Coding & Reimbursement

CMS rules and family ties

We all know that Medicare prohibits charging for services to immediate family members, but the big, recurring question that we receive is: what does this really entail?

Q. Why doesn’t Medicare allow claims for services to family members?

A. According to the Centers for Medicare & Medicaid Services’ Medicare Benefits Policy Manual (MBPM), the intent of the exclusion is to bar Medicare payment for items and services that would ordinarily be furnished without charge because of the relationship of the beneficiary to the provider ( ).

Q. What are the excluded relationships?

A. The exclusion applies to immediate relatives of the owner(s) of the provider, as well as the provider himself or herself and members of the provider’s household.

Q. How does Medicare define “immediate relative”?

A. With few exceptions, the following relationships are included:

  • Spouse
  • Natural parent, as well as child and sibling
  • Adoptive parent, child and sibling
  • Stepparent, stepchild, stepbrother and stepsister
  • Father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law and sister-in-law
  • Grandparent and grandchild
  • Spouse of grandparent and grandchild

The instruction notes that a step- relationship or an in-law relationship continues to exist even if the marriage that created the relationship is terminated through divorce or death of one of the parties.

In other words, the step- or in-law relationship continues even when the individual who created the relationship is no longer there.

Individuals who are not considered in-laws include:

  • The provider’s spouse’s brother-in-law or sister-in-law
  • The provider’s spouse’s stepfather or stepmother.

Q. Who does CMS consider to be members of a household?

A. Persons sharing a common abode as part of a single family unit are included. This means those related by blood as well as by marriage or adoption. It also includes domestic employees and others who live together as part of a single family unit.

It does not include roommates or someone renting a room.

Q. Does the exclusion apply to other providers in the practice?

A. Yes, it does. Immediate relatives or other excluded individuals of the owner(s) of the provider are excluded. If the physician is in a partnership in which even one of the partners is related to the patient (as described above), then the exclusion applies to all of the partners.

Q. What about corporations?

A. The services of a physician who belongs to a professional corporation are subject to the same exclusion rules for immediate relatives. Services furnished incident to those services (for example, by the physician’s nurse or technician) are also excluded, if the physician who furnished the services or who ordered or supervised incident to services has an excluded relationship with the patient.

A professional corporation is an entity completely owned by one or more physicians and is operated to conduct the practice of medicine. Optometry, as well as ophthalmology, could be included in a professional corporation, but that would depend on state laws.

This rule does not apply to charges imposed by a corporation, other than a professional corporation, regardless of the patient’s relationship to any of the stockholders, officers or directors of the corporation or to the person who furnished the service. So, a publicly held corporation is not included in the above discussion.

In ophthalmology, however, most physicians are in either partnerships or professional corporations and are included.

Q. What about Medicare Advantage (Part C) plans?

A. Medicare Advantage (MA) plans are generally required to cover all medically necessary and appropriate services that are covered by regular Medicare.

The same non-coverage exclusions apply, so MA plans will also exclude coverage for family members as discussed here. OM