Staffing companies that retain contractor physicians should be permitted by Congress to enroll in Medicare, according to a report released Tuesday for the General Accounting Office, the investigative arm of Congress.
A large number of hospital departments, including emergency departments, use physicians provided by independent staffing firms. While CMS collects information on the individual physicians retained by those firms, it has no information on the staffing companies because currently they are not allowed to bill Medicare.
The GAO concludes that Congress should consider amending the Social Security Act to permit the reassignment of Medicare benefits to staffing companies and require them to enroll in the Medicare program.
In a letter to the GAO, CMS Administrator Thomas Scully agrees that a legislative amendment is needed to allow CMS to make the change to enroll staffing companies and other contractors, but he has not stated explicitly that CMS would push for such action.
Currently, Medicare law dos not permit physicians to reassign their right to payment to staffing companies, as they can to hospitals or other facilities. Yet staffing companies do receive some Medicare funds indirectly when they submit claims on behalf of their contractor physicians, who are entitled to direct reimbursement into accounts under the individual physician's control.
Depending on the contract arrangements, these funds can be shared between the staffing company and the contractor physician. Some staffing firms have arranged with the physicians to have funds transferred to the company's account from an individual doctor's account.
After reviewing 2.8 million emergency department claims for evaluation and management services for 2000 from five states, the GAO found that contractor physicians billed at similar rates to emergency physicians who practiced in partnerships, medical groups or employee-based staffing companies. The five states were Alabama, Florida, Pennsylvania, Texas and West Virginia.
In four of those states, 27% to 58% of physicians with significant emergency department practices were contractors retained by staffing companies.
But staffing companies are largely invisible to CMS oversight, because without formal Medicare enrollment, CMS cannot identify claims submitted by these companies on behalf of their contracted physicians. CMS also cannot differentiate which physicians work for which staffing company. Therefore, CMS can't assess the billing patterns of specific staffing companies or evaluate their impact on the integrity of the Medicare program, the GAO report says.
"As a result, these staffing companies may have less incentive than enrolled providers to ensure that the program is billed properly," the report says.
"But most staffing companies would like the opportunity (to enroll) because it would simplify for them some of the administrative aspects of their operations," says Geraldine Redican-Bigot, a GAO assistant director for healthcare.