CMS Expands Medicare Provider Disqualifications in Healthcare Industry



Jeff Aleixo

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

Now in Effect: 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 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 may now revoke a provider or supplier’s Medicare billing privileges if it determines that a “pattern or practice” of denied claims exists. Unfortunately, “pattern or practice” is not well defined.

Potential grounds for 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 time of billed service, or the necessary equipment for the billed service was not physically present).

While CMS says it doesn’t intend to revoke billing privileges based on errors or sporadic, occasional denied claims, the distinction between those and repeated, more systemic errors remains 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.

The takeaway: much like the recent push for UI Integrity, this new rule puts 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 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 risk of disqualification.

If you fall under the new CMS administrative rule and have questions about background packages, contact Frasco Profiles at 800-820-9029.

For more information on the new rule, please refer to the Federal Register athttp://www.gpo.gov/fdsys/pkg/FR-2014-12-05/html/2014-28505.htm.

By guest author Noelle Harling
VP Operations & Compliance
Former Vice Chair, Background Screening Credentialing Council (BBSC)

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