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From Health Law Daily, December 4, 2014

CMS puts off Incentive Reward Program changes but tightens provider enrollment rules

By Harold M. Bishop, J.D.

New rules designed to ensure that fraudulent entities and individuals do not enroll in or maintain their enrollment in the Medicare program have been finalized by CMS. The agency had also intended to increase the potential reward amount under the Incentive Reward Program (IRP) for information on individuals and entities engaging in sanctionable conduct in the Medicare program. However, based on adverse industry comments and the complexity of implementation, CMS chose not to finalize the proposed IRP provisions at this time. This Final rule will publish in the Federal Register on December 5, 2014.

Enrollment rule changes. The Final rule implements the following changes regarding provider/supplier enrollment:

  • Denial based on Medicare debt. Denial of enrollment will be allowed if the provider, supplier, or owner was previously the owner of a provider or supplier that had a Medicare debt existing when its enrollment was voluntarily terminated, involuntarily terminated or revoked and (1) the owner left the provider or supplier that had the Medicare debt within one year of that provider or supplier's voluntary termination, involuntary termination, or revocation; (2) the Medicare debt has not been fully repaid; and (3) CMS determines that the uncollected debt poses an undue risk of fraud, waste, or abuse. This denial based on Medicare debt can be averted if the enrolling provider, supplier, or owner satisfies the CMS claim collection criteria set forth in 42 C.F.R. §401.607 and agrees to a CMS-approved extended repayment schedule for the entire outstanding Medicare debt or repays the debt in full.

  • Felony conviction. Denial of enrollment or revocation of Medicare billing privileges will be allowed if, within the preceding 10 years, the provider or supplier, or any owner or managing employee, has been convicted of a federal or state felony offense that CMS determines to be detrimental to the best interests of the Medicare program and its beneficiaries.

  • Pattern or practice of bad claims. Revocation of Medicare billing privileges will be allowed if the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.

  • Ambulance suppliers. The ability of ambulance companies to “back bill” for services furnished prior to enrollment will be limited. Currently, physicians, non-physician practitioners, physician and non-physician practitioner organizations, diagnostic testing facilities and suppliers of durable medical equipment, prosthetics, orthotics, and supplies cannot bill for services furnished prior to the later of the date the supplier filed a Medicare enrollment application or the date the supplier first began furnishing services at a new practice location. CMS is simply expanding this rule to include ambulance suppliers.

  • CAP limitation. The ability of revoked providers and suppliers to submit a corrective action plan (CAP) will be limited to situations where the revocation was based on 42 C.F.R. §424.535(a)(1), i.e., noncompliance with enrollment requirements, the enrollment application, or failure to pay user fees. The provider and supplier will have only one opportunity to correct all deficiencies through the CAP.

  • Submission of remaining claims. All revoked providers and suppliers will be required to submit all of their remaining claims within 60 days after the effective date of their revocation.

Incentive Reward Program. On April 29, 2013, CMS published a Proposed rule to revise the provider enrollment requirements and the IRP provisions (see CMS releases proposed rule on Medicare Incentive Program, provider enrollment, April 29, 2013). Under the Proposed rule, the reward would be increased from 10 percent of the overpayments recovered or $1,000, whichever is less, to 15 percent of the final amount collected applied to the first $66 million for the sanctionable conduct. The Proposed rule also specified that CMS would not will not give a reward for the same or substantially similar information that was the basis of a payment under the federal False Claims Act (31 U.S.C. sec. 3729 et seq.) or any state False Claims Act. The tip would need to provide sufficiently specific information to start a review or investigation by CMS, and the reward would go to the first person to give specific information on a provider or supplier.

CMS received a number of adverse comments regarding these proposed changes, including the following:

  • The significantly increased reward amount would lead to many reports containing irrelevant or erroneous information that would ultimately impose a heavy burden on CMS and its contractors.

  • The proposal to limit reward eligibility to the first reporter of information could create “shoot first, ask questions later” situations leading to tension between providers and patients.

  • The proposal would encourage whistleblowers to first report their concerns to CMS instead of using established internal compliance reporting methods created within Medicare provider organizations.

  • Does CMS have the resources in place to handle the large influx of tips and complaints that the proposal will generate?

In response to these concerns and due to the complexity of implementation, CMS chose not to finalize the proposed IRP provisions contained in its Proposed rule, but indicated that it may finalize them in the future.

Cost and impact. According to CMS, savings from most of the finalized provider enrollment provisions cannot be quantified. However, with regards to the limitation on ambulance supplier back-billing, CMS believes that this provision will result in a transfer of $327.4 million per year from ambulance suppliers to the federal government. In addition, CMS believes that the requirement for revoked providers and suppliers to submit remaining claims within 60 days of revocation will limit Medicare’s vulnerability to fraudulent claims and allow for a more focused medical review. The agency believes this will likely lead to some future savings to the federal government.

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