On March 1, 2016, CMS is publishing a proposed rule that would make a variety of changes to the Medicare, Medicaid, and CHIP provider and supplier enrollment requirements.  CMS believes that the proposal would assist in ensuring that individuals and entities posing risks to federal health care programs are removed or temporarily/permanently barred from participation in such programs.  Comments regarding the proposed rule will be accepted for 60 days after publication.

Notably, the proposed rule would implement an Affordable Care Act (ACA) provision requiring certain providers and suppliers to disclose if they have any current or previous direct or indirect affiliations (as defined in the rule) with a provider or supplier that:  has uncollected debt; has been or is subject to a payment suspension under a federal health care program; has been excluded from Medicare, Medicaid or CHIP; or has had its Medicare, Medicaid or CHIP billing privileges denied or revoked.  Under the ACA, the Secretary is permitted to deny enrollment based on an affiliation that the Secretary determines poses an “undue risk” of fraud, waste or abuse.  The proposed rule enumerates the factors that would be considered in such a determination, such as the duration and extent of the affiliation and the nature of the affiliated party’s disclosable event.  CMS proposes a 5-year “look-back” period for determining previous affiliations (as of the date the enrollment application is submitted).

The proposed rule also would authorize the Secretary to: 

  • Deny or revoke a provider’s or supplier’s Medicare enrollment if CMS determines that 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.
  • Revoke a provider’s or supplier’s Medicare enrollment — including all of the provider’s or supplier’s practice locations, regardless of whether they are part of the same enrollment — 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.
  • Revoke a physician’s or eligible professional’s Medicare enrollment if he or she has a pattern or practice of ordering, certifying, referring or prescribing Medicare Part A or B services, items or drugs that is abusive, represents a threat to the health and safety of Medicare beneficiaries or otherwise fails to meet Medicare requirements.
  • Revoke a provider’s or supplier’s Medicare enrollment if the provider or supplier has an existing debt that CMS refers to the United States Department of Treasury.
  • Deny a provider’s or supplier’s Medicare enrollment application if — (1) the provider or supplier is currently terminated or suspended (or otherwise barred) from participation in a state Medicaid program or any other federal health care program; or (2) the provider’s or supplier’s license is currently revoked or suspended in a state other than that in which the provider or supplier is enrolling.

In addition, the proposed rule would strengthen the Medicare program re-enrollment bar by:

  • Increasing the maximum reenrollment bar from 3 to 10 years, with certain exceptions;
  • Permitting the Secretary to impose a maximum 20-year reenrollment bar if the provider or supplier is being revoked from Medicare for the second time; and
  • Allowing that CMS to add up to 3 more years to the provider’s or supplier’s reenrollment bar if the provider or supplier submits false or misleading information on (or omits information from) its application in order to gain enrollment in the Medicare program.

The proposed rule also would require that to order, certify, refer or prescribe any Part A or B service, item or drug, a physician (or, when permitted under state law, an eligible professional) must be enrolled in Medicare in an approved status or have validly opted-out of Medicare.  The furnishing provider or supplier, as well as the physician or eligible professional who ordered, certified, referred or prescribed the service, item or drug, would be required to maintain documentation for 7 years from the date of the service and provide access to that documentation upon CMS or Medicare contractor request.  CMS proposes to make this provision effective January 1, 2018 to enable operationalization and to give providers and suppliers time to complete the enrollment or opt-out process.

The proposed rule includes other modifications to current enrollment procedures.  For instance, CMS would modify the surety bond requirements for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers to allow CMS to reject an enrolling or enrolled DMEPOS supplier’s new or existing surety bond if the surety that issued the bond has failed to make a required payment to CMS.  The rule sets forth the factors CMS would consider in determining whether to exercise this authority.  Under the proposed rule, if CMS rejects a surety bond for this reason, the enrolling or enrolled DMEPOS supplier would have to obtain a bond from a new surety in order to enroll in or maintain its enrollment in Medicare.  CMS states that it is proposing this change to address instances in which a surety has failed to submit payment to CMS, notwithstanding its obligation to do so.

Release of the proposed rule follows a February 22, 2016 CMS announcement that the agency is taking additional steps to strengthen provider and supplier screening policies in response to recent Government Accountability Office findings.  Specifically, CMS is:  increasing the number of site visits to Medicare-enrolled providers and suppliers through use of the National Site Visit Contractor; enhancing address verification software; monthly monitoring of data in the Provider Enrollment, Chain, and Ownership System (PECOS) to detect vacant or invalid addresses or commercial mail reporting agencies; and regularly deactivating providers and suppliers that have not billed Medicare in the last 13 months.