Provider Alert: Do Not Neglect the Reporting Requirements Associated with a Pending or Final Adverse Legal Action

Licensees who have been the subject of an adverse legal action, such as a criminal charge, State licensing disciplinary matter, or adverse credentialing action, have a duty to report such action. The time limit for reporting varies. As such, it is important to consider reporting obligations and applicable time limits during the pendency of an adverse legal action, and not just at the conclusion of the action.  Consideration must be given to potential reporting requirements for Medicare, Medicaid, private insurers, State licensing agencies, hospital medical staffs, and other credentialing entities. Failing to self-report within the required period can, and often does, result in additional adverse consequences.   

Reporting requirements vary, depending on the nature of the legal action taken and the entity to which reporting may be necessary. For example, under 42 CFR § 424.516, physicians, nonphysician practitioners, and physician and nonphysician practitioner organizations must report to their Medicare contractor within 30 days the following events: a change of ownership, any adverse legal action, or a change in practice location. “Final adverse action” under 42 CFR  § 424.502, is described as: (1) A Medicare-imposed revocation of any Medicare billing privileges; (2) Suspension or revocation of a license to provide health care by any State licensing authority; (3) Revocation or suspension by an accreditation organization; (4) A conviction of a Federal or State felony offense (as defined in § 424.535(a)(3)(i)) within the last 10 years preceding enrollment, revalidation, or re-enrollment; or (5) An exclusion or debarment from participation in a Federal or State health care program. Failing to comply with the foregoing reporting requirements may result in revocation of a provider’s Medicare enrollment, which means that revocation is permissive, as opposed to mandatory. A revocation for failing to report and the duration of such revocation typically depends on whether the provider or supplier has any history of final adverse actions and the nature of any such actions, as well as any other information regarding the provider or supplier’s specific circumstances that CMS deems relevant to its determination. Private insurer payor contracts may also require a provider  to self-report certain final legal actions, and these requirements may vary from Medicare and Medicaid requirements, as well as from insurer to insurer. 

State licensing agencies also require disclosure of adverse legal actions, and the specific requirements  may differ from Medicare and  from state-to-state. For example, the New Jersey State Board of Medical Examiners, under N.J.A.C. 13:35-6.19, requires notice to the Board within ten (10) days of any changes in circumstances that would alter the information provided in the licensee’s biennial renewal form pertaining to pending or finalized legal actions. The required categories for mandatory reporting, which basically reflect on a provider’s competence or character to practice medicine, are broader than that required by Medicare. They include arrest and pending or final actions by criminal authorities for any criminal or quasi-criminal offense pursuant to federal and state law; actions by a health care facility or health maintenance organization grounded, in whole or in part, upon patient care concerns which actions condition, curtail, limit, suspend or revoke privileges; disciplinary actions by state licensing authorities; actions by the Department of Health and Senior Services; actions by the Drug Enforcement Administration or any state drug enforcement agency; actions by Medicaid, Medicare, CHAMPUS, or other governmental insurance program; actions by professional review organizations or utilization review organizations; or actions by a medical malpractice insurance carrier declining coverage or a continuation of coverage, assessing a surcharge based on claims experience, imposing new limitations or restrictions on practice, or requiring remedial education or office monitoring. 

It is important to remember that the individual against whom action is taken may have a duty to self-report, even when an agency involved in the action, or that otherwise has knowledge of the action, has its own duty to report.  In other words, the fact that an agency or entity to which a licensee has a reporting obligation is already aware of an action does not absolve the licensee from needing to self-report.

As the examples above illustrate, reporting requirements vary depending on the nature of the legal action and the entity to which reporting is required. Careful consideration must be given to identify and analyze these reporting requirements during the pendency of an action, not only to ensure timely compliance with the reporting obligations, but also because the licensee’s reporting obligations may impact and shape the strategy of the negotiations and/or litigation involved in the adverse legal action.   

Frier Levitt attorneys have significant experience in representing providers in all adverse legal actions, including the  related reporting requirements, and the  drafting and submission of notice to satisfy a licensee’s reporting obligations. Frier Levitt has spent decades counseling providers through every conceivable adverse legal action and navigating the corresponding maze of reporting requirements. For more information, contact Frier Levitt to speak with an attorney.