July 17th, 2015
The FI or carrier makes payment in the name of the provider (Carriers additionally may pay in the name of supplier or employer, facility, or organized health care delivery system.) to an agent who furnishes billing or collection services if:
• The agent receives the payment under an agreement between the provider and the agent;
• The agent’s compensation is not related in any way to the dollar amount billed or collected;
• The agent’s compensation is not dependent upon the actual collection of payment;
• The agent acts under payment disposition instructions which the provider may modify or revoke at any time; and
• In receiving the payment, the agent acts only on behalf of the provider (except insofar as the agent uses part of that payment to compensate the agent for the agent’s billing and collection services).
For this purpose, an agency is an entity that provides computer and other billing services to prepare claims, and receive and process Medicare benefit checks for the provider, supplier, physician or other practitioner.
The primary purpose of this exception is to permit computer and other billing services to claim and receive Medicare payment on behalf of and in the name of the provider, supplier or eligible party). The conditions for payment insure that the billing agent has no financial interest in how much is billed or collected and is not acting on behalf of someone who has such an interest, other than the provider/supplier itself.
The conditions specified in subsection A do not apply if the agent merely prepares bills for the provider and does not receive and negotiate the checks payable to the provider/supplier.
The conditions specified in subsection A also do not apply where the entity receiving payment in the name of the physician qualifies to receive payment for the physician’s services by definition in law and regulations. Thus, a hospital which is entitled to bill and receive payment in its name for a physician’s service under §30.2.7 may bill and receive payment in the physician’s name (negotiating the checks under a power of attorney) even though its compensation is related to the amount billed or collected or is dependent on collection.
If payment is being made or requested to be made in the name of a provider to an agent, the contractor assumes that the conditions for such payment are met in the absence of evidence to the contrary. If there is evidence to the contrary, the agent must document the agreement by submitting to the contractor a copy of the written agreement. The written agreement may be a formal legal document or merely an exchange of correspondence. If there is no written agreement of either a formal or informal nature or all the required conditions for payment are not clear in the agreement, the contractor obtains a statement from the agent describing the pertinent terms of the agreement or of those provisions that need to be clarified. The contractor verifies the agent’s allegations by obtaining statements from one or more providers/physicians/suppliers that have agreements with the agent. See §18.104.22.168.D for reviewing endorsements on benefit checks.