Entities Billing for Physicians Need to Check Criminal Histories, Based on Authority of CMS to Revoke Billing Privileges Retroactively for Certain Criminal Convictions

Revocation of billing privileges is a relatively new enforcement tool being used by the Centers for Medicare & Medicaid Services (CMS). Based on the authority of CMS to revoke billing privileges based on certain criminal convictions occurring in the 10 years preceding enrollment or revalidation, physician groups and other organizations that bill for practitioner services need to check the criminal history of practitioners who reassign billing privileges to the group or organization.

Under Social Security Act § 1842(h)(8), CMS may revoke the billing privileges of a physician or supplier who was convicted of a felony offense that CMS has determined to be “detrimental to the best interests of the program or program beneficiaries.” CMS implemented the statutory provision as part of the Medicare rules governing enrollment and billing privileges (which were effective June 20, 2006). Felonies that are deemed detrimental to the program include but are not limited to “financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes.” 42 C.F.R. Sec. 424.535(a)(3)(i)(B). The revocation authority applies regardless of whether the physician was excluded from the Medicare program in connection with the offense, and the effective date of the revocation is retroactive to the date of the conviction; there is no right to a pre-revocation hearing.

While by the terms of the statute and regulation, the revocation of a physician’s billing privileges is discretionary, in practice, such revocation appears to be practically automatic. However, the carrier or Medicare Administrative Contractor may not always learn of the conviction on a timely basis. This means that an organization billing for the services of a physician with a criminal history may be at risk for potential overpayments if the revocation is made retroactive. Such organizations need to check criminal histories (state Medical Boards often post felony convictions). If a conviction is found, it may be necessary to query the carrier or Medicare Administrative Contractor (MAC) regarding the status of the practitioner’s billing privileges.