Bolstered by the Supreme Court’s landmark decision in National Federation of Independent Business v. Sebelius, 132 S.Ct. 2566 (June 28, 2012), the movement toward affiliation as a means of improving quality is continuing unabated. Accountable Care Organizations (ACOs), a concept created under the Affordable Care Act and further refined in lengthy regulations and guidance, are one method of achieving the benefits of care coordination. Hospital acquisition of physician practices, however, provides another alternative. In March of 2011, the Medicare Payment Advisory Commission (MedPAC) reported to Congress that hospital-based outpatient physician office visits grew by 9 percent from 2008 to 2009, representing a quarter of all hospital outpatient volume growth.
Hospitals are buying or otherwise affiliating with physician practices in epic proportions in an effort to expand service lines and service areas. Physicians, facing higher expenses, dwindling reimbursement and greater administrative costs, are jumping on board, eager to gain the financial stability that affiliation is likely to provide. Depending on the services offered by the practice, a hospital purchaser may receive significantly greater reimbursement if the services are billed under the hospital’s provider number, as opposed to under the Medicare Physician Fee Schedule. A hospital can only bill the services as “provider-based” if the practice meets the Medicare provider-based billing rules. Otherwise, the services must be billed on a free-standing basis. Navigating these provider-based billing rules demands careful vigilance, however, and should be undertaken with a careful eye for hidden hazards.
