Is New Medicare Affiliation Rule Good, Bad, or Ugly?

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THERE IS AN OFT-REPEATED ADAGE THAT what the government gives you with one hand, it takes away with the other. This may be an apt description of the new Medicare final rule that takes effect today, called the Program Integrity Enhancements to the Provider Enrollment Process (CMS-6058-FC).

The goal of the new rule is to give federal officials a way to identify, in advance, bad players as they move from one provider organization to another. In that sense, the new rule is a proactive tool that Medicare officials have needed for decades. One important element of the law is that the Medicare program now has the ability to ban individuals and provider organizations from participating in Medicare for up to 10 years. Previously, Medicare could exclude an individual or entity for just three years.

Lab companies that engage in fraud and abuse—often paying illegal inducements to physicians to encourage them to order medically-unnecessary tests—distort the lab testing marketplace and capture lab test referrals that would otherwise go to compliant clinical labs and pathology groups. So, honest labs will recognize how the new rule can help suppress various types of fraud that constantly plague the clinical lab industry.

That’s all to the good. But the new rule also comes with risks for compliant labs. When providers, including clinical labs and pathologists, enroll or re-enroll in the Medicare program, the rule requires them to identify affiliations with individuals or entities that owe Medicare money or have been sanctioned by the Medicare program, going back five years. Even compliant labs can owe Medicare money if they are appealing in response to claims of overpayments or similar situations. (See TDR, Oct. 14, 2019)

That’s why, in this and the previous issue, The Dark Report has interviewed four attorneys for their insights about what clinical lab executives and pathologists need to know about how the new rule could ensnare even compliant labs. Nowhere else will you get such a deep dive on this new and important development. As you will read, these attorneys are still sorting through the implications of the new role. They are identifying landmines within the rule that can catch even honest labs. Most importantly, each attorney warns that there are ways that even a lab diligently trying to comply with the new affiliation rule can find itself facing serious sanctions.


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