---
kind: "section"
citation: "42 C.F.R. § 447.10"
title: "42"
number: "447.10"
heading: "Prohibition against reassignment of provider claims."
url: "https://uscodex.org/cfr/42/447.10"
---

# §447.10. Prohibition against reassignment of provider claims.

- (a) **Basis and purpose.** This section implements section 1902(a)(32) of the Act which prohibits State payments for Medicaid services to anyone other than a provider or beneficiary, under an assignment, power of attorney, or similar arrangement, except in specified circumstances.
- (b) **Definitions.** For purposes of this section:

  Facility means an institution that furnishes health care services to inpatients.

  Factor means an individual or an organization, such as a collection agency or service bureau, that advances money to a provider for accounts receivable that the provider has assigned, sold or transferred to the individual organization for an added fee or a deduction of a portion of the accounts receivable. Factor does not include a business representative as described in [paragraph (f)](#f) of this section.

  Organized health care delivery system means a public or private organization for delivering health services. It includes, but is not limited to, a clinic, a group practice prepaid capitation plan, and a health maintenance organization.

- (c) **State plan requirements.** A State plan must provide that the requirements of [paragraphs (d) through (h)](#d..h) of this section are met.
- (d) **Who may receive payment.** Payment may be made only—
  - (1) To the provider; or
  - (2) To the beneficiary if he is a noncash beneficiary eligible to receive the payment under [§ 447.25](/cfr/42/447.25.md); or
  - (3) **In accordance with paragraphs (e), (f), and (g) of this section.**
- (e) **Reassignments.** Payment may be made in accordance with a reassignment from the provider to a government agency or reassignment by a court order.
- (f) **Business agents.** Payment may be made to a business agent, such as a billing service or an accounting firm, that furnishes statements and receives payments in the name of the provider, if the agent's compensation for this service is—
  - (1) Related to the cost of processing the billing;
  - (2) Not related on a percentage or other basis to the amount that is billed or collected; and
  - (3) **Not dependent upon the collection of the payment.**
- (g) **Individual practitioners.** Payment may be made to—
  - (1) The employer of the practitioner, if the practitioner is required as a condition of employment to turn over his fees to the employer;
  - (2) The facility in which the service is provided, if the practitioner has a contract under which the facility submits the claim; or
  - (3) A foundation, plan, or similar organization operating an organized health care delivery system, if the practitioner has a contract under which the organization submits the claim.
- (h) **Prohibition of payment to factors.** Payment for any service furnished to a beneficiary by a provider may not be made to or through a factor, either directly or by power of attorney.
- (i) The payment prohibition in section 1902(a)(32) of the Act and [paragraph (d)](#d) of this section does not apply to payments to a third party on behalf of an individual practitioner for benefits such as health insurance, skills training, and other benefits customary for employees, in the case of a class of practitioners for which the Medicaid program is the primary source of revenue, if the practitioner voluntarily consents to such payments to third parties on the practitioner's behalf.

## Notes

### Amendments

[43 FR 45253, Sept. 29, 1978, as amended at 46 FR 42672, Aug. 24, 1981; 61 FR 38398, July 24, 1996; 79 FR 3039, Jan. 16, 2014; 84 FR 19728, May 6, 2019; 87 FR 29690, May 16, 2022]

### Authority

Authority: 42 U.S.C. 1302, and 1396r-8, and Pub. L. 111-148.

### Source

Source: 43 FR 45253, Sept. 29, 1978, unless otherwise noted.

### Amendments

[43 FR 45253, Sept. 29, 1978, as amended at 46 FR 42672, Aug. 24, 1981; 61 FR 38398, July 24, 1996; 79 FR 3039, Jan. 16, 2014; 84 FR 19728, May 6, 2019; 87 FR 29690, May 16, 2022]