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, NC
Joseph Van Leer, Chicago, IL
Sean Timmons, Raleigh, NC
April 7, 2016

real challenges. real answers. sm
Objectives of Today’s Webinar
2

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
3

Summary and Rationale for the
Proposed Rule
4

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
5

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
6

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
7

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.
8

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.
9

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.
10

Affiliations and Disclosable Events
11

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.
12

 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).
13

 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
14

 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.”
15

 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.
16

 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?
17

 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.
18

 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.
19

Sample Adverse Action Reporting
Existing Requirements
BOX 3
[Owner of Box 2]
BOX 2
[Owner of Box 1]
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
Enrolled
Facility B
Enrolled
Facility 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 Actions
Facility 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
BOX 3
[Owner of Box 2]
BOX 2
[Owner of Box 1]
BOX 4
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
Facility A
Enrolled
Facility B
Enrolled
Facility C
Operating
Division
Enrolled
Facility D
Legal
Entity/Person
Key
BOX 2B
[Owner of Box 1 and
Box 5]
Each Facility must report the Disclosable Event
Disclosable
Event
No Adverse
Action
Boxes 2–4: No reporting obligation
Boxes 1, 5: Reports the disclosable event
Facility A: Reports the disclosable event
Facility B: Reports the disclosable event
Facility C: Reports the disclosable
event/final Adverse Action(s)
Facility D: Reports the disclosable event

BOX 3
[Owner of Box 2]
BOX 2
[Owner of Box 1]
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
Facility A
Enrolled
Facility B
Enrolled
Facility C
Operating
Division
Enrolled
Facility D
Legal
Entity/Person
Key
BOX 2B
[Owner of Box 1 and
Box 5]
Disclosable
Event
No Adverse
Action
Boxes 2,3: No reporting obligation
Boxes 1,4,5: Reports the disclosable event

BOX 3
[Owner of Box 2]
BOX 2
[Owner of Box 1]
BOX 4
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
Facility A
Enrolled
Facility B
Enrolled
Facility C
Operating
Division
Enrolled
Facility D
Legal
Entity/Person
Key
BOX 2B
[Owner of Box 1 and
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 event

New Reasons to Revoke or Deny
24

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
25

 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
26

 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
27

 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
28

 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
 Would include a balancing factor test
29

 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.
30

 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
31

 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.
 Would impose a factor test
32

Other Impacts Under the
Proposed Rule
33

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.
34

 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
35

 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)]
36

Refinements to Internal Processes to
Ensure Compliance Under
The Proposed Revisions
37

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.
38

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
39

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
40

Comments to Consider
Filling with CMS
41

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
42

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
43

 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”
44

 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
45

 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
46

 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
47

 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.
48

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