Legal Experts Agree: Decide Now Whether PBS Is Right for You

The deadline to apply for provider-based status (PBS) has been extended to Oct. 1, 2002, but legal experts agree that now is the time for hospitals and integrated delivery systems to think seriously about whether to establish or continue PBS for off-campus clinics and services. The main advantage of PBS is a financial one reimbursement is generally higher. But, administrative costs and hassles could outweigh the benefits.

Medicare, Medicaid and the State Childrens Health Insurance Program Benefits Improvement and Protection Act of 2000 (BIPA), which extended the deadline, made several important changes in the outpatient prospective payment system (OPPS) among the most important were the rules for provider-based facilities (PBFs). The deadline applies to:

facilities already determined as provider-based

facilities that dont have this determination but were reimbursed as provider-based on Oct. 1, 2000. (Facilities that apply for provider-based status before Oct. 1, 2002, will qualify until a final determination is reached.)

As difficult and distant as it might seem now, Diane Lee, a partner in the San Francisco office of the Davis Wright Tremaine LLP law firm, warns that hospitals should not delay the decision about provider-based status because the issues are complicated and time-consuming and could use up the time remaining between now and October 2002.

Weigh Revenue Versus Cost

With few exceptions, reimbursement for the technical component of the services a PBS hospital provides is higher under APCs compared to a non-PBF, which is generally reimbursed at the physician fee schedule, says James C. Dechene, a partner with Sidney Austin Brown & Wood, a Chicago law firm. On the other hand, Lee and Dechene point out that PBFs are subject to many burdensome and costly regulations under Medicare. The hassle factor includes both the technical criteria for demonstrating PBS and the obligations HCFA requires for compliance once that determination is made.

Its important to determine the dollar value of the reimbursement advantages, because PBS applies only to Medicare patients, Dechene notes. If you dont see many Medicare patients, the cost of complying with HCFA requirements could be much greater than the reimbursement.

Dechene recommends hospitals think about enforcing compliance with this regulation for each off-campus service or clinic before deciding. For large integrated delivery systems, compliance could involve dozens of facilities ranging from physical therapy or rehab centers to primary care services, imaging centers, and freestanding surgery or urgent-care centers.

Consider HCFA Obligations and Requirements

In deciding whether to seek PBS for a facility, hospitals also have to consider the obligations HCFA has imposed, including:

Emergency Medical Treatment and Labor Act (EMTALA) regulations that require off-campus departments to provide appropriate medical screening or stabilizing treatment to individuals who request help in potential [...]

- Published on 2001-06-01