What Is Provider Based Billing?

This conversion may impact patients who have one or more of the following plans: Medicare, Medicare Advantage, and Medicaid. Receiving care at Memorial Healthcare locations, also known as Hospital Outpatient departments, will result in a hospital facility charge for outpatient services and/or procedures. These charges will be reflected on the patient statement you receive for services provided.

Hospital-based outpatient clinics are considered a department of the hospital; “private” physician offices are not (generally, these are smaller physician offices out in the community). Clinics located miles away from the main hospital campus may still be considered part of the hospital. Hospital-based outpatient clinics are subject to stricter government rules, making them more complex and more costly to operate. When you see a physician or receive services in a hospital-based outpatient clinic, you are technically being treated within the hospital rather than the physician’s office as these offices are now considered a department of the hospital.

According to Medicare billing rules, when you see a physician in a private office setting, all services and expenses are bundled into a single charge. When you see a physician in a hospital-based outpatient clinic, physician and clinic (facility) charges are billed separately.

For patients with insurance, physician services are processed under physician benefits, which are generally subject to patient liabilities in the form of copayments, while hospital services are processed under hospital benefits subject to deductibles and coinsurance amounts. Providing services in a hospital-based outpatient clinic costs more and depending on your insurance plan, may result in greater out-of-pocket expenses.

Memorial Healthcare has made this change in order to better integrate our physician practices in standardized performance improvement processes and  improve overall quality of care for patients in many ways, some of which include:

  • Building stronger physician-patient relationships,
  • Improving communication frequency and offering more/different/convenient ways to stay in touch (e.g. patient portal, email, online bill pay),
  • Ability to coordinate your care across our continuum and with other entities,
  • Ability to transmit your medical information electronically to specialists, and any other care providers involved in your care.

Many private insurance companies do not require that we follow the same billing rules required by Medicare and Medicaid. For patients with private insurance, the facility component of the physician office visit will be billed as a part of the physician bill and will be processed by the insurance company under the patient’s physician benefits defined in their individual plans.

Insurance benefits vary significantly by insurance company, but in general, physician services are processed under the benefit plan’s physician benefits and are subject to co-payment amounts from the patient. Laboratory and radiology services provided by the hospital are billed by the hospital regardless of the type of insurance. Hospital services are generally processed under the benefit plan’s hospital benefits and are subject to deductibles and coinsurance amounts.

In hospital-based outpatient clinics, Medicare and Medicaid patients could receive two (2) separate bills for services provided in the clinic – one from the doctor and one from the hospital. Adult Medicaid patients who have a spend down agreement will be required to pay for the clinic visit – and the facility fee — until they have met their pre-determined spend down amount thru Medicaid. For patients covered by Medicare or Medicare Advantage plans, non-physician charges billed by the hospital will be subject to coinsurance.

Co-insurance and deductibles may be covered by a secondary insurance. Check your benefits or with your insurance company for details.

Memorial Healthcare has staff available to assist with questions. Please contact (989) 720-2000.

Please don’t hesitate to contact us with concerns.  We have different options for different situations and are available to help. Visit our Financial Services page to learn more.


Questions or concerns?

Please contact (989) 720-2000 with any questions or concerns you may have.


Expert Care Close to Home

Patients in the Greater Shiawassee County area and surrounding locations rely on Memorial Healthcare for compassionate care services. Besides the 161-bed facility in Owosso, MI, Memorial Healthcare also has over 25 satellite offices. Contact us today to learn more about our providers or to receive answers to other questions.