You Be The Coder:
Private Practice on Hospital Premises
Published on Fri Nov 01, 2002
Test your coding knowledge. Determine how you would code this situation before looking at the box below for the answer.
Question: My physician is considering moving into a suite at the hospital to see patients while a new cancer center is being completed. His concern is that "someone" told him that if he sees patients on the hospital premises, the insurance carriers reimburse at a lower rate. His address will be the same because his office is now in the professional building connected to the hospital. Only the suite number will change. I have not heard of reduced reimbursement if an office is in a hospital.
West Virginia Subscriber
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Answer: There is in fact a reimbursement difference for services rendered in a hospital setting rather than an office setting. In the hospital setting, both inpatient and outpatient, generally the physician does not employ the nurses or purchase the drugs and supplies used to treat patients. Therefore the physician overhead is lower, and reimbursement is also lower. To consider chemotherapy services "office-based," services must be rendered in an office that is leased to the physician at a fair-market rent; the nurses must be employed by the physician; and the physician must supply the drugs, supplies and equipment. If these requirements are met, it is appropriate to bill as an office location.
Check your situation carefully, especially the issue of rent. If a fair-market rent is being paid to the hospital for the office space, and if the nurses are employed by the physician and the drugs are purchased by the physician, then generally all chemotherapy-related services may be appropriately billed. If there is no rent (or the physician is paying only minimal rent) or the nurses are hospital employees, Medicare will consider these services "hospital-based" and the physician will only be able to bill for evaluation and management services. All other chemotherapy-related services will be billed by the hospital.
If the physician is not paying rent to the hospital and the hospital incurs the overhead, he should bill POS 22 (Outpatient hospital). POS 22 for professional fees is less than POS 11 (Office). For example, 99215 billed as POS 11 reimburses $112.35, while 99215 billed as POS 22 reimburses $88.43.
One other note: Under Medicare, a physician cannot bill for drugs furnished to patients in a hospital outpatient department even if the physician is responsible for supplying the drugs. Medicare will pay only the hospital for drug costs. Again, if the physician is paying fair-market rent to the hospital for designated space, this space can be considered "office-based" and this outpatient restriction will not apply.
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