Wachler & Associates Health Law Blog

The many ways in which a provider might be removed from the Medicare program are often a source of confusion and consternation for Medicare-enrolled healthcare providers and suppliers. Sometimes a Medicare revocation or suspension may occur unexpectedly and devastate a provider’s business. Sometimes a provider will voluntarily leave the Medicare program in an attempt to avoid inevitable sanctions. Each of these is a distinct mechanism and should be considered separately.

A revocation of Medicare billing privileges, commonly called a “Medicare revocation,” is a forced removal of a provider’s participation in and ability to bill the Medicare program. There are approximately two dozen grounds on which a provider’s billing privileges may be revoked, from noncompliance with Medicare program requirements (as simple as a missed signature on an insurance policy) up to abuse of billing privileges and patient harm. A revocation may be retroactive and take effect sometime in the past, before the provider is notified, or it may take effect sometime in the future, such as 30 days after the provider is notified. A Medicare revocation will be accompanied by a reenrollment bar of one to twenty years and often placement on the CMS Preclusion List. A Medicare revocation is subject to an appeals process, but most of the process is stacked heavily against the provider and it is important for the provider to be active in their response as early in the process as possible.

A suspension of Medicare billing privileges, commonly called a “Medicare suspension,” is a temporary suspension of a provider’s ability to bill the Medicare program. They are often imposed pursuant to a review or an audit where a Medicare contractor has alleged that the provider has committed some form of fraud. Suspensions are often imposed with immediate effect and sometimes without prior notice to the provider. Although suspensions are meant to be temporary, they are of undefined duration and often last for months without a specific end date, suffocating a provider’s business as effectively as a revocation. Medicare suspensions are technically subject to a truncated appeals process, but, although the suspension appeal process should still be pursued, the process is effectively meaningless and suspensions are generally best addressed through contesting the audit that supposedly identified fraudulent claims. However, it is worth noting that Medicare will often suspend a provider long before giving the provider the results of the underlying audit or the opportunity to appeal those results.

The Centers for Medicare & Medicaid Services (CMS) recently announced that it is planning to launch a new iteration of PECOS in Summer 2023. Dubbed “PECOS 2.0”, the new provider system aims to make the Medicare enrollment and revalidation processes faster and more efficient.

According to CMS, PECOS 2.0 will modernize Medicare enrollment management and allow providers to accomplish more tasks electronically. Some of these changes include faster applications using pre-population information, one application to update multiple enrollments, faster and easier revalidation processes, and the ability to track application status in real-time. CMS has also stated that provider data and records in current PECOS will transfer to PECOS 2.0 seamlessly. Applications currently in progress can be continued in PECOS 2.0, and applications previously closed will be available but will include limited information. All records transferred from current PECOS to PECOS 2.0 will be noted as such to make them easily identifiable. Additionally, providers’ login credentials will not be affected, and providers will still be able to log in to PECOS 2.0 using their Identity & Access (I&A) username and password.

With PECOS 2.0, providers will gain the benefit of consolidated applications, which is a combined application that updates and handles multiple enrollments. Consolidated applications will make it easier for providers to submit changes across multiple similar enrollments and multiple Medicare Administrative Contractors (MACs). When a provider submits a consolidated application that would normally require sending information to two different MACs, PECOS 2.0 will automatically separate the application and send the appropriate information to the relevant MACs. To ensure compliance with varying state requirements, PECOS 2.0 is also introducing a smart error process check which reviews and validates information for correctness as applications are completed. Moreover, there is no additional fee for consolidated applications. Whether providers choose to submit a consolidated application that covers multiple enrollments or an individual application for each enrollment, the fees will be the same and application fees will be automatically determined by each application.

Under the Medicare Part C or Medicare Advantage (MA) program, the Centers for Medicare & Medicaid Services (CMS) contract with Medicare Advantage Organizations (MAOs), typically private insurance companies, that administer MA health plans to Medicare beneficiaries as an alternative to traditional Medicare. Enrollment in MA plan has steadily grown in the last several years, and currently roughly half of all Medicare beneficiaries are enrolled in an MA plan. Further, federal authorities recently accused MAOs of overcharging the Medicare program by millions of dollars. Increased scrutiny of MAOs could lead to more stringent review of claims submitted by providers and MAOs may take greater action against providers through overbearing audits in an effort to offset losses. In any event, providers can likely expect MA plans to increase their audit activity of healthcare providers.

Some of the most popular MA health plans are administered by Humana, UnitedHealthcare, Aetna, BlueCross BlueShield, and Cigna. Audits by MA plans differ from audits conducted by Medicare or those conducted pursuant to commercial insurance plans, but MA plans are governed primarily by the provider’s participation agreement with the MA plan. As part of a provider’s participation contract, MA plans generally have the right to audit a provider’s claims. MA plans may audit providers for a number of reasons, such as suspicions of alleged upcoding, overutilization, irregularities, or fraud and abuse. A provider’s contract with the MA plan will generally prescribe a limited lookback period that restricts how far back in time the plan can review claims for audit purposes. The contract will generally also prescribe the policies and procedures which the plan must follow when conducting audits. However, state laws may affect the extent to which MA plans can audit providers by providing for conflicting maximum lookback periods or imposing other limitations. Notably, health plans may use these audits to retroactively deny a number of claims, which may then be extrapolated over several years of service, resulting in significant alleged overpayments against the provider. This may further result in serious actions such as recoupment, mandatory prior authorization, or even removal from the MA plan’s network of providers. Additionally, certain adverse actions imposed by MA plans may serve as the basis for even further consequences from CMS, such as suspension or termination from the Medicare program. Given the rapid growth of MA plans, providers should be aware of their rights and responsibilities regarding the most common MA plan audits, as well as be proactive in their compliance efforts.

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 Advantage audits or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.