Federal Medicaid Law Prevents a Nursing Home from Billing You Directly

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, Monmouth County, NJ Elder Law & Medicaid Attorney

NJ Medicaid, Elder Law

NJ Medicaid, Elder Law

I read an interesting case, which frankly brought up an issue I had not contemplated which is; must a medical service provider (i.e., a doctor, hospital x-Ray technician) bill a Medicare/Medicaid patient directly for services etc. rendered rather than Medicare or Medicaid directly?  I pretty much assumed that if you are eligible for Medicare or Medicaid and receiving services, there would be no reason for a nursing home or other medical provider to bill anyone but Medicare/Medicaid, otherwise, the provider would go unpaid.  Apparently, in this case, the patient was a plaintiff in a fairly substantial personal injury lawsuit and the hospital billed the patient directly rather than Medicaid to which he had become eligible after the lawsuit was filed which brings us to the origin of the conflict.  The article is interesting because it lays out the circumstances under which medical providers can and cannot privately bill individuals for medically related services rather than Medicare/Medicaid.  I have given you excerpts of the opinion for your review.

Here’s The Law

Federal Medicaid law precludes direct patient billing in specific instances.  Section 1396a(a)(25)(c) of the law prohibits medical providers from “substitute billing” and “balance billing”.  A medical provider engages in substitute billing when it already has accepted payment from Medicaid but tries to refund the payment in order to bill the patient directly, usually because Medicaid reimbursements are often much lower than the provider’s  “customary fee[s],”. “Balance billing occurs when a provider accepts payment from Medicaid and then seeks to recover from the patient the balance between that payment and the customary fee.”  Thus, § 1396 a(a)(25)(C) becomes relevant once the provider has billed Medicaid and accepted payment for services proved to be beneficiary.  The law does not bar a provider from taking a chance that a Medicaid-eligible patient has a non-Medicaid source of payment for the medical services rendered.  The provider may opt to attempt collection directly from the patient or a liable third party instead of seeking a certain but likely reduced payment from Medicaid.

To discuss your NJ Elder Law Medicare and/or Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.

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