1. You mention the MDs are in the same department, but do they have the same specialty and subspecialty? CPT guidelines state the patient is “established” for the second same-group MD if both MDs have the exact same subspecialty. If the MDs have different subspecialties, then the patient can be “new” to the second MD.
Medicare refers to different specialties rather than taking subspecialty into account.
See this FAQ: https://questions.cms.gov/faq.php?id=5005&faqId=1969
Also see this manual section:
30.6.7 -Payment for Office or Other Outpatient Evaluation and Management (E/M)
Visits (Codes 99201-99215)
A Definition of New Patient for Selection of E/M Visit Code
Interpret the phrase “new patient” to mean a patient who has not received any professional services, i.e., E/M service or other face-to-face service (e.g., surgical procedure) from the physician or physician group practice (same physician specialty) within the previous 3 years. For example, if a professional component of a previous procedure is billed in a 3 year time period, e.g., a lab interpretation is billed and no E/M service or other face-to-face service with the patient is performed, then this patient remains a new patient for the initial visit. An interpretation of a diagnostic test, reading an x-ray or EKG etc., in the absence of an E/M service or other face-to-face service with the patient does not affect the designation of a new patient.
2. The claim should be billed under the rendering provider. In any case, Medicare pays non-par MDs who accept assignment, so it’s questionable whether a par rendering provider would have avoided a denial.
This AAFP page helps explain non-par: http://www.aafp.org/practice-management/regulatory/medicare.html
According to the MGMA (http://www.mgma.com/medicareparticipation/#q3) …
Q: What does it mean to be a Medicare non-participating physician or practitioner?
A: If a physician chooses to not participate in Medicare, s/he has the option to accept assignment. If the non-Par physician accepts assignment, Medicare pays claims at 95 percent of the participating amount, with 80 percent of that amount coming from the contractor and 20 percent from the patient. If the non-Par physician decides not to accept assignment, s/he must fill out a Medicare beneficiary's claim form and submit the claim directly to Medicare. Medicare then pays the patient directly, leaving the physician to bill the patient for services rendered. Physicians cannot charge Medicare patients for filing their claims, but by refusing assignment, non-Par physicians can balance-bill patients up to the limiting charge.
Electing non-par status is not without its drawbacks, such as challenges group practices may face when collecting from patients. As such, related cash flow and administrative implications should be factored in by practices electing non-par status for their physicians.
Q: What are the key group practice issues related to Par/non-Par election?
A: Except in the case of university medical centers, if a hospital, medical group, or other entity bills and receives payment for physician services in the name of the entity (rather than have the individual physicians bill and receive payment in their own names and reassign this payment to the group practice), one participation agreement by the entity binds all physicians with respect to any services furnished for the entity. In these cases, the individual physicians do not enter into participation agreements.
In university medical centers, when individual departments bill under the name and provider identification number of the department, decisions for or against participation can be made on a departmental basis.