Unlawful, Unfair and Unwise: Constitutional and Rulemaking Infirmities in CMS's Enrollment Revocation Regulations and How to Challenge Them

Welcome to the Medicare Program – Now Get Out

Imagine you are a physician who has been convicted of a minor felony, such as one count of possession of a controlled substance, which was not a crime of dishonesty or had anything to do with Medicare or any other healthcare program. You report the felony conviction to your Medicare contractor within 30 days, as required. You also report the conviction to the state licensing board, which decides to take no action against your license. You wait to see what happens with Medicare, because, after all, revocation of billing privileges for a felony conviction is not automatic. Revocation due to a felony conviction is supposed to be based on a determination that a provider’s or supplier’s continued participation in the Medicare program is “detrimental to the best interests of the Medicare program and its beneficiaries,” (whatever that means). Two years later, without any notice of a proposed revocation for which you would be offered the opportunity to respond, or any other warning from your Medicare contractor, you receive a notice stating your billing privileges are revoked for a period of three years. To make matters worse, the contractor notifies you that it is recouping Medicare payment for all of the services from the date of your conviction through the date of the notice, which amounts to several hundreds of thousands of dollars.

Or imagine that you are a physician practice that employs someone who is listed as a managing employee on the practice’s enrollment form. The employee does not tell you that he has been excluded from participation in the federal healthcare programs by the Department of Health and Human Services’ Office of Inspector General (“OIG”) and despite your routine searches of OIG’s listing of excluded individuals and entities (“LEIE”) you fail to find that has been excluded. You discover he has been excluded when you receive a notice from the Centers for Medicare & Medicaid Services (“CMS”) informing you that your billing privileges have been revoked for three years for having an excluded individual as a managing employee. Although CMS’s regulations allow it to rescind a revocation where the provider or supplier fires the managing employee (or if an owner who is the subject of the adverse action terminates the owner’s ownership interest) within 30 days of the revocation, and although you do so within a matter of days, CMS refuses to rescind the revocation. Instead, the revocation of billing privileges is made retroactive to the date of the employee’s exclusion and an overpayment is created in the amount of $500,000.

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