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Hospital Based Billing

FAQs About Hospital Based Billing

What Does the "Hospital-Based" Designation Mean?

Medicare and insurance companies recognize integrated healthcare delivery systems, like Mercy Medical Center, in a distinct way. The term “Hospital-Based” is derived from special rules that Medicare developed. Under these rules, if a physician’s practice is owned by a hospital, then his/her practice can be designated as “Hospital-Based” and the physician is paid under hospital outpatient department rates.

Mercy Medical Center owns the medical practice of Oncology Associates. Under this agreement, Medicare and insurance providers now recognize Oncology Associates as a department of Mercy Medical Center, i.e., the term “Hospital-Based.”

How Does the "Hospital-Based" Status Affect Me?

When seeing an Oncology Associates physician for any type of outpatient services, i.e., office visits, treatment, etc., you will see a change in the way you are billed. Under “Hospital-Based” status, Medicare and insurance providers require us to bill all Hospital-Based physician services in two parts.

  • A physician fee billed by Oncology Associates.
  • An outpatient facility services fee billed by Mercy Medical Center.

When your medical services are completed, our billing staff will submit two claim forms to Medicare or your insurance company for physician services on your behalf — a bill from Oncology Associates for the physician charge and one from Mercy Medical Center for the outpatient facility charge.

Medicare recipients: You will receive two Medicare Summary Notices (MSN) from Medicare. Once Medicare has paid their portion of the charge, the balance will be submitted to a secondary payor. If there is a balance after the secondary insurance processes the claim, or if you do not have secondary insurance, you will receive a bill for the remaining balance.

Please note: With this billing process, there is no increase in charges being billed to Medicare for patients using Oncology Associates services. However, Medicare’s allowable amount may be different, which may increase your co-payment, coinsurance or deductible portion depending on your insurance. If a balance remains after insurance carrier payments, you will receive a monthly statement and payment is due within 30 days following the date of billing. Financial assistance is available by calling 363-8303.

What is the Process for Submitting a Medicare Claim?

All medical providers, both hospitals and physicians, are required to screen Medicare patients according to Medicare Secondary Payor rules. At each visit, Clinic staff will ask you to complete, or update, a “Medicare Secondary Payor” questionnaire. The answers to these questions confirm that either Medicare, or another payor, is the primary payor.

Throughout the billing process, our staff will work with Medicare to ensure your claims are processed correctly. In summary, the submission of Oncology Associates’ claims to Medicare will include two claim forms, one for the physician service and a second for the facility or hospital charge (including laboratory and X-ray services).

Does This Mean Patients Will Pay More for Services?

Most Medicare patients will be covered by their supplemental insurance and will not have to pay more out-of-pocket. Medicare patients without supplemental insurance will pay a small amount.

For patients with commercial insurance: depending on their particular insurance coverage, it is possible patients may pay more for certain outpatient services and procedures compared to the previous billing process. We recommend patients review their insurance benefits or contact their insurance provider to determine what their policy will pay and what out-of-pocket expenses they may incur. Pleas note some lab work which have been drawn at our facility may be sent to Mercy Medical Center for processing and would show a hospital outpatient lab charge.

What Type of Questions Should I Ask My Insurance Company?
Ask your health insurance company whether it covers facility charges or provider-based billing. If it does, ask what percentage of the charge is covered.
Does This Affect Patient Co-pays or Deductible?

Depending on each patient’s specific insurance benefits, additional patient out-of-pocket expenses may be incurred by the hospital-based model.