Physicians Cautioned to Monitor Reassigned Medicare Claims for Services

For practitioners who reassign their benefits to third parties, failure to monitor the claims submitted by the entity submitting claims using their reassigned provider number can lead to stiff sanctions. After recently reaching settlements with eight physicians who had violated the Civil Money Penalties Law (CMP) by causing the submission of false claims to Medicare from physical medicine companies, the Office of Inspector General (OIG) issued an alert to physicians to exercise caution when reassigning their Medicare payments to avoid liability for false claims submitted by entities receiving the reassigned Medicare payments.

Background on Reassignment

As described in an October 2009 OIG report, a reassignment of benefits is a mechanism by which Medicare practitioners allow third parties to bill and receive payment for services that they rendered (see Social Security Act §1842(b)(6); 42 CFR §424.73). Third parties that may receive reassignments include the practitioners’ employers or billing agents, other Medicare-enrolled entities with which practitioners have contractual arrangements, government agencies or entities, or other entities as established by court orders (see 42 CFR § 424.80). For example, anesthesiologists might reassign their benefits to several different hospitals where they render services for the hospitals to bill and receive payment from Medicare Part B for the services that the anesthesiologists performed. The hospitals also would bill and receive payment from Medicare Part A for the hospital portion of the service. Anesthesiologists might have multiple reassignments, one for each hospital where they render services.

To reassign benefits:

  • (1) practitioners must first enroll in Medicare as individuals,
  • (2) the third parties to which the benefits are reassigned must enroll in Medicare as institutions or groups, and 
  • (3) practitioners and the third parties must enroll with the same contractor serving their region.

Practitioners must submit Form CMS-855R (855R) to the Medicare contractors with which the practitioners are enrolled. The 855R contains information about both the practitioners and the third parties to which practitioners reassign benefits. The 855R requires the practitioners’ or delegated officials’ original signatures authorizing the reassignments.

OIGs Findings of Submission of False Claims  

According to OIG, the physicians reassigned their Medicare payments to various physical medicine companies in exchange for Medical Directorship positions. While serving as Medical Directors, the physicians did not personally render or directly supervise any services. In addition, the physicians failed to monitor the services billed under their reassigned provider numbers.

OIG found that the physical medicine companies 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. Instead, unlicensed individuals, such as retail and cashiers and massage therapists with little to no medical background, served as physical therapy “technicians” and rendered unsupervised in-home physical therapy services to Medicare and Medicaid beneficiaries. Many of the owners and operators of the physical medicine companies were criminally prosecuted. In addition, OIG concluded that the physicians were an integral part of the scheme and pursued their liability under the CMP. 

OIG Recommendations for Physicians Who Reassign Their Medicare Payments

OIG recommended that physicians use heightened scrutiny prior to reassigning their Medicare payments. “Physicians should carefully consider entities to which they choose to reassign their Medicare payments and ensure that the entities are legitimate providers or suppliers of health care items and services,” OIG said. A physician who reassigns his or her right to bill Medicare and receive Medicare payments to any entity has the unrestricted right to access claims submitted by an entity for services that the entity billed using the physician’s reassigned provider number to provide added assurances that the services for which the entity billed Medicare were performed and were performed as billed, OIG added.

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