CMS Finalizes New Fraud Safeguards Including Ambulance Backbilling

#000000;">The Centers for Medicare & Medicaid Services (CMS) just issued a #0000CD;">Final Rule#000000;"> intended to improve CMS’s ability to deny or revoke the enrollment of entities and individuals that pose an integrity risk to the Medicare program.  This Rule would also significantly limit ambulance suppliers' ability to "backbill" for ambulance services provided prior to their date of enrollment.  

#000000;">This Rule was proposed on April 29, 2013, and the #0000FF;">Proposed Rule#000000;"> also included increased incentives for beneficiaries to report suspected fraud under the Medicare Incentive Reward Program (IRP). The Final Rule does not finalize the IRP proposals and CMS says that it may finalize those proposed changes in future rulemaking.  

#000000;">But, this Rule could have a significant impact on the ambulance industry.  Below is a summary of what the Final Rule does.  

#0000CD;">PWW's Summary of the Final Rule#000000;"> 

#000000;">CMS is finalizing a number of fraud safeguards in this Final Rule, including: 

  • #000000;">Elimination of "Backbilling" for Newly Enrolling Ambulance Suppliers.  Until this Rule goes into effect, ambulance suppliers can bill Medicare for ambulance services rendered prior to the date of enrollment as long as the claims are still within Medicare's timely filing deadline.  So, ambulance suppliers are able to bill Medicare for ambulance services furnished up to 12 months prior to enrollment.  This is because ambulance suppliers are not specifically included in a Medicare regulation, 42 CFR § 424.520(d), which states that the effective date for billing privileges for "physicians, nonphysician practitioners, and physician and nonphysician practitioner organizations" is the later of the date of filing of an approved Medicare enrollment application or the date an enrolled individual or organization first began furnishing services at a new practice location. CMS is now including ambulance suppliers under this regulation, eliminating the ability to bill for up to a year prior to enrollment in the Medicare program.  Under the Final Rule, newly enrolling ambulance suppliers will generally be unable to bill for services furnished prior to the later of: (1) the date of filing a Medicare enrollment application; or (2) the date the supplier first began furnishing services at a new practice location. This regulation will also affect a#000000;">mbulance suppliers that, for any reason, need to apply for a new Medicare provider number (e.g., because of an issue with the current Medicare provider number).    
  • #000000;">#000000;">#000000;">Inclusion of Ambulance Suppliers in Retrospective Billing Regulation.  The Medicare regulations, at 42 CFR § 424.521, have 30-day and 90-day retroactive billing provisions for physicians and other practitioners that apply under limited circumstances.  CMS agreed with a commenter that this regulation should apply to ambulance suppliers to the same extent that it does to physicians and other practitioners because such application would ensure that ambulance suppliers can also avail themselves of a retroactive billing period if suppliers are able to show that urgent circumstances precluded them from submitting an enrollment application. Thus, the regulations will now permit ambulance suppliers to retrospectively bill for services when the ambulance supplier "has met all program requirements . . .  and services were provided at the enrolled practice location for up to -- (1) Thirty days prior to their effective date if circumstances precluded enrollment in advance of providing services to Medicare beneficiaries; or (2) Ninety days prior to their effective date if a Presidentially-declared disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act) precluded enrollment in advance of providing services to Medicare beneficiaries."
  • #000000;">Denial of Enrollment for Bad Debt.  CMS is adding the ability to deny the enrollment of providers, suppliers, and owners affiliated with an entity that has unpaid Medicare debt. Specifically, the new regulation will permit denial of enrollment when the enrolling provider, supplier, or owner was previously the owner of a provider or supplier that had a Medicare debt that existed when the provider or supplier's enrollment was voluntarily terminated, involuntarily terminated, or revoked, and all of the following criteria are met: 
    • #000000;">The owner left the provider or supplier with the Medicare debt within 1 year before or after that provider or supplier's voluntary termination, involuntary termination or revocation;  
    • #000000;">The Medicare debt has not been fully repaid; and 
    • #000000;">CMS determines that the uncollected debt poses an undue risk of fraud, waste, or abuse.
  • #000000;">​​Denial or Revocation of Billing Privileges for Certain Felony Convictions of Managing Employees.  The Final Rule grants CMS the ability to deny the enrollment or revoke the billing privileges of a provider or supplier if a managing employee #000000;">has been convicted of certain felony offenses that CMS determines to be detrimental to the best interest of the Medicare program and its beneficiaries.  Under the current regulation, enrollment could not be denied or revoked based on a managing employee's felony conviction (only convictions of the provider, supplier or an owner). "Managing employee" is defined in the Medicare regulations at 42 CFR § 424.502 as a "general manager, business manager, administrator, director, or other individual that exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operation of the provider or supplier, either under contract or through some other arrangement, whether or not the individual is a W-2 employee of the provider or supplier."  
  • #000000;">Revocation of Billing Privileges Based on a "Pattern or Practice" of Not Meeting Medicare Requirements.  This Rule would also permit CMS to revoke billing privileges of providers and suppliers if "CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements."  In determining whether such a "pattern or practice" exists, CMS said it will consider the following: 
    • #000000;">The percentage of submitted claims that were denied; 
    • #000000;">The reason(s) for the claim denials; 
    • #000000;">Whether the provider or supplier has any history of final adverse actions (as that term is defined under § 424.502) and the nature of any such actions; 
    • #000000;">The length of time over which the pattern has continued; 
    • #000000;">How long the provider or supplier has been enrolled in Medicare; and 
    • #000000;">Any other information regarding the provider or supplier's specific circumstances that CMS deems relevant to its determination as to whether the provider or supplier has or has not engaged in the pattern or practice described in this paragraph. .  
  • Limits on Participation in Correction Action Plans.  Under the Final Rule, Corrective Action Plans (CAPs) are only available when a revocation of enrollment and billing privileges was based on a violation of 42 CFR § 425.535(a)(1), meaning that the provider/supplier was not in compliance with enrollment requirements or the enrollment application or has failed to pay any user fees. The Final Rule eliminates the possibility of participating in CAPs when the revocation was based on any other violation, including the following:
    • #000000;">Provider or supplier conduct - excluded, debarred, suspended
    • #000000;">Felonies
    • #000000;">False or misleading information 
    • #000000;">On-site review
    • #000000;">Grounds related to provider/supplier screening requirements
    • #000000;">Misuse of billing number
    • #000000;">Abuse of billing privileges
    • #000000;">Failure to report.  This includes failure to report a practice location or change in practice location.  CMS specifically stated that a failure to report a practice location change cannot be corrected by a CAP because CMS needs to know where a provider is operating to determine if Medicare requirements are being met.
    • #000000;">#000000;">Medicaid termination

#000000;">​​When a CAP is not available, a provider or supplier must appeal the revocation.  

  • #000000">All Revoked Providers and Suppliers Must Submit Claims Within 60 Days After Revocation.  Finally, the Rule requires that all revoked providers and suppliers, including ambulance providers and suppliers, submit all claims for items and services furnished before the date of the revocation letter within 60 calendar days after the effective date of revocation.