CMS 2023 Medicare Physician Fee Schedule Final Rule Impact on Provider Enrollment
The Centers for Medicare and Medicaid Services (CMS) 2023 Medicare Physician Fee Schedule final rule includes updates and policy changes for Medicare provider enrollment. Effective the first day of this year, providers should be aware of the following five primary changes:
- Expansion and clarification of persons and parties subject to the provider enrollment requirements;
- Re-categorization of Skilled Nursing Facilities (SNF) as high risk;
- Revisions to Reporting Changes of Ownership (CHOW);
- Extension of applicability of “Bump-up” risk adjustments and resulting duties; and
- Addition of Rural Emergency Hospitals (REH) as a new Medicare provider.
I. Expansion & Clarification of Those Subject to Provider Enrollment Requirements.
CMS expanded the categories of parties listed within the denial and revocation regulations to include profit and not-for-profit directors, officers, and managing organizations. These parties are now required to be reported on the provider’s or supplier’s Medicare enrollment application. Previously, only those with 5% or more ownership were subject to this disclosure requirement.
II. Re-categorization of Skilled Nursing Facilities (SNF) as High Risk.
Previously, SNFs were categorized as a limited-risk screening entity, but after increasing concern regarding SNFs risk involving patient abuse deficiencies as found on State surveys between 2013 and 2017, as well as billions of dollars in fraud, waste, and abuse from 2019 to 2022, CMS has moved SNFs to the high-risk screening category. As a result, SNFs overseers are now subject to heightened screening requirements during enrollment, which includes (1) a site visit and (2) submission of fingerprints for a national background check and a criminal history record check for all individuals with a five percent or greater (direct or indirect) ownership interest in the provider or supplier.
III. Revisions to Reporting Changes of Ownership (CHOW).
Although the 2023 final rule includes requirements for initial enrollment applications, CMS has failed to roll out the changes in the current enrollment application(s).
CHOW reporting now includes the addition of any new owners even when a formal change of ownership is not involved. Upon reporting the change of ownership, the provider or supplier is subject to the enrollment risk-screening requirements depending upon the entity at issue. As discussed below, these risk-screening requirements may increase or “bump-up” based on provider fraud or abuse.
IV. Extension of Applicability of “Bump-up” Risk Adjustments and Resulting Duties.
CMS may adjust a particular provider’s or supplier’s screening level from “limited” or “moderate” to “high” if the provider or supplier participates in certain misconduct. As such, there may be heightened compliance and survey requirements as a result of a bump-up. It should be noted that any screening level adjustment or bump-up of one entity would also apply to all other Medicare enrolled and prospective providers and suppliers that have the same legal business name and tax identification number as the adjusted entity, irrespective of the provider or supplier type.
V. Addition of Rural Emergency Hospitals (REH) as New Medicare Provider.
Section 125 of the Consolidated Appropriations Act of 2021, Division CC created REHs to deliver emergency hospital, observation, and other services to Medicare beneficiaries on an outpatient basis. However, it was not until the 2023 final rule that CMS implemented guidance for the conversion process and conditions of participation for REHs. At this time, REH status can only be obtained if either a critical access hospital (CAH) or a rural hospital with less than fifty beds converts its CMS provider-type to a REH. Facilities converting from a CAH or rural hospital to an REH do not need to do so without considering the impact of the prohibitions and limitations related to inpatient services and distinct part units.
As stated above, CMS has not updated the application forms to reflect the revised regulations. However, providers should be aware of potential supplementary requests from its CMS Medicare Administrative Contractor (MAC) following the submission of an enrollment application or CHOW.
 See 87 FR 69404-01 (Nov. 18, 2022); CMS Newroom, Calendar Year (CY) 2023 Medicare Physician fee Schedule Final Rule (Nov. 1, 2022), https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2023-medicare-physician-fee-schedule-final-rule.
 “Director” includes a director of a corporation or any member of the corporation’s governing body. Provider Enrollment: Regulatory Changes, CMS MLN (Jan. 24, 2023), https://www.cms.gov/files/document/mm12865-provider-enrollment-regulatory-changes.pdf.
 “Officer” includes any officer of a corporation regardless of whether the provider or supplier is a non-profit entity. Id.
 “Managing organization” includes an entity that exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operations of the provider or supplier, either under contract or through some other arrangement. Id.
 87 Fed. Reg. 69998 (Nov. 18, 2022).
 87 Fed. Reg. 70002-70003 (Nov. 18, 2022).
 87 Fed. Reg. 70000-70003 (Nov. 18, 2022).
 Id. at 70001
 Kasey Ashford and Sophie Munroe, CMS Publishes CY 2023 Outpatient Prospective Payment System Final Rule, American Health Lawyers Association (Nov. 17, 2022).
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