The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule (Proposed Rule) on July 6 that would expand its authority over Medicare enrollment denials and revocations applicable to all providers and suppliers (Providers). CMS's proposed expansion of Medicare enrollment denial and revocation authorities is consistent with the Trump administration's broader strategy of preventing improper payments before they occur.
Currently, CMS's revocation authority allows it to revoke enrollment prospectively following notice to the Provider. Following revocation, the Provider is no longer allowed to bill Medicare. CMS's proposal would not only make the revocation date retroactive to the date of alleged noncompliance (or other triggering event) but would also allow CMS to claw back payments to the retroactive revocation date. CMS estimates approximately $82 million in annual savings from this proposal, clearly indicating that CMS views it as a high-impact program integrity measure.
CMS's proposal is also notable because, if finalized, it would give CMS greater flexibility to address suspected fraud without considering criteria that might otherwise constrain its actions. For example:
* CMS currently has the authority to revoke enrollment for abuse of billing privileges. CMS must determine that the Provider has a pattern or practice of submitting claims that fail to meet Medicare requirements by considering several factors, including the Provider's percentage of denied claims and history of final adverse actions. CMS proposes to set aside these factors, reasoning that a Provider may abuse billing privileges even if it has no history of adverse actions or submission of claims that Medicare regularly denies.
* CMS seeks a broad new authority to revoke a Provider's enrollment if the enrollment presents a high risk of fraud, waste, or abuse because the Provider is located within a limited geographic area with an excessive number of Providers. "Limited geographic area" and "excessive number" would have their plain meanings, and CMS would not impose fixed distances to determine geographic area or a set number of Providers to determine how many are "excessive." Further, no actual finding of fraud, waste, or abuse is needed; revocations would be based on an assessed risk rather than on whether Providers actually engage in fraud. CMS recognizes that several existing revocation grounds require consideration of specified factors, but it does not propose similar safeguards here because it seeks discretion to act across varied factual circumstances.
Several provisions place the onus on Providers to vet key personnel within their organizations and individuals or entities with whom they have business or financial relationships for Medicare debt, Medicare or Medicaid payment suspensions, or state or federal program licensure suspensions or terminations. CMS can already deny enrollment if the enrolling Provider or its owner carries Medicare debt, for instance. One CMS proposal would expand denial grounds to the Provider's managing employees, managing organizations, and individuals or entities with any form of business or financial relationship with the Provider.
Finally, the Proposed Rule reflects a desire for CMS's revocation actions to have broad consequences. For example, under CMS's current authority, if a Provider has five Medicare enrollments, and CMS revokes one of them, CMS may also revoke the Provider's remaining four enrollments. The Proposed Rule would go even further: if the same Provider applied for a sixth enrollment, and CMS denied that application, CMS could revoke all five of the Provider's existing enrollments based solely on that denial.
We anticipate comments on the Proposed Rule, which are due August 31, will address the following areas of potential concern:
See the table below for a summary of CMS's proposed changes and relevant takeaways for industry.
