Frier Levitt recently averted the complete destruction of a pharmacy client’s business by successfully appealing a Medicare revocation with a 10-year reenrollment bar. The revocation had been imposed due to allegations of abusive billing practices, threatening the pharmacy’s ability to serve its substantial Medicaid patient population.
Case Background
The pharmacy faced a critical challenge: a significant portion of the pharmacy’s patients were enrolled in the Medicaid program, which necessitated the pharmacy’s continued enrollment as a Medicaid provider. Notably, the pharmacy’s ability to maintain its enrollment as a Medicaid provider is contingent on its active enrollment in good standing in the Medicare program as a DMEPOS supplier. The Medicare revocation and 10-year reenrollment bar would trigger
- the pharmacy’s termination as a Medicaid provider
- potential placement on the CMS Preclusion List, which would prevent the pharmacy from being eligible to receive payment for Medicare Advantage (MA) items and services or Part D drugs furnished or prescribed to Medicare beneficiaries.
- Network terminations from by pharmacy benefit managers (“PBMs”) because CMS deemed the underlying conduct that led to the revocation detrimental to the best interests of the Medicare program.
Without a successful appeal, this pharmacy would have lost the ability to serve a substantial portion of its patient population.
Legal Strategy and Success
Frier Levitt’s defense focused on demonstrating that revocation under 42 CFR §424.535(a)(8)(ii) for abuse of billing privileges was not warranted. CMS may generally revoke an enrolled supplier’s Medicare billing privileges and any corresponding supplier agreement for several reasons, including if it determines that a supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.[1] In making this determination, CMS must consider
- The percentage of denied claims during the period under consideration
- The provider’s history of final adverse actions
- The type of billing non-compliance and the facts surrounding such non-compliance
- Any other information regarding the provider or supplier’s specific circumstances that CMS deems relevant to its determination.[2]
Under this factor test, CMS retains the discretion to revoke billing privileges under any one or more of these factors in order to protect the integrity of the Medicare program funds. Critically, a relatively small number of technically improper claims could constitute “a pattern or practice” because the regulation “is meant to capture a variety of situations in which a provider or supplier regularly and repeatedly submits non-compliant claims over a period of time.”[3]
Under this standard, a variety of proofs were required in support of each factor because CMS may apportion more weight to one factor versus another in determining whether to revoke billing privileges under 42 CFR §424.535(a)(8)(ii). As a result of a multifaceted legal strategy and a robust submission of proofs addressing each factor in the CMS analysis, Frier Levitt secured a complete reversal of the revocation. This outcome allowed a multi-generational family business to remain operational as a local community pharmacy.
How Frier Levitt Can Help:
Our attorneys regularly counsel healthcare providers on a variety of enrollment, termination, and/or audit issues related to state and Federal health care programs, including, issues affecting providers who dispense DMEPOS. If you have questions about enrollments, terminations, or audits, or you have received a Medicare or Medicaid revocation notice, contact Frier Levitt to speak with an attorney.
Frier Levitt provides strategic, industry-focused legal counsel tailored to your needs. Contact our team today to learn how we can help you.
[1] 42 C.F.R. § 424.535(a)(8)(ii).
[2] Id.
[3] Id.
