New Medicare Rule

By Mathew J. Levy, Esq. & Stacey Lipitz Marder, Esq.

As of November 4, 2019, a new Medicare Rule known as the Program Integrity Enhancements to the Provider Enrollment Process (CMS-6058-FC) became effective. This Rule gives Centers for Medicare and Medicaid Services (CMS) broader authority to deter fraud by preventing certain providers and suppliers from participating in the CMS program based upon their actions and affiliations. This new rule is being phased in, and CMS has advised that it will be providing more guidance as to its implementation.

Specifically, CMS now has the authority to revoke or deny a provider’s or supplier’s enrollment for any of the following reasons:

(a) a pattern or practice of abusive ordering or certifying of Medicare Part A or Part B items, services or drugs;

(b) attempts to circumvent applicable rules by attempting to use a different name to reapply;

(c) billing for services or items from non-compliant locations; and

(d) an outstanding debt to CMS from an overpayment that was referred to the Treasury Department.

A new “affiliations” authority in the Rule allows CMS to identify individuals and organizations that pose an undue risk of fraud, waste or abuse based on their relationships with other previously sanctioned entities, and either deny or revoke enrollment. Providers now have to disclose on their initial 855 enrollment application and re-validation forms any current or past “affiliations” with organizations or individuals who have had certain “disclosable events”. Failure to accurately disclose the required information can result in denial or revocation of a provider’s Medicare enrollment.

The new Rule also allows CMS to prevent providers from re-enrolling in Medicare for up to ten years (or longer if CMS determines that providers are trying to circumvent their existing bar) if their Medicare enrollment was previously revoked. Previously, providers were able to re-apply after three years.

In light of the new Rule, providers need to be extra cognizant of who they associate with, and do their due diligence to determine whether their business partners and employees have or previously had issues with CMS. While providers can check the Office of Inspector General (“OIG”) excluded-provider database and corresponding state databases to determine if individuals or entities are or have been sanctioned by OIG or Medicaid, most of the information required to be disclosed is not public. Since this information cannot be publicly obtained, providers will need to rely on representations made by such individuals and representatives. Accordingly, providers should consider updating their contracts to reflect these additional representations, as well as updating their policies and procedures to ensure there is a mechanism in place to obtain this required information. Although burdensome, it is essential that providers consider taking these extra steps to protect themselves as their Medicare privileges are on the line.

Should you have any questions regarding the new Rule please contact Mathew Levy at 516-926-3320 or MLevy@weisszarett.com or Stacey Marder at 516-926-3319 or SMarder@weisszarett.com.

About the Authors:

Mathew J. Levy, Esq. is a Principal of Weiss Zarett Brofman Sonnenklar & Levy, PC. Mr. Levy is nationally recognized as having extensive experience representing healthcare clients in transactional and regulatory matters. Mr. Levy has particular expertise in advising health care clients with respect to contract issues, business transactions, practice formation, regulatory compliance, mergers & acquisitions, professional discipline, criminal law, healthcare fraud & billing fraud, insurance carrier audits, litigation & arbitration, and asset protection-estate planning.

Stacey Lipitz Marder is senior counsel at Weiss Zarett Brofman Sonnenklar & Levy, PC with experience representing healthcare providers in connection with transactional and regulatory matters including the formation and structure of business entities, negotiating and drafting contracts and commercial real estate leases, stock and asset acquisitions and general corporate counseling. Ms. Marder also has experience advising healthcare clients on a wide range of regulatory issues including Stark, the Anti-Kickback Statute, fraud and abuse regulations, HIPAA, reimbursement and licensing matters.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors' rights, and commercial real estate transactions.

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