§ 447.10 Prohibition against reassignment of provider claims. ( a ) *Basis and purpose.* This section implements section 1902(a)(32) of the Act which prohibits State payments for Medicaid services to anyone other than a provider or beneficiary, under an assignment, power of attorney, or similar arrangement, except in specified circumstances.
( b ) *Definitions.* For purposes of this section: *Facility* means an institution that furnishes health care services to inpatients.
*Factor* means an individual or an organization, such as a collection agency or service bureau, that advances money to a provider for accounts receivable that the provider has assigned, sold or transferred to the individual organization for an added fee or a deduction of a portion of the accounts receivable. Factor does not include a business representative as described in paragraph (f) of this section.
*Organized health care delivery system* means a public or private organization for delivering health services. It includes, but is not limited to, a clinic, a group practice prepaid capitation plan, and a health maintenance organization.
( c ) *State plan requirements.* A State plan must provide that the requirements of paragraphs (d) through (h) of this section are met.
( d ) *Who may receive payment.* Payment may be made only— ( 1 ) To the provider; or
( 2 ) To the beneficiary if he is a noncash beneficiary eligible to receive the payment under § 447.25; or
( 3 ) In accordance with paragraphs (e), (f), and (g) of this section.
( e ) *Reassignments.* Payment may be made in accordance with a reassignment from the provider to a government agency or reassignment by a court order.
( f ) *Business agents.* Payment may be made to a business agent, such as a billing service or an accounting firm, that furnishes statements and receives payments in the name of the provider, if the agent's compensation for this service is— ( 1 ) Related to the cost of processing the billing;
( 2 ) Not related on a percentage or other basis to the amount that is billed or collected; and
( 3 ) Not dependent upon the collection of the payment.
( g ) *Individual practitioners.* Payment may be made to— ( 1 ) The employer of the practitioner, if the practitioner is required as a condition of employment to turn over his fees to the employer;
( 2 ) The facility in which the service is provided, if the practitioner has a contract under which the facility submits the claim; or
( 3 ) A foundation, plan, or similar organization operating an organized health care delivery system, if the practitioner has a contract under which the organization submits the claim.
( h ) *Prohibition of payment to factors.* Payment for any service furnished to a beneficiary by a provider may not be made to or through a factor, either directly or by power of attorney.
( i ) The payment prohibition in section 1902(a)(32) of the Act and paragraph (d) of this section does not apply to payments to a third party on behalf of an individual practitioner for benefits such as health insurance, skills training, and other benefits customary for employees, in the case of a class of practitioners for which the Medicaid program is the primary source of revenue, if the practitioner voluntarily consents to such payments to third parties on the practitioner's behalf.
[43 FR 45253, Sept. 29, 1978, as amended at 46 FR 42672, Aug. 24, 1981; 61 FR 38398, July 24, 1996; 79 FR 3039, Jan. 16, 2014; 84 FR 19728, May 6, 2019; 87 FR 29690, May 16, 2022]