Medicare Enrollment Denials and Appeals

The credentialing process is often time-consuming and frustrating, especially for providers with blemishes on their record, or non-traditional education or medical training. Unfortunately, most private payors do not share their credentialing policies with providers. Providers often become aware of the payor’s grounds for denial once the provider is denied enrollment. For providers with blemishes, denials just add fuel to the fire as payors often report credentialing denials to the NPDB, causing another entry that the provider must explain on their CAQH profile.

Denials from Medicare are the most troublesome. While grounds for Medicare denials are codified in rule 42 CFR § 424.530, they have been interrupted differently by state Medicare contractors who make the enrollment determinations. The biggest area of confusion is also the most common reason for denial — felony convictions.

42 CFR § 424.530 provides that CMS may deny a provider or supplier enrollment into the Medicare program if within the 10 years preceding application for enrollment, the provider, supplier, owner or managing employee has been convicted (including nolo contender pleas) of a felony offense that CMS determines is detrimental to the best interest of the Medicare program and its beneficiaries. The rule enumerates the following types of felony convictions that can result in denial of Medicare enrollment:

• • Felony crimes against a person, such as murder, rape, assault and other similar crimes
  • Financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud or other similar crimes
  • Any felony that placed Medicare or its beneficiaries at immediate risk, such as a malpractice suit that resulted in conviction of criminal negligence or misconduct

In addition to the above felonies, Medicare must deny enrollment and exclude a provider who has been convicted of a:

• • Felony convictions related to unlawful manufacture, distribution, prescription or dispensing of a controlled substance
  • Felony convictions related to health care fraud, including theft, embezzlement, breach of fiduciary responsibility and other financial misconduct in connection with the delivery of health care services or items or health care program
  • A conviction related to patient abuse
  • A conviction of program-related crimes

Unfortunately, many local Medicare contractors who issue enrollment determinations have interpreted “a  felony offense that CMS determines is detrimental to be in the best interest of the Medicare program and its beneficiaries” to include any felony, thus using the language as a “catch-all.” As a result, providers with felony convictions not involving offenses enumerated in 42 CFR § 424.530 or mandatory exclusions under Social Security Act §1128A have their enrollment applications routinely denied. In some cases, providers with felony convictions unrelated to their professional competence or performance also have their Medicare enrollment application denied. Often, contractors do not supply any information for their denial determination other than “denied due to felony conviction.” Some contractors do not appear to make any attempt to determine whether the felony conviction is detrimental to the best interest of Medicare or its beneficiaries.

In addition to felony convictions, Medicare can also deny enrollment if the provider or supplier:

• • Is found not in compliance with enrollment requirements in subpart P or the enrollment application, and the provider has not submitted a corrective action plan (see Preparing corrective action plans)
  • Personnel required to be reported on the application are excluded, suspended or debarred from the Medicare program
  • Submits false or misleading information on their enrollment application
  • Is unable to furnish service or fails to satisfy enrollment requirements as determined during an onsite review
  • Has an existing Medicare debt
  • Does not submit the application fee and their hardship exception is denied
  • Submits an application for a location in which there is a moratorium
  • Has their DEA registration revoked or suspended or has a restriction on their ability to prescribe

In addition, Medicare may deny a business application if the owner has been placed under a Medicare payment suspension or if the applicant is an HHA and does not furnish documentation to support financial ability to operate.