CMS Increases Enrollment Enforcement

By Adrienne Dresevic, Esq. and Jessica L. Gustafson, Esq. of The Health Law Partners, P.C.

Section 6401 of the Affordable Care Act mandated enhanced enrollment scrutiny of providers and suppliers based on their perceived “risk” to the Medicare program. 42 C.F.R. 424.518 assigns such “risk” levels to providers and suppliers. While physicians, medical groups, and clinics have been found to have a “limited risk,” independent diagnostic testing facilities (IDTFs) have been found to have a “moderate” risk. Providers and suppliers with a higher risk categorization will face heightened enrollment scrutiny.

On December 5, 2014, the Centers for Medicare & Medicaid Services (CMS) published a final rule (the Final Rule), which amended federal regulations governing provider enrollment, expanding CMS’ enforcement authority.¹ From CMS’s point of view, changes to existing regulations governing provider enrollment were necessary to “strengthen program integrity and help ensure that fraudulent entities and individuals do not enroll in or maintain their enrollment in the Medicare program.”¹ The Final Rule was effective February 3, 2015.¹ It contains three key provisions that could impact radiology providers. The Final Rule serves to:

Expand the instances in which a felony conviction can serve as a basis for denial or revocation of a provider’s enrollment;

In certain cases, enable CMS to deny enrollment to a provider or owner that had an ownership interest in a previously-enrolled provider or supplier that had a Medicare debt; and

Permit CMS to revoke a provider’s billing privileges if it determines that the provider has a pattern or practice of submitting claims that fail to meet Medicare requirements.

Felony Convictions

Prior to the Final Rule, CMS already had the authority to deny or revoke a provider’s or supplier’s enrollment in the Medicare program, if, in the 10 years prior to enrollment or revalidation of enrollment the provider or supplier (or any owner) had been convicted of any of the felony offenses enumerated within 42 C.F.R. 424.530 (a) (3) and 42 C.F.R. 424.535 (a) (3).

The Final Rule expands CMS’ authority under these federal regulations to deny or revoke a provider’s or supplier’s enrollment in the Medicare program. Specifically, enrollment may be denied or revoked if in the preceding 10 years, the provider or supplier (or any owner) was convicted of any of the enumerated felonies or any felony CMS determines to be “detrimental to the best interests of the Medicare program and its beneficiaries.”² The Final Rule further expands the regulations’ application to a provider’s or supplier’s managing employees.

Debts to Medicare

Prior to publication of the Final Rule, existing federal regulations granted CMS the authority to deny the enrollment application of a physician, non-physician practitioner, or owner, in those situations where the applicant had a current Medicare overpayment. Due to concerns regarding those situations in which an owner of a provider or supplier incurs a significant debt to Medicare, subsequently exits the Medicare program or shuts down operations, and thereafter re-enrolls in Medicare through a new business entity, the Final Rule proposed several changes to 42 C.F.R. 424.530 (a) (6). In particular, the Final Rule:

Expands application of 42 C.F.R. 424.530 to all providers and suppliers and owners thereof (and not limit the regulation’s application to physicians, non-physician practitioners, or owners).

Creates a new regulation which permits CMS to deny an enrollment application of a provider, supplier, or owner that had an ownership interest in a provider or supplier whose Medicare participation was voluntarily terminated, involuntarily terminated, or revoked and

1. The Medicare debt was not subsequently repaid; and

2. The owner left the provider or supplier with the Medicare debt within one year before or after that provider’s or supplier’s termination or revocation;

3. From the perspective of CMS, the uncollected debt poses an undue risk of fraud, waste and abuse.

In the Final Rule, CMS identified five factors that it would consider in determining whether an uncollected debt posed undue risk of fraud, waste, and abuse:

The amount of the Medicare debt
The length and timeframe that the enrolling provider, supplier, or owner thereof was an owner of the prior entity
The percentage of the enrolling provider, supplier, or owner’s ownership of the prior entity
Whether the Medicare debt is currently being appealed
Whether the enrolling provider, supplier, or owner thereof was an owner of the prior entity at the time the Medicare debt was incurred.³

In its Final Rule, CMS declined to provide greater specificity related to the above elements, but assured providers that it would “only exercise [its] discretion under 424.530 (a) (6) in a careful and consistent manner.”⁴ Under 42 C.F.R. 424.530 (a) (6) (iii), a provider or supplier with a current overpayment or history of Medicare debt may avoid denial of its enrollment application if it either re-pays the debt in full or agrees to a CMS extended repayment schedule for the entire outstanding Medicare debt.

Improper Billing

The Final Rule also grants CMS the authority to revoke a provider’s or supplier’s enrollment if it is found to engage in abusive billing practices. Abusive billing practices may be found even if “CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.”⁵ Denials giving rise to a finding of abusive billing practices could include denials made because the reviewer determined provided services were not reasonable and necessary.

Conclusion

All providers and suppliers (and in particular, IDTFs, given the heightened enrollment scrutiny they will face), are well advised to carefully review the enrollment regulations and ensure their compliance. Failure to comply with the enrollment regulations could result in a bar from Medicare enrollment for a period of one to three years, a result highly detrimental to any healthcare provider or supplier.

References:

79 Fed. Reg. 72500 et seq. (December 5, 2014)
79 Fed. Reg. at 72509
79 Fed. Reg. at 72532
79 Fed. Reg. at 72507
42 C.F.R. 424.535 (a) (8)

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, e.g., IDTFs, mobile leasing entities, and radiology and multi-specialty group practices.

Jessica L. Gustafson, Esq. graduated from Wayne State University Law School. Practicing healthcare law, she concentrates on representing providers in the Medicare, Medicaid and third party payor audit appeals processes, compliance with federal and state healthcare regulations, and reimbursement matters.

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

For more regulatory news, visit www.ahraonline.org/news.