Wachler & Associates Health Law Blog

Published on: November 9, 2026

Is Medicare Opt-Out Right for Your Practice?

As Medicare reimbursement continues to decrease while the administrative burden of accepting Medicare only increases, many physician practices and other healthcare professionals are left wondering if there is a better, more efficient way to serve their patients. Add in Medicare’s endless regulatory changes, intrusive and poorly-conducted audits, and arbitrary enforcement actions, and a practice’s decision to take Medicare can quickly become more trouble than it is worth.

A possible solution may be to turn back the clock and return healthcare to a matter between the physician and the patient, without an insurance company or government agency intruding on that relationship and attempting to direct treatment through its power over reimbursement. While accepting payments directly from patients can avoid many of the obstacles presented by billing third-party payors, it is not a decision that should be taken lightly or haphazardly, especially where Medicare is involved.

In general, healthcare providers that furnish Medicare-covered items or services to Medicare-eligible patients are required to submit claims for those services to the Medicare program. A practice that charges cash to Medicare patients for Medicare-covered services may be in violation of federal law for doing so, unless the practice has “opted out” of Medicare. Medicare “opt out” is the process by which a physician or practitioner formally withdraws from participation in the Medicare program and establishes private contracts with patients to furnish items or services that would otherwise be covered by Medicare. The opt-out itself requires a specific regulatory filing, and the private contracts with patients are also required to meet certain criteria. Not all healthcare provider types have the ability to opt out, and once a provider opts out of Medicare, it can be difficult to undo or reverse the opt out.

Published on: October 26, 2026

Sixth Circuit Revives Medicare Waiver of Liability Doctrine

by Wachler & Associates, P.C.

Medicare providers understand that a claim may be denied if the services do not satisfy applicable coverage requirements. The more difficult question is whether a provider must repay Medicare when a coverage determination is later overturned and recouped, or when the provider reasonably believed the services qualified for coverage at the time they were furnished. That question was recently addressed by the U.S. Court of Appeals for the Sixth Circuit in In Home Health, LLC v. Kennedy, a decision that could have significant implications for Medicare providers facing post-payment audits and overpayment demands.

The Social Security Act provides for a Waiver of Liability doctrine wherein a provider is not liable for a Medicare overpayment where the provider did not know and could not reasonably have been expected to know that payment would not be made. Waiver of Liability issues typically arise where Medicare coverage guidance is vague, open to interpretation, or non-existent. However, the doctrine typically gets extremely short shrift in the Medicare claims appeal process, where most reviewers simply conclude that it does not apply without performing any substantive analysis.

In Home Health involved a hospice provider that faced a demand for nearly $1 million in alleged overpayments after Medicare contractors, and further levels of administrative review by a Qualified Independent Contractor and Administrative Law Judge (ALJ), that numerous hospice claims did not meet Medicare’s coverage requirements.

Published on: October 19, 2026

Medicare Overpayments: When Does a Billing Error Become a False Claims Act Problem?

by Wachler & Associates, P.C.

Most healthcare providers understand that Medicare billing mistakes can result in repayment. The more difficult question is what happens when a provider discovers—or reasonably should discover—that it has been overpaid. That question matters because Medicare’s overpayment rules can intersect with the federal False Claims Act (FCA), creating consequences that extend well beyond repayment of an individual claim.

An overpayment is defined broadly as an amount paid to a provider that exceeds what was due and payable under applicable laws and regulations. Common alleged causes include incorrect coding, insufficient documentation, medical-necessity errors, and administrative or processing problems.

For Medicare Parts A and B providers and suppliers, the central rule is familiar: an identified overpayment generally must be reported and returned by the later of 60 days after identification or the applicable cost-report due date. Federal regulations also establish a six-year lookback period for identifying overpayments. The critical word is “identified.” Typically, an overpayment is identified when a provider has, or through reasonable diligence should have, determined that it received an overpayment and quantified the amount.

Published on: October 5, 2026

Incident-to Billing Under Medicare: A Compliance Trap for Otherwise Compliant Practices

by Wachler & Associates, P.C.

For many physician practices, “incident-to” billing can look like a straightforward way to structure care delivered by non-physician practitioners (NPPs). But the Medicare rules are more nuanced than simply having a physician somewhere in the practice. When the requirements are not satisfied, a practice can face claim denials, repayment demands, and potentially broader compliance concerns.

Under Medicare Part B, services furnished by certain NPPs may be billed as “incident to” a physician or other qualifying practitioner when specific requirements are met. In general, the services must be an integral part of the patient’s normal course of treatment, the physician or other practitioner must have personally performed the initial service and remain actively involved in the course of treatment, and the service must satisfy supervision and additional requirements.

One of the most important requirements is supervision. For traditional incident-to services, CMS requires direct supervision by a physician or other listed practitioner, meaning the supervising practitioner must meet the applicable supervision standard when the service is furnished. CMS also states that only the practitioner who provides the required supervision may bill the incident-to service. That requirement can create operational problems for otherwise well-run practices.

Published on: September 28, 2026

From Denial to ALJ: Building a Medicare Appeal Record That Actually Wins

by Wachler & Associates, P.C.

A Medicare denial is not necessarily the end of the road. For providers, physicians, and healthcare organizations, it can be the beginning of an administrative appeal that ultimately reaches an Administrative Law Judge (ALJ), the Medicare Appeals Council, or even federal court. But successful appeals rarely begin at the hearing stage. They are built from the earliest stages of the dispute.

For Original Medicare Part A and Part B claims, CMS identifies five levels of appeal: redetermination by the Medicare Administrative Contractor (MAC), reconsideration by a Qualified Independent Contractor (QIC), an ALJ-level proceeding through the Office of Medicare Hearings and Appeals, review by the Medicare Appeals Council, and judicial review in federal district court. That structure creates a practical lesson for providers: the appeal record matters from the beginning.

A common mistake is to treat the first two appeal levels as relatively informal requests for review and assume that the “real” case can be developed later at the ALJ hearing stage. That approach can be costly. The early levels of appeal, especially reconsideration, are an opportunity to identify the precise reason for the denial, assemble the relevant medical and billing evidence, and establish a coherent explanation for why Medicare payment was appropriate. Timing matters, too. Evidence and medical records that are submitted at the earlier appeal levels may be excluded from consideration before the ALJ and later appeal level.

Published on: September 14, 2026

Medicare Denials as Compliance Intelligence: Turning Appeals Data Into a Risk-Management Tool

by Wachler & Associates, P.C.

For many healthcare organizations, a Medicare denial is treated as a financial nuisance: the claim was rejected, staff appeal it, and everyone moves on. That approach leaves valuable information on the table.

Medicare denials can function as an early-warning system for broader compliance problems. When analyzed systematically, denial data can help physicians and healthcare business leaders identify weaknesses in documentation, coding, medical necessity, utilization, training, and internal controls before those weaknesses become larger financial or regulatory problems. CMS uses multiple contractors and review programs to evaluate Medicare claims. Medical review contractors assess whether claims satisfy Medicare’s coverage, coding, payment, and billing requirements, and CMS explains that review activity may be driven by data analysis and identified vulnerabilities.

That same concept can be applied internally. Suppose a physician practice receives a handful of denials involving insufficient documentation. Viewed individually, each denial may seem routine. But if the same issue appears repeatedly across physicians, locations, or service lines, the organization may have identified a process problem rather than a collection of unrelated claim or documentation errors.

Published on: August 3, 2026

Medicare PPEO Audits

by Wachler & Associates, P.C.

Medicare-certified hospice providers are facing heightened regulatory oversight. In response to ongoing concerns about hospice compliance, as well as fraud, waste, and abuse within the hospice industry, both the Centers for Medicare & Medicaid Services (“CMS”) and the Department of Health and Human Services Office of Inspector General (“OIG”) have expanded their use of audits, investigations, and enforcement actions targeting hospice providers. Among these enforcement tools are Provisional Period of Enhanced Oversight (“PPEO”) audits, which apply to certain Medicare-enrolled hospice agencies. Providers should recognize that a PPEO audit can carry significant consequences, even where the perceived compliance issues appear relatively minor.

CMS introduced PPEO audits to address concerns surrounding hospice program integrity and regulatory compliance. Under the PPEO initiative, beginning in mid-2023, CMS has required audits of all “newly enrolled” hospice providers located in Arizona, California, Nevada, and Texas. Georgia and Ohio were added in late 2025. For purposes of the program, the term “newly enrolled” extends beyond providers entering the Medicare program for the first time. It also includes hospices that have undergone a Change of Ownership (“CHOW”), as defined by Medicare regulations, providers that have experienced a 100% ownership transfer, and agencies reactivating Medicare enrollment after a period of deactivation.

PPEO audits are sometimes likened to Targeted Probe and Educate (“TPE”) reviews because both processes may involve multiple rounds of claim review during which providers can receive feedback and, in some cases, an opportunity to correct identified deficiencies. That comparison, however, is limited, and in practice the two review processes differ substantially. TPE audits typically involve three rounds of review, and occasionally a fourth. CMS guidance requires the reviewing contractor to provide education to the provider and to allow time between review rounds so the provider can implement corrective measures and improve compliance. In addition, providers generally are not referred to CMS for administrative sanctions unless they fail three consecutive rounds of review by demonstrating persistently high error rates throughout the TPE process. Although TPE audits can ultimately result in revocation of Medicare billing privileges, that outcome generally occurs only after repeated unsuccessful review cycles.

Published on: July 27, 2026

CMS Proposes to Further Expand Its Medicare Revocation Authority

by Wachler & Associates, P.C.

In the recently published 2027 Home Health PPS proposed rule, CMS proposed several significant expansions of its authority to revoke Medicare billing privileges.

CMS proposed two new bases on which it would be permitted to revoke Medicare billing privileges. First, CMS proposed that it be permitted to revoke a provider’s or supplier’s Medicare enrollment if CMS “deems the enrollment as presenting a high risk of fraud, waste, or abuse due to the provider’s or supplier’s location within a limited geographic area that has an excessive number of providers and suppliers.” This proposal was a direct response to recent media reports regarding large numbers of providers registered or operating at the same address or building. However, the extremely broad and vague authority that CMS seeks is concerning for providers, as CMS declined to limit what is meant by “high risk,” “excessive number,” or “limited geographic areas” and also stated that an actual showing of fraud would not be required. This expansion would effectively permit CMS to revoke the Medicare enrollment of any provider, anywhere, anytime, and without a showing of misconduct by the provider.

Second, CMS proposed that it be permitted to revoke Medicare enrollments where a provider or supplier, or any owner, manger, officer, or director, is convicted of a federal or state misdemeanor related to sexual assault or financial misconduct within the past 10 years that CMS deems detrimental to the best interests of the Medicare program and its beneficiaries. CMS has long had the authority to revoke for felonies, but has struggled to define how it should address misdemeanor convictions. A similar, though broader, proposal in 2024 was never implemented. This more limited proposal would permit CMS to revoked Medicare enrollment based on crimes that are plainly harmful to patients and/or the Medicare program, but that are simply not categorized as felonies.

Published on: July 13, 2026

What Healthcare Providers Need to Know About Medicare Audits

by Wachler & Associates, P.C.

For healthcare providers enrolled in Medicare, a claims audit can present significant operational and financial challenges. When an audit results in denied claims, the appeals process often becomes lengthy, with cases taking months—or even years—to reach a final resolution. Successfully navigating each stage requires careful planning, strategic decision-making, and close attention to procedural deadlines.

Most Medicare audits begin with a request for medical records from a Medicare contractor. From the outset, providers should determine the purpose and scope of the review. Identifying the contractor conducting the audit—whether a Medicare Administrative Contractor (MAC), Unified Program Integrity Contractor (UPIC), Recovery Audit Contractor (RAC), or Supplemental Medical Review Contractor (SMRC)—can offer valuable insight into the government’s objectives. It is equally important to understand the type of audit involved. Is the review occurring before or after payment? Is it part of a Targeted Probe and Educate (TPE) initiative, a Comprehensive Error Rate Testing (CERT) review, or a Provisional Period of Enhanced Oversight (PPEO) audit? Providers should also evaluate whether statistical sampling or extrapolation may be part of the review.

The provider’s own circumstances should also factor into a response strategy. Previous audit activity, recent ownership changes, or situations where records are maintained by another organization may all influence how the audit should be handled. Depending on the issues presented and the potential exposure, providers may choose to supplement the record with additional documentation, obtain an independent clinical review, communicate directly with the auditing contractor, or prepare a comprehensive legal response. In lower-risk situations, however, submitting the requested records and waiting for the contractor’s determination may be the most appropriate approach.

Published on: July 7, 2026

OIG Focusing on Clinical Laboratories

by Wachler & Associates, P.C.

The HHS Office of Inspector General (OIG) recently updated its work plan to announce two new initiatives directed towards clinical laboratories billing Medicare for laboratory tests. The OIG work plan includes the various projects, audits, evaluations, and reviews that OIG is planning or that are currently underway. Medicare providers often experience the downstream effects of OIG projects or are directly the subject of OIG projects, and should therefore be aware of OIG’s enforcement priorities.

First, OIG intends to review trends and vulnerabilities in genetic tests covered under Medicare Part B. OIG noted the steady increase in Medicare expenditures on genetic tests, as well as the higher average per-test payment amount of these tests when compared to other laboratory tests under Part B. OIG asserted that it had identified genetic testing fraud schemes involving deceptive telemarketing campaigns and kickbacks. Pursuant to this project, OIG will examine avenues for strengthening oversight of genetic tests covered under Part B, including identifying tests that may be vulnerable to fraud, waste, and abuse; assessing trends among laboratory test providers; and examining whether geographic variations exist, particularly between jurisdictions that do and do not participate in the Molecular Diagnostic Services Program.

Second, OIG intends to review Medicare payments to providers for some expanded laboratory panels. OIG noted that expanded panels (those that can detect six or more pathogens) result in higher Medicare payments than targeted panels (those that can detect up to five pathogens). OIG stated it has concerns that providers have been administering expanded laboratory panels when targeted laboratory panels would be sufficient, resulting in significantly higher Medicare payments to those providers. OIG intends to determine whether Medicare has paid providers for some selected expanded panels that are not medically necessary, do not meet Local Coverage Determination (LCD) requirements, or otherwise do not meet Medicare requirements.