The Future of Hospital-Based Clinics

By Jack Duffy
Executive Vice President

For a number of years hospital-based clinics have played a significant role in the business operations of many hospitals. They played a key role in care coordination for complex services like infusion therapies, and allowed physicians more hours to remain productive on the hospital campus. The clinics also served as an integral part of comprehensive treatment plans that could include advanced diagnostics, procedures and rehabilitation. Today these services are under a great deal of economic and authorization pressure from healthcare players. For example:

  1. CMS just announced the reduction of available clinic CPT codes 10 codes to one. This creates a single APC, 0634, and eliminates the ability to bill and collect additional fees for the most time consuming or complex cases.
  2. Commercial insurance continues to reject claims for services where their care standards indicate that the service can be successfully completed in a physician office. As physician group practices have become better staffed and equipped, the line between hospital and office has become less defined every year.
  3. Physicians have maintained an economic interest in serving patients in hospital clinics. The correct way to bill for this care is to submit a claim for the professional service only. Insurance companies insist that these bills are often incorrectly coded causing the insurance to pay for a full office visit and the hospital clinic. To the extent this is true; it will put tremendous pressure on payers to move the maximum amount of care to the physician office.

Hospitals have a few choices on how to respond to the pressures these clinics face. They can “ride it out,” and react as changes occur; they can also repurpose the clinic space to provide other services that require a hospital setting; they can lease the clinic to the physician, but must charge full market rates for the space; and finally, hospitals can coordinate with physician billing systems to produce correct coding and thus reduce the argument that clinics create double billing.

The movement towards new care models and aggressive integration between hospitals and physicians may reduce the impact of clinic changes. One thing is certain – the issues caused by hosting these services will continue to be under review by both regulators and payers as the industry continues to transform.

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