Provider-based status: Is your organization compliant?

Compliance: Meeting provider-based status requirements

Organizations must meet several requirements to be designated as a provider-based clinic. The following requirements are for all on-campus and off-campus clinics.

• Attestation. Attestation is voluntary. To remain compliant, a facility must bill CMS properly and have operational standards in place to comply with the provider-based status requirements.
• Licensure. In many instances, provider-based clinics will be able to operate under the same license as the main hospitals with which they are associated. Requirements vary by state, so organizations will want to closely examine the rules in their locations.
• Clinical integration. Clinical services by a provider-based entity and main provider must be integrated according to CMS regulatory standards. Overall, their services are considered integrated if the following are true:
  • Professional staff have privileges at the main provider.
  • The provider-based clinic has the same monitoring and oversight as the main provider’s other departments.
  • The medical director maintains a reporting relationship with the main provider’s chief medical officer or other similar official who has the same frequency, intensity, and level of accountability as other medical directors.
  • The main provider’s medical staff and other professional committees are responsible for the provider-based entity’s activities (for example, quality assurance, utilization review, and coordination and integration of services).
  • The provider-based clinic’s medical records are integrated with those of the main provider (so each site can retrieve one another’s records).
  • Inpatient and outpatient services are integrated to provide patients with access to all the main provider’s services.
• Financial integration. A provider-based clinic must be fully integrated with the main provider’s financial system, including shared income and expenses. The clinic’s costs should be reported in the main provider’s appropriate cost centers, and financial status should be incorporated – and readily identified – in the main provider’s trial balance. In addition, the provider-based clinic’s costs and revenue should appear in the main provider’s cost report.
• Public awareness. Noncompliance in the area of public awareness can lead to poor patient experience in addition to breach of CMS regulations. To meet public awareness requirements, provider-based clinics must present themselves to the public and other payors as being a part of the main provider. Patients who enter the provider-based entity should know they are entering a facility affiliated with the main provider (not an independent physician clinic) and should be billed accordingly. Provider-based facilities are required to make sure all public-facing communications – such as signage, websites, marketing materials, patient handouts, and forms – indicate that the location is part of the main provider.

In addition to these requirements that apply to on- and off-campus provider-based clinics, CMS has several additional requirements specifically for off-campus clinics seeking provider-based department status, including rules for ownership and control, administration and supervision, and patient responsibility. Facilities defined as off-campus clinics will want to thoroughly understand those requirements to remain compliant.

Adding to the complexity, separate, additional provider-based requirements also exist for joint ventures, hospital outpatient departments, and off-campus locations operated under management contracts. Provider-based clinics also must meet several billing requirements. Hospital and healthcare leadership should work closely with revenue cycle staff to better understand these requirements and to help ensure all billing procedures are designed for compliance with provider-based payment designation.