Health Law Daily Physicians’ billing privileges properly revoked where they failed to provide direct supervision
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Tuesday, April 16, 2019

Physicians’ billing privileges properly revoked where they failed to provide direct supervision

By Jeffrey H. Brochin, J.D.

Use of their personal NPI numbers for incidental services required their personal, on-site presence as the billing physicians, and not supervision by other practitioners.

A federal appeals court has ruled that husband and wife physicians who were out of the country on the dates they billed Medicare for services provided properly had their Medicare billing privileges revoked for three years. They were required to be physically present for direct supervision over any services billed under their respective National Provider Identifier (NPI) numbers, and not merely arrange for supervision of incidental services by other practitioners during their absences (Shah v. Azar, April 12, 2019, Higginbotham, P.).

Out of the country on dates billed. A Texas-based cardiologist and his Texas-based primary care physician wife both participated in the Medicare program. They conceded that they were both out of the country during various periods in 2011, 2012, and 2013, during which times, the cardiologist submitted over 100 claims for reimbursement at the physician billing rate for medical services using his unique Medicare NPI, and the primary care physician submitted over ninety Medicare claims for reimbursement at the physician billing rate using her unique Medicare NPI. In September 2014, their Medicare Contractor, Novitas Solutions, informed them that their Medicare privileges were being revoked pursuant to 42 C.F.R. § 424.535(a)(8), ("Abuse of Billing Privileges"), because they submitted the respective claims during documented periods of travel outside the United States. They both had the right to submit a Corrective Action Plan (CAP) within 30 calendar days, which they did.

CAPs not determinative. The cardiologist acknowledged that the claims at issue were for services performed by nurse practitioners while he was out of the country, and that he was unaware that services for a nurse practitioner could not be billed under his NPI number unless he was physically present with them at all times. The primary care physician explained that she had hired experts to guide her through the process of correcting billing errors and had discontinued the use of nurse practitioners altogether. Although CMS, through Novitas, acknowledged receipt of both CAPs, it determined that it would not overturn the initial revocations: the explanations did not negate the fact that claims were submitted for services that could not have been furnished by either physician on the dates of service reported.

Administrative review and appeals. Both physicians sought review of CMS’s decision before an ALJ, and in both cases, the ALJ noted that the physicians did not deny that they were out of the country on dates for which they submitted claims for services they allegedly provided, and that concession was all that CMS needed in order to authorize revocation of Medicare participation. Both physicians appealed to the HHS’ Departmental Appeals Board (DAB) which affirmed each decision noting that the uncontested facts showed that each physician had been outside of the country while using personal NPI numbers. Further judicial review in district court pursuant to 42 U.S.C. § 405(g), affirmed the previous rulings, and the physicians filed a consolidated appeal with the Fifth Circuit.

‘Incident to’ services permitted. The physicians contended that billing for services "incident to the service" of a physician did not require the personal, on-site presence of the billing physician and allowed direct supervision to be provided by an "other practitioner." They further argued that the ALJ and DAB misread the regulations because the regulations recognize that the billing physician may make arrangements with another practitioner. The services were actually rendered and were services performed by nurse practitioners acting under the physicians’ orders after initial evaluations, and they were performed with covering physicians available. Medicare allows for the provision of services "incident to" a physician’s professional service by non-physician practitioners such as nurse practitioners or physician assistants.

Direct supervision required. However, the regulations also require that the incident to services be furnished under the "direct supervision" of the physician (or other practitioner), and the regulations define direct supervision as follows: "Direct supervision in the office setting means the physician must be present in the office suite and immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician must be present in the room when the procedure is performed." Therefore, when incident to services are furnished, a physician or other practitioner must be physically present in the office suite to directly supervise the services.

Misuse of personal NPI. If no physician is present to directly supervise the auxiliary personnel, then the service must be billed under the NPI of the auxiliary personnel, which results in a reduction from a 100 percent billing rate for the medical service to an 85 percent billing rate. The court also noted that a separate regulation outlines the reasons for which CMS may revoke Medicare privileges, including for abuse of billing privileges, which specifically cites the circumstance of when "the directing physician or beneficiary is not in the state or country when services were furnished."

Based on the foregoing, the appeals court found that the physicians did not render the requisite direct supervision, and abused their billing privileges by not being in the country when the services were rendered, and billed via their personal NPIs. Accordingly, both revocations were affirmed.

The case is (consolidated) No. 17-40897 c/w 17-40898.

Attorneys: Emil Lippe, Jr. (Lippe & Associates) for Zille Shah and Zille Huma Zaim. Bradley Elliot Visosky, U.S. Attorney's Office, for Alex M. Azar, II.

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