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A Trap for the Unwary

What You Need to Know Before Billing Services Furnished by One Provider under another Provider’s NPI

By Emma Cecil, JD Senior Regulatory Attorney, The Institute at MagMutual

An Oklahoma physician agreed in August 2017 to pay the government $580,000 to resolve allegations that he violated the False Claims Act (“FCA”) by causing false claims to be submitted to Medicare for services he neither provided nor supervised. According to the government, the physician allowed a company that employed him to use his national provider identification (NPI) number to bill Medicare for physical therapy evaluation and management services furnished by other providers.

Even more recently, California-based Scripps Health agreed on January 23, 2018 to pay $1.5 million to resolve allegations that it had violated the FCA by submitting claims for physical therapy services under the names and NPIs of physicians who neither performed nor supervised the services. The qui tam complaint, filed by Scripps’ former Director of Business Operations, alleged that because the physical therapists who actually rendered the services did not have Medicare provider numbers of their own and could not bill directly for the services they provided, Scripps fraudulently billed the services under physician provider numbers. Importantly, the government pursued the case even though there were no allegations regarding quality of care or medical necessity, and even though all physical therapists were properly licensed and all services billed to Medicare were actually provided.

Other examples of government enforcement action against providers who submit or cause to be submitted claims for services under the name and NPI of a physician who did not personally furnish the services include:

• Alaska’s Bartlett Regional Hospital, which paid more than $1.4 million to resolve allegations that it had submitted claims using incorrect physician names and NPIs and had improperly submitted claims for services rendered by non-physician providers under a physician’s name and NPI. Specifically, the hospital had self-disclosed to OIG that for a six-year period, it had instructed its billing staff to submit claims for services that had been furnished by physicians who were not enrolled with Medicare under the name and NPI of a physician who was enrolled with Medicare.

• The University of North Texas Health Science Center, which paid nearly $860,000 to resolve allegations it had submitted claims for physicians’ services provided to Medicare and Medicaid beneficiaries using the NPIs of physicians who neither provided nor personally supervised the services.

• A Massachusetts doctor who agreed to pay $799,000 for, inter alia, billing for services of genetic counselors “incident to” his own professional services when the counselors were not located in the same office suite or at the same address and thus did not provide such services under the physician’s direct supervision.

• Rutherford Hospital, Inc., which paid $706,000 for allegedly submitting claims for physicians’ services provided by a doctor to Medicare beneficiaries using the NPI of another doctor who did not furnish the services.

• The University of Nevada School of Medicine, which paid just over $138,000 for allegedly submitting or causing to be submitted claims for services provided by two physicians to beneficiaries of federal healthcare programs using the NPIs of two physicians who did not furnish the services.

• A North Carolina family practice physician who paid nearly $134,000 to resolve claims that he billed Medicare for nurse practitioner services as though he had personally performed the services.

• A Texas physician who paid $110,000 for allegedly billing Medicare for services provided by a physician who did not have a Medicare provider number.

As a reminder, services generally must, subject to the limited exceptions described below, be billed under the name and NPI number of the provider who actually rendered the services. See Medicare Claims Processing Manual Publication #100-04 Chapter 1, 30.2.13 (noting that each physician performing services for a patient must be identified on the claim form by his or her NPI number). Misidentifying the treating physician by submitting claims under the name and NPI of a physician who did not actually furnish the services may result in civil liability under the FCA and even criminal liability if the requisite intent to defraud can be established.

Incident-To Billing
One exception to this general rule is when services provided to Federal health program beneficiaries by non-physician practitioners (“NPP”s) such as physician assistants (PA) and nurse practitioners (NP) are billed “incident-to” a physician’s services. “Incident to” services are services that are furnished as an integral, though incidental, part of the physician’s personal professional services in the course of diagnosis or treatment of an injury or illness. When the incident to rules are properly followed, the physician may bill Medicare for the NPP’s services as if he personally provided them – that is, he may submit claims using his name and NPI number – and the services are paid at 100% of the physician fee schedule amount. When billed by the NPP, the same services are paid at only 85% of the PFS. Although incident to billing can increase revenue, it is not without significant risk as the requirements are stringent and failure to strictly comply with those requirements could subject providers to hefty fines and penalties.

In order to bill a provider’s services incident to a physician’s services and collect 100% of the PFS amount, all of the following requirements must be satisfied:

• The services must be an integral part of the patient’s normal course of treatment, during which a physician personally performed an initial service and remains actively involved in the course of treatment.

• The services must be the kind that are commonly rendered without charge or included in the physician’s bill.

• The services must be of a type commonly furnished in a physician’s office or clinic (not in an institutional setting).

• The services must be a direct financial expense to the physician (i.e., the supervised provider furnishing the services must be a W-2 or leased employee or independent contractor).

• The physician must provide direct supervision. Direct supervision does not mean that the physician must be physically present in the patient’s treatment room while these services are provided. However, he or she must be present in the office suite to render assistance, if necessary. Note also that the direct supervision requirement applies even if the NPP is licensed under state law to perform a specific procedure and is able to perform the procedure without supervision and have the service separately covered and paid for by Medicare as a PA or NP service. If that service is going to be billed “incident to” the services of a physician, it must be performed under the physician’s direct supervision and as an integral part of the physician’s personal in-office service.

• The patient record should document the essential requirements for incident to services.

While incident to billing is typically used to bill for services provided by NPPs, questions have emerged regarding the appropriateness of billing services provided by one physician “incident to” the services of another physician. Notably, the incident to rules refer to “auxiliary personnel,” which is broadly defined as, among other things, “any individual who is acting under the supervision of a physician (or other practitioner), regardless of whether the individual is an employee, leased employee, or independent contractor of the physician (or other practitioner) or of the same entity that employs or contracts with the physician (or other practitioner).” 42 C.F.R. § 410.26(a)(1). Although CMS has acknowledged that it “deliberately used the term any individual so that the physician (or other practitioner), under his or her discretion and license, may use the service of anyone ranging from another physician to a medical assistant,” 66 F.R. 55245, 55268 (Nov. 1, 2001), it has elsewhere indicated that the practice of billing the services of one physician incident to another physician’s professional services is discouraged and should be used sparingly. In addition to ethical concerns, it raises questions regarding the supervising physician’s responsibility and the qualifications of the individual furnishing the services. Moreover, in order for a physician’s services to be billed incident to another physician’s services, all of the incident to requirements must be satisfied. Among other things, the rendering physician’s services must in fact be “incidental” to the billing physician’s professional services.

Locum Tenens and Reciprocal Billing Arrangements
The other exception to the general prohibition against billing under the name and NPI of a non-rendering physician is for services furnished pursuant to locum tenens and reciprocal billing arrangements. These billing arrangements allow for services furnished by a substitute physician on a temporary bases to be billed under the name and NPI of the regular physician when the regular physician is unavailable. Unlike incident to billing, the locum tenens and reciprocal billing rules apply only to physician services, not to services provided by non-physician providers.

Locum Tenens or “Fee-For-Time Compensation Arrangements”
A physician who is absent due to reasons such as illness, pregnancy, vacation, or continuing medical education may need to hire a substitute physician to see her patients. During the regular physician’s absence, she may bill and receive payment for the substitute physician’s services as though she performed the services herself. Under such a scenario, the regular physician compensates the substitute physician on a per diem or other fee-for-time compensation basis with the substitute physician having the status of an independent contractor, rather than of an employee, of the regular physician.

In order for the regular physician to submit a claim and receive payment for a substitute physician’s services, the following conditions must be satisfied:

• The regular physician must be unavailable to provide the services;

• The Medicare beneficiary must have arranged or sought to receive the services from the regular physician;

• The regular physician must pay the substitute for his/her services on a per diem or similar fee-for-time basis;

• The substitute physician may not provide the services to Medicare patients over a continuous period of longer than 60 days; and

• The regular physician must indicate that the services were provided by a substitute physician under a fee-for-time compensation arrangement meeting the above requirements by entering HCPCS code modifier Q6 after the procedure code (the Q6 modifier denotes that the service was furnished under a fee-for-time compensation arrangement by a substitute physician).

The same requirements apply when a medical group submits claims in the name of the regular physician for the services of a substitute physician. In those cases, the substitute physician must not have reassigned his right to payment to the group, and the per diem or similar fee-for-time compensation the group pays the substitute is considered paid by the regular physician. Because the term “regular physician” includes a physician who has left the group and for whom the group has hired the substitute as a replacement, a group that hires a substitute as a temporary replacement for a physician who has departed the practice may bill for the temporary physician for up to 60 days.

The continuous 60-day period begins on the first day the substitute physician provides services to the regular physician’s Medicare patients and continues without interruption, including days on which no services are provided to patients on behalf of the regular physician. A new period of services may begin after the regular physician has returned to work.

To help clarify the 60-day continuous period, CMS provides the following example:

The regular physician goes on vacation on June 30, and returns to work on September 4. A substitute physician provides services to Medicare Part B patients of the regular physician on July 2, and at various times thereafter, including August 30 and September 2. The continuous period of covered visit services begins on July 2 and runs through September 2, a period of 63 days. Since the September 2 services are furnished after the expiration of 60 days of the period, the regular physician is not entitled to bill and receive direct payment for the services furnished August 31 through September 2. The substitute physician must either bill for the services furnished August 31 through September 2 in his/her own name and billing number or reassign payment to the person or group that bills for the services of the substitute physician. The regular physician may, however, bill and receive payment for the services that the substitute physician or physical therapist provides on behalf of the regular physician or physical therapist in the period July 2 through August 30.

See Medicare Claims Processing Manual, Chp. 1, § 30.2.11.
If the regular physician is going to be absent for more than 60 days, he or she will need to contract with a different locum tenens physician. Alternatively, the regular physician can return to work for one (1) day, which will restart the 60-day clock, allowing for the current substitute physician to begin a new continuous 60-day period of services. The regular physician might also consider hiring and credentialing the substitute physician so that the substitute can submit claims under his or her own NPI.

Importantly, a physician whom a practice has newly hired but who has not yet been credentialed with Medicare may not act as a locum tenens physician. As noted, a locum tenens physician is a physician who serves temporarily as a substitute for a regular physician who is absent or for a physician who has left a group. A locum tenens arrangement is therefore inappropriate for employed physicians awaiting enrollment with Medicare.

Reciprocal Billing Arrangements
Reciprocal billing arrangements, which are similar to locum tenens arrangements, allow a patient’s regular physician to submit a claim and receive payment for services that the regular physician arranges to be provided by a substitute physician on an occasional reciprocal basis. The primary difference between locum tenens billing and reciprocal billing is that reciprocal billing is used when a physician covers for another physician within the same group practice. Many of the same conditions that apply to locum tenens billing apply to reciprocal billing. That is, the regular physician may submit a claim and receive payment for services furnished by a substitute if:

• The regular physician is unavailable to provide the services;

• The Medicare patient has arranged or seeks to receive the services from the regular physician or physical therapist;

• The substitute physician does not provide the services to Medicare patients over a continuous period of longer than 60 days; and

• The regular physician indicates that the services were provided by a substitute physician under a reciprocal billing arrangement meeting the above requirements using the Q5 modifier after the procedure code. The regular physician must keep on file a record of each service provided by the substitute physician along with the substitute physician’s NPI.

A physician may have reciprocal billing arrangements with more than one physician, and these arrangements do not need to be in writing. The continuous period for purposes of reciprocal billing is the same as the continuous period for locum tenens billing.

Whether billing under a locum tenens or reciprocal billing arrangement, the physician is certifying, by entering the Q6 or Q5 modifier, respectively, that the services are covered visit services furnished by the substitute physician identified in a record of the regular physician which is available for inspection, and are services for which the regular physician (or group) is entitled to submit the claim. Any false certifications when billing pursuant to these arrangements may result in civil or criminal liability, or administrative penalties including revocation of the physician’s Medicare billing privileges, right to receive payment, or to submit claims or accept any assignments.

Commercial Payor Rules
It is important to remember that the above rules are Medicare rules and may not apply in the context of commercial payor billing. While some private insurers may allow providers to bill using an absent provider’s NPI for a period of time, others may require that the substitute provider be credentialed. With respect to incident to billing, many commercial plans have declined to adopt a similar mechanism and instead explicitly require that all services be billed under the name of the rendering provider. Providers billing private payors must therefore review their provider contracts and health plan rules to determine whether billing the services of one provider under the name and NPI number of another provider is allowed, and if so, under what circumstances. If prohibited, billing the services of the rendering provider under the name and NPI of another provider could result in criminal liability under the federal health care fraud statute, 18 U.S.C. § 1347, which makes it a crime to knowingly and willfully obtain, by means of false or fraudulent representations, money owned by any health care benefit program in connection with the delivery of or payment for health care services.

Conclusion
Before billing services under the name and NPI of a physician who did not personally perform the services, providers must be intimately familiar with the Medicare rules under which such billing is permissible, as failure to comply with these rules can lead to both civil and criminal liability. Providers who avail themselves of Medicare’s incident to, locum tenens, and reciprocal billing rules must also remember that private payors are not required to follow Medicare rules and may prohibit such billing arrangements. In no case is it ever appropriate to submit claims that contain false representations about the services provided, with knowledge that the representations are false, in order to obtain payment for health care items or services.

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