(UPDATE: March 9, 2020): A Medicare revocation action can destroy the financial viability of your practice. Moreover, effective November 4, 2019, the reasons for which a health care provider or supplier may have its Medicare billing privileges revoked have greatly expanded. Our article titled “42 CFR Sec. 424.535(a) Medicare Revocation Actions — Your Medicare Billing Privileges Can be Revoked For a Host of New Reasons. Are You Facing a Medicare Revocation Action? If so, You Must Act Fast to Preserve Your Appeal Rights,” discusses these revocation reasons in much more detail). After reviewing the materials below, we strongly recommend that you also review the updated article linked above.
The information in this article only applies to a Medicare revocation action with an effective of November 3, 2019 or earlier. During 2015, more than 1.2 million non-institutional health care providers participated in the Medicare program.  Over the last year, a number of these providers have unexpectedly found themselves in a difficult situation where their Medicare number has been either “deactivated” or “revoked.” While Medicare deactivation actions remain somewhat rare, over the past year, the number of Medicare revocation actions taken by Medicare Administrative Contractors (MACs) appears to have greatly increased. Both of these actions will effectively suspend a provider’s ability to bill for services rendered to Medicare beneficiaries. In order to receive reimbursement for services rendered to Medicare beneficiaries, a provider must properly enroll in the Medicare program and remain compliant with all of its conditions of enrollment and participation requirements.  The purpose of this article is discuss the differences between these two types of adverse actions and possible remedial steps that you can take if your Medicare number is deactivated or revoked.
When a health care provider’s Medicare number is revoked, its billing privileges are terminated. Notably, the associated provider agreement is also automatically terminated. There are a wide variety of bases upon which a revocation action can be initiated. The two primary reasons for revocation we have addressed in recent months have included licensure-based actions and those resulting from a provider’s failure to report an adverse action or change in location.
Unfortunately, if a physician, falls out of compliance with applicable enrollment requirements, his or her Medicare billing privileges may be revoked. Typically, revocation actions associated with this reason result from a determination by a Medicare contractor that a physician or his / her practice no longer meets all of the necessary registration requirements. When this occurs, the contractor notifies the CMS Provider Enrollment & Oversight Group with the pertinent provider information and its recommendation that a revocation action be authorized.
For instance, Medicare requires that physician services be furnished by a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the state in which he or she practices. The Medicare Program Integrity Manual (MPIM) further elaborates on this basis for revocation in cases where a physician is not appropriately licensed: “…situations in which § 424.535(a)(1) may be used a revocation reason include [where]…[t]he provider or supplier is not appropriately licensed.” MPIM Ch. 15 § 15.27.2(A)(1)(c).
This basis for revocation is especially pertinent in a large state like Texas, where the Texas Medical Board remains active with respect to disciplinary actions. At its June 10, 2016 meeting, the Texas Medical Board disciplined 78 licensed physicians and issued one cease and desist order. A significant number of these disciplinary actions resulted in licensure revocation or suspension. Each of these adverse disciplinary actions would likely result in the revocation of a physician’s billing privileges.
- Failure to Report.
Should a provider fail to comply with its reporting requirements under 42 C.F.R. 424.516(d)(1)(ii) and (iii), which include “any adverse legal action” and / or “a change in location,” CMS may revoke the provider’s billing privileges. Additional reasons for revocation we have seen also include:
- Provider or Supplier Conduct.
Under this regulatory provision, if a provider (or supplier), or an owner, managing employee, authorized or designated official, medical director, supervising physician or other health care personnel of the provider (or supplier) is excluded from the Medicare, Medicare or other federal health care program, the provider’s Medicare number can be revoked and its billing privileges terminated. This basis for revocation is especially harsh – it can be imposed based on the fact that a provider has failed to adequately screen out employees, staff and contractors that have been excluded from participation in one or more federal health benefit programs. Debarment or suspension from federal procurement and nonprocurement programs can also result in revocation.
If a provider (or supplier) or any owner or managing partner of the provider (or supplier) has been convicted of a federal or state felony within the past 10 years and CMS determines that the offense is detrimental to the best interest of the Medicare program, the agency may revoke the provider’s Medicare number.
- False or Misleading Information.
If a provider or supplier has certified as “true” false or misleading information on an enrollment application, its Medicare number may be revoked. Importantly, such an action may also constitute a violation of criminal law due to the submission of a “false statement” to the government.
- On-Site Review.
If a program integrity contractor (such as a Unified Program Integrity Contractor (UPIC)) visits your office and makes a determination that your practice or agency is no longer operational or fails to meet another Medicare enrollment requirement, the UPIC will recommend to CMS that your Medicare billing privileges be revoked. This often occurs when a provider moves offices and either fails to notify Medicare of the move in a timely fashion OR a Medicare contractor claims that it never received notice of the change in location. Importantly, it isn’t merely enough for a provider to be able to show that notice of the change in location was actually sent – you need to be able to prove that the Medicare contractor RECEIVED the notice.
- Misuse of Billing Number.
If a provider knowingly sells its billing number or allows another individual or entity to use its billing number, CMS can revoke the provider’s billing privileges. Exceptions are permitted for a valid reassignment of benefits or a change of ownership.
- Abuse of Billing Privileges.
Should CMS determine that a provider has engaged in abusive billing practices, it can revoke the provider’s billing privileges. Examples cited in the regulation include:
Billing for services provided to a Medicare beneficiary that is deceased.
Billing for services when either the physician or the beneficiary is not in the state or the country when the service was supposedly rendered.
Billing for services that require certain testing equipment when that equipment was not available at the location where the services were allegedly rendered.
CMS may also revoke a provider’s billing privileges if it determines there is a pattern or practice of submitting claims that fail to meet Medicare’s requirements. When considering this basis for revocation, CMS considers:
The percentage of claims that were denied.
The reasons for claims denials.
Whether or not the provider has a history of previous final adverse actions.
The length of time over which a pattern or practice or improper billing has taken place.
How long the provider has been enrolled in the Medicare program.
Any other information that CMS feels is relevant in its determination of whether a pattern or practice of improper billing has occurred.
II. What is the Effect of the Revocation of a Provider’s Billing Privileges?
The revocation of a provider’s billing privileges can destroy the provider’s practice. A provider will be barred from participating in the Medicare program for a minimum of one to three years, depending on the basis for revocation and the facts in a particular case. Once this period has expired, a provider will be required to submit a new enrollment application to CMS for its review and consideration.
III. Responding to Medicare Revocation Action:
What actions should you take if your Medicare billing privileges have been revoked? While a provider may choose to represent themselves in the appeal of a revocation action, we recommend that you engage experienced legal counsel to assist you with this process. A well written letter telling your side of the story is unlikely to persuade a reviewer at reconsideration that your billing privileges should be restored. Successful defenses of revocation actions typically require a careful analysis of both the facts and the law. Liles Parker attorneys have represented a wide variety of health care providers and suppliers in Medicare revocation actions. Please give me a call for a free consultation on your case.
Robert W. Liles, M.B.A., M.S., J.D., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law. Liles Parker is a boutique health law firm, with offices in Washington DC, Houston TX, and Baton Rouge LA. Robert represents physicians and other health care providers around the country in connection with Medicare revocation actions. Our firm also represents health care providers in connection with federal and state regulatory reviews and investigations. For a free consultation, call Robert at: 1 (800) 475-1906.
 42 C.F.R. § 424.505; MPIM Ch. 15 § 15.1.