Hospital-owned practices get lower Medicare rates under new rule

A recent Medicare Supplement billing policy aims at lowering rates for certain office visits and other services in facility-owned physician practices. The policy has been opposed by physicians and practice managers and they are not willing to conform to a July 1 time limit.

Physician offices entirely owned or operated by hospitals are expected to modify their coding practices under a regulation from the Centers for Medicare Advantage & Medicaid Services, starting on that day. The policy necessitates a hospital and its units providing outpatient services to organize billing efforts when patients are admitted to the hospital soon afterward.

Hospitals are required to inform it’s wholly owned or operated physician practices when a patient has been admitted to the facility. A practice that had taken care of the patient within the three days before the admission would be expected to update billing forms for that patient employing a special coding modifier. This would indicate to Medicare Plans that the office visit and other services given during that window should be paid at the lower facility rate.

The policy was planned to be executed on Jan. 3, but CMS decided to holdup the policy as hospitals and practices said they needed more. The rule had been confirmed in the 2012 Medicare health physician fee schedule in November 2011.

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