By Kimberly A. H. Baker, JD, Director of Medicare and Compliance, H3.Group
Healthcare executives should challenge assumptions about how to operate current and new service lines by conducting detailed financial analysis.
When healthcare executives are planning new service lines, the default has been to provide them through a provider-based department.
Medicare reimbursement, which has typically been higher at provider-based facilities, was a driver.
Recently, Congress and CMS have made a two-prong assault on provider-based department reimbursement that should cause healthcare executives to carefully consider the financial ramifications and options before developing new provider-based departments.
Strategic analysis should result in reconsidering the structure of existing provider-based departments.
In the Bipartisan Budget Act of 2015, Congress required a change to payments for new off-campus provider-based departments developed after November 2, 2015.
CMS implemented this change with a payment rate that equals half of the applicable rate for the same service on campus, with a few exceptions for drugs, lab, and therapy.