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CMS Medicare Preclusion List Requirements Go Into Effect in 2019

CMS Medicare Preclusion List Requirements Go Into Effect In 2019

In April of this year, the Centers for Medicare and Medicaid Services (CMS) rescinded the requirement that providers serving Medicare Advantage (MA) and Part D (PDP) plans be enrolled in the Medicare program. Instead, CMS is dictating that these plans ensure that any provider in MA and PDP plans must not be on a Preclusion List that will be maintained and updated by CMS.

In general, the Preclusion List includes individuals that have committed or are suspected of committing waste, fraud and abuse (FWA) or have run afoul of other Medicare requirements. CMS will assemble these suspect providers from various lists within CMS. Providers will be notified of their potential inclusion on the list and their appeal rights. CMS will add the provider only after an appeal is denied. CMS will make the initial Preclusion List available beginning January 1, 2019, with updates monthly.

What must plans do?

  • Plans must remove any provider on the CMS list from their Part C and D networks, including providers/prescribers and pharmacies. Removals must occur by January 31, 2019 and regularly thereafter.
  • Plans are required to notify enrollees who have received care from one of these providers in the last 12 months. CMS has issued a sample notice that can be used. Sixty days’ advance notice to members is required before payments to preclusion list providers are denied. That means denials would begin starting April 1, 2019.
  • After this point, plans may not reimburse or make payment for claims, even for emergency or urgent services that may be out of network.
  • Plans should use the same processes each month, including review of the preclusion list, notification of members (60 days before), and denial of payments/claims (after the 60-day period).
  • While CMS is doing its own initial notification directly to impacted providers, plans should also notify providers by copying them on the member communication.
  • CMS notes that this preclusion list does not replace other regulatory requirements, including regularly reviewing the Office of Inspector General (OIG) exclusion list. CMS notes that providers on the exclusion list will be on the preclusion list, but the preclusion list will be bigger.

Plans have just a short time to prepare for this change.  They will need to:

  • Overhaul policies and procedures as well as compliance oversight for this change.
  • Work with their provider relations department to identify contracted providers on the preclusion list and terminate them. This may involve their own contract appeals rights.
  • Make changes to their pharmacy and medical prior authorization systems and processes to ensure that a service or drug is not authorized for a precluded provider.
  • Make changes to their claims systems and processes to ensure that claims are denied for such providers as well.
  • Oversee any delegated entities, including pharmacy benefits managers, to ensure these changes are carried out downstream.
  • Member and provider notifications will need to be done just after January 31 and monthly thereafter.
  • Work with their pharmacy, utilization and care management departments to find alternative providers for members who are negatively impacted.

While the new rule is better than the requirement to enroll all MA and PDP providers in Medicare, the change will challenge plans over the next several months.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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