Mar. 07, 2017

Medicaid Providers Warned About Collection Arrangements

Medicaid Providers Warned About Collection Arrangements

New York’s Medicaid Fraud Control Unit (MFCU) recently sent letters to health care providers in the state regarding “percentage of collection” arrangements with outside billing companies. These arrangements are illegal under Medicaid law, and providers should evaluate all billing vendor service contracts to confirm they do not provide compensation to the billing company based on a percentage of collections.

The MFCU states in its correspondence, “Billing agents are prohibited from charging Medicaid providers a percentage of the amount claimed or collected. In addition, such payment arrangements, when entered into by a physician, may violate the Education Law and State Education Department’s regulations on unlawful fee-splitting.”

Providers who are not compliant may be required to refund the resulting Medicaid payments made to the provider or practice. In its notification, the MFCU alerts health care providers to contract with billing agents enrolled in the Medicaid program and to obtain written proof of enrollment before contracting with them. 

For assistance in ensuring your billing arrangements are compliant with Medicaid law, contact the ICRH Health Care Practice Group at 518-462-3000.