Supervision may increase for third-party billers
New national database coming next year
Providers using outside billing companies to prepare and process their Medicare claims should be prepared for increased scrutiny by federal investigators.
The caution is spurred by an Office of the Inspector General (OIG) report that concludes the Health Care Financing Administration (HCFA) encourages fraud because it cannot identify and track the third-party billers used by providers. Federal policy-makers have put HCFA on notice that they are becoming frustrated with the agency’s efforts in this area. "A scam artist can hide behind the billing number of a legitimate health care provider and evade detection,’’ argues Lew Morris, counsel to the inspector general.
Adds House Commerce Committee Chairman Rep. Tom Bliley (R-VA), "HCFA is failing to adequately protect Medicare from potential fraud and abuse by third-party billers."
The issue should be of more than passing interest to medical practices because physicians can be held liable for misdeeds done in their names. (See story, p. 83.)
In response to the criticism, HCFA agreed to a May minisummit with billers and Congress to come up with ways to implement new third-party billing safeguards. Among the ideas to be considered at the summit are for HCFA to:
• register all claims clearinghouses and third-party billers to identify billers participating in Medicare and other federal heath programs. This step also would require billers to place their ID on all claims they prepare.
"The Internal Revenue Service requires all preparers of tax returns to identify themselves. Medicare should require claim preparers to do the same," the OIG report states. "This would provide an audit trail and ensure that claims enter the Medicare system from authorized sources."
• require providers to periodically verify enrollment data and report who does their third-party billing. HCFA is expected to unveil a proposed rule by October implementing these ideas.
Other measures that could be included are to:
• develop a new national database, the Provider Enrollment, Chain, and Ownership System (PECOS), to provide information on provider billing arrangements. HCFA hopes to implement PECOS as early as August 2001, say agency officials.
• outlaw commissions paid to billers based on the number of claims they process or the amount of money they collect.
In 1996, HCFA updated enrollment forms for new health care providers to require identification of outside billing companies. Under the rules HCFA wants in place by October, providers would have to update their Medicare enrollment forms every three years.
Admitting that "our overall ability to monitor third-party billing companies is quite limited,’’ Medicare’s director of program integrity, Penny Thompson, says HCFA also will ask providers to be more careful about the billing companies they hire and review their work.
Billing companies, however, don’t like the idea of additional regulations, arguing adequate rules are already on the books. However, there are indications the billing industry would accept a ban on collections-based commissions. Industry representatives also are pushing for safe harbors and amnesty from prosecution for billing firms that voluntarily disclose possible payment problems they know about.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content