In this review: US Centers for Medicare & Medicaid Services (CMS) Medicare, Medicaid, and Children's Health Insurance programs; Program Integrity Enhancements to the Provider Process (final rule)
Effective date: November 4, 2019
CMS Press Release

The big picture: a new level of authority for CMS
CMS has released a final rule that gives it the power to revoke Medicare, Medicaid, and Children's Health Insurance Program (CHIP) enrollments of providers or suppliers who have an "affiliation" with previously sanctioned entities, even if those providers and suppliers aren't directly violating any existing rules themselves. CMS says the new authority will help to "stop fraud before it happens."

While APTA supports efforts to reduce waste, fraud, and abuse in all areas of health care, we believe this rule may create more problems than it solves, particularly given an overly broad definition of what constitutes an "affiliation." The likely result: undue administrative burden for providers and suppliers who have been compliant from the start.

The rule goes into effect November 4.

Notable in the final rule

• "Affiliations" authority. Under the new rule, all Medicare, Medicaid, and CHIP providers must disclose current or past affiliations with any organization that has uncollected debt, has had a payment suspension under a federal health care program, has been excluded from a federal health care program, or has had billing privileges denied or rescinded. If they don't disclose, CMS reserves the right to prevent them from participating in Medicare, Medicaid, and CHIP. These affiliations must be reported even if the other organization was not enrolled in Medicare, Medicaid, or CHIP at the time of the relationship.

What's an "affiliation"? CMS provides 5 definitions:

1. Direct or indirect ownership of 5% or more in another organization
2. A general or limited partnership interest, regardless of the percentage
3. An interest in which an individual or entity "exercises operational or managerial control over, or directly conducts" the daily operations of another organization, "either under direct contract or through some other arrangement"
4. When an individual is acting as an officer or director of a corporation
5. Any reassignment relationship

• Expanded authority to revoke Medicare enrollment for other reasons. The final rule also gives CMS more power to revoke or deny Medicare participation for providers or suppliers who do any of the following:

• Try to come back into the Medicare program under a different name.
• Bill for services or items from noncompliant locations
• "Exhibit a pattern or practice of abusive ordering or certifying of Medicare Part A or Part B items, services or drugs."
• Owe CMS money from an overpayment referred to the US Treasury Department.

Concerns
When the rule was first proposed in 2016, we voiced our concerns in a comment letter that characterized the plan as an overly burdensome one that would prove costly for providers and, ultimately, decrease patient access to care as providers downscaled or ended their participation in Medicare. Not much has changed since then

Between the extremely low 5% ownership threshold that triggers disclosure (APTA proposed a 25% bar), the requirements that providers disclose relationships with affiliates who weren't enrolled in Medicare at the time, and a poorly defined "lookback" requirement that puts a 5-year limit on how far back a provider must scour its records for bad-actor affiliates but no similar timeframe on how long ago that affiliate's violations may have occurred, the new rule is burdensome to say the least.

Under the rule, we wrote, "providers and suppliers will be forced to become private investigators to determine whether an affiliate ever had its enrollment denied, revoked, or terminated. We believe this is simply not feasible and will divert time that physical therapists could spend on improving the quality of patient care rather than on regulatory requirements that will not make the Medicare program appreciably safer."

Where things stand
According to Kate Gilliard, APTA senior regulatory affairs specialist, now that the rule is final, the emphasis should be on monitoring for impacts and reporting problems to strengthen APTA's advocacy for changes in future versions.

"It's clearly important for CMS and the physical therapy profession to make every reasonable effort to eliminate fraud in health care, and APTA will continue to work toward that goal," Gilliard said. "But this rule threatens to sacrifice patient access to care for the sake of a shotgun approach to the problem, adding further unnecessary burden to providers who already follow the rules. That's the message we will continue to bring to CMS."

The new rule goes into effect November 4. APTA will provide information on how to comply with the new requirements as it becomes available.