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During the last decade CMS has been progressing through a rather lengthy procedure to update and refine the overall process of enrolling in the Medicare program. Medicare enrollment has been an investigative target, particularly in terms of fraudulent enrollment and subsequent fraudulent billing of Medicare. One of the more significant areas of focus has been DME.


The GAO has encouraged CMS to continue to improve the process of enrollment to help curtail fraud. For instance, in a July 25, 2011 report, “Improper Payments – Reported Medicare Estimates and Key Remediation Strategies,” one of five recommendations was:


“Strengthen provider enrollment standards and procedures. Strong standards and procedures can help reduce the risk of enrolling providers intent on defrauding the program. CMS has taken action to implement provisions of the Patient Protection and Affordable Care Act by screening providers by levels of risk and providing more stringent review of high-risk providers, but has yet to implement certain GAO recommendations in this area.”


The GAO gave CMS credit for making certain changes, but the GAO certainly is encouraging CMS to do more in this area. As we shall discuss briefly, CMS is making the process of enrolling in the Medicare program more rigorous in various ways, including by introducing a new revalidation process.


Current enrollment activities are the end result of work conducted by CMS through the April 25, 2003 Federal Register, which proposed changes that were finalized in the April 21, 2006 Federal Register. Note that CMS had to hurry to publish this final Federal Register in order to meet the three-year deadline created by MMA 2003.(1) During the last several years there have been additional modifications to the provision addressing the CMS Form 855 processes. For instance, the revalidation cycle initially was set at every three years, but this since has been changed to every five years.


CMS periodically issues Federal Register entries discussing various aspects of the provider enrollment process. The most recent of these is in the February 2, 2011 Federal Register, pages 5862-5971 (76 FR 5862-5971). Yes, this is a 110-page Federal Register entry. Also, CMS is providing additional information through national phone calls.(2) Needless to say, there are extended discussions in this Federal Register, including mention of the new risk screening categories. Among the many concepts referenced is that hospitals, but not physicians, will have to pay a fee when filing a new CMS-855-A or revalidating their current CMS-855-A. The fee for 2012 is $523.


Again, the newest CMS-855 form is the 855-O. There were several reasons why CMS developed this form and made it available. The most immediate reason is to address physicians and practitioners who may not need to enroll with Medicare directly, however, these same physicians may need to be recognized for ordering services or referring Medicare beneficiaries for services. For example, a physician at a VA hospital may not need to file claims with Medicare directly, but this same physician may order services and/or refer patients for services. One of the claims filing requirements CMS very much wants to implement is to mandate that the service provider report the NPI for the ordering or referring physician/practitioner.


The CMS-855-O also makes life a bit easier for opt-out physicians and practitioners. With Medicare reducing physician reimbursement, some physicians have decided to opt out of the Medicare program formally. These physicians still can treat Medicare beneficiaries; they simply render services under a private contract and do not bill Medicare. These physicians certainly could order services or refer patients for services. Additionally, there is a complicating factor: opt-out physicians and practitioners are allowed to treat Medicare beneficiaries and bill Medicare if the services are for urgent(3) or emergent conditions.(4)

(1)MMA 2003, that is, the Medicare Modernization Act, had a provision indicating that when CMS issued a proposed Federal Register, it had to be published within three years. Otherwise CMS would have to start over on the national public rulemaking process.

(2)The most recent call was held on Oct. 27, 2011. The transcript, without questions and answers, is available at http://www.cms.gov/ProspMedicareFeeSvcPmtGen/downloads/Transcript_102711_Revalidation_Call.pdf.

(3)While not widely recognized, CMS developing the 12-hour rule definition for urgent conditions was prompted by allowing opt-out physicians to treat both urgent and emergent conditions. See the Nov. 2, 1998 Federal Register, page 58902 (63 FR 58902).

(4)For further information on opt-out physician/practitioners, see CMS Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, § 40.


During the last several years CMS has started the initial five-year revalidation process. Any suppliers or providers(5) that have not filed a CMS-855 since 2003 are first on the list. This means that physicians will be among the first to go through this process. Anecdotal cases seem to indicate that there are some significant problems with the revalidation process, particularly with suppliers receiving and responding to revalidation requests from CMS properly.


ACA 2010 required that risk levels be established for revalidation, and for initial enrollments, for that matter. There are three levels:


  • Limited;
  • Moderate; or
  • High.


The “High” category includes newly enrolling home health agencies (HHAs) and DME suppliers. The “Moderate” category includes hospice, revalidating HHAs and DME suppliers along with mental health centers and independent clinical laboratories. Most providers and suppliers will fall under the “Limited” category. There are additional requirements for the other two categories, and at the highest level one of the requirements is an on-site visit. Unannounced site visits can be made to any enrollee, and these visits were discussed in the 2003 and 2006 Federal Register entries. Very little has been heard concerning experiences with the on-site visits as part of the revalidation process.


A major challenge with the CMS-855 forms is developing the organizational infrastructure to address them. Even for a modest integrated delivery system revolving around a hospital as a hub, there can be affiliated home health services, skilled nursing services, provider-based clinics, freestanding clinics and numerous employed physicians and practitioners. Thus there can be dozens, in some case hundreds, of these forms that must be filed properly and updated consistently. This raises two questions:


1.   Who is going to fill out these forms; and

2.   How are these forms going to be filed?


Whoever addresses Medicare enrollment will need to possess significant knowledge of the forms and the required information. Even for a modestly sized hospital, identifying a single individual who knows everything that is happening within the organization can be problematic. In some cases it is not unusual that patient financial services remain unaware of the existence of a new service area until months after the fact, when questions arise about not receiving reimbursement.


Beyond the question of who is addressing these forms is the “how” question relative to filing these forms. The CMS-855 forms currently are in what can be called “interactive PDF.” These forms can be filled out on the computer and then printed for submission. Unfortunately, sometimes a particular page or pages must be repeated, which creates a challenge. Some personnel prefer to use a typewriter(6) to fill out the forms and then submit them. The fact that there may be additional information required in the form of attachments gives some credence to this manual process.


CMS has worked to get PECOS (Provider Enrollment, Chain and Ownership System) to the point where it can be utilized effectively. For updating, PECOS does provide some efficiencies, and this system probably will become more user-friendly.


Now that we have discussed some of the changes occurring in the area of provider enrollment, is it possible that this whole area will come under the scrutiny of the RACs? Without a doubt, improper payments are being made, and this situation could be the basis for claiming that there is some deficiency within the enrollment information for a given provider or supplier. Such a general assertion would be made by a RAC auditor or other auditor because  deficiency of some sort exists, and thus all of the payments are improper (i.e., overpayments). Predicting the future in this area is difficult, but this issue does not appear to lend itself to a RAC process.


Enforcement in this area more likely will fall to the Medicare Administrative Contractors and will take the form of suspended payments and investigations when deficiencies are identified.


This is a major compliance area, however, and thus due diligence is in order.


About the Author


Duane C. Abbey, Ph.D., CFP, is an educator, author and management consultant working in the healthcare field. He is President of Abbey & Abbey Consultants, Inc., which specializes in healthcare consulting and related areas. His firm is based in Ames, Iowa. Dr. Abbey earned his graduate degrees at the University of Notre Dame and Iowa State University.


Contact the Author




To comment on this article please go to editor@racmonitor.com


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(5)Keep in mind that in this area, physicians are considered suppliers. Hospitals are considered providers because they have a provider agreement with the Medicare program.
(6)Yes, there is still a need for that “old” IBM Selectric III.


Duane C. Abbey, PhD, CFP

Duane C. Abbey, PhD, CFP, is an educator, author, and management consultant working in the healthcare field. He is president of Abbey & Abbey Consultants, Inc., which specializes in healthcare consulting and related areas. His firm is based in Ames, Iowa. Dr. Abbey earned his graduate degrees at the University of Notre Dame and Iowa State University. Dr. Abbey is a member of the RACmonitor editorial board and is a frequent guest on Monitor Mondays.

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