Wachler & Associates, P.C

The Centers for Medicare and Medicaid Services has released its final rule with comment period regarding the disclosure of affiliations in the provider enrollment process. This rule will take effect on November 4, 2019. This rule provides the authority to revoke or deny enrollment based on the disclosure of any affiliations that CMS determines poses an undue risk of fraud, waste, or abuse. Although the plan is to have this rule be applicable to all providers, CMS is starting out with a phase-in approach, where the rule will be applied to initially enrolling or revalidating providers that CMS has specifically determined may have one or more applicable affiliations.

The Final Rule requires providers and suppliers to disclose any current or previous direct or indirect affiliation with a provider or supplier that has a “disclosable event”:
• Has an uncollected debt;
• Has been or is subject to a payment suspension under a federal health care program
• Has been or is excluded by the Office of Inspector General (OIG) from Medicare, Medicaid, or CHIP; or
• Has had its Medicare, Medicaid or CHIP billing privileges denied or revoked.

If any of these affiliations are present, the Secretary is authorized to deny enrollment when it is determined that this affiliation poses an undue risk of fraud, waste, or abuse. To determine the existence of undue risk, CMS will consider: (1) the length and period of the affiliation; (2) the nature and extent of the affiliation; and (3) the type of disclosable event and when it occurred.

What does it mean to be “affiliated” with these providers or suppliers? The newly added definition of “affiliation” to the CMS rule includes more than just ownership interests. Affiliation means:
• 5 percent or greater direct or indirect ownership interest that an individual or entity has in another organization;
• A general or limited partnership interest (regardless of the percentage) that an individual or entity as in another organization;
• An interest in which an individual or entity exercises operational or managerial control over, or directly or indirectly conducts, the day-to-day operations of another organization, either under contract or through some other arrangement, regardless of whether or not the managing individual or entity is a W-2 employee or the organization;
• An interest in which an individual is acting as an officer or director of a corporation; or
• Any reassignment relationship under [42 § C.F.R. 424.80].

CMS believes these provisions will help ensure that entities and individuals who pose risks to the Medicare and Medicaid programs are removed and kept out of these programs, as well as assist in the effort to prevent providers and suppliers from circumventing Medicare requirements through name and identity changes, complex business structures, as well as through elaborate inter-provider relationships. CMS estimates that this will lead to approximately 2600 new revocations per year and have an annual cost of $937,500 to providers and suppliers for the first three years of this rule’s implementation.

If a Provider or Supplier has one or more “disclosable events,” they should consult with an experienced attorney before submitting an enrollment application. Failure to disclose a “disclosable event” can lead to revocation, and how you frame the circumstances surrounding the “disclosable event” can have a significant impact on whether this “disclosable event” will affect the enrollment application.

For additional information or assistance regarding this, or any other health professional issue, contact Andrew B. Wachler, Esq. or Kaitlin A. Nucci, Esq., at Wachler & Associates at (248) 544-0888.