On April 1, 2019, the Center for Medicare and Medicaid Services ("CMS") announced a new exclusion sanction: the CMS Preclusion List. This lesser-known sanction is different than placement on the Office of Inspector General ("OIG") Exclusion List that is familiar to providers and administrators in the healthcare realm, and preclusion usually goes hand-in-hand with a CMS revocation. A comparison of the differences between the OIG exclusion, CMS revocation, and CMS preclusion processes is helpful to understand the consequences to providers who receive these sanctions and to healthcare entities who need to screen their providers to prevent incorrect and potentially fraudulent billing to federal payors.
The Exclusion Process
All providers who enroll with a federal healthcare program can be subject to exclusion from participation in all federal healthcare programs by the OIG if the provider has engaged in conduct that does not protect the integrity of the federal healthcare program. If a provider is convicted of certain felony crimes related to the delivery of items of services under the Medicare, Medicaid, SCHIP or other state health care programs, certain felony crimes for other health care fraud or financial misconduct, certain felony crimes relating to controlled substances, or certain crimes related to patient abuse or neglect than exclusion by the OIG is mandatory.1 Exclusion can also be imposed at the OIG's discretion for other reasons, including certain misdemeanor convictions not related to the delivery of services under the Medicare or Medicaid program, certain misdemeanor convictions related to health care fraud or controlled substances, state medical licensure sanctions, and exclusions from other federal or state health care programs, such as Medicaid.2
There is an appeals process for exclusion that depends on whether the OIG exclusion is mandatory or permissive.3 The OIG will send written notice to the provider of the exclusion that explains whether the exclusion is indefinite or for a certain time period, as well as the appeal process available to the provider. However, if an appeal deadline is missed by the provider, the provider has no recourse other than to apply for reinstatement as a federal health care provider. 4 Reinstatement is not automatic, and in most cases, an application for reinstatement can be submitted no sooner than 90 days before their exclusion period ends.5
Excluded providers are listed in a database available to the public on the OIG's website.6 As part of a robust compliance program, health care entities should have a process for checking this OIG Exclusion List to screen their employed providers, referring providers, and contractors.
How CMS Revocation is Different
All providers who enroll with Medicare are subject to revocation of their Medicare billing privileges if CMS determines that the provider's enrollment subjects the Medicare program to potential fraud waste and abuse.7 Unlike OIG exclusion, a CMS revocation only prohibits a provider from participating in Medicare and does not automatically exclude them from participation in other federal healthcare programs. Some reasons for revocation are similar to OIG exclusion reasons, such as convictions for certain crimes related to the delivery of services and items under the Medicare program and state Medicaid exclusions. However, CMS revocations also can be imposed for reasons specific to Medicare enrollment and participation, such as failure to meet revalidation or capitalization requirements, failure to comply with enrollment and documentation requirements, failure to report changes of location or adverse actions within 30 days, and abusive billing practices.8
CMS revocations are accompanied by re-enrollment bars which prohibit revoked providers from re-applying for Medicare enrollment for a certain period of time. 9 The length of the enrollment bar is primarily determined by the severity of the underlying offense.10
There is an administrative appeals process for a CMS revocation that is detailed in the revocation letter from CMS. Unlike an OIG exclusion, if an appeal deadline is missed to appeal the CMS revocation, an appeal can still be filed and will be considered by CMS if "good cause" can be shown as to why the appeal deadline was missed.11 Providers also have the option of two potential early intervention responses that can overturn a revocation without going through the appeals process: (1) reversal of revocation and (2) corrective action plan.12
There is no public database accessible to healthcare providers or the general public to look up providers who have been subject to CMS revocation.
How CMS Preclusion is Different
A healthcare provider added to the CMS Preclusion List will be precluded from receiving payment for Medicare Advantage ("MA") services and items, as well as Medicare Part D drugs. A provider can be placed on the CMS Preclusion List at CMS' discretion based on the following criteria:
(1) Is currently revoked from Medicare, are under an active re-enrollment bar, and CMS has determined that the underlying conduct that lead to the revocation is detrimental to the best interests of the Medicare Program; or
(2) Have engaged in behavior for which CMS could have revoked the individual or entity to the extent applicable had they been enrolled in Medicare, and CMS has determined that the underlying conduct that lead to the revocation is detrimental to the best interests of the Medicare Program; or
(3) Have been convicted of a felony under federal or state law within the previous ten years that CMS determines is detrimental to the best interests of the Medicare program.13
Of note, the second criteria listed above allows for a provider not currently enrolled in Medicare to be placed on the CMS Preclusion List. Since there is currently no requirement that MA providers and Part D prescribers be enrolled with Medicare, CMS has been granted authority to place providers not enrolled in Medicare on the CMS Preclusion List.14
There is also an appeals process for providers to appeal placement on the CMS Preclusion List which is detailed in the notice letter sent out by CMS. Typically, if a provider is placed on the CMS Preclusion List, the provider's Medicare enrollment is concurrently revoked and a re-enrollment bar established. Both the revocation, the re-enrollment bar, and the placement on the CMS Preclusion List can be appealed simultaneously.15
MA plans and Part D sponsors can access the CMS Preclusion List via an electronic database. Part D Sponsors and MA Plans are required to notify beneficiaries who have received treatment or prescriptions from a precluded provider within 30 days prior to the provider being placed on the CMS Preclusion list.16 In addition, MA Plans and Part D Sponsors are required to make a reasonable effort to notify the provider who has been placed on the CMS Preclusion List of the beneficiaries that can no longer be prescribed Part D drugs or otherwise treated.17
The general public, which includes health care entities, does not have access to the CMS Preclusion List.
How Lack of Transparency Related to CMS Revocations and Preclusions Causes Compliance Issues
While placement on the CMS Preclusion List is automatic when a provider is excluded by the OIG18, a provider can be revoked from Medicare and/or on the CMS Preclusion List and not on the OIG Exclusion List. Currently, health care entities have no way to know if their providers are revoked or precluded by CMS unless the entity receives the written notice from CMS, the sanctioned provider notifies the entity or claims submitted under the sanctioned provider are denied by Medicare, a MA plan or a Part D sponsor. The lack of transparency by CMS regarding CMS revocations and the CMS Preclusion List is unfair to health care entities who are charged by CMS with screening the enrollment status of their providers when they participate in federal health care programs.
OIG exclusion, Medicare revocation, and CMS preclusion are three very different sanctions, but they are usually related. Providers and entities must understand the different effects of each of these sanctions and know that all these sanctions are soon to follow after criminal convictions and state board or licensure issues. Healthcare entities need to closely screen their providers and claim denial reasons to ensure the compliant billing of their rendering and ordering providers to Medicare and other federal payors.
1. See 42 U.S.C. §1320a -7(a)(1-4).
2. See 42 U.S.C §1320a – 7(b)(1-15) and 1320c – 5.
3. See 42 C.F.R. §1001.2001-2007.
4. See 42 C.F.R §402.214(f).
5. See 42 C.F.R. §1001.3001. Early reinstatement is possible if the reason for exclusion was a license revocation. See 42 C.F.R. §1001.501.
7. 42 C.F.R.§ 424.535
8. 42 C.F.R.§ 424.535(a)
9. 42 C.F.R.§ 424.535(c)
10. 42 C.F.R.§ 424.535(c)
11. 42 C.F.R § 498.22(d)
12. 42 C.F.R.§ 424.535(e) and 42 C.F.R.§ 424.535(a)(1)
15. See 42 C.F.R. 498.5(n)(ii)(B) and https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/Downloads/Preclusion_List_FAQs.pdf
16. 42 CFR § 423.120(c)(6)(iv)(B)(2) and 42 CFR § 422.222(a)(1)(ii)(A-B)
17. See id.
18. 42 CFR § 422.222(a)(3)(ii)
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