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.

Firm Highlights


65 Verrill Attorneys Recognized by Best Lawyers® 2022, Including Eight Named Lawyers of the Year

(August 31, 2021) – 65 Verrill attorneys were recognized as "Best Lawyers" by Best Lawyers® 2022 , including 8 attorneys named “Lawyer of the Year,” a distinguished recognition for only a single lawyer in...


Massachusetts Health Care Bill Makes Several Significant Changes

While you were celebrating the New Year, Governor Baker signed Chapter 260 of the Acts of 2020, an “Act promoting a resilient health care system that puts patients first,” the result of the Legislature’s...


Verrill Welcomes Jeffrey A. Smagula, Experienced Health Care and Life Sciences Attorney, Former Health Plan Compliance Executive

(May 12, 2021) – Verrill is pleased to welcome Jeffrey A. Smagula to the firm’s Boston office as Counsel in its nationally recognized Health Care & Life Sciences Group. Jeff Smagula brings to Verrill...


340B Providers Get Partial Relief from New Dispute Resolution Regulation

1. 340B ADR Process Established At long last, more than ten years after Congress directed it to do so, HHS has finalized an alternative dispute resolution (“ADR”) process for both providers and pharmaceutical manufacturers...


Fraud and Abuse Investigations Handbook for the Health Care Industry, Second Edition.

Health care attorney Paul Shaw co-authored Fraud and Abuse Investigations Handbook for the Health Care Industry, Second Edition with Robert Griffith, published by the American Health Law Association (AHLA). Paul and Robert provide legal...


The Regulatory Sprint is Over - What’s at the Finish Line Under the New Stark and AKS Final Rules?

The U.S. Department of Health and Human Services (HHS) completed its “Regulatory Sprint” by finalizing changes to regulations pertaining to two federal fraud and abuse laws. On December 2, 2020, the Centers for Medicare...


Hospital Price Transparency Rule: Full Steam Ahead

Neither COVID-19 nor continued legal challenges appear likely to derail the Centers for Medicare & Medicaid Services ( CMS) Hospital Price Transparency Rule from going into effect on January 1, 2021. Hospitals therefore should...


“If I've told you once, I've told you eight times…” HHS OIG Issues Another Audit Report on Hospitals’ Failure to Report Credits for Explanted Cardiac Devices and Lays the Groundwork Collection of Overpayments


HHS Confirms Providers’ Right to 340B Discount Pricing for Contract Pharmacies

As a holiday gift to providers, the U.S. Department of Health and Human Services (HHS) General Counsel recently issued a strongly worded Advisory Opinion indicating that federal law requires drug manufacturers to deliver covered...

Contact Verrill at (855) 307 0700