As we previously discussed in this New York Provider Alert, the New York Department of Health (the “Department”) has increased enforcement of Medicare enrollment requirements for pharmacies participating in the state’s Medicaid program. Understanding and maintaining compliance with these requirements is essential to avoiding costly disruptions to pharmacy operations and potential enforcement actions, including the possibility of Medicaid termination.
As a condition of enrollment and continued participation in the New York Medicaid program, the Department requires that community pharmacies demonstrate “full participation” in Medicare, i.e., active enrollment through CMS Form 855S for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), and CMS Form 855B for drugs and immunizations covered by Medicare Part B. This requirement is based on the need to “ensure that Medicaid dual eligible members receive drugs and supplies from Medicaid providers enrolled in accordance with federal and State laws, and regulations.”[1]
The Challenges of Medicare Enrollment as a DMEPOS Supplier Under Form 855S
To obtain enrollment as a DMEPOS supplier in the Medicare program, pharmacies must meet special additional enrollment requirements commonly known as the “DMEPOS Supplier Standards,” in addition to the other enrollment requirements for suppliers participating in Medicare. These requirements include maintaining: (i) specific site policies; (ii) accreditation for those products that require accreditation (as well as annual renewals); (iii) comprehensive liability insurance; and (iv) a surety bond to protect against loss to the Medicare program.
To ensure continuous compliance, pharmacy management must be proactive to prevent an inadvertent lapse in compliance with these standards. A lapse in compliance that is not immediately and fully remediated frequently forms the basis for retroactive revocation of Medicare billing privileges and the imposition of a reenrollment bar.
Even providers who have successfully enrolled in Medicare and satisfied the DMEPOS Supplier Standards and other requirements can face revocation of their billing privileges if they do not adhere to revalidation requirements and ongoing compliance obligations.
The Impact of a Medicare Revocation on Medicaid Participation
If a pharmacy cannot successfully resolve the revocation of its Medicare privileges via a Corrective Action Plan and/or Reconsideration Request, the pharmacy will be terminated from participation in the Medicaid program for the duration of the Medicare reenrollment bar.
Further, the pharmacy will not be able to submit a new Medicaid program application until after the Medicare enrollments have been reactivated, which, at a minimum, requires several months to complete. Thereafter, a pharmacy seeking to reactivate its Medicaid enrollment must undergo review of a new Medicaid application and site visit.
Audits and Overpayments: Failure to Coordinate Benefits
Maintaining proper Medicare enrollment is not merely an administrative formality, it is directly tied to coordination of benefits obligations and audit exposure.
The Department has reiterated in numerous publications that, in addition to termination, pharmacies are subject to audit and recovery for non-compliance with the requirement of Medicare enrollment. As most recently communicated in the Department update Pharmacy Reminder: Coordination of Benefits Processing Instruction for New York State Medicaid, pharmacies are responsible for submitting claims to other coverage sources before submitting claims to NYS Medicaid, and are required to coordinate with the proper primary payer, including submitting a claim under the appropriate coverage benefit (i.e., medical or pharmacy).
This includes properly billing Medicare Part D for services covered by Medicare Part D, and Medicare Part B for services covered by Medicare Part B. Claims that do not adhere to these requirements are “inaccurate or false claim submissions resulting in NYS Medicaid payment … subject to audit and recovery and may result in NYS Medicaid enrollment termination for the provider.”[2] The frequency of overpayment recovery for pharmacies that have had their Medicare billing privileges revoked and their Medicaid billing privileges terminated is likely to increase, especially considering the recently enacted authority of CMS to retroactively revoke DMEPOS suppliers’ billing privileges for failure to adhere the DMEPOS Supplier Standards.
Taking Action to Protect Your Pharmacy
Community pharmacies should implement proactive compliance measures to avoid Medicare revocation. Such measures include monitoring Medicare enrollment status continuously and establishing internal systems to track renewal deadlines and certification requirements. Pharmacies must respond promptly to any notices from CMS or the Department regarding enrollment status. Finally, if a pharmacy has received a notice of termination from New York Medicaid, the pharmacy should act immediately, as there is a limited window within which to cure enrollment deficiencies.
Further, pharmacies should carefully consider whether their enrollment type accurately reflects their operations. Updates to the Department’s pharmacy policy have incorporated changes to Medicare enrollment requirements based on Medicaid pharmacy enrollment type. In some cases, the Medicare enrollment requirement is reviewed based on whether the pharmacy dispenses items that must first be billed to Medicare on behalf of a dual-eligible member to adhere to Coordination of Benefits Requirements.
How Frier Levitt Can Help
Frier Levitt attorneys understand the critical importance of compliance with Medicare and New York Medicaid enrollment requirements for pharmacies to avoid disruption to their business. Frier Levitt attorneys regularly counsel pharmacy clients on enrollment issues in state and federal programs. Contact us if you have received a notice of termination from New York Medicaid.
[1] See NYRx Medicaid Pharmacy Program Pharmacy Manual Policy Guidelines (Oct. 2025) at 21, available at https://www.emedny.org/ProviderManuals/Pharmacy/PDFS/Pharmacy_Policy_Guidelines.pdf (last accessed Feb. 12, 2026).
[2] Pharmacy Reminder: Coordination of Benefits Processing Instruction for New York State Medicaid, New York State Medicaid Update – April 2025 Volume 41 – Number 4, available at https://www.health.ny.gov/health_care/medicaid/program/update/2025/no04_2025-04.htm#COB
