By Jennifer Jones Thomas

On September 10, 2019, the Centers for Medicare and Medicaid Services (“CMS”) published a Final Rule in the Federal Register which will require Medicare, Medicaid, and Children’s Health Insurance Program (“CHIP”) providers and suppliers to disclose current and previous affiliations with other providers and suppliers who CMS identifies as posing an undue risk of fraud, waste, or abuse.  The effective date of the Final Rule is November 4, 2019.  The Final Rule will require providers and suppliers to disclose any current or previous direct or indirect affiliation with a provider or supplier that: 1) Has uncollected debt; 2) Has been or is subject to a payment suspension under a federal healthcare program; 3) Has been or is excluded by the Office of Inspector General (“OIG”) for Medicare, Medicaid, or CHIP or; 4) Has had its Medicare, Medicaid, or CHIP billing privileges denied or revoked.  “Affiliation” is defined as:

  • A five percent (5%) or greater direct or indirect ownership interest that an individual or entity has in another organization.
  • A general or limited partnership interest (regardless of the percentage) that an individual or entity has in another organization.
  • An interest in which an individual or entity exercises operation of managerial control over, or directly or indirectly conducts, the day-to-day operations of another organization either under contract or other arrangement, regardless of whether or not the managing individual or entity is a W-2 employee of the organization.
  • An interest in which an individual is acting as an officer or director of a corporation.
  • Any reassignment relationship.

The Secretary will have the authority to deny provider enrollment based on an affiliation the Secretary determines poses an undue risk of fraud waste or abuse.  CMS believes that this rule will help “make certain that entities and individuals who pose risks to the Medicare and Medicaid programs and CHIP are removed from and kept out of these programs.”  Specifically, the Final Rule will allow the Secretary:

  • To revoke or deny a provider’s or supplier’s Medicare if they are currently revoked under a different name, numerical identifier, or business identity.
  • To revoke a provider’s or supplier’s Medicare enrollment, including all 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 reasonably have known did not comply with the Medicare enrollment requirements.
  • To revoke a physician’s or other eligible professional’s Medicare enrollment if he or she has a pattern of practice of ordering, certifying, referring, or prescribing Medicare 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.
  • To revoke a provider’s Medicare enrollment if he or she has an existing debt that CMS refers to the U.S. Department of Treasury.
  • To deny a provider’s Medicare enrollment application if the provider is currently terminated or suspended from participation in a state Medicaid program or any other federal healthcare program or the provider’s license is currently revoked or suspended in a state other than that in which the provider is enrolling.

The Final Rule also increases the maximum re-enrollment bar from the current three years to ten years.  If a provider submits false or misleading information on the enrollment application, the Secretary can bar enrollment for three years.

CMS reports that the new revocation authority will lead to approximately 2,600 new revocations per year with a projected savings over a ten year period at $4.16 billion.  The new reenrollment and reapplication bar provisions will apply to 400 of CMS’ revocations resulting in an additional savings of $1.79 billion over 10 years.