Get Your Comments Ready; CMS Proposes New and Significantly Enhanced Enrollment Requirements

Polsinelli PC. In California, Polsinelli LLP

Get Your Comments Ready; CMS Proposes New and Significantly Enhanced Enrollment Requirements

Ross Sallade, Raleigh, NCJoseph Van Leer, Chicago, ILSean Timmons, Raleigh, NC

April 7, 2016

real challenges. real answers. sm

Objectives of Today’s Webinar

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Objectives of Today’s Webinar

Summary of Proposed Rule CMS Rationale for Proposed Rule Specifics of Proposed Rule

– Reporting Affiliations with providers who/that underwent disclosable events.– New bases for denial/revocation– Re-enrollment bars– Changes to CMS enrollment moratoria authority– Changes to process for reactivating a deactivated supplier’s billing privileges

Refinements to Internal Processes Comments to Consider Filing

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Summary and Rationale for the Proposed Rule

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What is CMS Proposing to do Under these Newly Proposed Rules?

Disclosure of “affiliations” with other providers/suppliers who underwent “disclosable events”

New and expanded bases for enrollment denials and revocations

Possibility for extension of revocation to all of a provider’s or supplier’s enrollments

Increase of Medicare re-enrollment bar Application bar for submission of false information Reactivation following deactivation – the only bright spot! Moratoria implications

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Background to the Proposed Rule

Released March 1, 2016 Proposed new and revised enrollment

requirements Issued pursuant to Section 6401(a)(3) of

the Affordable Care Act Comments due April 25, 2016 – query

whether extended to May 1, 2016

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Who Does the Proposed Rule Apply to?

“Providers” – Includes ALL Part A providers, e.g., hospitals, hospice agencies,

HHAs, CAHs, etc.– NO Exceptions!!

“Suppliers” – Includes ALL Part B suppliers, e.g., IDTFs, ASCs, physician

practices, individual practitioner enrollments, etc.– NO Exceptions!!

Applies to enrollment or participation in– Medicare, Medicaid and CHIP programs– Similar requirements already exist in many state Medicaid

enrollment programs, e.g., North Carolina

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Why Did CMS Create the Proposed Rule?

Program integrity concerns:– Collect additional information regarding certain affiliations to

assist CMS in its efforts to help combat fraud, waste and abuse. – Specifically:

1. enable CMS to better track of current and past relationships among providers and suppliers

2. that CMS believes will reveal schemes involving “inappropriate behavior”

3. so that CMS can identify and take action against them – i.e., enrollment denials and revocations

Eliminate the game of “whack-a-mole”– Where revoked, or about to be revoked providers and suppliers

simply shut down and re-open a new entity under an entirely new ownership structure in a new location.

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Why Did CMS Create the Proposed Rule?

Doesn’t CMS already have this ability? – CMS says no, but….– Arguably, yes, this information is already at their disposal – but

not as readily. It would take some effort to connect the dots. Will this adequately address CMS’ concerns?

– Maybe, but likely not….– Those intent on continuing to defraud the Medicare and

Medicaid programs will continue to do so– Those who have no such intent are likely to get caught in

technical violations and face severe sanctions in the face of expanded denial and revocation powers.

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Adoption of a “Reasonableness” Standard

Per CMS, adoption of these new rules won’t inadvertently harm honest providers and suppliers because they will build in “reasonableness” standards into the rules.

Most proposed rules contain a balancing factor rest requiring CMS to review each situation on a case-by-case basis.

CMS will also develop certain fact specific inquiries to weigh any “undue risk” to the program.

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Affiliations and Disclosable Events

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Taking a Harder Look at Disclosure of Affiliations

Providers and suppliers submitting an initial or revalidating 855 must disclose [424.519, 455.107]:– Any person or entity who is or has been in the last 5

years an “affiliate” of: The provider or supplier; Any 5% owner; or Any Managing Employee/Organizations; and

– Who has had a “disclosable event” at any time in the affiliate’s history.

– That the provider or supplier knew about or reasonably should have known about.

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Who is included as an “affiliate”? [424.502]– A 5% or greater direct or indirect owner;– A general or limited partner (regardless of

percentage);– An individual with operational or managerial

control– An officer or director; or– Any individual with reassignment relationship

(M’care) or assignment relationship (M’caid).

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What constitutes a “Disclosable Event”? [424.519(b)]– Uncollected debt to Medicare/Medicaid/CHIP (even if in

repayment or under appeal);– Payment suspension from a federal health care program;– Exclusion from Medicare, Medicaid or CHIP; and– Enrollment denial, revocation, or termination.

These events must be disclosed even if they are under appeal

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What will happen if report an affiliation with a disclosable event?– CMS will consider whether the affiliation and disclosable event

warrants an enrollment denial or revocation of billing privileges. CMS will determine whether there is an “undue risk” of

harm to the program based on certain factors, e.g.:– Length and period of affiliation;– Nature and extent of affiliation;– Type of disclosable event; and– Date of disclosable event. [424.519(g)]

Implementation of a “reasonableness” standard – i.e., did the provider/supplier “know or should have known.”

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What if I don’t report an affiliation with a disclosable event? [424.519(e)]– CMS will have the ability to deny enrollment or revoke

enrollment status of any provider or supplier failing to report an affiliation with a disclosable event that it discovers.

– This authority will Include past affiliations that were not previously required to be disclosed before implementation of the proposed rule.

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If a provider/supplier is revoked after implementation of the Proposed Rule what is the impact?– And the revocation stands

5% Owners must report their affiliation with the revoked entity on any future initial application or revalidation

Managing Employees must report their affiliation with the revoked entity on any future initial application or revalidation

– And the revocation is reversed No reporting obligation But, is the damage already done?

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Reporting affiliations and disclosable events:– Will require amendments to the various 855 enrollment forms

“Disclosable Events” versus “Adverse Action”– Will they be equivalent to “Adverse Actions”?– How will they be integrated into the 855 applications?

Existing reporting obligations for Adverse Actions:– Examples include: (1) Medicare-imposed revocation; (2)

suspension or revocation of a state license; (3) revocation or suspension by an accreditation organization; (4) conviction of a Federal or State felony within the last 10 years; or (5) exclusion or debarment from participation in a Federal or State health care program.

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Existing reporting obligations on adverse actions:– Requires submission of documentation concerning the type and date of

the action, what court(s) and law enforcement authorities were involved, and how the adverse action was resolved.

– All final adverse actions that occurred under the LBN and TIN of the disclosing entity (e.g., applicant; section 5 owner) must be reported.

– Revocations reversed on appeal should not be reportable, some CMS ROs have historically taken a different position.

Reporting obligations for disclosable events:– Name, TIN, NPI for the affiliate;– Reason for disclosing the affiliation; and– Specific information regarding the affiliation, including reason for

termination. Sample disclosure charts to follow.

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Sample Adverse Action Reporting Existing Requirements

BOX 3[Owner of Box 2]


BOX 4[Owner of Box 3, 3A]

BOX 3A[Owner of Box 2A]

BOX 2A[Owner of Box 1]

BOX 5[Legal Entity of

Facility D]

BOX 3B[Owner of Box 2B]

BOX 1[Legal Entity for

Enrolled Facilities]

Enrolled Facility A

EnrolledFacility B

EnrolledFacility C

Operating Division

Enrolled Facility D

Legal Entity/Person

Key

BOX 2B[Owner of Box 1 and

Box 5]

Boxes 1– 5: Report no Adverse ActionsFacility A: Reports no Adverse Actions.Facility B: Reports no Adverse Actions.Facility C: Reports Final Adverse Action(s) of Box 1 on Section 3 of CMS-855A and Final Adverse Action(s) of Boxes 2A and 3 on Section 5 of CMS-855A.Facility D: Reports no Adverse Actions.

Each Facility must report the Adverse Action(s) on the applicable CMS-855 as follows:

Final Adverse Action

Received

No Adverse Action

NOTE: Assume each Box owns 5% or more of Box 1


Sample Disclosable Event Reporting Proposed Requirements







Facility D]




Enrolled Facility A

EnrolledFacility B

EnrolledFacility C

Operating Division

Enrolled Facility D

Legal Entity/Person

Key


Box 5]

Each Facility must report the Disclosable Event on the applicable CMS-855 as follows:

Disclosable Event

No Adverse Action


Boxes 2–4: No reporting obligationBoxes 1, 5: Reports the disclosable eventFacility A: Reports the disclosable eventFacility B: Reports the disclosable eventFacility C: Reports the disclosable event/final Adverse Action(s)Facility D: Reports the disclosable event





BOX 4[Owner of Box 3, 3A




Facility D]




Enrolled Facility A

EnrolledFacility B

EnrolledFacility C

Operating Division

Enrolled Facility D

Legal Entity/Person

Key


Box 5]


Disclosable Event

No Adverse Action


Boxes 2,3: No reporting obligationBoxes 1,4,5: Reports the disclosable eventFacility A: Reports the disclosable eventFacility B: Reports the disclosable eventFacility C: Reports the disclosable event/final Adverse Action(s)Facility D: Reports the disclosable event









Facility D]




Enrolled Facility A

EnrolledFacility B

EnrolledFacility C

Operating Division

Enrolled Facility D

Legal Entity/Person

Key


Box 5]


Disclosable Event

No Adverse Action

NOTE: Now assume each Box owns 5% or more of Box 1 and is also itself an enrolled provider or supplier

Boxes 1– 5: Reports the disclosable eventFacility A: Reports the disclosable eventFacility B: Reports the disclosable eventFacility C: Reports the disclosable event/final Adverse Action(s)Facility D: Reports the disclosable event


New Reasons to Revoke or Deny

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Current Authority To Revoke or Deny

Quick review of current CMS authority to revoke or deny:– Denial vs. revocation– Selected examples to revoke or deny:

No license or lost license, if required Listing individual excluded or debarred from Medicare, Medicaid or

another Federal program Reporting of certain felony convictions Non-operational (can include instances where the supplier is not at

the location listed when the NSCV surveys) Failing to repay overpayments or having a Medicare payment

suspension

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New and expanded bases for revocation and denial:– Failure to disclose an affiliate with a disclosable event

[424.519(e)].– Non-Compliant Practice Location [424.535(a)(20)]

Failure to comply with Medicare enrollment requirements and bill for services, if known or reasonably should have been known

Would include all practice locations, regardless if part of the same enrollment

CMS would balance certain factors to determine whether to revoke Designed to stop circumvention schemes and stop knowing use of

fictitious locations

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New and expanded bases for revocation and denial – Continued:– Revoked under different name, numerical identifier or business

entity [424.530(a)(12), (18)] Deny or revoke enrollment if prospective provider/supplier is or gets

revoked from participating in Medicaid or another federal program Deny or revoke enrollment if a state license is revoked or

suspended. Applies regardless of pending appeals CMS would consider degree of commonality by weighing certain

factors Proposed to stop providers/suppliers from circumventing M’care re-

enrollment bars

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New and expanded bases for revocation:– Failure to timely report changes of information [424.535(a)(9)]

Applies to all providers/suppliers Intent is to focus on egregious failures, e.g., CHOWs, changes in

location, loss of state licensure, changes over 90 days old, etc. Includes a balancing factor test.

– Abusive ordering, certifying, referring or prescribing practices [424.535(a)(21)]

Physicians and NPPs Pattern/practice of ordering, certifying, referring or prescribing that is

abusive or represents a threat to the health or safety of beneficiaries Includes factor balancing test

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New and expanded bases for revocation – continued:– Outstanding debt to Dept. of Treasury [424.535(a)(17)]– Voluntary termination to avoid possible or pending revocation

[424.535(j)(1)] Effective from day prior to CMS’ receipt of provider’s or supplier’s

855 to voluntarily terminate enrollment Would include a balancing factor test Designed to prohibit circumvention schemes

– Revocations under other programs [424.535(a)(12)] if prospective provider/supplier is terminated, revoked or suspended

from participating in Medicaid or another federal program Applies regardless of pending appeals Would include a balancing factor test

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New and expanded bases for revocation – continued:– Extension of Revocation [424.531(i)]

May revoke any and all of a provider or supplier’s M’Care enrollments (including those under different names, numerical identifiers or business identities and those under different provider/supplier types)

If the provider/supplier is revoked under 424.535(a) Reserved for “highly exceptional” cases where conduct was

“particularly egregious” or remaining in the program would put beneficiaries or the Trust Funds at risk.

Would include a balancing test.

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New and expanded bases for denials:– Imposition of a payment suspension [424.530(a)(7),

405.371]: expanded from physicians and NPPs to all providers and

suppliers expanded to include both M’Care and M’Caid payment

suspensions expanded to include:

– (1) the provider/supplier; or any owning or managing employee or organization organization curent or former names, numerical identifiers or business identities

– (2) to any of its existing enrollments includes balancing factor analysis

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New and expanded bases for denial – Continued:– Denials under other programs [424.530(a)(14)]

if prospective provider/supplier is currently terminated or suspended from participating in Medicaid or another federal program

if a state license is revoked or suspended, including in a state other than that which the provider/supplier is applying.

Applies regardless of pending appeals Would impose a factor test

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Other Impacts Under the Proposed Rule

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Other Impacts of Proposed Rule

Expansion of re-enrollment bar in event of revocation [424.535(c)]– Expansion of the maximum re-enrollment bar from 3 years to 10

years Should not result in longer re-enrollment bars for existing

revocations (currently 1-3 years)– Addition of up to 3 more years if CMS determines that revoked

entity is attempting to circumvent the re-enrollment bar– If revoked a second time CMS can make the re-enrollment bar

up to 20 years– Re-enrollment bar to apply to a provider/supplier under any of its

current, former or future business names, numerical identifiers or business identities.

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Other CMS proposals:– Prohibition against provider/supplier from enrolling in

Medicare for 3 years if enrollment application denied for submitting false/misleading information [424.530(f)]

– Moratoria on new enrollment extended to a practice location that is moved from outside to inside the moratorium area [424.570(a)]

– Deactivation/reactivation [424.540(b)] Recertify information on file May require submission of new 855

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Other CMS proposals:– Changes to the definition of “enrollment” [424.502]– Enrollment for ordering/certifying/referring/prescribing

practitioners [424.507]– Impacts on opt-out practitioners [405.425(i), (j)]– Impacts on surety bonds [424.57(d)(16)]

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Refinements to Internal Processes to Ensure Compliance Under

The Proposed Revisions

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Existing Obligation to Track and Update Information on File with CMS

Required as condition of participating in Medicare to provide timely updates to any changes in information encompassed in your 855.

Need to design a tracking mechanism of what was reported, and what/when that information changes.

Need to adhere to timelines.

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Obligation to Track and Update Information on File with CMS – Impact of Proposed Revisions

Database development and tracking Potential need to audit existing enrollment

platform to determine:– Providers and suppliers will have a duty to ask

anyone with whom they currently affiliate, or have affiliated in the last five years, whether the affiliates have had a disclosable event

– Also 5% owners and Managing Employees of providers and suppliers have a duty to ask their current affiliates and those with whom they have affiliated in the last five years whether the affiliates have had a disclosable event

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Obligation to Track and Update Information on File with CMS – Impact of Proposed Revisions

Changes of information: – Any changes with regards to current or new

affiliations and disclosable events must be reported– Will require database management and tracking

capabilities Impact on transactions:

– Significant diligence impact on the target entity or the merger partner

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Comments to Consider Filling with CMS

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Overview: Submission of Comments

Review the components of the proposed rule.

STRONGLY consider submission of comments to CMS.

Comments due on or before April 25, 2016

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Suggested Comments to Consider

Limit Definition of Affiliation– Remove Officers, Directors and Managing

Employees– Limit to Affiliations with the actual enrolled

Provider or owners of 50% or more (i.e. substantial owners)

Limit Look-back Period to 3 Years

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Disclosable Events– Require the Uncollected Debt only include

debt which (i) exceeds a minimum threshold, (ii) is subject to a repayment plan and (iii) is currently in appeal

– Limit to disclosure of revocations, denials, etc. to those which occurred within 10 years

– Remove “voluntary terminations”

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Reporting of Affiliations– Require only upon initial enrollment or

revalidation– No requirement to report changes or new

affiliations until revalidation– No requirement to report changes to past

affiliations

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Undue Risk– Ask CMS to clarify whether it (regionally or nationally)

is making the assessment or whether MACs are responsible If MACs are responsible, then there should be more detail on

parameters and guidance on handling providers with affiliations in numerous MAC jurisdictions

– Generally, ask CMS to provide more clarity/guidance on determination of undue risk

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Denials– Clarify that an application should not be denied on the

basis of suspension or termination from a State Medicaid program if an appeal is pending. This is consistent with Medicare revocation rules.

Reapplication/Re-enrollment Bar– Limit prohibition of enrollment for a denial based upon

submission of false information to instances when the submission/omission was intentional.

– CMS should provide examples to better understand varying degrees of severity/time-bar

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Revocations– Failure to Report – Limit ability to revoke on failure to

report to instances when the information was material– Billing from Non-Compliant Location - CMS should

narrow what non-compliant means, as it should not include non-compliance with Conditions of Participation, etc.., which are subject to a different process imposed by CMS.

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