On February 2, 2011, the Centers for Medicare & Medicaid Services is publishing a final rule implementing provisions of the Affordable Care Act (ACA) that strengthen provider and supplier screening provisions under the Medicare, Medicaid, and Children's Health Insurance Program (CHIP). The rule is effective March 25, 2011, as mandated by the ACA. Based on the level of risk associated with different provider and supplier types, CMS will apply three levels of screening tools: (1) “limited risk” providers will have enrollment requirements, license, and database verifications (although CMS has not finalized its proposal to check tax delinquency status); (2) those in the “moderate risk” category will have those verifications plus unscheduled site visits; and (3) high risk providers and suppliers will have verifications, unscheduled site visits, and fingerprint-based criminal history record checks of law enforcement repositories. CMS has modified certain the provider risk assignments in the final rule and specified risk levels for other provider types that were not addressed in the September 23, 2010 proposed rule. CMS also decided not to consider all publicly-traded companies to be in the “limited risk” category, and it eliminated the distinction between government-owned and non-government owned ambulance companies for purposes of the screening level assignments. Additional details are available after the jump.

The following table indicates the provider/supplier types CMS includes in each of the three risk categories under the final rule:

To see table please click here.

In other areas, the rule also: imposes application fees on institutional providers and suppliers (Medicare application fees are expected to total $304 million over the next 5 years); authorizes CMS and states to impose moratoria on the enrollment of new providers when deemed necessary to protect against a high risk of fraud; authorizes the suspension of payments pending an investigation of a credible allegation of fraud; provides guidance to states regarding termination of providers from Medicaid and CHIP if terminated by Medicare or another state program; and addresses termination of providers and suppliers from Medicare if terminated by a Medicaid state agency. The rule also discusses comments regarding an ACA requirement that providers or suppliers in certain industry sectors establish compliance programs; these comments will be considered in a future rulemaking. CMS notes it has identified specific provisions surrounding implementation of fingerprinting for certain providers and suppliers that may be subject to change based on public comments; comments on the fingerprinting requirements only will be accepted for 60 days after publication. Reed Smith is preparing an analysis of the final rule.