The Patient Protection and Affordable Care Act (PPACA) requires the US Department of Health and Human Services (HHS) to develop procedures to screen providers before and after the Medicare enrollment process. According to HHS Secretary Kathleen Sebelius, “[u]sing these new fraud prevention measures, CMS will be able to move from a ‘pay and chase’ approach to one that makes it harder to commit fraud in the first place.” In an effort to implement these provisions of the PPACA, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule addressing the enrollment process for Medicare providers and suppliers.

Under the proposed rule, issued September 23, 2010, providers and suppliers will be assessed based on their risk for fraud, waste and abuse and assigned to one of the following three risk categories: limited risk, moderate risk and high risk. Providers and suppliers in each risk category will be subject to different levels of screening. The following is a summary of the proposed screening procedures for each risk category and the provider and supplier types that will fall within each of those categories:

Limited Risk

The limited risk category includes, among others, physicians, non-physician practitioners, group practices, medical clinics, hospitals, ambulatory surgical centers, end-stage renal disease facilities, critical-access hospitals and skilled nursing facilities. Additionally, all providers and suppliers that are publicly traded on the Nasdaq or New York Stock Exchange would only be subject to the limited-risk category screening requirements because of the existing financial oversight they receive. Limited risk providers will be subject to verification that the provider meets applicable federal regulations or state requirements for their specific provider-type, state licensure verification and database checks, such as the Office of Inspector General’s List of Excluded Individuals/Entities, both before and after enrollment in order to ensure that applicable enrollment criteria are met.

Moderate Risk

The moderate risk category includes independent diagnostic testing facilities (IDTFs), hospices, ambulance service providers, community mental health centers, comprehensive outpatient rehabilitation facilities and independent clinical laboratories. Currently enrolled home health agencies and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) providers/suppliers are also classified in the moderate risk category, while those that are newly enrolling are categorized as high risk. In addition to those screening procedures that are conducted under the limited risk category, these providers and suppliers will be subject to unscheduled and unannounced site visits both prior to and after enrollment.  

High Risk

The high risk category includes home health agencies and DMEPOS suppliers newly enrolling or enrolling a new practice location. In addition to those screening procedures that are conducted under the limited and moderate risk categories, these providers and suppliers will be subject to criminal background checks and fingerprinting. The criminal background checks and fingerprinting will be required for owners, authorized or delegated officials, or managing employees.

The CMS is also proposing a $500 application fee for both new enrollment and revalidation of institutional providers only. The amount will adjust yearly based on the consumer price index. The new screening procedures will be effective for the following:

  1. New providers beginning on March 23, 2011;
  2. Providers currently enrolled who revalidate their enrollment information also beginning on March 23, 2011; and
  3. Currently enrolled providers beginning on March 23, 2012.

In addition to the Medicare screening requirements, the proposed rule requires state agencies to screen Medicaid or Children’s Health Insurance Program (CHIP) providers in accordance with the new screening standards. The rule also contains several additional provisions aimed at reducing fraud, waste and abuse, such as granting HHS the authority to implement temporary enrollment moratoria if necessary to prevent or combat, fraud, waste and abuse and establishing requirements for suspensions of payments pending credible allegations of fraud.

Comments on the proposed rules are due by November 16, 2010. To view the proposed rule in its entirety, please click here.1