CMS finalizes provider enrollment safeguards and tables fraud whistleblower rewards

On December 3, 2014, the Centers for Medicare & Medicaid Services (CMS) issued a Final Rule to enhance CMS’ ability to deny or revoke a provider’s enrollment of certain entities or individuals in the Medicare program that may pose a Medicare program integrity risk.

The provider enrollment changes are common sense safeguards to increase CMS oversight of Medicare providers, protect the Medicare program from bad actors, and make the enrollment rules more consistent for all providers. They are intended to ensure that fraudulent entities and individuals do not enroll in or maintain their enrollment in the Medicare program.

The provider enrollment changes include the following:

1. Medicare Debt. The Final Rule authorizes CMS to deny Medicare enrollment to providers, suppliers and owners affiliated with any entity that has Medicare debt. CMS currently has authority only to deny enrollment to an entity that has an overpayment, but lacks authority to deny enrollment to an affiliate of such an entity. Denial can be avoided if the debt is repaid or the provider, supplier, or owner agrees to a CMS-approved repayment plan.
2. Definition of Enrollment. The Final Rule clarifies that physicians and non-physician practitioners can enroll in Medicare for the sole purpose of ordering and certifying Medicare items or services by completing a CMS 855-O (versus an 855-I). CMS 855-O may only be used by physician or non-physician practitioners who wish to enroll solely to order or certify items or services; it cannot be used to obtain Medicare billing privileges.
3. Felony Convictions. A provider or supplier's Medicare enrollment may be denied or revoked if the provider or supplier—or any owner of the provider or supplier—has, within the 10 years preceding enrollment or revalidation, been convicted of a federal or state felony offense. In the Final Rule, CMS expanded the range of felonies to include any felony conviction that CMS determines to be detrimental to the best interests of the Medicare program and its beneficiaries; previously, the list of felonies had been limited to those found in Sections 424.530(a)(3)(i) and 424.535(a)(3)(i). In addition, CMS made this section applicable to managing employees as well.
4. Abuse of Billing Privileges. A provider or supplier's Medicare billing privileges may be revoked if the provider or supplier submits a claim or claims for services that could not have been furnished to a specific individual on the date of service. This revocation was expanded to permit revocation if CMS determines that the provider or supplier has a pattern or practice of billing for services that do not meet Medicare requirements such as, but not limited to, the requirement that the service be reasonable and necessary.
5. Post-Revocation Submission of Claims. Currently, a revoked physician organization, physician, non-physician practitioner, or independent diagnostic testing facility must submit all claims for furnished items and services within 60 calendar days of the effective date of the revocation. The Final Rule requires that all revoked providers and suppliers submit, within 60 days after the effective date of the revocation, all claims for items and services furnished prior to the date of the revocation letter. For home health agencies (HHAs), the date would be 60 days after the later of: (1) the effective date of the revocation, or (2) the date that the HHA's last payable episode ends.
6. Effective Date of Billing Privileges. The effective date of billing privileges for physicians, non-physician practitioners, and physician and non-physician practitioner organizations is the later of: (1) the date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor, or (2) the date an enrolled physician or non-physician practitioner first began furnishing services at a new practice location. The Final Rule expands this to include ambulance suppliers as well.
7. Effective Date of Re-enrollment Bar. A revoked provider, supplier, delegated official or authorizing official is barred from participating in Medicare from the effective date of revocation until the end of the re-enrollment bar. The duration of the re-enrollment bar ranges from one year to three years, depending on the severity of the basis of revocation. The Final Rule makes consistent the effective date of the re-enrollment bar: 30 days after CMS or its contractor mails notice of its revocation determination to the provider or supplier.
8. Corrective Action Plans. When Medicare billing privileges are revoked, a provider or supplier may submit a corrective action plan (CAP) that evidences compliance with Medicare requirements. CMS or the Medicare contractor may then reinstate billing privileges. The Final Rule limits the opportunity to submit a CAP to those revocations based on a lack of compliance with enrollment requirements. For other revocation grounds, the provider would not be able to utilize the CAP process but would have to use the appeals process. The Final Rule also limits the opportunity correct all deficiencies at the basis of revocation to a single CAP.

Generally. Throughout its comments, CMS reiterated its commitment to achieving an appropriate balance between ensuring the integrity of the Medicare Trust Funds and easing the burden on providers and suppliers. CMS also noted that any final decisions regarding the revocation of a provider’s Medicare billing privileges should come from CMS Central Office, rather than from a Medicare contractor.

Rewards for Fraud Whistleblowers. In the Final Rule, CMS also announced it will not finalize its April 29, 2013, proposed changes to the Incentive Reward Program (IRP), in which CMS would have offered financial rewards of up to $10 million to whistleblowers who report information about sanctionable fraud. CMS cited concerns that offering substantial incentives could trigger an enormous influx of unfounded reports and cause whistleblowers to ignore existing compliance reporting methods, such as hotlines.

The Final Rule was published in the Federal Register on December 5, 2014, and is effective February 3, 2015.