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Home Health Revocation Actions by Medicare are Expanding Around the Country

September 28, 2020 by  
Filed under Home Health & Hospice

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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Rule, the enrollment and Medicare billing privileges of an increasing number of home health agencies nationwide have been revoked.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).

Medicare Revocation Actions Resulting from Telemedicine Evaluations are on the Rise!

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Medicare Revocation Actions are Increasing Around the Country(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 physicians, NPs and PAs in connection with Medicare revocation actions, 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).

Responding to a Medicare Revocation Action Effective Prior to November 4, 2019

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

(UPDATE:  March 9, 2020):  A Medicare revocation action can destroy the financial viability of your practice.  Moreover, effective November 4, 2019, the reasons for which a health care provider or supplier may have its Medicare billing privileges revoked have greatly expanded. Our article titled “42 CFR Sec. 424.535(a) Medicare Revocation Actions — Your Medicare Billing Privileges Can be Revoked For a Host of New Reasons. Are You Facing a Medicare Revocation Action? If so, You Must Act Fast to Preserve Your Appeal Rights,” discusses these revocation reasons in much more detail).  After reviewing the materials below, we strongly recommend that you also review the updated article linked above. 

The information in this article only applies to a Medicare revocation action with an effective of November 3, 2019 or earlier.  During 2015, more than 1.2 million non-institutional health care providers participated in the Medicare program. [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 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

Unfortunately, if a physician, falls out of compliance with applicable enrollment requirements, his or her Medicare billing privileges may be revoked. Typically, revocation actions associated with this reason result from a determination by a Medicare contractor that a physician or his / her practice no longer meets all of the necessary registration requirements.  When this occurs, the contractor notifies the CMS Provider Enrollment & Oversight Group with the pertinent provider information and its recommendation that a revocation action be authorized.

For instance, Medicare requires that physician services be furnished by a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the state in which he or she practices. The Medicare Program Integrity Manual (MPIM) further elaborates on this basis for revocation in cases where a physician is not appropriately licensed: “…situations in which § 424.535(a)(1) may be used a revocation reason include [where]…[t]he provider or supplier is not appropriately licensed.” MPIM Ch. 15 § 15.27.2(A)(1)(c).

This basis for revocation is especially pertinent in a large state like Texas, where the Texas Medical Board remains active with respect to disciplinary actions.  At its June 10, 2016 meeting, the Texas Medical Board disciplined 78 licensed physicians and issued one cease and desist order. A significant number of these disciplinary actions resulted in licensure revocation or suspension.  Each of these adverse disciplinary actions would likely result in the revocation of a physician’s billing privileges.

  • Failure to Report.

Should a provider fail to comply with its reporting requirements under 42 C.F.R. 424.516(d)(1)(ii) and (iii), which include “any adverse legal action” and / or “a change in location,” CMS may revoke the provider’s billing privileges.  Additional reasons for revocation we have seen also include:

  • Provider or Supplier Conduct.

 Under this regulatory provision, if a provider (or supplier), or an owner, managing employee, authorized or designated official, medical director, supervising physician or other health care personnel of the provider (or supplier) is excluded from the Medicare, Medicare or other federal health care program, the provider’s Medicare number can be revoked and its billing privileges terminated.  This basis for revocation is especially harsh – it can be imposed based on the fact that a provider has failed to adequately screen out employees, staff and contractors that have been excluded from participation in one or more federal health benefit programs.  Debarment or suspension from federal procurement and nonprocurement programs can also result in revocation.

  • Felonies.

If a provider (or supplier) or any owner or managing partner of the provider (or supplier) has been convicted of a federal or state felony within the past 10 years and CMS determines that the offense is detrimental to the best interest of the Medicare program, the agency may revoke the provider’s Medicare number.

  • False or Misleading Information.

If a provider or supplier has certified as “true” false or misleading information on an enrollment application, its Medicare number may be revoked.  Importantly, such an action may also constitute a violation of criminal law due to the submission of a “false statement” to the government.

  • On-Site Review.

If a program integrity contractor (such as a Unified Program Integrity Contractor (UPIC)) visits your office and makes a determination that your practice or agency is no longer operational or fails to meet another Medicare enrollment requirement, the UPIC will recommend to CMS that your Medicare billing privileges be revoked.  This often occurs when a provider moves offices and either fails to notify Medicare of the move in a timely fashion OR a Medicare contractor claims that it never received notice of the change in location.  Importantly, it isn’t merely enough for a provider to be able to show that notice of the change in location was actually sent – you need to be able to prove that the Medicare contractor RECEIVED the notice.

  • Misuse of Billing Number

If a provider knowingly sells its billing number or allows another individual or entity to use its billing number, CMS can revoke the provider’s billing privileges.  Exceptions are permitted for a valid reassignment of benefits or a change of ownership.

  • Abuse of Billing Privileges.

Should CMS determine that a provider has engaged in abusive billing practices, it can revoke the provider’s billing privileges.  Examples cited in the regulation include:

Billing for services provided to a Medicare beneficiary that is deceased.

Billing for services when either the physician or the beneficiary is not in the state or the country when the service was supposedly rendered.

Billing for services that require certain testing equipment when that equipment was not available at the location where the services were allegedly rendered.

CMS may also revoke a provider’s billing privileges if it determines there is a pattern or practice of submitting claims that fail to meet Medicare’s requirements.  When considering this basis for revocation, CMS considers:

The percentage of claims that were denied.

The reasons for claims denials.

Whether or not the provider has a history of previous final adverse actions.

The length of time over which a pattern or practice or improper billing has taken place.

How long the provider has been enrolled in the Medicare program.

Any other information that CMS feels is relevant in its determination of whether a pattern or practice of improper billing has occurred.

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

The revocation of a provider’s billing privileges can destroy the provider’s practice.  A provider will be barred from participating in the Medicare program for a minimum of one to three years, depending on the basis for revocation and the facts in a particular case.  Once this period has expired, a provider will be required to submit a new enrollment application to CMS for its review and consideration.

III.  Responding to Medicare Revocation Action:

What actions should you take if your Medicare billing privileges have been revoked?  While a provider may choose to represent themselves in the appeal of a revocation action, we recommend that you engage experienced legal counsel to assist you with this process. A well written letter telling your side of the story is unlikely to persuade a reviewer at reconsideration that your billing privileges should be restored.  Successful defenses of revocation actions typically require a careful analysis of both the facts and the law.  Liles Parker attorneys have represented a wide variety of health care providers and suppliers in Medicare revocation actions.  Please give me a call for a free consultation on your case.

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, 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.

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.

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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 is not 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?

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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,
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Robert W. Liles Healthcare Attorney

Robert W. Liles,
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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

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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.

Medicare Revocation Action: Steps for Avoiding and Appealing

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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.

Robert W. Liles, J.D., M.B.A., M.S.

January 16, 2021 by  
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Robert W. Liles is a Health Law Partner at Liles Parker.
Managing Member
Office: (202) 298-8750
Facsimile: (202) 337-5804
rliles@lilesparker.com

He has been peer rated for high professional achievement in 2020Robert Liles has been rated "AV" by Martindale-HubbellNamed one of "America's Most Honored Lawyers"Robert Liles has been named a "Top-Rated Lawyer for 2020"Robert Liles has been named a "Top Attorney" by AVVO

Robert W. Liles — Practice Concentration and Experience:

Robert W. Liles has worked in regulatory compliance as a Federal prosecutor and as defense counsel, for more than 25 years. This has provided a unique perspective on the challenges faced by clients in highly regulated industries such as health care, banking and finance. Mr. Liles focuses his practice on fraud defense, internal audits, investigations, compliance and regulatory matters. He has represented both individuals and entities in administrative, civil and criminal proceedings.  Robert has achieved an “AV” rating by Martindale-Hubbell, the highest rating that may be awarded to an attorney.  He has also been rated “10.0” (out of a possible 10.0) by AVVO, a nationwide attorney rating service.

Mr. Liles first began working in management after receiving both an M.B.A. and, subsequently, an M.S. in Health Care Administration.  After graduating from law school, he was hired as an Assistant United States Attorney (AUSA) in the Southern District of Texas (SDTX) where he primarily handled False Claims Act cases.  He was later promoted to serve as Chief of the Financial Litigation Unit.

Shortly after the passage of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Mr. Liles was asked to serve as our country’s first National Health Care Fraud Coordinator.He was detailed to Washington, DC and was later promoted to the position of Deputy Director, Legal Programs, for the Executive Office for U.S. Attorneys (EOUSA), a component of the United States Department of Justice (DOJ).  While at EOUSA, he advised Federal prosecutors around the country on civil and criminal fraud statutes, schemes, investigative tools, privacy concerns, and compliance issues. He was instrumental in writing and implementing DOJ guidance on the judicious use of the False Claims Act.  Notably, while a Federal prosecutor, he was asked by the Office of Inspector General (OIG) to travel overseas and train Ukrainian prosecutors and investigators on health care fraud and abuse issues.  Mr. Liles also regularly taught OIG agents and investigators at the Federal Law Enforcement Training Center (FLETC), on Jekyll Island.

Robert’s health care management education / background and his prior experience as a Federal prosecutor provide a real-world perspective when advising individuals and entities on enforcement and regulatory compliance issues.

Financial / Regulatory Matters Handled:

  • Managed our team in an investigation and document production responding to a subpoena directed to a large, international bank, by the Department of Treasury, Office of Foreign Asset Control (OFAC).
  • Managed our production team’s efforts in responding to a subpoena for documents by the Securities and Exchange Commission (SEC) that was directed to our client, a U.S. bank.
  • Represented bank officer and defended his deposition by the Office of the Comptroller of the Currency (OCC).
  • Represented large international bank in a False Claims Act case.

Health Care Regulatory Matters Handled:

  • Represented licensed health care professionals in State Licensure Board proceedings.
  • Represented entities in connection with UPIC and ZPIC audits, and investigations by OIG.
  • Worked with a variety of providers and suppliers to develop and implement an effective Compliance Plan.  Conducted training for staff on statutory and regulatory requirements to be followed.
  • Diligently reviewed (and when appropriate), challenged the validity of the statistical methodology used to extrapolate alleged damages in audit cases of Medicare, Medicaid and private payor medical, home health, DME and dental claims.
  • Directed internal audit of non-profit corporate operations, policies and procedures to better ensure statutory and regulatory compliance.
  • Conducted internal investigation of alleged malfeasance of corporate employees.  Provided recommendations for the implementation of safeguards to better prevent improper employee conduct.
  • Worked with corporate clients to properly incorporate privacy provisions into the client’s overall effective compliance strategy.
  • Provided assessment and advice to corporate clients on proposed business models, addressing both the prohibition against improper self-referrals, Federal/State Anti-Kickback Act concerns, and violations of Federal/State False Claims Act provisions.
  • Represented individuals and entities in ongoing litigation under the False Claims Act, addressing concerns raised by DOJ and State prosecutors.
  • Managed large document productions on behalf of corporate clients in response to Grand Jury, DOJ and Federal agency subpoenas. Advised investors and investment companies with respect to health care sector issues and the possible impact of health care fraud enforcement activities.

Education:

  • South Texas College of Law, Houston, Texas (J.D.)
  • Trinity University, San Antonio, Texas (M.S. in Health Care Administration)
  • Trinity University, San Antonio, Texas (Master’s in Business Administration)
  • University of the South, Sewanee, Tennessee (B.A. in Economics)

Certifications

  • Certified Professional Coder (CPC)
  • Certified Medical Compliance Officer (CMCO)

Professional Affiliations:

  • Member, American Health Lawyers Association
  • Member, National Association of Criminal Defense Lawyers
  • Member, American Association of Professional Coders
  • Member, National Alliance of Medical Auditing Specialists
  • Member, American College of Legal Medicine
  • Member, Christian Trial Lawyers Association
  • Compliance Counsel, American Medical Billing Association
  • Compliance Counsel, American Association of Clinical Endocrinologists
  • Faculty Instructor, Practice Management Institute

Recent Awards:

  • Top Rated Lawyers of Washington, DC (As Chosen by Peers)(2020).
  • America’s Most Honored Professionals:  Top 1% (2017-2020).
  • Rated “AV Preeminent” Highest Possible Peer Review Rating in Legal Ability and Ethical Standards (2003 — 2020).
  • Rated “10.0,” AVVO’s Highest Rating for Attorneys. (2020)
  • Top Rated Lawyers in Washington, DC & Baltimore (as Published in the Wall Street Journal — Based on Martindale-Hubbell Ratings)(December 2015).

Federal Admissions:

  • U.S. Supreme Court
  • District of Columbia District Court
  • Maryland District Court
  • Texas Northern District Court
  • Texas Southern District/Bankruptcy Court
  • Texas Western District Court

State Admissions:

  • District of Columbia
  • State of Texas

Presentations and Speaking Engagements (Partial Listing):

  • National Webinar, American Medical Billing Association (AMBA). “10 Steps You Can Take to Improve Your Compliance Efforts in 2021″ (2021).
  • National Webinar, Texas Association of Home Care and Hospice (TAHCH).  Problems and Pitfalls With Home Health and Hospice EHR Systems — Address These Software Deficiencies Now, Before it is Too Late!”  (2020).
  • National Webinar, American Medical Billing Association (AMBA).  Compliance Pitfalls With Physician Practice EHR Systems — Deficiencies You Must Address Now!”  (2020).
  • National Webinar, Texas Association of Home Care and Hospice (TAHCH).  “An Overview of the CMS Preclusion List”  (2020).
  • Practice Management Institute, Abilene TX. “Compliance Officer Certification Course” (2020).
  • National Webinar, National Alliance of Medical Auditing Specialists (NAMAS). “Structuring an Effective Compliance Program:  The Ins and Outs of How to Ensure You Are On the Right Track.”  (2020).
  • National Webinar, National Alliance of Medical Auditing Specialists (NAMAS). “I Have an Excluded Employee — What Should I Do?” (2020).
  • G2:  Lab Reimbursement Summit 2019, Charlotte, NC.  “Government Enforcement Efforts Targeting Labs:  Are Your Marketing Practices Compliant with the Law.”  (2019).
  • American Association of Orthopedic Executives (AAOE), Arlington, VA. “Regulatory Enforcement Actions: Compliance Issues Impacting Orthopedics.” (2019).
  • Florida Behavioral Health Conference, Orlando, FL.  “Government Enforcement Efforts Targeting Substance Abuse Treatment Clinics — Are Your Marketing Practices Compliant with EKRA and Other Applicable Laws?”  (2019).
  • National Webinar, American Association of Clinical Endocrinologists. “EKRA, the Anti-Kickback Statute and State All-Payor Laws — Steps Your Endocrinology Practice Should Take to Stay Out of Trouble.”  (2019).
  • West Coast Symposium on Addictive Disorders (WCSAD), La Quita, CA.  “Enforcement and Regulatory Risks Facing CEOs, Managers and Physicians of Addiction Medicine Clinics.” (2019).
  • Annual Conference — American Alliance of Orthopedic Executives (AAOE), Nashville, TN. Regulatory Risk Areas Facing Orthopedic Practices in 2019.”  (2019).
  • Annual Conference, American Association of Professional Coders (AAPC), Las Vegas, NV. Potential Liability of Coders and Billers in a Health Care Fraud Case.” (2019).
  • National Webinar, Liles Parker.  “Top 10 Steps You Can Take to Improve Compliance and Stay Out of Trouble with the Government — Parts 1 and 2.”  (2019).
  • DHR Health — Partnership Meeting, Edinburg, TX.  An Overview of Current Health Care Fraud Enforcement Efforts – Steps You Can Take to Improve Compliance and Stay Out of Trouble.”  (2019).
  • National Webinar, Exclusion Screening, “Exclusions Screening of Vendors and Contractors — Who Should You Screen?”  (2019).
  • National Webinar, American Medical Billing Association (AMBA).  Third-Party Billing Agreements: Does Your Contract Protect Your Interests? Is it in Violation of Federal or State Requirements?” (2019).
  • Endocrine University: American Association of Clinical Endocrinologists (AACE).  Mayo Clinic, Rochester, MN.  “The Business of Medicine.”  (2019).
  • American College of Legal Medicine, 11th Annual Ethical and Legal Aspects of Dentistry, Los Angeles, CA.  Current Audit and Government Enforcement Efforts Against Dentists and Dental Practices.”(2019).
  • National Webinar.  Exclusion Screening. Disclosure Risks When Enrolling in Medicare and Medicaid.”(2019).
  • National Webinar, National Alliance of Medical Auditing Specialists (NAMAS). “2019 OIG Work Plan Update.”  (2019).
  • Annual Conference, Cape Cod Symposium on Addictive Disorders (CCSAD), Hyannis, MA. Enforcement and Regulatory Risks Facing CEOs, Managers and Physicians of Addiction Medicine Clinics.” (2018)
  • Annual Conference (AOA-36), Association of Otolaryngology Administrators, New Orleans, LA, “Health Care Employment Law Update. From Marijuana to Sexual Harassment.” (2018).
  • National Webinar, American College of Clinical Endocrinologists, “Endocrinologist Considerations When Negotiating a New Employment Contract AND When Leaving a Job.” (2018).
  • AAPC Alexandria, VA Chapter Conference, “Regulatory and Enforcement Risks to be Addressed by Professional Coders.”  (2018).
  • Annual Conference, American College Health Association, Washington, DC, “Workplace Violence in College Health Care Clinics.” (2018).
  • National Webinar, Exclusion Screening, Top Regulatory and Billing Risks Facing Dentists and Dental Practices.” (2018).
  • Quality & Compliance Conference, Home Care Alliance of Massachusetts, Worchester, MA, “ADRs, Prepayment Reviews, Post-Payment Audits and Suspensions – Navigating Medicare’s Administrative Appeal Process.” (2018).
  • Annual Retreat, Washington, DC, “The Criminalization of Pain. The Investigation and Prosecution of Physicians, Nurse Practitioners and Dentists based on Their Opioid Prescribing Practices.” (2018).
  • National Webinar, Exclusion Screening, “History and Current Status of Health Care Regulatory Enforcement Efforts.” (2018).
  • Endocrine University, American Association of Clinical Endocrinologists, Rochester, MN, “The Business of Medicine.”  (2018).
  • Annual Conference, American College of Legal Medicine, Charleston, SC, Top Regulatory and Billing Risks Facing Dentists and Dental Practices.(2018). 
  • National Conference, National Alliance of Medical Auditing Specialists, Orlando, FL, “Enforcement Efforts for 2018: What You Can Do to Prepare for the Upcoming Changes in Laws & Statutes.” (2017).
  • Annual Conference (AOA-35) , Association of Otolaryngology Administrators, Las Vegas, NV, “Emergency Preparedness and Workplace Violence.” (2017).
  • National Conference, National Alliance of Medical Auditing Specialists, Orlando FL, “History & Current Status of Healthcare Compliance Requirements.” (2017).
  • National Conference, American Medical Billing Association, Las Vegas, NV, “Vital Billing Contract Terms for Billers and Health Care Providers.” (2017).
  • National Conference, The Business of Pain Medicine, “IPM Compliance.” (2017).
  • National Webinar, American Association of Healthcare Administrative Management, “Effective Compliance Plans — How is Law Enforcement Evaluating Your Efforts?” (2017).
  • New Directions in Home Care & Hospice Conference, Dixon Healthcare Solutions, Las Vegas NV, “New Developments in Regulatory and Judiciary Enforcement of Home Health Agencies.” (2017).
  • National Webinar, American Medical Billing Association, “Employer Scrutiny and Screening for Current and New Employees and Providers.” (2017).
  • National Webinar, Texas Association for Home Care and Hospice, “Employer Scrutiny and Screening for Current and New Employees and Providers.” (2017).
  • Annual Conference, West Virginia State Medical Association, Charleston WV, “Employment Law and the Medical Practice. What are the Risks Facing Your Practice.”  (2017).
  • Annual Conference, West Virginia State Medical Association, Charleston WV, “ADRs, Prepayment Reviews, Postpayment Audits, Suspensions and Revocations – The Impact of these Administrative Enforcement Tools on a Physician Practice.” (2017).
  • National Webinar, Texas Association for Home Care and Hospice, “Reading the Tea Leaves – What are the Top Ten Risks Your Home Health Agency will Face in 2016.” (2016).
  • National Webinar, Texas Association for Home Care and Hospice, “Employer Scrutiny and Screening for Current and New Employees and Providers” (2016).
  • National Webinar, Texas Association for Home Care and Hospice, “Pre-Claim Reviews – Is Your Agency Prepared?” (2016).
  • National Conference, Practice Management Institute, Las Vegas NV, “Compliance and Ethics in the Medical Practice.” (2016).
  • National Conference, Practice Management Institute, Las Vegas NV, “Workplace Violence in the Medical Practice.” (2016).
  • National Conference, National Alliance of Medical Auditing Specialists, Orlando FL Attorney-Client Privilege: Issues to be Considered by Health Care Providers.”  (2016).
  • National Conference, National Alliance of Medical Auditing Specialists, Orlando FL, “What is Your Liability? As the Auditor and Compliance Officer What Role do You Play in Your Day-to-Day Operations?”  (2016).
  • National Conference, National Alliance of Medical Auditing Specialists, Orlando FL, “Developing a Voluntary Disclosure and Refund Policy.” (2016).
  • National Conference, National Alliance of Medical Auditing Specialists, Orlando FL, “Repercussions and Penalties of Non-Compliance. The Potential Price Tag of Not Having a Compliance Plan.” (2016).
  • National Conference, American Medical Billing Association, Las Vegas NV, “The Liles Report: An Update on Compliance.” (2016).
  • National Conference, Professional Association of Health Care Office Management (PAHCOM), Clearwater Beach FL “Reading the Tea Leaves – How Does 2017 Look for Health Care Providers?” (2016).
  • National Conference, American Medical Billing Association, Las Vegas NV, “Rules for Billers in Compliance.” (2016).
  • National Webinar, National Alliance of Medical Auditing Specialists, “The FY 2017 OIG Work Plan: What Should You Expect.”  (2016).
  • National Conference, Association of Otolaryngology Administrators, Chicago IL, “What are the Top 10 Regulatory Risks Your Practice will Face in the Next Year?” (2016).
  • National Conference, Association of Otolaryngology Administrators, Chicago IL, “Professional Courtesy, Discounts and Waivers – When are they Permissible? When are they Likely Illegals?” (2016).
  • National Webinar, Texas Association for Home Care and Hospice, “Home Health Pre-Claim Demonstration Review Project & New HHS-OIG Home Health Audits on the Horizon.” (2016).
  • National Conference, Practice Management Institute, Las Vegas NV, “Compliance and Ethics in the Medical Practice.” (2016).
  • National Webinar, Practice Management Institute, “Compliance News Update.” (2016).
  • National Webinar, American Medical Billing Association, Third-Party Billing Agreements – Does Your Contract Protect Your Interests?” (2016).
  • National Conference, Practice Management Institute, New Orleans LA, “Compliance and Ethics in the Medical Practice.” (2016).
  • National Conference, Practice Management Institute, New Orleans LA, “HHS-OIG Fraud Efforts & Physician Compensation.” (2016).
  • 16th Annual Health Care Business Summit, MedAssets, Las Vegas NV “Regulatory Risks:  The Anti-Kickback Statute, Stark and the False Claims Act”  (2016).
  • Long Term Care and the Law, American Health Lawyers Association, Orlando FL “Tactical Approaches to Claim Audits and Recovery Risks in Home Health and Hospice”  (2016).
  • 15th Annual National Medical Billing Conference, American Medical Billing Association, Las Vegas NV “Provider Exclusions, HIPAA Changes and Legal Issues with ICD-10” (2015).
  • Cutting Edge Home Health Leadership Summit, Dixon Healthcare Solutions, Maui HI, “Defending Your Medicare and Other Government Claims” (2015).
  • West Virginia State Medical Association — Winter Conference, Charleston WV, “Physician Compliance Challenges – Regulatory Risks Areas to be Considered by Your Practice” (2015).
  • Private Duty Conference, Dixon Healthcare Solutions, Las Vegas NV, “Understanding HIPAA and other Privacy Issues Affecting Your Private Duty Agency” (2015).
  • National Conference, Practice Management Institute, San Antonio TX, “Compliance and the Physician Practice: A Glimpse of the Future” (2015).
  • National Webinar Series, Exclusion Screening “Don’t Forget, The OIG Is Not the Only Game in Town!” (2015).
  • National Webinar Series, American Medical Billing Association, “Using an Overseas Billing Company and /or Using the Cloud to Store Your Data: What are the Risks and Benefits of these Practices?” (2015).
  • Home Health Conference, Dixon Healthcare Solutions, Las Vegas NV, “Employment Law Issues Impacting Home Health Agencies” (2015).
  • Home Health Conference, Dixon Healthcare Solutions, Las Vegas NV “Preparing and Responding to Various Medicare Claims Audits” (2015).
  • Doctor’s at Renaissance Conference Center, Edinburg TX, “South Texas Takedown — How to Stay within the Four Corners of the Law” (2015).
  • APPNA, Arlington VA, “Top 10 Steps You Can Take to Improve Compliance and Stay Out of Trouble with the Government” (2015).
  • Private Duty Conference, Texas Association of Home Care and Hospice, San Antonio TX, “Risky Business. . . Avoiding Legal Pitfalls to Protect Your Business and Bottom Line” (2014).
  • Regulatory Educational Group Services, McAllen TX, “Top 10 Steps You Can Take to Improve Compliance and Stay Out of Trouble with the Government” (2014).
  • NSCHBC Annual Conference – San Juan PR, “Be Careful Before Moving to Cloud Computing: A Contrarian View of the Inevitable” (2014).
  • NAMAS Annual Conference, Ashville NC, “Enhanced Provider Exclusion Rules and the Impact on Your Screening Obligations” (2014).
  • NAMAS Annual Conference, Ashville NC, “When to Disclose – Legal Obligations and Options” (2014).
  • Fall Conference — Jefferson IPA, Dallas TX, “Risky Business: Avoiding Program Integrity Pitfalls Currently Facing Your Health Care Practice” (2014).
  • National Webinar Series, Practice Management Institute, “Human Resource / Employee Relations Risks” (2014).
  • National Webinar Series, American Medical Billing Association, “Identifying Risks and Modifying Your Compliance Plan to Take These Risks Into Account” (2014).
  • Rio Grande Valley Healthcare Fraud and Compliance Conference, McAllen TX, “Overview of Health Care Compliance and Relevant Statutory Provisions Now Facing South Texas Providers” (2013).
  • Physician Practice Conference & Annual Business Meeting, West Virginia Medical Association, Charleston WV, “Red Hot Compliance Update — 2013” (2013).
  • National Conference, Practice Management Institute, New Orleans, LA, “Conducting a Gap Analysis: Turning the Lights On in Your Practice.” (2013).
  • National Webinar Series, American Medical Billing Association, “Social Media Concerns for Providers and Billers” (2012).
  • National Webinar Series, American Medical Billing Association, “HIPAA, HITECH and Emerging Risk Areas for 2012” (2012).
  • Fifth Annual Medical Coding Conference, Coding Con, Orlando FL, “Building an Effective Anesthesia Compliance Program” (2012).
  • Revenue Cycle Management 2011, Decision Health, Atlanta GA, “Responding to Unannounced Audits” (2011).
  • Annual Conference, Practice Management Institute, San Antonio TX, “Federal Compliance Panel Addresses Compliance Risks” (2011).
  • National Webinar Series, Practice Management Institute, “Reading the Tea Leaves — Issues of Concern Covered in HHS-OIG’s 2012 Workplan” 2011.
  • National Webinar Series, American Medical Billing Association, “Returning Overpayments to the Government” (2011).
  • National Webinar Series, Decision Health, “What to do When the Auditor Knocks” (2011).
  • Medical Coding, Billing and National Conference, CodingCon, Las Vegas NV, “Impact of Healthcare Reform on Healthcare Entities” (2011).
  • Annual Conference, American Medical Billing Association, Las Vegas NV, “Third-Party Billing Company Compliance Concerns” (2011).
  • Practice Management Institute, Dallas TX, “Compliance Officer Certification Course” (2011).
  • Practice Management Institute, Las Vegas NV, “Compliance Officer Certification Course” (2011).
  • Practice Management Institute, San Diego CA, “Compliance Officer Certification Course” (2011).
  • Practice Management Institute, Alexandria VA, “Compliance Officer Certification Course” (2011).
  • National Webinar Series, American Medical Billing Association, “Health Care Reform and Third-Party Billers“(2010).
  • South Texas Home Health Conference, The Forum, McAllen TX, “Responding to ZPIC Audits and Investigations” (2010).
  • Annual Conference, Practice Management Institute, San Antonio TX “Medicaid Integrity Contractors: The Newest Challenge Faced by Providers” (2010).
  • Annual Conference, Practice Management Institute, San Antonio TX, “Responding to an Audit by Medicaid Integrity Contractor” (2010).
  • Webinar, Rocky Mountain Chapter – American Medical Billing Association, “Current Issues Facing Third-Party Billing Companies” (2009).
  • Annual Convention, Practice Management Institute, Las Vegas NV, “Medicare Audits: How to Respond to a RAC Review” (2009).
  • 9th Annual AMBA National Conference, Las Vegas NV, “RAC, PSC and ZPIC Audits — How to Respond if Your Practice is Audited” (2009).
  • 21st Annual PAHCOM Conference, Phoenix AZ, “Current Risks Faced by Physician Practices” (2009).
  • National Conference, Practice Management Institute, San Antonio TX, “Responding to PSC and RAC Audits” (2009).
  • Medical Billing and User Conference, CodingCon, Orlando FL, “Issues Facing Third-Party Billing Companies” (2009).
  • National Conference, Practice Management Institute, Las Vegas NV, “A New Breed CMS Auditor: PSCs and RACs” (2008).
  • Regional Conference, Practice Management Institute, Anaheim CA, “A New Breed of CMS Contractors: PSCs and RACs” (2008).
  • Regional Conference, Decision Health, Atlanta GA, “Keynote Speaker: Post-Election Legislative Initiatives” (2008).
  • Regional Conference, Decision Health, Atlanta GA, “Provider-Vendor Relationships: How to Stay on the Right Side of the Red Line” (2008).
  • Fall Health Care Conference, Practice Management Institute, San Antonio TX, “RACs and PSCs: Addressing Audits by CMS Contractors” (2008).
  • Central Illinois Chapter Meeting, American Medical Billing Association, Chicago IL, “Issues Facing Third-Party Companies” (2008).
  • National Conference, American Medical Billing Association, Las Vegas NV, “Issues Facing Third-Party Billing Companies” (2008).
  • Semmelweis Annual Conference, Washington, DC, “History and Current Status of the False Claims Act” (2007).
  • Annual Convention, Medical Association of Billers, Las Vegas, NV, “Compliance Violations and Penalties” (2007).
  • Chapter Conference for Medical Office Professionals, American Medical Billing Association, Largo, MD, “Health Care Fraud: Audits and Investigations” (2007).
  • Semmelweis Society Annual Conference — Washington, DC, “Bad Faith Peer Review Concerns” (2006).
  • Prosecuting Chiropractic Fraud Cases, NCHAA, Harrisburg, PA, “Chiropractic Fraud Issues” (2006).
  • Health Care Fraud Issues Faced by Medical Group Managers, MGMA, Washington, DC, “Health Care Fraud Update” (2006).
  • Annual Conference, American Medical Billing Association, Las Vegas, NV, “Keynote Speaker: Health Care Compliance” (2006).
  • Medical Practice Coding & Compliance Summit, Practice Management Institute, San Antonio TX “Health Care Fraud: Issues and Concerns from a Legal Perspective” (2006).
  • Intensive Session in Trial Advocacy Skills, National Institute of Trial Advocacy, Washington DC, “Trial Advocacy Skills” (2003).
  • Health Privacy, American Academy of Pediatric Dentistry, “HIPAA Privacy: An Essential Element of an Effective Compliance Strategy” (2003).
  • Webinar, Ohio Hospital Association, “Handling Overpayments — Selected Issues and Considerations“(2003).
  • Intensive Session in Trial Advocacy Skills, National Institute of Trial Advocacy, Washington DC, “Trial Advocacy Skills” (2002).
  • Trinity University and the Greater San Antonio Hospital Council, San Antonio TX, “How to Respond to a Federal Investigation of Your Hospital or Medical Practice” (2002).
  • Greater New York Chapter of the American Corporate Counsel Association, New York NY, “How to Respond to a Federal Investigation of Your Company“ (2002).
  • Member Teleconference, Ohio Hospital Association, “New Leadership: What to Expect from DOJ and HHS-OIG” (2001).
  • Health Care Fraud Enforcement Issues and Considerations, Georgia Podiatric Association, Atlanta GA, “2001 Podiatric Coding & Practice Management Summit” (2001).
  • Member Teleconference, Healthcare Financial Management Association, “Health Care Fraud Enforcement Efforts This Year and Beyond“(2001).
  • Annual Meeting: Legislative Update, Academy of Managed Care Pharmacies, San Antonio TX, “Pharmaceutical Legislative Initiatives” (2001).
  • Ukrainian Prosecutors and Interior Ministry of Interior Law Enforcement Officials, Sponsored by the Department of Health and Human Services, Office of Inspector General, Kharkov Ukraine, “Civil and Criminal Health Care Fraud Enforcement” (multiple sessions covering various aspects of this topic)(2000).
  • Evaluator Team Leader Training, Executive Office for U.S. Attorneys, “Priority Prosecution Areas” (2000).
  • ABA Health Care Fraud Conference, “Priority Prosecution Areas” (2000).
  • Midwest Regional Nursing Home Fraud and Abuse Conference, Chicago IL, “Moderator, Nursing Fraud and Abuse Enforcement Panel” (1999).
  • Basic Health Care Fraud Enforcement, Federal Law Enforcement Training Center (FLETC), Glynco GA, “Civil & Criminal Health Care Fraud Statutes” (1999).
  • Advanced Health Care Fraud, National Advocacy Center, Executive Office for U.S. Attorneys, Columbia SC,  “Qui Tams” (1999).
  • National Level Health Care Fraud Working Group, Executive Office for U.S. Attorneys, Columbia SC, “False Claims Act and National Project Developments” (1998)
  • National Civil Chiefs Seminar, National Advocacy Center, Executive Office for U.S. Attorneys, Columbia SC, “Use of the False Claims Act in Civil Health Care Matters” (1998).
  • Basic Affirmative Civil Enforcement Seminar, Executive Office for U.S. Attorneys, Columbia SC, “Use of the False Claims Act” (1998).
  • Texas Statewide Financial Litigation Conference, San Antonio TX, “Health Care Fraud Collection Issues” (1997).
  • Basic Health Care Fraud Prosecution Team Training, Executive Office for U.S. Attorneys, Washington DC, “Investigative Techniques & Issues” (1997).
  • Affirmative Civil Enforcement, Executive Office for U.S. Attorneys, Washington DC, “Role of Auditors & Investigators” (1997).


Chiropractor Owned Multidisciplinary Practices are at a Higher Risk of Audit

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(January 13, 2021):  Over the last few years, we have noted a significant increase in the number of audits initiated against Chiropractor owned multidisciplinary practices.  Typically, these integrated medical practices and clinics employ at least one Chiropractor (typically in an ownership or managerial capacity), along with multiple Doctors of Medicine (MDs), Doctors of Osteopathy (DOs). Physician-extenders such as Nurse Practitioners (NPs) and Physician Assistants (PAs) are also commonly employed in these multidisciplinary practices and clinics.

The purpose of this article is to examine Chiropractor owned multidisciplinary practices which employ MDs, DOs and physician extenders in order to provide a wide range of care and treatment services.  While there are a number of benefits to such a model, both State regulatory entities and Federally-contracted Unified Program Integrity Contractors (UPICs) working for the Centers for Medicare and Medicaid services (CMS) have shown their concern regarding these organizations.  Depending on the jurisdiction, a number of State regulatory entities have questioned the appropriateness of the model itself.  UPICs and other CMS Medicare contractors have initiated (or, in some cases, are in the process of initiating) a review or audit of various claims submitted to Medicare for coverage and payment.

I. Why have Chiropractors Worked to Integrate Other Medical Services Into Their Practice?

While you may disagree, it has been our observation that many Chiropractors have an entrepreneurial spirit.  This has manifested itself in a growing number of Chiropractor owned multidisciplinary practices which provide health care services other than merely those associated with chiropractic care.  Depending on the State, integrating other medical services into a chiropractic practice isn’t always easy – there are often a number of statutory and / or regulatory barriers to be overcome. Examples of the Chiropractor owned multidisciplinary practices we have recently seen have included:

  • Pain management clinics.
  • Multidisciplinary clinics which also offer complimentary and alternative medicine therapy options.
  • Industrial medicine clinics (often focusing on Workman’s Compensation cases).
  • Orthopedic clinics focusing on back injuries, spinal compression problems and victims of automobile accidents.

Chiropractic practices choosing to transition over to a multidisciplinary model have often found that they are better equipped to address the health problems of their patients.  This is often due to the fact that an integrated DC / MD practice typically greatly expands the scope of care and treatment services available to patients. This multidisciplinary approach provides patients with a convenient one-stop care and treatment option.

From a financial standpoint, Chiropractor owned multidisciplinary practices have also found that this business model opens up a number of previously-unavailable opportunities.  As you are aware, only a few chiropractic services qualify for coverage and payment under Medicare.  While private payor plans typically cover a somewhat wider scope of services, many Chiropractors have essentially built their business on cash-pay patients.  The addition of MDs, DOs and physician extenders has permitted integrated practices to expand their scope of medically-reimbursable services, many of which now qualify for coverage and payment by Medicare and  private payor programs.  While there are both patient-care and financial benefits to the integrated, multi-disciplinary model, there are also a number of challenges you should consider prior to setting up this type of practice or clinic.

II.  Challenges to be Considered:

A.     State Regulatory Considerations.

Depending on the State, it may be illegal for anyone other than a medical physician to own a medical practice.  For example, many jurisdictions still prohibit the “Corporate Practice of Medicine.” In such States, it is illegal for a corporation to practice medicine.  Moreover, a corporation cannot employ a physician to provide medical care and treatment services.

Although every State is different, if your State prohibits the Corporate Practice of Medicine, it may be against the law for a corporation or for a non-physician individual (including a Chiropractor) to own or control a physician practice or clinic which provides professional physician services.  Therefore, we strongly recommend that prior to setting up a Chiropractor-owned, multidisciplinary practice or clinic, you should contact a qualified health lawyer to assist you maneuvering through the myriad statutory and regulatory requirements governing this complex area of law.  As a final point in this regard, should you choose to set up an integrated practice or clinic, it is essential that you have a full understanding of both your State’s Chiropractic Practice Act and the Medical Practice Act governing the physicians you intend to employ.

B.    Current Audit Challenges.

Over the last few years, many providers, including Chiropractor owned multidisciplinary practices, have been advised that their claims are being placed on prepayment review or that their prior-paid claims are being be subjected to a postpayment audit by a “Unified Program Integrity Contractor (UPIC), such as Qlarant, Safeguard Services or CoventBridge. [1]  Most of these CMS program integrity contractor audit actions have been generated as a result of data-mining.  Other reasons for audit and / or review have included: patient complaints, competitor complaints and referrals from State Medical Boards.  Regardless of the reason for audit, if your integrated practice or clinic is audited, it is essential that you engage qualified health law counsel to advise you on your options for responding to an inquiry by a UPIC.  For a detailed discussion of the current UPIC audit environment, please see our article titled “A UPIC Audit is Serious Business — Is Your Office Prepared?”  [2]

Prepayment Reviews:  Unlike postpayment overpayment assessments, there is not an effective administrative overpayment process for health care providers placed on prepayment review.  We recommend that you consult with legal counsel if your practice is placed on prepayment review.  There are three points to keep in mind in such cases:

(1) It is often in your best interest to continue to submit claims for review and not hold them.  Even if they are denied, at least you can initiate the postpayment appeals process as soon as possible and hopefully begin to restore cash flow;

(2) It is often helpful to engage qualified health law counsel to review your claims and generate a report that can be sent to the UPIC, pointing out that the claims do, in fact, qualify for coverage and payment.

(3) Think outside of the box—no provider can survive on prepayment review over a long period if a significant portion of their payor mix is Medicare.  Contact your health law counsel to discuss possible options for seeking remedial action to have the prepayment review lifted.

Postpayment Audits: Over the last decade, program integrity contractors (such as UPICs) have aggressively pursued alleged Medicare overpayments from Chiropractors, Physicians and other health care providers around the country.  Specific actions taken have included:

(1)  Using statistical sampling and extrapolation.  While the Medicare Program Integrity Manual sets out the basic requirements for a UPIC to conduct a statistical sampling, these contractors have been known to have deviated from the sampling methodologies proscribed by CMS.

(2)  UPIC reviews have often alleged significant claims coverage concerns.  Identified error rates of 100% by UPICs are not uncommon.  They then seek a full refund of all claims submitted by an individual provide.

(3)  Multiple errors often identified. Due to the massive amount of minute technical requirements imposed on providers, UPICs are often able to identify and allege multiple technical and substantive errors in many of the claims which they review.

Medicare Revocation Actions:  Over the last year, we have seen a sharp increase in the number of Medicare revocation actions taken.  The reasons for revocation have varied but have typically been associated with alleged violations of a health care provider’s participation agreement.  In some cases, the UPIC contractors found that the provider had moved addresses and had not properly notified Medicare.  In other cases, a health care provider was alleged to have not been cooperative or refused to participate in a site visit.  As a participating provider in the Medicare program, your organization must fully meet each of its obligations under the agreement in order to remain in the program.

UPIC Referrals for Civil and Criminal Enforcement:  UPICs are actively referring health care providers to law enforcement agencies such as the Office of Inspector General (OIG) and the  Department of Justice (DOJ) for possible civil and / or criminal enforcement) when a case appears to entail more than a mere overpayment.  However, just because a referral is made doesn’t mean that it will be prosecuted.  In many instances, OIG and / or DOJ will decline to open a case for a variety of reasons (such as lack of evidence, insufficient damages, etc.). 

What Sources of Coding / Billing Data are used by UPICs?  UPICs are required to use a variety of proactive and reactive techniques to identify and confront any potentially improper or fraudulent practices.  As set out in Chapter 2 of the Medicare Integrity Policy Manual (MIPM), UPICs have  utilize a wide variety of data sources. 

III.  Final Thoughts:

Chiropractor-owned multidisciplinary practices and clinics currently appear to be under the proverbial microscope While there is little, if any, action that can reduce your likelihood of being targeted for an audit due to data-mining, there are a number of effective steps that you can reduce your risk of liability if an audit or investigation is initiated.  The design, implementation and adherence to provisions set out in an effective compliance plan can greatly improve your efforts to fully meet your statutory and regulatory requirements under the law.

Healthcare LawyerRobert W. Liles, JD, MBA, MS, CPC, serves as Managing Partner at the health law firm of Liles Parker, Attorneys and Counselors at Law.  Robert represents Chiropractors and other health care providers around the country in connection with UPIC audits, DOJ investigations, State Medical Board disciplinary, and other health law related issues.  Please give Robert a call for free consultation.  He can be reached at:  1 (800) 475-1906.


[1] Qlarant, Safeguard Services and CoventBridge are the current program integrity contractors that have been awarded contracts as Unified Program Integrity Contractors (UPICs) by the Centers for Medicare and Medicaid Services (CMS).

[2]  A copy of this article can be found at the following link.

[3] CMS, Medicare Program Integrity Manual, § 2, available at this link.

What is a Medicare Deactivation of Your Billing Privileges?

January 10, 2021 by  
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A Medicare participant’s billing privileges can be terminated or revoked for many reasons. [1]  Unfortunately, if the Centers for Medicare and Medicaid Services (CMS) revokes the Medicare billing privileges of a participating provider or supplier, the revocation action may be in effect for up to 10 years.  In comparison, if a provider’s Medicare billing privileges are deactivated, it is often more straightforward to seek reactivation of an entity’s billing privileges.  An overview of the Medicare deactivation process and several considerations when seeking Medicare reactivation of your billing privileges are set out below.

I.  What is a Medicare Deactivation Action?

The term “Deactivate” is expressly defined by regulation to mean that a “provider or supplier’s billing privileges were stopped, but can be restored upon the submission of updated information.” [2]   A participating health care provider or supplier typically runs the risk of having its Medicare number deactivated if one of the following occurs:

“(1) The provider or supplier does not submit any Medicare claims for 12 consecutive calendar months. The 12 month period will begin the 1st day of the 1st month without a claims submission through the last day of the 12th month without a submitted claim. [3]

(2) The provider or supplier does not report a change to the information supplied on the enrollment application within 90 calendar days of when the change occurred. Changes that must be reported include, but are not limited to, a change in practice location, a change of any managing employee, and a change in billing services. A change in ownership or control must be reported within 30 calendar days as specified in §§ 424.520(b) and 424.550(b). [4]

(3) The provider or supplier does not furnish complete and accurate information and all supporting documentation within 90 calendar days of receipt of notification from CMS to submit an enrollment application and supporting documentation, or resubmit and certify to the accuracy of its enrollment information.” [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 protect 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.  Real-Life Examples of Medicare Deactivation Actions:

42 C.F.R. § 424.540(a)(1).   Did not submit any Medicare claims for 12 consecutive months.  When considering this basis for Medicare deactivation, it would be completely reasonable for you to ask “Why should it matter if I haven’t submitted any Medicare claims for this period?”  Good question.  The purpose of this particular provision is “to prevent situations in which unused, idle Medicare billing numbers could be accessed by individuals and entities to submit false claims.” [7]  Only a handful of published administrative decisions address this reason for deactivation.

In one California case, an Oncologist’s Medicare billing privileges were deactivated because the physician had allegedly not submitted any claims to Medicare for 12 consecutive months or more.  The physician appealed the action before an Administrative Law Judge (ALJ) and lost.  He subsequently appealed the ALJ’s decision to the Departmental Appeals Board (DAB).

As with all of the (a)(1) Medicare deactivation actions we reviewed, there were factual disputes related to the submission of reactivation requests and associated documentation discussed throughout the record in this case.  While a resolution of these factual disputes is typically important to determine when reactivation should have occurred, the more interesting aspect of this DAB’s discussion of what, if any, appeal rights a provider has when it comes to challenging a Medicare deactivation action.  As the DAB noted, 42 C.F.R. §424.545 sets out the appeal rights of Medicare providers and suppliers.  While a prospective provider or supplier whose enrollment has been revoked may appeal that decision under 42 C.F.R. §424.545(a), no such rights are available in a Medicare deactivation action.  In fact, as 42 C.F.R. §424.545(b) expressly states:

 “(b) A provider or supplier whose billing privileges are deactivated may file a rebuttal in accordance with § 405.374 of this chapter.”

As 42 C.F.R. §405.374 discusses, an opportunity to file a rebuttal is really nothing more than the opportunity to submit a statement in support of your position.  The bottom line is that there is no regulation that affords appeal rights to a provider to challenge a Medicare contractor’s deactivation of the provider’s billing privileges.[8]

42 C.F.R. § 424.540(a)(1).  Did not report a change in enrollment application information, change in ownership, or a change of practice location within the specified timeframes. In a New Jersey case involving a medical group, the group was advised by its Medicare Administrative Contractor (MAC) that it needed to file a CMS-855B change request because the MAC had learned from the Social Security Administration that one of the practice’s owners had recently died.  The letter also informed the medical group that the changes request must be submitted “within 90 calendar days of the date of [the] letter in order to avoid deactivation of Medicare billing privileges.”

The medical group failed to respond within 90 days.  When it finally did respond, the CMS-855B change request deleted five partners from the medical groups enrollment record, not merely the one physician who had recently died. The MAC subsequently approved the medical group Medicare reactivation request but there was a three week “gap” in billing privileges between the deactivation date and the reactivation date (caused by the late submission of documentation by the medical group).  The medical group then challenged the dates used by the MAC in an effort to get the three week gap erased.  They lost.

42 C.F.R. § 424.540(a)(3).  Did not furnish complete and accurate information and all supporting documentation within 90 calendar days of receipt of notification from CMS.   Most of the Medicare deactivation actions taken based on (a)(3) are the result of a participating provider or supplier failing to properly respond to a revalidation request from a MAC.  As you may recall, to maintain its Medicare billing privileges, an enrolled provider or supplier must “revalidate” their enrollment every five years.  This is accomplished by resubmitting and recertifying their Medicare enrollment information.[9]  Should a provider or supplier fail to submit the information requested within 90 calendar days, CMS may deactivate the entity’s Medicare billing privileges.

In a recent case out of Michigan, an oncology clinic failed to submit its revalidation paperwork in a timely fashion and its Medicare billing privileges were deactivated under reason (a)(3).  By the time a proper reactivation requires was filed and approved, there was a gap in the provider’s billing privileges.  Once again, the provider appealed the dates at issue in an effort to “remove the gap.”  The ALJ sustained the agency’s deactivation action noting that he did not have the authority to review deactivation decisions.  The ALJ further stated that he:

“not have authority to provide equitable relief. . . based on principles of fairness.” 

IV.  What is a Medicare Reactivation Action?

When the Medicare number of a participating provider or supplier has been deactivated because of one of the reasons set out under 42 C.F.R. § 424.540(a)(1) to (a)(3), action may be taken to reactivate the entity’s billing privileges.  The Medicare reactivation requirements are set out under 42 C.F.R. § 424.540(b)(1) to (b)(3):

“(1) In order for a deactivated provider or supplier to reactivate its Medicare billing privileges, the provider or supplier must recertify that its enrollment information currently on file with Medicare is correct and furnish any missing information as appropriate. [10]

(2) Notwithstanding paragraph (b)(1) of this section, CMS may, for any reason, require a deactivated provider or supplier to, as a prerequisite for reactivating its billing privileges, submit a complete Form CMS-855 application. [11]

(3) Except as provided in paragraph (b)(3)(i) of this section, reactivation of Medicare billing privileges does not require a new certification of the provider or supplier by the State survey agency or the establishment of a new provider agreement.  [12]

(i) An HHA whose Medicare billing privileges are deactivated under the provisions found at paragraph (a) of this section must obtain an initial State survey or accreditation by an approved accreditation organization before its Medicare billing privileges can be reactivated.”  [13]

V.  Responding to the Deactivation of Your Medicare Billing Privileges:

While responding to a Medicare deactivation action is significantly less complex than handling a Medicare revocation action, we recommend that you obtain the assistance of a qualified health law attorney before attempting to challenge a Medicare deactivation case or the effective of a Medicare reactivation decision issued by a MAC.

Liles Parker attorneys have extensive experience representing participating providers and suppliers nationwide in Medicare deactivation actions.  We can help.  Give us a call for a free consultation.  1 (800) 475-1906.

Liles Parker attorneys can assist you with your Medicare Reactivation Request

[1] For an overview of the reasons that a participating provider’s Medicare billing privileges, please see our page 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.”

[2] 42 C.F.R. § 424.502.

[3] 42 C.F.R. § 424.540(a)(1).

[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] Final Rule, 77 Fed. Reg. 29,002, 29,010 (May 16, 2012).

[8] See also Arkady B. Stern, M.D., DAB No. 2417, at 3 n.4 (2011) (Petitioner argues on appeal that deactivation was improper, but Board “does not have authority to review” deactivation under circumstances of this case, citing 42 C.F.R. §§ 424.545(b) and 498.3(b)); Andrew J. Elliott, M.D., DAB No. 2334, at 4 n.4 (2010) (Board “does not have authority to review” a deactivation).

[9] 42 C.F.R. § 424.515.

[10] 42 C.F.R. § 424.540(b)(1).

[11] 42 C.F.R. § 424.540(b)(2).

[12] 42 C.F.R. § 424.540(b)(3).

[13] 42 C.F.R. § 424.540(b)(3)(i).

 

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