Paying your billing service by percentage of claims – is there risk? (Maybe)

Paying your billing service by percentage of claims – is there risk?  (Maybe)

The medicaidlaw-nc blog posted “Do You Pay Your Billing Agent a Percentage of Claims? You May Be in Violation of Federal law!” on 7-12-17.  Obviously, this is an attention-getting title, so let’s begin with a deep breath and some background about the source.  This blog is posted regularly by Nicole Emmanuel, a lawyer in North Carolina who specializes in Medicaid litigation.  She blogs regularly about Medicaid issues, with her intended audience being NC medical professionals but MHConcierge finds her posts to be informative about national issues and monitors her blog.

In this posting Nicole discusses a recent development in New York, in which the Federal Office of Inspector General (OIG) issued “hundreds” of recoupment letters to clinicians who have percentage-based contracts with billing agents.  The rational is documented to be that these unfortunate clinicians are in violation of a Federal law prohibiting fee splitting for Medicaid payments by re-assigning Medicaid payments. This action is limited to Medicaid, but Nicole notes that that state law may or may not prohibit various forms of feel splitting and recommends confirming the law in the reader’s own State for non-Medicaid billing. She recommends following the outcome of the OIG action in New York, as if it is successful it would certainly be expanded to other States.  She strongly recommends paying your billing service a flat fee or a fee based on time spent on your account. 

The full post is available online.

MHConcierge’s take:  MHConcierge is loath to post about things that may cause our loyal readers to have indigestion, bad dreams, or to feel compelled to consult a lawyer – but sometimes it is necessary!  We took a quick look at the MN Statute about the practice of psychology, MN Statute 148.941.   Subd 11,  discusses fee splitting, includes as an example of prohibited fee splitting:

ii. dividing client fees with another individual or entity, unless the division is in proportion to the services provided and the responsibility assumed by each party; 

MHConcierge wonders if this means that it is acceptable to pay your billing service a fee based on percentage of claims, for non-Medicaid claims,  as long as the fee is proportional to the work done by the billing agency – but of course, if in doubt, get legal advice. MHConceige pays for billing services based on an hourly rate, and sleeps well at night knowing that the billing staff is paid fairly and there is no fee-splitting risk. As to whether you need to worry about Medicaid claims, this requires ongoing monitoring. 

Disclaimers: Only lawyers can provide legal advice. This posting is intended to provide info about a complex and evolving practice issue, and to not provide advice about whether, or how, to respond. 

 

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