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American Academy of Emergency Medicine

HCFA Answers the Contract Companies

Following this introduction you will find some of the responses of HCFA to a series of questions regarding compliance put forth by the EM contract management industry. These questions were posed by the contract groups to HCFA when HCFA stated it would no longer send independent contractor physician payments to them. This ruling threatens to blow the lid off the "closed books" status for emergency physicians and actually allow the docs to see the income they generate. This would expose the extent of fee siphoning and empower you, the physician, to address this exploitation head on.

Read both the questions and answers carefully. AAEM believes this to be a major milestone in the battle to help the working EP. The questions also expose the true intent of the contract groups: keeping you in the dark about your economic worth. AAEM fully supports the "open book" policy and HCFA here states that we are right on the mark. You need to be aware that AAEM is leading the way in this fight. We need your help as this will not be the final battle.

The following replies from HCFA say that you are supposed to see the remittance. Yes, you are supposed to see the money paid on your behalf. AAEM urges you to speak out on this issue. We welcome your help in defending the practicing emergency physician.

Question: If an independent contractor physician uses a billing company, does he/she have to submit a billing agreement with the HCFA 855 enrollment application?

Answer: Yes. Any provider that enrolls with Medicare to obtain a billing number (or PIN) must submit a copy of their billing agreement. The Medicare Carriers Manual instructs carriers to request a billing agreement as part of their validation process. Physicians that are already enrolled and adding a new practice location would have to include a billing agreement if an agent is used. HCFA needs to ensure that the Agency is allowed to send Medicare payments to an agent of the provider that performs billing and/or collection services. In general, Medicare law (sections 1842(b)(6) and 1815(c)) requires that payment should be made directly to the provider of service. However, if certain conditions are met, we may make payment to a billing agent. When payment is properly made to a provider's billing agent, there is no reassignment issue because the billing agent is not a health care provider with a Medicare billing number, and the checks are made out in the name of the billing number of the provider of service.

Question: Will HCFA require that physicians receive a copy of the remittances?

Answer: Yes. Remittance notices are being sent to the business address of the physician. The remittance notice is made out in the physician's name, and the physician has the right to review the remittance. The billing agreement must ensure that the physician has unrestricted access to this information and that the agent operates only on behalf of the physician.

In addition, a physician can request to see a copy of the remittance notice from the appropriate Medicare carrier, under the Privacy Act, in order to find out what was billed and paid on their behalf. Since the physician is being held accountable for any service that he or she provides to a Medicare beneficiary, they have the right to know what is being billed and paid on their behalf.

AAEM's Comment: The last line above is what AAEM considers the heart of the issue. You have the RIGHT TO KNOW what is being billed and paid on your behalf.

Question: Can an emergency department staffing organization (ED group) sign a financial agreement with HCFA attesting that the ED group will be accountable to the federal government for all billings? Thus, the ED group would be responsible to repay the federal government for any overpayments it may have received due to upcoding, overbilling, or fraudulent billing. Also, if the ED group will be held liable, can the ED group be considered the supplier of service and receive direct Medicare Part B payments for services of its independent contractor physicians?

Answer: No. Section 1842(b)(6) of the Social Security Act makes an exception to the prohibition on the reassignment of claims to allow an employer to receive direct Medicare payments for services of its employees. Also, section 3060.D of the Medicare Carriers Manual recognizes the employer as a supplier, and thus is accountable for its employees. Unless the organization meets one of the exceptions that allows payment to a facility or to a health care delivery system, the independent contractors are providing physician services, and Medicare must pay only the physicians directly.

AAEM's Comment: This was an attempt to prevent the doctors from seeing what is billed and paid out.

Question: If a limited partnership meets state law requirements, will HCFA require the physician partners to obtain a minimum percentage interest in the limited partnership?

Answer: No. Currently, HCFA would recognize a limited partnership that meets state law requirements as a supplier that can bill for its partners and employees.

AAEM's Comment: We need to watch out for this one. The obvious implication is that the CMG will make you an extremely limited partner in order to receive reassignment. Do not sign away your right to review the books. Remember, even if you are a limited partner, you may be 100% accountable for the funds billed and collected in your name.

Question: Will HCFA recognize an emergency department staffing organization that uses independent contractor physicians that are shareholders of the emergency department staffing company?

Answer: No. Shareholders of a corporation are not necessarily employees. We can pay individuals, corporations, partnerships, trusts, or estates as suppliers for services furnished by their employees or partners. Neither the law nor our regulations state that we can pay an organization on behalf of services provided by its shareholders.

If an independent physician contractor works for an emergency department staffing company, and purchases stock in that company, the fact that he or she is a shareholder in this company doesn't give him or her the right to reassign his or her Medicare benefits over the company.

AAEM's Comment: Again, another attempt to avoid the problem of letting you see the remittance.

Question: What types of payment and/or billing arrangements are acceptable?

Answer: In order for HCFA to make payment to an agent, the payment to agent conditions specified in 424.73(b)(3) of the Medicare regulations and in section 3060.10 of the Medicare Carriers Manual (MCM) must be met. For electronic fund transfers, payment must go directly into the physician's bank account. See section 3060.11 of the MCM.

In order for the billing agreement to be acceptable to Medicare, the agreement must ensure that the physician billing records will be available and accessible to the physician on a timely basis. In addition, the billing agent must be paid only by the physicians and cannot be compensated by any other third party. HCFA must be assured that the billing agent's sole responsibility is to act on behalf of the physician.

AAEM's Comment: Physician billing records "available and accessible to the physician on a timely basis." Simple, but powerful words. These, combined with the right to know what is paid out are the foundations for us to crack open the closed books. Take this document with you to the contract holder or the management group. Academic faculty should see that their graduating residents use this information during their job searches. AAEM supports your right to know! Please contact us at info@aaem.org if you need further information.