Reliance on the Billing Company

Continuing her theme on the need for vigilance in billing company relationships, a second circuit Court of Appeals case [Retina Grp of New England PC v Dynasty Healthcare LLC, No 21-1622-cv (2dCir, July 7, 2023] rejected a medical billing company’s claims against a Medicare Administrative Contractor,(MAC) who misclassified the billing company’s client as non-participating when they intended to enroll as participating. The MAC never notified the billing company of the classification, but paid some claims at the lower rate for non-participating physicians. The problem was discovered a year after the relationship between the biller and client ended. The client sued the biller for negligence, breach of contract and fraud. The court found it had no jurisdiction because the biller neglected to exhaust its administrative remedies before suing the MAC. But the real story in this case is that the rate at which a physician practice is paid is one of the most essential responsibilities of a billing company. The failure of the biller to confirm the proper enrollment of its client is unfathomable. The client’s reliance on the billing company with little oversight of what was being paid and at what rate is also problematic and underscores Alice’s advice regarding the need for clients to monitoring billing even when the activity is outsourced.