In April 2018, the Centers for Medicare and Medicaid Services (CMS) canceled the requirement that providers serving Medicare Advantage (MA) and Part D (PDP) plans need to be enrolled in the Medicare program. Instead, CMS requires that these plans ensure that any provider in MA and PDP plans must not be on a Preclusion List that will be maintained and updated by CMS.
What is the Preclusion List?
The Preclusion List is a list of prescribers and individuals or entities who fall within any of the following categories:
- Are currently revoked from Medicare, are under an active reenrollment bar, and CMS has determined that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program; or
- Have engaged in behavior for which CMS could have revoked the prescriber, individual or entity to the extent applicable if they had been enrolled in Medicare, and CMS determines that the underlying conduct that would have led to the revocation is detrimental to the best interests of the Medicare program. Such conduct includes, but is not limited to, felony convictions and Office of Inspector General (OIG) exclusions.
According to CMS, the Preclusion List will be available to Part D sponsors and the Medicare Advantage plans. The initial list of providers will be precluded effective January 1, 2019. However, MA and Part D plans will not begin editing claims until April 1, 2019. This consists of 30 days for the MA and Part D plans to review the Preclusion List and notify the affected patients by mail if they have received a healthcare item or service or prescription drug in the past from a provider that has been added to the CMS Preclusion List. The notification will allow a 60-day period before Part D sponsors reject a pharmacy claim for a Part D drug that is prescribed by an individual on the Preclusion List, and MA plans deny payment for a health care item or service furnished by an individual or entity on the Preclusion List.
The Preclusion List Will be compiled by CMS and will be separate and distinct from the OIG Exclusion List. Also, the List will not be available to the public and will only be accessible to Plan D sponsors and MA plans.
Background to the April Final Rule
Prior to 2018, many Part D prescribers, MA providers, MA Organizations (MAOs) and Part D Plans (PDPs) had complained about the enrollment burden imposed by CMS’ preexisting rules. According to these rules:
- For a prescription to be eligible for coverage under Part D, the prescriber has to be enrolled in the Medicare fee-for-service program, and
- Providers who deliver 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 given that nearly 500,000 Part D prescribers and 120,000 MA providers are not enrolled in the Medicare fee-for-service program.
As a result, in its Final Rule, CMS removed those regulatory requirements in order to protect MA and Part D program integrity by publishing a preclusion list that will identify problematic prescribers and providers. In addition to this, CMS requires MAOs and PDPs to reject or deny payments for MA services and items and Part D drugs given or prescribed by precluded providers and prescribers.
Notifying Providers if They Are on the Preclusion List
CMS issues an initial email notification to the impacted providers using the email addresses obtained from the Provider Enrollment, Chain and Ownership System (PECOS) the Medicare enrollment system of record or the National Provider Plan and Enumeration System (NPPES). CMS or a Medicare Administrative Contractor (MAC) follows up with a written notice through mail to the impacted provider in advance of his or her inclusion on the Preclusion List and their applicable appeal rights.
Beneficiaries receiving prescription drugs in the past 12 months from a specific provider that is being added to the Preclusion List will also be notified. The notification will allow a 60-day period for them to make arrangements to receive prescriptions from another provider who is not precluded. In case that a beneficiary decides to continue receiving prescriptions from a precluded provider, any prescription for a drug will be rejected or denied at the pharmacy and the beneficiary will only have the option to pay it.
How Long Can a Provider Be on the Preclusion List
A provider will be precluded for the length of their re-enrollment bar if they are currently revoked or would have been revoked if they had enrolled in the Medicare program. The re-enrollment bar is a minimum of 1 year, but not greater than 3 years depending on the severity of the basis for revocation. This timeframe will be specified in the notification letter that a provider receives.
Providers are not added to the list until they have exhausted their first level of appeal. If the appeal is found favorable, they would not be included on the list. If the appeal is unfavorable or the provider fails to submit an appeal, they would be added to the list.
Impact of the New Rule on Providers and Suppliers
This new requirement allows flexibility to prescribers, providers and suppliers who have not enrolled in Medicare to provide services to MA plan members, easing the burden of enrollment. It also allows providers who have opted out of providing services under traditional Medicare to provide services to beneficiaries under Medicare part C or prescribe Part D covered drugs.
It is estimated that the Preclusion List provision will save providers $34.4 million because of removal of the requirement of MA providers and suppliers and Part D prescribers to enroll in Medicare as a prerequisite for ensuring health care items and services. Part C providers and suppliers will save $24.1 million in reduced costs while Part D providers will save $10.3 million in reduced costs.See how an electronic solution can help you reduce exclusion screening costs and provide maximum compliance for your company.