Basics of Provider-Based and Teaching Physician Services
                     
Basics of Provider-Based and Teaching Physician Services
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 with 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.
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Basics of Provider-Based and Teaching Physician Services
The Professional Component 
The professional component of a provider-based physician’s services pertains to that part of the physician’s 
activities that is directly related to the medical care of the individual patient. 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 such costs are not met by special research funds), administration, general  
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Basics of Provider-Based and Teaching Physician Services
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. For other services, such as surgical procedures, notes in the record by interns, 
residents, or nurses, which indicate that the physician was physically present when the service was 
rendered, are sufficient. Note that, in order to pay a teaching physician under Part B, the teaching physician
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Basics of Provider-Based and Teaching Physician Services
must at least be present during the key portion of a service rendered by a resident or intern. When a 
resident does a visit without a teaching physician’s presence, the teaching physician must repeat the key 
portions of the visit and have his own documentation in order to get paid.
Interns and Residents
For Medicare purposes, the terms “interns” and “residents” include physicians participating in approved 
postgraduate training programs and physicians who are not in approved programs but who are authorized 
to practice only in a hospital setting, e.g., individuals with temporary or restricted licenses, or unlicensed 
graduates of foreign medical schools. Where a senior resident has a staff or faculty appointment or is 
designated, for example, a “fellow,” it does not change the resident’s status for the purposes of Medicare 
coverage and payment. 
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Basics of Provider-Based and Teaching Physician Services
We shared the basics of provider-based and teaching physician services for your reference, For detailed 
information you can refer to “Medicare Benefit Policy Manual Chapter 15“. Medical Billers and Coders is a 
leading revenue cycle company providing complete medical billing services. If you need any assistance in 
medical billing and coding for your practice, you can contact us at [email protected]/ 
888-357-3226
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