Wachler & Associates Health Law Blog

Published on: August 13, 2025

CY 2026 Medicare Physician Fee Schedule: CMS Proposes Permanent Telehealth Changes

Recently, the Centers for Medicare & Medicaid Services (CMS) published the calendar year (CY) 2026 Medicare Physician Fee Schedule (PFS) Proposed Rule. The Proposed Rule includes significant changes to Medicare telehealth policies, among other proposals. Healthcare providers that utilize telehealth in their practices should understand the proposed changes and be prepared to comply with any shifts in Medicare policy if the proposed changes become final.

In the proposed rule, CMS proposes simplifying the current five-step process to determine if a service qualifies for the Medicare Telehealth Services List. Under the new process, CMS would only keep three criteria: the service must be separately payable under the PFS; fall within the scope of certain federal laws regulating telehealth services; and be deliverable through real-time, two-way interactive communication. This change aims to lower provider burden and speed up access to new telehealth services.

Based on the revised review process, CMS proposes adding five new services to the Medicare Telehealth Services List for CY 2026:

Published on: August 11, 2025

Medicare Deactivation Versus Revocation

by Wachler & Associates, P.C.

Medicare-enrolled providers have seen a recent increase in the number of deactivations issued by the Centers for Medicare & Medicaid Services (CMS) and its contractors. A deactivation of Medicare billing privileges effectively turns off a provider’s ability to bill Medicare and at first glance may appear to be similar to a Medicare revocation. However, the two are very different in practice and in how a provider may respond.

A revocation of Medicare billing privileges has long been a punitive measure to remove a provider or supplier’s ability to bill Medicare. CMS usually imposes these based on alleged misconduct by the provider, such as repeatedly billing claims that do not comply with Medicare requirements or being convicted of a felony. CMS will generally impose a bar of how long the provider must wait before it can attempt to re-enroll with Medicare, usually ten years. A Medicare revocation may also lead to a provider’s termination by other payors, including Medicaid and Medicare Advantage plans. A revocation can be a very serious sanction.

A deactivation of Medicare billing privileges is often more administrative in nature. It removes a provider’s ability to bill Medicare, but generally on different grounds, such as not billing Medicare for six months, not reporting a change in information, or not being in full compliance with all enrollment requirements, among others. When a provider is deactivated, it can generally reactivate its billing privileges by correcting the administrative issue and recertifying that its enrollment information is correct. Some provider types, especially home health agencies, may have additional requirements. Where a “gap” exists between when the provider’s billing privileges are deactivated and when they are reactivated, Medicare will likely deny claims from that period. The provider may consider whether to appeal the deactivation itself, in addition to any reactivation. The provider may also need to appeal any denied claims from such a period.

Published on: July 29, 2025

Basics of the Medicare Claims Appeal Process

by Wachler & Associates, P.C.

The regulatory process for appealing Medicare claim denials and overpayments is a complex, lengthy, and administratively burdensome process. Through up to five levels of appeals, Medicare-enrolled providers and suppliers, and their representatives, must contend with inflexible deadlines, tight procedural and bureaucratic requirements, and biased reviewers, all while contesting the denials and asserting the medical necessity of the items or services at issue.

After a Medicare Administrative Contractor (MAC) has issued an Initial Demand, the letter that informs the provider of the claim denials, the reasons for the denials, and the amount of repayment demanded, the first step in appeal is Redetermination. Redetermination review is conducted by the same MAC who issued the Initial Demand and the contractor nearly always upholds its earlier decision. A provider can stop or halt recoupment of the alleged overpayment at this stage of appeal, but only if it requests Redetermination within a certain timeframe.

After Redetermination, the next level of appeal is Reconsideration. Reconsideration is conducted by a Qualified Independent Contractor (QIC), a separate Medicare contractor than the contractor that conducted Redetermination. The QIC is generally more impartial than the MAC, but often finds against the provider. A provider can stop or halt recoupment of the alleged overpayment at this stage of appeal as well, but only if it requests Reconsideration within a certain timeframe.

Published on: July 25, 2025

CY 2026 Physician Fee Schedule: Proposed Overhaul of Skin Substitutes

by Wachler & Associates, P.C.

Recently, the Centers for Medicare & Medicaid (CMS) released the CY 2026 Physician Fee Schedule (PFS) Proposed Rule, introducing sweeping changes to Medicare Part B payment policy. Among the most significant updates is a restructuring of how Medicare pays for skin substitute products commonly used by wound care providers.

Skin Substitutes Reclassified as Incident-to Supplies

Historically, Medicare has paid for skin substitutes as biological products under the Social Security Act, using the Average Sales Price (ASP) methodology to determine reimbursement rates. However, CMS has raised concerns about increasing costs and utilization rates, noting that Medicare Part B spending on skin substitutes rose from millions in 2019 to billions in 2024.

Published on: July 16, 2025

Heightened FCA Scrutiny for Providers: DOJ and HHS Renew Enforcement Task Force

by Wachler & Associates, P.C.

The False Claims Act (FCA) remains a crucial focus for healthcare providers and hot-button issue under the current Administration. On July 2, 2025, the U.S. Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced they are teaming up once again. This signals a resurgence of the DOJ-HHS False Claims Act (FCA) Working Group and a revival of another healthcare enforcement initiative from the past. The main goal of the Working Group is to move fast, improve interagency collaboration, and strengthen FCA oversight with advanced data analysis tools, all focused on healthcare.

What Providers Need to Know: Enforcement Priorities

The Working Group will be co-led by senior officials from HHS’s Office of the General Counsel (OGC), the HHS Office of Inspector General (OIG), and DOJ’s Commercial Litigation Branch. U.S. Attorneys’ Offices and CMS’s Center for Program Integrity will also be actively involved.

Published on: July 3, 2025

Are More Medicare Advantage Audits on the Horizon?

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) recently announced two major policy efforts directed at Medicare Advantage (MA) plans. As MA plans have become a significant share of the healthcare insurance market, healthcare providers are left wondering what impacts these attempts at MA reform will have on providers.

First, CMS has announced a significant expansion of its auditing efforts for Medicare Advantage (MA) plans. Beginning in May 2025, CMS began to audit all eligible MA contracts for each payment year and invest additional resources to expedite the completion of audits for payment years 2018 through 2024. These audits primarily involve Risk Adjustment Data Validation (RADV) audits to confirm that diagnoses used for payment are supported by medical records. CMS reported that it is several years behind in completing these audits, but that recent estimates suggest that MA plans may have been overpaid by several billion dollars.

If CMS demands that MA plans return significant overpayments, the MA plans may seek to pass this cost along to providers. Namely, where an MA plan experiences an unexpected expense in the form of an overpayment demand, it will likely seek to decrease its costs elsewhere. This may lead to increased scrutiny of claims billed to MA plans, meaning more audits and overpayment demands aimed at healthcare providers.

Published on: June 30, 2025

Increasing Scrutiny of Medicare Hospice Providers

by Wachler & Associates, P.C.

The Department of Health and Human Services Office of Inspector General (“OIG”) recently announced that it would closely examine data relating to new Medicare hospice provider enrollments. These efforts build on existing practices by the Centers for Medicare & Medicaid Services (“CMS”) to increase oversight of certain Medicare hospice providers.

Hospice provides palliative care and support for patients who are terminally ill and for their families. Medicare covers hospice care only where certain criteria are met, including that a qualifying physician has certified that the patient has a terminal illness and a life expectancy of six months or less. Medicare-enrolled hospice providers are also required to be certified by CMS, be licensed as required by State and local law, and meet Medicare Conditions of Participation to receive payment.

For the past several years CMS has been concerned with hospice compliance and with fraud, waste, and abuse by hospice providers. To this end, CMS has increased audits of hospice providers, adjusted the 36-month rule restricting certain sales of hospice providers, and implemented the Provisional Period of Enhanced Oversight (“PPEO”) pilot program. Pursuant to the PPEO program, since mid-2023, CMS audits all “newly-enrolled” hospice providers in Arizona, California, Nevada, and Texas. “Newly-enrolled” is not limited to hospice providers enrolling in Medicare for the first time, but also includes those that undergo a Change of Ownership (“CHOW”) as that term is defined under the Medicare program, those that undergo a 100% change in ownership, and those reactivating Medicare enrollment after being in a deactivated status. PPEO audits function similar to TPE audits, but tend to be more rushed and less forgiving in terms of the education provided to the hospice under review. Hospices under PPEO audits should treat them with due caution and take measures to ensure that their claims and documentation meet Medicare requirements.

Published on: June 24, 2025

Are Medicare DME Surety Bond Requirements About to Go Up?

by Wachler & Associates, P.C.

The Department of Health and Human Services Office of Inspector General (“OIG”) recently announced that it would conduct a detailed review of the use of surety bonds by the Centers for Medicare & Medicaid Services (“CMS”) in regard to suppliers of durable medical equipment (“DME”).

Medicare-enrolled DME suppliers are required to maintain a surety bond against which CMS and its contractors can make claims and collect alleged Medicare overpayments. The required amount for the posted surety bond is generally $50,000 for each NPI the supplier maintains, but can be increased in certain circumstances. In theory, the bond provides a ready pool of funds from which CMS can collect overpayments without having to rely on recouping Medicare payments or forcing the supplier to pay the debt.

OIG asserts that it has long-raised concerns about fraudulent practices among DME suppliers and has reported that CMS underutilized surety bonds as a tool to protect Medicare from overpayments to DME suppliers. For example, OIG cites that CMS recovered only $263,000 from surety bonds of $50 million in overpayments identified for collection between October 2009 and April 2011. It is unclear why OIG is citing such out-of-date data or whether more recent data is available.

Published on: April 18, 2025

Congress Again Extends Telemedicine Flexibilities

by Wachler & Associates, P.C.

Congress recently passed another limited extension of certain flexibilities relating to Medicare coverage of telemedicine. While the current extension is another stop-gap measure that expires September 30, 2025, it may further signal Congressional acknowledgement of the importance of these flexibilities to healthcare providers and patients across the country and an intent to eventually make them permanent.

Prior to the COVID-19 Public Health Emergency (PHE), Medicare coverage of services provided by telemedicine was very limited. Two of the most important limitations related to the “originating site” of the telemedicine service, that is, where the patient is located while receiving the service via telemedicine. Specifically, Medicare would only cover telemedicine services where the originating site (1) was located in specified rural area and (2) was a specified clinical setting, such as a physician’s office or other facility. These rules generally precluded the use of telemedicine in urban or suburban areas and precluded nearly all patients from receiving telemedicine services in their homes.

During the COVID-19 PHE, the Centers for Medicare & Medicaid Services (CMS) waived these requirements and allowed telemedicine services in more settings, including in patients’ homes and in more than just rural areas. When the PHE ended, so too did CMS’ authority to continue these regulatory flexibilities. However, by that point, telemedicine services had become widespread and providers and patients acknowledged that it had a valuable role to play in the delivery of healthcare services. Therefore, Congress by statute extended these flexibilities past the end of the PHE, but at the time included an expiration date of December 31, 2024.

Published on: April 16, 2025

HHS OIG Discovers What Medicare Providers Have Long Known

by Wachler & Associates, P.C.

The US Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) recently released a report wherein it found what Medicare providers have long known, that Medicare Administrative Contractors (“MACs”) frequently commit significant errors and do not comply with Medicare requirements when they conduct audits of Medicare providers.

Specifically, OIG reviewed MAC audits of Medicare costs reports and found that, for federal fiscal years 2019–2021, each of the 12 MAC jurisdictions failed to comply with the contract requirements for audit and reimbursement desk review and audit quality for at least 1 of the 3 years. The Centers for Medicare & Medicaid Services (“CMS”) also identified 287 total audit issues among all MAC jurisdictions during that period, including MACs not performing proper reviews; inadequate review of graduate medical education and indirect medical education reimbursement; improper review of allocation, grouping, or reclassification of charges to cost centers; improper calculation and reimbursement for nursing and allied health programs; and inadequate review of bad debts.

Issues with MAC reviews are nothing new to Medicare providers. In addition to auditing cost reports, MACs also audit claims under Medicare fee-for-service and perform the first level of claims appeals, referred to as Redetermination. In regard to audits, MACs are often criticized for misinterpreting criteria, applying the wrong criteria, using nurse reviewers with little to no experience in the clinical area under review, and taking excessive amounts of time to complete reviews. However, MAC audit issues might not present such a significant issue if MACs did not also perform the first level of appeal – Redetermination – of their own audits.