As the impact of the Affordable Care Act (ACA) on providers continues to unfold, the tools the legislation provides to reduce fraud, waste and abuse are being implemented. The Centers for Medicare & Medicaid Services (CMS) has issued a final rule, effective March 25, 2011, that increases the scrutiny placed on medical service and medical supply providers applying for enrollment or revalidation as a Medicare provider.
Based on CMS experience with various types of providers and its assessment of risk of fraud, waste and abuse, providers and suppliers will be classified into limited-, moderate- and high-risk categories. Each category has corresponding screening levels. Click here to see where you fall in the risk matrix, along with related screening requirements.
Screening levels for providers and suppliers in the limited-risk category are largely unchanged from existing screening measures. These procedures include verification of provider-specific requirements as established by Medicare, license verifications and various database checks. Moderate-risk providers and suppliers will be subject to additional screening procedures, including unannounced site visits. Finally, the screening procedures for providers and suppliers in the high-risk category will be extended to include fingerprint-based criminal history checks of key individuals, including owners and managing employees.
To cover the costs of additional screening procedures, CMS will begin charging institutional providers a $505 application fee in 2011; this fee will be adjusted annually for inflation. If the fee is not submitted, the application will be rejected or billing privileges revoked, as applicable. “Institutional provider” includes any provider or supplier submitting a paper Medicare enrollment application using the CMS-855A form, CMS-855B form, not including physician and nonphysician practitioner organizations, CMS-855S form or the associated Internet-based Provider Enrollment, Chain, and Ownership System (PECOS) enrollment applications.
The final rule also enables CMS to impose incremental six-month moratoria on the enrollment of new Medicare providers and suppliers in certain situations, including:
- Instances where CMS has identified trends that could be indicative of fraud, waste and abuse, including a disproportionate number of providers relative to the number of beneficiaries and rapid increase in enrollment applications within a particular provider category
- A state-imposed moratorium on enrollment in a particular geographic area or a particular provider type
- CMS, in conjunction with the Office of Inspector General (OIG), identifying a significant risk of fraud, waste and abuse in a particular provider type or geographic area
The ACA also gives CMS greater authority in the suspension of payments to providers during an investigation of credible fraud allegations. Existing rules allowing CMS to suspend payments for 180 days with a one-time 180-day extension will be relaxed and will no longer apply if the case is being considered by the OIG for administrative action. Extensions beyond 180 days also can be granted if requested by the U.S. Department of Justice due to an ongoing investigation.
CMS efforts to reduce fraud, waste and abuse continue to evolve, and health care providers should consider the implications of this final rule. For more information, please contact your BKD advisor.