CMS Proposes Rule to Ease the Burden on a Variety of Providers

Executive Summary

In a flurry of regulatory activity aimed at improving efficiencies in health care delivery, on October 24, 2011, the Centers for Medicare and Medicaid Services (“CMS”) issued, among other rules1, a proposed rule to eliminate anachronistic and burdensome regulations (“Proposed Rule”).   The Proposed Rule applies to a variety of health care providers.  The revisions would implement the President’s Executive Order 13563 calling for the removal or revision of obsolete, duplicative or unnecessary regulatory provisions in order to reduce burdens and costs for providers and suppliers.  The Proposed Rule can be found at: http://www.gpo.gov/fdsys/pkg/FR-2011-10-24/pdf/2011-27176.pdf

CMS invites comments on the Proposed Rule which must be received by CMS no later than 5 p.m. on December 23, 2011.  Commenters should refer to file code CMS-9070-P and should submit comments in accordance with instructions described in the Proposed Rule.

Significant Proposed Revisions

Only Certain ESRD Facilities Would Be Obligated to Comply with Life Safety Code Provisions Incorporated by ESRD CfCs

In an effort to standardize CMS regulations across different types of providers, in 2009, CMS amended the end stage renal disease (“ESRD”) facilities conditions for coverage (“CfC”) to require ESRD facilities to comply with the NFPA 101 Life Safety Code (“LSC”) regulations.  The LSC regulations require ESRD facilities to install smoke compartments, occupancy and hazardous area separations and upgraded fire alarms.  CMS has since determined that the LSC requirements, in many cases, are unnecessary since ESRD facilities do not have fire ignition sources, do not administer anesthesia and require staff presence in patient treatment areas at all times – all factors which minimize the risk of fire.  Further, in follow-up data collection, CMS determined that it significantly underestimated the cost of renovations necessary to meet the applicable LSC provisions.  Therefore, CMS is proposing to revise the CfCs to require compliance with the LSC only if the ESRD facility is located adjacent to “high hazard occupancies” (i.e., locations where flammable or combustible materials are used or stored),  or does not have ground-level direct access to the outside for purposes of emergency evacuation.

Proposed Removal of Mandatory List of  ASC Emergency Equipment

The CfCs for ambulatory surgical centers (“ASC”) require all ASCs to have available in the operating room a specific list of emergency equipment (e.g., emergency call system, mechanical ventilator assistance equipment, cardiac monitoring equipment).  CMS is proposing to revise the CfCs to remove the list and to require instead that each ASC, in conjunction with its governing body and medical staff, develop policies and procedures specifying the types of emergency equipment needed for the particular ASC’s patient population.  The ASC would then  have to make “immediately available” the identified equipment and also ensure that  the emergency equipment meets “current acceptable standards of practice in the ASC industry.”

Revocation of  Billing Privileges “Re-enrollment Bar” – Too Harsh in Certain Circumstances

In the Conditions for Medicare Payment, CMS provides that if any provider or supplier has its billing privileges revoked, it is barred from participating in the Medicare program from the effective date of the revocation through the end of the re-enrollment bar, which may be one to three years depending on the severity of the basis for revocation.   Because the re-enrollment bar is a severe consequence in certain cases and may also result in compromised access to care, CMS is proposing to revise the Conditions for Medicare Payment to eliminate the re-enrollment bar in situations where providers/suppliers have not responded timely to CMS requests for revalidation of enrollment or other requests for information.  This frequently occurs due to such mishaps as misrouted mail or clerical errors.

Related to this, CMS is proposing to add a new Condition for Payment which would allow it to deactivate rather than revoke billing privileges if the provider/supplier fails to furnish complete and accurate information and supporting documentation within 90 days of receiving notice to submit an enrollment application or certify accuracy of enrollment information.  The deactivation action is less severe than a revocation action; thus, CMS believes the new provision would reduce the burden on providers/suppliers.

Physicians and Non-Physician Practitioners No Longer Would Be Subject to Deactivation for Billing Inactivity

The current Conditions for Medicare Payment provide that Medicare billing privileges may be deactivated if Medicare claims are not submitted for 12 consecutive months.  The provision presently applies to all providers and suppliers.  The purpose of the provision is to prevent unscrupulous individuals and entities from using inactive or idle Medicare billing numbers to submit false claims.  CMS is proposing to revise the Condition for Payment to exclude its application to physicians and non-physician practitioners.  CMS believes this revision will decrease the burden on physicians and non-physician practitioners who are deactivated most often due to billing inactivity, without jeopardizing CMS’s ability  to detect and prevent fraud and abuse.  CMS would continue to deactivate other categories of providers/suppliers not actively billing to prevent health care provider identity theft.

ICFs/MR Provider Agreements under Medicaid to Be Open-Ended

Current regulations limit Intermediate Care Facilities for the Mentally Retarded (“ICF/MR”) Medicaid provider agreements to 12 months.  CMS is proposing to remove time limited agreements for ICFs/MR and also to replace the term “mentally retarded” with the term “intellectually disabled.”

Conclusion

The Proposed Rule has “a little something” for  every type of provider/supplier.  It potentially provides significant financial relief to dialysis centers unable to afford the structural changes required by the LSC.  It also paves the way for each ASC to decide on the most appropriate  emergency equipment for the ASC’s patient population, unfettered by a prescriptive mandatory list.  The proposal to eliminate the “re-enrollment bar,” with respect to providers who fail to respond timely to CMS requests for information, is a sensible response to lapses in correspondence often due to inadvertent oversight.  Finally, if the Proposed Rule is finalized, a physician or non-physician practitioner who generally treats non-Medicare patients would not have to go to the trouble of submitting a new provider enrollment application if he/she failed to submit claims for 12 months.

If you have any questions, would like additional information about this topic or need help preparing and submitting comments, please contact Adele Merenstein at (317) 752-4427 or amerenst@hallrender.com or your regular Hall Render attorney.

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