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Due Process Issues Abound in Medicare Revocation Cases

Revocation of Medicare billing privileges means much more than the simple loss of the ability to bill Medicare. It can also lead to loss of staff privileges or to termination by commercial payors, severely impacting the livelihood of a revoked physician or provider. Moreover, the Centers for Medicare & Medicaid Services (CMS) recently expanded its authority to issue more severe reenrollment bars and revocation is often accompanied by placement of the CMS Preclusion List, which further tarnishes a provider’s reputation by labeling them a “bad actor.” Given the devastating impacts that a Medicare revocation can have, CMS and Medicare Administrative Contractors (MACs) give surprisingly little heed to due process in meting out revocations.

In general, the due process clause of the U.S. Constitution prevents the government from interfering with a protected liberty or property interest without due process of law. Federal courts around the country are split on whether healthcare providers have protected interests at stake and what those interests may be. Some courts hold that providers have a property interest in their participation in the Medicare program due to the complex rules and regulations that provide payments to providers. Some courts hold that providers have a liberty interest in their reputation and integrity. Some grounds for revocations, such as “Abuse of Billing Privileges,” may impact a provider’s reputation more than others.

Once a protected interest is established, the essential elements of due process require that a person be given prior notice of an allegation against them and the opportunity to respond before a decision is made. However, CMS and MACs often revoke providers without notifying them of the allegations or giving providers the chance to respond. Instead, many providers receive a letter notifying them that the revocation decision has already been made. Providers then face the difficult task of trying to convince the agency to reverse its own decision, a decision in which the agency has already become entrenched, ­—the very situation due process is meant to prevent.

This lack of notice is particularly evident in revocations for an “Abuse of Billing Privileges” based on a Targeted Probe and Educate (TPE) audit. When the TPE program began in 2017, CMS did not provide the MACs with sufficiently detailed instructions on how to implement the audits. As a result, MACs often initiated TPE reviews and portrayed the review to providers as an educational opportunity, without telling providers that the review could lead to a revocation. The provider would then be revoked based on the TPE review, sometimes months or years after the MAC closed the review, without ever knowing revocation was a possibility—a likely due process violation. CMS eventually amended the instructions to requires MACs to put providers on notice that a TPE review could lead to a revocation.

In late 2019, CMS expanded the maximum reenrollment bar that it may impose with a revocation from three years to ten years. In general, due process prohibits laws and regulations from being applied retroactively, that is, applied to conduct or events that occurred before the law existed. However, CMS and the MACs often disregard this due process requirement by imposing ten-year reenrollment bars in revocations based on conduct allegedly committed in 2017 or 2018, when at the time the maximum reenrollment bar was only three years.

For over 35 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 Medicare and other rules and regulations that may have an impact on Medicare revocations. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney  at 248-544-0888 or

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