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FAQ On Provider Based Billing And Facility Charges


DMH recently was notified that it is eligible to participate in the 340B Federal Drug Program due to the large number of Medicaid patients it serves. However, according to federal regulations, in order to participate in the 340B Program, DMH must be using “Provider-Based Billing” at its physician offices and Express Care locations. Provider-Based Billing is a national model of billing practice that is regulated by Medicare.

Provider-Based Billing means that receiving care at Decatur Memorial Hospital’s “Provider-Based” locations may result in a facility charge as well as a professional or physician charge for outpatient services and/or procedures. These charges will be reflected on the patient statements that you will receive for services provided.

Not all hospitals qualify for the 340B program. The 340B drug program extends discounts to hospital providers on some drugs it purchases for use in the hospital outpatient setting.

DMH is taking proactive steps to fulfill its mission of improving the health of the people of Central Illinois. By converting to the Provider-Based model, DMH is ensuring it is reimbursed fairly for services it provides. By participating in the 340B Drug Purchasing Program, DMH is trying to reduce the supply cost of providing care to patients.

Insurance coverage for the facility charge will depend on a patient’s specific insurance coverage. Patients are advised to review their insurance benefits or contact their insurance provider to determine what their policy will cover and identify any out-of-pocket expenses. Patients may also contact the DMH Business Office at (217) 876-3785 for questions about the facility charge.

Following are some frequently asked questions regarding Provider Based Billing and the facility charge.

What are the “Provider Based” locations at Decatur Memorial Hospital?
What does “Provider-Based” mean?
What is the 340B program?
Will I have to pay an additional fee for my next visit?
How will this affect my next visit?
What if I’m confused about the bills I get?
What if I’m having trouble paying my medical bills?
Why did DMH convert to this model for its physician office locations?
Will this billing practice change?

What are the “Provider Based” locations at Decatur Memorial Hospital?

All Decatur Memorial Hospital Medical Group (DMG) offices are considered outpatient departments of DMH. Likewise, DMH Express Care locations are also considered outpatient departments of DMH.

What does “Provider-Based” mean?

“Provider-Based” refers to the billing process for services rendered in a hospital outpatient clinic or location. This is the national model of practice for large, integrated delivery systems involved in patient care.

Provider Based status is a status sanctioned by Medicare for hospitals and clinics. Simply put, it means that physician offices (and Express Care locations) are departments of the hospital. One of the benefits of having Provider-Based status is the opportunity to participate in the Federal 340B Drug Purchasing Program.

What is the 340B Program?

By converting our physician practice locations to provider-based status, DMH can participate in a program called 340B that extends discounts to hospital providers on some drugs it purchases for use in the hospital outpatient setting. The Federally-designed 340B Program enables approved nonprofit health care organizations to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The discounts available through this program will help reduce overall expenses for drug supplies.

Because of the large percentage of Medicaid patients it serves, DMH recently qualified for participation in the 340B program. Not all hospitals qualify for the 340B program.

Will I have to pay an additional fee for my next visit?

If you have a visit to an Express Care location, you will be billed a facility charge. For a visit to a physician’s office, you may be billed a facility charge. Whether you receive a facility charge at a physician’s office depends on the type of visit you have. In each instance where there is a facility charge, the facility charge for an office visit will then be applied to the patient’s insurance plan and be billed accordingly. The patient’s insurance plan coverage will be applied to the charges and the remaining balances will be billed to the patient – one charge for hospital facility fees and one for physician services. This is no different than the way DMH currently bills for other hospital based services like the Emergency Department, Therapy Services, Lab services and surgical procedures.

How will this affect my next visit?

Provider Based billing will not change your covered services, but it may affect your copayments and deductible.

What if I’m confused about the bills I get?

If you have questions about your bills, please call the DMH Business Office at (217) 876-3785.

What if I’m having trouble paying my medical bills?

DMH has a number of options for those struggling to pay medical bills, including payment plans and free or discounted health care through the DMH Financial Assistance Program. If you’d like to hear more on these options, call the DMH Business Office at (217) 876-3785.

Why did DMH convert to this model for its physician office locations?

The rising cost of health care and lower reimbursements prompted DMH to make this change for its physician office locations and Express Care locations. The Medicare-approved Provider Based model ensures DMH is compensated fairly for services provided and allows DMH to participate in a federal drug purchasing program that will help lower the total cost of care.

Like all Illinois hospitals, DMH is experiencing significant reductions in reimbursement.

DMH is taking proactive steps to fulfill its mission of improving the health of the people of Central Illinois by delivering high-quality medical care. By converting to the provider-based model, DMH is ensuring it is reimbursed fairly for services it provides. By participating in the 340B Drug Purchasing Program, DMH is trying to reduce the supply cost of providing care to patients. DMH is not unique in this regard, as this is the case in many integrated health care delivery systems, not only in Illinois, but across the country.

Will this billing practice change?

Possibly. Health care policies and regulations are constantly changing and evolving. DMH continually monitors its billing practices to ensure they are compliant with the most recent federal guidelines and regulations. If the federal government issues new billing practice guidelines which have an impact on Provider Based Billing, DMH will modify its practices accordingly.