CMS Cracking Down on Health Care Fraud and Abuse

September 19, 2019 Alerts and Newsletters

To increase provider and supplier transparency and accountability, the Centers for Medicare & Medicaid Services (CMS) recently issued a final rule (Final Rule) with comment period that allows CMS greater ability to prevent fraud and abuse by providers and suppliers enrolled in federal health care programs such as Medicare, Medicaid, and the Children's Health Insurance Programs (CHIP). These new authorities and restrictions will be effective as of November 4, 2019. Below, we highlight some of the key provisions of the Final Rule.

Affiliations Disclosure

The Final Rule requires Medicare, Medicaid, and CHIP providers and suppliers to reveal particular past and current relationships with other providers and suppliers. Providers and suppliers must disclose any direct or indirect affiliation with a provider or supplier that (1) has uncollected debt; (2) has been or is subject to a payment suspension under a federal health care program; (3) has been or is excluded by the Office of Inspector General from Medicare, Medicaid, or CHIP; or (4) has had its Medicare, Medicaid, or CHIP billing privileges denied or revoked. Providers or suppliers with such affiliations may be denied enrollment if the Secretary determines that the affiliation poses an undue risk of fraud, waste, or abuse. For instance, Medicare, Medicaid, and CHIP enrollment may be revoked or denied if an owner or managing employee of a currently enrolled or newly enrolled provider or supplier has a relationship with another provider or supplier that has been previously revoked.

Additional Authorities to Revoke or Deny Medicare Enrollment

The Final Rule allows CMS additional authority to revoke or deny a provider or supplier's Medicare enrollment in a number of circumstances, including when a provider or supplier uses a different name or number to re-enroll prior to the allowed re-enrollment period; when a provider or supplier bills for services performed at a practice location that is not in compliance with Medicare enrollment requirements; when a provider or supplier abusively orders or certifies Medicare Part A or B services, items, or drugs; or when a provider or supplier has an outstanding overpayment debt to CMS that has been referred to the United States Department of Treasury. CMS may also deny a provider or supplier's Medicare enrollment if (1) the provider or supplier is terminated, suspended, or otherwise banned from participation in a federal health care program or a state Medicaid program; or (2) the provider or supplier's license is revoked or suspended in another state.

Additionally, if a provider or supplier includes falsified or misleading information in its initial enrollment application, CMS may now bar them from enrolling in Medicare for up to three years. The Final Rule allows CMS to also block revoked providers and suppliers from re-entering Medicare for up to ten years, compared to the previous time limit of three years. Providers and suppliers who are revoked twice may not re-enter Medicare for up to 20 years. These new risk-based authorities and restrictions will permit CMS to proactively identify providers and suppliers that pose undue risk to taxpayers and beneficiaries. CMS Administrator Seema Verma said in a statement, "[f]or too many years, we have played an expensive and inefficient game of 'whack-a-mole' with criminals – going after them one at a time—as they steal from our programs. Now for the first time, we have tools to stop criminals before they can steal from taxpayers."

Verrill has been analyzing the Final Rule and will continue to monitor developments in this area. Comments on the Final Rule must be received by 5 P.M. on November 4, 2019 and may be submitted here. For assistance with questions regarding the Final Rule or if you would like to become directly involved in this conversation, please reach out to Paul Shaw, Drew Douglas-Steele, or your regular Verrill attorney.