Medicare Payment Suspensions: Shortcut to Revocation

The number of Medicare payment suspensions issued by the Centers for Medicare & Medicaid Services (CMS) has grown in recent years. Although generally framed as a temporary and less severe sanction than an outright revocation of Medicare billing privileges, a suspension of Medicare payments can be just as devastating to a Medicare provider or supplier and can in many cases put the provider out of business, leading to significant procedural and due process concerns regarding CMS’ frequent use of payment suspensions.

A Medicare payment suspension is a suspension of a Medicare-enrolled provider or supplier’s ability to receive payment from the Medicare program. Suspensions are usually scheduled to last for 180 days, but they can be extended essentially indefinitely. While a provider may technically continue to treat Medicare patients and submit Medicare claims for payment – the claims simply will not get paid until the suspension ends – for a provider with a high percentage of Medicare patients, a sudden, unforeseen, and indefinite interruption of all Medicare payments can wreak havoc on cash flow and destroy a practice or business as quickly and effectively as any enrollment or licensing sanction. Payment suspensions are also often issued without notice, meaning that a provider’s Medicare payments may abruptly stop, often days before the provider receives a letter informing them of the suspension.

Given the devastating effects of a suspension of Medicare payments, one may think there may be significant procedural, due process, or appeal protections in place for providers. That is not the case. Although federal law only explicitly authorizes CMS to issue payment suspensions where there is a “credible allegation of fraud,” CMS has implemented regulations that also give it the authority to suspend payments any time CMS believes it has “reliable information that an overpayment exists” and that broadly expand the definition of what constitutes a “credible allegation of fraud.” These regulations also give CMS extremely broad authority to issue suspensions without first notifying the provider, while giving the provider very limited appeal rights.

Further, CMS almost never performs the reviews or investigations that it uses to determine if an overpayment or a credible allegation of fraud exists. Instead, it relies on its contractors, generally the Unified Program Integrity Contractors (UPICs), to audit the provider and report its findings to CMS. The issues with the UPICs are many, including awful communication with providers, lack of expertise in particular specialties or niche coverage policies, and incorrect claims determinations and denials. Indeed, by the time a provider is afforded their very limited appeal rights, CMS has likely already reviewed multiple dubious reports from a UPIC regarding the provider’s alleged noncompliance. However, the most frustrating issue regarding UPICs in suspension cases may be that the UPICs and CMS will often wait months or years between issuing audit findings – if the UPIC issues findings at all – and issuing a suspension purportedly based on those findings. When deciding whether to appeal a UPIC audit, even a small probe audit, providers should be aware that those findings may be used to justify a Medicare payment suspension years later.

A provider who is subject to a Medicare payment suspension faces a difficult path, but there are certain appeals, remedies, and strategies available. Such a provider should consider engaging experienced healthcare counsel to assist during these challenging times.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to Medicare payment suspensions or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.