Sparrow to pay settlement for alleged misuse of 'incident-to' billing

Lansing, Mich.-based Sparrow Health System has agreed to pay $671,310 to settle allegations that it violated the False Claims Act by misuse of "incident-to" billing, according to the Justice Department. 

An "incident-to" billing provision allows advanced practice providers — including nurse practitioners and physician assistants — to treat a patient but bill the visit under the physician's name and reimbursement rate if certain criteria are met. 

Criteria include the presence of an on-site physician, that the physician performs the initial visit and that the physician establish the patient's diagnosis and treatment plan during the initial visit. If an APP property performs a service "incident to" under a physician’s oversight, the physician or their practice can submit a claim for full reimbursement for the visit, compared with an 85 percent reimbursement rate if the APP billed services under their own billing number, according to the Justice Department. 

Prosecutors alleged that Sparrow improperly billed services under a physician's name and reimbursement rate when the services were provided by mid-level providers at the health system's locations where the criteria for "incident-to" billing were not met.

The settlement resolves claims brought by family medicine physician Patricia Crowe, MD, under whistleblower provisions of the False Claims Act. 

The settlement is not an admission of any wrongdoing by Sparrow.

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