PORT ANGELES — Make money from Medicare!
Sounds like something you’d read inside a matchbook before matches went the way of cigarettes.
It can be done successfully, however, a Twin Falls, Idaho, hospital official told Olympic Medical Center commissioners last week.
The trick is double billing, which might seem shady but which the federal Center for Medicare and Medicaid Services allows.
The catch is that a hospital must provide the treatment by a hospital-employed doctor in a hospital-owned practice in a hospital-owned building furnished to hospital standards.
The hospital bills Medicare under Part A for the use of its facility and receives reimbursement for about three-fourths of its customary charges. It also bills through Part B for the physician’s services and receives about a quarter of the doctor’s bill.
Do the math, remembering that both the facility’s and the doctor’s charges contain profit margins.
Debbie Kytle, RN, executive director of physician services at Magic Valley Regional Medical Center, showed OMC commissioners typical accounts that were submitted to Medicare. While one bill recovered only 65 percent of customary charges, another received 109 percent.
To the 11 doctors and their nearly 13,000 patients caught in the Virginia Mason clinic crisis last winter, the so-called Twin Falls model sounded like salvation.
Magic Valley falters
To some Olympic Medical Center commissioners and administrators, however, it sounded too good to be true.
They chose instead to enlist the Virginia Mason physicians as independent contractors and provide them with hospital-employed staff and hospital-owned equipment.
Magic Valley Regional Medical Center had been down that road, too.
In 1999, a Twin Falls pediatric-primary-care clinic owned by 17 doctors was faltering due to a high percentage of Medicare and Medicaid payers.
The Idaho hospital rose to the rescue by starting a subsidiary, Magic Health Partners, that acquired the practice.
The company provides financial services — budgeting, billing, accounting, setting fees — and “leases” hospital employees to the doctors.
The company handles staff hiring, firing, training and skills certification.
It also maintains the facility and, perhaps most importantly, electronic medical record keeping, which it extends to all doctors within its district, whether or not they are hospital affiliates.
Under independent contracts, the doctors earn a percentage of their billings from the previous month.
Gross billings are adjusted for Medicare, Medicaid or private insurance payment shortfalls. Deductions also are taken for staff, space, equipment, medical supplies, pharmaceuticals and administration.
“They know every month what they’re going to get,” Kytle said.
