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What is a Medicare Deactivation of Your Billing Privileges?


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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).