Do You Pay Your Billing Agent a Percentage of Claims? You May Be in Violation of Federal law!

The Office of Inspector General (OIG) recently disseminated hundreds of recoupment letters to providers in New York who had percentage-based contracts with billing agents. OIG is seeking recoupment for services spanning a five-year period, plus 9% interest. See example redacted letter from OIG.

oig letter

42 CFR 447.10 prohibits the re-assignment of provider claims and applies only to Medicaid. It is recommended that you pay your billing agent a flat fee or on a time basis.

North Carolina Medical Society also discourages fee splitting. On the NCMS website, the Society warns that “Except in instances permitted by law (N.C. Gen. Stat. § 55B-14(c)), it is the position of the Board that a licensee cannot share revenue on a percentage basis with a non-licensee. To do so is fee splitting and is grounds for disciplinary action.”

Not all States prohibit fee splitting, and if Medicare or Medicaid is not involved, then we look to state law. But if Medicare or Medicaid is involved, then federal law matters. Some States prohibit fee splitting for doctors, chiropractors, and hospitals, while other states do not prohibit fee splitting for massage therapists. So it is important to know your State’s laws.

Lawyers also have fee-splitting prohibitions. To split fees with a nonlawyer constitutes the practice of law without a license (and probably multiple other ethical concerns).

Physicians, group practices and management services organizations should continue to carefully examine their current and proposed arrangements to ensure compliance with the fee-splitting prohibition applicable to your State. If you are unsure, consult an attorney.

OIG may have started these audits in New York, but, as New York State says “Excelsior” – ever upward – we can be sure that OIG will continue across the country.

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on July 12, 2017, in Alleged Overpayment, Anti-Kickback and Stark law, Chiropractors, CMS, Federal Government, Federal Law, Health Care Providers and Services, Hospitals, Knicole Emanuel, Legislation, Medicaid, Medicaid Attorney, Medicaid Providers, Medicaid Reimbursements, Medicare, Medicare and Medicaid Provider Audits, Medicare Attorney, New York Medicaid, North Carolina, Office of Inspector General, Stark Law, Taxes and tagged , , , , , , , , , , , , , , , . Bookmark the permalink. 2 Comments.

  1. I appreciate your work in the industry . Please consider putting out information about the problems we as providers are dealing with inside the MCO system who have the BILLING CLERKS and reimbursement “claims specialist ” who process all the states reimbursement and often are not efficient and even “pick and choose” who…??to pay… WHEN AND FOR WHAT EVER REASON not paid!!! We as behavior health providers work and do all we can to promote stable and reliable mental health services and daily!!! are denied claims reimbursements from billing clerks and claims specialist who are low level uneducated in behavioral issues…they are administrative clerks… they work without being audited and or credentialed…ore CEU requirements!! and they deny claims and “hold up” commerce flow in our state….daily hourly … if they decide they can’t “find” a claim in the system ….that they paid in the recent the past …but then… suddenly the client is not in the system …more often too … they say the diagnosis this week.. isn’t payable… but the same diagnosis was a month ago…if you would call the MCO Board and CEOs and have them direct a leadership directive to the billing clerks and claims specialist to pay claims!!! not make personal evaluations, abuse power…laugh … they know they don’t have to pay… … nobody holds these clerks accountable…. for how many claims they PAY!! instead of NOT pay!! then maybe the economic state of NC would improve… as money would flow… into the general economy instead of sit somewhere in a bank account… the claims specialist are rude,resentful and unprofessional….your missing there departments …they actually laugh and go hdotn answer voice mail… from their safe 9 to 5 JOB… with benefits…and sick leave and vacation time …. knowing the providers especially…. SOLO Independent practioners are doomed for a slow death without them “clicking the computer button” that they sit at all day !!! TO PAY CLAIMS NOW!!!!while we are out there not only marketing ,meeting needs of other coordination of care demands… and seeing clients… handling crisis and getting required CEU trainings…without employee benefits, vacation sick leave and or unemployment… if we lose a contract!…Recently,as an example… Sandhills started cutting contracts from Solo providers… they have a monitor Karen Kern who is LPC… with a private practice in Jamestown and also works inside the MCO…is that not a conflict of interest…all the provider that she dropped contacts need to be immediately restored!! She alone decided she didn’t like the note format and electronic software offered and used for the last five years …by an excellent billing agent…so you tell me …where does it stop!!! So what should a provider in Sandhills do if a Medicaid child needs services and they cant see the provider they choose!!! Cause the monitor specialist didn’t like the note formate….that was approved for the last five years!!! Some one should call SANDHILLS MCO and OPERATION VP ask them!!! WHY and when do they want to reinstate contracts for solo providers who have rights! Your the lawyer!!!I was a whistle blower for the state….I know how this works!

    It stops when the claims specialist pays for “back owned claims” and “current claims !!!!” so we csan pay for required CEU and Malapractice insurance and paper clips!!! Whart so sickening is the claims specialist… they all know they have” no political power”, but they sure do have power !!! Its called pay or not pay power….who is watching ….the claim specialist assigned to each provider actually laughs and picks up their monthly pay and they don’t have to worry about weekly notes ….why not monthly notes….that cost effective and smart!!! and the billing clerks inside the MCO???? Well last one I tried to call her voice message indicated she was on summer vacation!

    Chelsea Elizabeth Greene MA,LPC

    On Wed, Jul 12, 2017 at 1:27 PM, medicaidlaw-nc wrote:

    > kemanuel posted: “The Office of Inspector General (OIG) recently > disseminated hundreds of recoupment letters to providers in New York who > had percentage-based contracts with billing agents. OIG is seeking > recoupment for services spanning a five-year period, plus 9% interes” >

  1. Pingback: Paying your billing service by percentage of claims – is there risk? (Maybe) | Mental Health Concierge

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