# Hospital Owned Physicians office



## ahoward (Aug 24, 2011)

We are the billing office and we would like to get some direction on the following scenerio, specifically Nuclear Medicine in a Cardiology office.  This is a new arrangement for the Cardiologist.

1.  The office is owned by the hospital.
2.  The equipment is owned by the hospital.
3.  The Doctor is an employed physician by the hospital
4.  The meds will be supplied by the hospital
5.  The staff in the office are employed by the hospital
6.  The Place of service will be office - 11.

As an example, how would you bill a 78452?  Modifiers etc...

Thanks so much for your help!


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## mitchellde (Aug 24, 2011)

Your POS will be 22 not 11. As far as the modifiers go you will more than likely need a 26 on the pro fee and a TC for the facility fee.  for most radiology tests.  You need to check to see if this is a test that can be split this way.  For office visits your physician will use the level met by the 95/97 guidelines, the facility will bill a facility fee using the E&M code that matches their facility guidelines.


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## Pam Brooks (Aug 25, 2011)

Deb...if the office is designated as an "office" and not a department of the hospital, why would POS be 22?  Even if owned by the hospital, unless the practice is classified as provider-based, hospitals can own physician practices who do business in an office setting.

Also, if there is a physician practice in a hospital building that is  not classified as a department of the hospital, because the practice carries the expense of the overhead by renting the space from the hospital...why would this be called POS 22?  

Thoughts?  and regulatory guidance?  Thanks for the info.


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## mitchellde (Aug 25, 2011)

She did not say the physician would be renting the space and all the ancillary personnel are part of the hospital as well as all supplies.  If the physicians are renting the space then yes POS 11.  But the way the poster described the relationship I say 22, as there is no overhead for the physician.  I agree just being located in the facility is not an automatic 22, but when the hospital is absorbing all of the overhead including personnel then it would have to be a 22.


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## ahoward (Aug 25, 2011)

Thank you for your replies.  Would you have any idea where we can find any regulatory guidance for this situation?


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## Pam Brooks (Aug 30, 2011)

Thanks, Deb.  You're right, the OP didn't specify.


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## nnoyes (Aug 30, 2011)

If you bill a  POS 22 is the hospital billing out their portion? If the hospital is not billing their portion of charges you should still use a POS 11. POS 22 splits charges into physician fee and facility fee. If you use POS 22 and your facility (hospital) is not billing the facility portion you will lose alot of money. For example, you bill a 99213 out at $70 using POS 22 your reimbursement will be $30.80 and the facility reimbursement would be $26.00 . (remainder is contractual adj) Same bill POS 11 your reimbursement is $56.80. Now, if your office uses POS 22 and the facility isn't billing their portion then you lose $26 a visit.  Because the clinic is owned and operated by the hospital (hospital holds overhead and Doc is not renting space), and the Doc is employed by the hospital the hospital has the option of wether or not to bill the facility fee.  That decision is what effects your POS. I hope that this helps. I just had this exact scenario with my family practice docs at the hospital that I work for.  Good Luck.


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## brockorama01 (Aug 31, 2011)

FYI:  The scenario initally described is a physician becoming a HOPD (Hospital Outpatient Department).  This is typically used with cardiologists, pain management specialists and other providers who perform procedures in their office.  As surgery center reimbursement as dropped and hospital reimbursement has grown, hospitals find it advantageous to stop owning surgery centers and work directly with physicians.  Example:  Medicare pays $275 for basic pain block in an ASC, but will pay $550 in a hospital outpatient dept.  So hospital goes to busy physician and says we will buy/lease your office, equipment and staff; pay the physician a straight salary (not based on production), and bill the facility portion of the procedure as a HOPD....and the POS would be 22.

Warning: Works great but not for the sloppy...The agreements must be very specific and carefully structured.  If done incorrectly, you end up breaking a dozen federal laws.

Brock Berta


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## mitchellde (Aug 31, 2011)

nnoyes said:


> If you bill a  POS 22 is the hospital billing out their portion? If the hospital is not billing their portion of charges you should still use a POS 11. POS 22 splits charges into physician fee and facility fee. If you use POS 22 and your facility (hospital) is not billing the facility portion you will lose alot of money. For example, you bill a 99213 out at $70 using POS 22 your reimbursement will be $30.80 and the facility reimbursement would be $26.00 . (remainder is contractual adj) Same bill POS 11 your reimbursement is $56.80. Now, if your office uses POS 22 and the facility isn't billing their portion then you lose $26 a visit.  Because the clinic is owned and operated by the hospital (hospital holds overhead and Doc is not renting space), and the Doc is employed by the hospital the hospital has the option of wether or not to bill the facility fee.  That decision is what effects your POS. I hope that this helps. I just had this exact scenario with my family practice docs at the hospital that I work for.  Good Luck.


Regardless of whether the facility is billing their portion correctly if the physician does not rent or lease the office and pay the staff himself then he cannot bill for that overhead with a POS 11 he must use the 22.


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## cansas (Sep 1, 2011)

When you are billing for the physician are you billing with the hospitals tax id, or did the physician group retain their own tax id's for billing purposes?


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## medsolutions (Sep 20, 2011)

I am currently facing a similar situation with a 1206B clinic, where the clinic is a hospital based clinic, the staff is employed by the hospital but the doctors are not considered hospital employees.  The doctors bill for their "professional" E/M services and the hospital bills for the facility.  My question is, and I have gotten contradicting info on this before, if the doctor bills for example a 99213 using 22 as the POS, shouldn't the hospital also bill for a 99213? or should the hospital bill using a different E/M code? A question was asked as to where to obtain more info on this subject but I did not see a response, can someone enlighten me as well? Thanks


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## mitchellde (Sep 20, 2011)

The facility E&M will be whatever level is met according to the facility criteria, it might equal the physicians level but it might not.  Facilities do not follow the same criteria as the physician for the E&M and each facility is different as they are required to make up their own.  So it will be only a coinicidence if your levels match.


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## medsolutions (Sep 20, 2011)

I was actually told that each facility makes up their own, but I really found that so hard to beleive.  Where can I get information regarding what criteria to follow, benchmarks etc.  And if facilities create their own what would CMS use to audit them, their own criteria? I guess I'm finding it hard to beleive that CMS will leave this decesion up to the facilities.  Is there a website or other source where I can get more info and actually have something to show? I'm suppose to attend a meeting this afternoon and any info would be greatly appreciated.  Thanks.


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## mitchellde (Sep 20, 2011)

medsolutions said:


> I was actually told that each facility makes up their own, but I really found that so hard to beleive.  Where can I get information regarding what criteria to follow, benchmarks etc.  And if facilities create their own what would CMS use to audit them, their own criteria? I guess I'm finding it hard to beleive that CMS will leave this decesion up to the facilities.  Is there a website or other source where I can get more info and actually have something to show? I'm suppose to attend a meeting this afternoon and any info would be greatly appreciated.  Thanks.



I understand you skepticism but it has been that way since 2000.  This is due to OPPS and APCs  Outpatient prospective payment system (OPPS) and ambulatory procedure classifications (APCs).  Hospitals had to have a way to capture the facility charge using a CPT code so that it could be placed into an APC for payment.  No such codes existed and no guidelines exisited.  Therefor CMS directed the facility to utilize the E&M codes, however the guidelines were created for physician use, and the facilities now had to capture their utilization of resources, so CMS instructed that the facilities were to create their own unique criteria to determine the E&M level, there are certain requirements this criteria must follow but beyond that it can be whatever the facility desires.  So for example we used a point system so to have vitals signs taken was 5 points, and if we wanted to we could say that a 99211 was equal to 5 points and so on.  Look up OPPS and APCs the instructions are there as well as the dos and don'ts.


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## medsolutions (Sep 20, 2011)

Thank you so much, that really helps.


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## medsolutions (Sep 20, 2011)

O.k., I may be asking for much, but I went onto cms.gov and can not find anything that has to do with the dos and dont's you are referring to, do you have a link or is there somethng more specific I need to put in the search field to get this info? I'm sorry to keep bugging you, but I've been trying to get this info for over a week now, and I'm very frustrated.  Thanks.


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## mitchellde (Sep 20, 2011)

I am not sure where you can find this on the CMS web my link for.this is ages old.  Try a Google search for opps or apc or even facility e&m billing.  I worked in the outpatient area in 2000 and did all the leg work on APC coding at that time.  I even taught a seminar on APCs for a couple of years.   So I know you will find it, just may take some digging.


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## medsolutions (Sep 21, 2011)

Thank you for your help, I really appreciate it.


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## Coder85 (Dec 30, 2014)

Hi, 
Can someone please tell me whether it makes a difference if it is a separate physician group vs. an employed physician by the hospital?  In either case can we still bill for both, professional fees and facility fees?

Thanks so much!


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## napahny@aol.com (Jan 6, 2015)

*Physician based office*

Are these regulations apply to inpatent long term facility clinic billing?

Contracted cardiologist seeing a registered inpatents in long term psych facility
. Hospital owns the office, paying for an employees and paying a cardiologist a contracted dollar amount. Doctor wants to use the POS as 11. 

What will be the correct POS in this setting?


Thank you for your help.


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## mitchellde (Jan 7, 2015)

napahny@aol.com said:


> Are these regulations apply to inpatent long term facility clinic billing?
> 
> Contracted cardiologist seeing a registered inpatents in long term psych facility
> . Hospital owns the office, paying for an employees and paying a cardiologist a contracted dollar amount. Doctor wants to use the POS as 11.
> ...


The POS is where the patient is registered.  If the patient is registered as an inpatient long term care then that is the POS even if the patient is brought to the office setting.


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## napahny@aol.com (Jan 7, 2015)

*Physician based office*

Thank you very much Debra for your response. 

I truly appreciated!


Mariam


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