Demystifying Reporting Rebate Requirements: What Clinicians Should Know
In some cases, providers are required by third-party payers to list the invoice price of a product used on the claim form. Some third-party payers require this when using certain skin substitute products. This requirement to list skin substitute invoice pricing on the claim form differs based on third-party payer and may only be required of certain skin substitute products. Therefore, the answer to the question, “Do I need to list the invoice price?” depends on which skin substitute product was used, and to which third-party payer the claim is being submitted to.
When submitting invoice pricing on a claim form is required, there are several guidelines to consider.
Medicare
When listing the invoice price is required for a Medicare beneficiary, the price must be adjusted to reflect any rebate. The Medicare Provider Reimbursement Manual,1 Part I, Chapter 8, Section 804 states:
“Where a discount, allowance, refund, or rebate is received on supplies or services, the cost of which is apportioned under the Medicare program, it must be used to reduce the total cost of the goods or services.1
Anti-Kickback Statute
The federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) is a criminal statute that prohibits the exchange (or offer to exchange), of anything of value, in an effort to induce (or reward) the referral of business reimbursable by federal health care programs.2 This Anti-Kickback Statute states penalties may be imposed if a doctor knowingly receives any remuneration in return for purchasing or ordering any item for which payment may be made by a federal health care program, such as Medicare, and rebates may be considered a form of remuneration. There is an exception under “safe harbor” for certain discounts if the discount is properly disclosed and appropriately reflected in the costs claimed or charges made by the doctor to Medicare.2
Third-Party Payers
Many third-party payers have their own guidelines related to the requirement to account for rebates when submitting invoice pricing, including rebates that may be received after a claim has been paid. For example, Noridian, a Part B Medicare Administrative Contractor, provides the following direction when invoice pricing is required:3
“Total invoice price is the net amount a provider pays for an item/service, taking into account ALL discounts, rebates, refunds, or other adjustments.”
It is suggested that providers check with the third party payer to which a claim is to be submitted regarding that payer’s invoice pricing requirements.
Medicare Overpayments
Medicare regulations at 42 C.F.R. § 401.305(b)(1) require that overpayments must be refunded within 60 days after the date on which they are identified.4 Finally, Chapter 4 (4.16.3) of the Medicare Program Integrity Manual states:5
“A rebate rendered after the time of sale is not protected under any circumstances.”
Conclusion
When submitting invoice pricing on a claim form is required, providers are encouraged to consider the guidelines provided in this article. Providers should consult with legal counsel if they have questions regarding their legal responsibilities.
Dr. Lehrman operates Lehrman Consulting, LLC and is a Certified Professional Coder and Certified Professional Medical Auditor. Follow him on Twitter @DrLehrman
References
1. Centers for Medicare and Medicaid Services. Medicare Provider Reimbursement Manual, Part I, Chapter 8, Section 804.
2. Cornell Law School. 42 U.S. Code § 1320a–7b - Criminal penalties for acts involving Federal health care programs.
3. Noridian. Skin substitute codes.
4. Code of Federal Regulations. 42 C.F.R. § 401.305(b)(1). Requirements for reporting and returning of overpayments.
5. Centers for Medicare and Medicaid Services. Medicare Program Integrity Manual.
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