Judith Waltz Weighs in on CMS Affiliation-Based Revocations
August 31, 2026
Report on Medicare Compliance
Foley & Lardner LLP partner Judith Waltz features in the Report on Medicare Compliance article, “Affiliation-Based Revocations Ramp Up; Hospices, Medical Directors Feel the Heat,” offering essential insights on the Centers for Medicare & Medicaid Services’ increasing use of affiliation-based Medicare billing privilege revocations, the resulting risks for hospice medical directors, and the distinctions between CMS revocations and OIG exclusions.
Waltz said “the use and deadly effectiveness” of affiliations as grounds for revoking Medicare billing privileges seem to be underestimated.
Below is a chart Waltz developed included in the Report on Medicare Compliance article, which compares exclusions (Imposed by HHS Office of Inspector General) to Medicare billing revocations (Levied by CMS).
While both exclusions and revocations turn off Medicare payments to the provider, there are meaningful differences between the two.
Comparison – Exclusions and Medicare Billing Privilege Revocations
| Issue | Exclusions (OIG) | Billing Privileges Revocations (CMS) |
| Statutory Authority | 42 U.S.C. § 1320a-7, 42 U.S.C. § 1320a-7(a); 42 U.S.C. § 424.1 1320a-7(b), 42 U.S.C. § 1320c-5 | List of statutory authorities – 42 C.F.R. § |
| Discretion | Some mandatory, some discretionary | All discretionary |
| List available to public | Yes | Yes, Revocation List. Preclusion list availability historically limited to MA Plans and Part D sponsors; loss of billing privileges reported to NPDB. |
| Regulations | 42 C.F.R. Chap. V, Subchapter B, Part 1001 et seq. | 42 C.F.R. Part 424, subpart P; CMS Prog. Int. Manual, Ch.10, sec. 10.4.7 et seq. |
| Applicability | Federal Health Care Programs (FHCP), including Medicare/Medicaid | Medicare (with collateral terminations required of Medicaid) |
| Collateral Impact | Federal health care program exclusions do not reach other Federal programs (although HHS or another Federal agency could separately initiate a suspension or debarment of an excluded person from other Federal procurement or nonprocurement programs). | Revocation is a basis for preclusion from MA and Part D; terminations from state health care programs |
| Time Period for reinstatement | Minimum exclusion periods vary by exclusion authority, typically 3-5 years | Reenrollment bar generally 1-10 years |
| Grounds for action | List of authorities | 23 grounds listed in 42 C.F.R. § 424.535 |
| Effective Date | Varies | Varies, see 42 C.F.R. § 424.535(g); also see CMS Prog. Int. Manual, Chap. 10, sec. 10.4.7.2 (updated 3/24). |
| Part of FCA Settlement | Yes. Corporate Integrity Agreements are a settlement of OIG’s discretion to exclude an individual or entity. | No. FCA settlement is not grounds for denial or revocation, but FCA civil judgment (i.e., post trial) within prior 10 years may be grounds for denial of new application or revocation, 42 C.F.R. §§ 424.530(a)(17) and 424.535(a)(15). |
| Reinstatement | Application to OIG after exclusion period | 42 C.F.R. § 424.535 |
| Managing Employee Based Action | 42 C.F.R. § 1001.1001 Exclusion of entities owned or controlled by a sanctioned person | 42 C.F.R. § 424.535(e) Reversal of revocation. If the revocation was due to adverse activity (sanction, exclusion, or felony) against the provider’s or supplier’s owner, managing employee, managing organization, officer, director, authorized or delegated official, medical director, supervising physician, or other health care or administrative or management services personnel furnishing services payable by a Federal health care program, the revocation may be reversed if the provider or supplier has terminates and submits proof that it has terminated its business relationship with that party within 15 days of the revocation notification. |
| Appeals (ALJ level) | Departmental Appeals Board; In general, the regulations governing cases in which the HHS IG is a party are found at 42 C.F.R. Part 1005. | Departmental Appeals Board; In general, the regulations governing cases in which CMS is a party are found at 42 C.F.R. Part 498. |
| Issues on Appeal | 42 C.F.R. § 1005.2(d). The request for a hearing will contain a statement as to the specific issues or findings of fact and conclusions of law in the notice letter with which the petitioner or respondent disagrees, and the basis for his or her contention that the specific issues or findings and conclusions were incorrect. | St. Joseph Healthcare Agency, Inc., DAB CR6879 (2026) The Board has consistently held that ALJ review of the CMS revocation determination is limited to whether CMS had a legal basis for revocation. Letantia Bussell, M.D., DAB No. 2196 at 10 (2008). If CMS establishes the elements necessary for revocation, “revocation must be sustained, and neither the [All] nor the Board may `substitute its discretion for that of CMS in determining whether revocation is appropriate under all the circumstances.” |
| Appeal of length of sanction (exclusion v. reenrollment bar) | See 42 C.F.R. §§1005.4(c) The ALJ does not have authority to (5) Review the exercise of discretion by the OIG to exclude an individual or entity under section 1128(b) of the Act or under part 1003 of this chapter, or determine the scope or effect of the exclusion; (6) Set a period of exclusion at zero, or reduce a period of exclusion to zero, in any case in which the ALJ finds that an individual or entity committed an act described in section 1128(b) of the Act or under part 1003 of this chapter; or (7) Review the exercise of discretion by the OIG to impose a CMP, assessment or exclusion under part 1003 of this chapter; 1005.20(b) (“The ALJ may affirm, increase or reduce the penalties, assessment or exclusion proposed or imposed by the IG, or reverse the imposition of the exclusion.”) | No review of reenrollment bar years, see Frank B. Lee, M.D., DAB No. 3170 (2025) |
An earlier version of this summary was submitted by Waltz as a “practice tool” for a session at the American Health Law Association’s (AHLA) 2026 Institute on Medicare & Medicaid Payment Issues.
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