FIs pay benefits due a provider only to the provider.
Carriers may pay assigned benefits only to the physician, practitioner, or supplier who furnished the service. They do not pay the benefits to any other person or organization under an assignment or reassignment, power of attorney, or under any other arrangement in which the other person or organization receives the payment directly. For this purpose, assigned benefits include, in addition to the benefits usually encompassed by this term, benefits payable after the death of the enrollee to the physician or other supplier on the basis of his agreement to accept the reasonable charge as the full charge. A power of attorney for this purpose means a written authorization by a principal to an agent:
• To receive in the agent’s own name amounts due the principal;
To negotiate checks payable to the principal; or
• To receive in any other manner direct payment of amounts due the principal.
The prohibition against assignment of a provider’s benefits also applies to payment of benefits due a provider as a reassignee of the physician.
Payment is considered to be made directly to an ineligible person or organization if that person or organization can convert the payment to its own use and control without the payment first passing through the control of the provider or other party eligible to receive the payment under the exceptions in §30.2.1. (For payment to a bank, see §30.2.5.)
Forwarding of amounts due a provider to its home office is not affected by the prohibition described in this section. Reimbursement amounts for providers of a chain organization may be forwarded to a central location of the home office when it has set up a lock box or special bank account and the FI has secured a written assignment or other authorization from the respective provider(s) that payment may be sent to the home office. The payments must be made out in the individual provider’s name and payment may be made by check or electronic funds transfer (EFT).
Establishment of internal controls and other related administrative details necessary to effect these payments are left to the individual contractors involved. However, FIs must be sure that the individual signing the assignment can legally bind the provider. Payment under those procedures is payment to the provider.