Wednesday, July 22, 2020

A Win for Private Medical Practices

The news for privately held medical practices of late has been bad. Revenue cuts from insurance companies, continuing competition from Hospital Based Groups, the continued selling of practices to Hospitals or simply closing business due to lack of funds.

Friday July 17, Private Practices were given a win by a federal appeals court:

A federal appeals court ruled the federal government has the authority to cut Medicare payments to off-campus clinics to bring them in line with independent physician practices, reversing a lower court’s decision.
The goal of the rule is to reduce a disparity in Medicare payments where hospital-affiliated clinics get paid more than physician offices for the same services. Some critics have said the gap has helped fuel a race towards hospital-physician consolidation.”

So dear readers, this does sound confusing. If you are a provider practicing in the same locality, doing the same work, and billing the same CPT codes to Medicare, why are Hospital-owned providers paid more than non-hospital (private) providers? The answer lies in the place of service:

When a provider bills for your appointment, there are several key pieces of information sent to your insurance carrier so that they'll know both what happened and how to pay. One of those pieces of information is the 'place of service' code. This code lets the insurance carrier know if the facility is an office, a hospital, an ASC (Ambulatory Service Center), or a myriad of other facilities where medical care is rendered. Depending on the place of service, the payment for the same procedure can be more than the standard payment. Hospitals are one facility where the payment is higher.

This affected private practice owners because hospital-owned providers, who worked in a hospital or in a Medical Building next to the hospital, billed the facility code as a hospital instead of as an office. Thus, hospital-owned providers would receive higher compensation for an office visit than would a private practice provider.

So in the end, is this a turnaround for private practices or a little too little, a little too late?
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