Recent trends across the country have health systems buying out private physician practices and reclassifying them as hospital-outpatient departments. There are a number of motivations behind these transactions, the greatest being managed care contracting. Typically, the physician practice will reassign its Medicare NPI Number to the Hospital and the Hospital will then bill exclusively under that NPI number. The Hospital will also submit claims to the third party payor and receive payments based on the hospital’s negotiated contract rates and fee schedule.
Critics, including a number of insurers, have claimed that this practice allows the hospital to bill higher rates for the same service at the same location. For this reason, on February 26, 2014, Highmark, a Blue Cross Blue Shield company based in Pittsburgh, stated that it would stop reimbursing health systems at higher hospital-outpatient rates for cancer treatment performed in physician offices. Highmark explained that this move would save patients’ money by reducing out-of-pocket costs for deductibles and co-insurance. Continue reading