1.   Medicare Pass‐Through Billing – Permitted or Not? Home / Billing / Blog / Medicare Pass‐Through Billing – Permitted or Not? Posted on June 7, 2023 | By Simon | In Billing, Blog | Leave a comment Facebook   Twitter LinkedIn  American Medical Association ﴾AMA﴿ prohibits healthcare practitioners from charging for ancillary services to increase their markups. This practice violates not only the laws of ethics but also the regulations and policies of insurance companies and makes the healthcare system work harder than necessary. The facility violates the law if a clinic invoices a patient for services performed by an independent medical contractor. This practice of pass‐through billing has serious consequences. So, it is crucial to know everything about it and how to prevent falling into its trap. Today’s post answers an important query, i.e., what is pass‐through billing? From answering what pass‐through billing is to presenting the reasons for its illegality, the post sheds light on every aspect of this non‐permitted and fraudulent practice and why Medicare does not permit it. What is Pass Through Billing Most clinics use the tactic of pass‐through billing as a method to generate revenue without increasing overhead expenditures. A contractor intends to supply the appropriate equipment and a specialist to perform certain additional services, whether a CLIA laboratory or other well‐ patient tests employing the most up‐to‐date device or technology. The physician orders the test, permits the contractor to conduct the work on a machine that the clinic does not own using contract staff, and then bills for the service using the clinic’s NPI number.  In other words, the billing process between a reference laboratory and a physician’s office is known as pass‐through. Using this strategy, the physician’s office can send samples to a reference laboratory for testing, pay the reference laboratory directly, and then charge the patient or insurance company a higher amount for the medical test. This is illegal and might

2. severely damage the reputation of the practice. Why is Pass Through Billing Fraudulent and Illegal Pass‐through billing is not permitted since the contractor, not the clinic, performed the service. The tests are performed in an independent CLIA laboratory ﴾Clinical Laboratory Improvement Amendments﴿, yet the clinic bills the insurance company as though they are performed in‐ house. The amount paid to the contractor, not the marked‐up price on the HCFA 1500 claim form, represents the true cost of the service, making pass thru billing a fraudulent business practice. The American Medical Association believes that pass‐through billing is unethical, as stated in Opinion 8.0321. It is illegal for physicians to mark up the prices of services provided by third parties. Both the Anti‐Kickback Statute and Stark law consider pass thru billing illegal. Medicare does not permit pass‐through billing because the clinic does not perform the services in question as part of its regular office services. An independent contractor instead performs them. The clinic charged for the services as though the test was conducted even though it was not performed there. Pass Thru Billing Relevant Laws Three laws regulate pass thru billing, as follows: False Claims Act The legislation prohibits the government from selling substandard or poor services. Anti‐Kickback Statute A criminal statute makes it illegal to receive or provide money in exchange for recommending patients or acquiring federally funded businesses. Physician Self‐Referral/ Stark Law It prohibits doctors from referring individuals needing health care to businesses they own or operate. Avoiding Pass Through Billing Pass‐through billing is typically employed in rural healthcare settings. This is because these hospitals generate relatively little revenue. They use fraudulent billing techniques to maximize their income by receiving payment for services they did not offer customers. Even while pass‐thru billing is becoming an increasing problem in the US, it can be readily avoided by implementing a compliance program. Compliance with the CMS ﴾Centers for Medicare and Medicaid Services﴿ Program reduces the likelihood of pass‐through billing. The following tips help you in avoiding the trap of pass‐thru billing: Compliance Program Implementation: An effective compliance program can assist in eliminating errors in medical coding or billing and decrease the likelihood that your medical billing practices will get you in trouble. Infrastructure for Medical Billing: You can make your billing more dependable and accurate

3. by ensuring you have a solid infrastructure for medical billing that adheres to the APC ﴾Ambulatory Payment Classification﴿ and allows you to perform your billing in‐house. Therefore, medical providers are highly encouraged to invest in their workers’ training and resources to deliver high‐quality maintenance. Learn the guidelines and regulations: Another strategy to prevent getting trapped in a pass thru billing is to familiarize yourself with the Office of Inspector General’s ﴾OIG﴿ rules and regulations. It investigates allegations of fraudulent billing and other criminal activities in Medicare, Medicaid, and other federal healthcare programs. If you understand what the OIG requires, you will never bill incorrectly. You may ensure compliance with OIG laws and regulations if you pay close attention to correct medical coding, documentation, and other medical norms. See Also: Why You Should Conduct Medical Billing Audit? Conclusion Pass‐through billing is a terrible practice that you should avoid at all costs. Sometimes, it might be difficult to distinguish between pass‐through billing and legitimate medical claims. You should consult a medical attorney if you have questions about pass‐through billing. They can provide a comprehensive explanation. It is never a smart decision. Initially, it provides a significant boost, but it will be discovered sooner or later. You can only avoid these issues if you have professional billing experts like Precision Hub who are familiar with laws and regulations. Precision Hub is here to assist you in managing your RCM. So, schedule your consultation now to learn more about our expert services. pass through billing pass thru billing what is pass through billing New Cpt Codes 2023: Is Your Practice Ready? Previous Simon My name is Simon and I hold a PhD in Medical Sciences. I bring to Precision Hub my seven years of exposure. As a medical writer, I have contributed to industries as vast as medical devices & med‐tech, pharmaceuticals, healthcare agencies, hospitals, health tech firms and healthcare communication agencies. Recommended Posts

4. New Cpt Codes 2023: Is Your Practice Ready? Physical Therapy CPT Codes & Billing Guidelines 2022 New ICD 10 Codes for Pathology Billing – Is Your Practice Ready? No comment yet, add your voice below! Add a Comment Your email address will not be published. Required fields are marked * Comment * Comment * Name *Name * Email *Email * WebsiteWebsite Save my name, email, and website in this browser for the next time I comment. SUBMIT Recent Posts Medicare Pass-Through Billing – Permitted or Not? New Cpt Codes 2023: Is Your Practice Ready? Physical Therapy CPT Codes & Billing Guidelines 2022 New ICD 10 Codes for Pathology Billing – Is Your Practice Ready? Preventive Medicine Services Coding Guidelines Subscribe Enter your email SUBSCRIBE

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