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  • provider based billing model

    Sorry for all the hospital bashing posts lately... I am just over a year into practice and feel as I haven't even scratched the surface of shadiness of hospital goings on... As I am currently being heavily recruited by the local private practice group things like this make it hard to resist. But, I would like to see if I understand the concept of provider based billing appropriately so I am hoping someone can help. Wonka I am looking your way!

    Hospital based outpatient clinic: As I understand it provider based billing (PBB) splits a charge for certain payers (medicare/Medicaid) into hospital billing (HB) and professional billing (PB) with the two equaling the usual charge. For example... lets say we charge $1000 for procedure X. All privately insured patients are billed $1000, we are reimbursed at negotiated rates with said private payers and my production shows billed services of $1000 and collections of whatever it happens to be for that procedure. Now for Medicare/Medicaid patients undergoing the exact same procedure X, the PB charge is $100 and the HB charge is $900. Again we are reimbursed at whatever rates may be but my production now shows billed services of $100 rather than $1000.

    Is this the correct understanding of the PBB model?

  • #2
    Cant help with billing, but seriously do yourself a favor and make a decision one way or the other and stop torturing yourself.

    Either find a way to mentally accept "it is what it is" if you cant negotiate something reasonable, or move on to private practice. No sense in ruminating and always feeling screwed and such, thats toxic and not good for you in any way (especially if its true). Dont do it to yourself.

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    • #3




      Sorry for all the hospital bashing posts lately… I am just over a year into practice and feel as I haven’t even scratched the surface of shadiness of hospital goings on… As I am currently being heavily recruited by the local private practice group things like this make it hard to resist. But, I would like to see if I understand the concept of provider based billing appropriately so I am hoping someone can help. Wonka I am looking your way!

      Hospital based outpatient clinic: As I understand it provider based billing (PBB) splits a charge for certain payers (medicare/Medicaid) into hospital billing (HB) and professional billing (PB) with the two equaling the usual charge. For example… lets say we charge $1000 for procedure X. All privately insured patients are billed $1000, we are reimbursed at negotiated rates with said private payers and my production shows billed services of $1000 and collections of whatever it happens to be for that procedure. Now for Medicare/Medicaid patients undergoing the exact same procedure X, the PB charge is $100 and the HB charge is $900. Again we are reimbursed at whatever rates may be but my production now shows billed services of $100 rather than $1000.

      Is this the correct understanding of the PBB model?
      Click to expand...


      Provider based billing is hospital outpatient billing.  It's the thing that's come under scrutiny for site neutrality payments.  The crux of this billing issue is based on location - are you in a "facility"?  A private group will bill services under the physician fee schedule (PFS) only.  If you look at the CMS PFS rule and look at the RVUs you'll see it broken down into 3 different types of RVUs - work, practice, malpractice.  The practice RVUs are either "facility" or "non-facility".  As a private group you'll get the RVUs under "non-facility", which are higher than "facility" because that's all you get paid.  With provider based billing you charge under the PFS for the provider component of the billing AND you charge under the outpatient payment system (separate CMS rule) for the facility fee.  This more than makes up for the practice RVU difference and actually pays more for the total service.  Which is why politicians are (rightly) putting this in the crosshairs and trying to make all payments "site neutral" - essentially trying to pay hospitals the same amount as what the private person is getting paid down the street.

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      • #4
        Payments will be site neutral within a few years, which will make all this moot.

        Do your best not to be in a hospital based clinic (this is a technical definition. A freestanding clinic can still be hospital owned but not HBC). It’s bad for patients and slimy. Commercial patients get hit with a hospital fee not covered by their insurance.

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        • #5
          Is that true about the hospital fee not being covered? It seems odd that they would specifically exclude that under the insured’s policy. All that should be relevant is whether something was a covered benefit, if an institution (and provider) are in network, and what the cost sharing arrangement is.

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          • #6
            As I read more and more about hospital billing charges, I agree that their demise is imminent. Are there thoughts on the effect this will have physicians? One could argue that may lead to physician salary decreases... I wonder if we will see the pendulum shift back to private practice models for the bulk of medicine.

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            • #7
              It will mean lower salaries and leaner operations for hospitals. It will also mean less purchasing of private practices to capitalize on the arbitrage that hospital outpatient billing provides them. It will also result in less healthcare spending and more value for the consumer.

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              • #8
                https://www.medscape.com/viewarticle/918744

                Looks like there’s still work to do. If you don’t want to click, article came out yesterday called “Court Overturns CMS' Site-Neutral Payment Policy; Doc Groups Upset”

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