FUNDAMENTALS OF PROVIDER ENROLLMENT

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1 FUNDAMENTALS OF PROVIDER ENROLLMENT Jeanne L. Vance Salem & Green, A Professional Corporation 3604 Fair Oaks Boulevard, Suite 200 Sacramento, CA (916) March 1, 2013 I. Introduction Becoming and maintaining the privilege of being a Medicare provider necessitates a screening process known as provider enrollment. Provider enrollment is a program integrity effort. It emanates from the requirement for Medicare participation that providers disclose information about those with a 5% direct or indirect ownership or control interest as a condition of Medicare payment. 1 Provider enrollment rules are set forth in the following sources of law, administrative guidance, and application forms: A. Regulations: 42 C.F.R et seq. (2012). See also 42 C.F.R et seq. (2012). B. Centers for Medicare & Medicaid Services ( CMS ) State Operations Manual, Chapter 3. C. CMS Program Integrity Manual, Chapter U.S.C. 1320a-3 (2012). This material is for informational purposes only and does not constitute legal advice.

2 D. Paper forms are available at: E. Online filing of forms is available at: https://pecos.cms.hhs.gov. F. See also helpful information at: the AHLA Accreditation, Certification and Enrollment Affinity Group website: This includes recent summaries of Departmental Appeals Board and Civil Remedies Division enrollment/certification decisions. II. The Forms A. There are six forms available: A Part A providers; B Part B providers, 2 including hospitals billing for Part B physician services; I for individual practitioners; R links individual practitioners to reassign benefits; 2 References in this outline to both Medicare providers and suppliers, as defined in the Social Security Act, will be referred to herein as providers. 2

3 5. 855O completed by physicians and non-physicians who need Medicare enrollment solely to order and refer patients for Medicare benefits 3 ; and S DME providers (including Part B providers selling DME). B. Supplemental Instructions Regarding Forms Sections 5 and 6 1. Percentage of Control. Current 855 forms require the exact date ownership or control began, the exact percentage of ownership or control, the date and place of birth of individuals disclosed with an ownership and control interest in the Medicare supplier or provider, and the disclosure of all physician owners of physician-owned hospitals. 4 As of the date of this paper, CMS has in effect instructions that portions of the new 855A form, having to do with the effective date and exact 3 Effective May 1, 2013, CMS indicates that providers and suppliers furnishing Part B, DME and Part A Home Health Agency claims will not be paid for Medicare services that were ordered or referred by practitioners who are not enrolled in the Medicare Program. MLN Matters SE1305 effective May 1, See forms CMS 855A, 855B and 855S issued July 2011, available at 3

4 percentage of an individual s operational or managing control over the applicant, need not be completed Organizational Diagram. All providers must submit an organizational structure diagram/flowchart identifying the entities listed in Section 5 and their relationship to each other 6 and the providers. If the provider is a skilled nursing facility, it must also submit a diagram/flowchart identifying the organizational structures of all of its owners, even those not required to be disclosed on the application in Section 5 and 6. 7 C. Special Circumstances 1. Independent Diagnostic Testing Facilities ( IDTFs ) are required to complete Attachment 2 to the CMS 855B form. The enrolled IDTF will be able to bill only for those CPT/HCPCS codes specifically listed on Attachment 2. The IDTF must include in the application the names and types of equipment used for each procedure, the model number of the equipment used, information about the interpreting and supervising physicians for each code, as well as 5 CMS MLN Matters No. SE1135 (Special Edition), revised 11/27/2012 at available at https://www.cms.gov/mlnmattersarticles/downloads/se1135.pdf 6 7 CMS Program Integrity Manual, Ch (5). Id. 4

5 information about each technician that provides services at the IDTF. 8 Providers seeking to secure new IDTF enrollment status, or desiring to change the services offered at the IDTF, should study their Medicare contractor s coverage policy decisions carefully since the information supplied on the Medicare enrollment forms must match those coverage policies. 2. Physician Assistants ( PAs ) unlike other nonphysician practitioners who seek to have an employer bill the Medicare program for his or her services, the 855R form is not used for PAs. A PA whose employer will bill for the PA s services will complete the 855I form only to accomplish this task. 9 III. Mechanics of Filing A. When to File 1. Initial enrollments As a general rule these may be filed up to 60 days prior to the date that the provider is to commence providing services Initial enrollments Providers submitting CMS 855A, ASCs and portable x-ray suppliers these may be submitted 180 days prior to the date the provider is to commence providing services See Attachment 2, form CMS 855B. See form CMS 855I. 10 CMS Program Integrity Manual, Ch. 15, Id. 5

6 3. Change of ownership These may be filed up to 90 days prior to the CHOW date Change of information With some exceptions, these changes can be filed up to 90 days prior to the occurrence. 13 B. Effective Date of Enrollments 1. For certified providers the date that a successful survey is passed, or on the effective date of the accreditation decision if on that date all federal requirements are not met. 14 If there are deficiencies in the survey, the effective date of the enrollment will be the date of submission of an acceptable plan of correction on approvable waiver request for lower level deficiencies For physicians, PAs, NPs, CRNAs, other non-physician practitioners and groups the later of the date of filing of the 855 form that was subsequently approved or the date they begin providing services at the new practice location. 16 However, CMS generally allows physicians and non-physician practitioners to bill for services provided up to 30 days prior to the billing effective date Id C.F.R (e) (2012) C.F.R (b) (2012). 15 CMS State Operations Manual, Ch. 2, 2008D (2008) C.F.R (d) (2012) CFR

7 IV. Events Triggering Filing A. Initial Enrollment This is the way new providers get into the Medicare program. The provider must secure a survey by CMS or an accrediting body with deeming authority to complete the enrollment process. A provider cannot have this survey until after the Medicare contractor has favorably approved the CMS 855 form. HHAs that are subject to the 36-Month Rule (see Section IV.E of this outline) are required to use the initial enrollment process. B. Change of Information This is the process used to report changes to a provider s Medicare file that are not changes of ownership. 18 As a general rule, they do not routinely impact the flow of Medicare receivables except to the extent that they assist the provider in continuing to meet eligibility for Medicare payment. Examples of events that would trigger a change of information filing are: 1. Transfers of stock in a company (whether 5% of the operating company s stock or 100%) would generally be reported to the Medicare program through this mechanism. 2. An update to a provider s pay to or correspondence address. 18 See forms CMS 855A, at pages 4-6, and CMS 855B, at page 3. 7

8 3. A change of the name of the entity doing business. C. Revalidations This is the means by which an existing enrolled provider amends and restates in its entirety its information on file with PECOS. Most providers are required to revalidate their enrollment files every five years. 19 Suppliers of durable medical equipment, however, must revalidate their Medicare enrollment files ever three years. 20 CMS may also require offcycle revalidations as a result of random checks, complaints, national initiatives and fraud information. 21 D. Changes of Ownership Some sales of Medicare providers constitute CHOWs; others do not. With respect to a corporation, Medicare regulations provide that, [t]he merger of the provider corporation into another corporation, or the consolidation of two or more corporations, resulting in the creation of a new corporation constitutes a change of ownership. Transfer of corporate stock or the merger of another corporation into the provider corporation does not constitute a change of ownership. 22 With respect to a partnership, a CHOW is the removal, addition or substitution of a partner, C.F.R (2012). 42 C.F.R (e) (2012). 42 C.F.R (d) (2012). 42 C.F.R (2012). 8

9 unless the partners expressly agree otherwise, as permitted by applicable State law. 23 The importance of whether or not a CHOW has occurred significantly affects the Medicare and Medicaid billing processes for the buyer and seller in the transaction. The operating company s Medicare billing entitlements do not terminate upon the sale of a business that does not constitute a CHOW, such as a sale of all of the outstanding shares of a corporation. Providers that experience a CHOW transaction, however, are able to use the selling provider s Medicare billing entitlements for a period of time after the closing of the business transaction but before the CHOW process has been finally approved by CMS, which occurs sometime after the transaction closes. 24 Providers experiencing a CHOW that choose not to accept the assignment of the selling provider s Medicare provider agreement will be required to use the initial enrollment process. That invariably necessitates a gap in the provider s Medicare billing entitlements and an important source of revenue for a period of time until the initial application process has concluded and a survey arranged Id. CMS Program Integrity Manual, Ch. 15,

10 Business transactions are frequently structured with reference to the Medicare CHOW rules and their impact on the flow of funds into the provider. For providers who choose to use the CHOW process, the assignment of the seller s provider agreement to a purchaser occurs on the transfer of the business and the purchaser s billing privileges can commence on that date. Depending on the billing arrangement, it is possible that there can be only very minimal interruptions in the billing privileges of the provider that experiences a CHOW. Purchasers of a business can avoid providing uncompensated care to Medicare beneficiaries using this process by accomplishing seamless enrollment between the seller and the buyer. Providers that experience a CHOW but choose not to accept assignment of the seller s provider agreement have all billing entitlements cease on the date that the CHOW occurs. 25 In this situation, a provider that purchases a business would either discharge Medicare beneficiaries on or before the date of the purchase (if this can be done without running afoul of patient abandonment rules) or provide uncompensated care to Medicare beneficiaries for an unknown period of time until the date of the Medicare certification survey. 25 See CMS State Operations Manual, Ch A. 10

11 E. Limitations on Use of the CHOW Process: Home Health and Change in Majority Ownership Home health agencies that experience a change in majority ownership (a CMO ) will fall within the 36-Month Rule which can force an HHA to use the initial enrollment (rather than the CHOW or change of information) process at an inconvenient time. A CMO occurs when an individual or organization acquires more than a 50% direct ownership interest in an HHA during the 36 months following the HHA s initial enrollment into the Medicare program or the 36 months following the HHA s most recent change in majority ownership (including asset sale, stock transfer, merger, and consolidation). 26 A CMO includes the acquisition of majority ownership through a series of cumulative changes that occur within a 36-month period. 27 The following HHAs are exempt from the 36-Month Rule: 1. HHAs that have submitted two consecutive years of full cost reports; 2. HHAs whose parent company experiences an internal corporate restructuring, such as a merger or consolidation; 3. An HHA operating company that experiences a legal conversion from one entity type to another (such as conversion from a See new 42 C.F.R (2012). Id. 11

12 corporation to a limited liability company, for example) so that the indirect owners of the operating company did not change; or 4. When an individual owner of an HHA dies. 28 V. Health Care Reform Revalidation Effort Most providers and suppliers will be required to affirmatively revalidate their Medicare enrollment records, if they have not done so already, over the next several years. In the Fall of 2011, CMS began the process of requesting that providers and suppliers who enrolled prior to March 25, 2011, the date that new program integrity provisions were added to the Medicare enrollment process under regulations implementing the Patient Protection and Affordable Care Act ( PPACA ). 29 This process must be completed by The consequences of failure to comply with a Medicare Administrative Contractor ( MAC ) request to C.F.R (b)(2)(i) (iv) (2011). 29 PPACA, Section 6401(a); see also MLN Matters SE CMS, Further Details on the Revalidation of Provider Enrollment Information, MLN Matters SE1126, revised August 10 and December 9, 2011 and December 3, 2012, available at https://www.cms.gov/mlnmattersarticles/downloads/se1126.pdf.; CMS, Important Information on Revalidation of Provider Enrollment, to list serve, November 4,

13 revalidate include deactivation 31 of a provider or supplier s enrollment, which means that the Medicare revenue stream ceases. Providers and suppliers irregularly received requests from MACs pre-ppaca. Thus, this new enrollment effort by CMS is creating quite the firestorm in the provider and supplier community. Providers and suppliers should be aware and prepared to respond to a MAC request within the 60 days required in the letter. Revalidation requires more than restating a provider or supplier s Medicare enrollment file. This time around, revalidation will require that providers and suppliers be screened under the program integrity rules that went into effect under PPACA. 32 Additional details about the new PPACA rules are provided in my co-presenter s written materials. In addition, 31 An enrollment revocation with a subsequent term-limited enrollment ban is also possible, but CMS has indicated on several occasions that this enrollment revalidation effort will not result in revocations. See MLN Matters SE 1126 and Transcript of CMS Revalidation of Medicare Provider Enrollment National Provider Call, October 27, 2011, available at Certification/MedicareProviderSupEnroll/Downloads/Transcript_ _NationalRevalidationCall.pdf 32 Id. 13

14 Medicare enrollees who are revalidating will need to provide content for new enrollment forms that were issued in Medicare-enrolled providers and suppliers are under an obligation to report changes to their enrollment records such as location changes, changes to officers and directors, and adverse action occurrences on a timely basis (depending on the type of change and type of provider/supplier, within days). 33 Thus, providers and suppliers must continue to submit other updates to Medicare and should respond separately even if they have received a revalidation request from the MAC. Steps for Getting Ready for Revalidation 1. Medicare enrollees should counsel staff who sorts mail at the special payments address on file with Medicare where to direct revalidation requests for prompt attention to avoid deactivation of an enrollment based on mere failure to respond to the MAC request C.F.R (2012); 42 C.F.R (g)(2) (2012); 42 C.F.R (c)(2) (2012). 14

15 2. Medicare providers and suppliers should review the CMS website for a list of providers/suppliers listed by national provider number to see if a revalidation request has been sent Review revalidation correspondence carefully; note that revalidation requests are specific to a single provider transaction access number, not to the entity. Organizations with more than a single Medicare enrollment should expect to receive revalidation requests for each of the enrollments. 4. Prepare in advance for site visits; ensure that signage is accurate. 5. Assemble the information required for revalidation in advance to permit a prompt response to a MAC revalidation request. VI. Conclusion Given the increased focus on Medicare provider enrollment and the impact it has on a provider or supplier s revenue cycle, providers and suppliers and their lawyers will be well served to devote meaningful resources to compliance. 34 Certification/MedicareProviderSupEnroll/Revalidations.html 15

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