Health Care Law Alert: HHS OIG Advises Physicians to Use Caution When Reassigning Medicare Payments

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The Department of Health and Human Services, Office of the Inspector General ("OIG") recently issued a broad warning that physicians who reassign their right to bill Medicare and receive Medicare payments may be liable for false claims submitted by the entities to which the physicians have reassigned their Medicare rights.

The OIG's warning came in the wake of its recent settlement with eight physicians who violated the Civil Monetary Penalties Law by causing the submission of false claims to Medicare. By executing CMS-855R forms, and in exchange for "Medical Directorship" positions, these physicians reassigned their rights to receive Medicare payments to a number of physical medicine companies. While serving in their Medical Directorship positions, the physicians did not personally render or directly supervise any services. Moreover, the OIG found evidence that the services the companies claimed the physicians performed had not actually been performed or had not been performed as described in the Medicare claim that was submitted.

Because the physicians did not monitor the services billed under their supplier numbers, individuals with little or no medical background (including retail cashiers and physical therapists) served as unlicensed physical therapy "technicians." These "technicians" provided unsupervised in-home physical therapy services to Medicare and Medicaid beneficiaries, and the services were improperly and falsely billed to Medicare using the physicians' reassigned supplier numbers as though the services had actually been performed or supervised by the physicians themselves. The government criminally prosecuted the owners and operators of the companies involved, and the OIG pursued the physicians' personal liability under the Civil Monetary Penalties Law.

Given the OIG's willingness to enforce the Civil Monetary Penalties Law against allegedly false statements made by reassigning physicians, we strongly recommend that all similarly situated physicians carefully monitor the services that are billed using their reassigned supplier numbers. When a physician permits someone to use his or her supplier number, the physician is arguably allowing that person to certify on the physician's behalf that the statements made on the bill are true and correct. One of those statements (located on the back of the CMS-1500 form) is that the services performed were "personally furnished by me or were furnished incident to my professional service by my employee under my immediate personal supervision, except as otherwise expressly permitted" by Medicare. Physicians should ensure that all services billed under their supplier number are correctly billed, that the proper level of supervision has been maintained, and that all "incident to" bills are submitted under the names and numbers of the physicians who actually provided the supervision. Failure to do so can result in significant penalties.

Please contact a key contributor if you have questions regarding this issue.

Key Contributors

Per A. Ramfjord
Jeremy D. Sacks
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