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The health system, which is facing unprecedenter uncompensated-care costs and looming budget cuts, says moving the clinicz from the purview ofthe system’s physicians’ practicese to will generate about $2.3 million in new revenue annually, a 32 percent increase in fee revenue generated by its hospital-baserd clinics. “If there is a sourcw of revenue, we can keep people’s jobs and keep providinyg services to our patients and all sortwof things,” says hospital spokeswoman Karen McCall. A hospital-based clinic is one that is operated by the hospital and not by aphysician group.
It has nothinfg to do with the clinic’s McCall says clinics in which more advanced specialty procedures are performed are most likely to behospitakl based. Primary care clinics will remainphysiciaj based, largely because few procedures are conducted there. The healtnh system, which operates 160 clinics, both hospita l and physician based, has been converting specialthy clinics to hospital based forseveral years. The latestf round of clinics being reclassifiedcover gastrointestinal, geriatrics, nephrology, pulmonary and rheumatology The new clinics will boosf hospital-based clinic facility fee revenue to abourt $9.
5 million annually, almost 1 percent of the system’s total operatint budget. The Centers for Medicare and Medicaid Services allows hospitals to chargew higher facility feesfor hospital-based clinics than for physiciah clinics. The rationale for the disparity is that hospitals need larger fees to help cover the cost of providingemergency departments, burn units, obstetrics and other areaas that are expensive to maintain but are not self-supporting.
The ability to convertf a physician practice toa hospital-based practicwe is largely confined to academic health centers such as UNC Hospitals and , which have hundreds of physicianas on staff who not only providre clinical care, but also conducyt research and teach medical students and residents. Other such or even UNC Healthg Care-owned , largely do not employ thei r own doctors. The bulk of theitr physicians work in private practices and offerd their services to the hospitals in exchange for beinbg able to usethe hospital’sd facilities. The hospitals do charges patients a fee for the use ofthe hospital’s equipment and staff.
UNC’s actiojn will boost costs to patients visitinb theaffected clinics. Insured patients could pay morein co-payments and spokesman Lew Borman says it is not uncommon for hospitals to reclassifuy clinics to be able to charge additiona fees. The hospital simply informs the insurer of its and BCBSNC and other insurers have littld say inthe decision. UNC’s move comesa as the hospital faces cuts in stater appropriationsand $270 million in uncompensated-care costs. UNC Hospitals CEO Bill Ropere has said that state budgey cuts and rising uncompensated care couldc force the hospital to makemajoer cuts, including possibly letting some physicianes go.