Q: What does “Hospital-Based Outpatient” mean?

A: “Hospital-Based Outpatient” refers to medical services rendered in an on-site hospital operated outpatient clinic or other hospital affiliated clinic location. This is in contrast to “freestanding” clinics that are not hospital based or hospital affiliated. When you see a physician or receive services in a hospital-based outpatient clinic, you are considered to be treated within the hospital rather than a physician’s office.


Q: How does this designation affect the cost of medical services?

A: Under the hospital-based model, patients often receive two (2) charges on their combined patient bill for services provided within the hospital-based clinic location. One is the “facility/hospital” charge and the other is the “physician (professional)” charge. When you see a physician in a freestanding private office setting, all services and expenses are bundled in a single charge. In addition, the cost of services provided by hospital-based providers is often higher, which is also reflected in the price.


Q: What are the primary reasons for the cost and ultimately the prices possibly being higher for hospital-based services versus freestanding clinics?

A: Given that the hospital-based clinic is actually considered a part of the hospital, the pricing structure must take into account many cost factors that don’t apply to freestanding clinics including, but not limited to; maintaining an emergency room, dealing with patients who are too sick to seek services from other medical providers, offering state-of-the-art medical equipment, providing 24-hour per-day access and rendering care to underinsured and uninsured persons that have a limited ability to pay for their care (charity).


Q: Why does Knoxville Hospital & Clinics (KHC) use the “Hospital-Based” model?

A: Since KHC employs physicians, it makes good sense to follow same type of billing process as the one used for outpatient care rendered at our hospital, which not only ensures more appropriate payment for services provided by the hospital staff and physicians, but better distinguishes the extensive services available from the hospital as compared to the more limited services offered by freestanding providers.


Q: Does this mean patients will pay more for services?

A: Depending on the particular insurance coverage, it is possible patients may pay more for certain outpatient services and procedures at our hospital-based outpatient locations than at a freestanding clinic. We recommend patients review their insurance benefits or contact their insurance provider to determine what their policy will pay and what out-of-pocket expenses may incur. It is important to note, for example, that some lab tests drawn at a freestanding clinic may need to be sent to a hospital or other facility for processing, which will result in a separate (additional) lab charge for the processing.


Q: Does this affect patient co-pays or deductibles?

A: Depending on each individual patient’s specific insurance benefits, additional out-of-pocket expenses may be incurred under the “Hospital-Based” model. If you want to know how you might be impacted, we recommend that you contact your insurance company directly prior to scheduling any medical services.


In Summary

Receiving care at KHC’s “Hospital-Based” locations may result in a facility charge as well as a professional or physician charge for outpatient services and/or procedures. These charges will be reflected on the patient statement you receive for services provided. Depending on each patient’s specific insurance coverage, it is possible that some patients may pay more for these services and procedures than they would at a freestanding medical clinic. KHC is not unique in this regard as this is the case with many integrated healthcare delivery systems across the country.

Patients are advised to review their insurance benefits or contact their insurance provider to determine what their policy will cover and identify any out-of-pocket expenses. For more information please contact our Customer Service Department at (641) 842-1423 if you have further questions regarding “Hospital-Based Outpatient” services.