Sep 1998 Table of Contents

REIMBURSEMENT STRATEGIES

Medicare Update

A Quick Review of Reassignment Can Help Avert Fraud Accusations



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Fam Pract Manag. 1998 Sep;5(8):21-23.

Medicare fraud and abuse investigators have found that, under the guise of reassignment, some unscrupulous clinics have billed for services that weren't performed using the billing numbers of physicians who were no longer affiliated with them. In such cases, physicians have unwittingly become the subjects of targeted reviews and, even worse, participants in fraud and abuse investigations. This association between a pattern of reassignments and fraud has sensitized investigators to reassignment.

You can minimize your chances of getting caught up in this kind of mess simply by terminating your out-of-date reassignment arrangements. To make the termination official, you should do it in writing, send a copy of the letter to your carrier and, of course, keep a copy for yourself.

HCFA Administrator Nancy-Ann Min DeParle has said that the agency has considered whether to limit the number of reassignments that an individual physician can make as a way of preventing fraud and abuse. For the time being, however, the reassignment rules continue to permit reassignment in a wide variety of circumstances. Although the rules haven't changed, the threat of increased enforcement makes it worthwhile to reacquaint yourself with them, review your current arrangements and make sure you have information about what is being billed in your name.

Remember the rules

A Medicare beneficiary may generally assign to a physician his or her right to payment for services received. However, because reassignment of that right by physicians and other providers has been a source of incorrect and inflated claims and fraud, Medicare now limits the situations in which reassignment is allowed.

Reassignment is permissible under the following circumstances:

  • To a physician's employer, if reassignment is a condition of employment,

  • To the facility in which the service was provided, if the physician and facility have a contractual arrangement under which the facility bills for the physician's services,

  • To an organized health care delivery system, if the physician and organization have a contractual arrangement under which the organization bills for the physician's services,

  • To the physician for purchased diagnostic tests other than clinical diagnostic laboratory tests,

  • To a governmental agency or entity,

  • Under reciprocal billing arrangements (for example, when one physician covers for another while he or she is on vacation),

  • Under locum tenens arrangements,

  • Pursuant to a court order. Reassignment may also be made to an agent who furnishes billing or collection services, provided the following conditions are met:

  • The agent receives the payment under an agency agreement with the physician,

  • The agent's compensation is not related in any way to the dollar amounts billed or collected, nor does it depend on the actual collection of the payment, The agent acts under payment disposition instructions that the physician may modify or revoke at any time,

  • In receiving the payment, the agent acts only on behalf of the physician (except insofar as the agent uses part of the payment to compensate itself for its billing and collection services).

Note that if the agent providing your billing and collection services qualifies to receive payment for your services under one of the circumstances listed earlier (for example, if the hospital is acting as your billing agent), reassignment is permissible even though the above conditions aren't met.

The agent exception is designed to permit computer and other billing services to claim and receive Medicare payments in the name of the physician but in such a way that the agent has no financial interest in how much is billed or collected. If you have an arrangement in which a billing agent prepares your bills but does not receive your Medicare payments, you don't need to worry. If you've reassigned to a billing agent your right to collect Medicare payments, you should make sure the payments are being mailed to the agent for bookkeeping purposes only and are being forwarded to your practice's bank account for deposit.

The final exception you should be aware of relates to the “indirect payment procedure” for complementary insurers. The exception allows physicians to reassign Medicare payments to entities that cover the gap between Medicare payments and patients' total health care bills. The strategy enables you to file a single claim and receive full payment in a single check from the complementary insurer, avoiding Medicare hassles altogether, and it also relieves your patient of having to file a claim with the complementary insurer. You would qualify for the indirect payment procedure only under these circumstances:

  • The complementary insurer has paid you for the services and you've accepted the payment as payment in full,

  • The beneficiary has agreed in writing that the Medicare payment may be made to the complementary insurer.

With all of these possibilities, it may be hard to imagine a situation in which you couldn't reassign your right to receive Medicare payments. Here are a couple of examples: You could not reassign it to a bank in exchange for capital financing by the bank. Likewise, you couldn't reassign it to a hospital for services provided in the hospital unless you had a contract with the hospital that specified it could bill for your services.

Take corrective action

If you've just discovered that one of your reassignment arrangements violates the rules, correct the problem, but don't panic. If Medicare were to discover the violation, you would probably be advised of it in writing and asked to change the payment address. In cases in which the problem persists, Medicare may revoke assignment privileges, which forces physicians to collect payments from beneficiaries.

Your biggest concern should be preventing your billing number from becoming the tool someone else uses to commit fraud. Do that, and you'll avoid the attention of fraud and abuse investigators.

Kent Moore is reimbursement issues manager for the AAFP and a contributing editor to Family Practice Management.

Copyright © 1998 by the American Academy of Family Physicians.
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