CMS Announces New Rule to Prevent “Bad Actors” from Participating in Medicare and Medicaid Programs

On September 5, 2019, the Centers for Medicare & Medicaid Services (CMS) issued Program Integrity Enhancements to the Provider Enrollment Process (CMS-6058-FC) (“New Rule) increasing the agency’s revocation and denial authorities to stop waste, fraud and abuse, by identifying individuals and organizations that pose an undue risk based on their past actions and/or “affiliation” with previously sanctioned persons or entities.   In announcing the New Rule, CMS Administrator Seema Verma emphasizes the need to stop repeat “bad actors” from continuing to directly or indirectly benefit from participation, stating that the current rules are “hardening the target for criminals and locking the door to the vault.”  Click here to read the full press release published by CMS, “CMS Announces New Enforcement Authorities to Reduce Criminal Behavior in Medicare, Medicaid, and CHIP”.

Effective November 4, 2019, the New Rule expands CMS’s authority to punish Medicare and Medicaid providers with a history of noncompliance or who are affiliated with “bad actors”. The new “affiliations” authority expands the agency’s ability to identify individuals and organizations that are pose an increased risk of fraud because of their relationships with previously sanctioned entities. CMS explains “[f]or example, a currently enrolled or newly enrolling organization that has an owner/managing employee who is “affiliated” with another previously revoked organization can be denied enrollment in Medicare, Medicaid, and CHIP or, if already

The rule also includes other authorities intended to improve CMS’ fraud-fighting capabilities, allowing for revocation or denial of Medicare enrollment if:

  • A provider or supplier circumvents program rules by coming back into the program, or attempting to come back in, under a different name (e.g. the provider attempts to “reinvent” itself);
  • A provider or supplier bills for services/items from non-compliant locations;
  • A provider or supplier exhibits a pattern or practice of abusive ordering or certifying of Medicare Part A or Part B items, services or drugs; or
  • A provider or supplier has an outstanding debt to CMS from an overpayment that was referred to the Treasury Department.

With regard to reenrollment, the New Rule includes added authority to:

  • prevent applicants from enrolling in the program for up to 3 years if a provider or supplier is found to have submitted false or misleading information in its initial enrollment application;
  • block providers and suppliers who are revoked from re-entering the Medicare program for up to 10 years (increased from 3 years); and
  • block providers or suppliers who are revoked from Medicare for a second time from re-entering the program for up to 20 years.

With the November 4, 2019 effective date right around the corner, Medicare and Medicaid providers and suppliers are encouraged to review their ownership relationships and compliance activities.  Providers and suppliers should also develop policies for evaluating relationships supplier and providers which necessitates investigating their history of participation in and compliance with the rules and regulations of the Medicare and Medicaid programs.

Mr. Rafael (Ralph) Gaitan, Esq., is experienced in Medicare enrollment, revocation and deactivation matters and can assist all different types of health care providers enrolled in the Medicare program with filing an appeal to challenge a CMS revocation action (reconsideration of initial revocation or request for Administrative Law Judge “ALJ”); filing a corrective action plan (“CAP”) if permitted; and/or communicating with the Medicare contractor or CMS regarding said action. Mr. Gaitan can be reached at (786) 440-8115 or via email at [email protected] should you require additional information or assistance with this topic or any other health care related matter.