CMS Final Rule Expands Authority to Deny Or Revoke Medicare Provider Enrollment

BNA’s Medicare Report™ provides reliable, objective weekly news and analysis of all related legislation, regulation, litigation, and court and administrative...

By James Swann

Dec. 3 — The Centers for Medicare & Medicaid Services can deny providers or suppliers from enrolling in Medicare if they were previously affiliated with any organizations that have unpaid Medicare debts and have been terminated from Medicare, according to one of several enrollment-related provisions included in a final rule released Dec. 3. It was published in the Dec. 5 Federal Register and will take effect Feb. 3, 2015 (Fed. Reg. 72,499).

Enrollment will be denied if the provider or supplier left its previous organization within a year of the organization's termination or revocation from Medicare, the final rule (CMS-6045-F; RIN 0938-AP01) said, although denial can be prevented if the provider or supplier agrees to a repayment plan for the debt or pays the debt in full.

According to a CMS fact sheet, the final rule also eliminates ambulance suppliers’ previous ability to bill for up to a year prior to enrollment in the Medicare program.

In addition, it requires that ambulance providers and suppliers submit any claims within 60 days of the revocation of their billing privileges, consistent with the requirements for practitioners and practitioner groups.

The CMS said this provision could save an estimated $327 million annually.

Additional enrollment restrictions in the final rule allow the CMS to deny or revoke a provider's billing privileges if a managing employee is found to have been convicted of a state or federal felony within the previous 10 years, as well as revoke Medicare billing privileges if a provider's billing patterns don't meet Medicare requirements.

“For years, some providers tried to game the system and dodge rules to get Medicare dollars; today, this final rule makes it much harder for bad actors that were removed from the program to come back in,” CMS Deputy Administrator Shantanu Agrawal and director of its Center for Program Integrity (CPI), said Dec. 3 in a statement.

The CMS proposed rule containing the enrollment restrictions, which was published in April 2013, also proposed increasing the rewards under the Medicare Incentive Reward Program (IRP), but the agency said those provisions aren't in the final rule because of their complexity and that they might be addressed in future rulemaking.

Attorney: Tough Enforcement Lacking 

Kirk Ogrosky, an attorney with Arnold & Porter LLP in Washington, told Bloomberg BNA the final rule appears “to be a simple articulation of common practices” and doesn't seem to address real fraud enforcement. “It is hard to beat people who ‘dodge rules’ by releasing new rules.”

Ogrosky said protecting Medicare is more about management and enforcement issues, “such as whether providers have been allowed to voluntarily walk away from overpayments and simply get a new provider number to ‘avoid’ debts, or whether ambulance transport companies convicted of fraud have been allowed to continue to commit fraud by simply backdating claims.”

He said he was shocked that the final rule estimated a $327 million annual savings by blocking ambulance providers from billing a year before their Medicare enrollment, “because those who steal from Medicare do not care about complying with rules, they make decisions in split seconds easily sidestepping or dodging rules by using nominee owners or alternative provider numbers.”

“My concern in reading the new rules is whether they will be used to ensnare legitimate providers who are focused on care, not paperwork,” Ogrosky said.

Unpaid Medicare Debts

The provision regarding enrollment denials for providers with unpaid Medicare debt was intended “to address situations in which the owner of a provider or supplier incurs a substantial debt to Medicare, exits the Medicare program or shuts down operations altogether, and attempts to re-enroll through another vehicle or under a new business identity,” the final rule said.

Currently, the CMS can only deny enrollment to providers and suppliers who have Medicare overpayments, whereas Medicare debt encompasses overpayments and other obligations to Medicare.

Additionally, current enrollment denials don't cover situations where a provider or supplier was previously affiliated with an organization with an unpaid Medicare debt, the final rule said.

The CMS said some unpaid Medicare debts present no risk of fraud, waste or abuse to the Medicare program, and as such, the agency will evaluate each situation on a case-by-case basis. If the unpaid Medicare debt poses no risk, then enrollment won't be denied.

Revoking Billing Privileges

As for denying or revoking a provider's billing privileges in the case of a felony conviction over the previous 10 years, the final rule listed several felonies considered to be detrimental to both the Medicare program and beneficiaries, including:

• felony crimes against a person, such as murder, assault and rape;

• financial felonies, such as embezzlement and income tax evasion; and

• malpractice felonies.

The final rule said the CMS could also view felonies involving drug use or traffic violations as detrimental to Medicare.

The agency said it would determine whether a provider's billing patterns didn't meet Medicare requirements based on several factors, such as the percentage of claims denied, the reasons for the claim denials, the total number of denials and the extent and length of any billing irregularities.

To contact the reporter on this story: James Swann in Washington at

To contact the editor responsible for this story: Kendra Casey Plank at

The CMS final rule is at

The fact sheet is at