Hospital-Based Outpatient Services Frequently Asked Questions

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 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 charges on their combined bill for services provided within the clinic. One is the “facility/hospital” charge and the other is the “physician (professional)” charge. When you see a physician in a freestanding private office, they bundle services in a single charge. In addition, the cost of services in the hospital-based providers is often higher.

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

A: Since a hospital-based clinic is a part of the hospital, the pricing structure must account for costs that don’t apply to freestanding clinics. This includes 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 sense to follow the same type of billing process as the outpatient care rendered at our hospital. This ensures more appropriate payment for services. Additionally, it better distinguishes the extensive services available from the hospital as compared to limited services offered by freestanding providers.

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

A: Depending on insurance coverage, it’s possible patients may pay more for services at hospital-based outpatient locations than a freestanding clinic. We recommend patients contact their insurance provider to determine what their policy will pay and what out-of-pocket expenses may incur.  Freestanding clinics may send tests to a hospital for processing, resulting in a separate charge.

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

A: Depending on each patient’s specific insurance benefits, additional out-of-pocket expenses may incur under the “Hospital-Based” model. If you want to know what costs might impact you, contact your insurance company prior to scheduling medical services.

In Summary

Receiving care at KHC’s “Hospital-Based” locations may result in a facility charge as well as a professional charge for outpatient services/procedures. These charges will be reflected on the patient statement you receive for services provided. Depending on each patient’s specific coverage, it’s possible some patients may pay more than they would at a freestanding clinic. This is the case with many integrated healthcare delivery systems across the country.

Patients are advised to contact their insurance provider to determine what their policy will cover and identify any out-of-pocket expenses. For more information, contact our Customer Service Department (641) 842-1423 if you have further questions.