I. INTRODUCTION

On April 21, 2006, the Centers for Medicare & Medicaid Services ("CMS") published a long anticipated final rule regarding provider and supplier enrollment requirements entitled "Medicare Program: Requirements for Providers and Suppliers to Establish and Maintain Medicare Enrollment" (the "Final Rule").1 The new regulations are designed to supplement (but not replace) existing regulations on provider agreements, Medicare billing numbers, and payments for services and supplies covered under the Medicare program. The Final Rule implements rules proposed by CMS on April 25, 2003 (the "Proposed Rule").2 The regulations set forth in the Final Rule will become effective on June 20, 2006.

In addition to the Final Rule, new versions of the Medicare Enrollment Application (Forms CMS-855A, CMS-855B, CMS-855I, CMS-855R, and CMS-855S, collectively, the "Enrollment Applications") were posted on the CMS website on May 1, 2006. The new Enrollment Applications contain an effective date of April 2006. CMS is discontinuing use of the prior version of the CMS-855 forms, which became effective as of November 2001, and at least some fiscal intermediaries and carriers have already stopped accepting the prior version. Therefore, providers and suppliers should start using the new forms immediately.

II. MEDICARE ENROLLMENT FINAL RULE

As summarized below, the Final Rule establishes a new Subpart P, entitled "Requirements for Establishing and Maintaining Medicare Billing Privileges," in 42 C.F.R. Part 424. Through these new regulations, CMS is attempting to consolidate current regulations scattered throughout the Code of Federal Regulations and more clearly convey its expectations regarding obtaining and maintaining enrollment in the Medicare program. The Final Rule is designed to ensure that CMS can collect, periodically review, and update adequate information on Medicare-enrolled providers and suppliers. It develops national enrollment procedures that will be administered uniformly by all Medicare contractors.3 Finally, the Final Rule establishes safeguards that will allow CMS to deny enrollment to unqualified providers and suppliers and revoke the billing privileges of existing enrollees who place the Medicare program at risk of abuse.

A. Sec. 424.500 – Scope

The new regulations set forth requirements for initial enrollment in the Medicare program, along with revalidation of, and updates and changes to, previously submitted enrollment information. All providers and suppliers of Medicare services are covered by the Final Rule, except those physicians and other practitioners who have elected to "opt-out" of the Medicare program by entering into private contracts with Medicare beneficiaries. Providers and suppliers must adhere to the regulations set forth in the Final Rule to maintain their ability to bill both the Medicare program and Medicare beneficiaries for Medicare-covered services and supplies.

B. Sec. 424.502 – Definitions

The Final Rule revises the definition of "managing employee" to mean "a general manager, business manager, administrator, director, or other individual that exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operation of the provider or supplier, either under contract or through some other arrangement, whether or not the individual is a W–2 employee of the provider or supplier" (emphasis added). CMS is extending the definition to include individuals who are performing managerial duties but who are not technically employees, due to information indicating that a number of providers and suppliers are managed by non-employees, some of whom are know to have billed Medicare fraudulently and are debarred, suspended, or otherwise excluded from participation in Medicare and other federal programs. In response to comments regarding the Proposed Rule, CMS clarified that there are no limits on the number of managing employees who must be reported.

In addition, the Final Rule defines "delegated official" to mean "an individual who is delegated by the ‘Authorized Official,’ the authority to report changes and updates to the enrollment record. The delegated official must be an individual with ownership or control interest in, or be a W-2 managing employee of the provider or supplier." In response to comments, CMS further discusses the requirement that a delegated official be directly employed by the Medicare applicant. More specifically, a commenter recommends that a W-2 employee of an applicant’s parent corporation be permitted to serve as a delegated official, even if the person is not a W-2 employee of the applicant itself. CMS rejects this suggestion, stating:

it is essential that any individual assigned as a delegated official has a direct relationship and connection with the applicant. We recognize that there are instances where an employee of a provider’s parent company may exercise a tremendous degree of authority over the provider. However, in these cases the fact remains that the provider and the parent company are two separate legal entities. For obvious legal reasons, we simply cannot establish a blanket provision whereby a W-2 employee of one entity can sign the CMS 855 on behalf of another entity.4

Because some Medicare contractors will deal only with a "delegated official" or "authorized official" in following up on the status of enrollment and reenrollment applications or requests for additional information, providers and suppliers often currently designate the employees who are actually involved in the application process as "delegated officials." This may require changes if the current individuals are not employees of the applicant legal entity.

A number of other terms also are defined in the Final Rule. They are included in our analysis as necessary.

C. Sec. 424.505 – Basic enrollment requirement

Providers and suppliers must be enrolled in the Medicare program before a claim can be processed for payment. Providers and suppliers must have a valid Medicare billing number, effective for the date a service is rendered, in order to be paid for covered items or services. In response to concerns expressed in a number of public comments, CMS repeats that it will continue to pay claims under all current reimbursement policies, maintaining the current effective dates for reimbursement.

D. Sec. 424.510 – Requirements for enrolling in the Medicare program

CMS has retained many of the current enrollment requirements, including the following:

  • Submission of a complete, accurate, and truthful Enrollment Application and supporting documentation (notably including the National Provider Identifier ("NPI"), "if issued"5 – See further discussion on this issue in Section III below);

  • Signature on the certification statement found in Section 15 of the Enrollment Application by: the applying practitioner (if an individual practitioner); the sole proprietor (if a sole proprietorship); or an authorized official6 (if a corporation, partnership, group, limited liability company, or other organization).

  • Completion of state survey and certification or accreditation, if applicable;

  • Completion of a signed provider agreement, if applicable;

  • Operational ability to furnish Medicare covered items or services;

  • Submission of accurate and verifiable information; and

  • Adherence with the compliance and reporting requirements in Sec. 424.520 (discussed below).

Both the initial Enrollment Application and subsequent applications required in connection with the new revalidation of enrollment information requirement (see discussion of Section 424.515 below for information regarding the requirement to revalidate enrollment information) must be signed by an authorized official. Update and change forms submitted outside the initial enrollment or revalidation processes also may be signed by a delegated official in lieu of the authorized official (except in the case of an individual practitioner or sole proprietorship), once the delegation of authority is established in Section 16 of the Enrollment Application. See further discussion on this issue in Section III below.

Finally, the new regulations permit CMS to perform on-site inspections to verify the accuracy of enrollment information and compliance with Medicare enrollment requirements. CMS intends to conduct on-site visits of all prospective new suppliers of durable medical equipment, prosthetics, orthotics and supplies ("DMEPOS suppliers") before approving enrollment. In response to comments, CMS further states that these site visits may be unannounced. Enrollment site visits will be carried out by Medicare fiscal intermediaries and carriers, and these visits will be unrelated to and separate from survey and certification site visits by state agencies and accreditation bodies to measure compliance with the Medicare conditions of participation.

E. Sec. 424.515 – Requirements for reporting changes and updates to, and the periodic revalidation of Medicare enrollment information

Under the Final Rule, all providers and suppliers of Medicare services and supplies are required to submit the applicable Enrollment Application to CMS. Providers and suppliers currently enrolled in the Medicare program that have not submitted an Enrollment Application in the past will be required to submit an Enrollment Application.

Based upon CMS’s current re-enrollment policy for DMEPOS suppliers, the Final Rule also includes a requirement that all providers and suppliers (except for ambulance service providers who must resubmit enrollment information in accordance with 42 C.F.R. § 410.41(c)(2)) resubmit and recertify the accuracy of their enrollment information every five years.7 The routine five year cycle may be adjusted to a more or less frequent revalidation cycle for specific provider or supplier types depending on circumstances (e.g., complaints, evidence of noncompliance, or a history of integrity and compliance). Notice of any change in the five year cycle would be provided at least 90 days in advance, presumably in writing.

When revalidation information is requested, providers and suppliers will have 60 calendar days to submit an Enrollment Application, with applicable supporting documentation.8 New certifications and provider agreements are not required, but providers and suppliers must continue to meet the Medicare requirements found in 42 C.F.R. Parts 488 and 489 and in any currently established provider agreements, if applicable. CMS has the right to perform on-site inspections to verify the accuracy of a provider or supplier Enrollment Application and compliance with Medicare enrollment requirements as part of the revalidation process.

The Final Rule also provides CMS with the ability to perform off-cycle revalidation at any time. Off-cycle revalidation may be triggered by a number of factors, including random checks, information indicating local health care fraud problems, national initiatives, complaints, or other factors which lead CMS to question a provider or supplier’s compliance with Medicare enrollment requirements. Site visits may again accompany off-cycle revalidations.

CMS received a number of comments in response to the Proposed Rule expressing concern over the increased burden contractors and enrollees will face because of the new enrollment and periodic revalidation requirements. As a result, CMS increased the revalidation cycle from the proposed three years to five years. In addition, CMS indicates that it expects to phase-in the enrollment and revalidation processes. Medicare enrollment contractors will be instructed to process new Enrollment Applications first. Requests and processing of Enrollment Applications from providers and suppliers currently billing Medicare will follow, with revalidation activities for most providers and suppliers falling last in priority. More specifically, during fiscal years 2006 and 2007, CMS expects its contractors to request Enrollment Applications from providers and suppliers who are already billing Medicare but have not submitted an Enrollment Application (including a large number of physicians). Contractors are expected to conduct only a limited number of revalidations in the same timeframe, with the number increasing in fiscal year 2008. CMS also states that it will closely monitor contractor workloads and processing times. It intends to issue specific processing timeframes as part of future rulemaking to implement Section 936(a)(2) of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

CMS rejected a request to "grandfather" providers who already have Medicare billing numbers. However, CMS did indicate that it will consider limiting the revalidation process to those proven to be a potential threat to Medicare or its beneficiaries in a future rulemaking. CMS also rejected a suggestion that physicians be allowed to revalidate their enrollment through the credentialing office of hospitals. Finally, CMS rejected requests to exclude certain provider types, such as skilled nursing facilities or provider groups with a history of compliance with Medicare requirements, from the revalidation site visit process.

F. Sec. 424.520 – Additional provider and supplier requirements for enrolling and maintaining active enrollment status in the Medicare program

To enroll and maintain active enrollment status a supplier or provider must certify that it meets, and continues to meet, and CMS verifies, the following requirements:

  • Compliance with Title XVIII of the Social Security Act (the "Act") and applicable Medicare regulations;

  • Compliance with licensure, certification, and regulatory requirements, as required for the type of service or supplies furnished and billed; and

  • No direct employment of, or contracting with, any individual or entity excluded from participation in any federal health care program or debarred by the General Services Administration from any other executive branch procurement or non-procurement programs or activities.

The Final Rule extends the time in which providers and suppliers must report any changes to existing enrollment information (accompanied by supporting documentation) from 30 to 90 calendar days. For DMEPOS suppliers, however, changes of information continue to be required within 30 days. Moreover, changes of ownership or control of providers and suppliers must also be reported within 30 calendar days (see discussion of Section 424.550 below for additional discussion of this issue). The regulations specifically point out that failure to comply with these deadlines may result in the deactivation or revocation of the provider’s or supplier’s Medicare billing privileges.

G. Sec. 424.525 – Rejection of a provider or supplier’s enrollment application for Medicare enrollment

CMS may reject a provider’s or supplier’s Enrollment Application for failing to furnish:

  • Complete information on the Enrollment Application within 60 calendar days from the date a Medicare contractor requests missing information; or

  • All required supporting documentation within 60 calendar days of submitting the Enrollment Application.9

CMS may choose to extend the 60 day deadline if it believes an applicant is working with CMS to resolve outstanding issues. Once an Enrollment Application is rejected, however, the provider or supplier must complete and submit an entirely new Enrollment Application (and applicable supporting documents). Rejection of an Enrollment Application cannot be appealed.

H. Sec. 424.530 – Denial of enrollment

CMS may deny enrollment to a provider or supplier for the following reasons:

  • Compliance: The provider or supplier is found to be noncompliant with Medicare enrollment requirements and has not submitted a plan of corrective action as outlined in 42 C.F.R. Part 488.

  • Conduct: A provider, supplier, owner, managing employee, authorized or delegated official, medical director, supervising physician, or other health care personnel furnishing Medicare reimbursable services who is required to be reported on the Enrollment Application is excluded from the Medicare, Medicaid, and any other federal health care program or debarred, suspended, or otherwise excluded from participating in any other federal procurement or non-procurement activity.10

  • Felonies: The provider, supplier, or any owner of the provider or supplier, has been convicted of a federal or state felony offense that is detrimental to the best interests of the Medicare program and its beneficiaries, within 10 years prior to enrollment or revalidation. CMS will consider that severity of the offense in determining whether an Enrollment Application will be denied based on a prior felony conviction. While the Secretary of the Department of Health and Human Services ("HHS") is responsible for determining the length of any denial based on a felony conviction, the minimum period of time for a denial of an individual with a prior conviction is ten years from the date of the conviction. Examples of felony offenses include:

    • Murder, rape, assault, or other felony crimes against persons for which an individual was convicted (including guilty pleas and adjudicated pretrial diversions);

    • Insurance fraud and other financial crimes for which an individual was convicted (including guilty pleas and adjudicated pretrial diversions);

    • Any felony that places the Medicare program and its beneficiaries at immediate risk, such as a malpractice suit that results in a conviction of criminal neglect or misconduct11; and

    • Felonies listed in Section 1128 of the Act.

  • False or misleading information: A provider or supplier is found to have submitted false or misleading information on the Enrollment Application to gain enrollment in the Medicare program (in which case offenders may be referred to the HHS Office of Inspector General for further investigation and potential sanctions).

  • On-site review: Based on on-site review or other reliable evidence, CMS determines that the provider or supplier is not operational, is not meeting enrollment requirements, or, in the case of suppliers, has failed to furnish Medicare covered items or services as required by statute or regulations.

Providers and suppliers that have been denied enrollment may resubmit an Enrollment Application in cases where:

  • A denial is not appealed, after the lapse of appeal rights12;

  • A denial is upheld on appeal, after notification of such determination; or

  • A denial is based on adverse activity by any of the personnel listed under the "Conduct" bullet above, in which case the denial may be reversed if the business relationship between the provider or supplier and such personnel is terminated and proof is submitted within 30 days of the denial notification.

Denial of enrollment will trigger automatic review by CMS of all other related Medicare enrollment files associated with the denied provider or supplier (i.e., as an owner or managing employee).

I. Sec. 424.535 – Revocation of enrollment and billing privileges in the Medicare program

CMS may revoke the enrollment of a currently enrolled provider or supplier’s Medicare billing privileges (and any corresponding provider agreement) on the same grounds that it may deny enrollment (e.g., compliance, conduct, felonies, false or misleading information, and on-site review). In cases of noncompliance, all providers and suppliers will be given an opportunity to correct the deficiency before billing privileges are revoked. In addition, if CMS has information indicating potential noncompliance, it may request additional documentation, which must be submitted by the provider or supplier within 60 calendar days.

CMS may also revoke a provider’s or supplier’s billing privileges on the following grounds:

  • Inadequate reverification information: The provider or supplier fails to supply complete and accurate information and supporting documents within 60 calendar days of request from CMS for an application or supporting documentation or resubmission and certification of the accuracy of enrollment information.

  • Misuse of billing number: The enrollee knowingly sells or allows another individual or entity to use its billing number, with the exception of enrollees who have entered into a valid reassignment of benefits or a change of ownership.

Revocations will become effective within 30 days of the initial revocation notice. Provider agreements also will be terminated, as of the date billing privileges are revoked. To reestablish billing privileges, a provider or supplier must resubmit a new Enrollment Application, obtain new survey or certification by applicable state survey agencies, and establish a new provider agreement with the CMS regional office. Once again, in cases where enrollment is revoked due to adverse activity by an individual or organization other than the provider or supplier, it may be reversed if the business relationship is terminated and proof is submitted within 30 days of the revocation notification. Revocation of enrollment will also trigger additional automatic review by CMS of all other related Medicare enrollment files associated with the denied or revoked provider or supplier.

J. Sec. 424.540 – Deactivation of Medicare billing privileges

Deactivation of Medicare billing privileges may occur when a provider or supplier:

  • Does not submit any Medicare claims for 12 consecutive calendar months, beginning the first day of the first month without claims submission through the last day of the twelfth month without claims submission (this 12 month period corresponds with current CMS policy; CMS had proposed to reduce the period to six months, but decided to retain the current policy when concerns were expressed about the proposal);

  • Does not report a change of information (such as, but not limited to a change of location, managing employee, or billing service) within 90 calendar days; or

  • Does not report a change of ownership or control within 30 calendar days (see discussion of Section 424.550 below for additional discussion of this issue).

Except in cases of deactivation due to non-submission of claims, providers and suppliers must submit a new Enrollment Application to reactivate their billing privileges or, when determined appropriate and at a minimum, recertify that current enrollment information is correct.13

In cases of deactivation due to non-submission of claims, providers and suppliers must recertify that current enrollment information is correct and submit any missing information. The provider or supplier must also meet all current Medicare requirements and be prepared to submit a valid Medicare claim at the time of reactivation. Neither a new provider agreement nor new certification by the applicable state survey agency is required. Deactivation does not affect a provider or supplier’s participation agreement or any conditions of participation, but would prevent the provider or supplier from submitting claims until the number is reactivated.

K. Sec. 424.545 – Provider and supplier appeal rights

Denial or revocation of enrollment may be appealed according to the process set forth in applicable CMS regulations. Payments will not be made during an appeal, but if an appeal succeeds, unpaid claims for services rendered during the overturned period may be resubmitted. In response to comments, CMS indicates that it will propose an appeals process as part of a future rulemaking.

Deactivation of enrollment may be rebutted according to previously established CMS regulations.

L. Sec. 424.550 – Prohibitions on the sale or transfer of billing privileges

In general, providers and suppliers may not sell or allow another individual or entity to use their billing number or privileges.

In addition, Medicare billing privileges may be transferred only in cases of changes of ownership. With specific respect to providers falling under 42 C.F.R. Part 489 of the regulations, the Final Rule states that both the current and prospective new owner must submit Enrollment Applications before completion of the change of ownership. Current owners who fail to comply with this rule may be sanctioned or penalized, even after the change occurs. CMS may deactivate the billing number if a prospective new owner fails to submit a new Enrollment Application within 30 days of the change of ownership.14 CMS may also deactivate a billing number if an incomplete Enrollment Application is submitted, based on material omissions or preliminary review which leads CMS to question whether the new owner will ultimately be granted a final transference of the provider agreement. With respect to suppliers not covered under part 489, changes of ownership or control interest must be reported within 30 days. Finally, the Final Rule notes, any change of ownership that also changes the tax identification number of a supplier will require submission of a new Enrollment Application by the new owner.

M. Sec. 424.555 – Payment liability

No payments may be made to a DMEPOS supplier unless the supplier has obtained Medicare billing privileges. Providers or suppliers whose billing privileges are deactivated, denied, or revoked (in which case a Medicare beneficiary also has no financial responsibility and any payment they have made must be refunded in a timely manner15) may not receive payment. If providers or suppliers pursue these payments, they may be criminally liable.

III. APRIL 2006 VERSION OF FORM 855

On May 1, 2006, new versions of the Medicare Enrollment Application (Form CMS-855A for institutional providers, Form CMS-855B for clinics/group practices and certain other suppliers, Form CMS-855I for physicians and non-physician practitioners, Form CMS-855S for DMEPOS suppliers, and Form CMS-855R for reassignment of Medicare benefits) were posted on the CMS website. The new forms contain an effective date of April 2006.

CMS believes the new forms will simplify the enrollment process, combining forms or sections of information when possible. Use of the current 855 forms is being discontinued, and at least some fiscal intermediaries and carriers have already stopped accepting the prior (November 2001) version of the application. We suggest that providers and suppliers begin using the new forms immediately.

The following items are of note on the new Enrollment Applications:

  • The new Enrollment Application forms (Forms CMS-855A, CMS-855B, CMS-855I, and CMS-855S) require most applicants (except for organ procurement organizations) to obtain a National Provider Identifier ("NPI") before they enroll or submit changes to their existing Medicare enrollment information. (A copy of the NPI notification furnished by the National Plan and Provider Enumeration System should be included with each Enrollment Application.) Many providers and suppliers may not yet have obtained NPIs, because HIPAA regulations do not require use of NPIs until May 23, 2007 (or a year later for small health plans). (It is noteworthy that the Final Rule does not contain an immediate requirement to include NPIs on an Enrollment Application (see Sec. 424.510 above)). In addition, CMS’s discussion of the Final Rule simply indicates that "CMS won’t be able to finalize the enrollment review process after May 23, 2007 unless an NPI is provided." Nevertheless, we believe that CMS intends for the NPI requirement to be enforced. Accordingly, we suggest that suppliers and providers be prudent in this regard and begin the process to obtain NPIs immediately, especially given that Sec. 424.530 of the Final Rule (relating to denial of enrollment) indicates that enrollment requirements include those on the applicable Enrollment Application.

  • Mandatory use of electronic funds transfer will now begin, starting with providers and suppliers initially enrolling or making changes to their enrollment information. Such applicants are now required to complete the previously optional Authorization Agreement for Electronic Funds Transfer (Form CMS-588).

  • The new forms specifically state that there may be as many authorized officials as desired by the provider or supplier, as long as each individual meets the definition of an authorized official.

  • The new forms imply that there can be as many delegated officials as desired by the provider or supplier, as long as each individual meets the definition of a delegated official. By signing an Enrollment Application, the delegated official is certifying that he/she meets the definition.

  • Prior sections on the Enrollment Application forms relating to electronic claims submission (Section 9), staffing companies (Section 10), and surety bonds (Section 11) have been removed from the new forms. In addition, information regarding overpayments no longer must be submitted.

  • CMS also removed or revised certain data collections from specific forms, such as a shortened attachment for ambulance companies on the CMS-855B, elimination of practice locations from the CMS-855R, and elimination of questions dealing with fiscal intermediary preferences on the CMS-855A.

  • CMS simplified Sections 5 and 6 of the Enrollment Applications (relating to ownership interest and managing control information) and added clarifications in the instructions.

  • CMS has revised Section 17 of the Enrollment Application in an attempt to clarify what documents must accompany the Enrollment Application.

  • The certification statement on the new applications specifically indicates that deliberate omission, misrepresentation, or falsification of any information contained in the Enrollment Application may be punished by criminal, civil, or administrative penalties, including but not limited to the denial or revocation of Medicare identification numbers and the imposition of fines, civil damages, and/or imprisonment.

  • CMS clarifies that a sole proprietor who incorporates (and who is the sole owner of the business) only needs to complete the CMS 855I form and report information about the practice.

Finally, it is noteworthy that CMS indicates in the Final Rule that it is currently developing a web-based electronic enrollment process. CMS expects to begin using the electronic system, which enrollees will also be able to use to report changes, in 2007. The web-based system will also further simplify multi-state enrollment burdens.

Footnotes

1 71 Fed. Reg. 20754 (April 21, 2006). The text of the final rule is available on the internet at: http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/06- 3722.pdf.

2 68 Fed. Reg. 22064 (April 25, 2003). The text of the proposed rule is available on the internet at http://a257.g.akamaitech.net/7/257/2422/30may20030800/edocket.access.gpo.gov/2003/pdf/03- 9943.pdf.

3 In response to a public comment, CMS rejected the idea of implementing a single, nationwide enrollment process to cover the entire country through only one enrollment application, stating that this had been tried unsuccessfully in the past.

4 71 Fed. Reg. 20764.

5 CMS notes, however, that issuance of any identification number, including the NPI, does not automatically grant Medicare billing privileges. While the NPI will become the Medicare billing number upon its adoption by the Medicare program, providers and suppliers still must apply for and obtain approval to bill for services and supplies.

6 An "authorized official" is defined in the Final Rule to mean "an appointed official (for example, chief executive officer, chief financial officer, general partner, chairman of the board, or direct owner) to whom the organization has granted the legal authority to enroll it in the Medicare program, to make changes or updates to the organization’s status in the Medicare program, and to commit the organization to fully abide by the statutes, regulations, and program instructions of the Medicare program." 42 C.F.R. 424 § 502.

7 DMEPOS suppliers must still revalidate their enrollment every three years in accordance with 42 C.F.R. § 424.57(e).

8 In response to comments, CMS indicates that those needing more than 60 days may request additional time, and Medicare contractors will decide whether to take action (i.e., revoking a billing number) against those who have not submitted information in a timely manner. If no changes have occurred, CMS expects current enrollees will be able to simply sign, date, and return the revalidation application.

9 It is notable that CMS’s discussion of this point differs slightly from the regulatory language. In the preamble discussion, failing to furnish all required supporting documentation within 60 calendar days of the request (rather than submission of the application) is cause for rejection of an application. In case of a challenge on this issue, however, regulatory language is likely to prevail.

10 In discussion of the Final Rule, CMS indicates that this would include any individual, entity, provider, or supplier that arranges or contracts with (by employment or otherwise) an individual or entity that the provider or supplier knows or should know has been excluded, debarred, or suspended as described above.

11 This is the regulatory language. We note that a malpractice suit is a civil action that does not lead to a felony conviction; however, the underlying facts could lead to a separate criminal action arising under the criminal neglect or abuse laws, that could result in a felony conviction.

12 CMS states that it is adopting this policy to avoid administrative confusion, which could result if a new application is under consideration while an old application for the same applicant is under appeal.

13 In discussion of the Final Rule, CMS indicates that it would give reactivation of billing numbers priority handling to ensure expedited payment of claims.

14 In the preamble discussion of the Final Rule, CMS indicates that failure of a new owner to submit an application before a change of ownership may result in deactivation of Medicare billing privileges until an Enrollment Application has been submitted. CMS may also deactivate a Medicare billing number at any time before final transference of the provider agreement to the new owner. CMS believes this policy will permit it to obtain adequate information to determine if a provider or supplier should have billing privileges before complete validation of their enrollment and transfer of the provider agreement. "We understand that not all enrollment information is available before the change of ownership. We will work with the new owner(s) to ensure a seamless transition, but it is the provider’s or supplier’s responsibility to report this and any other changes to us…." 71 Fed. Reg. 20762.

15 The discussion of the regulations indicates that a refund does not need to be made until all appeal processes have been exhausted. 

This article is presented for informational purposes only and is not intended to constitute legal advice.