Can the Doctor Refer, Order or Prescribe?

M RosenBy Michael Rosen

Seems like a simple question. But the answer may surprise you. There are three things that are needed for a referral to be legitimate and to avoid potential civil fines and penalties.

1.  Does the Physician have a current license without restrictions?

2.  Is the Physician privileged or credentialed at the hospital?

3.  Is the Physician excluded from participating in Medicare/Medicaid or other federal healthcare dollar reimbursed programs?

Each of these must be met in order for the Physician to be able to refer a patient to a hospital or other related services for which federal healthcare dollars are involved.  The OIG has made it clear.

“If you are excluded by OIG from participation in the Federal healthcare programs, then Medicare, Medicaid, and other Federal health care programs, such as TRICARE and the Veterans Health Administration, will not pay for items or services that are furnished, ordered or prescribed. Excluded Physicians many not bill directly or indirectly for treating Medicare and Medicaid patients, nor may their services be billed indirectly through an employer or a group practice.  In addition, if the Physician furnishes services to a patient on a private-pay basis, no order or prescription that is given to that patient will be reimbursed by and Federal healthcare  program.”

Further the OIG states: “This responsibility requires screening all current and prospective employees and contractors against the OIG’s List of Excluded Individuals and Entities (LEIE).  In fact, the OIG has a set of training materials and even offers a 1 Hour Continuing Medical Education Credit on its site on this and other Physician related compliance issues.

Finally, the OIG has posted a very instructive Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs, dated May 8, 2013 that addresses the Physician referral issues. (p.p. 8-13).

On a related note and advice from the OIG, footnote 10 states that “Some excluded practitioners will have valid licenses or Drug Enforcement Agency (DEA) numbers. Therefore, it is important not to assume that because a prescription contains a valid license number or DEA number, the practitioner is not excluded.”

If the excluded Physician has a management, administrative or billing role in a third party company, then such items claimed for reimbursement will not be eligible for payment due to the excluded Physician’s role. “This prohibition applies even if the administrative and management services are not separately billable.”  (p.7)

[bctt tweet=”@mrosen64 An effective Exclusion Monitoring #Compliance Program will include searching for exclusions on Physicians & referring Physicians” via=”no”]


An effective Exclusion Monitoring Compliance Program will include searching for exclusions on Physicians and referring Physicians.  Otherwise you may be exposing your organization to Civil Fines and Penalties.