Exclusion Screening

Expansion of CMS Enforcement Actions in Healthcare Industry


Emptech's founder, Jeff Aleixo


Jeffrey Aleixo

CMS enforcement actions team doctor medical

Editor’s note: This is a guest article from subject matter expert Noelle Harling of Frasco Profiles, Emptech’s Background Check partner.

CMS Has Significantly Expanded Enforcement Reach

As published in the Federal Register Volume 79, Number 234 (Friday, December 5, 2014), the Centers for Medicare & Medicaid Services (CMS) have greatly expanded the criteria for excluded provider contract disqualifications.

As of February 3, 2015, disqualifying factors leading to CMS enforcement actions may now include management personnel with felony convictions in the past ten years that CMS deems relevant. Crimes that fall under this new rule may include violent felonies such as murder, assault, or rape and financial or integrity crimes such as drug abuse, drug trafficking, embezzlement, tax evasion, and malpractice. There are additional provisions for persons affiliated in the past twelve months with excluded contractors or those owing money to Medicare.

Most of all, CMS enforcement actions may now revoke a provider or supplier’s Medicare billing privileges if there is a pattern or practice of denied claims. Unfortunately, the pattern or practice is not well defined.

Potential grounds for CMS enforcement actions of billing privilege revocation include:

  • The percentage of previously submitted claims that have been denied,
  • Reason for the previous denials,
  • Whether the provider or supplier has a history of final adverse actions,
  • The length of time over which the pattern has continued,
  • How long the provider or supplier has been enrolled in Medicare,
  • Any other information CMS finds relevant.

Under the previous rules, per 42 C.F.R. §424.535(a)(8), CMS was only able to revoke Medicare provider billing privileges when claims were submitted for services that would have been impossible to give, such as where the beneficiary was deceased, the patient was out of state at the time of billed service, or the necessary equipment for the billed service was not physically present.

While CMS says it does not intend to revoke billing privileges based on errors or sporadic, occasional denied claims, the distinction between those and repeated, more systemic errors remain fuzzy without quantification. Though there is little clarity and much room for subjectivity, the fact that CMS itself, versus contractors, will be making any determinations may support greater consistency.

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Takeaway of the New Rule

Much like the recent push for UI Integrity, new CMS enforcement actions put employers on notice that they must be more vigilant, in this case about Medicare claim submissions. CMS regards denied claims as a notice served to providers and suppliers, and that is how they must be taken in order to avoid the risk of disqualification. Additionally, exclusion screening services must be brought up to date for the new rules so that organizations remain insulated from exposure to CMS enforcement actions.

Learn about different types of OIG exclusions in order to remain compliant and stay abreast of OIG investigations.

CMS Preclusion List

Many Part D prescribers, Medicare Advantage (MA) providers, MA Organizations (MAOs), and Part D Plans (PDPs) had complained about the enrollment burden imposed by CMS’ pre-existing rules, which required that for a prescription to be eligible for coverage under Part D, the prescriber must be enrolled in the Medicare fee-for-service program, and providers who furnish items and services to a beneficiary who receives his or her Medicare benefit through an MAO must be enrolled in the Medicare fee-for-service program. MAOs and PDPs had also complained about the rules’ impact on their ability to maintain adequate provider networks. Nearly 500,000 Part D prescribers and 120,000 MA providers remain unenrolled in the Medicare fee-for-service program.

In its April 16, 2018, Final Rule, CMS enforcement actions were stopped. Instead, CMS opted to protect MA and Part D program integrity not via the enrollment processes, but rather by promulgating rules that would:

  1. Have CMS publish a preclusion list that will identify demonstrably problematic providers and prescribers, and
  2. Require MAOs and PDPs to reject or deny payments for MA services and items and Part D drugs furnished or prescribed by precluded providers and prescribers.

Under the Final Rule, unenrolled prescribers and providers who are on the preclusion list stay on the preclusion list for the same length of time as the reenrollment bar that CMS could have imposed, had they been enrolled and then revoked. However, CMS believes that providers and prescribers convicted of a felony should remain on the preclusion list for longer periods of time, if appropriate. Therefore, the Proposed Rule would require providers and prescribers included on the preclusion list because of a felony conviction to stay on the list for a 10-year period running from the date of conviction, unless CMS determines a shorter length of time is warranted. This is a significant consideration for providers faced with criminal proceedings and the choice to plea to a lesser offense. Similarly, to the extent that the OIG excludes a provider or prescriber from Federal health care program participation for a period of time longer than the reenrollment bar, CMS proposes to keep such a provider or prescriber on the preclusion list until the OIG reinstates the provider.

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This post has been updated for accuracy and comprehensiveness.

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