Practice Management

Professional versus facility billing: What hospitalists must know


Support from the hospital

Some hospitalists may think facility billing is not their concern. But consider this: The average support or subsidy paid by U.S. hospitals for a full-time equivalent hospitalist is estimated at $198,750, according to SHM’s 2020 State of Hospital Medicine.2 That support reflects the difference between the cost of employing a hospitalist in a competitive labor environment and what that provider is actually able to generate in billing income, said Hardik Vora, MD, MPH, SFHM, chair of SHM’s practice management committee.

Hardik Vora, MD, MPH, chair of SHM’s Practice Management Committee. Medical Director for Hospital Medicine and Physician

Dr. Hardik Vora

With a lot of medical specialties, the physician’s salary is only or largely supported by professional billing, said Dr. Vora, who is medical director for Hospital Medicine and physician advisor for utilization management and CDI at Riverside Health System, Yorktown, Va.

“Hospital medicine is different in that aspect, regardless of employment model. And that’s where the concept of value comes in – how else do you bring value to the hospital that supports you,” said Dr. Vora.

Hospitalists often emphasize their contributions to quality improvement, patient safety, and hospital governance committees – all the ways they contribute to the health of the institution – as justification for their support from the hospital. But beneath all of that is the income the hospital generates from facility billing and from the hospitalist’s contributions to complete, accurate, and timely documentation that can support the hospital’s bills.

Typically, this hospital support to supplement hospitalist billing income is not directly tied to the income generated by facility billing or to the hospitalist’s contribution to its completeness. But between growing technological sophistication and greater belt-tightening, that link may get closer over time.

Other players

Because of the importance of complete and accurate billing to the hospital’s financial well-being, specialized supportive services have evolved, from traditional utilization review or utilization management to CDI services and the role of physician advisors – experienced doctors who know well how these processes work and are able to teach providers about regulatory compliance and medical necessity.

“One of my jobs as the medical director for our hospital’s CDI program is to educate residents, fellows, and newly onboarded providers to be descriptive enough in their charting to capture the complexity of the patient’s condition,” Dr. Arafiles said. Physician advisors and CDI programs can involve clinical providers in bringing value to the institution through their documentation. They serve as the intermediaries between the coders and the clinicians.

The CDI specialist’s job description focuses on diagnosis capture and associated reimbursement. But integrity broadly defined goes to the integrity of the medical record and its contribution to quality and patient safety as well as providing a medical record that is defensible to audits, physician revenue cycle expert Glenn Krauss noted in a recent post at ICD10 Monitor.3

Dr. Vora sees his role as physician advisor to be the link between the hospital’s executive team and the hospital’s medical providers. “Providers need help in understanding a complex set of ever-changing rules of facility billing and the frequently competing priorities between facility and professional billing. I tell my providers: The longer the patient stays in the hospital, you may be generating more RVUs, but our facility may be losing money.”

Jay Weatherly, cofounder of Hospitalist Billing, Inc., is a company that specializes in comprehensive billing and collection solutions for hospitalist groups

Jay Weatherly

Hospital administrators are acutely aware of facility billing, but they don’t necessarily understand the nuances of professional billing, said Jay Weatherly, MS, the cofounder of Hospitalist Billing, a company that specializes in comprehensive billing and collection solutions for hospitalist groups that are employed directly by their hospitals. But he sees an essential symbiotic relationship between hospital administrators and clinicians.

“We rely on hospitalists’ record keeping to do our job. We rely on them to get it right,” he said. “We want to encourage doctors to cooperate with the process. Billing should never be a physician’s top priority, but it is important, nonetheless.”

HBI is relentless in pursuit of the information needed for its coding and billing, but does so gently, in a way not to put off doctors, Mr. Weatherly said. “There is an art and a science associated with securing the needed information. We have great respect for the doctors we work with, yet we’re all spokes in a bigger wheel, and we need to bill effectively in order to keep the wheel moving.”


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