On December 5, 2014, the Centers for Medicare & Medicaid Services (CMS) published a final rule that expands the circumstances under which it may deny or revoke the Medicare enrollment of entities and individuals on program integrity grounds, effective February 3, 2015.  

  • Allows CMS to deny the new enrollment of providers, suppliers, and owners that previously were affiliated with an entity with unpaid Medicare debt that existed when the entity’s enrollment was voluntarily terminated, involuntarily terminated, or revoked. This provision applies when (1) the owner left the provider or supplier that had the Medicare debt within one year of that provider or supplier’s voluntary termination, involuntary termination, or revocation; (2) the Medicare debt has not been fully repaid; and (3) CMS determines that the uncollected debt poses an undue risk of fraud, waste, or abuse (based on factors set forth is the final rule). A denial under this provision can be averted if the enrolling provider, supplier, or owner (1) satisfies the criteria set forth in 42 CFR § 401.607 and agrees to a CMS-approved extended repayment schedule for the entire outstanding Medicare debt; or (2) repays the debt in full.
  • Provides that a managing employee’s felony conviction can serve as a basis for denial or revocation of a provider or supplier's enrollment. Specifically, CMS could deny enrollment or revoke Medicare billing privileges if, within the preceding 10 years, the provider or supplier, or any owner or managing employee thereof, was convicted of a federal or state felony offense (including those enumerated in the rule) that CMS determines to be detrimental to the best interests of the Medicare program and its beneficiaries.
  • Enables CMS to revoke Medicare billing privileges if it determines that the provider or supplier has a “pattern or practice” of submitting claims for services that fail to meet Medicare requirements. CMS enumerates the following five factors as ones it will consider prior to imposing a revocation under this authority: (1) the percentage of claims denied; (2) the reasons for the claims denials; (3) a history of final adverse actions; (4) the length of time the pattern has continued; and (5) the length of time the provider or supplier has been enrolled in Medicare. CMS also may consider any other information regarding the provider or supplier’s specific circumstances the agency deems relevant. Importantly, CMS clarifies that its contractors (e.g., Medicare Administrative Contractor, Recovery Audit Contractors) will not be authorized to make determinations under this authority; only CMS itself will make such a determination.
  • Limits the ability of ambulance suppliers to “backbill” for services performed prior to enrollment.
  • Requires all providers and suppliers subject to revocations to submit all of their remaining claims within 60 days after the effective date of such revocation, except that with regard to home health agencies (HHAs), this date will be 60 days after the later of: (1) the effective date of the revocation; or (2) the date that the HHA’s last payable episode ends.
  • Limits the ability of revoked providers and suppliers to submit a corrective action plan (CAP) to situations in which the revocation was based on 42 CFR § 424.535(a)(1), which states in part that a provider or supplier’s billing privileges may be revoked if the provider or supplier is determined not to be in compliance with enrollment requirements. CMS notes that it believes “providers and suppliers generally should not be exonerated from failing to fully comply with Medicare enrollment requirements simply by furnishing a CAP.” Nevertheless, there are situations in which revocations under § 424.535(a)(1) could result when a provider or supplier “had only minimally failed to comply with our enrollment requirements,” and revoking billing privileges “when the problem can be quickly and easily corrected via a CAP could in some instances lead to unfair results.”

Notably, CMS is not finalizing its proposal that would have dramatically increased the potential reward to an individual who provides a tip leading to the recovery of Medicare funds under the Medicare Incentive Reward Program due to the complexity of the operational aspects of the proposed changes,” but CMS may finalize the proposal in future rulemaking.