Repeat Medicare Offenders Beware: “New” Sanctions are on the Horizon

Posted on Health Care Law News by author

According to a recent HHS-CMS directive that went into effect on January 15, 2014, “CMS has learned from contractors that providers are abusing the program and not changing inappropriate behavior even after extensive education to address these behaviors.” Such providers have now been deemed “recalcitrant,” and the “recalcitrant” category is one into which Medicare providers most certainly do not want to fall. This is because CMS has now mandated that its contractors “shall” begin identifying “recalcitrant” providers so that the CMS can take advantage of the sanctions available to it under the current statutory framework: i.e., (1) civil monetary penalties and/or (2) exclusion from Federal health care programs.

In the directive, CMS correctly observes that historically, recalcitrant providers have typically been subjected to prepayment review in lieu of penalties and/or exclusion. CMS also boasts that its prepayment review process has been effective in protecting the Trust Fund, but laments that “it is exhausting contractor resources which could be utilized in more productive activities.” Any provider who has dealt with prepayment review would probably agree that the process is indeed “exhausting” and oftentimes less than “productive.” In any event, we believe it is fair to assume that CMS, with HHS-OIG’s help, will shift its focus to some degree away from placing providers on prepayment review and towards imposing hefty monetary fines and/or altogether purging its rolls of seemingly problematic providers through its exclusion authority. The directive also notes that HHS-OIG has already confirmed that it will work with CMS to pursue “recalcitrant” providers identified by the contractors.

Although the ability to impose penalties and/or exclude providers are not technically “new” arrows in in CMS’ quiver, its stated change in enforcement policy should not be taken lightly. Concerned providers should take proactive measures to ensure compliance. Therefore, if you have had historical issues with Medicare and are concerned about being deemed “recalcitrant,” please call us today for a consultation.