New Medicare enrollment rules and forms

By Robert H.C. Ralston, Esq.

Enrollment in the Medicare program is now an ongoing process, not a one-time event. On April 21, 2006, the Centers for Medicare and Medicaid Services (CMS) issued substantial revisions to the regulations that control the Medicare enrollment process. Not only do the new regulations require additional information to be submitted during the enrollment process, they also create new obligations for hospitals, physician practices, and other health care providers and suppliers to report changes to the government. Concomitant with the release of the new regulations, CMS completely revised the Medicare 855 enrollment forms. New applicants for Medicare billing privileges started using the revised forms in June of 2006, but with the more stringent filing requirements found in the new enrollment rules, all providers and suppliers must be familiar with the revised 855 forms and the procedures for filing them.

The CMS-855 forms are used by providers and suppliers both to enroll in the Medicare program and to report status changes and other relevant information to CMS. The 855 form comes in four different flavors. Hospitals, home health agencies, nursing facilities, and other institutional providers use Form 855A. Physician group practices, clinics, ambulance providers, and other freestanding entities such as Independent Diagnostic Testing Facilities (IDTFs) use Form 855B. Individual physicians and non-physician suppliers such as physician assistants, nurse practitioners, psychologists, and clinical social workers submit Form 855I. Finally, reassignment of Medicare benefits by physicians and other professionals to other entities-such as reassignment of billing rights by a physician to his or her group practice-requires the submission of Form 855R.

CMS issued the new enrollment rules and forms with a desire to avoid fraudulent billing and ensure the providers and suppliers billing the Medicare program are legitimate and qualified. Recent studies conducted by CMS discovered that inaccuracies in enrollment information are common, and quite a few Medicare provider numbers were found to be held by fictional businesses set up to facilitate fraud. The new rules contain more stringent rules as to the types and detail of information that must be submitted to CMS. For example, enrollees must now disclose the identity of the billing agencies they use and notify CMS if they switch agencies. As the new enrollment rules may essentially be considered new fraud and abuse regulations, it should be expected that CMS will engage in stringent enforcement.

Not only do the new enrollment rules require more detailed information from each provider and supplier, they also strengthen the requirements for sending information to CMS. CMS already requires provider and suppliers to notify the government upon significant changes, such as a change in ownership, a change of managing employee, or a change of main practice location. In the past, however, providers and suppliers often failed to notify CMS of many of these changes, as there was little risk of penalty for failing to do so. The requirement to notify CMS of status changes now has “teeth.” Under the new enrollment rules, a failure to report a change to CMS within the specified time can result in deactivation of the enrollee’s Medicare billing number. A change in information related to a change in ownership and/or control must be reported to CMS within 30 days. A change in billing services, managing employees, practice location, or other information required by the 855 form must be reported to CMS within 90 days of the change.

CMS will have a much better grasp than before as to whether information for a given enrollee is current. The new rules require all providers and suppliers currently enrolled in the Medicare program to revalidate their information no less often than every five years. Starting in 2007, CMS will establish a rolling five-year revalidation schedule incorporating all current Medicare enrollees. Current providers and suppliers will be notified by CMS when their revalidation form is due, and do not need to submit any forms until requested to do so. Once contacted by CMS, providers and suppliers will have 60 days to submit the appropriate 855 form. The penalty for failing to submit a recertification form is even more severe than the failure to notify CMS of a change. An enrollee that does not submit the revalidation form within 60 days of the request from CMS may be terminated from the Medicare program. In addition, an intentional submission of false or misleading information will result in termination from Medicare, and may also lead to criminal and civil fines and penalties. A prompt, truthful response to a revalidation request is mandatory.

While the new rules provide that all providers and suppliers must submit a revalidation form at least every five years, CMS has the discretion to require more frequent filings. The new regulations permit CMS to require enrollees to file additional 855 forms at any time and as often as necessary between five-year filings. CMS can require an off-cycle filing any time it believes a provider or supplier failed to submit an amended 855 after a status change. Off-cycle revalidations may be also be triggered as a result of regional health care fraud problems, national fraud initiatives, complaints from patients, or any other reason that causes CMS to question the integrity of the information submitted by a provider or supplier. Regardless of whether the revalidation request is scheduled or not, the enrollee must respond within the 60 day window or face penalties.

The new enrollment rules also reserve to CMS the right to conduct on-site inspections of any provider or supplier to verify the information it submitted in its 855. These inspections are separate from inspections to determine compliance with the Medicare program’s Conditions of Participation. CMS reserves the right to make the inspections at any time and without any prior announcement.

The new enrollment regulations also require an enrollee to select a “delegated official.” A provider or supplier must name a delegated official who will be responsible for reporting changes and updates to the enrollment record (individual practitioners and sole proprietors must submit everything personally). The delegated official must be an owner, director, officer, or W-2 managing employee of the particular provider or supplier. In the comment and response section of the new regulations, CMS rejected a proposal to permit a W-2 employee of a parent corporation to serve as a delegated official for a subsidiary. That means the delegated official must be an owner, director, officer, or W-2 managing employee of the subsidiary itself. Consequently, hospital systems and health care providers comprising multiple businesses may have to designate a different delegated official for each subsidiary, each of which would be an employee of the particular subsidiary he or she represents.

At the moment, the new CMS-855 forms are still paper-based. In the introduction to the new regulations, however, CMS indicated it is developing a web-based electronic system which will also allow for the electronic submission of changes in enrollment information. CMS indicated the web interface will be operation sometime in 2007 and should reduce the burden on providers and suppliers and speed the approval process for new applications.

All hospitals, physician practices, and other providers and suppliers must be familiar with the new enrollment rules and forms. More than ever before, enrollment in the Medicare program is an continuing obligation, not a single event.

Robert H.C. Ralston, Esq., is an attorney with the Pittsburgh law firm Houston Harbaugh, P.C. He focuses his practice on Health Care and Business Law.