Liles Parker PLLC
(202) 298-8750 (800) 475-1906
Washington, DC | Houston, TX
San Antonio, TX | Baton Rouge, LA

We Defend Healthcare Providers Nationwide in Audits & Investigations

Home Health Revocation Actions by Medicare are Expanding Around the Country

September 28, 2020 by  
Filed under Home Health & Hospice

Download PDF

Have you received a letter proposing the home health revocation of your agency?(September 28, 2020):  Last September, CMS published a Final Rule titled “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.”[1]Among its many changes, the Final Rule significantly expanded the reasons that may be asserted by the Centers for Medicare and Medicaid Services (CMS) when revoking a health care provider’s enrollment and Medicare billing privileges.  The Final Rule also extended the period that a health care provider can be barred from reenrolling in the Medicare program.  Since the issuance of the Final Rule, the enrollment and Medicare billing privileges of an increasing number of home health agencies nationwide have been revoked.   This article examines several of the primary regulatory bases that have been cited by CMS when pursuing a home health revocation action.  It also examines a number of the issues that a home health agency should consider when faced with a potential revocation action.

I.  Summary Listing of the Reasons a Home Health Agency’s Medicare Enrollment May be Revoked:

With the implementation of the Final Rule, the number of reasons upon which CMS may seek to revoke the enrollment and Medicare billing privileges of a participating provider or supplier grew from 14 to 22.[2]  A summary listing of the expanded list of reasons for revocation is set out below.

  • Revocation Reason #1. Noncompliance. 42 C.F.R. §424.535(a)(1).

  • Revocation Reason #2. Provider or supplier conduct. 42 C.F.R. §424.535(a)(2).

  • Revocation Reason #3. Felonies. 42 C.F.R. §424.535(a)(3).

  • Revocation Reason #4. False or misleading information. 42 C.F.R. §424.535(a)(4).

  • Revocation Reason #5. On-site review. 42 C.F.R. §424.535(a)(5).

  • Revocation Reason #6. Grounds related to provider or supplier screening requirements. 42 C.F.R. §424.535(a)(6).

  • Revocation Reason #7. Misuse of billing number. 42 C.F.R. §424.535(a)(7).

  • Revocation Reason #8. Abuse of billing privileges. 42 C.F.R. §424.535(a)(8).

  • Revocation Reason #9. Failure to report. 42 C.F.R. §424.535(a)(9).

  • Revocation Reason #10. Failure to document or provide CMS access to documentation. 42 C.F.R. §424.535(a)(10).

  • Revocation Reason #11. Initial reserve operating funds. 42 C.F.R. §424.535(a)(11).

  • Revocation Reason #12. Other program termination. 42 C.F.R. §424.535(a)(12).

  • Revocation Reason #13. Prescribing authority. 42 C.F.R. §424.535(a)(13).

  • Revocation Reason #14. Improper prescribing practices. 42 C.F.R. §424.535(a)(14).

  • Revocation Reason #15. Reserved. 42 C.F.R. §424.535(a)(15).

  • Revocation Reason #16. Reserved. 42 C.F.R. §424.535(a)(16).

  • Revocation Reason #17. NEW — Debt referred to the United States Department of Treasury. 42 C.F.R. §424.535(a)(17).

  • Revocation Reason #18. NEW Revoked under different name, numerical identifier or business identity. Under 42 C.F.R. §424.535(a)(18).

  • Revocation Reason #19. NEW Affiliation that poses an undue risk. 42 C.F.R. §424.535(a)(19).

  • Revocation Reason #20. NEWBilling from a non-compliant location. 42 C.F.R. §424.535(a)(20),

  • Revocation Reason #21. NEW — Abusive ordering, certifying, referring, or prescribing of Part A or B services, items or drugs. 42 C.F.R. §424.535(a)(21).

  • Revocation Reason #22. NEWPatient harm. 42 C.F.R. §424.535(a)(22).

For a detailed discussion of the 22 revocation reasons summarized above, you may wish to review 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.”

II.  Primary Reasons Cited in Home Health Revocation Actions:

In reviewing the 22 reasons that CMS may revoke a home health agency’s enrollment and Medicare billing privileges, it is worth noting that only Revocation Reason #11. Initial reserve operating funds. 42 C.F.R. §424.535(a)(11), specifically targets home health agencies.  Under this provision, CMS can revoke the Medicare billing privileges of a home health agency if the agency fails to provide documentation that CMS can use to verify that the home health agency meets the initial reserve operating funds requirement described in 42 C.F.R. §489.28(a).  Although this particular basis for Medicare revocation is explicitly aimed at home health agencies, to date, it is rarely been cited by CMS as the primary reason for revoking an agency’s enrollment and Medicare billing privileges.

Of the remaining revocation reasons cited above, the reasons CMS has repeatedly relied on a home health revocation action are Revocation Reason #5. On-site review. 42 C.F.R. §424.535(a)(5) and Revocation Reason #8. Abuse of billing privileges. 42 C.F.R. §424.535(a)(8).  Both of these reasons for revocation are discussed in more detail below, along with recent home health Medicare revocation case decisions examining these regulatory violations.

III.On-Site Review” as a Basis for a Home Health Revocation Action:

In recent years, our attorneys have represented numerous home health agencies whose enrollment and Medicare billing privileges have been revoked due to the fact that an unannounced, on-site visit by a CMS-contracted inspector found that the provider was no longer operational to furnish Medicare covered home health services. As 42 C.F.R. §424.535(a)(5) provides:

“(5) On-site review. Upon on-site review or other reliable evidence, CMS determines that the provider or supplier is either of the following:

(i) No longer operational to furnish Medicare-covered items or services.

(ii) Otherwise fails to satisfy any Medicare enrollment requirement.” (emphasis added).

What does this mean?  Simply put, if a CMS-contracted inspector conducts an unannounced site visit of a home health agency’s existing certified location and finds that the agency is no longer “operational” at that location, the home health agency’s enrollment and Medicare billing privileges are subject to revocation.  A home health agency is considered to be operational[3] if it:

“. . . has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered), to furnish these items or services.”

Many of these revocation cases are the result of a home health agency’s failure to properly notify the appropriate MAC that it intends to move from its surveyed and certified location to a new site (within its current approved geographic area).[4]  Home health agencies must also submit an amended Form CMS-855A, along with any other required documentation within 90 days.[5]  A recent DAB decision affirmed the revocation of a home health agency by CMS on the basis that an on-site review of the provider’s surveyed location found that the agency was not operational.

March 2020.  Texas Home Health Agency. Reason for Revocation – On-Site Review.  In a recent case decided by an Administrative Law Judge (ALJ) of the HHS, Departmental Appeals Board (DAB), the ALJ reviewed a revocation case involving a Texas home health agency that allegedly failed to meet its regulatory requirements under 42 C.F.R. §424.535(a)(5).

The facts in the case are fairly straightforward. In July 2017, a CMS-contractor inspector attempted to conduct an unannounced site visit of a home health agency in Tyler, Texas.  When the inspector arrived at the agency address on file with CMS and the MAC, she found that the building at that location was “[v]acant and locked.”  The inspector also found that no employees were present and there were no signs of customer activity.”

At appeal, the home health agency argued that the regulations require that a provider NOT the provider’s physical practice location was required to be “open to the public” for the purpose of providing health care related services.  The home health agency argued that since its staff delivered home health services in the homes of patients and not in a single practice location, it was, in fact, “open to the public.”  Based on the facts presented, the DAB ruled that since the home health agency was not operational at the address on file with CMS, it was in violation of the requirements under 42 C.F.R. §424.535(a)(5)(i).  The DAB therefore affirmed the revocation action and the two-year enrollment bar that had been imposed.

III. “Abuse of Billing Privileges” as a Basis for a Home Health Revocation Action:

As a review of 2019 and 2020 DAB decisions will confirm, CMS is increasingly citing a home health provider’s abuse of billing privileges when exercising its Medicare revocation authority.  Most of the revocation actions taken during this period alleged that the home health agency “has a pattern or practice of submitting claims that fail to meet requirements.” [6] As 42 C.F.R. §424.535(a)(8) provides:

“(8) Abuse of billing privileges. Abuse of billing privileges includes either of the following:

(i) 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. These instances include but are not limited to the following situations:

(A) Where the beneficiary is deceased.

(B) The directing physician or beneficiary is not in the state or country when services were furnished.

(C) When the equipment necessary for testing is not present where the testing is said to have occurred.

(ii) CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements. In making this determination, CMS considers, as appropriate or applicable, the following:

(A) The percentage of submitted claims that were denied.

(B) The reason(s) for the claim denials.

(C) Whether the provider or supplier has any history of final adverse actions (as that term is defined under § 424.502) and the nature of any such actions.

(D) The length of time over which the pattern has continued.

(E) How long the provider or supplier has been enrolled in Medicare.

(F) Any other information regarding the provider or supplier’s specific circumstances that CMS deems relevant to its determination as to whether the provider or supplier has or has not engaged in the pattern or practice described in this paragraph.”  (emphasis added).

What does this mean?  When analyzing this revocation reason, it is worth noting that it is comprised of two parts, paragraphs (i) and (ii).  Under 42 C.F.R. §424.535(a)(8)(i), several straightforward criteria are outlined in sections (i)(A)-(C) that can serve as the basis for revoking a provider’s enrollment and Medicare billing privileges.  In contrast, paragraph (ii) permits CMS to revoke a provider’s enrollment if it determines that the provider “has a pattern or practice of submitting claims that fail to meet Medicare requirements.”   Although sections (ii)(A)-(F) are intended to provide a framework that can be used by CMS to determine if a “pattern or practice” of improper billing conduct is present, in our opinion this reason for revocation is still remarkably broad and subject to the vagaries of the discretion of CMS and its contractors.  An overview of one of the more interesting Medicare revocation cases brought under 42 C.F.R. §424.535(a)(8) is set out below.

May 2020.  Texas Home Health Agency. Reason for Revocation — Abuse of billing privileges:  In this case, an ALJ was faced with a case where a Texas home health agency was alleged to have submitted 38 claims (associated with 13 beneficiaries) to Medicare for services that were allegedly provided without a valid certification of eligibility.

In this case, the 13 home health Medicare beneficiaries at issue listed a Houston physician as the ordering / certifying physician.  Qlarant, the Unified Program Integrity Contractor (UPIC) for Texas, conducted a review of these claims and discussed them with the physician who allegedly ordered the home health services.  The physician attested that he did not order home health services for any of the 13 beneficiaries under review.  Based on Qlarant’s findings, Palmetto (the assigned Medicare Administrative Contractor) revoked the home health agency’s enrollment and Medicare billing privileges, citing violations of 42 C.F.R. § 424.535(a)(8)(ii). In support of its decision, Palmetto noted that the physician denied ordering the home health services.  Palmetto further stated that the physician did not have a prior Part B relationship with the 13 beneficiaries at issue.[7] Therefore, Palmetto took the position that the Physician was not involved in the care, treatment, or monitoring of the 13 beneficiaries whose medical records he reviewed.

On appeal, it was argued that a licensed nurse practitioner working under a valid collaboration agreement with a Houston-based physician properly certified the need for home health services in connection with these 13 beneficiaries.  As the home health agency noted, the supervising physician had signed a letter which stated:

To whom it may concern: This is [to] certify that I [Physician] authorized [Nurse Practitioner] NP of [Pasadena Medical Clinic] to sign all Home Health orders on my behalf as her supervising physician.”

In its arguments, the home health agency conceded that “all related orders were signed and submitted by [Physician] and/or [Nurse Practitioner] of [Pasadena Medical Clinic].”  On appeal, the home health agency acknowledged that the claims were noncompliant because there was an impermissible delegation of his authority to sign home health certification documents” by the nurse practitioner.  Therefore, the DAB found that the claims did not qualify for coverage and payment.  The DAB also ruled that it was appropriate to revoke the home health agency’s enrollment and Medicare billing privileges for violating 42 C.F.R. § 424.535(a)(8), “Abuse of Billing Privileges.”  The ALJ also upheld the three-year enrollment bar that had been imposed by CMS.

As a final point, it is worth noting that during the period at issue (August 2016 through November 2017), Medicare paid for home health services only if a physician certifies the beneficiary’s eligibility for the home health benefit – not a nurse practitioner.[8]

IV.  Length of a Medicare Enrollment or Re-enrollment Bar:

As the case examples above reflect, until recently a health care provider could only be barred from being enrolled in the Medicare program for a period of one to three years.  Under the Final Rule effective November 4, 2019,[9] this period was extended to ten years[10] (under certain circumstances, a provider may be barred from enrolling or re-enrolling in the Medicare program for up to 20 years).[11]

V.  Anticipated Impact of New Medicare Revocation Authorities:

Six of the reasons that may be relied on by CMS when revoking a home health agency’s enrollment and Medicare billing privileges are new and became effective November 4, 2019.  Of the six new reasons, we believe that Revocation Reason #17: Debt referred to the United States Department of Treasury.  42 C.F.R. §424.535(a)(17) may represent the most significant risk to your home health agency.  As 42 C.F.R. §424.535(a)(17) provides:

“(17) Debt referred to the United States Department of Treasury. The provider or supplier has an existing debt that CMS appropriately refers to the United States Department of Treasury. In determining whether a revocation under this paragraph (a)(17) is appropriate, CMS considers the following factors:

(i) The reason(s) for the failure to fully repay the debt (to the extent this can be determined).

(ii) Whether the provider or supplier has attempted to repay the debt (to the extent this can be determined).

(iii) Whether the provider or supplier has responded to CMS’s requests for payment (to the extent this can be determined).

(iv) Whether the provider or supplier has any history of final adverse actions or Medicare or Medicaid payment suspensions.

(v) The amount of the debt.

(vi) Any other evidence that CMS deems relevant to its determination.”

What does this mean?  Many home health agencies around the country have been subjected to postpayment audits by UPICs (or their predecessor contractors, ZPICs).  Alleged overpayments in these cases have been as high as $10 million.  As you are likely aware, the Medicare administrative appeals process used to appeal these alleged debts has been hopelessly overwhelmed by the appeal of alleged debts identified in audits by UPICs, ZPICs and RACs.  From a practical standpoint, if your home health agency files for a hearing before an ALJ, it will be an average of 3.9 years before your case gets adjudicated.

Assuming that you haven’t paid-off the alleged debt, while your administrative appeal is pending, CMS and its contractors will be required under the Debt Collection Improvement Act of 1996 (DCIA) to refer eligible delinquent debt to the Department of Treasury (Treasury) for collection or offset through the Treasury Offset Program (TOP).  Upon receipt of the referral, Treasury or one of its contracted collection agencies will initiate proceedings to satisfy the alleged debt.

We can typically get Treasury to place its collection efforts on hold while an alleged Medicare overpayment is actively being appealed,  Unfortunately, with the implementation of 42 C.F.R. §424.535(a)(17), CMS is now also able to revoke a home health agency’s enrollment and Medicare billing procedures after referring an alleged debt to Treasury for collection.

VI.  Responding to a Proposed Home Health Revocation Action:

We cannot overstate the seriousness of a home health revocation action.  For most home health agencies, traditional Medicare is the largest payor, with Medicaid typically constituting the second-largest payor.  From a practical standpoint, if your home health agency’s Medicare enrollment and billing privileges are revoked, it will be difficult, if not impossible, for your company to remain solvent.

It is therefore crucial that you contact experienced health law counsel to represent you when you first receive notice of a revocation action.  The appeals procedures followed in a revocation case is quite different from that employed in the appeal of a claim denial or an alleged overpayment.  Liles Parker attorneys have extensive experience representing health care providers and suppliers in challenging the imposition of a Medicare revocation action.  Is your home health agency facing revocation?  Give us a call for a free consultation.  1 (800) 475-1906.

Robert W. LilesRobert W. Liles and the health lawyers at Liles Parker, Attorneys & Counselors at Law have extensive experience representing health care providers and suppliers nationwide in Medicare revocation actions.  Has CMS proposed that your enrollment and Medicare billing privileges be revoked?  Give us a call for a free consultation.  We can be reached at:  1 (800) 475-1906.

[1] The Final Rule under 42 C.F.R. §424.535(a), was published in order to implement sections 1866(j)(5) and 1902(kk)(3) of the Social Security Act (as amended by the Affordable Care Act).

[2] Two of the new reasons for revocation have not yet been announced.  Placeholder slots remain open at 42 C.F.R. §424.535(a)(15) and (16).

[3] The definition of “operational” is set out at 42 C.F.R. §424.502.

[4] For additional information, please see CMS guidance titled Home Health Agencies (HHAs): Change of Address Notification of the Medicare Administrative Contractor (MAC).”

[5] See 42 C.F.R. §424.516(e)(2).

[6] The revocation reason “Abuse of Billing Privileges” was added to the existing list of revocation reasons that may be asserted by CMS effective February 3, 2015.  79 Fed. Reg. at 72,513 (adding paragraph (ii) to 42 C.F.R. § 424.535(a)(8)).

[7] While not explicitly stated, we suspect that this means that the so-called ordering physician had not billed Medicare for an Evaluation and Management (E/M) service in the course of caring for these 13 patients.

[8] Prior to the emergence of COVID-19, CMS had identified limited exceptions to this rule.  For example, under Maryland law, a nurse practitioner can provide primary care services.  Effective January 1, 2020, CMS allowed Medicare-enrolled nurse practitioners to certify home health services for Medicare beneficiaries as part of the Maryland Total Cost of Care (TCOC) Model. See MLM Matters Number MM 11330Additionally, as provided Section 3708 of the CARES Act, CMS is temporarily allowing a Medicare-eligible home health patient to be under the care of a nurse practitioner, clinical nurse specialist, or a physician assistant who is working in accordance with State law (for Medicare claims with a “claim through date” on or after March 1, 2020).  For additional information on the temporary regulatory waivers that CMS has implemented in response to COVID-19, see the agency’s guidance entitled “Home Health Agencies: CMS Flexibilities to Fight COVID-19,” issued September 8, 2020.

[9]Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process”

[10] See 42 C.F.R. §424.535(c)(1)(i).

[11] See 42 C.F.R. §424.535(c)(1)(ii).

Telemedicine Related Medicare Revocation Actions for Failure to Provide Access to Documentation are on the Rise!

Download PDF

Medicare Revocations of a Provider's Billing Privileges(September 25, 2020):  In recent years, many individuals (especially younger members of our work force) have embraced the chance to supplement their income through short-term engagements in the “gig economy.”  Notably, both professionals and non-professionals alike have found flexible, part-time opportunities online, allowing them to work remotely as independent contractors.  A number of physicians, nurse practitioners and physician assistants have taken advantage of the chance to participate in the gig economy, working virtually and providing telemedicine services for patients.  Unfortunately, many of these licensed professionals have conducted little or no due diligence into the companies engaging them to conduct evaluations by phone, video or asynchronously.  In some cases, the company engaging these licensed professionals to provide telemedicine evaluations has been alleged to have illegally funneled prescriptions issued by these professionals to third-party durable medical equipment (DME) suppliers.  Associated physicians, nurse practitioners and physician assistants (collectively referred to as “Telemedicine Providers”) have then found themselves subject to administrative sanctions, civil liability, and, in some case, criminal prosecution.  This article examines the Medicare revocation actions that have resulted from a Telemedicine Provider’s failure to provide access to documentation related to telemedicine services that are currently being pursued by Medicare Administrative Contractors (MACs) around the country.

I.  Overview of Statutory and Regulatory Concerns When Providing Telemedicine Evaluations:

With the advent of COVID, both governmental and private payors alike have supported the expansion of telehealth / telemedicine services.  Coverage and payment rules have been expanded by most payors and patients have welcomed the opportunity to be evaluated remotely by their caregiver.  Generally, the current wave of telemedicine related enforcement actions has been unrelated to the coverage expansions resulting from the spread of COVID.  The vast majority of Medicare revocation actions associated with improper telemedicine business practices have been related to pre-COVID conduct.   An overview of these improper telemedicine cases is provided below:

  • Intermediary marketing companies.  Over the last few years, licensed providers with prescribing authority have been actively recruited by an intermediary company[1] OR have responded to an online advertisement seeking to hire physicians, nurse practitioners or physician assistants to perform remote telemedicine evaluations. These companies essentially serve as middlemen – they are not typically participating providers or suppliers in the Medicare program.
  • Lists of beneficiaries to be evaluated remotely are assembled by the intermediary marketing companies. Using a variety of patient recruiting and screening methods, representatives of the intermediary marketing company will work to assemble a list of prospective beneficiaries who have expressed an interest in being evaluated for DME.  The intermediary marketing company then provides these beneficiary lists to Telemedicine Providers who have been engaged to conduct remote assessments and evaluations[2] of these individuals. After completing an evaluation, the Telemedicine Provider then decides whether it is medically necessary and appropriate to order DME for the beneficiary. Typically, the licensed providers have been paid a fixed amount of $25 — $30 for each telemedicine evaluation conducted.
  • Beneficiaries have no control of where an order or prescription is referred.  In the cases we have handled, orders for DME have NOT been issued to a supplier, pharmacy or testing laboratory selected by the patient.  Instead, the order has been directed by the intermediary marketing company to a particular supplier, pharmacy or testing laboratory with whom the company has a business relationship.[3]
  • Unified Program Integrity Contractors (UPICs) are using data mining to identify potentially fraudulent telemedicine business relationships.  Through an analysis of billing data, UPICs have noted that some DME suppliers have billed Medicare for items based on orders issued by a physician, nurse practitioner or physician assistant who did NOT bill Medicare for an associated Evaluation and Management (E/M) service, either directly or through an appropriate reassignment relationship.
  • UPIC requests for medical records have often gone unanswered or unfulfilled.  Both UPICs and a variety of state and federal law enforcement agencies around the country have been investigating questionable telemedicine related business relationships.  One of the essential steps in investigating the propriety of these claims has included an assessment of the beneficiary’s medical records, along with the telemedicine evaluation conducted.  These medical records and intake documents are often maintained by the intermediary marketing company and have not been downloaded or maintained by the ordering physician, nurse practitioner or physician assistant. Moreover, the contracts between the parties often prohibit the physician from retaining copies of documents. In several cases we have handled, the licensed provider’s relationship with the intermediary marketing company was terminated long ago and the provider no longer has access to the beneficiary records now being requested.
  • Telemedicine providers are often unaware that a marketing company is engaging in illegal kickback activities.  Licensed providers are not usually privy to the terms of any business relationship between an intermediary marketing company and an associated DME supplier.  Both UPICs and law enforcement agencies around the country are investigating these telemedicine related business relationships.

II. Medicare Revocation Actions Based on a Provider’s Failure to Provide Access to Documents are Being Pursued by CMS Around the Country:

The failure to respond or comply with a UPIC request for records is one of the many bases[4] that CMS may assert to revoke a provider’s enrollment in the Medicare program, along with any corresponding provider agreement. As provided by 42 C.F.R. § 424.535(a)(10):

Ҥ 424.535 РRevocation of enrollment in the Medicare program.

(10) Failure to document or provide CMS access to documentation. (i) The provider or supplier did not comply with the documentation or CMS access requirements specified in § 424.516(f). . .”

As 42 C.F.R. § 424.516(f) provides:

  • 424.516 – Additional provider and supplier requirements for enrolling and maintaining active enrollment status in the Medicare program.

“(f) Maintaining and providing access to documentation. (1)(i) A provider or a supplier that furnishes covered ordered, certified, referred, or prescribed Part A or B services, items or drugs is required to –

(A) Maintain documentation (as described in paragraph (f)(1)(ii) of this section) for 7 years from the date of service; and

(B) Upon the request of CMS or a Medicare contractor, to provide access to that documentation (as described in paragraph (f)(1)(ii) of this section).

(ii) The documentation includes written and electronic documents (including the NPI of the physician or, when permitted, other eligible professional who ordered, certified, referred, or prescribed the Part A or B service, item, or drug) relating to written orders, certifications, referrals, prescriptions, and requests for payments for Part A or B services, items or drugs.

(2)(i) A physician or, when permitted, an eligible professional who orders, certifies, refers, or prescribes Part A or B services, items or drugs is required to

(A) Maintain documentation (as described in paragraph (f)(2)(ii) of this section) for 7 years from the date of the service; and

(B) Upon request of CMS or a Medicare contractor, to provide access to that documentation (as described in paragraph (f)(2)(ii) of this section).

(ii) The documentation includes written and electronic documents (including the NPI of the physician or, when permitted, other eligible professional who ordered, certified, referred, or prescribed the Part A or B service, item, or drug) relating to written orders, certifications, referrals, prescriptions or requests for payments for Part A or B services, items, or drugs.” (emphasis added).

III.  Medicare Revocation Actions for the Failure to Provide Medical Records Have Typically Sought a 10-Year Re-Enrollment Bar.

CMS extended the maximum re-enrollment bar that can be applied after a revocation from three years to ten years through a Final Rule, which was published on September 10, 2019 and became effective November 4, 2019.[5]  Although a 10-year re-enrollment bar is supposed to be reserved for cases involving serious misconduct, CMS has been actively seeking a 10-year re-enrollment bar in cases where the basis for exclusion is the failure to provide access to documentation.[6]

  • What is the impact of a Medicare revocation action?  The imposition of a 10-year re-enrollment bar can effectively destroy a health care provider’s practice.  Moreover, it will likely limit a provider’s employment options.  Additional potential consequences of having your Medicare enrollment revoked are discussed below.
  • Depending on the facts, the role you played in a telemedicine fraud case may result in a referral to the U.S. Department of Justice (DOJ) for investigation and possible prosecution. Since 1994, CMS has participated in an interagency agreement with the DOJ which allows CMS program integrity contractors (in this case, UPICs) to send health care fraud referrals directly to the DOJ without having to first route the referral through the Office of Inspector General (OIG).  Your involvement in a telemedicine related fraud case will be carefully evaluated.  For instance, did you actually conduct evaluations by phone, video or asynchronously OR did you perform an evaluation based solely on the medical information and intake documents provided to you by an intermediary marketing company?
  • You will be likely be barred from enrolling in the Medicare program for a period of 10 years. In light of the cases we have handled since the issuance of the November 4th Final Rule, it appears to be CMS’s policy to seek to impose a 10-year enrollment bar in revocation cases based on a violation of 42 C.F.R. § 424.535(a)(10).
  • You will likely be placed on Medicare’s “Preclusion List.” Individuals and entities that have been revoked from Medicare, are under an active reenrollment bar, AND CMS has determined that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program may qualify to be placed on the Medicare Preclusion List.  The Preclusion list is made available to Medicare Advantage and Part D plans.   If placed on the Preclusion List, an individual or entity will not be permitted to enroll in the Medicare Part C or Part D programs.
  • A Medicare revocation action may result in the revocation of your enrollment as a provider in your state’s Medicaid program. Using Texas as an example, Rule § 371.1703(a) of the Texas Administrative Code provides that:

“(a) The OIG may terminate the enrollment or cancel the contract of a person by debarment, suspension, revocation, or other deactivation of participation, as appropriate. The OIG may terminate or cancel a person’s enrollment or contract if it determines that the person committed an act for which a person is subject to administrative actions or sanctions. . . .

(b)(7) a provider that is terminated or revoked for cause, excluded, or debarred under Title XVIII of the Social Security Act or under the Medicaid program or CHIP program of any other state;[7]

  • A Medicare revocation action will result in a report being sent to the National Practitioner Databank (NPDB). As the NPDB Guidebook[8] notes, “formal or official actions such as revocation of suspension of a license, certification agreement, or contract for participation in government health care programs; reprimand; censure; or probation,” is considered to be a final adverse action and must be reported by a Federal agency.
  • A report to the NPDB may result in an investigation by your State Medical Board. A revocation action based on your failure to provide records to a UPIC may generate a collateral investigation by your state licensing board since you are likely required to maintain adequate patient records.  For instance, under Rule § 165.1(a) of the Texas Administrative Code, a licensed physician is required to maintain an “adequate medical record” for each patient that is complete, contemporaneous and legible.  Your failure to maintain a copy of the records you reviewed when making a telemedicine evaluation may constitute a violation of your obligations under the Texas Medical Practice Act. As such, you may be subject to disciplinary action.
  • A Medicare revocation of your billing privileges may result in the termination of your hospital credentialing. Many hospitals require that a physician, nurse practitioner or physician assistant be enrolled in the Medicare program (or at the very least, be eligible to enroll in the Medicare program), in order to be credentialed and granted privileges.  If you have been barred from enrollment in Medicare, you may not be eligible to obtain privileges at a hospital.
  • Termination from commercial payor agreements. Unfortunately, Medicare revocation actions are often used by commercial payors as a basis for terminating a provider from their plan.
  • Loss of employment. The collateral consequences of a Medicare revocation action can greatly limit your ability to work for a practice or entity that treats Medicare and Medicaid patients.   As a result, you may be terminated from employment.

IV.  Responding to a UPIC Request for Records:

We cannot overemphasize the seriousness of a UPIC request for records, especially when those records are related to your telemedicine evaluation of a patient’s DME needs.  Remember – UPICs are tasked with identifying suspected cases of fraud and abuse being committed against the Medicare and Medicaid programs.   Should you fail to provide records requested by a UPIC, the proposed revocation of your Medicare billing privileges may be the least of your problems.  Therefore, it is essential that you engage qualified health law counsel to represent you and guide you through this administrative process.  Liles Parker attorneys have extensive knowledge of the Medicare revocation process and have successfully represented multiple physicians and nurse practitioners in the appeal of a proposed revocation action, including those involving failure to respond to a records request.  For a free consultation, give us a call.  We can be reached at: (202) 298-8750.

Robert W. Liles defends health care providers in Medicare auditsRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent individuals and entities around the country in connection with administrative audits (UPIC audits / private payor audits), civil False Claims Act cases, and criminal violations of the Federal Anti-Kickback Statute and EKRA.  Are you currently being audited or under investigation?  We can help.  For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.

[1]  Often the companies identify themselves as “locum tenens” agencies, or “telemedicine providers.” Most have a contract the physician signs that (1) doesn’t permit the physician to retain any patient records, and (2) requires the physician to agree not to file any claims or bill the patient.

[2] A variety of telemedicine compliance issues arise at this stage of the agreement.  Many times, the physician does not directly speak with the patient.  The physician’s agreement with the intermediary may say that the physician is supposed to conduct their telemedicine services “in compliance with their state licensing law” but most physicians have no idea what their state law requires.

[3] Licensed providers are not usually privy to the terms of any business relationship between a telemedicine marketing company and an associated DME supplier, compound pharmacy or testing laboratory.

[4] For an overview of the various reasons that a provider’s Medicare enrollment and billing privileges may be revoked, please see 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.(March 9, 2020).

[5] See Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process, 84 Fed. Reg. 47794 (Sep. 10, 2019).

[6] See 42 C.F.R. § 424.535(a)(10).

[7] Title 1, Part 15, Rule § 371.1703(a) of the Texas Administrative Code, “Termination of Enrollment or Cancellation of Contract.”

[8] NPDB Guidebook (October 2018), (Page E-81).

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.

Download PDF

Have Your Medicare Billing Privileges Been Revoked Under 42 CFR Sec. 424.535(a)?

(March 9, 2020):   Last September, the Centers for Medicare and Medicaid Services (CMS) published a Final Rule titled “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.”  The Final Rule under 42 CFR Sec. 424.535(a), was published in order to implement sections 1866(j)(5) and 1902(kk)(3) of the Social Security Act (as amended by the Affordable Care Act).

As we discussed in earlier articles[1], the Final Rule is quite expansive. It implements a wide range of new enrollment, affiliation, revocation and denial authorities.  As a reminder, here’s an overview of the timeline we are concerned with:

  • November 4, 2019: Purported effective date of the expanded revocation bases outlined in the Final Rule. 

  • September 10, 2019: CMS published the Final Rule titled Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.” in the Federal Register. [2]  The Final Rule sets out the expanded reasons for revocation or denial of a provider’s or supplier’s billing authority.  

  • March 1, 2016: CMS published a Proposed Rule titled “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.”[3] This Proposed Rule set out the enrollment revocation and denial changes CMS planned to implement in an effort to address long-standing program integrity risks that have previously been exploited in the past.

Within hours of the purported[4] effective date of the Final Rule, CMS Medicare Administrative Contractors (MACs) began issuing revocation letters to participating Medicare providers and suppliers who had been identified as slated to have their Medicare billing privileges revoked (based on one or more of the expanded revocation letters set out in the Final Rule).  This updated article focuses on one aspect of the Final Rule – the expanded Medicare billing privilege revocation authorities now exercised by CMS.

I.   Implementation of Medicare’s Expanded Billing Privilege Revocation Authorities Under 42 CFR Sec. 424.535(a):

Prior to the issuance of the Final Rule, under 42 CFR Sec. 424.535(a), CMS exercised the authority to revoke the Medicare billing privileges of a currently-enrolled provider or supplier (along with any related provider or supplier agreement) based on fourteen reasons.  Under the Final Rule, the number of reasons upon which revocation could be based grew to 22.[5]  Moreover, the scope of several of the original fourteen reasons for revocation was expanded under the Final Rule, primarily due to implementation of new requirements with respect to “Affiliations,” “Disclosable Events,” and “Uncollected Debts.”  Over the last few months, since the expanded bases for revocation have been implemented, we have seen a significant increase in the number of revocation actions being pursued by Medicare MACs around the country. Moreover, as discussed in Section III below, CMS is now typically imposing a 10-year reenrollment bar (rather than the previous 3-year reenrollment bar) when pursuing a revocation action. An overview of the expanded list of reasons upon which a provider’s Medicare billing privileges can be revoked is provided below:

1. Noncompliance. Under 42 CFR Sec. 424.535(a) (1), CMS can revoke Medicare billing privileges if it has determined that a provider or supplier isnot in compliance with its enrollment requirements(as set out in the appropriate enrollment application) AND has not submitted an appropriate plan of correction, CMS may revoke the Medicare billing privileges.

2. Provider or supplier conduct. Under 42 CFR Sec. 424.535(a) (2), CMS can revoke Medicare billing privileges if a provider, supplier or any owner, managing employee, delegated official, medical director, supervising physician or other health care personnel of the provider or supplier has been excluded from participation in a Federal health care program OR has been disbarred, suspended, otherwise excluded from participating in any other Federal procurement program. 

3. Felonies.  Under 42 CFR Sec. 424.535(a) (3), CMS can revoke Medicare billing privileges if a provider, supplier or any owner or managing employee was convicted of a Federal or State felony (within the preceding 10 years) that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries. 

4. False or misleading information. Under 42 CFR Sec. 424.535(a) (4), CMS can revoke Medicare billing privileges if a provider or supplier certified as “true” information on the enrollment application that is misleading or false. As the regulation is quick to point out, the false certification action can also lead to fines and imprisonment. 

5. On-site review. Under 42 CFR Sec. 424.535(a) (5), CMS can revoke Medicare billing privileges if when conducting an “on-site review” at the purported address of the provider or supplier, it finds that the site is no longer operational OR the on-site review shows that the provider has moved and did not update their address appropriately. In recent years, this revocation reason is typically cited when a Unified Program Integrity Contractor (UPIC) conducts an unannounced, on-site visit of a practice, home health agency, hospice or other provider, based on the location listed in PECOS.  If a provider has moved offices and has failed to update CMS Form 855B and the Provider Enrollment, Chain, and Ownership System (PECOS), the CMS contractor will recommend that a provider’s billing privileges be revoked. 

6. Grounds related to provider or supplier screening requirements. Under 42 CFR Sec. 424.535(a) (6),  CMS can revoke the Medicare billing privileges of an institutional provider[6] that fails to submit an application fee or hardship exception request with their Medicare revalidation application.

7. Misuse of billing number.  Under 42 CFR Sec. 424.535(a) (7), CMS can revoke Medicare billing privileges if a provider or supplier knowingly sells to or allows another individual or entity to use its billing number (other than in the case of a valid reassignment of benefits). 

8. Abuse of billing privileges. Under 42 CFR Sec. 424.535(a) (8), CMS can revoke the Medicare billing privileges of a provider or supplier: 

    • Submits a claim for services that have not been furnished to a specific individual on the date of service. Examples provided under 42 CFR scc. 424.535(a) (8) include situations where beneficiary is deceased, situations where the directly physician or beneficiary is not in the state or country when the serves were allegedly furnished, OR when the equipment necessary for testing is not present when the testing is said to have taken place.
    • Has a pattern or practice of submitting claims that fail to meet Medicare requirements.[7]

9. Failure to report[8]. Under 42 CFR Sec. 424.535(a) (9), can revoke the Medicare billing privileges if a provider or supplier: 

    • Failed to comply with its reporting requirements under 42 CFR Se. 516(d), such as changes in ownership or control, any other changes in enrollment within 90 days, any revocation or suspension of a Federal or State license within 30 days; OR
    • Failed to comply with its reporting requirements under 42 CFR Sec. 33(g)(2), such as changes in ownership, changes of location, changes in general supervision, and adverse legal actions must be reported to the Medicare fee-for-service contractor on the Medicare enrollment application within 30 calendar days of the change. All other changes to the enrollment application must be reported within 90 days. As a recent letter to a provider from CMS contractor Novitas Solutions stated:

 An undeliverable records request sent to the provider’s Medicare 855 correspondence address constitutes a failure to provide CMS access to documentation in violation of 42 U.S. Code Sec. 424.516(1).”  

            OR

    •  Failed to comply with its reporting requirements under 42 CFR Sec. 424.57(c)(2), such as changes in information on a provider’s application for billing privileges within 30 days of the change. 

10. Failure to document or provide CMS access to documentation. Under 42 CFR Sec. 424.535(a) (10), CMS can revoke the Medicare billing privileges if a provider or supplier has failed to comply with the documentation or CMS access requirements. Under 42 CFR Sec. 516(f), a provider or supplier is required to maintain documentation for 7 years from the date of services, AND upon the request of CMS or Medicare contractors, provide access to that documentation. 

11. Initial reserve operating funds. Under 42 CFR Sec. 424.535(a) (11), CMS can revoke the Medicare billing privileges of a home health agency if within 30 days of CMS or a Medicare contractor request, the home health agency cannot furnish supporting documentation verifying that the home health agency  meets the initial reserve operating funds requirement found in 42 CFR Sec. 489.28(a). 

12. Other program termination. Under 42 CFR Sec. 424.535(a) (12), CMS can revoke Medicare billing privileges if a provider or supplier is terminated, revoked or otherwise barred from participation in a State Medicaid program or any other Federal health care program. This represents a significant change.

13. Prescribing authority. Under 42 CFR Sec. 424.535(a) (13), CMS can revoke Medicare billing privileges if a physician or other eligible professional’s Drug Enforcement Administration (DEA) Certificate of Registration is revoked or suspended; OR a State licensing body suspends or revokes the ability of a physician or other eligible professional to prescribe drugs.

14. Improper prescribing practices. Under 42 CFR Sec. 424.535(a) (14), CMS can revoke Medicare billing privileges of a physician or other eligible professional if it determines that there has been a pattern or practice of prescribing Part B or Part D drugs that is:

    • Abusive or represents a threat to the health and safety of Medicare beneficiaries or both; OR
    • Fails to meet Medicare requirements.

15. Reserved.

16. Reserved.

17. NEW — Debt referred to the United States Department of Treasury. Under 42 CFR Sec. 424.535(a) (17), CMS can revoke Medicare billing privileges if a provider or supplier has an existing debt that CMS appropriately refers to the United States Department of Treasury.[9]

18. NEW — Revoked under different name, numerical identifier or business identity. Under 42 CFR Sec. 424.535(a) (18) CMS can revoke the Medicare billing privileges if a provider or supplier is currently revoked under a different name, numerical identifier, or business identity, and the applicable reenrollment bar period has not expired. [10]

19. NEW Affiliation that poses an undue risk. Under 42 CFR Sec. 424.535(a) (19), CMS may revoke the Medicare billing privileges if it determines that the provider or supplier has or has had an affiliation under 42 CFR Sec. 424.519 that poses an undue risk of fraud, waste, or abuse to the Medicare program.

20. NEW — Billing from a non-compliant location. Under 42 CFR Sec. 424.535(a) (20), CMS may revoke the Medicare billing privileges of a provider or supplier, even if all of the practice locations associated with a particular enrollment comply with Medicare enrollment requirements, 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.[11]

21. NEW Abusive ordering, certifying, referring, or prescribing of Part A or B services, items or drugs. Under 42 CFR Sec. 424.535(a) (21), CMS may revoke the Medicare billing privileges if it determines that a physician or eligible professional has a pattern or practice of ordering, certifying, referring, or prescribing Medicare Part A or B services, items, or drugs that are abusive, represents a threat to the health and safety of Medicare beneficiaries, or otherwise fails to meet Medicare requirements.[12]

22. NEW — Patient Harm. Under 42 CFR Sec. 424.535(a) (22), CMS may revoke the Medicare billing privileges if it determines that a physician or eligible professional has been subject to prior action from a State oversight board, Federal or State health care program, Independent Review Organization (IRO) determination(s), or any other equivalent governmental body or program that oversees, regulates, or administers the provision of health care with underlying facts reflecting improper physician or other eligible professional conduct that led to patient harm.[13]

As the above expanded list of revocation authorities reflects, CMS now has the express ability to revoke the Medicare billing privileges of a health care provider or supplier for serious violations of law (such as conviction of a felony or patient abuse).  However, it also has the authority to revoke Medicare billing privileges for conduct that may only amounts to an administrative error or mistake by a provider or supplier.  Perhaps even more troubling is the fact that the past or current “affiliations” of a provider or supplier may lead to a revocation action if CMS determines that the affiliation represents an undue risk to the Medicare program or its beneficiaries.

A hundred years ago, the U.S. Supreme Court stated in the case Rock Island Arkansas & Louisiana R. Co v. United States[14]:

Men must turn square corners when they deal with the government

That statement still rings true in today’s world.  Health care providers and suppliers are permitted to apply to participate in the Medicare and Medicaid programs.  Participation isn’t a “right.”  It is a privilege.  When you complete your enrollment paperwork, you expressly agree to comply with the terms of the Form 855 Enrollment Application.  Should you fail to comply with each of the obligations set out in that agreement, CMS reserves the right to revoke your Medicare billing privileges. Now, more than ever, it is essential that you have an effective Compliance Program in place and that you periodically review your practices to ensure that you and your staff are fully complying with applicable Medicare regulatory, statutory and legal requirements.

II.   Length of Time a Provider’s Medicare Billing Privileges May be Revoked Under 42 CFR Sec. 424.535(c):

The Final Rule significantly modified 42 CFR Sec. 424.535(c). This regulatory provision sets out the potential reenrollment bar time limits that may imposed by CMS when initiating a Medicare revocation action.  If this is the first time that a provider’s Medicare billing privileges are being revoked, the minimum reenrollment bar is 1 year, and the maximum reenrollment bar is 10 years.[15]  If CMS determines that a provider attempted to circumvent its existing reenrollment bar by enrolling in Medicare under a different name, numerical identifier or business identity,” the agency can further tack on up to 3 additional years onto the reenrollment bar it has imposed.[16] As a final point in this regard, Moreover, under if a provider or supplier is being revoked from Medicare a second time, CMS may choose to impose a reenrollment bar of up to 20 years.[17]

III.   Responding to a Medicare Revocation Action:

If you receive notice that CMS is intending to revoke your Medicare billing privileges, it is essential that you engage experienced health law counsel to represent you in the appeal process.  This is especially critical given the fact that recent revocation actions initiated by CMS have all sought to impose of reenrollment bar of 10 years, rather than the 3-year bar that was typically imposed prior to November 4, 2019.  Unfortunately, a Medicare revocation action can trigger a number of other secondary adverse actions by law enforcement, private payors and a provider’s State Medical Board. If your Medicare billing privileges are being revoked, please feel free to give us a call for a free consultation.  Liles Parker attorneys have extensive experience representing health care providers around the country in Medicare revocation actions.  We can be reached at:  1 (800) 475-1906.

42 CFR scc. 424.535(a)Robert W. Liles is a former Federal prosecutor and has more than 25 years of health law experience.  Mr. Liles and the other attorneys at Liles Parker have extensive experience representing providers and suppliers in the appeal of proposed Medicare revocation actions. Questions?  Give Robert Liles a call.  For a free consultation, he can be reached at:  1 (800) 475-1906.

[1] September 2019 article titled Medicare, Medicaid and CHIP Enrollment Revocation and Denial Authorities Have Expanded.  What Steps are You Taking to Reduce Your Level of Risk?”

and our December 2017 article titled Revocation of Your Medicare Billing Privileges.”

[2] 84 FT 47794 (September 10, 2019). https://www.govinfo.gov/content/pkg/FR-2019-09-10/pdf/2019-19208.pdf

[3] 81 FR 10720.

[4] We are in currently in the process of challenging the purported effective date of November 4, 2019.  CMS failed to provide the proper notice requirements mandated under the Congressional Review Act.  This failure thereby delays the effective date of the expanded revocation authorities.

[5] Slots have been placed in reserve for revocation reasons number 15 and 16 which would likely be assigned by CMS in the future and would presumably go through the rulemaking process.

[6] Under 42 CFR Sec. 424.502, the term “Institutional Provider” means any provider or supplier that submits a paper Medicare enrollment application using the CMS-855A, CMS-855B (not including physician and nonphysician practitioner organizations), CMS-855S, CMS-20134, or an associated Internet-based PECOS enrollment application.

[7] Under 42 CFR Sec. 424.535(a) (8), when making this determination, CMS considers:

  • The percentage of submitted claims that were denied;
  • The reasons for the denials; whether the provider has a history of final adverse actions (and the nature of these actions;
  • The length of time over which the pattern has continued; how long the provider has been enrolled in Medicare; and
  • Any other information that CMS deems relevant to its determination of whether the provider or supplier has or has not engaged in the pattern or practice identified.

[8] Under 42 CFR Sec. 424.535(a)) (9), when determining whether a revocation under this paragraph is appropriate, CMS considers the following factors:

(i) Whether the data in question was reported.

(ii) If the data was reported, how belatedly.

(iii) The materiality of the data in question.

(iv) Any other information that CMS deems relevant to its determination.

[9] Under 42 CFR Sec. 424.535(a) (17), when determining whether a revocation under this paragraph is appropriate, CMS is supposed to consider:

  • The reason(s) for the failure to fully repay the debt (to the extent this can be determined).
  • Whether the provider or supplier has attempted to repay the debt (to the extent this can be determined).
  • Whether the provider or supplier has responded to CMS’ requests for payment (to the extent this can be determined).
  • Whether the provider or supplier has any history of final adverse actions or Medicare or Medicaid payment suspensions.
  • The amount of the debt. (vi) Any other evidence that CMS deems relevant to its determination.

[10] Under 42 CFR Sec. 424.535(a) (18), when determining whether a provider or supplier is a currently revoked provider or supplier under a different name, numerical identifier, or business identity, CMS investigates the degree of commonality by considering the following factors:

  • Owning and managing employees and organizations (regardless of whether they have been disclosed on the Form CMS–855 application).
  • Geographic location.
  • Provider or supplier type.
  • Business structure.
  • Any evidence indicating that the two parties are similar or that the provider or supplier was created to circumvent the revocation or reenrollment bar.

[11]  Under 42 CFR Sec. 424.535(a) (20), when determining whether and how many of the provider’s or supplier’s enrollments, involving the non-compliant location or other locations, should be revoked, CMS considers the following factors:

  • The reason(s) for and the specific facts behind the location’s noncompliance.
  • The number of additional locations involved.
  • Whether the provider or supplier has any history of final adverse actions or Medicare or Medicaid payment suspensions.
  • The degree of risk that the location’s continuance poses to the Medicare Trust Funds.
  • The length of time that the noncompliant location was non-compliant.
  • The amount that was billed for services performed at or items furnished from the non-compliant location.
  • Any other evidence that CMS deems relevant to its determination.

[12] Under 42 CFR Sec. 424.535(a) (21), when making its determination as to whether such a pattern or practice exists, CMS considers the following factors:

(i) Whether the physician’s or eligible professional’s diagnoses support the orders, certifications, referrals or prescriptions in question.

(ii) Whether there are instances where the necessary evaluation of the patient for whom the service, item or drug was ordered, certified, referred, or prescribed could not have occurred (for example, the patient  was deceased or out of state at the time of the alleged office visit).

(iii) The number and type(s) of disciplinary actions taken against the physician or eligible professional by the licensing body or medical board for the state or states in which he or she practices, and the reason(s) for the action(s).

(iv) Whether the physician or eligible professional has any history of final adverse action (as that term is defined in Sec. 424.502).

(v) The length of time over which the pattern or practice has continued.

(vi) How long the physician or eligible professional has been enrolled in Medicare.

(vii) The number and type(s) of malpractice suits that have been filed against the physician or eligible professional related to ordering, certifying, referring or prescribing that have resulted in a final judgment against the physician or eligible professional or in which the physician or eligible professional has paid a settlement to the plaintiff(s) (to the extent this can be determined).

(viii) Whether any State Medicaid program or any other public or private health insurance program has restricted, suspended, revoked, or terminated the physician’s or eligible professional’s ability to practice medicine, and the reason(s) for any such restriction, suspension, revocation, or termination.

[13] Under 42 CFR Sec. 424.535(a) (21), when determining whether a revocation is appropriate, CMS considers the following factors:

(A) The nature of the patient harm.

(B) The nature of the physician’s or other eligible professional’s conduct.

(C) The number and type(s) of sanctions or disciplinary actions that have been imposed against the physician or other eligible professional by the State oversight board, IRO, Federal or State health care program, or any other equivalent governmental body or program that oversees, regulates, or administers the provision of health care. Such actions include, but are not limited to in scope or degree:

(1) License restriction(s) pertaining to certain procedures or practices.

(2) Required compliance appearances before State medical board members.

(3) License restriction(s) regarding the ability to treat certain types of patients (for example, cannot be alone with members of a different gender after a sexual offense charge).

(4) Administrative or monetary penalties.

(5) Formal reprimand(s).

(D) If applicable, the nature of the IRO determination(s).

(E) The number of patients impacted by the physician’s or other eligible professional’s conduct and the degree of harm thereto or impact upon.

[14] 254 U.S. 141, 143 (1920).

[15] 42 CFR Sec. 424.535(c)(1)(i).

[16] 42 CFR Sec. 424.535(c)(2)(i).

[17] 42 CFR Sec. 424.535(c)(3),

Medicare, Medicaid and CHIP Enrollment Revocation and Denial Authorities Have Expanded.  What Steps are You Taking to Reduce Your Level of Risk?

Download PDF
Medicare Enrollment

Big Changes to CMS Form 855 are on the Horizon

(September 18, 2019):  On September 10, 2019, the Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS) published a Final Rule in the Federal Register entitled, “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.” Issuance of the Final Rule is necessary in order to implement sections 1866(j)(5) and 1902(kk)(3) of the Social Security Act (as amended by the Affordable Care Act), which require that providers and suppliers fully disclose information related to affiliations, uncollected debts and certain adverse actions that may impact the program integrity of the affected government health plan.  As discussed below, the impact of the Final Rule on the Medicare enrollment disclosure requirements of providers and suppliers has been significantly enhanced.  Moreover, the authority of CMS to revoke or deny the enrollment of a participating provider or supplier has been greatly expanded.  Under the Final Rule, the reporting obligations of Medicare, Medicaid, and CHIP providers and suppliers will dramatically increase when they file a new enrollment application, revalidate their enrollment, need to file a change of information, or need to notify the agency of a change in ownership .[1]  This article is intended to take a “first look” at the impact of the Final Rule on the obligations  faced by providers and suppliers. Additionally this article reviews CMS’ new revocation and denial authority, and it explores a number of the challenges that you or other providers may face, as a result.

I.  Background – Medicare Enrollment and Revalidation Program Integrity Measures:

Approximately, 54 million individuals are enrolled in the Medicare program.[2]  In order to qualify to provide care and treatment services to these beneficiaries, a health care provider or supplier must meet a number of administrative, regulatory, and statutory requirements that are meant to protect both the patient and the financial integrity of the Medicare program.  The Medicare enrollment process effectively serves as one of the agency’s primary ways to protect patients and the Medicare Trust Fund from the actions of providers and suppliers whose participation would represent a significant risk of fraud or abuse.

When enrolling in the Medicare program, an applicant provider or supplier must complete and submit an appropriate enrollment application (i.e., a Form CMS-855) to their assigned Medicare contractor.  The enrollment application can be submitted by paper or electronically through the agency’s Provider Enrollment, Chain, and Ownership System (PECOS).  Several of the previous rules promulgated by CMS to strengthen the overall effectiveness and program integrity of the enrollment process have included:

  • April 21, 2006: CMS published a Final Rule entitled “Medicare Program; Requirements for Providers and Suppliers to Establish and Maintain Medicare Enrollment.”[3] This Final Rule laid out a number of requirements that must be met by providers and suppliers in order to maintain their Medicare billing privileges.
  • February 2, 2011: CMS published a Final Rule entitled “Medicare, Medicaid, and Children’s Health Insurance Programs; Additional Screening Requirements, Application Fees, Temporary Enrollment Moratoria, Payment Suspensions and Compliance Plans for Providers and Suppliers.”[4]  This Final Rule established a number of new provider enrollment screening requirements.
  • March 1, 2016: CMS published a Proposed Rule entitled “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.” This Proposed Rule set out the enrollment revocation and denial changes CMS planned to implement in an effort to address long-standing program integrity risks that have previously been exploited in the past.[5]

A little more than three years after the issuance of the March 2016 Proposed Rule, CMS has now issued its much-anticipated Final Rule entitled, “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.” [6]  With the implementation of this Final Rule,  CMS will now have expanded authority to deny the enrollment and / or revalidation of a provider or supplier if it determines that an “affiliation” presents an undue risk of fraud risk or abuse.  The Final Rule will also make it much easier to revoke the enrollment of existing providers and suppliers whose continued participation in the Medicare, Medicaid, or CHIP programs is determined to represent a program integrity risk.

II.  Why Has CMS Tightened Up the Medicare Enrollment and Revalidation Process?

Despite past efforts to strengthen the Medicare provider enrollment process, existing Medicare, Medicaid, and CHIP systems haven’t been fully effective in identifying direct owners, managing employees, and close affiliates of provider and supplier applicants with a history of certain adverse  events.  As representatives of the Office of Inspector General (OIG) have testified before Congress, health care providers and suppliers engaging in wrongful billing practices have often been found to have relied on networks of affiliations with other fraudulent providers and suppliers. For example, in south Florida, law enforcement has previously found that some Medicare providers and suppliers have taken steps to hide their ownership through the use of straw owners.  The real owners (who are likely prohibited from participating or likely to be denied participation in Federal health care programs) are then free to engage in improper billing practices.[7]

The issuance of the new Final Rule requires that as part of the enrollment and revalidation process, providers and suppliers must disclose any business affiliations that may pose an undue risk of fraud, waste and / or abuse to the Medicare, Medicaid and CHIP programs. CMS will be phasing the new affiliation reporting requirements in over a period of years. First, the agency will update and issue new provider enrollment Form CMS-855 applications, and then it will require reporting of certain affiliations “upon request.”[8] At least initially, only those providers or suppliers who are asked to report affiliations on the new enrollment forms will be required to do so. CMS states in the new Final Rule that it will publish further rulemaking to expand this reporting requirement after assessing the progress of its initial phased-in approach.

Notably, CMS estimates that the new disclosure requirements and revocation authorities implemented by the Final Rule will result in approximately 2,600 new revocations each year and will save the affected government health programs an estimated $4.16 billion over the next 10 years.

III.  Reporting Affiliations:

Under the Final Rule, the “affiliations” that a provider or supplier may have to disclose upon request by CMS include the following:

The term “affiliation” is defined under 42 CFR §424.519 as meaning any of the following:

  • A 5 percent or greater direct or indirect ownership interest that an individual or entity has in another organization.
  • A general or limited partnership interest (regardless of the percentage) that an individual or entity has in another organization.
  • A 5 percent or greater direct or indirect ownership interest that an individual or entity has in another organization.
  • An interest in which an individual or entity exercises operational or managerial control over, or directly or indirectly conducts, the day-to-day operations of another organization (including, for purposes of § 424.519 only, sole proprietorships), either under contract or through some other arrangement, regardless of whether or not the managing individual or entity is a W–2 employee of the organization.
  • An interest in which an individual is acting as an officer or director of a corporation.
  • Any reassignment relationship under 42 CFR § 424.80.”

The new affiliation provisions are intended to identify individuals and entities that have an ownership interest or exercise managerial control in multiple Medicare program providers or suppliers. Both OIG and CMS have repeatedly identified situations where providers and suppliers whose Medicare billing privileges have been revoked for fraud and / or other improper conduct have managed to surreptitiously re-enter the program using a nominee owner to disguise their true ownership or through other deceptive means.  As the agency has noted, the broad definition of affiliation that has been adopted, is needed so that providers and suppliers fully disclose any prior or current relationships that could pose risks of fraud, waste or abuse to the Medicare program.  CMS has estimated that if the new affiliation provisions had been in place over the previous five years, it could have prevented $51.9 billion from being paid to 2,097 entities with affiliations with a previously-revoked individual or entity.

IV.  Disclosable Events Under 42 CFR § 424.519:

When initially enrolling or revalidating with the Medicare program, the new regulations will require that a provider or supplier disclose whether it or any of its owning or managing employees or organizations (consistent with the terms ‘‘owner’’ and ‘‘managing employee’’ as defined in 42 CFR § 424.502) has or, within the previous 5 years, has had an affiliation with a currently or formerly enrolled Medicare, Medicaid, or CHIP provider or supplier that has had any “disclosable events.”[9] Importantly, the term, “disclosable event“ is defined in the new regulation as an affiliation with a currently or formerly enrolled Medicare, Medicaid or CHIP provider or supplier that:

“(1) Currently has an uncollected debt to Medicare, Medicaid, or CHIP, regardless of – (i) The amount of the debt; (ii) Whether the debt is currently being repaid (for example, as part of a repayment plan); or (iii) Whether the debt is currently being appealed;

(2) Has been or is subject to a payment suspension under a federal health care program (as that latter term is defined in section 1128B(f) of the Act), regardless of when the payment suspension occurred or was imposed;

(3) Has been or is excluded by the OIG from participation in Medicare, Medicaid, or CHIP, regardless of whether the exclusion is currently being appealed or when the exclusion occurred or was imposed; or

(4) Has had its Medicare, Medicaid, or CHIP enrollment denied, revoked, or terminated, regardless of— (i) The reason for the denial, revocation, or termination; (ii) Whether the denial, revocation, or termination is currently being appealed; or (iii) When the denial, revocation, or termination occurred or was imposed.”

Responding to comments submitted in connection with the Proposed Rule, CMS clarified who must be reported as an owner or managing employee of a provider or supplier, and likewise, who the organization must collect information from to identify all “affiliations” and “disclosable events.” CMS commented that the following situations would (1) require disclosure of a person or organization as an owner or managing employee, and (2) require disclosure of those persons or organizations “affiliations” if there has been a disclosable event:

      • Does a “Physician Director” or “Director of Nursing” have to be reported as part of the enrollment process? Yes, if the Physician Director or the Director of Nursing fall within the definition of “managing employee”[10] under 42 CFR § 424.502, he or she would have to be reported [on the Form CMS-855 application as a managing employee]. Moreover, if the Physician Director or the Director of Nursing was previously a managing employee of another provider or supplier with a “disclosable event,” the Physician Director or Director of Nursing would have to be reported.
      • Do the members of the Board of Trustees of a tax-exempt entity have to be reported as part of the enrollment process? Yes, as set out in CMS Publication 100-08, Program Integrity Manual (PIM), Chapter 15, Section 15.5.5 (Owning and Managing Organizations) members of a Board of Trustees are considered to be Corporate Directors and must be reported on CMS Form 855.  As an aside, CMS takes the position that non-profit entities and offices would fall under the affiliation definition to the same extent as for-profit entities and officials.
      • Does an entity with a 5% or greater mortgage or security interest have to be reportedConsistent with the PIM, Chapter 15, Section 15.5.5:  “All entities with at least a 5 percent mortgage, deed of trust or other security interest in the provider must be reported in section 5. This frequently will include banks, other financial institutions, and investment firms.”
      • Does a billing agency or a collection agency have to be reported? Yes, if the billing agency or collection agency meets the definition of a managing employee (as it applied to organizations), then they would have to be reported on the CMS Form 855.
      • Does a public company that owns 5% of more of an enrolling or reenrolling company have to be reported?   CMS takes the position that public companies fall within the purview of 42 CFR §424.519.
      • Does an affiliated managing individual have to be reported in CMS Form 855 even if he or she has no responsibilities concerning payment for services? The definition of managing employee under 42 CFR §?424.502 includes all persons who directly or indirectly conduct a provider’s or supplier’s day-to-day operations. There is no requirement that these individuals must have responsibilities related to payment for services.

In short, the above individuals must be disclosed in the owner and managing employee sections of the Form CMS-855 applications (or their counterpart in PECOS), and if those owners or managing employees have affiliations that have disclosable events, then those must be reported as well. As we stated earlier, in response to the many comments and concerns submitted by providers and suppliers, for now, CMS is not requiring that providers and suppliers disclose affiliations with disclosable events under 42 CFR §?424.519 unless CMS specifically requests that they do so.[11]  Moreover, CMS does not intend to request these disclosures until it has updated CMS Form-855.  However, as CMS further noted:

“Although we will initially be implementing a more targeted approach to the disclosure requirement, we recognize that section 1866(j)(5) of the Act requires every provider and supplier (regardless of the relative risk they may pose) to disclose affiliations upon initial enrollment and revalidation. While section 1866(j)(5) of the Act does give the Secretary some discretion in applying this provision in terms of form, manner, and timing, it does not permanently exempt any provider or supplier from its applicability . . . Consequently, CMS must eventually secure affiliation data from all initially enrolling and revalidating providers.” (emphasis added).

Therefore, at this time, providers and suppliers are not required to report disclosable affiliations until CMS has an opportunity to update its Form CMS-855 applications so that this data can be collected.  Furthermore, CMS will be issuing additional sub-regulatory guidance regarding the affiliation disclosure process.  This sub-regulatory guidance is expected to set out the agency’s expectations with respect to the level of effort that is required of a provider or supplier to research and secure an owner or managing employees relevant affiliation information.

V.  When Will a Disclosed Affiliation be Found to “Pose an Undue Risk of Fraud, Waste or Abuse”?

The Final Rule makes it clear that just because an affiliation must be disclosed, does not necessarily mean that CMS will determine that an affiliation will “pose an undue risk of fraud, waste, or abuse.”[12] Before making a determination, CMS intends to carefully examine the specifics of each situation prior to deciding whether to exercise its discretion to deny an application for enrollment OR to revoke the participation of a currently enrolled provider.  When deciding whether a disclosed affiliation represents an undue risk, CMS will consider:

(1) The duration of the affiliation.
(2) Whether the affiliation still exists and, if not, how long ago it ended.
(3) The degree and extent of the affiliation.
(4) If applicable, the reason for the termination of the affiliation.
(5) Regarding the affiliated provider’s or supplier’s disclosable event, CMS will consider:

(i) The type of disclosable event.
(ii) When the disclosable event occurred or was imposed.
(iii) Whether the affiliation existed when the disclosable event occurred or was imposed.
(iv) If the disclosable event is an uncollected debt:

(A) The amount of the debt.
(B) Whether the affiliated provider or supplier is repaying the debt.
(C) To whom the debt is owed.

(v) If a denial, revocation, termination, exclusion, or payment suspension is involved, the reason for the disclosable event.

(6) Any other evidence that CMS deems relevant to its determination.

Depending on the particulars of each case, CMS may find that a disclosed affiliation does, in fact, pose an undue risk of fraud, waste, or abuse. Should this occur, CMS will deny a provider’s or supplier’s initial enrollment application under 42 CFR § 424.530(a)(13) OR revoke a currently participating provider’s or supplier’s Medicare enrollment under 42 CFR § 424.535(a)(19).

VI.  What Can Happen if a Provider or Supplier Fails to Report a Disclosable Affiliation?

When asked to do so by CMS, it will be essential that a provider or supplier ensure that any and all disclosable affiliations and other general business information is fully and completely reported.  If a provider or supplier fails to report a disclosable affiliation and “knew or should have known”[13] of the omitted information, CMS may choose to deny an applicant’s initial enrollment application (under 42 CFR § 424.530(a)(1) and, if applicable, 42 CFR § 424.530(a)(4)). Alternatively, if a currently participating provider or supplier fails to report a disclosable affiliation, CMS may choose to revoke the entity’s Medicare enrollment (under 42 CFR § 424.535(a)(1) and, if applicable, 42 CFR § 424.535(a)(4)).

VII.  What is an “Uncollected Debt”?

As set out under 42 CFR §?424.519(a)(1), if an applicant, or an applicant’s owner or managing employee is affiliated with another provider or supplier that has an “uncollected debt,” that is a disclosable event under 42 CFR §?424.502.  As previously discussed, an uncollected debt is only intended to include:

“(i) Medicare, Medicaid, or CHIP overpayments for which CMS or the state has sent notice of the debt to the affiliated provider or supplier.
(ii) Civil money penalties imposed under this title.
(iii) Assessments imposed under this title.”

(emphasis added).

Importantly, the phrase notice of the debt to the affiliated provider or supplier” does not include audit requests or routine denial letters where refunds are made through remittance advices or claims corrections.  In its response to comments from stakeholders, CMS expressly notes that “notice of the debt” would include something like a demand letter or other formal request for payment.

CMS has not established a minimum amount that would require the reporting of an uncollected debt.  Regardless of whether an alleged uncollected debt is $500 or $5 million, it would qualify as a reportable disclosable event under the Final Rule.  As CMS noted, “there could be isolated cases where a particular debt, though of a de minimis amount, presents an undue risk when all of the applicable factors are considered.”   CMS further states that even though a provider or supplier may currently be in the process of repaying a debt, the debt would still be a reportable disclosable event.

VIII.  Impact of Filing an Appeal in an Uncollected Debt or Enrollment-Related Action:

Throughout the Final Rule, multiple commenters urged CMS to view alleged debts and enrollment-related actions that are being appealed by a provider or supplier differently than those where no appeal has been filed.  After considering the points raised, CMS consistently declined to adopt such a position and has decided that even if an alleged debt is currently under appeal, the debt would still qualify as a disclosable event.  As CMS wrote:

“consistent with our obligation to protect the Medicare program and the Trust Funds, as well as with our authority under section 1866(j)(5) of the Act, we believe we should have the ability to determine whether the debt and the associated affiliation pose an undue risk regardless of whether the debt is being appealed.” (emphasis added).

Similarly, CMS held that under 42 CFR § 424.519, enrollment denial, revocation, and termination actions will still qualify as disclosable events even if they are under appeal.

IX.  Modification to the Enrollment Denial Reasons Under 42 CFR § 424.530:

As set out under 42 CFR § 424.530(a), CMS is authorized to deny a provider’s or supplier’s enrollment in the Medicare program for a number of reasons. Prior to the issuance of the Final Rule, the authorized reasons for denying enrollment in Medicare fell within the following broad categories:

(1) Noncompliance

(2) Provider or supplier conduct.

(3) Felonies

(4) False or misleading information.

(5) On-site review.

(6) Medicare debt.

(7) Payment suspension.

(8) Initial reserve operating funds.

(9) Application fee / hardship exception.

(10) Temporary moratorium.

(11) Prescribing authority.

Under the Final Rule, enrollment denials based on “Payment Suspension” (42 CFR § 424.530(a)(7)) have been expanded and may now be based on the following:

“(i) The provider or supplier, or any owning or managing employee or organization of the provider or supplier, is currently under a Medicare or Medicaid payment suspension as defined in §§ 405.370 through 405.372 or in § 455.23 of this chapter.

(ii) CMS may apply the provision in this paragraph (a)(7) to the provider or supplier under any of the provider’s, supplier’s, or owning or managing employee’s or organization’s current or former names, numerical identifiers, or business identities or to any of its existing enrollments.

(iii) In determining whether a denial is appropriate, CMS considers the following factors:

(A) The specific behavior in question.
(B) Whether the provider or supplier is the subject of other similar investigations.
(C) Any other information that CMS deems relevant to its determination.”

Prior to this expansion, the Payment Suspension basis for denying a provider’s or supplier’s Medicare enrollment was limited to situations where the current owner, physician, or non-physician practitioner had been placed on Medicare suspension.  CMS believed this did not allow them to deny enrollment to any provider or supplier type based on a payment suspension by the Medicare program, and did not encompass scenarios where a provider or supplier’s payments had been suspended by a state Medicaid payment but the Medicare program. Under the revised Final Rule, now all provider and supplier types can be denied enrollment if that provider or supplier is subject to a Medicare OR Medicaid payment suspension, or if the provider’s or supplier’s owners or managing employees or organizations are subject to such a suspension. Importantly, CMS will look at a provider’s or supplier’s owners and managing employee’s or organization’s current and former names, business identities and related numerical identifiers to identify any payment suspensions.

Additionally, the Final Rule has added several additional bases that may be relied on by CMS when deciding to deny a provider’s or supplier’s Medicare enrollment.  These new reasons for denial include:

(12) Revoked under different name, numerical identifier or business identity and the applicable re-enrollment bar has not expired.[14]
(13) Affiliation that poses undue risk.
(14) Other program termination or suspension.

Each of the fourteen reasons that may be relied on by CMS when denying a provider’s or supplier’s Medicare enrollment have specific requirements which must be met.  If you or your practice are denied Medicare enrollment, you should work with your legal counsel to determine whether the denial reason cited by CMS is accurate and consistent with the facts in your case.

X.  Introduction of a New “Reapplication Bar” Rule Under 42 CFR § 424.530(f):

As revised, the Medicare enrollment denial regulations now include a new “Reapplication Bar” rule.  As 42 CFR § 424.530(f) sets out, if a provider or supplier submitted false or misleading information on (or with) their Medicare enrollment application, CMS can choose to prohibit the prospective provider or supplier from enrolling in the Medicare program for up to three years.  Importantly, the scope of the reapplication bar rule set out under 42 CFR § 424.530(f)(1) and (f)(2) is quite broad:

“(1) The reapplication bar applies to the prospective provider or supplier under any of its current, former, or future names, numerical identifiers or business identities.

(2) CMS determines the bar’s length by considering the following factors:

(i) The materiality of the information in question.
(ii) Whether there is evidence to suggest that the provider or supplier purposely furnished false or misleading information or deliberately withheld information.
(iii) Whether the provider or supplier has any history of final adverse actions or Medicare or Medicaid payment suspensions.
(iv) Any other information that CMS deems relevant to its determination.

XI.  Modifications to the Medicare Enrollment Revocation Regulations Under 42 CFR § 424.535:

Prior to the issuance of the Final Rule, under 42 CFR § 424.535(a), CMS has long exercised the authority to revoke a currently-enrolled provider’s or supplier’s Medicare billing privileges (along with any related provider or supplier agreement).  Reasons for revocation have included:

  1. Noncompliance
  2. Provider or supplier conduct.
  3. Felonies
  4. False or misleading information.
  5. On-site review;
  6. Grounds related to provider or supplier screening requirements.
  7. Misuse of billing number.
  8. Abuse of billing privileges.
  9. Failure to report.
  10. Failure to document or provide CMS access to documentation.
  11. Initial reserve operating funds.
  12. Medicaid termination.
  13. Prescribing authority.
  14. Improper prescribing practices.

Under the Final Rule, the reasons for revocation under 42 CFR § 424.535(a)(9) and (a)(12) have been revised.  The revocation reason set out under 42 CFR § 424.535(a)(9) Failure to report, has been changed.  The basis for revocation has now been expanded to cover the following:

(9) Failure to report. The provider or supplier did not comply with the reporting requirements specified in § 424.516(d) or (e), § 410.33(g)(2) of this chapter, or § 424.57(c)(2). In determining whether a revocation under this paragraph (a)(9) is appropriate, CMS considers the following factors:

         (i) Whether the data in question was reported.
         (ii) If the data was reported, how belatedly.
         (iii) The materiality of the data in question.
        (iv) Any other information that CMS deems relevant to its determination.”

Similarly, the Final Rule expands the revocation basis set out under 42 CFR § 424.535(a)(12).  Rather than focus exclusively on the termination of a provider’s or supplier’s Medicaid billing privileges, under the Final Rule 42 CFR § 424.535(a)(12) the basis for revocation has been expanded to include not merely Medicaid but also adverse actions taken by any other Federal health care program.  As the regulation now reads:

“(12) Other program termination.

(i) The provider or supplier is terminated, revoked or otherwise barred from participation in a State Medicaid program or any other federal health care program. In determining whether a revocation under this paragraph (a)(12) is appropriate, CMS considers the following factors:

(A) The reason(s) for the termination or revocation.
(B) Whether the provider or supplier is currently terminated, revoked or otherwise barred from more than one program (for example, more than one State’s Medicaid program) or has been subject to any other sanctions during its participation in other programs.
(C) Any other information that CMS deems relevant to its determination.

 (ii) Medicare may not revoke unless and until a provider or supplier has exhausted all applicable appeal rights.
 (iii) CMS may apply paragraph (a)(12)(i) of this section to the provider or supplier under any of its current or former names, numerical identifiers or business identities.”

 The Final Rule has set aside slots for future bases for revocation at 42 CFR § 424.535(a)(15) and (a)(16).

Notably, a number of new bases for Medicare enrollment revocation have now been established under the Final Rule and are set out under 42 CFR § 424.535(a)(17) through (a)(20).  These new reasons for revocation include the following:

(17) Debt referred to the United States Department of Treasury. The provider or supplier has an existing debt that CMS appropriately refers to the United States Department of Treasury. In determining whether a revocation under this paragraph (a)(17) is appropriate, CMS considers the following factors:

(i) The reason(s) for the failure to fully repay the debt (to the extent this can be determined).
(ii) Whether the provider or supplier has attempted to repay the debt (to the extent this can be determined).
(iii) Whether the provider or supplier has responded to CMS’ requests for payment (to the extent this can be determined).
(iv) Whether the provider or supplier has any history of final adverse actions or Medicare or Medicaid payment suspensions.
(v) The amount of the debt. (vi) Any other evidence that CMS deems relevant to its determination.

(18) Revoked under different name, numerical identifier or business identity. The provider or supplier is currently revoked under a different name, numerical identifier, or business identity, and the applicable reenrollment bar period has not expired. In determining whether a provider or supplier is a currently revoked provider or supplier under a different name, numerical identifier, or business identity, CMS investigates the degree of commonality by considering the following factors:

(i) Owning and managing employees and organizations (regardless of whether they have been disclosed on the Form CMS–855 application).
(ii) Geographic location.
(iii) Provider or supplier type.
(iv) Business structure.
(v) Any evidence indicating that the two parties are similar or that the provider or supplier was created to circumvent the revocation or reenrollment bar

(19) Affiliation that poses an undue risk. CMS determines that the provider or supplier has or has had an affiliation under § 424.519 that poses an undue risk of fraud, waste, or abuse to the Medicare program.

(20) Billing from non-compliant location. CMS may revoke a provider’s or supplier’s Medicare enrollment or enrollments, even if all of the practice locations associated with a particular enrollment comply with Medicare enrollment requirements, 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. In determining whether and how many of the provider’s or supplier’s enrollments, involving the non-compliant location or other locations, should be revoked, CMS considers the following factors:

(i) The reason(s) for and the specific facts behind the location’s noncompliance.
(ii) The number of additional locations involved.
(iii) Whether the provider or supplier has any history of final adverse actions or Medicare or Medicaid payment suspensions.
(iv) The degree of risk that the location’s continuance poses to the Medicare Trust Funds.
(v) The length of time that the noncompliant location was non-compliant.
(vi) The amount that was billed for services performed at or items furnished from the non-compliant location.
(vii) Any other evidence that CMS deems relevant to its determination.  

(21) Abusive ordering, certifying, referring, or prescribing of Part A or B services, items or drugs. The physician or eligible professional has a pattern or practice of ordering, certifying, referring, or prescribing Medicare Part A or B services, items, or drugs that are abusive, represents a threat to the health and safety of Medicare beneficiaries, or otherwise fails to meet Medicare requirements. In making its determination as to whether such a pattern or practice exists, CMS considers the following factors:

(i) Whether the physician’s or eligible professional’s diagnoses support the orders, certifications, referrals or prescriptions in question.
(ii) Whether there are instances where the necessary evaluation of the patient for whom the service, item or drug was ordered, certified, referred, or prescribed could not have occurred (for example, the patient was deceased or out of state at the time of the alleged office visit).
(iii) The number and type(s) of disciplinary actions taken against the physician or eligible professional by the licensing body or medical board for the state or states in which he or she practices, and the reason(s) for the action(s).
(iv) Whether the physician or eligible professional has any history of final adverse actions (as that term is defined in § 424.502).
(v) The length of time over which the pattern or practice has continued.
(vi) How long the physician or eligible professional has been enrolled in Medicare.
(vii) The number and type(s) of malpractice suits that have been filed against the physician or eligible professional related to ordering, certifying, referring or prescribing that have resulted in a final judgment against the physician or eligible professional or in which the physician or eligible professional has paid a settlement to the plaintiff(s) (to the extent this can be determined).
(viii) Whether any State Medicaid program or any other public or private health insurance program has restricted, suspended, revoked, or terminated the physician’s or eligible professional’s ability to practice medicine, and the reason(s) for any such restriction, suspension, revocation, or termination.
(ix) Any other information that CMS deems relevant to its determination.

Notably, under the Final Rule, 42 CFR § 424.535(c), the regulations setting out the rules for reapplying after a provider’s or supplier’s Medicare enrollment has been revoked, have been revised and enhanced. First, the maximum reenrollment bar for a first-time revocation has been extended to 10 years. 42 CFR § 424.535(c)(1)(i). Second, if a provider or supplier attempts to “circumvent its existing reenrollment bar by enrolling in Medicare under a different name, numerical identifier or business identity,” CMS can extend that provider’s or supplier’s existing reenrollment bar by 3 additional years.   See 42 CFR § 424.535(c)(2)(i).

Moreover, under 42 CFR § 424.535(c)(3), if a provider or supplier is being revoked from Medicare a second time, CMS may choose to impose a reenrollment bar of up to 20 years.  The factors to be considered by CMS when determining the proper length of a reenrollment bar are set out under 42 CFR § 424.535(c)(3), subsections (i) through (iii).

In an effort to further prevent improper attempts to reenroll in the Medicare program, 42 CFR § 424.535(c)(4) provides a reenrollment bar applies to a provider or supplier under any of its current, former or future names, numerical identifiers or business identities.”

XII.  Impact of the Final Rule on State Medicaid and CHIP Enrollment and Disclosure Practices:

Section 1902(kk)(3) of the Act,1 as amended by section 6401(b) of the Affordable Care Act, which mandates that states require providers and suppliers to comply with the same disclosure requirements established by the Secretary under section 1866(j)(5) of the Act. In other words, the increased disclosure requirements apply to providers and suppliers enrolling or revalidating in the Medicare or Medicaid programs. It also applies to changes of information that must be reported under the Final Rule.

As the Final Rule further notes, as long as they continue to work within the broad Federal framework, States have been delegated considerable flexibility in how they administer their Medicaid and CHIP programs.  Ultimately, the enrollment requirements established by a State must be consistent with section 1902(a)(23) of the Act and implementing regulations at 42 CFR § 431.51. As the Final Rule reflects, as long as a State meets its obligations under 42 CFR § 431.51, it is free to:

“. . . [S]et reasonable standards relating to the qualifications of providers but may not restrict the right of beneficiaries to obtain services from any person or entity that is both qualified and willing to furnish such services.”

XIII. Due Diligence and Credentialing Risks When Enrolling, Revalidating or Submitting a Change of Information:

The affiliation disclosure requirements set out in the Final Rule are anticipated to be gradually implemented by CMS over the next three years.  The agency contends that such an approach will better enable the provider and supplier communities to meet their affiliation, uncollected debt and adverse event reporting obligations. Unfortunately, the Final Rule imposes yet another unfunded obligation on participating providers and suppliers.  From a practical standpoint, the implementation of the Final Rule will have an enormous impact on the credentialing process.  Federal and State payors have historically used the credentialing process as their first line of defense with respect to program integrity. The disclosure obligations set out in the Final Rule are quite comprehensive. Third-party billing companies and credentialing companies handling these submissions on behalf of their provider and supplier clients will need to diligently work to better ensure that each submission is both accurate and complete before submitting the credentialing package to a Federal or State payor.  On the payor side of the credentialing equation, professional credentialing companies, (such as CredSimple), will likely see an exponential increase in the demand for their verification and screening services.  Moreover, we fully expect to see private payors, medical centers and hospital systems adopt program integrity safeguards similar to those outlined in the Final Rule as they take steps to protect their organizations from fraud, waste, and abuse.

XIV.  Final Thoughts:

As the Final Rule details, the Affordable Care Act imposed a number of enrollment and reenrollment disclosure obligations on Medicare, Medicaid, and CHIP providers and suppliers.  These revised reporting obligations are intended to prevent bad actors from circumventing the existing safeguards that had been implemented to guard against fraud, waste, and abuse.  CMS estimates that it will take at least several years for the agency to revise the various versions of its CMS Form 855 enrollment applications and fully implement the new reporting obligations.  The true enormity of these new obligations has yet to be realized.  Affiliations, disclosable events and uncollected debts will be carefully evaluated by CMS and weighed as the agency decides whether to deny an application for enrollment or revalidation or revoke an existing provider’s or supplier’s Medicare billing privileges.

Healthcare Attorney

Jennifer Papapanagiotou,
Click here for bio

Robert W. Liles Healthcare Attorney

Robert W. Liles,
Click here for bio

Now, more than ever before, it is important for providers and suppliers to effectively conduct due diligence before hiring managerial staff, purchasing or selling an entity, appealing an alleged overpayment and / or seeking relief in bankruptcy.  As the enrollment disclosure and reporting process moves towards full implementation, it will be essential for you to fully understand your obligations under the law.  The attorneys at Liles Parker have extensive experience representing providers and suppliers in the provider enrollment, revalidation, change of information and change of ownership process.  Our team has represented healthcare providers and suppliers around the country in the appeal of Medicare termination actions, enrollment denials, and the revocation of an entity’s billing privilegesQuestions?  Give Robert Liles or Jennifer Papapanagiotou a call.  For a free consultation, we can be reached at:  1 (800) 475-1906.

[1] 42 CFR § 424.516.

[2] CMS is the single largest health care insurance payor in the country.  Approximately 90 million individuals are currently covered by Medicare, Medicaid and / or the Children’s Health Insurance Program (CHIP) programs.

[3] 71 FR 20754.

[4] 76 FR 5861.

[5] 81 FR 10720.

[6] The Final Rule is effective on November 4, 2019.

[7] 84 FR 47794, 47797.

[8] 84 FR 47794, 47803.

[9] 84 FR47794, 47802.

[10] Under 42 CFR § 424.502, the term “managing employee” means:

a general manager, business manager, administrator, director, or other individual that exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operation of the provider or supplier, either under contract or through some other arrangement, whether or not the individual is a W-2 employee of the provider or supplier.”

[11] 84 FR 47794, 47803, 47805.  In light of the concerns raised, CMS will be adopting a “phased-in” approach to complying with the requirements under 42 CFR §?424.519(b).  Under this phased-in approach, CMS will first be revised Form CMS-855 to cover the various disclosures required under the Final Rule.  Initially, providers and suppliers will not be required to disclose affiliations under 42 CFR §?424.519(b) unless CMS asks for this information.  While this approach will initially relieve providers and suppliers of the disclosure burden, CMS notes that this is not meant to be a permanent exemption.  Ultimately, providers and suppliers will be required to report any affiliations with one or more disclosable events.

[12] 84 FR 47794, 47807.

[13] CMS acknowledges in its response to comments in the Final Rule that the additional sub-regulatory guidance is needed to further clarify the “knew or should have known” standard.  See 84 FR 47794,47811.

[14] This is similar to CMS’ new expanded authority to deny enrollment if an owner or managing employee of a provider or supplier is under a payment suspension by Medicare or a state Medicaid program. Under this new denial authority, CMS will examine the degree of commonality between the applicant and other revoked providers and suppliers, looking specifically at the owning and managing employees and organizations of the applicant and a revoked provider or supplier, the applicant and revoked provider’s or supplier’s geographic location, provider or supplier type, business structures, and “any evidence indicating the two parties are similar or that the provider or supplier was created to circumvent the revocation or reenrollment bar.” 84 FR 47794, 47823.

Revocation of Your Medicare Billing Privileges

Download PDF
Revocation of Your Medicare Billing Privileges

The revocation of your Medicare billing privileges can subject your practice to financial ruin!

(December 14, 2017):  The Centers for Medicare and Medicaid Services (CMS) has engaged various types of outside contracting entities to perform program integrity functions on behalf of the Medicare program.  At the present time, Uniform Program Integrity Contractors (UPICs) and Zone Program Integrity Contractors (ZPICs) are very aggressive when it comes to referring evidence of potential fraud to federal law enforcement agencies, primarily the Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the U.S. Department of Justice (DOJ).  In matters where fraud is not apparent but it appears that other improper conduct has occurred, UPICs and ZPICs are actively recommending to CMS that adverse administrative actions (such as the revocation of your Medicare billing privileges), be taken.  As the General Accounting Office (GAO) noted in its August 2017 report entitled “CMS Fraud Prevention System Uses Claims Analysis to Address Fraud,  the administrative actions[1] recommended by these program integrity contractors typically range from prepayment review to revocation.[2]

 Revocation of your Medicare Billing Privileges

I. Background:

To participate in the Medicare program, a provider must typically complete either a CMS-855A, CMS-855B, CMS-855I or CMS-855S[3] enrollment application, each of which requires that the provider disclose their practice or office address.[4] Notably, a provider may also  provide documentation of its “practice location” with its enrollment application.[5] Once a provider has enrolled in the Medicare program, any changes to the provider’s enrollment information must be reported within a strict timeframe.  For example, a change in practice location must be reported within 30 days.[6]

Among their various duties, Medicare Administrative Contractors (MACs), UPICs and ZPICs are required to periodically perform site visits in order to verify that a provider is operational, that the provider’s enrollment information is accurate, and that the provider is in compliance with applicable Medicare enrollment requirements.[7] To accomplish this, the CMS contractor will normally inspect the  “qualified physical practice location” given by the provider or supplier that is currently in file with the MAC. See, e.g., JIB Enterprises, LLC, DAB CR3010, at 9 (2013).

II. Failure to Meet Provider Requirement to Maintain Active Enrollment Status:

Over the past year, our firm has represented more physicians, home health agencies and other providers than ever before in challenging proposed Medicare revocation actions.  As we indicated in an article on ZPIC audits last March, program integrity contractors are aggressively conducting site visits of enrolled providers. Approximately one-third of these revocation actions have been based on a Medicare contractor’s assertion that they were unable to verify a provider’s operational status. In many cases, this has occurred because a provider has moved its office or clinic without properly reporting the relocation to Medicare in a timely manner. GAO’s December 2017 report on the status of CMS fraud efforts illustrates how frequently this particular category of revocation action has been occurring. As GAO noted with respect to Florida:

“According to a 2016 report, from July 1, 2015, through September 30, 2016, a contractor covering Florida had conducted 9,891 site visits to verify providers’ and suppliers’ operational status, deactivated 422 practice locations, and revoked or denied 1,157 providers.[8]

III.  What Occurs if a Medicare Contractor Believes that a Provider is Not Operational?

What does it mean for a provider’s practice or office to be “operational”?  As set out under 42 C.F.R. § 424.502, the term operational:

“means the provider or supplier has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered), to furnish these items or services.”

Therefore, if a UPIC or ZPIC were to visit the location of your practice (as then listed in Medicare’s records) and were to find that the practice or office were closed, the contractor would likely take the position that your organization is not operational.

Neither UPICs nor ZPICs exercise independent authority to issue a revocation letter or otherwise revoke your Medicare billing privileges.  These contractors must first obtain prior approval from CMS’ Provider Enrollment & Oversight Group (PEOG).  When seeking approval to initiate a revocation action, the contractor is required to cite the specific regulatory basis upon which this adverse action is being based.  In most cases, obtaining CMS approval to initiate a revocation action is a perfunctory step in the process. Once approval is obtained, the provider’s Medicare billing privileges are normally revoked, retroactive to the date that the CMS contractor determined that the provider was not operational.[9]  As set out in the Federal Register:

“Moreover, we maintain that when CMS or our contractor determines that a provider or supplier, including a DMEPOS supplier, is no longer operating at the practice location provided to Medicare on a paper or electronic Medicare enrollment application that the revocation should be effective with the date that CMS or our contractor determines that the provider or supplier is no longer operating at the practice location.”[10]

ANon-Operational Due to Change in Location Without Proper Notice.

 We have handled practically every permutation of this scenario that you can imagine.  The most common facts have involved a provider or supplier who moved offices and failed to notify their MAC.  As luck would have it, a UPIC or ZPIC contractor conducted a site visit, found that the practice location on file was closed or empty, and concluded that it was not operational.  The contractor then recommended to CMS that a revocation action be pursued.

In several instances, the provider and / or the provider’s office manager was willing to swear that written notice of the change in location was, in fact, sent to the MAC.  Unfortunately, unless the provider can provide proof that notice was given by Certified Mail, Return Receipt Requested or other trackable mail service, these cases have been an uphill battle in the administrative appeals process.

In other cases, a provider has been able to show that written notice was given, in a timely fashion, to state regulatory authorities.  In at least one case, a provider argued that the MAC was provided proper notice through the Cost Report process.  Unfortunately, proof of such notice was not provided to the Administrative Law Judge so no ruling as to adequacy was issued.

The bottom line with respect to notice is fairly straight forward, timely notice of a change in practice location must be provided to the MAC, on the proper form and within the proscribed time limits.  Moreover, as with all communications to a CMS contractor, it is imperative that proof of submission and receipt be maintained.

B.  Non-Operational Due to Closed or Non-Staffed at the Time of the Site Visit.

From a practical standpoint, a provider doesn’t necessarily have to change its practice or office location to be found non-operational.  We have handled multiple cases where a ZPIC contractor conducted a site visit at the provider’s address listed on the CMS-855, but for one reason or another, the office was locked and was not staffed at the time of the visit, thereby giving rise to a revocation action.

IV.  A Look at the Regulatory Bases for Revocation:

As reflected under 42 CFR §424.535(a)(1)-(14), there are fourteen regulatory bases for revocation that may be relied upon by the government.  This article focuses on only one of these reasons for revocation – a provider’s failure to notify Medicare of a change in its practice location.  Notably, there are several regulatory bases that may be cited when revoking a provider’s billing privileges for this infraction, each of which are briefly discussed below.

A.  42 C.F.R. §424.535(a)(1), “Non-Compliance.”

Under 42 C.F.R. §424.535(a)(1), a revocation may be pursued if:

“The provider or supplier is determined to not be in compliance with the enrollment requirements described in this subpart P or in the enrollment application applicable for its provider or supplier type, and has not submitted a plan of corrective action as outlined in part 488 of this chapter. The provider or supplier may also be determined not to be in compliance if it has failed to pay any user fees as assessed under part 488 of this chapter.

(i) CMS may request additional documentation from the provider or supplier to determine compliance if adverse information is received or otherwise found concerning the provider or supplier.

(ii) Requested additional documentation must be submitted within 60 calendar days of request.”

Under this basis for revocation, CMS or one of its contractors typically alleges that a provider has violated an enrollment requirement listed on the enrollment application or currently in Medicare’s electronic records system.  Although most revocation actions pursued under this regulatory provision are based on a licensure-related violation, the scope of the provision is broad enough to cover situations where a provider has failed to meet its obligations to report a change in practice location in a timely fashion.

B.  42 C.F.R. §424.535(a)(5), “On-Site Review.”

Under 42 C.F.R. §424.535(a)(5), a revocation action may be pursued if:

“Upon on-site review or other reliable evidence, CMS determines that the provider or supplier is either of the following:

 (i) No longer operational to furnish Medicare-covered items or services.

(ii) Otherwise fails to satisfy any Medicare enrollment requirement.”

As previously indicated, both CMS contractors are actively conducting site-visits of Medicare providers and suppliers in an efforts to better ensure the program integrity of the Medicare Trust Fund.  These site-visits are expected to intensify, not subside in 2018.  It is therefore essential that you understand your obligations under the regulations to qualify as an “operational” entity and to properly notify Medicare of any changes to your enrollment status.

C.  42 C.F.R. §424.535(a)(9), “Failure to Report.”

Under 42 C.F.R. §424.535(a)(9) a revocation action may be pursued if:

The provider or supplier did not comply with the reporting requirements specified in § 424.516(d)(1)(ii) and (iii) of this subpart.”

As 42 C.F.R. §516(d)(1)(ii) and (iii) describes, physicians, nonphysician practitioners, and their organizations must report any adverse legal action or change in practice location to their Medicare contractor within 30 days. If a provider that has failed to meet this reporting requirement is subject to having their Medicare billing privileges revoked under 42 C.F.R. §424.535(a)(9).

V.  Impact of a Medicare Revocation Action:

Simply put, if your Medicare billing privileges are revoked, you will be barred from participating in the Medicare program from the date of the revocation until the end of the re-enrollment bar that has been identified in the revocation letter.  The re-enrollment bar lasts from 1 – 3 years. [11]  The length of the re-enrollment bar depends on the severity of the reason for the underlying revocation. The re-enrollment period begins 30 days after the provider receives the notice of revocation letter from CMS.

Under 15.1.1 of the MPIM, the definition of the term “Final Adverse Action” includes a Medicare-imposed revocation of any Medicare billing privileges.”  More than likely, each of your private payor participating agreements includes a requirement that you notify the payor within 30 days of any adverse action.  If for some reason your particular contract does not include this requirement, it is important to remember that all licensing boards, payors and hospitals have access to the NPDB and regularly submit queries on their staff or licensees.  Depending on the reason for revocation, these organization may choose to pursue a reciprocal action.

VI.  Appealing a Medicare Revocation Action:

As reflected in Section IV above, the business impact of a revocation action on your practice can be devastating.  If you are facing a revocation action, we strongly recommend that you engage experienced health law counsel to represent you in the process. Unlike the traditional Medicare administrative appeals process, the Medicare revocation appeals process has abbreviated timeframes and is highly restrictive with respect to the introduction of evidence and arguments.  Having said that, our attorneys have been very successful in working directly with CMS to resolve many of these revocation actions to the satisfaction of our clients and achieve a result that likely would be unavailable through the traditional revocation appeals process.

Generally, the Medicare revocation appeals process is set out under 42 C.F.R. § 405.803, “Appeal Rights.” As this provision outlines, a provider is entitled to challenge the revocation of its Medicare billing privileges an may appeal an initial determination made by CMS or its contractor by following the procedures specified in Chapter 498.  A brief overview of these provisions is outlined below:

Preliminary Appeal Determination: Can We File a Corrective Action Plan (CAP)?  In limited circumstances, if a provider’s Medicare billing number has been revoked, it may be afforded an opportunity by CMS to take remedial action to correct the deficiencies that were the basis for the revocation action.   After the effectuation of the December 2014 Final Rule, only provider’s whose Medicare billing privileges have been revoked due to non-compliance under 42 CFR 424.535(a)(1) are entitled to submit a CAP. The other thirteen regulatory bases for revocation are not eligible for CAP remediation.  To the extent that your revocation action falls within category, the CAP must be submitted within 30 days of the date of the revocation notice and must provide evidence that the provider is now in full compliance with its applicable obligations.  If the provider can demonstrate compliance, CMS will reinstate the provider’s billing privileges.  If the CAP is denied, the provider can still exercise its appeal rights under Part 498.  Importantly, the submission of a CAP does not “stay” your appeal deadlines.  More than likely, you will therefore pursue a dual-track approach is challenging the revocation action.

Appeal Level I:  Reconsideration.  The first level of appeal for a provider to contest the evocation of its Medicare billing privileges is known as the “Reconsideration” level. A reconsideration request must be submitted within 60 days from receipt of the notice of initial determination. Take care, some appeals will be filed with the CMS-PEOG while others must be filed with MAC. Any documentary evidence a provider wants considered by the hearing officer assigned to their case must be submitted at this level of appeal. If a provider later wants to submit documentary evidence into the record, an Administrative Law Judge (ALJ) will require that the provider show “Good Cause” exists for the late submission of the evidence. “Good Cause” is rarely found to exist absent evidence of an Act of God that prevented earlier submission.

Appeal Level II: Administrative Law Judge (ALJ) Hearing. Should you not prevail at the reconsideration level of appeal, you can seek a hearing before an ALJ of the HHS Departmental Appeals Board, Civil Remedies Division. Requests for an ALJ hearing must be submitted within 60 days from the date of the reconsideration decision.  The ALJ hearing is like a “mini-trial.”  The government will be represented by an attorney assigned by your HHS Regional Office of General Counsel.  If the facts in the case are contested, both sides will typically submit briefs, introduce evidence and present witness and / or expert testimony.  If both sides agree as to the basic facts in the case, the ALJ will often issue his / her ruling based on the written record.

Appeal Level III: Departmental Appeals Board (DAB) Hearing.   Both the provider and CMS may contest a decision of the ALJ. Should a party choose to do so, they must request review of the ALJ’s decision by the Departmental Appeals Board, Appellate Division within 60 days of the date of the ALJ’s decision.  Importantly, this is the end of the proverbial line administratively.  If a provider is dissatisfied with the DAB’s ruling, it must seek judicial review.

Appeal Level IV:  Judicial Review  If a provider wishes to challenge the decision of the DAB, it must file a civil action in U.S. District Court within 60 days of the date of the DAB decision.  If a provider can show “Good Cause,” the DAB is permitted to extend the civil action filing deadline.

VII.  Conclusion:

The revocation of a provider’s Medicare billing number often comes as a shock.  It is never expected and few providers are prepared to effectively respond to the challenges presented by the hyper-strict requirements of the revocation appeals process.  It is important to keep in mind that the appeals process isn’t meant to provide a level playing field for a provider to argue its case.  Unfortunately, the rules are skewed in favor of CMS from the very start.  It is therefore essential that you take steps to challenge the revocation of your Medicare billing privileges.  Unless you are skilled in responding to these types of adverse actions, it is likely in your best interests to engaged experienced health law counsel.

Robert W. Liles Healthcare LawyerRobert W. Liles, J.D., M.B.A., M.S., is a former Federal prosecutor and an experienced health lawyer.  Robert and the other lawyers at Liles Parker, PLLC, represent health care providers and suppliers around the country in connection with Medicare revocation actions.  If you or your practice have been had their Medicare billing privileges revoked, please give Robert a call for a complimentary consultation:  Please call:  1 (800) 475-1906.    

 

[1] Importantly, this list of administrative adverse actions is not all-inclusive.  For instance, as set out in Section 4.19.2.2 of the Medicare Program Integrity Manual (MPIM), UPICs and ZPICs are also required to  review and evaluate cases to determine if they warrant exclusion action.  If so, they are to make a recommendation to OIG for exclusion. One of the examples cases suitable for exclusion listed in the MPIM includes:

“Providers who are the subject of prepayment review for an extended period of time (longer than 6 months) who have not corrected their pattern of practice after receiving educational/warning letters.”

[2] As defined under 15.1.1 of the MPIM, the term “Revocation” means that the provider or supplier’s billing privileges are terminated.

[3] CMS-855A – Medicare Enrollment Application for Institutional Providers; CMS-855B – Medicare Enrollment Application for Clinics, Group Practices, and Certain Other Suppliers; CMS-855I – Medicare Enrollment Application for Physicians and Non-Physician Practitioners; CMS-855S – for DME suppliers.

[4] 42 C.F.R. § 424.510(a).

[5] 42 C.F.R. § 424.510(d)(2)(ii).

[6] See 42 C.F.R. § 424.516(d)(1)(iii).

[7] 42 C.F.R. §§ 424.510(d)(8), 424.515(c), 424.517(a).

[8] GAO-18-88. “CMS Needs to Fully Align Its Antifraud Efforts with the Fraud Risk Framework,” December 2017.  See footnote 62.

[9]42 C.F.R. §§ 405.800(b)(2); 424.535(a)(5)(i), (g).

[10] 73 Fed. Reg. 69,725, 69,865 (Nov. 18, 2008) (emphasis added).

[11] 42 CFR §424.535(c)

[12] If a revocation actions is based on an “Abuse of Billing Privileges” under 42 CFR 424.535(a)(8), the initial level of appeal (Reconsideration) will be filed directly with CMS rather than with the provider’s MAC.

Responding to a Medicare Revocation Action / Medicare Deactivation Action

Download PDF

A Medicare revocation action can be devastating on your medical practice.

(UPDATE:  March 9, 2020):  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. 

(August 18, 2016):  During 2015, more than 1.2 million non-institutional health care providers participated in the Medicare program.[1]  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.[2] 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.

I.  What is a Medicare Deactivation Action?

A health care provider or supplier typically runs the risk of having their Medicare number “deactivated” if they have not submitted a Medicare claim in the previous 12 months.[3]  Essentially, when a Medicare number is deactivated, The Centers for Medicare and Medicaid Services (CMS) may also deactivate a providers Medicare number if the provider or supplier fails to submit a change to the information previously submitted on its enrollment application within 90 calendar days or the change.[4]  Finally, a provider or supplier may have its Medicare number deactivated if it fails to fully respond within 90 calendar days after it receives notification from CMS that additional enrollment application information is needed, supporting documentation is required, or that the provider / supplier must certify the accuracy of the pervious enrollment information submitted.[5]

II.  What is the Effect of the Deactivation of a Provider’s Billing Privileges?

Essentially, when a Medicare number is deactivated, the provider’s (or supplier’s) billing privileges are temporarily stopped. The deactivation of billing privileges is intended to protected the Medicare Trust Fund from abuse and keep a specific billing number from being misused.  Importantly, the deactivation of a provider’s (or supplier’s) Medicare billing privileges does not have any effect on its participation agreement or associated conditions of participation.[6]

III.  Responding to a Medicare Deactivation Action:

If a provider’s (or supplier’s) Medicare number has been deactivated because a no claim has been has been submitted within a 12 calendar month period, you can recertify that the enrollment information currently on file with correct, or as appropriate, submit any information that may be missing.  The provider or supplier must also meet all current Medicare requirements and be ready to submit a valid Medicare claims for payment.[7]   For all other reasons for deactivation, a provider or supplier must submit a new enrollment application or, at a minimum, recertify that the enrollment information currently on file is correct. [8]

IV.  What is a Medicare Revocation Action?

 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.

  • Noncompliance[9]

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.[10] 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.[11]

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.[12]

 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.[14]

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.

If a Medicare contractor (typically a representative of the Zone Program Integrity Co

After a contractor (ZPIC)) visits your office and makes a determination that your facility is no longer operational or fails to meet another Medicare enrollment requirement, the contractor will recommend to CMS that the provider’s Medicare number be revoked.  This typically 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.[16]

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.[17]

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.

V.  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.[18] Once this period has expired, a provider will be required to submit a new enrollment application to CMS for its review and consideration.

VI.  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.

Medicare revocationRobert 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, San Antonio TX, McAllen 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.

[1] https://www.cms.gov/fastfacts/

[2]     42 C.F.R. § 424.505; MPIM Ch. 15 § 15.1.

[3] 42 C.F.R. § 424.540(a)(1). A copy this regulation can be found at:  https://www.law.cornell.edu/cfr/text/42/424.540

[4]     42 C.F.R. § 424.540(a)(2).

[5]     42 C.F.R. § 424.540(a)(3).

[6]      42 C.F.R. § 424.540(c).

[7]      42 C.F.R. § 424.540(b)(2).

[8]      42 C.F.R. § 424.540(b)(1).

[9]       42 C.F.R. § 424.535(a)(1).

[10] 42 U.S.C. § 1395x(r); see also 42 C.F.R. § 410.20(b).

[11]      42 C.F.R. § 424.535(a)(9).

[12]      42 C.F.R. § 424.535(a)(2).

[13]      42 C.F.R. § 424.535(a)(3).

[14]      42 C.F.R. § 424.535(a)(4).

[15]      42 C.F.R. § 424.535(a)(5).

[16]      42 C.F.R. § 424.535(a)(7).

[17]      42 C.F.R. § 424.535(a)(8).

[18]      42 C.F.R. § 424.535(c).

Medicare Revocation Action: Steps for Avoiding and Appealing

Download PDF

A Medicare Revocation Action Can Financially Ruin a Practice(September 16, 2014): Consider the following scenario. You own a durable medical equipment (DME) company that you run out of a leased location in a local office building. Your customers are a mix of privately insured and Medicare/Medicaid beneficiaries. You’ve been in business for about 10 years, but money is tight and you need to reduce expenses. You decide to move your business to your home for the time being. You make all the arrangements to move, and prepare a CMS-Form 855S informing the National Supplier Clearinghouse (NSC) that you are relocating in 10 days. No one helps you fill out the form, no one reviews it for you, and no one goes with you when you take the signed CMS-Form 855S to the local post office in a manila envelope that you have hand addressed to the NSC. Because it’s only a few dollars, you pay for first-class postage for the envelope with the $5 bill you had in your pocket, hand the envelope to the postal clerk and leave.

Fast-forward six weeks…you receive an envelope from the NSC that is forwarded to you from your old business address. The letter inside informs you that Medicare revocation action has been initiated.  Your Medicare DME supplier number is being revoked because a site inspector visited your old address 5 days after you relocated and found the location empty. You frantically call the NSC and ask why you’ve received this letter. They confirm what the letter says. You ask the representative to confirm what the NSC has on file as your location, and the customer service representative reads back your old address. You ask if the NSC has any record of receiving the CMS-Form 855S you sent 10 days before you moved and the representative says it does not.  Cue full on panic…

I.  Appealing a Medicare Revocation Action:

What are your options at this point? The Medicare revocation notice letter says you have the right to seek reconsideration of the termination of your participation. Surely you can send a letter to the appeal address explaining what happened and they’ll stop the termination? Surely they’ll believe you when you say you sent the CMS-Form 855S notifying the NSC of your address change well before it was due (which was within 30 days after you moved since you are a DME provider), and they’ll let you resend it? Surely the NSC will be reasonable?  Sadly, that’s not how Medicare’s rules work. You have to appeal, and you have to do it quickly…within 60 days, or you’ll lose your right to do so. There are two steps to consider at this point…one is optional, and one is mandatory if you want to maintain your appeal rights.

II.  Corrective Action Plans to Address a Medicare Revocation Action:

First, consider filing a corrective action plan (CAP). Federal regulations give most providers the opportunity to do so within 30 days of receiving notice of Medicare revocation. It’s optional, but can sometimes result in a reversal of a termination much quicker than a request for reconsideration. Be forewarned, however, that filing a CAP is NOT the same as filing a request for reconsideration and WON’T preserve your appeal rights.

III. Challenging a Medicare Revocation Action — Reconsideration Requests.

Second, to maintain your appeal rights, you must file an official request for reconsideration within 60 days of receiving a revocation notice letter. Many of our clients elect to file a CAP, and if they don’t receive a decision before the 60 day reconsideration deadline, file the reconsideration also. The good news is that, when we prepare a CAP, it can serve as the foundation for the reconsideration request so that any duplication of effort is minimized.

IV.  Things to Know about CAPs and Reconsideration Requests.

First, a few notes on CAPs. They really aren’t what they sound like in the context of a Medicare revocation appeal. You can’t use a CAP to fix a problem that existed on the effective date of termination. For example, if you moved and didn’t file the necessary CMS Form-855 to tell the Medicare program on time, and were then terminated because a site inspector visited your old location and found you weren’t in business, you can’t use the CAP to fix the fact that you didn’t send the necessary forms on time. CAPs are most effective when a site inspector obviously made a mistake when they visited a location of record, or you can prove with objective evidence that you submitted required paperwork on time.

Let me illustrate…consider a home health agency client that received a revocation letter after a site inspector visited what they were told was the agency’s current practice location. The agency had concrete proof in the form of correspondence from the Medicare contractor that the contractor’s provider enrollment department had its correct address, but for some reason, the database used by the site inspector did not. The agency submitted a CAP that explained the apparent mismatch between the agency’s CMS provider enrollment record and the site inspector’s records and successfully reversed the revocation without ever having to file a request for reconsideration.  Another example might also be useful here. Many providers that receive revocation notices tell us they submitted necessary CMS-Form 855 updates on time, but they can’t provide any proof of delivery to the Medicare enrollment contractor such as Federal Express, UPS or USPS Priority Mail or Certified Mail tracking information. CMS and the provider community have long disagreed about exactly what a provider must do to satisfy its “duty to report” changes to its provider enrollment record. The relevant regulation applicable to our DME provider case described above is found at 42 CFR §424.57(c)(2); that regulation states in part that “. . . [t]he supplier must provide complete and accurate information in response to questions on its application for billing privileges. The supplier must report to CMS any changes in information supplied on the application within 30 days of the change.” (Emphasis added.)

A similar “duty to report” changes in enrollment information exists and is applicable to other providers. Physicians, non-physician practitioners and their organizations are required to report changes of ownership, adverse legal actions and changes in practice location within 30 days, and all other changes to information on their enrollment forms within 90 days. See 42 C.F.R. § 424.516(d). All other providers must report a change of ownership or control, a change of authorized or delegated official, or the revocation or suspension of a Federal or State license or certification within 30 days, and all other changes, including a change in practice location within 90 days. See id. at § 424.516(e).So the question remains…is proof of mailing to the correct Medicare enrollment contractor address enough to meet a provider’s or supplier’s duty to report under the above regulations, or do you also have to prove delivery? Is testimony that something was mailed enough to convince a hearing officer or administrative law judge that the duty to report was met, or must the provider have objective proof of delivery also? The regulations and the accompanying federal register notices promulgating them are silent on what “report” actually means. See, e.g., Potomac Medical Equipment, Inc. v. Centers for Medicare & Medicaid Services, DAB Decision CR3268, p. 8-9 (June 20, 2014). In spite of provider arguments to the contrary and the fact that the regulation does not require providers to submit enrollment applications via trackable mail, recent CMS Departmental Appeals Board decisions have interpreted the duty to report to require objective evidence that an application was delivered to the NSC. See id. In the Potomac case, the ALJ admitted that CMS regulations “do not required providers and suppliers [to] send documents by certified mail . . . .” Id. at p. 9. In the same sentence, the ALJ then states the following: “. . . however, if they fail to do so, they will be deprived of evidence they need to prove NSC received those documents.” Id. In spite of all arguments to the contrary and the admitted ambiguity in the regulations, the decision makers in Medicare revocation appeal cases seem to have found the duty to report to require objective proof of delivery.Based on the above, we all providers should do the following:

  • Send all initial applications and time-sensitive, required updates to your Medicare provider enrollment contractor using a tracked delivery services.  If you have proof of delivery from one of these services, it is much likelier that we will be able to reverse a revocation with a CAP than if you don’t have this proof.
  • Always make a complete copy of everything you submit, along with the outside of the envelope showing the address information or a copy of the completed shipping label.
  • Don’t wait to the last minute. Send your provider enrollment update forms to the contractor early enough so that if they don’t arrive at the contractor’s location when they should, you’ll have the time to re-send them before your deadline expires.
  • Use the buddy system. Have someone on your staff or even a friend review an application with you before you send it, verify that it is signed and dated, watch you make a copy and put the original application in the mailing envelope, review any shipping invoice or mailing envelope for accuracy, and watch you deliver the finished envelope to the mailing service. We know it sounds over the top, but if called on to testify to what happened, having a buddy with a clear and complete recollection of your actions to submit an application or update will go a long way toward convincing a hearing officer or ALJ that what you say happened actually did.

Also, providers should be aware of the evidentiary rules for reconsideration requests and the next level of appeal. A provider can send almost anything along with a written request for reconsideration…documents, photos, witness affidavits, etc. The reconsideration process is intended to allow the provider to make their case to the reconsideration hearing officer in whatever fashion they’d like. Be aware, however, that the rules are entirely different if a provider loses at reconsideration and moves on to the next appeal level.

If a provider loses at reconsideration, they have the option to appeal the decision to an Administrative Law Judge (ALJ) with the Department of Health & Human Services, Departmental Appeals Board (DAB). DAB appeals have specific procedural and evidentiary regulations, one of which states that a provider will not be permitted to submit new documentary evidence at the DAB level of appeal absent a showing of good cause. See 42 C.F.R. § 498.56(e). What this rule means is that a provider can submit all the testimony they like with a DAB appeal, but they generally won’t be permitted to submit any new documents that they didn’t submit at reconsideration. For this reason, it is very important that providers carefully and thoroughly collect and submit all the documents that they think are relevant to their case with their reconsideration request. Assistance for experienced legal counsel with identifying those documents that might be helpful and developing legal arguments that may help your reconsideration request be successful can be invaluable at this stage. Having handled a number of both reconsideration requests and DAB appeals, our Firm is well-equipped to assist providers with identifying critical documents and other evidence and developing effective legal arguments to submit with a reconsideration request.

V.   Revocation and Reimbursement.

When a provider receives a revocation letter, the effective date of revocation may be a few days or weeks later, or may even pre-date it.  Providers need to understand that they won’t receive payment for any services provided to Medicare beneficiaries after the revocation effective date unless they are successful in an appeal.  This can mean a 60 day disruption in payment, a 4 month disruption, a 12 month disruption or a two or three year period where the provider can’t participate in the Medicare program. That can be very challenging to downright impossible for some providers to survive.

When considering your appeal options, keep in mind that CAPs typically are processed in 30 to 60 days after they are submitted. Reconsideration appeal decisions similarly take somewhere between 30 to 60 days after all documents are submitted to the hearing officer by the provider. Finally, DAB appeals typically take 180 days from the date of filing to receive a decision. If a provider were to pursue an appeal all the way through the DAB stage, it is not uncommon for the entire multi-level appeal process to take a year. If successful, the provider’s billing rights are typically reinstated back to the date of revocation.  Be aware, however, that the reinstatement process can often take a month or more.

If a provider chooses not to appeal, they will ordinarily be subjected to a re-enrollment bar of between 1 and 3 years, depending on the reason or reasons for the Medicare revocation action. It is important to take these time frames and the nature of a provider’s business, payor mix, overhead costs, reserves, chances of success and other factors into consideration when deciding whether a CAP, a reconsideration, and if necessary, a DAB appeal makes sense. Because we have handled a number of these cases, Liles Parker can help you weigh your options and make the best decision for your business.

VI.  We Can Help.

The attorneys at Liles Parker have extensive experience handling Medicare revocation appeals at all levels.  If you have received a revocation notice and want help, please contact us. Our goal is to help our clients have the best possible chance of success in any appeal.

Jennifer Papapanagiotou Healthcare AttorneyJennifer Papapanagiotou is a Partner at Liles Parker.  Jennifer has extensive experience representing health care providers and suppliers around the country in Medicare revocation matters and cases.  Should you have any questions regarding these complex issues, please give her a call.  For a free initial consultation, please call Jennifer at:  1(800) 475-1906.

Small Business Administration Releases Express Bridge Loan Pilot Program for COVID-19

Download PDF

Express Bridge Loan Pilot Program COVID-19(March 26, 2020): The Small Business Administration (“SBA”) announced an Express Bridge Loan Pilot Program on March 25, 2020.[1]   The Express Bridge Loans are available to businesses, including health care providers, to provide economic relief for businesses impacted by the Coronavirus Disease (COVID-19) while they await long-term disaster financing.[2]

 

I.   Background:

The Express Bridge Loan Pilot Program was released by the SBA in October 2017 and was created to supplement the SBA’s ability to grant direct disaster loans.[3]  The program provides “expedited guaranteed bridge loan financing for disaster-related purposes” to any small business that is located in a Presidentially-declared disaster area[4] while the business awaits long-term financing, regardless of whether the long-term financing is sought through the SBA disaster loan program.  The Express Bridge Loan Program includes a “streamlined underwriting process” and is designed to “minimize the burden” of applying for a small business loan.[5]

II.   COVID-19 Expansion of the Express Bridge Loan Program:

The SBA expanded its Express Bridge Loan Program, effective March 25, 2020,[6] to include all small businesses impacted by COVID-19 Emergency Declaration.[7] This proclamation includes all states, U.S. Territories, and the District of Columbia. Express Bridge Loans can be approved for health care providers through March 13, 2021.

Express Bridge Loans may be granted at a maximum amount of $25,000 for a loan term of 7 years.  The maximum allowable interest rate is 6.5% over the Prime rate, regardless of the maturity of the loan.[8] A lender may charge an applicable fee of 2% of the loan amount (or $250), whichever is greater.[9] Lenders are not required to take collateral for Express Bridge Loans. The minimum accepted credit score is a FICO Small Business Scoring Service Score of 130.

a. Who is Eligible for an Express Bridge Loan?

Any small business located in any U.S. state, territory, or the District of Columbia that was operational on March 13, 2020.

b. How Does a Health Care Provider Qualify for an Express Bridge Loan?

A health care provider interested in applying for an Express Bridge Loan must demonstrate that it does not have credit available elsewhere.[10]  This can be achieved by having a lender[11] certify on a Lender’s Application for Loan Guaranty Form (SBA Form 1920) that the provider does not have the ability to obtain some or all of the requested loan amount from a non-Federal source, including from the lender completing the form, without SBA assistance.  The lender must also document that the provider / applicant had an operating business located in a disaster area on March 13, 2020, which was adversely impacted by COVID-19.

The provider / applicant must also complete the SBA 7(a) Borrower Information Form (SBA Form 1919). This form should be submitted to the provider’s lender. The form requires information about each of the applicant’s principals, which includes:

  • Sole proprietors;
  • For a general partnership: all general partners and all limited partners owning 20% or more of the equity of the business; or any partner that is involved in the management of the business;
  • For a corporation: all owners of 20% or more of the corporation, and each officer and director;
  • For limited liability companies: all members owning 20% or more of the company, each officer, director, and managing member;
  • Any person hired by the business to management day-to-day operations (“key employees”); and
  • Any Trustor (if the business is owned by a trust).

A separate SBA Form 1919 should be completed and signed by each of the above principals.[12] Finally, the lender must a signed IRS Form 4506-T to obtain an IRS transcript before it disburses the loan.[13]

C. How Soon Will a Provider Receive an Express Bridge Loan Payment?

The first disbursement of an Express Bridge Loan “should occur” within 45 days of the lender’s receipt of an SBA loan number. Disbursement must occur within 90 days of receipt of an SBA loan number or the loan will be cancelled.[14]  The SBA “endeavors” to provide loan numbers within one business day of receipt of the application (if filed through the SBA’s electronic transmission system, “E-Tran”).

III.   Conclusion:

The Federal Government is working with the SBA to make emergency funds available as quickly as possible to providers affected by COVID-19. Liles Parker attorneys are closely monitoring the available programs and are available to assist health care providers with the loan process and to answer any other concerns in response to this National Emergency.

Ashley Morgan is a Senior Associate at the health law firm, Liles Parker, PLLC.  Ms. Morgan represents health care providers and suppliers around the country in a wide variety of regulatory matters.  These include but are not limited to Medicare revocation, suspension and deactivation actions, prepayment reviews, postpayment claims audits, and State Board licensure matters.  Ms. Morgan is also assisting health care providers and suppliers adversely affected by COVID-19 with the completion and submission of SBA business loans.  For a free consultation regarding your needs, please give Ms. Morgan a call.  She can be reached at (202) 298-8750 or toll-free at 1 (800) 475-1906.

[1] Express Bridge Loan Pilot Program Guide, Small Business Administration, https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[2] COVID-19 SBA Loan Support May be Available for Qualified Health Care Providers, Liles Parker PLLC (Mar. 25, 2020) https://www.lilesparker.com/2020/03/25/covid-19-sba-loan/ (last accessed Mar. 26, 2020).

[3] 82 Fed. Reg. 47958, Express Bridge Loan Pilot Program; Modification of Lending Criteria (Oct. 16, 2017) (codified at 13 CFR Part 120).

[4] Current Declared Disasters, Small Business Administration, https://disasterloan.sba.gov/ela/Declarations (last accessed Mar. 26, 2020).

[5] Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 3, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[6] According to the SBA the expansion of the Express Bridge Loan Program will be published in the Federal Register. Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 3, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[7] This Emergency Declaration was issued by President Trump on March 13, 2020. Donald Trump, Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, The White House, Mar. 13, 2020, https://www.whitehouse.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-novel-coronavirus-disease-covid-19-outbreak/ (last accessed Mar. 26, 2020).

[8] Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 7-8, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[9] An SBA Form 159 must be completed and signed by the applicant and lender if the lender charges an application fee. Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 11, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[10] 42 C.F.R. § 120.101.

[11] The lender must have an existing banking relationship with the provider/applicant as of the date of the applicable disaster. Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 9, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[12] SBA 7(a) Borrower Information Form, Small Business Administration (SBA Form 1919) (OMB Control No. 3245-0348) (Exp. Date July 31, 2020).

[13] Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 11-12, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

[14] Express Bridge Loan Pilot Program: Program Guide v.2, Small Business Administration, Mar. 25, 2020, p. 12, available at: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide (last accessed Mar. 26, 2020).

COVID-19 SBA Loan Support May be Available for Qualified Health Care Providers

Download PDF

A COVID-19 SBA Loan May be Available for Your Health Care Practice.(March 25, 2020):  The Small Business Administration (SBA) offers loans to small businesses through community lenders.  The SBA acts as guarantor for these loans. In addition to the traditional lending, the SBA is also authorized to offer disaster assistance to businesses, renters, and homeowners who are located in regions with “declared disasters.”[1]  Small businesses impacted by Coronavirus (COVID-19) are eligible to apply for Disaster Loan Assistance from the SBA.[2]  As of January 31, 2020, individual states and the District of Columbia have been declared disaster areas.[3] These Economic Injury Disaster Loans (Disaster Loans or COVID-19 SBA loans) may be used by businesses to pay “fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.”[4]  The SBA may offer up to $2 million in Disaster Loan assistance with repayment options up to 30 years at an interest rate of no more than 3.75% for small businesses without credit available elsewhere.[5] If a business is a major source of employment, then SBA may waive the $2 million statutory limit.[6]

How can you apply for COVID-19 SBA loan?  The SBA utilizes a three-step process to administer disaster loans (such as those related to COVID-19 losses).  First, an applicant must submit an application for a Disaster Loan.  The SBA encourages online applications, but paper forms are available.[7] Second, the SBA will review the applicant’s credit and eligibility.  Third, the SBA will prepare and send loan closing documents and make an initial disbursement.  The initial disbursement for economic injuries is $25,000.[8]

Small businesses must complete several forms and provide the following information to apply for a Disaster Loan / COVID-19 SBA Loan [9]:

  • A Disaster Loan Application (SBA Form 5) must be filed.

  • A Tax Information Authorization (IRS Form 4506T) must be completed and signed by each applicant, each person owning 20 percent or more of the business, each general partner or managing member, and, any owner who has greater than 50 percent ownership in an affiliate business.

    • Affiliates include, but are not limited to, business parents, subsidiaries, and / or other businesses with common ownership or management.
  • The applicant must provide complete copies (including all schedules) of the business’s most recent Federal income tax return. An explanation may be submitted if a copy of the income tax return is not available.

  • A Personal Financial Statement (SBA Form 413) must be completed, signed, and dated by: (1) the applicant, (2) each principal owning 20% or more of the applicant business, and (3) each general partner or managing member.

Each form requires detailed information and it is critical to accurately complete the forms to avoid delays in processing or requests for additional information. Liles Parker attorneys are available to assist health care providers with the SBA Disaster Loan application process and to answer any other concerns in response to this National Emergency and your possible eligibility for a COVID-19 SBA loan.  For a free consultation, call Ashley Morgan at (202) 298-8750 or toll-free at 1 (800) 475-1906.

[An updated article dated March 26, 2020, titled “Small Business Administration Releases Express Bridge Loan Pilot Program for COVID-19” is available at this link.]

Ashley Morgan is a Senior Associate at the health law firm, Liles Parker, PLLC.  Ms. Morgan represents health care providers and suppliers around the country in a wide variety of regulatory matters.  These include but are not limited to Medicare revocation, suspension and deactivation actions, prepayment reviews, postpayment claims audits, and State Board licensure matters.  Ms. Morgan is also assisting health care providers and suppliers adversely affected by COVID-19 with the completion and submission of SBA business loans.  For a free consultation regarding your needs, please give Ms. Morgan a call.  She can be reached at (202) 298-8750 or toll-free at 1 (800) 475-1906.

[1] Disaster Assistance, Small Business Administration, https://www.sba.gov/funding-programs/disaster-assistance (last accessed Mar. 25, 2020).

[2] Economic Injury Disaster Loans, Small Business Administration, https://disasterloan.sba.gov/ela/Information/EIDLLoans (last accessed Mar. 25, 2020).

[3] A list of Declared Disasters is available on the SBA website. Current Declared Disasters, Small Business Administration, https://disasterloan.sba.gov/ela/Declarations (last accessed Mar. 25, 2020).

[4] SBA to Provide Disaster Assistance Loans for Small Businesses Impacted by Coronavirus (COVID-19), Release No. 20-24, Small Business Administration, Mar. 12, 2020, https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-provide-disaster-assistance-loans-small-businesses-impacted-coronavirus-covid-19 (last accessed Mar. 25, 2020).

[5] The interest rate for non-profits is 2.75%. Id.

[6] U.S. Small Business Administration Fact Sheet – Economic Injury Disaster Loans – Texas Declaration #16381: Incident: Coronavirus (COVID-19), Small Business Administration, available at: https://disasterloan.sba.gov/ela/Declarations/DeclarationDetails?declNumber=6064043&direct=false (last accessed Mar. 25, 2020).

[7] The online application portal for disaster loans, where you can also access paper applications is available here.

[8] Three Step Process: Disaster Loans, Small Business Administration, https://www.sba.gov/sites/default/files/files/Three_Step_Process_SBA_Disaster_Loans.pdf (last accessed Mar. 25, 2020).

[9] The SBA Schedule of Liabilities form (SBA Form 2202) may be used to identify all fixed debts to assist applicants in completing these forms.

 

Overview of Dental Claims Audits and Investigations by Medicaid and Private Payors in 2019

Download PDF

Audits of Dental Claims and Dental Fraud Investigations are Increasing.(March 4, 2020):  Many dentists and dental practices around the country are glad that 2019 is behind us.  Last year was a banner year for law enforcement investigators and administrative auditors of dental claims.  Federal and State prosecutors around the country actively pursued both civil and criminal cases against individual dentists for a variety of offenses.  Notably, a number of the defendants prosecuted by the government were first identified as engaged in wrongdoing by Unified Program Integrity Contractors (UPICs) conducting Medicaid dental claims audits and private payor Special Investigative Units (SIUs) reviewing dental claims submitted by a practice for payment.  In this article, we examine the administrative, civil and criminal cases that were brought against dentists in 2019 in order to identify the conduct that led to the imposition of overpayments, the imposition of civil penalties by the government, and in some instances, the criminal prosecution of dentists for various violations of law.

I.   Administrative Dental Claims Audits Expanded in 2019:

  • Medicaid Claims Audits.

Almost a decade ago, the enactment of the Affordable Care Act[1] made it possible for state Medicaid programs to greatly increased their eligibility criteria and the scope of services offered to program beneficiaries. While eligible child enrollees were already receiving dental benefits, in many states, the number of adults qualifying for Medicaid dental benefits doubled. Not surprisingly, as Medicaid dental services have grown, the costs associated with these benefits also greatly expanded.  In response, Federal and State authorities have steadily devoted ever increasing resources to the audit and investigation of improper dental business, coding and billing practices.

The Centers for Medicare and Medicaid Services (CMS) has engaged a number of third-party, UPIC contractors (such as Qlarent, AdvanceMed, the CoventBridge Group, and SafeGuard Services LLC) to perform program integrity audits of Medicaid dental claims around the country.  It is important to keep in mind that UPICs are expressly required to refer suspected cases of fraud and abuse to law enforcement for further investigation and possible prosecution.  UPICs are also required to recommend the revocation of participating providers and suppliers that are non-compliant with Medicare regulations and policies.

Notably, several large private dental management companies, such as DentaQuest and Delta Dental also currently serve as dental plan administrators for various state Medicaid Advantage dental plans around the country.[2]  SIUs at DentaQuest, Delta Dental and other dental plan administrators have implemented a number of measures to identify and investigate instances of suspected fraud or improper dental billing practices.

  • DentaQuest, Delta Dental and Other Private Payor Dental Audits.

DentaQuest, Delta Dental and a number of other payors serve as administrators for private dental plans and various employer-sponsored dental insurance policies around the country.  In 2019,  private dental payors greatly expanded the scope and frequency of audits conducted by their SIUs.  Additionally, these private dental payors greatly increased their use of “prepayment review” and “payment hold” actions, both of which can adversely impact a dental practice’s cash flow and possibly cripple a practice’s ability to operate.

II.   Common Reasons for Denial Cited in Administrative Dental Audits by UPICs, DentaQuest and Delta Dental:

In 2019, the following reasons for denial were commonly cited by UPICs, DentaQuest and Delta Dental in audits we handled:

    • Failure to sign progress notes (either electronically or by hand). At first glance, you may feel that the failure to electronically-sign a dental progress note is a mere technical deficiency. Unfortunately, that isn’t necessarily the case, CMS contractors (such as UPICs) are actively denying dental claims if the associated progress note has not been signed by the rendering dentist. As set out in the Medicaid Program Integrity Manual[3] reflects, unsigned entries (referring to electronic and handwritten), shall be excluded from consideration when performing [a] medical review.”  Similarly, in several of the private dental payors cases that we handled, the payors denied claims that were not supported by signed progress notes and / or orders.  As a final point in this regard, please keep in mind that most State Dental Practice Acts include specific requirements mandating that progress notes, orders and treatment records be signed by the licensed dental professional who performed the service.
    • Billing for dental services not rendered. Unfortunately, this reason for denial has been a recurring theme cited by UPICs and SIUs alike when auditing dental records and claims for many years.  For example, recent private payor audits conducted have alleged that multiple instances were found where dentists billed for periodontal services (CDT Code D4331 – periodontal scaling and root planing) that were not performed based on the auditor’s review of the patient dental treatment records and radiographs in the fileSimilarly, insufficient documentation has been cited when denying these services based on failure to establish medical necessity. In these instances, the auditors noted that in order to diagnose and treat periodontal disease, dated pre-operative diagnostic quality radiographs and pre-operative periodontal charting is needed. Without these, periodontal disease cannot be properly diagnosed and periodontal scaling and root planing should not be conducted.
    • Misrepresentation of a non-covered service. In some respects, this improper practice is nothing more than another form of “billing for services not rendered. Simply put, in the recent cases we have seen where this has occurred, a dentist or dental practice has either purposely or erroneously characterized a non-covered dental service as a covered service. Keep in mind, the definition of a non-covered service varies from policy to policy. Additionally, the list of non-covered services under a specific policy may change from year-to-year. In any event, it is important that dental providers regularly check to ensure that the services being provided qualify for coverage and payment.
    • Misrepresentation of the provider of the dental service. This type of billing error is still commonly found in both dental and medical practices around the country. In the cases we have seen, “fraud” wasn’t the reason for the underlying misrepresentation on the ADA Claims form. In most instances, it was merely a matter of a credentialing delay. In other cases, dental practices appeared to believe that they were permitted to bill for the services under a concept similar to Medicare’s “Incident-To” ruleAlthough we have not seen a dental misrepresentation case of this type referred for criminal prosecution, it is important to remember that the ADA Dental Claims form is being electronically submitted to the health plan for payment.  Depending on the facts, an aggressive prosecutor could argue that such conduct constitutes were fraud. 18 U.S.C. §1343.
    • Unlicensed individuals found to have performed dental procedures. Generally speaking, we have seen two categories of cases where this has occurred. In the first example, a licensed professional failed to renew his Because of this administrative error, the dentist inadvertently performed dental procedures while his license had lapsed.  In the second example, a dental assistant or dental hygienist was found to have performed one or more dental procedures that were outside of their scope of practice. Both of these examples typically lead to claims denials.  They may also result in complaints to the State Dental Board.
    • Routine failure to collect the patient’s full payment or share of cost without notifying the carrier. Is your dental practice consistently collecting co-payments and deductibles that may be owed by a covered beneficiary?  In the case of non-government administered plan, the unsupported waiver of these amounts may constitute a breach of contract. However, if the dental plan is Federally funded, such a failure may constitute a violation of the Anti-Kickback Statute.
    • Misreporting dates to circumvent calendar year maximums or time limitations. The misreporting of dates in an effort to evade calendar year maximums and / or time limitations may constitute a violation of one or more State and Federal fraud statutes.
    • Failure to properly document support for medical necessity. Properly documenting medical necessity continues to be a problem. Over the last year, our reviews have found that there was often little detail provided to support medical necessity of pediatric dental treatments provided. For example, prophylaxis was typically provided because it was medically required. Although dental notes often indicated that plaque was visible, the notes often failed to  specify any areas of build-up. Also, the level of decay was typically not included to support services such as fillings and crowns.
    • Missing dental treatment plans / consent forms. Completed dental treatment plans and consent forms have frequently been found to be missing from patient dental records. The dental treatment plans that were included were typically signed by the pediatric dental patient’s parent, but the signatures were often not dated. Signatures should be dated and these dates should correspond with the date listed as the date of authorization noted on the claim form. Many of the dates of authorization for the “signatures on file” on the claim form were after the date of service, which is an error cited in recent audits.  

 Have you received a request for dental records from a government or private payor?  Take care.  You don’t want to inadvertently turn an administrative or civil audit into a criminal case.  Dental records, progress notes, x-rays and other documents must be signed and dated by the health care provider at the time the services are rendered or conducted.  In conducting your review, did you find that the claims documentation is legible and complete?  If not, change your practices now.  Wholesale efforts to go back and supplement incomplete documentation may constitute obstruction of justice if incorrectly handled.  Never make changes to a patient’s documentation or dental records without first discussing the issues presented with legal counsel so that you can ensure that a third party reviewing the updated records will not be misled as to the nature of the changes or revisions AND when the changes or revisions were made

In other words, your records must accurately show when changes, corrections or additions were made to the patient’s dental records.  Late entries to a record must be dated as such.  More than likely, government and private payor auditors will give very little (if any) credit to late entries or supplemental records unless the service being supplemental was recently performed.   The falsification of information in a patient’s dental record (or in other records presented to the government, its agents or private payor auditors) can constitute a criminal violation and could lead to much bigger troubles for you and your dental practice than a mere overpayment.

III.   Civil Investigations / False Claims Act Dental Cases Brought in 2019:

Last fiscal year, the Federal government won or negotiated over $3 billion in judgments and settlements under the civil False Claims Act. Of the $3 billion in settlements and judgments recovered by the Department of Justice this past fiscal year, $2.6 billion involved the health care industry. It is worth noting that these recoveries only reflect Federal funds, millions of dollars more were also recovered for State Medicaid programs.   Despite the fact that literally billions of dollars were recovered from health care providers and suppliers using the False Claims Act, very few of the settlements and judgments were related to dentists, dental practices and / or dental management companies.  Examples of False Claims Act dental recoveries made in 2019 include:

    • December 2019. In this case, the government alleged that from 2014 through 2015, the defendant dentist presented claims to the State Medicaid program for dental services that were never provided.  Connecticut’s Superior Court ordered the defendant to pay treble damages, along with a civil penalty of $1.5 million.
    • March 2019. In this case dental fraud case, after reviewing a sample of patient dental records, the State Attorney General’s Office found that a dental practice has defrauded the State Medicaid program.  To resolve the allegations, the defendant dentists agreed to pay $1 million under the State False Claims Act and agreed to be voluntarily excluded from participating in the Medicare and Medicaid programs.

 IV.   Criminal Prosecutions of Illegal Dental Business Practices in 2019:

As the case overviews below reflect, both Federal and State prosecutors aggressively prosecuted dentists for their illegal conduct in 2019.  Examples of the criminal prosecutions pursued in dental cases last year include:

    • October 2019.  Virginia.  In this case, a Virginia-licensed dentist was sentenced to nearly eight and a half years in prison for conspiracy to distribute prescription opioids and muscle relaxant pills without a legitimate medical purpose.  The government alleged that the defendant was involved in an elaborate scheme to prescribe opioids such as hydrocodone and oxycodone pills for his personal use and the use of his co-conspirators
    • October 2019. Missouri. Federal prosecutors allege that two dentists at a Missouri dental practice participated in two different schemes to defraud Medicaid.  In the first scheme, patients were allegedly provided a $50 Ortho-Tain mouth pieces designed to straighten teeth but the Medicaid program was then billed $700 for a “speech aid prosthesis.” In the second scheme, federal prosecutors say the dentists provided dentures and other dental services to patients who did not qualify for Medicaid reimbursement and then submitted claims to Medicaid anyway Federal prosecutors say these two schemes netted $885,748.
    • September 2019. Maryland. The dental practice owner (and former dentist) at a Maryland practice agreed to pay over $5.4 million in restitution and nearly $4 million in a forfeiture money judgment after pleading guilty to health care fraud for involvement in a $5 million-plus Medicaid fraud scheme. Authorities said the former dentist (who is currently serving a 16-year sentence for sexual assault of patients), used his dental practices to submit fraudulent claims to D.C. Medicaid for thousands of unprovided provisional crowns, which resulted in around $5.4 million worth of improper payments from the program between August 2012 and February 2016.
    • August 2019. Illinois. An Illinois dentist was indicted on 13 counts of health care and wire fraud after prosecutors say he billed Illinois Medicaid hundreds of thousands of dollars for dental procedures he never performed. The U.S. Attorney’s Office for the Southern District of Illinois stated. In all, it is alleged that Kim collected more than $700,000, which prosecutors want paid back to the state.
    • July 2019. Arkansas.  In the case, an Arkansas dentist received a five-year suspended prison term and was ordered to pay $33,383.05 in restitution, $100,149.15 in damages and $2,500 in fines after pleading guilty to defrauding Medicaid. Authorities said the dentist submitted more than 3,100 fraudulent claims to Medicaid for X-rays and various dental services between September 2015 and December 2017, which resulted in $186,461 worth of improper payments from the program.
    • June 2019. Tennessee.  A Tennessee dentist and practice owner was sentenced to two years and nine months in prison and was ordered to pay $965,448 in restitution after pleading guilty to conspiracy to commit health care fraud for orchestrating a scheme to defraud TennCare and other health care benefit programs. Authorities said the dentist caused the submission of fraudulent claims to TennCare and other health benefit programs for unprovided or incomplete dental work from November 2013 to January 2018.
    • June 2019. California.  A California dentist based out of Los Angeles was sentenced to more than three years in prison for health insurance fraud and was ordered to pay restitution of more than $1.4 million after pleading guilty to submitting fraudulent claims to multiple private insurers for unprovided dental care services.
    • April 2019.  New Jersey.  An unlicensed dentist from New Jersey was convicted in a $2 million fraud case in New York.  The unlicensed dentist was sentenced to two years in prison and ordered to pay restitution of almost $1 million after being convicted for his role in the $2 million health insurance fraud scheme.  Prosecutors allege that the unlicensed dentist worked as a dentist in Manhattan and conspired with others to pay kickbacks to patients and submit fraudulent claims to health insurers for unprovided dental services or services. 

V.   Steps a Dental Practice Can Take to Reduce Regulatory / Statutory Risk:

  • Don’t Ignore a Request for Dental Records from a Medicaid or Private Payor Auditor? 

It has been our experience that a significant portion of all requests for dental records and claims information are either overlooked or ignored by a dental practice.  This error can result in a payor terminating your agreement.   Legal counsel can often intervene on your behalf and obtain an extension of time in which to submit the requested documents. We have seen several cases where a dental practice’s failure to response to the payor’s records request in a timely fashion resulted in the automatic denial of the claims being audited.

  • Implement an Effective Dental Compliance Program.

First and foremost, it is recommended (and if you take Medicaid it is required by law) that you develop and implement an effective Compliance Program.  This would include an aggressive plan to conduct periodic internal audits of your dental claims to ensure that the services have been provided, fully documented, were medically necessary and were coded / billed properly. When was the last time you conducted an internal dental claims audit and examined whether the services you are providing fully reflect medical necessity requirements, are documented to meet the requirements of the payor, and are properly coded and billed? What did you find?  Who conducted the audit, someone from your dental practice, or an outside dental consultant?  Be sure and engage any outside dental consultant through legal counsel.

  • Screen Your Employees, Contractors and Agents Against Available Screening Databases.

Dental providers should screen their applicants, clinical staff, administrative staff, contractors, vendors and agents on a monthly basis.  At this time, there are more than 40 different databases that need to be checked.  These databases include:

(1) List of Excluded Individuals and Entities (LEIE). Maintained by HHS-OIG.
(2)
System for Award Management (SAM). Maintained by the General Services Administration.
(3)
40 State Medicaid Exclusion Registries. Maintained by either the State Attorney General’s Office or the State Medicaid Fraud Control Unit (MFCU).

Questions regarding your screening obligations?  Call the helpful folks at Exclusion Screening, PLLC with any screening questions.  They can be reached at: 1 (800) 294-0952

  • Call a Qualified Health Law Attorney for Help in Responding to a Dental Audit.

 Hopefully, you won’t face a Medicaid or private payor dental audit in the near future.  If you do, it is essential that you engage qualified legal counsel to guide you through the process.  A knowledgeable, experienced lawyer can interact directly with the payor and work towards a reasonable resolution of the case.  Legal counsel can also provide guidance with respect to payor documentation, coding and billing requirements. Importantly, the Liles Parker attorneys who would represent you and your practice in a dental audit are both experienced health lawyers AND have achieved certification as Certified Medical Reimbursement Specialists (CMRSs) by the American Medical Billing Association (AMBA) and / or Certified Professional Coders (CPCs) by the American Academy of Professional Coders.

Are you facing a dental claims audit or investigation? We can help.  For a free consultation, please call Robert at:  1 (800) 475-1906.

Dental Claims AuditsRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with dental claims audits and investigation.  Is your dental practice being audited? Give us a call.  For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.

[1] Signed into law by President Obama on March 23, 2010.

[2] As Medicaid dental rolls have increased, many states have chosen to engage a third-party to administer their Medicaid dental programs, such as Delta Dental or DentaQuest.  At last count, Delta Dental administers dental programs serving more than 80 million Americans, many of whom are participants in a government-sponsored program.  Similarly, DentaQuest administers dental programs serving over 25 million beneficiaries, most of whom are covered by a government-sponsored program.

[3] Medicaid Program Integrity Manual, 1.7.5 “Medical Review for Program Integrity Purposes.”

Next Page »