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CMS Releases Final Rule on PPACA Program Integrity Provisions

May 17, 2012

On April 27, 2012, the Centers for Medicare & Medicaid Services (“CMS”) published a final rule (the “Final Rule”) implementing three Medicare and Medicaid program integrity provisions of the Patient Protection and Affordable Care Act (“PPACA”) making it easier for CMS to monitor and substantiate services and items ordered, certified and submitted for payment. The provisions are as follows:

1. National Provider Identifier on all Medicare and Medicaid Enrollment Applications and Claims

The Final Rule requires providers and suppliers that qualify for a National Provider Identifier (“NPI”) to include their NPI on all applications to enroll in the Medicare and Medicaid programs. A provider or supplier that enrolled in the federal health programs prior to obtaining an NPI and does not have one on record, must report their NPI to CMS in an enrollment application once it is obtained. In addition, fee-for-service providers and suppliers must include their NPI on all electronic or paper claims submitted for payment under Medicare and Medicaid. Pursuant to the Final Rule, any claims that are submitted that do not contain the required NPI will be denied.

2. Ordering and Certifying DMEPOS and Clinical Laboratory, Imaging and Home Health Services for Medicare Beneficiaries

The Final Rule provides that only physicians and other professionals enrolled in Medicare are permitted to order and certify durable medical equipment, prosthetics, orthotics and supplies (“DMEPOS”) and clinical laboratory, imaging and home health services. This requirement is intended to give CMS the ability to link specific claims to the ordering or certifying physician in order to monitor any questionable ordering or certifying activity. Specifically, providers must have an approved Medicare enrollment record or valid opt-out status. Claims submitted by a provider or supplier must contain the legal name and the NPI of the physician or eligible professional who ordered or certified the items or services. CMS indicates that it will issue warnings for claims that fail to meet these requirements, but will eventually deny such claims. While CMS states that it will provide advance notice before denying claims, the Final Rule does not indicate when such denials will begin to occur.

Furthermore, the Final Rule permits residents who are enrolled in an accredited medical school in a state that licenses or otherwise allows them to practice or order covered items and services to enroll in Medicare for such purposes. However, where states do not allow such conduct by residents, the Final Rule requires that the teaching physician’s full legal name and NPI be included on the claim as the person who ordered or certified the items or services. In these instances, CMS will not pay claims unless the teaching physician is listed on the claim as the ordering or certifying physician.

3. Maintenance of Documentation Relating to the Ordering or Certifying of DMEPOS or Referred Home Health, Laboratory, or Imaging Services

Finally, the Final Rule mandates that providers and suppliers who furnish services for Medicare beneficiaries, as well as the physicians or eligible professionals that order or certify those services, maintain appropriate documentation. Providers and suppliers who furnish DMEPOS or certify home health, laboratory, or imaging services must maintain related documentation for seven (7) years from the date of service, including all orders and certifications. Documentation refers to both written and electronic documents. This documentation must be made available to CMS or a Medicare contractor upon request.

Similarly, the physicians who order home health services and the physicians or eligible professionals who order or certify items of DMEPOS or laboratory and imaging services, must also maintain documentation relating to their certifications and orders. Again, such documentation must be kept for seven (7) years from the date of service and must be made accessible to CMS or a Medicare contractor upon request. Under the Final Rule, CMS may revoke the Medicare and Medicaid enrollment of a provider or supplier for up to one (1) year for failure to meet these documentation requirements.

The provisions of the Final Rule will become effective on June 26, 2012. If you have any questions about the Final Rule, please contact any of the members of the Shipman & Goodwin Health Law Practice Group.

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