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HIPAA >>
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Vendor Agreements

Policy Statement: Resident Referrals

To comply with applicable laws regarding referrals, neither [PROVIDER] nor a vendor shall solicit or receive from any person or entity, nor offer or give to any person or entity, anything of value if that person or entity is in a position to refer business and/or residents to [PROVIDER], or if [PROVIDER] is in a position to refer business to that person or entity, except as permitted by law. This policy does not preclude the purchase, rental, lease, or other acquisition or provision of reasonable and necessary services or items for fair market value by [PROVIDER] or its employees.

Suggested Elements

Providers may wish to include the following suggested elements in their corporate compliance policy. All vendor agreements shall meet the requirements listed below when any item(s) or service(s) supplied by the vendor are reimbursable under any state or federal health care program. The list is not exhaustive, but is the minimum required for any such vendor agreement. Vendor agreements:

  • Shall be in writing;
  • Shall specify the particular services or supplies to be provided;
  • Shall specify the fee or payment to be made to the vendor, which shall be set at the fair market value for such services or supplies and/or be based upon applicable fee schedules or other payment guidelines established by CMS or its designees, the state Medicaid agency or its designees, or other applicable third-party payers, and shall not take into consideration the value or volume or referrals provided to or by [Provider];
  • Shall specify that vendor will submit all bills in accordance with the payment method and amount set forth in the vendor agreement.
  • Shall have a term of at least one year or shall provide that the agreement shall not be renegotiated within 12 months of its inception in the event of its termination before the expiration of 12 months;
  • Shall be signed by all parties; and
  • Shall certify that the vendor currently is eligible for participation in the Medicare and, where applicable, Medicaid programs.

Vendor agreements involving services or supplies with a value in excess of [CHOOSE LIMIT] per year shall meet the following additional requirements:

  • The agreement shall be negotiated only by [legal counsel and/or the facility administrator or their designees or other people selected by the provider];
  • The agreement shall be approved by [legal counsel or his or her designee or other people selected by the provider];
  • If the value or cost of the services or supplies to be provided under the vendor agreement equals or exceeds $10,000 over a 12-month period, the vendor will, for a period of at least four years after the furnishing of the services and supplies, retain records to verify the nature and extent of the costs of such services and supplies and make such records available upon request by [PROVIDER]; and the vendor shall impose similar obligations on any subcontractor it uses to provide the services and supplies under the vendor agreements; and
  • The vendor and any subcontractor of the vendor shall cooperate with [PROVIDER] in the event that any third-party payer, including the Medicare or Medicaid program, conducts an audit or otherwise requests documentation regarding services or supplies provided by the vendor or its subcontractor.

All payments to vendor shall be specified in the vendor agreement.

Medicare – Prospective Payment System And Consolidated Billing

Suggested Elements – Part A Residents

For services provided on or after the effective date upon which [PROVIDER] must bill Medicare under the prospective payments systems (PPS) for items and services provided to Medicare Part A residents receiving services in the facility or under the facility’s plan of care, all vendor agreements shall, in addition to the requirements described above:

  • Provide that the vendor will bill [PROVIDER] for services provided to Medicare Part A residents, and that the vendor will not submit bills directly to Medicare for such services, except for those services specifically excluded from PPS;
  • Provide that the vendor or its subcontractors will ensure that [PROVIDER] receives any orders or certifications necessary before providing the service, as well as supporting documentation required to receive payment from Medicare or Medicaid for such service;
  • Provide that the vendor or its subcontractors will participate fully, as reasonably requested by [PROVIDER], in any appeals by
  • [PROVIDER] of payment decisions by any third-party payor in connection with items or services rendered by the vendor or its subcontractors;
    [PROVIDER] Provide that the vendor and its subcontractors will participate, as reasonably requested by [PROVIDER], in [PROVIDER’S] compliance program and quality assurance program, including any internal or external audits by [PROVIDER] or [PROVIDER’S] billing, payment, and/or collection procedures and quality assessments; and
  • Require that the vendor and its subcontractors notify [PROVIDER] prior to execution of a contract and on an ongoing basis of the imposition of any remedies or sanctions, including termination of Medicare and/or Medicaid program participation imposed by the OIG or a state Medicaid agency, and of the initiation of any audit or investigation of the vendor and/or its subcontractors by any such agency.

Suggested Elements – Part B Services

For services provided on or after the effective date upon which [PROVIDER] must submit consolidated bills to the Medicare program for certain items and services provide to Medicare Part B residents receiving services in the facility or under the facility’s plan of care, all vendor agreements shall, in addition to the requirements described above:

  • Provide that the vendor will bill [PROVIDER] for those Part B services provided to Medicare residents and that are subject to consolidated billing requirements, and that the vendor will not submit bills directly to Medicare for such services;
    Provide that the vendor or its subcontractors will ensure that [PROVIDER] receives any orders or certifications necessary to provide the service, as well as supporting documentation required to receive payment from Medicare or Medicaid for such service;
  • Provide that the vendor or its subcontractors will participate fully, as reasonably requested by [PROVIDER], in any appeals by [PROVIDER] of payment decisions by any third-party payor in connection with items or services rendered by the vendor or its subcontractors;
  • Provide that the vendor and its subcontractors will participate, as reasonably requested by [PROVIDER], in [PROVIDER’S] compliance program and quality assurance program, including any internal or external audits by [PROVIDER] of [PROVIDER’S] billing, payment, and/or collection procedures and quality assessments; and
  • Require that the vendor and its subcontractors notify [PROVIDER] prior to execution of a contract and on an on-going basis of the imposition of any remedies or sanctions, including termination of Medicare and/or Medicaid program participation imposed by CMS, the OIG, or any state Medicaid agency, and of the initiation of any audit or investigation of the vendor and/or its subcontractors by any such agency.

Verifying Vendor Certification For Medicare/Medicaid Participation

No vendor contracts shall be executed until [PROVIDER] has reviewed the OIG’s List of Excluded Individuals/Entities or other applicable source and verified that the vendor currently is certified to participate in the Medicare and Medicaid programs, and is not subject to any sanction that would render [PROVIDER] unable to legally contract with vendor.

Medical Director Contracts

All contracts with any physician serving as the medical director of [PROVIDER] must comply with the provisions of the manual governing vendor and physician agreements and be approved by legal counsel or his or her designee [or other person(s) selected by [PROVIDER] prior to execution.

Contracts With Entities In Which Medical Director Has An Ownership or Investment Interest

Contracts between [PROVIDER] and any entity in which [PROVIDER’S] medical director has an ownership or financial interest present special issues under federal and state law. No contract may be executed  between [PROVIDER] and any entity in which [PROVIDER’S] medical director has an ownership, investment, or other financial interest without approval by legal counsel or his or her designee [or other people selected by PROVIDER].
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