The Centers for Medicare and Medicaid Services released the Medicare Program; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and the PACE Program Proposed Rule CMS-4182-P to be published in the Federal Register on 11/28/2017. Comments must be received no later than 5 p.m. on January 16, 2018.

In the rule, CMS propose to update Medicare Advantage (MA) and the prescription drug benefit program (Part D) by promoting innovation and empowering MA and Part D sponsors with new tools to improve quality of care and provide more plan choices for MA and Part D enrollees. In addition to creating opportunities for innovation and additional plan choices in MA and Part D, the proposed changes would result in an estimated $195 million in savings a year for the Medicare program over 5 years (2019 through 2023) – some of which would be passed onto beneficiaries in the form of lower premiums or additional benefits. In 42 CFR part 460 of the rule, CMS address requirements relating to Programs of All-Inclusive Care for the Elderly (PACE).

Preclusion List Requirements for Prescribers in Part D and Providers and Suppliers in Medicare Advantage, Cost Plans and PACE
CMS proposes eliminating the prescriber and provider enrollment requirement and compiling a “Preclusion List” of individuals and entities that fall within either of the following categories:

  • (a) are currently revoked from Medicare, are under a re-enrollment bar, and CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program; or
  • (b) have engaged in behavior for which CMS could have revoked the individual or entity to the extent applicable if they had been enrolled in Medicare, and CMS determines that the underlying conduct that would have led to the revocation is detrimental to the best interests of the Medicare program. Under this option, CMS would make the Preclusion List available to Part D prescription drug plans and Medicare Advantage plans. Plans would then be required to deny claims from or written by prescribers and providers on the list.

CMS propose to make the following changes to Part 460:

Section 460.40 states that, in addition to other remedies authorized by law, CMS may impose any of the sanctions specified in §§ 460.42 and 460.46 if CMS determines that a PACE organization commits certain violations, one of which is outlined in paragraph (j) and reads: “Employs or contracts with any provider or supplier that is a type of individual or entity that can enroll in Medicare in accordance with section 1861 of the Act, that is not enrolled in Medicare in an approved status.”

CMS propose to revise paragraph (j) to state: “Makes payment to any individual or entity that is included on the preclusion list, defined in § 422.2 of this chapter.” Section 460.50(b) addresses grounds for which CMS or the state administering agency may terminate a PACE program agreement if CMS or the state administering agency determines that the conditions of paragraphs (b)(1) and (2) are met. In (b)(1), one of two conditions, outlined in paragraphs (b)(1)(i) and (ii), must be met. Paragraph (b)(1)(ii) states: “The PACE organization failed to comply substantially with conditions for a PACE program or PACE organization under this part, or with terms of its PACE program agreement, including employing or contracting with any provider or supplier that are types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act, that is not enrolled in Medicare in an approved status.”

CMS propose to revise paragraph (b)(1)(ii) by changing the current language beginning with “including” to read “including making payment to an individual or entity that is included on the preclusion list, defined in § 422.2 of this chapter.” CMS note that this change would not prohibit a PACE organization from employing or contracting with an individual or entity on the preclusion list. As previously discussed, the focus of our preclusion list proposals is on the denial of payment. Section 460.68(a) lists certain categories of individuals who a PACE organization may not employ, as well as individuals and organizations with whom a PACE organization may not contract. Among these parties are those listed in paragraph (a)(4); specifically, those “that are not enrolled in Medicare in an approved status, if the providers or suppliers are of the types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act.”

CMS propose to delete paragraph (a)(4), given our proposed removal of the Part C enrollment requirement. Section 460.70(a) states that a PACE organization must have a written contract with each outside organization, agency, or individual that furnishes administrative or care-related services not furnished directly by the PACE organization, except for emergency services as described in § 460.100; various requirements that a contract between a PACE organization and a contractor must meet are listed in §460.70(b). Paragraph (b)(1) states that the PACE organization must contract only with an entity that meets all applicable Federal and State requirements, including, but not limited to, those listed in paragraphs (b)(1)(i) through (iv). Paragraph (b)(1)(iv) reads: “Providers or suppliers that are types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act, must be enrolled in Medicare and be in an approved status in Medicare in order to provide health care items or services to a PACE participant who receives his or her Medicare benefit through a PACE organization.”

Consistent with their proposed deletion of § 460.68(a)(4), CMS propose to delete § 460.70(b)(1)(iv). CMS note that they are not proposing to prohibit individuals and entities on the preclusion list from furnishing services and items to PACE participants; they are merely proposing to prohibit payment for such services and items if provided by an individual or entity on the preclusion list. Section 460.71(b) states that a PACE organization must develop a program to ensure that all staff furnishing direct participant care services meets the requirements outlined in paragraph (b). One of these requirements, listed in paragraph (b)(7), reads: “Providers or suppliers that are types of individuals or entities that can enroll in Medicare in accordance with section 1861 of the Act, must be enrolled in Medicare and be in an approved status in Medicare in order to provide health care items or services to a PACE participant who receives his or her Medicare benefit through a PACE organization.”

Similar to their proposed deletion of § 460.68(a)(4), they propose to delete paragraph (b)(7). Section 460.86 addresses payments to excluded or revoked providers and suppliers as follows: Paragraph (a) states that a PACE organization may not pay, directly or indirectly, on any basis, for items or services (other than emergency or urgently needed services as defined in § 460.100) furnished to a Medicare enrollee by any individual or entity that is excluded by the Office of the Inspector General (OIG) or is revoked from the Medicare program. Paragraph (b) states: “If a PACE organization receives a request for payment by, or on behalf of, an individual or entity that is excluded by the OIG or is revoked from the Medicare program, the PACE organization must notify the enrollee and the excluded or revoked individual or entity in writing, as directed by contract or other direction provided by CMS, that payments will not be made. Payment may not be made to, or on behalf of, an individual or entity that is excluded by the OIG or is revoked from the Medicare program.”

CMS propose to revise these paragraphs as follows:

Paragraph (a) would state: “A PACE organization may not pay, directly or indirectly, on any basis, for items or services (other than emergency or urgently needed services as defined in § 460.100) furnished to a Medicare enrollee by any individual or entity that is excluded by the Office of the Inspector General (OIG) or is included on the preclusion list, defined in § 422.2 of this chapter.” We are not proposing to include the current regulatory language “or revoked” in our revised paragraph. This is because, as outlined previously, there could be situations under revised § 422.222 where a revoked individual or entity would not be included on the preclusion list.

Paragraph (b) would state: “If a PACE organization receives a request for payment by, or on behalf of, an individual or entity that is excluded by the OIG or is included on the preclusion list, defined in § 422.2 of this chapter, the PACE organization must notify the enrollee and the excluded individual or entity or the individual or entity included on the preclusion list in writing, as directed by contract or other direction provided by CMS, that payments will not be made. Payment may not be made to, or on behalf of, an individual or entity that is excluded by the OIG or is included on the preclusion list.”

The preclusion list in the proposed rule is in line with regulations that exist for other Medicare providers, such as home health.