New Signage, Notification, and Reporting Requirements for Provider-Based Clinics

December 18, 2012

During its 2012 session, the Legislature passed House Bill 2582, an act relating to billing practices for health care services. The goal of the legislation is to ensure patients are informed about the potential for additional charges and out of pocket costs for services at provider-based clinics. The law requires clinics that bill for the facility component of a service separate from the professional charge to post signs and provide notification to patients beginning January 1, 2013. The bill also requires clinics to report information regarding amount of visits and revenues to the Washington State Department of Health (DOH) as part of the operating hospital’s year-end reporting requirements beginning in 2013.

Bill Definitions: The bill defines a provider-based clinic as:

“The site of an off-campus clinic or provider office located at least two hundred fifty yards from the main hospital buildings or as determined by the centers for Medicare and Medicaid services, that is owned by a hospital licensed under chapter 70.41 RCW or a health system that operates one or more hospitals licensed under chapter 70.41 RCW, is licensed as part of the hospital, and is primarily engaged in providing diagnostic and therapeutic care including medical history, physical examinations, assessment of health status, and treatment monitoring. This does not include clinics exclusively designed for and providing laboratory, x-ray, testing, therapy, pharmacy, or educational services and does not include facilities designated as rural health clinics.”

To ensure compliance with the law, hospitals may want to consider applying the signage and notification requirements at all clinics billing separately for the facility component of the service, and where a patient may not know services are being provided in an outpatient hospital setting.  These requirements do not apply to rural health clinics that bill a single encounter rate-based billing for services.

The bill defines facility fee as:

“Any separate charge or billing by a provider-based clinic in addition to a professional fee for physicians’ services that is intended to cover building, electronic medical records systems, billing, and other administrative and operational expenses”

This is usually the facility component of a provider-based clinic charge that is billed on a UB04 form and paid as a hospital service.  Because of differences in clinic structure and contracts negotiated with payers, some clinics may not bill the facility component separately for all products.  Clinics should take care to ensure all affected patients receive notification.

These requirements do not apply to laboratory services, imaging services, or other ancillary health services not provided by staff employed by the health care facility.

Signage: The signage requirements of the bill are as follows:

(2) Each health care facility must post prominently in locations easily accessible to and visible by patients, including its web site, a statement that the provider-based clinic is licensed as part of the hospital and the patient may receive a separate charge or billing for the facility, which may result in a higher out-of-pocket expense.

WSHA has developed model signage format that can be downloaded and modified to fit the circumstances of each clinic. Clinics may wish to provide additional information for products where the facility component is not separately billed from the professional or in situations where there is no patient cost share involved, such as Medicaid.

Patient Notification: The notification requirements of the bill are as follows:

A clinic may provide advance notice to patients using a number of methods.  The most straightforward may be to make available and provide a brief notice to each patient via a card or brochure when they check in for services.  The card or brochure should have at a minimum, the language specified in the law. WSHA has developed a card format that can be used by clinics for this purpose.

Website:  The law requires the facility fee notification also be posted on the hospital and/or clinic’s website.  The website notice should include, at a minimum, the language specified in the law, though it can provide more detailed information.

Reporting Requirements:  The bill requires provider-based clinics report information to the Department of Health as part of the hospital’s year-end report:  Hospitals must report:

(a) The number of provider-based clinics owned or operated by the hospital that charge or bill a separate facility fee;

(b) The number of patient visits at each provider-based clinic for which a facility fee was charged or billed for the year;

(c) The revenue received by the hospital for the year by means of facility fees at each provider-based clinic; and

(d) The range of allowable facility fees paid by public or private payers at each provider-based clinic.


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