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Changes to CMS Enrollment and Enforcement Authority Designed to Close Loopholes for Bad Actors

on Wednesday, 2 October 2019 in Health Law Advisory: Zachary J. Buxton, Editor

On September 10, 2019, CMS published a Final Rule called Program Integrity Enhancements to the Provider Enrollment Process (CMS-6058-FC) with a comment period to be effective November 4, 2019. In previous enrollment changes establishing higher scrutiny for some provider/supplier types, CMS expressed its goal of stopping the “pay and chase” enforcement practices. The focus is on keeping bad actors out of federal health care programs before they can submit fraudulent bills. A major impetus for these most recent changes are persons or organizations who have been sanctioned under one name who enroll or continue to bill federal health care programs under different names.

This new rule adds several additional program integrity enhancements —all for the purpose of identifying individuals or entities who pose an undue risk of waste, fraud and abuse.

The rule applies to Medicare, Medicaid and the Children’s Health Insurance Program (“CHIP”).

The following is a summary of the major provisions set out in the Federal Register (84 FR 47794 (September 10, 2019):

–Implements a provision of the [Social Security] that requires Medicare, Medicaid and CHIP providers and suppliers to disclose any current or previous direct or indirect affiliation with a provider or supplier that has uncollected debt; has been subject to a payment suspension under a federal health care program; has been excluded from Medicare, Medicaid or CHIP; or has had Medicare, Medicaid or CHIP billing privileges denied or revoked (all of which are hereafter occasionally referred to as “disclosable events”), and that permits the Secretary to deny enrollment based on such affiliation when the Secretary determines that it poses an undue risk of waste, fraud or abuse.

–Provides CMS with the authority to:

  • Deny or revoke a provider’s or supplier’s Medicare enrollment if CMS determines that the provider or supplier is currently revoked under a different name, numerical identifier, or business identity, and the applicable enrollment period has not expired.
  • Revoke a provider’s or supplier’s Medicare enrollment—including all of the provider’s or supplier’s practice locations, regardless of whether they are part of the same enrollment—if the provider or supplier billed for services performed at, or items furnished from, a location that it knew or should have known did not comply with Medicare enrollment requirements.
  • Revoke a physician’s or eligible professional’s Medicare enrollment if he or she has a pattern of practice of ordering, certifying, referring, or prescribing Medicare Part A or B services, items or drugs that is abusive, represents a threat to the health and safety of Medicare beneficiaries, or otherwise fails to meet Medicare requirements.
  • Increase the maximum re-enrollment bar from three to 10 years with exceptions as stated in the rule.
  • Prohibit a provider or supplier from enrolling in the Medicare program for up to three years if its enrollment application is denied because the provider or supplier submitted false or misleading information on or with (or omitted information from) its application in order to gain enrollment in the Medicare program.
  • Revoke a provider’s or supplier’s Medicare enrollment if the provider or supplier has an existing debt that CMS refers to the United States Department of Treasury.
  • Deny a provider’s or supplier’s Medicare enrollment if –(1) the provider or supplier is currently terminated or suspended (or otherwise barred) from participation in a state Medicaid program or other federal health care program; or (2) the provider’s or supplier’s license is currently revoked or suspended in a state other than that in which the provider or supplier is enrolling.
  • Although a number of comments suggest that this new Final Rule is overly burdensome to all providers, CMS has stated that it will “ensure that the only providers and suppliers that will face additional burdens are ‘bad actors,'” defined as “those who have real and demonstrable histories of conduct and relationships that pose undue risk to taxpayers, patients, and program beneficiaries.”

Julie A. Knutson

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