The OIG issued an Alert in March 2004 reminding physicians participating in the Medicare program that they risk substantial penalties and exclusion from Medicare and other federal health care programs if they charge Medicare patients additional amounts for covered services, other than the applicable coinsurance and deductible. The Alert was prompted by reports of physicians charging patients "extra fees for already covered services" in violation of the terms of the physicians' assignment agreements.

Rather than focusing on the practice of balance billing, commonly understood to be inappropriate, the Alert points to the $600 annual fee that a physician was asking his patients, including Medicare patients, to pay under a "Personal Health Care Medical Care Contract." The OIG alleged that the fee constituted a violation of the physician's assignment agreement because a number of the contracted services (e.g., coordination of care with other providers, comprehensive assessment and plan for optimum health, and extra time spent on patient care) were Medicare covered services. The language of the Alert would not appear to prohibit payments for otherwise noncovered services.

According to the Alert, the physician resolved the OIG's allegations by paying the OIG an undisclosed settlement amount and agreeing to stop offering the contracts to his patients