Convoluted Arrangment - Legal?

[RichardP]

This is an actual situation I have just been confronted with.  It is not a question from a Billing Exam.   

All doctors are on the same floor in the same building, but in different offices.  This is not a doctor's group as defined by Medicare.

1. Dr. A employs Dr B.

2. Dr. A has no space for Dr B, so he strikes an arrangement with Dr. C.

3. Dr. C will allow Dr. B to use his space 2 days per week.  Dr. C will be absent from that space for those 2 days.

4. Dr. A will allow Dr. C to bill for the labs and x-rays ordered by Dr. B.  Dr. C can keep the money as payment for allowing Dr. B to use his office space.  (Office visits and other non-lab work and x-ray work will be billed by Dr. A)

5. Consider:  proper Medicare billing requires the CMS Form 1500 / Electronic Billing to show the NPI numbers for "who gets paid" and "who did the work".

6. Consider:  Stark laws prohibited certain kinds of behavior having to do with kickbacks

Question:

Dr. B decides what lab work needs to be done and what x-rays are needed.  Labs and X-rays are done in-house in a POL that is "owned" by about 12 individual doctors, including Drs. A and C (not a legit setup, based on the definition of a POL, but not part of this question)

They want us to bill for these labs and x-rays using Dr C as both "who gets paid" and "who did the work".

Problem is, Dr. C is nowhere around.  He is the one getting paid, per agreement with Dr. A.  But Dr. C did not see the patient and he is not the one who ordered the labs and x-rays.  That was done by Dr. B, who is not an employee of Dr. C, the one getting paid.

I'm thinking that it is not legit to present Dr. C as both "who gets paid" and "who did the work" on Dr C's CMS Form 1500 / Electronic Billing.

I'm thinking that it is also not legit to present Dr. B as "who did the work" on Dr C's CMS Form 1500 / Electronic Billing, because he is not employed by Dr. C.

Q1:  What sort of problem do you see coming up if we bill Dr. B's work under both of Dr. C's NPI numbers for "who gets paid" and "who did the work" under this scenario?

Q2:  Is it legal to put Dr. B's NPI # on Dr. C's billing as the one who did the work, even though he is not employed by Dr. C?

I will understand if your response is "ask a healthcare attorney".

[Michele]

I feel like I need to start with a disclaimer:  This is not legal advice.  I am not an attorney.

Q1:  What sort of problem do you see coming up if we bill Dr. B's work under both of Dr. C's NPI numbers for "who gets paid" and "who did the work" under this scenario?

If an audit is done.....there are so many things that they would probably be unhappy with, causing a major retraction of payments.

Q2:  Is it legal to put Dr. B's NPI # on Dr. C's billing as the one who did the work, even though he is not employed by Dr. C?

It is legal to put Dr B's NPI # on the claim.  There isn't a law saying that the dr must be employed by the group.  However, that could cause processing issues with claims being processed as out of network, or possibly processed to Dr B even though he's not indicated as the billing provider.

Honestly it sounds like a huge mess to me.  I know sometimes its hard to get Drs to understand why something is not 'ok'.   I would definitely recommend another way to cover the use of the office space.  JMO

[RichardP]

Thanks Michele.  That is also what I was thinking.

For the sake of others reading this, and based on the definition of "incident to", this is not an "incident to" situation.  For "incident to", Dr. C is required to do the initial work-up of the patient.  That won't be happening in this situation.

I vaguely remember situations such as this being asked about in the past.  If I can remember the terms used, I'll search this database and see if I can find some links.  But I'm thinking those conversations were about situations where Dr. 1 was the employer of Dr. 2. - so those conversations may not have information relevant to this situation - where Dr. C is not the employer of Dr. B.

My main concern here is that Dr. C (who will be doing the billing although doing none of the work) will be telling the Carriers he has contracts with that he did the work on these patients.  My concern is that this can be interpreted as fraud unless he tells the Carriers something about the guy who actually did the work (Dr. B), but who is not his employee.  The easiest way to handle this would be to put Dr. B's NPI number in the field on the CMS Form 1500 / Electronic Billing for "who did the work".  But Drs. A and C don't want to do this.

If anyone can remember these previous discussions about situations similar to this, and can come up with a link in this database, thank you in advance for posting such links below.

[RichardP]

This stuff was last discussed by me around 2013.  So it took a few minutes to get my memory back when the doctors told me what they wanted to do.

Here is the main link I was thinking about.  (There are other links like this, but this will do.)

https://www.medicalbillinglive.com/members/index.php?topic=7045.msg21031#msg21031

I remembered DMK's response directly under mine.  It was this that gave me pause:

You CAN NOT bill it "as if" the owner did the services.  And a good way to explain it to the doctor who owns the place is the malpractice issue.  If the patient sues, they're going to sue the doctor who performed the services.

     -----
In the link above, I said:

A supplier may be an individual, partnership, corporation, trust, or estate. Any services furnished by an employee of the supplier are considered furnished by the supplier if those services are within the scope of the employment.  Link to this statement given below.

Doctors groups may hire physicians and pay them a salary.  A doctor who has incorporated may hire physicians and pay them a salary.  A doctor acting as a sole proprietorship may hire physicians and pay them a salary.  All work done is billed under the name of the hiring group or physician.  The hiring group or physician gets paid and then pays the hireling(s) a salary.

In this way, we have satisfied the "who gets paid" and "who did the work" requirement by using the appropriate NPI Numbers in the appropriate boxes.

     -----

Given that Dr. B will not be an employee of Dr. C, the above does not seem to apply here.  DMK's rather emphatic statement does seem to apply, but DMK does not provide any support for that statement.

Which brings me to here:  Link provided below.

30.2.7 -  Payment for Services Provided Under a Contractual Arrangement -  Carrier Claims Only(Rev. 472, Issued:  02-11-05, Effective:  01-01-05, Implementation:  03-15-05)

A carrier may make payment to an entity (i.e., a person, group, or facility) enrolled in the Medicare program that submits a claim for services provided by a physician or other person under a contractual arrangement with that entity, regardless of where the service is furnished.  Thus, the service may be furnished on or off the premises of the entity submitting the bill and receiving payment.  The entity receiving payment and the physician or other person that furnished the service [two different entities it seems] are both subject to the following program integrity safeguard requirements:

1. The entity receiving payment and the person that furnished the service are jointly and severally responsible for any Medicare overpayment to that entity; and,

2. The person furnishing the service has unrestricted access to claims submitted by an entity for services provided by that person.

The wording here seems to allow Dr. C to bill and get paid for the work of Dr B, without Dr. B being an employee of Dr. C - so long as there is a contractual arrangement in place and Points 1 and 2 are met.

That still leaves the issue of malpractice.  But I at least found some wording from CMS that addresses the situation described at the top of this thread re. Drs. A, B, and C.  I still think it is convoluted and agree that there has to be a better way to do this.  But CMS has acknowledged the existance of this type of situation, so I'm going to put that in the file in case it is needed later, and go with what the doctors want.

Inside the link at the top of this post, I provided the following link.  I'm providing it again here, because the page numbers where the information can be found have changed.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c01.pdf

** See Section A, Page 54 for the "Supplier" quote above.

** See Pages 59 & 60 for the "Payment for Services" quote above.

[Michele]

Glad you found the info!  I hate when we are presented with crazy situations like this.