Hospital-based provider may not receive EHR incentive payments. The definition of a hospital-based provider is any provider who furnishes 90 percent or more of their professional services in the preceding calendar year in a hospital setting (which would include to inpatients in the hospital, in the emergency department, and in hospital owned ambulatory clinics). [495.4]
In the case of hospital-based providers, and several other areas where distinctions are being drawn, the reference point is the Place of Service Code (POS Code) utilized in billing Medicare for the professional services. In the case of hospital-based physicians, the POS Codes 21 (Inpatient Hospital), 22 (Outpatient Hospital), and 23 (Emergency Department) are the basis for the determination that a provider is hospital-based.
Place of Service Codes
21—Inpatient Hospital—is a facility, other than psychiatric, which primarily provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services by, or under, the supervision of physicians, to patients admitted for a variety of medical conditions.
22—Outpatient Hospital—is a portion of a hospital which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization.
23—Emergency Room, Hospital—is a portion of a hospital where emergency diagnosis and treatment of illness or injury is provided.
Many hospitals were counting on receiving the EHR incentive payments for the use of the EHR in their ambulatory clinics. The loss of this portion of the funds is of significant materiality for many such institutions. Whether the Final MU Rule will change this approach is uncertain. The underlying statute (ARRA) excludes hospital-based providers from receiving EHR incentive payments, HHS cannot change this, only Congress may.
Briefly, the entire set of incentives is built upon the Medicare program rules. In cases where the hospital is billing the facilities charge and the physician is only billing the professional fee (which excludes reimbursement for the facilities, staff, and infrastructure elements such as EHRs), CMS is on fairly firm ground that hospitals and their ambulatory clinic staff cannot double dip by receiving reimbursement twice for equipment and facilities.
