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CHANGE EXISTING PROVIDER ENROLLMENT INFORMATION

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Electronic Funds Transfer

EFT allows for claim payments to be electronically transferred to your bank in place of a hard copy check mailed to the facility. Medicare payments due a provider or supplier of services may be sent to a bank (or similar financial institution) for deposit in the provider/supplier’s account so long as the following requirements are met.

  • The bank may provide financing as long as it states in writing, in the loan agreement, that it waives its right of offset. Therefore, the bank may have a lending relationship with the provider/supplier and may also be the depository for Medicare receivables.
  • The account is in the provider/supplier’s name only and only the provider/supplier may issue any instructions on that account. The bank must be bound by only the provider/supplier’s instructions. No other agreement that the provider/supplier has with a third party shall have any influence on the account. In other words, if a bank is under a standing order from the provider/supplier to transfer funds from the provider/supplier’s account to the account of a financing entity in the same or another bank and the provider/supplier rescinds that order, the bank honors this rescission notwithstanding the fact that it is a breach of the provider/supplier’s agreement with the financing entity.

Note: A third party cannot purchase the provider/supplier’s Medicare receivables regardless of the language in any agreement a provider/supplier has with a third party that is providing financing.

Requirements for EFT and other payment arrangements can be found in the Centers for Medicare & Medicaid Services Internet-Only Manual Publication 100-04, Medicare Claims Processing Manual, Chapter 1, Sections 30.2.5 and 30.2.14 (4MB).

The Medicare law prohibits us from paying benefits due a provider to another person or organization under an assignment, power of attorney or any other arrangement whereby that other person or organization receives those payments directly. The following are exceptions to this rule.

CMS may pay a provider’s benefits (in the provider’s name) to a billing or collection agent if:

  • The agent receives the payment under an agency agreement with the provider
  • The agent’s compensation is not related in any way to the dollar amounts billed or collected
  • The agent’s compensation is not dependent upon the actual collection of payment
  • The agent acts under instructions which the provider may modify or revoke at any time
  • The agent, in receiving payment, acts only in the providers behalf

CMS may pay the providers’ benefits in accordance with an assignment established by, or pursuant to the order of, a court of competent jurisdiction.

A provider should notify us immediately if:

  • CMS has been mailing its benefits to the address of another person or organization
  • The provider has given that other person or organization power of attorney or other advance authority to negotiate its benefit checks
  • None of the above exceptions that would permit payment to another person or organization apply in the provider’s case

A provider which, hereafter, enters into or continues such a prohibited payment arrangement may have its participation in the program terminated and its right to receive assigned payment for physician services revoked.

Last Reviewed/Updated 4/30/2019



Electronic Funds Transfer
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