Recent Enforcement of Off-Campus Provider-Based Patient Financial Liability Requirement

Provider-based billing regulations require off-campus provider-based departments to provide written notice to Medicare beneficiaries, prior to delivery of services, that the beneficiary will incur a coinsurance liability to the hospital as well as for the physician service. The notice is required to include the amount of the beneficiary’s potential financial liability. Providing notice is intended to provide transparency to the patient and allow the patient to make an informed decision about where to receive care.

Historically, CMS has monitored compliance with provider-based regulations through voluntary submission of attestations. The coinsurance liability requirement was recently scrutinized by the U.S. Department of Justice (DOJ) in a recent case against a hospital in which the DOJ took the stance that claims paid to the hospital for an off-campus provider-based department when Medicare beneficiaries were not given written notice of coinsurance liability were implicitly false under the False Claims Act.

It is not known whether the government will continue to take action to enforce this provider-based regulation for off-campus locations. Hospitals should carefully review the regulation listed below and ensure current practices are accurate to enhance compliance and reduce risk.  

Per 42 CFR §413.65(g)(7)(i):

When a Medicare beneficiary is treated in a hospital outpatient department that is not located on the main provider's campus, the treatment is not required to be provided by the antidumping rules in §489.24 of this chapter, and the beneficiary will incur a coinsurance liability for an outpatient visit to the hospital as well as for the physician service, the following requirements must be met:

The hospital must provide written notice to the beneficiary, before the delivery of services, of -

• The amount of the beneficiary's potential financial liability; or
• If the exact type and extent of care needed are not known, an explanation that the beneficiary will incur a coinsurance liability to the hospital that he or she would not incur if the facility were not provider-based, an estimate based on typical or average charges for visits to the facility, and a statement that the patient's actual liability will depend upon the actual services furnished by the hospital.

The notice must be one that the beneficiary can read and understand.

If the beneficiary is unconscious, under great duress, or for any other reason unable to read a written notice and understand and act on his or her own rights, the notice must be provided, before the delivery of services, to the beneficiary's authorized representative.

In cases where a hospital outpatient department provides examination or treatment that is required to be provided by the antidumping rules of §489.24 of this chapter, notice, as described in this paragraph (g)(7), must be given as soon as possible after the existence of an emergency has been ruled out or the emergency condition has been stabilized.

For more information on provider-based regulations, reach out to your BKD Trusted Advisor™ or submit the Contact Us form below.