AMARILLO, TX – The following question often arises: “Is a DME supplier limited to collecting blue ink AOBs or can the supplier rely on recorded phone calls for AOBs?” The short answer is that suppliers can use recorded phone calls for AOBs, but certain requirements must be met for a recorded call to be considered a valid “electronic signature.”
TM’s recorded phone authorizations may be a valid signature for an AOB. TM, however, must first ensure that the phone conversations meet the E-SIGN Act’s requirements for a valid electronic signature. Thus, while obtaining the electronic signature over the phone, TM should use carefully scripted language that demonstrates to the beneficiary that the beneficiary: (1) understands the contents of the AOB and (2) understands and intends his/her actions to establish a signature for the AOB. Failure to do this may result in a non-binding electronic signature and an invalid AOB. In addition to the specific language, TM should keep a written copy of the verbal consent in its records.
The Medicare processing manual and the Code of Federal Regulations require an AOB to include a beneficiary’s signature when requesting payment. See 42 CFR § 424.36(a). Specifically, the beneficiary’s signature needs to either be on a physical claim form or other form that “contains adequate notice to the beneficiary that the purpose of the signature is to authorize a provider . . . to submit a claim to Medicare . . ..” Id.. Thus, when submitting a payment request for a Medicare claim, the beneficiary may either sign the form itself or the DME supplier may keep a signed statement by the beneficiary on file.
According to Chapter 1 of CMS’ Medicare Processing Manual, if providers are going to keep signatures on file, then the providers must have a procedure in place that keeps records of the beneficiary’s signed authorization of payment. The DME supplier can accomplish this by having language similar to the following:
I request payment of authorized Medicare benefits to me or on my behalf for any services furnished me by or in [provider’s name]. I authorize any holder of medical or other information about me to release to Medicare and its agents any information needed to determine these benefits or benefits for related services. Id.
As for the beneficiary’s signature, CMS typically accepts both written (i.e., “blue ink”) signatures and “electronic signatures.” See Medical Learning Network, Complying with Medicare Signature Requirements, U.S. Dep’t. Health & Human Servs. (May 2018). CMS, however, does not define what constitutes an electronic signature, so there may be more scrutiny over its use. Since electronic signatures are not clearly defined, the Electronic Signatures in Global and National Commerce Act (the “E-SIGN Act”) may be applied to determine what a valid electronic signature is.
The E-SIGN Act allows for electronic signatures to have the same binding effect as “blue ink” signatures in regards to transactions that affect interstate or foreign commerce. 15 U.S.C. § 7001. This act also preempts any federal law from requiring only nonelectronic signatures. Id. § 7002. The E-SIGN Act defines an electronic signature as “an electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.” Id. §7006(5). The E-SIGN Act manages to keep this definition very broad and does not further define what an “electronic sound” includes. Further, the Uniform Electronic Transactions Act (“UETA”), adopted by most states, also includes a similar definition of “electronic signature.” See, e.g., Tex. Bus. & Com. Code § 322.001. Thus, the DME supplier’s phone recordings of the beneficiary’s authorization most likely fall under the definition of an electronic signature because they can be considered an “electronic sound.”
To have a valid electronic signature, the E-SIGN Act requires the following:
- The beneficiary has consented to an electronic signature and has not withdrawn the consent;
- Prior to obtaining the beneficiary’s consent, the beneficiary must receive “a clear and conspicuous statement” informing him/her:
a. of any right or option to have the record provided or made available on paper or in a non-electronic form, and the right to withdraw consent, including any conditions, consequences, and fees in the event of such withdrawal;
b. whether the consent applies only to the particular transaction that triggered the disclosure or to identified categories of records that may be provided during the course of the parties’ relationship;
c. of the procedures the beneficiary must use to withdraw consent and to update information needed to contact the beneficiary electronically;
d. how the beneficiary may nonetheless request a paper copy of a record and whether any fee will be charged for that copy; and
e. of the hardware and software requirements for access to and retention of the electronic records; and consents electronically, or confirms his or her consent electronically, in a manner that reasonably demonstrates that the beneficiary can access information in the electronic form that will be used to provide the information that is the subject of the consent. 15 USC §7001(c).
Taking this all into consideration, certain procedures will need to be put in place to ensure that the DME supplier is obtaining both a valid electronic signature and a valid AOB authorization. First, the DME supplier should have very specific language that It uses for each phone recording. For example, the language can be the following:
“It is necessary for ABC Medical Equipment, Inc. to obtain your consent to submit a claim to Medicare for the following services: _____. In the past, we would have asked you to authorize this transaction by signing a written statement called an Assignment of Benefits. However, we are now asking for your consent for this Assignment of Benefits over the phone. If you still desire to have a paper copy of this consent, you may request a paper copy at: __________. You also have the right to withdraw this consent at any time. In the event of such withdrawal, [include any conditions, consequences, or fees (if any) that the supplier would like to include. If not, then omit this sentence]. To submit a withdrawal, please submit it in writing to: ________. Copies of your records for this Assignment of Benefits are provided to you [at no charge/with a charge of __per copy]. If you desire to have a copy of your records that pertains to this Assignment of Benefits, you may submit a request to ABC at: _________________. Additionally, electronic copies of all your records and this consent are located on [website] and can be accessed at: ______________. If your email address or other contact email changes, please notify ABC of the change at: _____________. Now, if you listen to and repeat a statement at the end of this section of the call, you can sign the Assignment of Benefits electronically. Do you agree to electronically sign the Assignment of Benefits?”
[Allow patient to answer. If yes, proceed with the following:]
“Please listen to the terms of the Assignment of Benefits and, at the end of this section of the call, I will ask you to repeat a statement. Under the Assignment of Benefits, you authorize ABC to submit claims to Medicare for any services that ABC furnishes to you. You also authorize ABC to receive payment from Medicare for such services. Finally, you authorize any holder of your medical information to release to Medicare information necessary to determine these payments and payments for related services. The Assignment of Benefits will be effective for any current and future claims unless you or your representative revokes the assignment. If you understand and agree to the terms of the Assignment of Benefits, please repeat: “I [and state your name] accept.”
Further, it is also recommended that the DME supplier keeps a physical copy of the AOB with a notation of the patient’s electronic signature in its records. This will help ensure that the record is accessible to all parties in accordance with the E-SIGN Act.
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The Retail Work Group is a vibrant network of DME industry stakeholders (suppliers, manufacturers, consultants) that meets once a month via video conference during which (i) an expert guest will present a topic on an aspect of selling products at retail, and (ii) a question and answer period will follow. The next Retail Work Group video conference is scheduled for August 8, 2019, at 11:00 a.m. Central. Mike Scarsella, Compass Health Brands, will present “Marketing ROI-Make Your Investment Measure Up.” Participation in the Retail Work Group is free to AAHomecare members. For more information, contact Ashley Plauché, manager of Government Affairs, AAHomecare (firstname.lastname@example.org).
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Texas. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or email@example.com.