The Office of the Inspector General (OIG) of the Department of Health and Human Services recently issued an alert to physicians to exercise caution when reassigning their Medicare payments. The OIG made it clear that physicians who reassign their billing rights to a third party may be liable for false claims submitted by the entities to which they reassign their Medicare benefits.
Based on a 2009 OIG audit report, at least 77% of all physicians reassign payment, making this alert relevant to most practitioners. It is a common practice in employment agreements, contractual arrangements and is a primary basis for contracting with a third-party billing agent. Reassignment is simply accomplished by completing a CMS-855R application with Medicare.
The OIG alert was prompted by prosecution of eight physicians who violated the Civil Monetary Penalties (CMP) Law by causing the submission of false claims to Medicare from physical therapy companies. The facts of the case indicate these physicians reassigned their Medicare payments to various physical therapy companies in exchange for medical directorship positions. As medical directors, the physicians did not personally render or directly supervise any services. Nevertheless, the physical therapy companies allegedly billed Medicare for services that were not actually performed or were not performed as billed. These services consisted of unlicensed technicians, including retail cashiers and massage therapists rendering unsupervised in-home physical therapy services to Medicare and Medicaid beneficiaries. The physical therapy companies then falsely billed Medicare using the physicians’ reassigned provider numbers, as if the physicians personally rendered the services or directly supervised a technician rendering the services. This resulted in the owners and operators of the physical therapy companies being criminally prosecuted. The OIG determined that the physicians were an integral part of the scheme and pursued their liability under the CMP law.
The OIG did not indicate whether the physicians had actual knowledge that the physical therapy companies were inappropriately billing for the physicians’ services. However, the OIG did find the physicians culpable to the degree that they did not investigate these companies to which they made reassignment, nor exercise his or her legal rights to access the physical therapy company’s billing information concerning the services that were alleged to have been performed.
The purpose of the alert was to remind practitioners that physicians making a reassignment are jointly and severally responsible for any overpayments that result from improper and inaccurate billing. The OIG also reminded physicians of their right to access the reassigned entities billing information concerning the services each physician is alleged to have performed for which the reassigned entity billed Medicare. Medicare rules require that physicians have unrestricted access to claims submitted by an entity for the services that the entity billed using the physician’s reassigned provider number.
Under the Civil Monetary Penalties Law, Section 1128A of the Social Security Act, the OIG is authorized to seek civil monetary penalties and exclusion for: presenting or causing claims to be presented to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent; violates the Anti-Kickback Statute or; knowingly presenting or causing claims to be presented for a service for which payment may not be made under the Stark law.
CMP penalties include: $10,000 for each item or service; $50,000 for each false record or statement; plus an assessment of up to 3 times the amount claimed for each such item or service; plus exclusion from the Medicare program.
Accordingly, Physicians who reassign their rights should periodically either personally or through an office manager, billing company personnel or their accountant request copies of all of their Medicare billings processed under his/her provider number. When in doubt or an issue arises, the physician should file a CMS-855R form and revoke their assignment.