The Office of the Inspector General (OIG) issued a press release alerting doctors and other providers to expect increased scrutiny from the OIG when reassigning their Medicare benefits to other entities.1  On February 8, 2012, OIG cautioned all providers to be more mindful of services billed under the provider’s Medicare number.  As a general rule, Medicare regulations require payments to be distributed directly to the physician who rendered the services. However, through a process called “reassignment,” a physician may submit a CMS-855R form and designate a third party to receive the physician’s distributed payments.  Reassignment by a physician of his provider number to a third party, such as a group practice, hospital, or under contract with another entity, can bill for the doctor’s services is very common.  According to an OIG report at least 77% of practitioners have at least one reassignment.  However, 37% of those reassignments should not have had claims filed using those provider numbers.  Of particular concern is those claims filed by an entity no longer affiliated with the practitioner, i.e., the physician retired, is no longer employed by the entity, or in some cases where a physician applied for a position with a provider but did not work for the company.

The OIG reached settlements with eight physicians who violated the Civil Monetary Penalties Law by causing the submission of false claims to Medicare from physical medicine companies. Specifically, these 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.  The services were actually completed by unlicensed “technicians” who rendered in-home physical therapy service to Medicare and Medicaid beneficiaries. While members of the physical medicine companies were criminally prosecuted, OIG also held the physicians liable, citing them as an “integral part of the scheme.” There was evidence that the claims submitted by the physical medicine companies were not actually performed by the physician, were billed at a higher rate than documented or were not performed as billed.

It is noteworthy that while these physicians may not have known the companies were filing improper claims with their provider numbers, the physicians were, nevertheless, held responsible for the fraudulent claims.  The OIG cautions:

A physician who reassigns to any entity his or her right to bill the Medicare program and receive Medicare payments has the right to access the entity’s billing information concerning the services the physician is alleged to have performed and for which the entity billed Medicare. Physicians have unrestricted access to claims submitted by an entity for services that the entity billed using the physicians’ reassigned provider numbers to provide added assurances that the services for which the entity billed Medicare were, in fact, performed and were performed as billed.

The physicians described above settled with the OIG and paid between $29,000 and $133,333 for their roles in the false billings.  Although the physicians may not have been involved in the billing procedures, they were not in the dark about the reassignments.  It is clear physicians should monitor any billings through a reassignment.

Recent enforcement actions by the Department of Justice (DOJ) have concentrated heavily on health care fraud and resulted in record-breaking recoveries. In February 2012, the Health Care Fraud and Abuse Control Program (HCFAC) report stated that nearly $4.1 billion was recovered in 2011. The DOJ cites the Department of Health and Human Services and the Health Care Fraud Prevention & Enforcement Action Team as the main reasons for DOJ’s success, and there is no indication that DOJ is slowing its aggressive fight against fraud. Additionally, the Affordable Care Act provides extra resources to assist DOJ, including an extra $350 million for HCFAC activities.  As such, the settlement agreements specifically give the OIG and CMS the right to take further legal action against the physicians, including exclusion from Medicare and Medicaid, criminal prosecution and even tax law violations.

Steps to Take:

I.    For any reassignments, be sure to terminate that reassignment as soon as the provider is no longer providing services for the company.  It’s the provider’s responsibility to follow-up and terminate the reassignment.
II.    Providers should monitor claims that are billed on behalf of the provider not just for fraudulent claims but also for upcoding and incorrect claims.
III.    If a provider believes there has been improper claims under the provider’s name, he should immediately contact an attorney. An attorney can verify that both the physician and entity are in compliance with all applicable regulations, assert the physician’s right to access the entity’s billing information concerning services the physician is alleged to have performed, and obtain access to claims submitted by entities that are billed using the physician’s reassigned provider number.