CMS Proposes to Further Expand Its Medicare Revocation Authority

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.

CMS also proposed expanding two of its existing bases for revocation. CMS proposed to remove all the factors that it must consider when determining whether a provider has engaged in a pattern or practice of submitting claims that fail to meet Medicare requirements under 42 CFR 424.535(a)(8)(ii). CMS had previously reduced the factors it was required to consider under this section and has stated that as few as three non-compliant claims would be grounds for revocation. The new proposal would remove all the factors and further broaden this basis for revocation. CMS also proposed to remove the requirement under 42 CFR 424.535(a)(4) that false or misleading information must be certified in order to constitute grounds for revocation, and to remove the requirement under the same section that the information is submitted to gain or maintain Medicare enrollment, meaning any inaccurate information submitted by a provider could lead to a revocation.

Further, CMS proposed several changes to its retroactive revocation authority. In general, a revocation is effective 30 days after notice is mailed to the provider. But under certain circumstances, CMS can revoke retroactively, or “back-date” the effective date of the revocation, sometimes years in the past. For the most part, CMS’ proposed changes expand the circumstances under which it can back-date the revocation or how far back, generally to the date the conduct giving rise to the revocation occurred. The practical effect of a retroactive revocation is that a provider can find that years of Medicare reimbursement are suddenly deemed an overpayment, though Medicare has made no allegations regarding the claims themselves.

For over 40 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to Medicare revocations or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com