On December 5, 2014, the Centers for Medicare & Medicaid Services (CMS) issued a final rule titled “Requirements for Medicare Incentive Reward Program and Provider Enrollment” (“the Rule”).1 The Rule implemented several provider enrollment requirements, including a significant, new regulatory provision that will permit CMS to revoke Medicare billing privileges for a provider or supplier that has a pattern or practice of submitting claims that fail to meet Medicare requirements. The new provision should be of particular concern to laboratories that bill Medicare for their clinical testing, because clinical testing is undergoing rapid innovation in both clinical utility and payment arrangements among laboratories, and that often results in large numbers of denied claims.
The provisions of the new rule will become effective on February 3, 2015. The previous regulation, 42 C.F.R. § 424.535(a)(8), stated that CMS could revoke Medicare billing privileges if the provider/supplier submitted a claim for services that could not have been furnished to a specific individual on the date of service. Examples of such “impossible” services included services to a deceased beneficiary and services for which the necessary equipment was not present.
In the Rule, CMS expanded its revocation powers to include a pattern or practice of billing for services that do not meet Medicare requirements. In making these determinations, CMS will consider the following criteria:
The immediate implication of this expanded provision is that CMS’s finding that a laboratory billing practice is incorrect may affect—or in fact, preclude—future claims in addition to existing claims.
In the preamble discussion to the Rule, CMS provided additional details regarding the implementation and enforcement of the provision. CMS noted the following:
The new regulatory provision is a powerful enforcement tool for CMS and a major consideration for providers and suppliers billing Medicare. It remains to be seen how CMS will use the provision against providers and suppliers, and whether revocations of privileges would be made public to serve as examples of CMS’s enforcement powers.
1. 79 Fed. Reg. 72500 (December 5, 2014).↩