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What Are Third-Party Vendors?

Providers use third-party vendors, otherwise known as outsourced agencies, to handle Medicare-related work. Agencies may handle billing, appeals, check claim status, and receive payment for transactions on your behalf. Examples of outsourced agencies include:

  • Billing agencies
  • Clearinghouses
  • Software companies
  • Auditing firms

What Are the Provider’s Responsibilities?

Third-party vendors are expected to:

  • Protect Health Insurance Portability and Accountability Act (HIPAA)-related information, such as protected health information (PHI) and personally identifiable information (PII).
  • Complete tasks according to Medicare guidelines.

If a vendor doesn’t follow Medicare requirements, providers remain responsible for any violations.

How Can Providers Ensure Vendors Are Compliant?

If you hire an outsourced agency:

  • Ask how they protect HIPAA-related information, such as PHI and PII.
    • Information handled outside of the United States is at higher risk of security breaches
  • Make sure their staff is knowledgeable in Medicare rules and regulations.
    • Ask the vendor:
      •  If they’re familiar with CGS and CMS resources.
      • If they report claim denials, rejections, and returned claims.
      • What percentage of your claims need appeals, and what percentage of appeals are successful?
      • If they check your remittance advice, and how they use that information.
  • Understand how the agency charges for their services.
    • Fees may be charged for each claim, each inquiry, etc.
    • Make sure they only bill you for necessary transactions.
    • To reduce unnecessary costs for you and the Medicare program, ensure agencies use self-service options, such as myCGS or the IVR, for claim status and eligibility.

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