New fraud prevention rule gives CMS greater discretion

Providers should read between the lines in order to understand how CMS will punish "bad actors"

Major takeaways

There are two major takeaways regarding the new CMS rule, Breen said.

First, providers need to know who they are doing business with, both internally and externally. CMS can now deny or revoke Medicare enrollment based on the criminal history of managing employees. Generally, owners, providers and suppliers are conscious of the people they hire, but the rule adds an additional layer of scrutiny.

"This sends the message that it's the expectation of the government that it ought to matter who works for you," Breen said.

Second, providers will want to pay attention to the actions of CMS contractors in order to better understand how this rule will be utilized. Contractors may begin using the sanction authority with increased frequency, in addition to requesting new or additional information about Medicare claims or employee backgrounds.

"CMS uses contractors, in some respects, as its eyes and ears," Breen said. "When you're looking for reports from contractors in terms of what they are finding out there, you want to be sensitive to the notion that you may start to be asked to produce information that you've not been requested previously."

Greater discretion for CMS

The new rule offers CMS significant discretion in its consideration of any factors that might justify refusing or revoking Medicare enrollment, Breen said. For example, the language surrounding felony convictions for managing employees is vague, stating only that CMS can deny or revoke enrollment if a managing employee has been "convicted of a felony offense that CMS determines to be detrimental to Medicare beneficiaries."

Previously, that rule included specific references to felonies such as murder, rape and assault, as well as extortion, embezzlement, income tax evasion and insurance fraud. Breen said that, though those references have been removed, they are still among the felonies that CMS will focus on in addition to "detrimental" offenses.

"There has not been a further delineation of that [definition], but I think it does certainly open the door for additional felony convictions--even convictions that wouldn't, on first flush, suggest that they directly relate to the provision of healthcare services to government beneficiaries," he said.