On September 5th, 2019, CMS released a final rule that aims to strengthen its ability to prevent fraud and widens the scope of CMS’s authority to revoke or deny enrollment status into federal health insurance programs.  The ultimate goal is to save billions in federal funds by blocking potential fraudsters from ever enrolling in Medicare, Medicaid and CHIP programs based on their affiliations with other providers.

Under the new rule, CMS requires providers to disclose certain relationships with affiliated entities that have been previously sanctioned by federal healthcare programs. CMS can then use this information to determine if a provider poses an undue risk of fraud based on those relationships, even if the provider itself has not been sanctioned. This rule defines the obligation to disclose these types of affiliations to the 5 years prior to the provider’s submission of enrollment or renewal in a federal healthcare program.

CMS states they are requiring that providers disclose any “current or previous affiliation”, direct or indirect, with another provider or supplier that:

  • Has uncollected debt – such as overpayments or civil money penalties, even if such debts are in the process of being repaid or repealed
  • Has been subject to payment suspension imposed by a federal healthcare program
  • Has been excluded from participation in Medicare, Medicaid or the Children’s Health Insurance (CHIP) program
  • Has had its billing privileges denied or revoked

CMS states in their press release announcing the rule that those who “have real and demonstrable histories of conduct and relationships that pose undue risk to taxpayers” will face additional burdens and CMS will consider each particular affiliation on a case-by-case basis. However, CMS goes on to define an “affiliation” as:

  • a 5% or greater direct or indirect ownership interest in another organization
  • a general or limited partnership interest without regards to the percentage that an individual or entity has in another organization
  • an interest in which an individual or entity exercises operational or managerial control over, or directly or indirectly conducts day to day operations of another organization either under contract or through some other arrangement irrespective of whether the manager is a W-2 employee
  • an interest in which an individual is acting as an officer or director of a corporation
  • any reassignment relationship.

The rule also expands the CMS’s ability to revoke or deny Medicare enrollment for the following circumstances:

  • A provider or supplier circumvents program rules by re-enrolling, or attempting to, under a different name
  • A provider or supplier bills for services/items from non-compliant locations
  • A provider or supplier exhibits a pattern or practice of abuse when ordering or certifying Medicare Part A or Part B items, services or drugs
  • A provider or supplier has an outstanding debt to CMS from overpayment that was referred to the Treasury department

Additionally, CMS will have the ability to prevent applicants from enrolling for up to 3 years if a provider or supplier is found to have submitted false or misleading information on initial enrollment applications. CMS can also block providers who have their status revoked from re-entering the Medicare program for up to 10 years or up to 20 years if revoked for a second time.

While CMS states their intention is to use their expanded authority to go after the worst offenders, their new scope of power may have providers examining their relationships and affiliations more closely in order to avoid being guilty by association. As you can imagine, since the release of this rule there’s been quite a bit of discussion within the healthcare community. We’ll continue to monitor developments as well as discussions in the community; especially regarding how providers will handle tracking affiliations and what CMS will expect in terms of disclosure after the rule is implemented.

The final rule is currently open for comment and will become effective November 4th, 2019.

As always, ADVOCATE will continue to keep you up to date on all regulatory issues impacting radiology.



Kayley Jaquet

Manager of Regulatory Affairs