The Centers for Medicare & Medicaid Services (“CMS”) published proposed changes to the Medicare Provider Enrollment requirements in the 2024 Medicare Physician Fee Schedule Proposed Rule (the “Proposed Rule”). If finalized, the changes would create denial and revocation authorities, establish a new provider enrollment status called a “stay of enrollment,” implement and amend key provider enrollment regulatory definitions, and clarify notification requirements for practice location changes. Below, we have outlined some of the provisions most impactful for providers and suppliers.

New Denial and Revocation Authorities

The Proposed Rule expands CMS’ current denial and revocation authorities and allows a Medicare enrollment application to be denied, or an existing enrollment to be revoked if:

• A provider or supplier, or any owner, managing employee or organization, officer, or director has been convicted (as defined in 42 C.F.R. § 1001.2) of a misdemeanor under Federal or State law within the previous 10 years that CMS deems detrimental to the best interests of the Medicare program and its beneficiaries. This is a discretionary authority, and importantly it does not require denial or revocation where a misdemeanor conviction is reported. In the preamble to the Proposed Rule CMS identified several cases it was aware of where individuals were not convicted of felonies but were convicted of misdemeanors CMS believed would create program integrity risks. CMS is specifically seeking comment on potential unintended consequences of the newly proposed authority and any guardrails which should be implemented.

• A provider or supplier, or any owner, managing employee or organization, officer, or director has a civil judgment under the False Claims Act imposed against them within the previous 10 years. CMS clarified in commentary that “civil judgment” would not include False Claims Act settlement agreements. Because the authority to deny or revoke a Medicare enrollment is discretionary, CMS proposed that it would consider factors on the nature and scope of the conduct leading to the False Claims Act judgment in making an enrollment determination. If finalized, this proposal would give the government another powerful tool to incentivize providers and suppliers under investigation for False Claims Act violations to settle those claims prior to trial.

• Independent Diagnostic Testing Facilities, durable medical equipment suppliers, opioid treatment programs, home infusion therapy suppliers, and Medicare diabetes prevention programs fail to comply with the standards of enrollment for their provider or supplier type.

Establishing a “Stay of Enrollment” Provider Enrollment Status

In an effort to create a “middle ground between a deactivation and non-action on our part,” for non-compliance with Medicare enrollment requirements, CMS proposes implementing a “stay of enrollment” status. A “stay of enrollment” would be a “pause” in an existing supplier or provider’s enrollment and would not last for more than 60 days. CMS proposes it could impose a stay of enrollment only when: (i) a provider or supplier is not compliant with at least one Title 42 enrollment requirement; and (ii) when it ascertains the non-compliance may be remedied through the provider or supplier’s submission of the appropriate enrollment report (Form CMS-855, Form CMS 20134, or Form CMS-588). Importantly, the provider or supplier would not receive payment for items or services provided during the stay period but would have the opportunity to remedy deficiencies in its enrollment profile instead of facing a deactivation or revocation of its Medicare enrollment.

The “stay of enrollment” is viewed by CMS as a less punitive action compared to deactivation or revocation. A deactivation of billing privileged extends for an indeterminate amount of time, whereas the “stay of enrollment” is only proposed to last 60 days. A revocation would terminate a provider or supplier’s Medicare enrollment permanently and carry with it a corresponding bar against re-enrolling for 1 to 10 years.

New and Updated Provider Enrollment Regulatory Definitions

CMS responded to several requests by suppliers and providers in key definitions and proposed changes or additions to the following:

• Add a definition of “indirect ownership interest,” including guidance on how to calculate the percentage of indirect ownership interest in a provider or supplier.

• Add a definition of “pattern or practice” specifying that three non-compliant prescriber claims, orders, certifications or referrals could potentially initiate a revocation. CMS noted in commentary that parties should not assume that three of these actions would always lead to revocation, and proposed additional clarifications within the Proposed Rule to clearly indicate their intention to consider a variety of factors when making pattern or practice determinations.

• Include in 42 C.F.R. 424.502 the definition of “supplier,” clarified to include physical therapists in private practice, occupational therapists in private practice and speech-language pathologists.

• Update the definition of “authorized official” to clarify that the “organization” referenced in the definition is meant to refer to the enrolling entity, as defined by its legal name and tax identification (rather than the provider or supplier type the entity is enrolling as).

Change in Location Clarification

The Proposed Rule would require all providers and suppliers to report a change in practice location within 30 days of the change (currently, some must report within 90 days). CMS proposes to also clarify that a change in practice location includes adding a new location or deleting an existing location.

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CMS is soliciting comments on the Proposed Rule until September 11, 2023. A full text of the proposed rule can be found here.