

The medical director maintains a reporting relationship with the chief medical officer of the

main provider that is similar to any other hospital dept.


CMS Requirements

Universal Provider Based Department requirements that applies to all

facilities or organizations seeking PB Status:

Public Awareness: must be held out to public and other payers as part of the

main provider

Obligations:

Must comply with antidumping rules

Must bill with correct site of service

Must comply with the terms of the provider/hospital agreement

Must comply with non-discrimination policies

Must treat all Medicare patients as hospital outpatients

Comply with issues related to co-insurance liability for beneficiary (for outpatient and

physician service)

Notice to patients (Amount of liability, explanation of coinsurance liability for both outpatient and physician

services); estimate of charges, must be provided before delivery of services.


CMS Requirements

Off Campus Sites:

Required Management Contract (MSA/PSA) needs:

Provider control is clear in Policies and Procedures

The facility or organization is operated under the same organizational documents as the main

provider. For example, the facility or organization seeking provider-based status must be

subject to common bylaws and operating decisions of the governing body of the main

provider where it is based

Provider must employ all non-management staff members who provide patient care

(excluding physicians and mid-levels)

Management and Senior Management must follow provider policies

Manager’s policies must be approved by provider

Reports to provider must be contained in policies/procedures

Employment of site staff members subject to provider approval process


CMS Requirements

Off Campus Sites Cont.:

Common Ownership – same legal entity and governing body

Administrative and supervision as any other hospital dept. by main provider

Facility is under direct supervision of the main provider

Accountable to governing body of main provider

Accounting functions done by same employees – billing, HR, Benefits, Salary, and

purchasing

Location:

Must be within 35 miles of main provider or meet market share test.

Market share – 75% of patients served are same as 75% of patients in contiguous zip codes

of main provider

Management contract rules apply


PB Clinics

Requirements:

Provider-Based Clinic may be on the hospital’s main campus or within 35 miles of the main

campus

Must operate under the Main Provider’s (Hospital’s) license unless state law mandates

separate licensure

PBC has ready access to the hospital’s and other provider-based clinics’ medical records

Physicians and staff operating within the clinic are under the same reporting structure as all

other hospital departments

PBC is incorporated into the hospital’s organizational chart


PB Clinics

Requirements:

Directors and managers are involved in the same meetings as their peers in other hospital

departments

Professional staff must have hospital privileges

Support staff receives the same in-service training as the clinical-support staff of the hospital

as applicable

Hospital policies on infection control, safety, disaster plans, etc., apply at Provider-Based

Clinic

Signage, name badges, business cards, letterhead, logos, billing invoices, voicemail, etc. are

identified as that of the hospital

Provider-Based Clinic appears on the hospital’s trial balance as an identifiable cost center

Must use the same Charge Description Master (CDM) as the hospital

Medicare patients must be registered as hospital patients


Hospital Obligations

Place of service (POS) indicator for professional component must be billed at

facility RVUs.

Cannot use POS 11 – Office Based Physicians

Must use POS 22 – Hospital Outpatient Services

Ensure that COPS are adhered to by hospital and any PB site

Remind PB site of compliance with non-discrimination rules.

EMTALA –

On campus – apply as part of the hospital (250 yards of main buildings)

Off campus – only if held out as Urgent Care or at least great than 33% of patient visits are

unscheduled


Hospital Obligations

Treat all Medicare patients as hospital patients – Bill facility/tech component

on UB-04

Inpatients of hospital – 3 day payment window applies to all facility

components for services in PB entity, and all disgnostic and related

therapeutic professional components

Off campus sites must provide dual co-insurance to each patient (see above).


Hospital Obligations - Claims

In many organizations, billers are either knowledgeable about Part B

(physician) or Part A (hospital) claim submission requirements, but they

seldom know both.

Part B billers are accustomed to identifying correct service provision on a

claim by using modifiers.

But split-billing a physician office visit for a provider-based clinic is not really

similar to billing a procedure or diagnostic service with modifiers.

There are no modifiers equivalent to 26 (professional component) and TC

(technical component) that would allow a provider to indicate to CMS

whether it is billing “globally” or “split-billing” the professional component

and the technical component.

Billers must be knowledgeable about POS 22 for 1500 claim forms


Hospital Obligations – Split Billing

Split Billing Reimbursement—A structure under which two separate bills, for

professional and technical reimbursements, are generated for a service.

Professional reimbursements go to the physician/physician practice and

technical reimbursements to the hospital.

Professional—Billable services provided by physicians. These include

physician consultation, physician interpretation of an x-ray, CT Scan or MRI ,

or physician interpretation of a laboratory test, often in the form of a written

report. Reimbursement is directed to the physician/physician practice.


Hospital Obligations –

Split Billing – what is it?

Definitions:

Technical—Billable services provided in a hospital setting. Includes lab, x-rays

and any other non-professional services. Reimbursement is directed to the

hospital.

Global Reimbursement—A structure under which one bill is generated for

each service. The service is billed and reimbursed at a global rate that includes

one global payment for the professional and technical components. All

reimbursements go to the physician practice.



Split Billing – what is it?

The Hospital incurs cost associated with facilitating the physicians and in turn

receives technical component reimbursement for services conducted by the

physicians in the hospital facilities. The physicians receive fee schedule rates

for the professional component.

The technical component and the professional component associated with

each service is billed separately.



Global or Non-Facility or Private Practice

A service is billed and reimbursed at a global rate that includes one global

payment for both the professional and technical components. The

combined payment is designed to compensate physicians operating in a

private practice and covers overhead and technical expenses associated with

operating the practice.

Applies to Medicare/Medicaid reimbursement as a hospital owned practice

wherein patient receives billing for both facility and professional charges.



Pros and Cons of Split Billing (PB Billing)

Pros

Ability to generate more total net revenue

The total of the professional and technical components are usually more than the global

payment for the same service.(1)

Split billing is commonly used by hospitals for surgery and radiology services.

The combination of professional and technical should be greater than the

global reimbursement, as would be the split billing reimbursement greater

than the global reimbursement.

The theory supporting this reimbursement is that if a service is performed in a

hospital (as opposed to a private practice setting), the technical component

should be greater because the hospital has more overhead costs than a private

practice.

Might not necessarily by true with advent of G0463 HCPCS for 2014.



Pros and Cons of Split Billing (PB Billing) Cons

More complex to manage and administer

Not all payors participate in split billing

The receipt of two bills are confusing and oftentimes a source of patient

dissatisfaction

The need for allocation of revenue between hospital and physician

organization must be considered (could be a pro or a con)

The site of service considerations as to costs are a factor; often this is a

positive to split billing in that greater margins result from billing in this

manner at the practice level as opposed to at the hospital

The possibility of CMS moving toward bundled payments could create

challenges to split billing scenarios in the future; this can lead to

conflicting incentives that may affect decisions about the care to be

provided (G0463 HCPCS)


Hospital Obligations – G0463

Effective January 1, 2014, all outpatient clinic visits furnished to Medicare

patients (regardless of on or off campus) require use of single HCPCS Level

II code, G0463, under OPPS.

Physician component will not be affected.

G0463 rate for 2014 is $92.53.

Eliminates need for CPT E/M codes 99201-99205 (New patient) and 99211-

99215 (established patient).

G0463 – removes acuity mix from payment methodology and could affect

future PB integration strategies.

Emergency E/M codes are not affected by G0463 at this time – deferred for

further study.


Hospital Obligations – Impact of G0463


Private Payors

Private pay: to bill or not to bill commercial / private payors as provider-

based?

All Medicare patients must be billed as hospital patients – 413.65(g)(5)

Have obtained CMS regional office confirmation that this does not apply to:

Medicare Advantage (HMO) patients and

Medicare secondary

Private pay point-of-care payment for provider-based services by patient may

be significantly higher than “free-standing” service!

Educate staff for appropriate explanations to patients/payors


Example

Outpatient Visit (Office)

Medicare Medicare

CPT Level 3 – 99213 E/M Charge Allowable APC Payment Co-pay

Free-standing Clinic $ 300.00 $ 86.56 $ 69.25 $ 17.31

Total Reimbursement $86.56

Provider-Based Clinic

Professional Fee $ 200.00 $ 62.41 $ 49.93 $ 12.48

Facility Fee $ 100.00 $ 92.53$ 55.52 $ 37.01

$ 300.00 $ 105.45 $ 49.49

Total Reimbursement $ 154.94


Attestations Application for provider-based entity, or pre-approval by CMS is NOT

required!

Eliminated by 2003 FY IPPS regulations and 42 CFR 413.65 now says may

submit “attestation”:

Notify CMS of provider-based locations

On Campus – just attestation

Off Campus – supporting documentation

Hospital states that applicable requirements have been met

Attest to meeting obligations for provider-based operations – to MACs

May notify CMS of material changes

Attestation of provider-based status, and meeting the requirements for PB is

“voluntary.”

Per CMS, provider-based operations depend on hospital’s self- monitoring

process

Protects from overpayments in case requirements are not met for PB Status.


Attestations - Limitations

If CMS accepts the attestation following review, it will limit recoupment if the

facility is later determined to be out of compliance.

Without a reviewed attestation on file, CMS can recoup as far back as the

applicable statute of limitations allows.

If subsequent review determines that the criteria were not met, the additional

money reimbursed due to billing as provider-based, rather than freestanding,

will be recouped.


PB Benefits

Miscellaneous benefits or deterrences

340-B benefits follow provider-based status – drugs used at PB departments are eligible for

340-B discounts.

Residents in provider-based location (department) count for IME / DME

FTE count

Direct payments (DME): These payments cover a portion of the direct costs of training

residents, including stipends, teaching physician and resident salaries and benefits, and

educational activity costs. DME is based on a prospectively determined per-resident amount,

weighted FTEs, and Medicare patient load.

Indirect payments (IME): These payments compensate for the anticipated higher cost of care

in teaching hospitals based on the ratio of FTEs to hospital beds. A portion of these funds

are disproportionate care funding, which subsidizes uncompensated care.


PB Benefits

Physicians in outpatient departments as POS 22, but not I/P or ER (POS 21

& 23) count for EHR incentives

Cannot use Stark group practice compensation methodology for ancillary

bonus pools

If docs employed by hospital, by definition not group practice

Medical Group, Inc., is group practice; however, ancillaries will not be part of

its business; will be in hospital


PB for a new location

Any time a provider (hospital) adds a new service location, the provider is

required to report it to the MAC within 90 days of the effective date of

change, regardless of whether the provider is filing a provider-based

attestation or not.

Per 42 CFR 424.520(b), failure to report such changes within 90 days may

result in the deactivation or revocation of the provider’s Medicare billing

privileges. These changes must be reported by submitting a CMS form 855.

File the 855 first so that it will have already been accepted by the MAC by the

time any provider-based attestation is filed.


Physician employment

Not required for PB status

Physicians must be compliant and bill POS 22 for Medicare/Medicaid

If hospital is not billing, must have a billing agreement requiring physicians to

bill POS 22 and allow hospital to audit

Hospital is ultimately responsible

Could be a risk if physicians cherry pick patients as private v. hospital

outpatient

All patients seen in PB locations must be admitted to hospital, processed

under hospital record system, and protected by hospital policies under COPS.


La. Admin Code. tit. 50, pt. V, § 5111

A. In order to receive Medicaid reimbursement as a hospital provider-based outpatient facility, an off-

site campus of a hospital which provides outpatient services shall meet the provider-based

requirements for Medicare as established in 42 CFR 413.65, except when the provisions in §5111.B

are applicable.

B. Closure of a State-Owned and/or Operated Hospital. If a state-owned and/or operated hospital

ceases to do business and surrenders its license, the off-site campus of that closed hospital may be

deemed to be “provider-based” for purposes of Medicaid reimbursement only when all of the

following criteria are met:

1. The off-site campus shall comply with the provider-based requirements in 42 CFR 413.65 except that:

a. the off-site campus shall be deemed in compliance with 42 CFR 413.65(d)(2)(vi) if the off-site

campus refers patients requiring inpatient hospital services to either its main hospital provider campus

or to the nearest available inpatient services; and

b. the off-site campus shall be deemed in compliance with 42 CFR 413.65(e)(3)(i) if they are licensed as

an off-site campus of another state-owned and/or operated hospital that is within 100 miles of the off-

site campus.

2. The off-site campus provides outpatient hospital services.


Provider Based – should you?

Analysis of G0463 HCPCS is necessary to determine overall financial impact

to facility as G0463 removes case mix and depending if your facility case mix

could impact negatively if your have increased patient acquity

Audit physicians to determine compliance

Follow the money

Compliance with cost reports



Questions Please contact:

CONRAD MEYER JD MHA FACHE

Health Care Section - Chehardy Sherman

One Galleria Blvd Suite 1100

Metairie, La. 70001

(504) 830-4141

[email protected]

mailto:[email protected]

Healthcare

Meyer provider based status lha health law symposium 11-5-14