Medicare Screening Requirements Finalized, Mandatory Compliance Programs Still Pending

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By Adrienne Dresevic, Esq. and Carey F. Kalmowitz, Esq.

February 2011–The October 2010 Regulatory Review column addressed the September 23, 2010 Centers for Medicare and Medicaid Services (CMS) proposed rule for establishing new screening requirements for enrollees in Medicare, Medicaid, and the Children’s Health Insurance Programs (CHIP) pursuant to Section 6401(a) of the Patient Protection and Affordable Care Act (PPACA).  The final rule, to be published in the Federal Register on February 2, 2011, is slightly more stringent, with respect to providers and suppliers of radiology services.  The Final Rule will be effective on March 25, 2011 for both newly enrolling providers and suppliers as well as currently enrolled providers and suppliers whose revalidation cycle ends between March 25, 2011 and March 25, 2012.  For all other currently enrolled providers and suppliers, the effective date for this final rule will be March 25, 2012.

Consistent with the proposed rule, the final rule solidified the three-tiered screening for providers and suppliers, categorizing them as either “limited,” “moderate,” or “high” risk.  In establishing these risk levels and the providers and suppliers assigned to them, CMS drew from its experience, as well as the experience of Medicare contractors, in identifying and investigating fraudulent billing practices.  Depending on the level of risk assigned to a provider or supplier type, the Medicare contractor will impose different screening measures to account for those categorical risks.  As with the proposed rule, radiology providers and suppliers pose either “limited” or “moderate” risk; however, no provider or supplier is immune from having its risk level increased.

The radiology providers and suppliers in the “limited” risk category include, for example, physicians or nonphysician practitioners and medical groups or clinics, radiation therapy centers, ambulatory surgical centers, federally qualified health centers, hospitals, mammography screening centers, and rural health clinics.  For providers or suppliers posing “limited” risk, Medicare contractors will verify that the provider or supplier meets all of the applicable federal and state regulations, conduct license verifications (including licensure verifications across state lines), and conduct database checks on a pre and post enrollment basis to ensure providers and suppliers continue to meet the enrollment criteria.

Radiological providers and suppliers posing “moderate” risk include, for example, independent diagnostic testing facilities (IDTFs) and portable x-ray suppliers.  “Moderate” risk providers and suppliers will be subject to all of the “limited” screening requirements as well as an onsite visit.

The “high” risk category does not contain any radiology providers and suppliers; however, as is explained below, radiology providers and suppliers cannot ignore the “high” risk screening requirements.  In screening “high” risk providers and suppliers, Medicare contractors will perform all of the “moderate” screening measures, and require the submission of a set of fingerprints for a national background check and an FBI criminal history record check from all individuals who maintain a 5% or greater direct or indirect ownership interest in the provider or supplier.

The most notable difference between the proposed and final rule for providers and suppliers of radiology services is that portable x-ray suppliers have been increased from “limited” risk to “moderate” risk.  In its comments, CMS states that “unusual claims patterns . . . raise concerns about the integrity of payments to certain portable x-ray suppliers.  Based on this, and combined with the fact that there are low barriers to entry for this type of supplier, portable x-ray suppliers will be placed in the moderate screening level.”  This increase in risk is an indication that CMS is and will be more closely scrutinizing radiology providers and suppliers in the future.

Although radiology providers and suppliers are not specifically named in the “high” risk category, the final rule allows CMS to adjust a screening level from “limited” or “moderate” to “high” upon the occurrence of specific events.  CMS has the authority to adjust a provider or supplier’s screening level if the provider or supplier (i) has had a payment suspension at any time in the last 10 years; (ii) has been excluded from Medicare by the Office of Inspector General (OIG); (iii) has had its billing privileges revoked by a Medicare contractor within the last 10 years and is attempting to establish additional Medicare billing privileges; (iv) has been terminated or otherwise precluded from billing Medicaid; (v) has been excluded from any federal healthcare program; or (vi) has been subject to any final adverse action (as defined in 42 CFR 424.502) within the last 10 years.  Finally, those providers and suppliers that were prevented from enrolling based on a temporary moratorium imposed on a particular provider or supplier type, and apply for enrollment as a Medicare provider within six months of CMS lifting the moratorium, will experience a higher level of screening for the six months following the lifting of the temporary moratorium.

The final rule also addressed the compliance program requirement as set forth in Section 6401 of PPACA, which prescribes that, as a condition of enrolling in Medicare, Medicaid, or CHIP, providers and suppliers must establish compliance programs that meet certain “core elements.”  Notably, at this time, CMS did not finalize any rules related to mandatory compliance.  Instead, CMS continues to do further rulemaking and will “advance specific proposals at some time in the future.”  The proposed rule solicited comments on these “core elements.”  While the final rule did not finalize the compliance plan requirements, all radiology provider and suppliers should remain attentive to the developments of the core elements to ensure full compliance with the future rule.

Even though the final rule does not differ significantly from the proposed rule for most providers and suppliers, CMS’ increase in screening level for portable x-ray providers indicates that CMS continues to scrutinize radiology providers and suppliers.  Providers and suppliers of radiology services should remain alert for adjustments in screening level, the imposition of temporary moratoria, and the compliance plan requirements.

Adrienne Dresevic, Esq. graduated Magna Cum Laude from Wayne State University Law School. Practicing healthcare law, she concentrates in Stark and fraud/abuse, representing various diagnostic imaging providers, eg, IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.

Carey F. Kalmowitz, Esq. graduated from NYU Law School. Practicing healthcare law, he concentrates on corporate and financial aspects, eg, structuring physician group practice transactions; diagnostic imaging and ancillary services, IDTFs, provider acquisitions, CON, compliance, and Stark and fraud/abuse.

The authors are founding members of The Health Law Partners, P.C. and may be reached at (248) 996-8510 or (212) 734-0128, or at

One comment

  1. This was good info and much appreciated. However, in the interest of sparing managers the time it takes to read all of this, it could have been edited down to about 2 paragraphs without losing anything pertinent.

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