New Rules Make it Easier for CMS to Revoke Medicare Enrollment

On December 3, 2014, CMS Administrator Marilyn Tavenner announced several new rules aimed at strengthening oversight of Medicare providers and protecting the Medicare Trust Fund. These rules could have a significant impact on Medicare providers that are currently involved in Medicare audits. The CMS press release states that the “new safeguards are designed to prevent physicians and other providers with unpaid debt from re-entering Medicare, remove providers with patterns or practices of abusive billing, and implement other provisions to help save more than $327 million annually.”

As part of its program integrity strategy, CMS has removed nearly 25,000 providers from Medicare and CMS has stated that the newly announced safeguards will help the agency to stop allegedly “bad actors” from returning to the Medicare program. The CMS Deputy Administrator and Director of the Center for Program Integrity noted that “for years, some providers tried to game the system” and the new final rule makes it harder for those providers removed from the program to get back in.

The newly announced safeguards allow CMS to:

  • Deny enrollment to providers, suppliers and owners affiliated with any entity that has unpaid Medicare debt. This will prevent people and entities with current Medicare debts with one entity from exiting the program and attempting to re-enroll as a new business to avoid repayment.
  • Deny or revoke enrollment of a provider or supplier if a managing employee has been convicted of a felony that CMS determines to be detrimental to Medicare beneficiaries. CMS will utilize recently implemented background checks to obtain more information regarding felony convictions for high-risk providers and suppliers.
  • Revoke enrollments of providers and suppliers engaging in abusive billing practices (i.e. a pattern or practice of billing for services that do not meet Medicare requirements).

These new rules will function alongside other authorities created by the Affordable Care Act focused on stopping Medicare fraud, waste and abuse. CMS is currently engaged in a temporary enrollment moratoria on new ambulance and home health providers in seven “fraud hot spots” around the country and has targeted resources, like fingerprint-based criminal background checks, on these areas. CMS has also used its Fraud Prevention System, a predictive analytics technology, to identify providers and suppliers who were ultimately revoked, preventing $81 million in being paid.

A CMS fact sheet detailing the final rule is available here. The final rule released on December 3, 2014 can be viewed here.

The application of this rule could be concerning for health care providers in the midst of a Medicare audit because “abusive billing practices” is defined by CMS as “situations in which a provider or supplier regularly and repeatedly submits non-compliant claims over a period of time.” Every Medicare appeal involves alleged “non-compliant claims” and the current delays in the process caused by the backlog at the administrative law judge level create a situation where health care providers may not have a chance to adjudicate their claims prior to being disenrolled from the Medicare program.

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