The Domino Effect: Tougher Medicare Regulations Have Far Reaching Implications for Florida Physicians

February, 2016

The following article was published in the February edition of South Florida Hospital News and Healthcare Report.

Recent changes in federal regulations may expose Medicare and Medicaid providers, particularly physicians, to tougher sanctions. Last year, the Centers for Medicare & Medicaid Services ("CMS") published a rule that expands its authority to revoke a provider's Medicare enrollment ("Rule"). The new regulations created by the Rule became effective on February 3, 2015, and were enacted as yet another enforcement tool in the fight against health care fraud and abuse. Undoubtedly, it will have far reaching implications to Florida's licensed health care providers, particularly physicians.

Now, CMS will have broader discretion to revoke a provider's Medicare billing privileges for what it deems as the provider's “pattern or practice” of submitting claims. In a newly added section titled, "Abuse of Billing Privileges," CMS provides several factors that it will consider to make that determination. For example, it will consider factors such as the percentage of submitted claims that were denied; the reasons for the claim denials, and the length of time over which the pattern has continued.

Another significant change is that CMS now limits the ability of Medicare providers to submit a corrective action plan ("CAP"). Previously, a provider was permitted to submit a CAP to CMS, as a proposed course of action to correct certain deficiencies. If approved, CMS would reinstate the Medicare provider's status. Now, CMS will only accept CAPs under very limited circumstances and will no longer permit providers to submit CAPs when billing privileges are revoked for billing deficiencies. The only recourse available to the Medicare providers will be to submit an appeal to CMS – which oftentimes is unpredictable and can prove to be costly.

The immediate implication of these new measures is that there will be an increase in Medicare provider revocations and terminations. Once a Medicare provider is revoked, it will begin the "domino effect" of other collateral damages that will impact that provider.

As it relates specifically to Florida physicians, this could result in very serious consequences – even impact their medical licenses. Under Florida law, if a provider has been suspended or terminated from participation in the Medicare program, then the Florida Agency for Health Care Administration ("AHCA") is required to terminate or suspend the provider's participation in Florida's Medicaid program.

Here is the rub – if AHCA terminates a physician's Medicaid provider "for cause," then a physician will not be permitted to renew his/her medical license. Under Florida law, Department of Health must refuse to renew a physician's license if the physician has been terminated "for cause" from the Florida Medicaid program. The Board of Medicine and the Board of Osteopathic Medicine have no discretion in the matter. This is one of the many potential disastrous "collateral consequences" of being terminated from the Medicare and Medicaid programs.

Physicians have a right to appeal each of these government and agency actions. If physicians receive a notice of any such government or agency action, they must act quickly within the prescribed time-sensitive deadlines and seek the advice of an attorney who specializes in Health Law.