Difference between Provider Based and Freestanding?

I recently took a training role in my healthcare system and would like to be able to properly explain how we are reimbursed vs how normal hospitals/clinics are reimbursed.

I transferred from the billing department. Our facilities are provider-based and I didn't know this wasn't the norm until a few months ago. I don't visit clinics/hospitals very often at all. I understand that the clinics are an extension of the hospital, and how we are paid. But I can't find anything anywhere on how normal facilities bill and are reimbursed.

Do normal hospitals always bill a professional and facility fee? Why can they do this and a clinic cannot?

Also, how is a clinic reimbursed for all of their facility expenses? I know the professional charge payments are slightly higher for non provider-based clinics, but do they just lump all of the facility charges into the professional charges? In other words, we bill $138 professional fee and $140 for facility fee on a normal clinic visit. Would a normal clinic bill a professional charge of $278?

re: Difference between Provider Based and Freestanding?

I think "normal" is a relative term.

What place of service are you using to submit claims?

A freestanding physician office uses POS 11 and is paid at the Medicare, non-facility rate.

A provider based clinic uses POS outpatient department. Think of like an ED visit. There are two charges: one for the facility and one for the doctor. Hospitals have found that switching to provider based billing increased their revenue.

re: Difference between Provider Based and Freestanding?

Facility clinic & emergency room fees are typically based on point systems for utilization of resources. The concept has nothing in common with a professional fee E & M for history, exam, MDM. Each hospital develops their own point system, but it must be realistic to the service, documented in the record, and consistent in the point assignment. The hospital will not bill for professional fee unless they have a billing arrangement with the physician. Many do bill for both, but the physicial/mid level provider would either be an employee of the hospital, or would have contracted with the hospital to bill for their services.