Summary

The Medicare Physician Fee Schedule proposed rule released by the Centers for Medicare & Medicaid Services (CMS) on July 7, 2016, (the Proposed Rule) requires certain providers and suppliers furnishing health care services to Medicare Advantage (MA) enrollees to be actively enrolled in Medicare. The Proposed Rule also prohibits Medicare Advantage Organizations (MAOs) from paying providers who are excluded and/or revoked from the Medicare program, except under certain circumstances. The proposed regulations on provider enrollment are slated to become effective as of January 1, 2019.

In Depth

The Medicare Physician Fee Schedule proposed rule released by the Centers for Medicare & Medicaid Services (CMS) on July 7, 2016, (the Proposed Rule) requires certain providers and suppliers furnishing health care services to Medicare Advantage (MA) enrollees to be actively enrolled in Medicare. The Proposed Rule also prohibits Medicare Advantage Organizations (MAOs) from paying providers who are excluded and/or revoked from the Medicare program, except under certain circumstances. The proposed regulations on provider enrollment are slated to become effective as of January 1, 2019.

Consistency with Enrollment Standards in Other Federal Health Care Programs

The proposed enrollment requirement is new for MAOs but is consistent with requirements recently enacted in other federal health care programs. Historically, providers and suppliers have been required to maintain enrollment with Medicare in order to receive payments for services furnished under Medicare Parts A and B. In 2014, CMS published new regulations requiring health care professionals who prescribe drugs to individuals covered under Medicare Part D to enroll in Medicare (or opt out of Medicare entirely) in order for the drugs they prescribe to be covered under the Medicare Part D Program. These regulations have been subject to multiple delays as CMS and prescribers have struggled to operationalize the new requirements. CMS also published a final rule this year requiring providers contracting with state Medicaid managed care organizations to enroll in the applicable state’s Medicaid program. Previously, many of these providers were only subject to applicable credentialing requirements imposed by Medicaid managed care organizations.

Operational and Oversight Challenges

The Proposed Rule raises questions about responsibility for compliance with the new requirements and relationships with certain non-contracted providers. Under the Proposed Rule, certain providers and suppliers (of the types able to enroll in Medicare) must be actively enrolled in Medicare in order to provide health care items or services to enrollees of MAOs, and MAOs must “ensure” that such providers “comply” with this requirement. If MAOs fail to ensure compliance, they may be subject to contract termination, intermediate sanctions or civil money penalties. The Proposed Rule will require increased oversight by MAOs over the enrollment status of contracted providers as well as certain non-contracted providers that render services to MA enrollees, such as locum tenens and incident-to suppliers.

MAO applications to CMS to offer new MA plans or expand the service areas of existing plans will be required to include documentation demonstrating that the MAO’s contracted providers and suppliers are actively enrolled in Medicare. It is unclear whether this new expectation will be implemented for Contract Year 2019 applications, which are submitted in February of 2018, or whether the requirement will be implemented for Contract Year 2020 applications that are submitted in February 2019.

Under the Proposed Rule, MAOs would be prohibited from paying for services furnished to MA enrollees by individuals or entities that are excluded by the Office of the Inspector General (OIG) or revoked from the Medicare program. CMS’s intent appears to be for MAOs to issue a first-time payment to excluded or revoked providers upon an initial request for payment, but to notify the provider and the enrollee that the MAO will not make payments for future services rendered by the provider. The Proposed Rule does not clarify whether the payment prohibition applies to providers that are not enrolled in Medicare but have not applied for such enrollment and therefore have not been “revoked.” The Proposed Rule also does not clarify how MAOs would be expected to handle requests for payment from one excluded or revoked provider that provides services to multiple MAO enrollees over time, how the MAO’s nonpayment for services rendered by excluded or revoked providers would impact an enrollee’s financial liability for such services, and whether one-time payments to excluded individuals and entities would be permissible under existing legal standards applicable to MAOs.

Next Steps

The Proposed Rule places significant responsibility on MAOs to ensure that providers and suppliers are actively enrolled in Medicare and that payments are not made to excluded or revoked provides. Some MAOs already require contracted suppliers and providers to be enrolled in Medicare, but others may need to update provider contracts and credentialing policies. MAOs that amend their provider contracts, roll out new contract templates or engage in network-wide recontracting should consider incorporating provisions to reflect these requirements. MAOs should also consider incorporating a Medicare enrollment check into their credentialing processes and/or monthly OIG/General Services Administration (GSA) exclusion checks. Comments can be submitted through September 6, 2016.