Basics of Provider-Based and Teaching Physician Services

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Provider-Based Physician Services

Providers may retain physicians on a full-time or part-time basis in, for example, the fields of pathology, psychiatry, anesthesiology, and radiology, and in many instances (especially in teaching hospitals) in other fields of medical specialization as well. Any one of these physicians may be engaged in a variety of activities including teaching, research, administration, supervision of professional or technical personnel, service on hospital committees, and other hospital-wide activities, as well as direct medical services to individual patients. The provider’s arrangement may be with a single physician or a group of physicians who assume joint responsibility for discharging agreed-upon duties. Provider-based physicians may include those on a salary, or a percentage arrangement, lessors of departments, etc. (whether or not they bill patients directly). The services to the patient are known as the professional component. The services to the provider are known as the provider component. Physician Services Group is the expert in physician employment, practice, urgent care operations, hospitalist integration, and more.

The Professional Component 

The professional component of a provider-based physician’s services pertains to that part of the physician’s activities directly related to the individual patient's medical care. It represents remuneration for the identifiable medical services by the physician that contribute to the diagnosis of the patient’s condition or to his treatment. 

The Provider Component

The portion of the physician’s activities representing services that are not directly related to an identifiable part of the medical care of the individual patient is the provider component. Payment for provider component services can be made only to a provider and is included in the provider’s prospective payment system (PPS) rate. Provider services include teaching, research conducted in conjunction with and as part of patient care (to the extent that special research funds do not meet such costs), administration, general supervision of professional or technical personnel, laboratory quality control activities, committee work, the performance of autopsies, and attending conferences as part of the physician’s provider service activities. 

Teaching Physician Services

Medicare Part B covers services that attending physicians (other than interns and residents) render in the teaching setting to individual patients. These include such services as reviewing the patient’s history and physical exams, personally examining the patient within a reasonable time after admission, confirming or revising diagnoses, determining the course of treatment to be followed, and assuring that any supervision needed by interns or residents is furnished, and making a frequent review of the patient’s progress. The medical record must contain signed or countersigned notes by the physician which show that the physician personally reviewed the patient’s diagnoses, visited the patient at more critical times of the illness, and discharged the patient.