Medicare New Fraud Regulations: Locking the Revolving Door re Provider Enrollment of Fraudsters

Updates regulations in April 2006 and February 2011.
Includes minor updates based on general authorities 1102 and 1871 (here).
The proposed rule (Obama administration, 3/1/2016) received only 87 comments.

Trade journal Health Care Dive, here.
Dark Report covered in its October 14, 2019 issue.
Arent Fox at JD Supra, here.

CMS final rule at Federal Register here.  84 FR 47794-857 (64 pp), September 10, 2019.

CMS NEWS / FOR IMMEDIATE RELEASE
September 5, 2019

Contact: CMS Media Relations
(202) 690-6145 | CMS Media Inquiries

https://www.cms.gov/newsroom/press-releases/cms-announces-new-enforcement-authorities-reduce-criminal-behavior-medicare-medicaid-and-chip

Inspection Copy:

https://s3.amazonaws.com/public-inspection.federalregister.gov/2019-19208.pdf

CMS Announces New Enforcement Authorities to 
Reduce Criminal Behavior in Medicare, Medicaid, and CHIP

The Centers for Medicare & Medicaid Services (CMS) today issued a final rule that strengthens the agency’s ability to stop fraud before it happens by keeping unscrupulous providers out of our federal health insurance programs. This first-of-its-kind action – stopping fraudsters before they get paid – marks a critical step forward in CMS’ longstanding fight to end “pay and chase” in federal healthcare fraud efforts and replace it with smart, effective and proactive measures. Today’s action is part of the Trump Administration’s ongoing effort to safeguard taxpayer dollars and protect the core integrity of the critical Medicare and Medicaid programs that millions rely on. 

The final rule, Program Integrity Enhancements to the Provider Enrollment Process (CMS-6058-FC), creates several new revocation and denial authorities to bolster CMS’ efforts to stop waste, fraud and abuse. Importantly, 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. For 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 enrolled, can have its enrollment revoked because of the problematic affiliation.   

“For too many years, we have played an expensive and inefficient game of ‘whack-a-mole’ with criminals – going after them one at a time -- as they steal from our programs. These fraudsters temporarily disappear into complex, hard-to-track webs of criminal entities, and then re-emerge under different corporate names. These criminals engage in the same behaviors again and again,” said CMS Administrator Seema Verma.  “Now, for the first time, we have tools to stop criminals before they can steal from taxpayers. This is CMS hardening the target for criminals and locking the door to the vault. If you’re a bad actor you can never get into the program, and you can’t steal from it.” 

The rule also includes other authorities that will effectively improve CMS’ fraud-fighting capabilities. Similar to the affiliations component, these authorities provide a basis for administrative action to revoke or deny, as applicable, 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.

The new rule also gives CMS the ability 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. Furthermore, the new rule expands the reenrollment bar that prevents fraudulent or otherwise problematic providers from re-entering the Medicare program. CMS can now block providers and suppliers who are revoked from re-entering the Medicare program for up to 10 years. Previously, revoked providers could only be prevented from re-enrolling for up to 3 years. Additionally, if a provider or supplier is revoked from Medicare for a second time, CMS can now block that provider or supplier from re-entering the program for up to 20 years.

These important new authorities and restrictions, effective November 4, 2019, ensure that the only providers and suppliers that will face additional burdens are “bad actors” — those who have real and demonstrable histories of conduct and relationships that pose undue risk to taxpayers, patients and program beneficiaries. This new rule ushers in an important new era of smart, effective, proactive and risk-based tools designed to protect the integrity of these vitally important federal healthcare programs we rely on every day to care for millions of Americans. 

This new rule builds on CMS’ previous successful efforts to protect beneficiaries and taxpayer dollars while limiting burden on our provider partners without whom we could not deliver high quality care to the millions of people we are honored to serve. “Every dollar that is stolen from federal programs is a dollar that will never contribute to paying for an item or service for seniors and eligible people who need them,” said Administrator Verma. 

The Trump Administration’s program integrity activities saved Medicare an estimated $15.5 billion in Fiscal Year (FY) 2017, for an annual return on investment of $10.8 to $1. The 2018 Medicare fee-for-service (FFS) improper payment rate was 8.12%, the lowest since 2010. This translates to about $4.5 billion less in estimated improper payments from 2017. For Medicaid, in FY 2018 CMS recovered $10.5 billion in FFS improper payments. An improper payment is any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative or other legally applicable requirements.

In addition to today’s rule, CMS has implemented several new initiatives to increase provider and supplier transparency and accountability while reducing burden in the Medicare and Medicaid programs. To learn more, click here.

https://www.cms.gov/About-CMS/Components/CPI/CPI-Spotlight.html

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