Medicare Provider Screenings – Will More Stringent Standards Reduce Improper Medicare Payments?

 The GAO is pointing to more stringent provider screening standards as a means of cutting down some of the almost $48 billion in improper Medicare payments, but CMS has yet to implement certain GAO recommendations in this area. Improper Medicare payments represent about 38 percent of the total $125.4 billion estimate for the federal government. Although CMS is putting plans in place to lower these payments, will it ever be enough?

According to GAO’s most recent report, strong standards and procedures will help reduce the risk of enrolling providers who are intent on defrauding the program, but points out that CMS  has yet to implement certain GAO recommendations in this area.  The GAO testified in March, 2011, that effective implementation of its recommendations, certain PPACA provisions, and recent guidance related to five key strategies could help remediate fraud, waste, abuse, and improper payments in the Medicare program. Strengthening provider enrollment was the first suggestion. This testimony came out just before final regulations that created new provider screening procedures became effective.

Under the final regulations, providers are placed into one of three screening categories by CMS; “limited,” “moderate,” or “high.”  Intended to keep fraudulent providers out of the program, the different levels of screening will be applicable to providers and suppliers according to the level of perceived risk they pose to potentially commit fraud, waste and abuse in federal health care programs.  Screening procedures for the “limited” screening category will largely be the same as those currently in use; screening procedures for the “moderate” screening category will include all current screening measures, as well as a site visit; screening procedures for the “high” screening category will include all current screening measures, as well as a site visit and, at a future date, a fingerprint-based criminal background check.  All providers will be subject to periodic revalidation procedures.  CMS anticipates that all providers will be revalidated by the end of 2015, with 20 percent of providers being re-screened each year beginning in 2011. 

How will these measures affect your industry, you ask? SNFs and hospitals are included in the “limited” screening level; CORFs, hospice organizations, and revalidating home health agencies are included in the “moderate” screening level; and prospective (newly enrolling) home health agencies and suppliers of DMEPOS are included in the “high” screening level. 

The special attention to home health agency enrollment is not new. In its 2009 report on HHAs, GAO found problems with the enrollment procedures, such as CMS’s contractors were not requiring HHAs to resubmit enrollment information (including information about key officials, operating capital, and practice location) for reverification every 5 years as required by CMS. CMS implemented one of the recommendations from that report but did not implement a recommendation to revoke billing privileges from HHAs engaged in a pattern of improper billing practices.

Similar issues exist with DMEPOS suppliers and CMS drug its feet on those as well. CMS took steps to implement new supplier quality standards as part of an accreditation rule issued in August 2006 and proposed new supplier enrollment standards in January 2008. It proposed that suppliers would be required to meet these new accreditation standards in 2009.  New supplier standards, however, were not finalized by CMS until 2010.

PPACA does a lot to increase provider screening and addresses some of GAO’s previous concerns and recommendations, but whether it’s requirements go far enough remains to be seen. In addition to the risk-level assessment and final regulations, CMS may now deny enrollment to any such provider whose previous affiliations pose an undue risk. PPACA imposes specific requirements for providers to disclose any current or previous affiliation with a provider that has uncollected debt; has been or is subject to a payment suspended under a federal health care program; has been excluded from participation under Medicare, Medicaid, or the Children’s Health Insurance Program or has had its billing privileges denied or revoked. CMS indicated to the GAO that that they were drafting a proposed rule to implement this authority, but it has yet to be published.

GAO notes that by the end of 2011, CMS plans to further enhance provider enrollment processes by contracting for automated enrollment screening which will automate initial screening tasks that are now generally conducted manually, and for a national site-visit contractor to conduct unannounced site visits for certain providers.  

The Federal government is gathering its top leaders to help with preventing improper payments, as it recently announced the launch of the Government Accountability and Transparency Board. The Board, first announced by the President and Vice President in June as part of the Campaign to Cut Waste, will focus on rooting out misspent tax dollars and making government spending more accessible and transparent for the American people. Several of the nation’s top watchdogs have been appointed to begin developing plans to enhance transparency in federal spending and root out and stop waste, fraud, and abuse in federal programs.