On June 1, 2018, CMS issued further guidance for reporting and reviewing final adverse legal actions (ALAs) in provider enrollment applications. In Transmittal 797, which replaces Transmittal 784 to the Medicare Program Integrity Manual, CMS clarifies what adverse actions should be reported and offers Medicare Administrative Contractors (MACs) guidance in reviewing them. Perhaps most significant is that, as of April 30, 2018, CMS no longer requires providers to report current or past Medicare payment suspensions or revocations. Historically, Medicare payment suspensions and revocations were reportable final adverse actions. Yet, CMS has also broadened the scope of disclosure for adverse actions. In particular, now all final adverse actions that occurred under the legal business name (LBN) and tax identification number (TIN) of the disclosing entity must be reported.

The MACs will examine resources like the Provider Enrollment, Chain, and Ownership System (PECOS) or the System for Award Management (SAM) (formerly the Excluded Parties List System) to determine whether “someone with ownership interest and/or managing control” of the provider is excluded, for example. In other words, an LBN and TIN, regardless of the strength of its connection to a provider, will be linked with any of the provider’s associates’ or affiliates’ revocations or exclusions. Further, all final adverse actions must be reported regardless of when they occurred, even if they have been expunged or are pending appeal.

Per the April 30, 2018 guidance, the updated list of reportable adverse actions includes:

• Felony and misdemeanor convictions within 10 years;
• Current or past medical license suspensions or revocations;
• Current or past accreditation suspensions or revocations;
• Current or past OIG suspensions or exclusions;
• Current or past federal executive branch debarments;
• Medicaid billing number exclusions, revocations, or terminations; and
• Current or past federal sanctions of any other type.

Transmittal 797 also provides updated “decision trees” for a MAC’s use in reviewing the reported (or unreported) adverse actions. The significant new “branches” of the decision trees concern the following scenarios:

• When a provider (or someone with managing control or ownership interest in the provider) has an active or previous OIG exclusion fails to report the exclusion, the MAC shall only cite 42 C.F.R. § 424.530(a)(4) (denial of Medicare enrollment for false or misleading information) as a reason for denial if the provider never before reported the adverse action.
• Enrollment applications will be processed despite the reporting of (or failure to report) current or past Medicare payment suspensions (the MACs will still review whether other denial reasons exist).
• When a provider seeks revalidation or to change information, but fails to report a prior license suspension, license revocation, or OIG exclusion, the MAC shall only cite 42 C.F.R. § 424.535(a)(4) (providing false or misleading information as grounds for revocation) as a reason for revocation from Medicare enrollment if the provider never before reported the adverse action.

The technical purpose of Transmittal 797 was simply to replace and rescind Transmittal 784 to add a note to business requirement 10558.3 that a provider education article would be published online. A Medicare Learning Network (MLN) article discussing the updates described above is now available here.