Revocation of Medicare enrollment may occur for a variety of reasons, including but not limited to a provider’s commission of a felony, debarment, suspension, or exclusion from any other Federal health care program, or allowing another individual or entity to use its billing number. Often, an unsuspecting physician, supplier, or group (collectively, the “Provider”) receives a notice of revocation from Medicare (“Termination Notice”) based on the Provider’s failure to adhere to Medicare’s reporting requirements. Such failures are usually the result of inadvertent administrative oversights, but they can result in the same harsh consequence of revocation that is imposed on a Provider who knowingly submitted false information on its Medicare enrollment application or abused its billing privileges. Despite the seemingly innocuous nature of the offense, it is an issue that the Centers for Medicare and Medicaid Services (“CMS”) treats seriously. Effective thirty (30) days from the date of the Termination Notice, these Providers can no longer participate in the Medicare program for at least one (1) year, the minimum time period associated with a “reenrollment bar.”
Reporting requirements include, but are not limited to, routine updates in information, changes in ownership, and the occurrence of adverse legal action. If a Provider does not make the required disclosures, Medicare can revoke the Provider’s enrollment for failure to report after consideration of the following factors set forth under 42 C.F.R. §424.535(a)(9): (i) whether the data in question was reported; (ii) if the data was reported, how belatedly; (iii) the materiality of the data in question; and (iv) any other information that CMS deems relevant to its determination.
The effects of revocation can be devastating. Even if a Provider does not have a substantial number of Medicare patients, termination from Medicare will trigger a Medicaid termination. Conversely, as discussed in the Final Rule Medicare and Medicaid Programs; CY 2024 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Advantage; Medicare and Medicaid Provider and Supplier Enrollment Policies; and Basic Health Program (the “Final Rule”), Section 5005(a)(1) of the 21st Century Cures Act (the “Cures Act”) requires states to report to CMS Provider terminations from state Medicaid and CHIP programs within 30 days of the effective date of termination; based on this information, CMS may also revoke a Provider terminated “for cause” under 42 CFR§ 424.535(a)(12)(i).[1] Medicare revocation may also result in the termination of the Provider’s participation agreement with other payers as an in-network provider. In sum, the domino effect of Medicare revocation may threaten the viability of the Provider’s business.
Recognizing the severe impact of Medicare revocation, effective January 1, 2024, CMS recently enacted a new enrollment status, a “stay of enrollment,” by amending §424.541 under the Final Rule. During a stay of enrollment, a Provider’s status is paused during a preliminary, interim status, not to exceed 60 days, prior to CMS taking action to deactivate the Provider’s billing privileges or, worse, revoke the Provider’s enrollment entirely, such that the Provider may only participate in the Medicare program again after waiting out a “reenrollment bar” and successfully completing a new enrollment application process. In order for a Provider to receive notice of a stay of enrollment, the Provider must (i) be noncompliant with at least one enrollment requirement in Title 42; and (ii) such noncompliance can be remedied by submission of a change of information or revalidation application. While the Provider cannot be paid for services during the stay, the Provider may be able to resume participation in the Medicare program more expediently than if faced with a revocation and reenrollment bar for a minimum period of one (1) year. If the Provider does not rectify the noncompliance during the stay of enrollment, CMS may then, in its sole discretion, deactivate the Provider or revoke the Provider. In response to comments to the then-proposed Final Rule, CMS noted that there is no requirement to implement a stay of enrollment for any particular Provider. Therefore, it remains to be seen how frequently CMS will utilize the less onerous “stay of enrollment” for noncompliant Providers.
In the Final Rule, CMS also expanded its revocation authority for Providers engaging in various types of conduct set forth under 42 C.F.R. §§ 424.535(a)(1), (15), (17), (23). In addition to the previous bases of revocation, Providers’ billing privileges may now also be revoked for the following reasons:
- Noncompliance with any of the Provider’s applicable enrollment requirements as set forth Title 42 (as opposed to requirements contained within 42 CFR part 424, subpart P);
- Imposition of a civil judgment under the False Claims Act, 31 U.S.C. § 3729-3733 against the Provider or any owner, managing employee or organization, officer or director within the previous ten (10) years;
- Violation of the enrollment standards specific to independent diagnostic testing facilities (“IDTF”), DMEPOS suppliers, opioid treatment programs (“OTPs”), home infusion therapy (“HIT”) suppliers, and Medicare diabetes prevention programs (“MDPPs”) as set forth in §410.33(g), 424.57(c), 424.67(b),(e), 424.68(c),(e), and 424.205(b), (d) respectively; and
- CMS’ referral of an existing debt to United States Department of Treasury for collection.[2]
Notably, CMS can recoup payments for claims made to Providers during the period of noncompliance via a retroactive effective date for revocation. The Final Rule amended § 424.535(g) to elaborate on circumstances that warrant retroactive effective dates for termination. For example, of particular relevance to Providers facing termination under proposed § 424.535(a)(23) for violation of enrollment standards, a retroactive effective date can be: (i) the date of the license, certification, accreditation, or MDPP recognition suspension, revocation, termination, or surrender; (ii) date of a facility’s nonoperational status; or (iii) date of the felony conviction.
Most Providers are aware of the types of affirmative misconduct that may jeopardize their Medicare enrollment status, but it is easy to overlook the impact of certain inadvertent failures to act, e.g., simply failing to update the information contained in the Provider’s Medicare enrollment profile. In addition to other compliance commitments, Providers should implement internal protocols to ensure that they are also timely updating their Medicare enrollment profiles.
How Frier Levitt Can Help
Our attorneys regularly counsel provider clients regarding enrollment, termination, and/or audit issues related to state and Federal health care programs. If you have questions about enrollments, terminations, or audits, or you have received a revocation notice from Medicare or Medicaid, contact Frier Levitt to speak with an attorney.
[1] 88 FR 79277 – 78.
[2] By way of example, a Provider’s failure to respond to a Medicare overpayment demand typically results in an escalation of collection efforts that may include a referral to the Department of the Treasury.
