CMS Adds Barriers to Medicare, Medicaid, and CHIP Disbursements

27 October 2019 - Collaborative Imaging
Doctor talking about CMS rules that require radiology practices to obtain attestations of compliance
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Image Courtesy (AP Photo/Julio Cortez)

No more “pay and chase.”

On November 4, 2019, the Centers for Medicare and Medicaid Services (CMS) will begin enforcing a recently issued final rule that empowers CMS to revoke or deny enrollment in provider programs for Medicare, Medicaid, and CHIP based on questionable business associations.

There are no databases of questionable businesses. CMS will act on its judgment of what radiologists should “reasonably have known” with regard to their employees, partners, and contractors.

This new “affiliations” authority in the Program Integrity Enhancements to the Provider Enrollment Process, CMS-6058-FC, authorizes CMS to name organizations and individuals that present a risk of waste, abuse, or fraud. This risk is determined by relationships with organizations and individuals that have been previously sanctioned. For example, a radiologist currently enrolled as a provider for Medicare, Medicaid, or CHIP who hires an employee who is treated as an affiliate of another provider who has been revoked by CMS may be denied continuing enrollment or kicked off the provider list.

CMS Administrator Seema Verma explained their position this way: “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 criminals engage in the same behaviors again and again. 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.”

Rule CMS-6058-FC contains other powers that expand the agency’s ability to fight fraud:

  • Providers will not be able to return to the program by reorganizing with a different name.
  • Providers can be dropped from the program for billing for services from locations that have been found to be out of compliance with CMS rules.
  • CMS is authorized to look for patterns of abusive certifying or ordering of Medicare Part A or Part B services or drugs.
  • The agency is also authorized to revoke enrollment of any provider that has an uncollected debt for over-payment from CMS currently in Collections with the Treasury Department.

The new rule gives CMS the ability to block enrollment into the program for up to three years if a provider is determined to have submitted false or misleading information on its original enrollment application. The rule also gives CMS the ability to block “problem” providers from re-enrolling in the program for ten years, instead of three, and for twenty years with the second violation.

Who is your affiliate?

The CMS is defining affiliation broadly. Affiliates of a practice are its owners, or the entities that have a reassignment relationship with a practice. Radiologists who receive reimbursement from Medicare, Medicaid, or CHIP are responsible for their own relationships with CMS. A practice is responsible for choosing physicians who are in compliance with CMS rules in their other activities.

  • Partners in a practice are affiliates regardless of the size of their share of the practice.
  • Any person who has 5 percent or more of the shares of a corporation is an affiliate of that corporation.
  • Any person who exerts day-to-day control over the business operations of a practice is an affiliate, regardless of whether they are paid with a W-2 or a 1099.

To the extent radiologists are “suppliers” of services, they are jointly and severally liable with the organizations to which supply services for any over-payment for those services to the organizations they serve.

Which affiliates have to be reported to CMS?

To continue to receive Medicare, Medicaid, or CHIP payments, affiliates have to be reported to if they fall into any of these four categories:

  • They currently have uncollected debt to Medicare, Medicaid, or CHIP.
  • They have ever been OR are currently excluded from Medicare, Medicaid, or CHIP.
  • They are under a payment suspension order under any federal health program.
  • They have had their Medicare, Medicaid, or CHIP billing privileges denied, revoked, or terminated.

Except for uncollected debt, the timing of the disclosable event is not taken into account. If reportable events occur at any time during the radiologist’s affiliation with these individuals or businesses, even years ago, they must be disclosed to CMS. Medicare Advantage plans additionally require providers to define and establish consistent and clear documentation of their partnerships with First Tier, Downstream, and Related Entities (FDRs).

Every radiologist’s business manager will see a major problem in complying with this rule. There are no databases of providers that have been suspended from Medicare. And although the enforcement authority for failure to report affiliations will go into effect November 4, CMS is still considering a “knew or should reasonably have known” standard for assessing penalties.

How can radiologists avoid responsibility for malfeasance of third parties?

While CMS assures us that its rules are “evolving,” there are positive steps radiology practices can take to avoid getting swept up in the new wave of enforcement.

  • Radiology practices may be exempt from liability when they rely on staffing services to assist in selecting employees and providers.
  • Radiology practices should obtain vendor and owner attestations of compliance with CMS rules before entering into a relationship these vendors and owners.
  • Compliance services, adding one more overhead cost, mitigate risk and provide a standard process for gathering and evaluating your vendor and owner information.

CMS assures us they are only going after “bad actors.” But careful, documentation of all business relationship is required for reasonable assurances of continuing participation in their reimbursement programs.