While formal enrollment in the Medicare program and the use of the CMS 855 forms have been required for some time, CMS has proposed a formal rule to codify the requirement that all providers and suppliers (other than those who have elected to opt out of the Medicare program) complete an 855 form initially and make periodic updates in order to receive and maintain billing privileges in the Medicare program. 68 Fed. Reg. 22,064 (April 25, 2003). The proposed rule is intended to standardize enrollment requirements in a new Subpart P of 42 C.F.R. § 424. However, it will not replace or nullify the existing regulations concerning the establishment of provider/supplier agreements, the issuance of provider or supplier billing numbers, and payment for Medicare-covered services or supplies to eligible providers or suppliers. 68 Fed. Reg. at 22,066.

The proposed rule is meant to require, by law, that providers and suppliers prove their qualifications and identity and submit specified information to CMS before they are granted or permitted to maintain billing privileges in the Medicare program. Under the proposed rule, failure to submit the required information on the 855 form would result in the denial of enrollment of the provider or supplier in the Medicare program or the revocation of billing privileges for a provider or supplier currently enrolled in the program.

Highlights of the proposed rule are discussed below. Changes from current CMS policy are noted.

Basic Enrollment Criteria

The term managing employee would be expanded to include individuals performing managerial duties who are not technically employees. A managing employee is currently defined as "a general manager, business manager, administrator, director, or other individual who exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operations of the [entity]." 42 CFR § 420.201. According to CMS, "a number of providers and suppliers are managed by individuals that have control over the day-to-day operations of the entity and are not 'employees'" (and who, in fact, may be listed on the OIG's list of excluded individuals and entities). 68 Fed. Reg. at 22,066. CMS therefore proposes to expand the definition of a managing employee to include any individual having effective control over a provider/supplier's day-to-day operations and performing managerial duties, regardless of W-2 status.
CMS is proposing additional changes to the CMS 855 form (which has already undergone substantial revision). Under the proposal, certain data collection items, such as information related to clearinghouses, would be removed from all forms; practice location data would be removed from the CMS 855 R form; and the CMS 855 B form would include a shorter attachment for ambulance companies to use.
The rule would also require that the signatory on the 855 form be a W-2 managing employee with ownership or control interests and have the authority to bind the provider or supplier both legally and financially to all applicable requirements. (This would not apply to individual practitioners and sole proprietors, who are required to sign the enrollment application individually.) 68 Fed. Reg. at 22,067.
Before they can be granted privileges, those providers and suppliers deemed to meet Medicare health and safety requirements by virtue of accreditation through a national accrediting body will be required to sign an attestation on the 855 form that all applicable accreditation requirements are met. CMS is further proposing a plan for integrating site visits by state survey and accreditation agencies as part of the enrollment validation process. Certain providers, such as hospitals and home health agencies, have always been subject to on-site inspections during the enrollment process. Under the proposed rule, CMS would reserve the right to conduct on-site inspections of all providers and suppliers when deemed necessary to ensure compliance with enrollment requirements, for example, to verify questionable enrollment information. 68 Fed. Reg. at 22,067-68.
Providers and suppliers requiring accreditation from a CMS-approved accreditation organization will be eligible to receive Medicare reimbursement on the later of the date the accreditation is granted or the date of final approval of the CMS 855. Citing a relationship between fulfillment of Medicare program requirements and the integrity of the provider of the supplier, CMS proposes to eliminate the current practice under which Medicare billing numbers are issued retroactive to the date that the supplier or provider received final approval of the enrollment application. Therefore, under the proposed rules, where applicable, billing privileges would not be issued until accreditation and approval of the 855 enrollment form is received. 68 Fed. Reg. at 22,068.
Requirements for Reporting Changes
Under the proposed rule, a provider/supplier must update its enrollment information and recertify the information's accuracy when any changes are made. Changes in a provider or supplier's operations, such as a change in billing services or practice location, or a change in any managing employee, must be reported within 90 days. A change in the provider/supplier's ownership and control, however, must be reported within 30 days. CMS is further proposing that providers/suppliers be required to submit a revalidation of enrollment on a three-year basis. CMS will initiate the revalidation process in the case of a provider or supplier that has not reported any changes or updates during the previous three-year period. Providers and suppliers will have 60 days to comply with the revalidation request. Revalidation information must be submitted on a completed 855 form, which, according to CMS's calculations, requires, on average, eight hours to complete. Failure to report changes as required may result in deactivation or even revocation of billing privileges. 68 Fed. Reg. at 22,068-69.

CMS will permit providers and suppliers an additional 60 calendar days to provide any additional information once requested, without risk of application rejection. However, according to CMS, rejection will not occur if the provider/supplier is actively communicating with CMS to resolve any issues regardless of any time frame. If an application is formally rejected by CMS, the provider or supplier must restart the enrollment process by completing and submitting a new CMS 855 application. 68 Fed. Reg. at 22,070.

Denial of Enrollment
CMS proposes to deny enrollment in the Medicare program to providers or suppliers determined ineligible for participation. Under the proposed rule, reasons for denial would include failure to comply with enrollment requirements, exclusion from any federal health care program, debarment, or suspension. CMS also is proposing to deny enrollment in the Medicare program if, within 10 years of enrollment, the provider/supplier or any owner of the provider/supplier has been convicted of a federal or state felony offense that CMS has determined to be detrimental to the best interest of the Medicare program or its beneficiaries, including crimes against persons, such as battery or robbery; and financial crimes, including extortion, embezzlement, making false statements, insurance fraud, or other similar crimes. CMS could also deny enrollment upon reliable evidence that medical professionals are not properly licensed as required under the statute or regulations. 68 Fed. Reg. at 22,070-71.

Revocation of Enrollment and Billing Privileges
CMS proposes to include failure to report changes and failure to adhere to corrective action plans as bases for revocation of provider/supplier billing privileges. 68 Fed. Reg. at 22,071-72.

Deactivation of Billing Privileges
Under the proposed rule, CMS would deactivate a provider/supplier's Medicare billing number if no Medicare claims are submitted under that number for two consecutive calendar quarters (six months). (Under current CMS policy, billing numbers are deactivated after no claims are submitted for a 12-month period (four quarters).) According to CMS, the basis for this change is to prevent questionable businesses from deliberately obtaining multiple billing numbers so they can keep one number in reserve in the event their active number is suspended, and to prevent fraudulent entities from obtaining information about discontinued providers or suppliers. CMS also proposes to deactivate a billing number if that providers/suppliers do not report changes in operations according to program requirements. 68 Fed. Reg. 22,072.

Provider/Supplier Appeals
In the proposed rule, CMS has provided for an appeals process for all providers and suppliers denied or revoked from participation in the program. No program payments will be made to the provider or supplier during a pending appeal, however. A new "rebuttal" procedure has also been proposed for certain cases of provider/supplier billing privilege deactivation. 68 Fed. Reg. at 22,072.

Sale or Transfer and Billing Privileges
For those providers and suppliers not permitted to transfer a Medicare provider agreement (e.g., hospitals), CMS will require that any change in provider/supplier ownership or control be reported on the CMS 855 within 90 days of the change. The purchasing owner will be required to submit a new CMS 855 form. 68 Fed. Reg. 22,072-73.

Payment Liability
The proposed rule would establish that claims or bills submitted by a provider or supplier who is not properly enrolled in the Medicare program and/or does not have an active billing number will be considered incomplete and returned. In such cases, the provider/supplier would be in violation of the mandatory claims submission requirement and could be fined for each occurrence. Moreover, under this rule, CMS would consider such a claim "incomplete" and the provider or supplier would not be permitted a right to appeal the return. 68 Fed. Reg. at 22,073.