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CMS Issues New Affiliation Fraud Rules for Providers


Recently, the Centers for Medicare and Medicaid Services (CMS) issued a final rule giving the agency more authority to prevent fraud. With the new rule, CMS can reject a provider’s or supplier’s enrollment in Medicare, Medicaid or Children’s Health Insurance Program (CHIP) if they are affiliated with businesses that have had their enrollments revoked due to fraud, abuse or waste.

Finalizing this rule has been a long drawn-out process, as it was first proposed in 2016. CMS cites provider burden concerns voiced during the proposed rule’s comment period as one of the reasons for the delay.

The new law which takes effect on November 4, 2019, greatly expands CMS’s ability to address fraud. Currently limited to a reactive mode by primarily recovering fraudulent payments after they are issued, the new process will actually allow CMS to block potential fraudsters from participating in these plans, thereby preventing fraud before it even begins.

Providers must gather documents about their affiliations in order to comply with the new rule.

Providers and Suppliers Must Disclose Certain Affiliations

Medicare, Medicaid and CHIP providers must disclose any current or former, direct or indirect affiliations with any provider that:

  • Has been or currently is excluded from Medicare, Medicaid or CHIP by the U.S. Department of Health and Human Services’ Office of Inspector General,

  • Has been or currently is subject to suspension of payments under a federal health care program,

  • Has had its Medicare, Medicaid or CHIP billing privileges denied or revoked, or

  • Has uncollected debt.

The same process applies to Medicare, Medicaid and CHIP suppliers.

The rule also allows CMS to revoke or reject a provider’s or supplier’s Medicare, Medicaid or CHIP enrollment based on their affiliations with an organization that has had its enrollment revoked.

Final Rule Imposes Additional Rules on Medicare Enrollment

Under the new rule, CMS can deny or revoke Medicare enrollment if a provider or supplier:

  • Reenrolls or attempts to re-enroll in Medicare under a different name in order to bypass Medicare rules,

  • Bills for services or items from non-compliant locations,

  • Shows a pattern or practice of abusive ordering or certifying of Medicare Part A or Part B drugs, items or services, or

  • Owes an outstanding debt to CMS from an overpayment that was referred to the U.S. Department of the Treasury.

There are additional components to the final rule that apply to providers or suppliers that have submitted false or misleading information in their Medicare applications and the period of time that CMS can bar fraudulent providers from re-entering Medicare.

CMS states that it would have saved more than $20 billion over the last five years if these rules had been in place. The agency estimates that 2,600 providers will withdrawal from federal health programs which will save more than $4 billion over 10 years.

Read the CMS press release for this new affiliation rule.

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