Medicare Reporting Requirements for Physicians Medicare Reporting Requirements for Physicians

Medicare Reporting Requirements for Physicians

In order to maintain enrollment in the Medicare program, physicians are required to report changes in their enrollment information to the Centers for Medicare & Medicaid Services (“CMS”). CMS is the government agency responsible for administering the Medicare program. Because failure to comply with the reporting requirements can result in the termination of a physician’s Medicare enrollment, physicians need to understand their reporting obligations. 

The Reporting Requirements.
 
The reporting requirements are located in Title 42, Section 424.516(d) of the Code of Federal Regulations. The applicable regulation requires physicians to report changes in their Medicare enrollment within certain time limits. 

The following events must be reported within 30 days:
  1. A change in ownership,
  2. Any adverse legal action, and
  3. Any change in practice location.
All other changes in enrollment must be reported within 90 days of the change. 

Changes must be reported on the “Medicare Enrollment Application – Physician and Non-Physician Practitioners.” The application is commonly referred to as the “855” because it is Medicare form 855I. The application is used for Medicare enrollment, as well as to make changes in enrollment information. Changes may also be reported electronically, using the Medicare Provider Enrollment, Chain, and Ownership (“PECOS”) system.

Why the Reporting Requirements are Important.

If a physician fails to comply with the reporting requirements, CMS is authorized to revoke the physician’s Medicare enrollment. Upon revocation, CMS will also impose a re-enrollment ban that will prevent the physician from re-enrolling in Medicare for a certain period. The re-enrollment ban is a minimum of 1 year, up to a maximum of 3 years. The length of the ban depends on the severity of the basis for the revocation. A physician whose enrollment is revoked by CMS is “barred from participating in Medicare from the effective date of the revocation until the end of the re-enrollment ban.” Thus, a physician who fails to report a change in her practice location may find that she has been terminated from the Medicare program altogether for a minimum of one year. 

Potential Traps for the Unwary.

At first glance, the rule seems simple. However, it contains a number of potential traps for the unwary.
 
1. Adverse legal action.

Physicians are required to report “adverse legal actions” within 30 days. Unfortunately, the rule does not define “adverse legal action.”

The regulations do define “final adverse action,” which includes license suspensions and certain felony convictions (among other things). The enrollment application also requires the disclosure of “Final Adverse Legal Actions/Convictions,” which are similar but not necessarily identical to “final adverse actions.” 

At first glance, it would appear “adverse legal action” means a “final adverse action” or the “Final Adverse Legal Actions/Conviction” that are described in the Medicare enrollment application. However, the United States Department of Health & Human Services (“HHS”) has interpreted “adverse legal action” to include more than just “final adverse actions” or the “Final Adverse Legal Actions/Convictions” listed on the Medicare enrollment application. Indeed, the government has interpreted “adverse legal action” broadly. At least two decisions by the Departmental Appeals Board (“DAB”) of HHS have found that the phrase refers to “some legal action *** that is hostile or contrary to the interest, concern, or position of one against whom the action was taken.” Another decision determined that the purpose of the section is to “provide CMS with information about adverse legal actions that CMS has determined are relevant to evaluating whether a supplier should continue to participate in Medicare.” So, for example, even a temporary suspension of a medical license has been treated as an adverse legal action that should have been reported to CMS.

To date, the government has not defined exactly what constitutes an “adverse legal action.” As a result, CMS has a tremendous amount of discretion in determining what it means for purposes of Medicare reporting obligations.
 
2. Change in practice location.
 
Physicians are required to report a “change in practice location” within 30 days. This should be fairly simple for physicians with only one practice location. However, physicians with multiple practice locations need to be careful because the rule makes no distinction between primary or secondary locations. Thus, CMS has taken the position that closing or adding any practice location qualifies as a “change in practice location” that must be reported within 30 days.
 
3. Change of ownership.

Physicians are required to report a “change of ownership” within 30 days. Determining whether a change of ownership has occurred and whether it has to be reported to CMS can be complicated. What constitutes a change of ownership depends on the type of entity undergoing the change and the nature of the transaction.   In the case of a partnership, the removal, addition, or substitution of a partner (unless the partners expressly agree otherwise, as permitted by applicable state law) constitutes a change of ownership. In the case of an unincorporated sole proprietorship, the transfer of title and property to another party constitutes a change of ownership. In the case of a corporation, the merger of the provider corporation into another corporation, or the consolidation of two or more corporations, resulting in the creation of a new corporation constitutes a change of ownership. However, transfer of corporate stock or the merger of another corporation into the provider corporation does not constitute a change of ownership.

Other Changes
 
All other changes in enrollment must be reported within 90 days of the change. These could include:
  1. Changes in a physician’s identifying information such as the physician’s “Correspondence Address.” The Correspondence Address is the contact information used by Medicare to contact the physician directly. This address cannot be a billing agency’s address.
  2. Changes in the location for storing medical records.
  3. Changes in the individuals having managing control (e.g., a general manager, business manager, administrator, director, or other individual who exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operations of the supplier).
  4. Changes in billing agency information.

Protecting Yourself
 
Know the Medicare reporting obligations. The government’s position is that “persons who deal with the government are expected to know the law.” In addition, by enrolling in Medicare and submitting a Medicare enrollment application, physicians are certifying they are in compliance with applicable Medicare regulations. As a result, physicians need to know and understand their reporting obligations.

Familiarize yourself with the Medicare enrollment application. Physicians should be familiar with the enrollment application, the “855I.”. Indeed, one of the easiest ways to learn the reporting obligations is to read the application itself. Physicians sometimes delegate the task of preparing the application to office staff or even outside third parties. While the physician might delegate the task of preparing the application, the physician has to sign it and is responsible for the accuracy of the information in the application. By signing the 855, the physician is certifying the information is correct. Thus, physicians need to read the application carefully. 

No question is a stupid question. When in doubt, ask for help. The determination of whether an action is “adverse” or whether there has been a change in ownership that has to be reported can be tricky. It may be necessary to consult a lawyer who is familiar with health care laws and regulations.

Warning signs. Finally, certain events should prompt a physician to at least consider whether a reporting obligation has been triggered. Depending on the facts, these events might be reportable:
  • Criminal convictions of any kind, including misdemeanor convictions for conduct having little or nothing to do with the practice of medicine. Even criminal matters that result in diversion, a deferred prosecution agreement, treatment in lieu of conviction may trigger a reporting obligation.
  • Licensure problems with state medical boards or other health-care related licensing boards or regulatory agencies, e.g., state pharmacy boards, DEA, health departments.
  • Problems with Medicaid. 
  • Any change in your practice location(s), including adding or closing a location. If your business-address changes, then you should consider whether you need to update Medicare.
  • Any change in ownership or control of your practice.
Failure to comply with Medicare reporting obligations can have serious consequences. A little bit of foresight can avoid serious problems later. Accordingly, physicians need to understand their reporting obligations.

For more information about Medicare Reporting Requirements for Physicians, contact Bob Cochran at robert.cochran@icemiller.com or 614-462-2248.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances. 
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