Reassignment of Benefits and Who May Bill

Start with the prohibition rather than the practice. The program does not pay amounts due a supplier to any other person under reassignment, power of attorney or any other direct arrangement. Every group practice bill, every hospital-employed physician claim and every staffing company invoice depends on an exception to that sentence. If the exception fails, the payment was not authorized, whoever did the work.

Employment and contract, and how they differ

The first exception permits payment to the supplier's employer where the supplier is required, as a condition of employment, to turn over the fees for their services. The condition is doing work in that sentence. An employment agreement silent on the point does not establish the exception, and practices that treat employment status alone as sufficient are relying on a rule that is not there.

The second permits payment to an entity enrolled in the program where a contractual arrangement exists under which the entity bills for the supplier's services. Two elements bind: the entity must itself be enrolled, and the arrangement must be contractual and documented. This is the route used by independent contractor physicians, locum arrangements and most management structures.

Two narrower routes exist. Payment may go to a government agency subject to the federal assignment of claims statute, and payment may be made under a reassignment established by court order. A billing agent may also be paid, but always in the name of the supplier or the employer rather than in the agent's own name.

Joint liability and the access right

Two conditions attach to reassignment and neither can be contracted away. An enrolled entity receiving payment under a contractual arrangement and the supplier who would otherwise receive payment are jointly and severally responsible for any overpayment to that entity. The clinician does not escape by pointing at the billing department, and the entity does not escape by pointing at the clinician's documentation.

The supplier who furnished the service also has unrestricted access to the claims the entity submitted for those services, whether the relationship is employment or contract. An entity that refuses to provide billing information on request risks revocation of its right to receive reassigned benefits. That is a real sanction and it applies to the arrangement rather than to the underlying enrollment.

Arrangements that look like reassignment and are not

Several structures move a bill from one name to another without being reassignment at all, and each has separate conditions. Services furnished by auxiliary personnel and billed under a physician run on the incident-to rules, which turn on supervision, employment relationship and the physician's involvement in the course of treatment. Reciprocal billing and substitute clinician arrangements allow a regular physician to bill for a substitute's services in defined circumstances, subject to a continuous-period limit and a claim modifier.

The rules that reassignment does not displace

Nothing in the reassignment rules alters obligations under the referral and remuneration statutes, the purchased diagnostic test limits, or the incident-to rules. That is stated expressly, and it defeats a common assumption that a properly executed reassignment sanitizes the underlying arrangement. It does not. A compensation formula that fails the self-referral prohibition fails it whether the money arrives by reassignment or directly.

The same is true of the intent-based analysis in the remuneration prohibitions and their safe harbors, where payments passing through a billing entity attract exactly the scrutiny they would attract in the open. And because the entity must be enrolled, every reassignment depends on the enrollment record staying accurate under provider enrollment and revalidation.

When the arrangement turns out not to have worked

Where reassignment was defective, the claims were paid to a party not entitled to receive them, and the amounts become identified overpayments once the defect is known. The clock and the suspensions in the sixty-day refund obligation then govern, and joint liability means both parties are exposed to the whole amount rather than to a share of it.

The practical fix is usually prospective: enroll the entity, execute the reassignment properly, and stop billing under the defective structure immediately. Retroactive repair is limited by the effective date rules, and a reassignment cannot be backdated to cover claims already submitted. Contracts should also allocate the joint liability between the parties expressly, since the program will pursue whichever party is easier to reach.