Proposed Initiatives Need More Work?

On April 29, 2013, CMS published a proposed rule in the Federal Register to solicit comment on two major issues: changes to the Medicare provider enrollment process and the establishment of a new Medicare Incentive Reward Program. CMS accepted comments on these two initiatives through June 28, 2013.

Medicare Provider Enrollment Changes

In the proposed rule, CMS seeks to revisit the enrollment process and give contractors more power to reject enrollments of entities that pose a perceived increased risk to the Medicare program. There are six prongs to this proposed rule that could potentially impact providers seeking enrollment.

CMS is seeking the ability to deny new enrollments when a current owner (or managing employee) was the owner of another provider or supplier that has an unpaid Medicare debt (absent a repayment plan) when the individual left the provider or supplier that had the debt within one year of that provider or supplier’s voluntary termination, involuntary termination or revocation.

CMS is seeking the ability to deny new enrollments when a current owner (or managing employee) has been convicted of any type of felony conviction that CMS determines to be detrimental to the best interests of Medicare within the preceding 10 years.

The most controversial change that CMS is seeking relates to the ability to revoke billing privileges based on a pattern or practice of billing for services that do not meet Medicare requirements including, but not limited to, an assessment that an item is reasonable and necessary. This proposal moves beyond existing provisions which allow CMS to revoke privileges in individual cases where services were billed but not rendered or could not be furnished. CMS solicited comments on what should qualify as a billing “pattern or practice” (which would presumably be identified during prepayment reviews). CMS suggests that they would take into account percentage of submitted claims that were denied, total denied claims, reasons for denial, history of final adverse actions, length of time a pattern persists and length of time the provider has been enrolled in the program. CMS also is considering whether a “knowledge standard” should be associated with the proposed provision, e.g. if the supplier submits claims with “reckless disregard” as to the accuracy or if the provider “knew or should have known” that the claims would not meet Medicare requirements.

CMS is seeking to require providers to submit claims for services furnished prior to revocation to Medicare within 60 days of the notice of revocation. Revoked suppliers are considered to be a high risk to the Medicare program and CMS is seeking to limit Medicare’s exposure to fraudulent claims by narrowing the window for suppliers to submit false claims.

CMS is also seeking to formalize the calculation of the effective date for re-enrollment when a provider or supplier has been barred from the program. CMS is proposing that the re-enrollment bar begin 30 days after the official CMS letter is mailed to the provider or supplier. The reenrollment bar is the period of time a supplier is excluded from applying or re-enrolling in the Medicare program, and is levied at a minimum of one year but not to exceed a three year period (depending on severity). Currently, when a bar is enforced due to a federal exclusion, felony conviction, license revocation/suspension, or nonoperational status, there are delays in updating databases such that a contractor may not receive notification until months have already lapsed. The notices are currently retroactive and the suspension or bar is also retroactive. CMS wants to ensure the full period of the reenrollment bar so that a revoked provider or supplier is not benefited by a gap between the effective date of the revocation and the date on which the letter is mailed. However, a point to consider is that if the notice continues to be retroactive as established under current protocols, then prior claims can be recouped and the full re-enrollment bar is truly satisfied. Whereas under the CMS proposal, the provider could potentially be penalized for longer than the re-enrollment bar established per regulations.

CMS is seeking to exempt certain violations resulting in revocation from the submission of a corrective action plan (CAP) as a means to cure the deficiency. The proposal is not seeking to eliminate CAPs in all situations—they are still relevant in cases where a provider or supplier only minimally failed to comply with enrollment requirements. But CMS asserts that CAPs should not be viable in cases of major violations, such as OIG exclusions or felony convictions, nor should they be viable in cases where the supplier is revoked for supplying false or misleading information, or for failure to report a change in practice location. In serious cases the provider would still have the right to pursue the formal appeals process, but CMS maintains that no amount of corrective action can change these findings. In cases where a CAP remains a viable option, CMS is also proposing that providers get one opportunity to correct all of the deficiencies resulting in revocation of billing privileges.

Medicare Incentive Reward Program (IRP)

Also introduced in this proposed rule is a new program that CMS wants to initiate called the Incentive Reward Program (IRP). The IRP would incentivize the public to report fraud and abuse by creating financial incentives modeled after a similar program deployed by the IRS which has been very successful. CMS is seeking to enhance incentives offered under the existing IRP which limits rewards to 10 percent of the first $10,000 ($1,000 cap) of the final amount collected.

Under the proposed rule, CMS suggests that rewards should be based on 15 percent of the final amount collected (where a minimum of at least $100 is collected) up to the first $66,000,000 ($9.9 million incentive payment cap). They believe this will motivate more individuals to report suspicious activity. Under the current program, only 18 rewards have been paid since 1988 for a total of less than $16,000 in rewards payments and amounts collected of less than $3.5 million. In contrast, over a five-year period from 2007-2012, the IRS program collected $1.6 billion and paid $193 million in rewards. CMS also seeks to clarify that an individual is not eligible for an IRP reward if he or she has filed a qui tam lawsuit under the federal or any state False Claims Act. CMS also proposes that they will not give a reward for information that is similar to information used in a False Claims Act case, or for instances where an individual or entity is already the subject of a review or investigation. The reward will be limited to the first person who provides specific intelligence that leads to imposition of a sanction against a provider or supplier. However, to be eligible for the reward, the individual making the report will also have to sign an attestation stating that he or she has not participated in the sanctionable conduct.