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CMS Loosens Restrictions on Medicare Billing
of Physician Fees
By Susan
L. Fine
[March 2004]
Hospitals, hospital systems, clinics, medical groups, and physicians
receive long-awaited relief from Medicare’s limits on
who can bill for the services of physicians. Billing reassignment
rules permit only the physician who actually furnishes the service
to bill Medicare and receive payment for the service, unless
one of the exceptions applies. Historically, in order to qualify
for one of the more common exceptions, the billing provider
has to employ the physician. This exception, however, is limited
in some cases based on the corporate practice of medicine doctrine.
Another exception applies only to services furnished in premises
owned or leased by the billing provider. Such restrictions,
however, do not accommodate many of today’s innovative
health care arrangements. A good example is a hospital’s
use of staffing companies to provide specialty services. Historically,
the reassignment rules require the hospital to do the billing
in such cases. Now, Medicare permits an entity to submit Medicare
bills and receive payment for services furnished by a physician
with whom it has a contract, regardless of where the services
are furnished or whether an employer-employee relationship exists.
This new rule greatly enhances flexibility for hospital-physician
contracting.
As revised, the Medicare Claims Processing Manual provides:
A carrier may make payment to an entity (i.e., a
person, group, or facility) enrolled in the Medicare program
that submits a claim for services provided by a physician
or other person under a contractual arrangement with that
entity, regardless of where the service is furnished. Thus,
the service may be furnished on or off the premises of the
entity submitting the bill.
When implementing this new rule, providers and physicians must
ensure that their contracts contain certain safeguards identified
by the Centers for Medicare and Medicaid Services (CMS). Specifically,
the contracts should specify that:
- Joint and several liability is shared between the entity
submitting the claim and the person actually furnishing the
service, for any Medicare overpayment relating to such claim;
and
- The person furnishing the service has unrestricted access
to claims submitted by the entity for the services provided
by that person.
See, Medicare Claims Processing Manual, Chapter 1
- General Billing Requirements, §30.2.7 - Payment for
Services Provided Under a Contractual Arrangement Carrier Claims
Only.
The CMS issued these revisions in Transmittal No. 111, dated
Feb. 27, 2004. They are to be implemented by Carriers March
12, 2004. These revisions implement congressional directives
made in Section 952 of the 2003 Medicare Modernization and Improvement
Act, signed into law Dec. 8, 2003.
Hospitals and other providers should review their affiliations,
billing relationships, and contracts with physicians to determine
whether this new rule potentially creates opportunities for
enhanced organizational and financial efficiencies.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Gerry
Hinkley, San Francisco, (415) 276-6530, gerryhinkley@dwt.com
Robert
G. Homchick, Seattle, (206) 628-7676, roberthomchick@dwt.com
Thomas
E. Jeffry, Jr., Los Angeles, 633-6882, tomjeffry@dwt.com
M.
Steven Lipton, San Francisco, (415) 6550, stevelipton@dwt.com
Clark
Stanton, San Francisco, (415) 276-6538, clarkstanton@dwt.com
This Health Law Advisory is a publication
of the Health Law Group of Davis Wright Tremaine LLP. Our purpose
in publishing this Advisory is to inform our clients and friends
of developments in health care law. It is not intended, nor
should it be used, as a substitute for specific legal advice
as legal counsel may only be given in response to inquiries
regarding particular situations.
Copyright © 2004, Davis Wright Tremaine LLP.
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