Billing Under Arrangements

80.5 - Billing Under Arrangements (Rev. 1, 10-01-03) SNF-510.2 A provider may have others furnish certain covered items and services to their patients through arrangements under which receipt of payment by the provider for the services discharges the liability of the beneficiary or any other person to pay for the service. In permitting providers to furnish services under arrangements, it is not intended that the provider merely serve as a billing mechanism for the other party. Accordingly, for services provided under arrangements to be covered, the provider must exercise professional responsibility over the arranged-for services. See the Medicare General Information, Eligibility, and Entitlement Manual, Chapter 5, “Definitions,” §10.3, for additional discussion on services furnished under arrangement. The law is silent regarding specific terms of a SNF’s payment to the outside provider or supplier and currently does not authorize the Medicare program to impose any requirements in this regard. Thus, the issue of the outside provider or supplier’s payment by the SNF is a private, contractual matter that must be resolved through direct negotiations between the parties. However, services provided under consolidated billing arrangements must be provided by Medicare certified providers that are licensed to provide the service involved. In addition, payment may not be made if the provider or supplier is subject to OIG sanctions that would prohibit Medicare payment for the service if the provider or supplier were billing independently. In some cases, SNFs may purchase services for their patients from a hospital “under arrangements.” Such services may include a physician component. When the physician has entered into a valid contractual arrangement with the hospital in which his/her services are furnished for it to bill for the services, no additional written authorization is needed for SNFs to bill for his/her services. For example, where SNFs arrange to obtain an EKG interpretation from Hospital B, and Hospital B has a valid contractual arrangement with its cardiologist authorizing it to bill for his/her services, SNFs do not need written authorization from the cardiologist to bill Medicare for the cost of the services. See the Medicare Benefit Policy Manual, Chapter 8, “Coverage of Extended Care (SNF) Services Under Hospital Insurance,” §70.4, for additional information on services under arrangements.