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June 15, 2012

Medicare Revalidation

Attention Medicare Providers

This Legal Alert will describe the Medicare provider enrollment revalidation mandate established by The Patient Protection and Affordable Care Act. Under section 6401(a) of the Act, all enrolled providers and suppliers must revalidate their enrollment information under new enrollment screening criteria. This revalidation mandate applies to those providers and suppliers that were enrolled prior to March 25, 2011.

Providers and suppliers that are subject to the revalidation requirement must submit a revalidation application only after receiving a revalidation notice from their Medicare Administrative Contractor (MAC). The Centers for Medicare and Medicaid Services (CMS) currently plans to have the MACs send out revalidation notices on an intermittent but regular basis through March 2015. It is crucial that all providers and suppliers that are currently enrolled in Medicare carefully examine all correspondence from its MAC and respond promptly; the consequences of a failure to respond to a revalidation notice can be severe.

Once notified by the MAC, the provider must submit the enrollment forms within 60 days of the notification. A failure to submit the enrollment forms in a timely manner could lead to deactivation of the provider from the Medicare program. Revalidation can be accomplished through the Internet-based Provider Enrollment, Chain, and Ownership System (PECOS), or through the paper CMS-855 application form. If a provider is deactivated from Medicare due to missing the 60 day deadline, it may be reinstated if it submits the reactivation documents within 120 days of its original revalidation notice. Providers may wish to contact their assigned MAC for further guidance on the revalidation requirement. Medicare's website contains a wealth of information as well:

Medicare providers should also be aware that CMS has begun to screen providers and suppliers based on a three-tiered risk system - limited, moderate and high – with each tier having its own screening procedures.

CMS believes that providers generally subject to state licensing provisions – such as physicians, clinics, hospitals and pharmacies – are at a lower risk for fraud, waste or abuse and will be placed in the "limited risk" category. This group will generally be subject to the least stringent screening procedures: verification of licenses and basic database checks.

"Moderate risk" providers (according to CMS) are those that can more easily enter into a line of business with minimal experience by, for example, leasing minimal office space or equipment. CMS also contends that these moderate risk providers are more likely to be heavily reliant on government health care programs like Medicare and Medicaid. This category includes ambulance, physical therapy, hospice, independent clinical laboratories, and portable x-ray suppliers, notwithstanding that these categories are also subject to state licensure and oversight. These providers are subject to the same screening as the limited risk group but could also receive pre- and post-enrollment site visits.

CMS considers newly-enrolling home health agencies and durable medical equipment providers to be in the "high risk" category. This category will be subject to the screening processes described above and will also have to submit fingerprints of persons with a 5% or greater direct or indirect ownership interest for purposes of criminal background checks.

CMS reserves the right to adjust the risk classification to a higher risk level to address specific program vulnerabilities. These "vulnerabilities" typically relate to bad behavior on the part of the provider such as termination from Medicaid or a previous history of exclusions or payment suspensions from a federal health care program. All of these new screening procedures will be applied to all new Medicare enrollment applications as well as to providers subject to the new revalidation procedures described above.

Hiscock & Barclay, LLP has significant experience in the enrollment of providers. Please contact Gregor Macmillan at (518) 429-4234 or, or Melissa M. Zambri at (518) 429-4229 or, Chair of the Firm's Health Care & Human Services Practice Area, to discuss the impact of these regulations and required compliance.


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