Client Alert

Hospitals With Off-Site Clinics And/Or Management Contracts Beware: The Medicare Programs Provider-Based Regulations Are Here

April 01, 2000

Kenneth J. Yood

In a move that may have significant impact on the Medicare certification status of both hospital departments and traditional provider-based entities such as skilled nursing facilities, home health agencies and hospices, the Health Care Financing Administration issued new regulations on April 7, 2000 setting forth the requirements to obtain and maintain provider-based status under the Medicare Program. Failure to comply with the regulations’ requirements may result in (1) a complete denial of Medicare certification status (and reimbursement) for hospital departments which cannot participate in the Medicare program as freestanding providers or (2) lower Medicare reimbursement for home health agencies, skilled nursing facilities and other entities which may be freestanding facilities but potentially receive greater reimbursement through the overhead allocation process attendant to provider-based status.

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