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New Medicare/Medicaid Enrollment and Screening Requirements Proposed

November 29, 2010 | Comments Off on New Medicare/Medicaid Enrollment and Screening Requirements Proposed
Posted by Beth Christian

On September 23, 2010, the Centers for Medicare and Medicaid Services (“CMS”) published proposed regulations which will modify Medicare/Medicaid provider screening and enrollment requirements.  These proposed regulations are designed to implement changes in the screening and enrollment process which were included in the federal healthcare reform legislation.  Under the proposed regulations, providers will be separated into three screening categories for purposes of evaluating their initial enrollment in Medicare and Medicaid, as well as periodic revalidation of their enrollment. 
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The first category encompasses providers and suppliers who are considered by CMS to be of “limited categorical risk”.  These include:  (i) physicians or nonphysician practitioners and medical groups or clinics; (ii) ambulatory surgery centers; (iii) end stage renal disease facilities; (iv) federally qualified health centers; (v) histocompatability laboratories; (vi) hospitals; (vii) Indian health service facilities; (viii) mammography screening centers; (ix) organ procurement organizations; (x) mass immunization roster billers; (xi) portable x-ray suppliers; (xii) religious non-medical healthcare institutions; (xiii) rural health clinics; (xiv) radiation therapy centers; (xv) public or government owned or affiliated ambulance service providers; and (xvi) skilled nursing facilities.  Providers or suppliers that are publicly traded on the New York Stock Exchange or on NASDAQ will also fall within the category of limited categorical risk. 

When limited categorical risk entities initially enroll as providers, or when periodic revalidation of their enrollment occurs, CMS will verify that the provider or supplier meets any applicable federal regulations or state requirements for their provider or supplier type.  In addition, CMS will conduct license verifications, including license verifications across state lines for multi-state providers.  CMS will also conduct database checks on a pre and post-enrollment basis to ensure that providers and suppliers continue to meet the enrollment criteria for their provider and supplier type. 

Certain other providers will be placed within a “moderate categorical risk” category.  These include:  (i) community mental health centers; (ii) comprehensive outpatient rehabilitation facilities; (iii) hospice organizations; (iv) independent diagnostic testing facilities; (v) non-government owned or affiliated ambulance service providers; and (vi) independent clinical laboratories.  These providers will also fall within the “moderate” risk category upon revalidation of their provider status, as will home health agencies. 

For providers in the moderate categorical risk categories, CMS will perform all of the screening requirements that it performs for providers falling within the limited categorical risk category.  In addition, providers or suppliers falling into the moderate categorical risk category will also be required to have an on-site visit. 

Suppliers of DMEPOS, as well as home health agencies seeking initial enrollment in Medicare or Medicaid or who are establishing a new practice location, will fall within the “high categorical risk category”.  Providers and suppliers in this category will be subject to the same screening requirements for limited and moderate categorical risk providers and suppliers.  In addition, they will be subject to criminal background checks and will also need to submit fingerprints to CMS. 

Under certain circumstances, a low or moderate risk provider may be moved to the high risk category.  This adjustment can occur if any of the following circumstances arise:  (i) CMS or its Medicare contractor has information from a physician or nonphysician practitioner that another individual is using their identity within the Medicare program; (ii) CMS imposes a payment suspension on a provider or supplier; or (iii) the provider or supplier has been excluded from Medicare by the Office of Inspector General or has had its billing privileges denied or revoked by a Medicare contractor within the previous 10 years and is enrolling as a new provider or attempting to establish billing privileges for a new practice location.  Movement from one category to another can also occur if the provider has been terminated or is otherwise excluded from billing Medicaid. 

The new enrollment and revalidation requirements will go into effect on March 23, 2011.  Thus, providers or suppliers enrolling on or after that date, as well as those revalidating their enrollment, will be required to meet these enhanced enrollment and screening requirements.  durable medical equipment prosthetic, orthotics and supplies (“DMEPOS”) suppliers will be required to complete the revalidation process every three years, while other providers and suppliers will be required to complete the process every five years. 

Providers and suppliers who are submitting an initial enrollment application, as well as providers and suppliers who undergo revalidation, will have to pay an application fee.  For 2010, the application fee is $500.  The application fee will be increased annually based upon the percentage changes in the consumer price index. 

The proposed regulations also would permit CMS to impose a temporary moratorium on the enrollment of new providers for a particular provider category if CMS determines that there is a significant potential for fraud, waste, or abuse with respect to a particular provider or supplier type or particular geographic area, or both.  The proposed temporary moratorium will not apply to existing providers or suppliers unless they are attempting to open up a new provider location in a geographic area where a temporary moratorium exists.  The temporary moratorium will also not apply to changes of ownership, mergers or consolidations of existing providers and suppliers.  There are similar regulatory provisions applicable to the Medicaid program which were also included as part of the proposed rule. 

In segregating providers into low, moderate and high risk categories, CMS appears to be sending a message to the provider and supplier communities that there are particular provider and supplier types that it considers to be at greater risk of engaging in fraud and abuse activities.  By proposing to utilize temporary moratoria on the enrollment of new providers in a particular provider or supplier type or geographic area, CMS appears to be following the lead of state Medicaid programs (such as New Jersey’s) that have previously imposed such moratoria for provider categories such as pharmacies and DMEPOS suppliers.  We have worked with a number of providers in connection with the preparation of CMS 855 forms and survey preparation.  It will be interesting to see whether the new enrollment and screening procedures will speed up or slow down the process, however, it seems certain that any step requiring an on-site inspection will slow the process down in New Jersey where the Department of Health and Senior Services has suffered from state-wide governmental layoffs.


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