Hospital-Based Billing

Like many medical centers and community hospitals across the nation, Skagit Regional Clinics, which is now a department of Skagit Valley Hospital, converted several of its physician clinics to hospital-based outpatient clinics on July 14, 2011. 

Integrated delivery systems began forming in the 1980’s and 1990’s when hospitals began purchasing a variety of medical entities, spreading themselves across the health care continuum from physician’s offices to inpatient hospitalization.  The traditional hospital “campus” has evolved from a single hospital building to multiple facilities and services that can be located in different geographic areas. Since 2005 there has been a dramatic increase in hospital-based outpatient clinics (sometimes referred to as “provider-based”) that were once freestanding and independently owned.  Physician practices, designated as “hospital-based” operate under the hospital’s license and Medicare certification.
For your convenience, the answers to frequently asked questions about hospital-based billing are found below.  Please click on the questions below to view the answers.


What does "hospital-based" outpatient mean?

How does "hospital-based" outpatient billing affect patients?

What are the benefits of being cared for at a "hospital-based" outpatient clinic?

Does this mean I will pay more for services?

Are all SRC locations becoming "hospital-based" outpatient clinics?

Is my insurance plan affected by hospital-based billing?

What if the Medicare patient has secondary insurance coverage?

Why does the Medicare Secondary Payor (MSP) questionniare need to be completed?

Where can patients call with questions or concerns?

If you would like to receive information about price comparisons between our hospital-based and freestanding clinics, call 360-428-2521.

Hospital-Based Billing Frequently Asked Questions (FAQ)

What does “hospital-based” outpatient mean?
The Centers for Medicare and Medicaid Services (CMS) have designated Skagit Regional Clinics as a “hospital-based” outpatient department of Skagit Valley Hospital. “Hospital-based” outpatient refers to the billing process for services rendered in a hospital outpatient clinic or location. This is the national model of practice for integrated health care systems like Skagit Regional Health, where the hospital (Skagit Valley Hospital) owns space and employs support personnel involved in patient care in outpatient clinics (Skagit Regional Clinics).

How does “hospital-based” outpatient billing affect patients?
Medicare and Medicaid patients receiving outpatient services (i.e. office visits, procedures, treatments, etc.) at one of Skagit Regional Clinics’ hospital-based outpatient clinics will notice a change in the way they are billed. Under “hospital-based” status, Medicare requires SRC to bill all hospital-based services in two parts. Therefore, patients will see two charges on their bill. One charge represents the facility charge (Part A) and the other represents the professional or physician fee (Part B) for outpatient services or procedures. Previously, all charges were grouped together on the billing statement. 

Patients admitted to the hospital have historically received two bills.  Following this same type of billing for services rendered at hospital-based outpatient locations ensures more apporpirate payment for services provded by hospital staff and physicians, and distinguishes facilities that function as departments of a hospital. 

Patients are advised to review their insurance benefits to identify any out-of-pocket expenses they may incur.

What are the benefits of being cared for at a “hospital-based” outpatient clinic?
Medicare acknowledges the value of providing care in an integrated, collaborative environment. Hospital-based outpatient clinics are held to nationally recognized service and patient care standards, leading to high quality care for patients. 

Does this mean I will pay more for services?
Medicaid patients will not see any increase in out-of-pocket expenses.

Medicare patients will be charged a facility fee that would not be owed if the facility were not hospital-based. Patients may have to pay more for certain outpatient services and procedures at SRC’s hospital-based outpatient locations than they would at one of SRC’s free-standing clinic locations.

However, many Medicare patients will be covered by their secondary or supplemental insurance and will not have to pay more out-of-pocket. Medicare patients without secondary or supplemental insurance will pay an additional amount.
Hospital-Based Clinics                      Freestanding Clinics
  -  Mount Vernon                                -  Anacortes
  -  Mount Vernon - Cardiology              -  Camano Island
  -  Oak Harbor                                    -  Urology (Anacortes and Mount Vernon)
  -  Sedro-Woolley                                 
  -  Stanwood                                     
  -  Cascade Skagit Health Alliance
Are all SRC locations becoming “hospital-based” outpatient clinics? 
No. SRC’s Anacortes, Camano Island and Urology locations will remain as freestanding clinic locations.  They will not be converted to hospital-based outpatient clinics at this time, so an additional facility charge will not be generated at these locations.
 Is my insurance plan affected by hospital-based billing?
Here is the list of insurance plans affected by hospital-based billing:
·   Medicaid
·   Medicare (traditional)
· Group Health Medicare Advantage Plans (effective 10/1/12)
·   Medicare Advantage Plans (effective 11/1/12)
·   Tricare (effective 11/1/12)
·   Indian Health (effective 11/1/12)
What if the Medicare patient has secondary or supplemental insurance coverage?
Coinsurance and deductibles may be covered by a secondary or supplemental insurance policy. The patient can check with his/her benefits or insurance company for detailed answers related to his/her secondary or supplemental insurance. For instance, he/she may ask whether the insurance covers facility charges or hospital-based billing. If it does, patients should ask what percentage of the charge is covered and verify what their hospital outpatient insurance benefits are, as they typically are applied toward a deductible and coinsurance.
Why does the Medicare Secondary Payor questionnaire need to be completed?
This is a Medicare requirement that hospital-based clinics must follow.As a participating Medicare provider, Skagit Valley Hospital and SRC hospital-based clinics are required to screen Medicare patients according to the Medicare Secondary Payor (MSP) rules. At each visit, Medicare patients will be asked the MSP questions during the registration process. These questions help SRC to confirm if Medicare or another payor should process the insurance claim as primary. This is one example of the requirement that hospital-based clinics need to use the same patient registration rules that apply in the hospital.
Where can patients call with questions or concerns?
Patients with questions about hospital-based billing may call 360-428-2521.