Medicare enrollment land mines

Corinne Smith

What would happen to you or your practice if your Medicare privileges were revoked? For many physician practices, this would essentially be a death penalty and their practice would have to shutter its doors. Despite the dire consequences related to mistakes in Medicare provider enrollment, many physicians are unaware of the provider enrollment rules and fail to update their Medicare enrollment information.

Are you at risk? The answer may depend on when you last reviewed your Medicare provider enrollment status, if ever. The Center for Medicare Services has recently initiated a significant process related to revalidation of provider enrollments, audits of physician enrollments and, as a result, is issuing harsh penalties for non-compliance. With the increased scrutiny on physician practices, it is important that you have a comprehensive understanding of the rules and know how to respond to any action by CMS.

All physicians and practices must enroll with Medicare in order to obtain a billing number.  This is usually accomplished by completing the CMS 855B form. This is a paper form that is still available even though Medicare moved to the Internet-based electronic system Provider Enrollment, Chain and Ownership System, or “PECOS”, several years ago. To maintain Medicare billing privileges, you must resubmit and recertify the accuracy of your individual and/or group Medicare enrollments every five years. You must also notify Medicare of changes to your practice when they occur.

The federal government recently ran an analysis of practice locations on Medicare enrollment against other data sources – U.S. Post office, state medical boards, and Social Security – and identified that 105,234, approximately 11 percent, of the listed physician practice location addresses were either vacant or contained an invalid address. You cannot use a post office box number as a practice location! If the error is determined by CMS before a contractor site visit occurs, CMS may send a notice letter and provide the practice an opportunity to correct the error. If CMS or one of its contractors visits your practice location and finds it is no longer being used, or is a post office box, but the practice location is still on your Medicare enrollment, your Medicare billing privileges will be revoked.

Why is this happening? CMS announced these audits and the expansion of its exclusion authority as part of a fraud fighting expansion. CMS can and will revoke or deny enrollment to physicians who do not comply with Medicare regulations. The fraud is not just focused on physicians who have a “pattern and practice” of submitting improper claims, even though these are the physicians who pose a program integrity risk to Medicare. 

To identify incorrect practice locations, CMS has implemented a site visit verification process using a National Site Visit Contractor. The NSVC will verify enrollment-related information during the site visit and collect specific information based on pre-defined checklists. Failure to cooperate with inspectors could result in the denial or revocation of your Medicare enrollment number.  In addition to the site validation, the contractor will look for minimal inadvertent claim errors, which can also result in revocation of billing privileges. CMS has confirmed that as few as three claims errors could indicate a “pattern or practice” of fraud. Physicians and physician groups are currently having their billing privileges revoked for inadvertent errors in claims, such as a few unrelated claims submitted under the provider number, without a modifier or for a person who is deceased. Sometimes the claims errors account for less than one percent of the total claims for the audit period but are still used against the physician and considered indicia of fraud.

What do you do if you receive a letter informing you that your Medicare billing privileges have been or will be revoked? First, stop billing Medicare immediately. Generally, a revocation of billing privileges is effective 30 days after the written notice is mailed. However in many cases, CMS has imposed the revocation with a retroactive date. This finding results in a period of non-compliance where the physician improperly billed, and received Medicare while the billing privileges were revoked. If the revocation is upheld, any Medicare collections during the period of “non-compliance” are considered overpayments and will result in a repayment obligation with possible penalties.

If the letter is providing warning or an advanced notice, physicians and suppliers should complete and file a corrective action plan. The CAP must be submitted within 30 days for all other suppliers and physicians. The CAP requires that you update the enrollment and correct any errors. In addition, the provider should file an explanation and any other remedial or prospective action regarding compliance. If the CMS contractor finds that the CAP contains sufficient evidence to determine the provider or supplier is now in compliance with the Medicare requirements, billing privileges may be reinstated. Payment would be made for services billed from the date of the reinstatement.

If you receive a letter indicating your privileges have already been revoked, you must file a request for reconsideration, usually within 60 days. The request must identify the error which resulted in the revocation and provide evidence as to why the finding was incorrect and why privileges should be reinstated. You should file a CAP within 30 days and a request for reconsideration within 60 days of the receipt of the letter. CAPS are usually reviewed quickly. Reconsiderations can take up to 90 days for review.

Federal regulations give most physicians the opportunity to file a CAP within 30 days of receiving notice of Medicare revocation. A CAP can result in a reversal of a termination much quicker than a request for reconsideration. Filing a CAP provides the opportunity to “correct” the deficiencies that resulted in the denial or revocation. In situations when the enrollment denial or revocation of billing privileges was not warranted, it is important that the CAP provide objective evidence demonstrating compliance with the enrollment rules. This requires not only a thorough knowledge of the enrollment requirements, but may also require detailed information regarding past enrollment application filings. Second, to maintain your appeal rights, you must file an official request for reconsideration within 60 days of receiving a revocation notice letter. The request for reconsideration is a more formal document and must include all of the evidence substantiating your response. Be forewarned however, that filing a CAP is NOT the same as filing a request for reconsideration and WON’T preserve your appeal rights. One strategy that is often employed is to file a CAP, and if you don’t receive a decision within 60 days, proceed with filing a request for a reconsideration.

If a provider loses at reconsideration, there is a final option which is to appeal the decision to an Administrative Law Judge with the Department of Health and Human Services, Departmental Appeals Board. DAB appeals have specific procedural and evidentiary regulations, one of which states that a provider will not be permitted to submit new documentary evidence at the DAB level of appeal absent a showing of good cause. What this rule means is that you can submit all the testimony they like with a DAB appeal, but you generally won’t be permitted to submit any new evidence that was not submitted at reconsideration. For this reason, it is very important that you carefully and thoroughly collect and submit all the documents relevant to your defense at the time of the reconsideration request. Assistance from experienced legal counsel with identifying those documents and developing legal arguments will be invaluable at this stage. 

As you can see, Medicare billing privilege revocations have serious consequences. If your billing privileges are revoked, you will also be barred from re-enrolling for a period of one to three years. While loss of Medicare billing privileges may not be harmful to certain physician practices, there are additional ramifications to consider. If you lose Medicare billing privileges, Medicaid, CHAMPUS and other federal payors will also revoke billing privileges. There is also a significant risk that commercial payers will terminate you from their networks if you no longer participate in Medicare. If you take call at a local hospital, you will need to tell the hospital that you are no longer enrolled with Medicare. Thus, the collateral damages associated with a Medicare billing privilege revocation are significant.

Now that you know all of the bad news, what can you do to stay out of trouble? First, if you don’t already have one, obtain a log-in to the PECOS system so that you can verify your enrollment and make changes in real-time. To validate or update your Medicare enrollment, you should use PECOS or fill out the paper forms 855B, for physician groups, and/or 855I for individual providers. There are significant advantages in using PECOS: (i) the turnaround time is shorter; (ii) you have more control over enrollment information including reassignments; (iii) it is easy to check and update your information for accuracy; and (iv) it takes less staff time and reduced administrative costs to complete and submit enrollment to Medicare. With the penalties associated with revocation being so high, it is very important to be aware of the ever-changing Medicare rules and remain in compliance.  

Remember you have only 30 days to notify Medicare when there are: (i) any changes in ownership; (ii) any changes in practice location; and/or (iii) any final adverse actions taken by Medicare. You have 90 days to notify Medicare of: (i) a change in practice status; (ii) a change in business structure, legal business name or taxpayer identification number; (iii) change in banking arrangements or payment information; and/or (iv) a change in the correspondence for special payments address.

Check your status with PECOS today and frequently. If you already have a log-in for the National Plan and Provider Enrollment System for your National Provider Identifier, you may use that same log-in for PECOS. If you have forgotten your NPPES user name or password, you may contact the NPI Enumerator at (800) 465-3203 or customerservice@npienumerator.com to obtain log-in information. Don’t forget to update your NPI information with NPPES Registry while you are at it. Your information in PECOS and NPPES must match. Finally, be careful to whom you delegate access to perform these vital functions. Blaming the mistake on a billing company or employee is not going to be a sufficient defense in any Medicare appeal you are personally responsible for the accuracy of your information. In the end, it is your livelihood at stake and the ramifications from mistakes are draconian.

Sidebars

1. Does your practice have a compliance plan? The Office of Inspector General issued practice guidance on compliance requirements several years ago. The existence of a compliance plan can be helpful in the event of a CMS audit or allegation of wrongdoing. If your compliance program does not include periodic claims reviews and reviews of enrollment data for accuracy, now would be the time to update your practice’s compliance plan to include these activities.

2. Currently, CMS has been focusing audits on provider practice locations as reported on the 855B. The audits have identified two major risk issues for physicians: (i) incorrectly identifying a post office box or home address as a practice location; and (ii) failing to make a timely report about a change in location, additional practice locations, closing of practice locations, etc. Many physicians are unaware that they only have 30 days to report changes such as the relocation of an office, changes in billing companies, or adding physicians to a group. Others simply “forget” to update their Medicare enrollment or don’t even know it is required. Failure to update your information could result in your Medicare billing provider status revoked and bar you from re-enrollment in the program for up to three years.

3. Is this really a big deal? It was just a mistake. Some of you may be thinking, how much could revocation really affect me? If it is an innocent error, shouldn’t I be able to fix it relatively easily? The short answers to those questions are (1) it will affect you a lot; and (2) no it is not easy to fix. If you receive a letter from CMS or from Novitas, the local Medicare Administrative Contractor, notifying you of a revocation, or potential revocation, do not delay in acting! There are quick deadlines requested for your response. If the CAP or letter of request for consideration are denied, there are further remedies for appeal or suit in district court.  However, even with the best legal counsel, there is no guarantee that the appeals will be successful and that billing privileges will be reinstated.

4. Keep good records and proof of filing. When you file any documents with CMS or the MAC, ALWAYS USE A TRACKING SERVICE (CERTIFIED MAIL OR FED EX) TO PROVE YOU FILED IT! If you don’t have a record of timely filing, your CAP or reconsideration can be denied without recourse. Likewise, if you are using paper forms instead of PECOS, you must keep excellent records and a proof of delivery. If you can’t prove you filed it, according to CMS, you didn’t file it.

5. What is re-validation? In February of 2016, CMS issued a Med Learn Matter (SE1605) concerning a new process for “re-validation” which was authorized under Section 6401 (a) of the Affordable Care Act. Providers should check the Medicare Revalidation website, http://go.cms.gov/MedicareRevalidation, to identify the due date for their validation. CMS encourages you to submit your re-validation SIX months before the due date or when you receive notification from your Medicare Administration Carrier.
   
   If you practice in Texas, your MAC is Novitas. Due dates are listed up to six months in advance and updated every 60 days. If the site says TBD, your due date is to be determined and you need to check back in 60 days or rely on the MAC to send you the re-validation notice. You will note that the advice to file the re-validation six months in advance doesn’t really work if the MAC gives you only two to three months’ notice of your due date. In fact, the Medlearn Matter states that if you are within two months of the due date and have not received notice to revalidate from the MAC, it is your responsibility to submit your revalidation application. If you are part of a large group – more than 200 providers – accepting reassigned benefits from providers or suppliers, the MAC will send you a spreadsheet and have dedicated provider enrollment staff to assist with large group revalidations.
   
   Failure to submit a timely revalidation application can result in deactivation of Medicare enrollment so the significance of the revalidation process cannot be overstated. If you are deactivated for a substantial period of time, your reactivation date will not be retrospective and there will be an interruption in billing and a loss in revenue.

Corinne Smith, partner in Strasburger & Price LLP’s Austin office, advises health care providers about complex health care transactions, regulatory matters, and reimbursement. Prior to joining Strasburger she served as in-house counsel for Seton Health care Family and UT Medicine San Antonio/UT Health Science Center San Antonio. She is also a former health care administrator and Fellow in the American College of Healthcare Executives.