Got Medicare Billing Privileges? Are You Sure? Traps for the Unwary in Medicare Enrollment


Buchalter Nemer Points & Authorities, Spring 2014

To receive payment for items and services furnished to Medicare beneficiaries, a health care professional or facility must have approved Medicare billing privileges, which requires enrollment in the Medicare program. Failure to update or apply for Medicare enrollment in a timely fashion, or comply with other rules governing Medicare billing privileges, risks the complete denial of claims for payment. This article highlights a few fundamentals of Medicare enrollment, which may help health care professionals and facilities avoid a few simple mistakes and their potentially extreme consequences. 

First, some definitions within the Medicare program:

  • a “provider” furnishes patient care services for those who are awaiting, receiving, or recuperating from treatment rendered by intervening practitioners. Providers include hospitals, hospices, home health agencies and skilled nursing facilities. 
  • a “supplier” furnishes the goods and services that actually comprise patient care and treatment, e.g., physicians, physician group practices, other health care professionals, ambulatory surgery centers and portable x-ray units. 

Trap: Physicians, certain non-physician practitioners and group practices have thirty days to notify the Medicare administrative contractor (“MAC”) about a change in practice location. Missing the deadline will preclude payment for services rendered more than thirty days prior to the effective date of the updated Medicare enrollment.

When a Medicare-participating physician group practice hires a new physician or a non-physician practitioner (an “NPP”), i.e., a nurse practitioner, clinical nurse specialist, certified mid-wife or physician assistant, the group practice must ensure that Medicare enrollment for the new hire is properly linked to the group at the practice location where he or she will provide services.  For example, if the group hires a physician who is already enrolled in the Medicare program, but is enrolled at the location of the physician’s former employer, the physician must submit a complete Medicare enrollment application indicating the new employer’s practice location. The complete application package must be submitted within thirty days of commencing services at the new location.  42 C.F.R. § 424.516(d)(1)(iii).

Specifically, the new hire will have to submit a Center for Medicare and Medicaid Services (“CMS”) Form 855I initial application and Form 855R to reassign his or her Medicare benefits to the new employer. Alternatively, the physician can use the internet-based Provider Enrollment, Chain and Ownership System (“PECOS”) located at

The effective date of Medicare enrollment for physicians, NPP’s and organizations comprised of physicians and NPP’s is the date when the enrollment application is initially filed, if that application is subsequently approved by the MAC, or the date when the supplier first began furnishing services at the newly enrolled practice location, whichever is later. § 424.520(d). The date of filing the application is likely to be the later of the two dates. Therefore, if the new hire completes the application process by submitting the application forms and all required supporting documentation within thirty days of his or her starting date with the new employer, the effective date of billing privileges will coincide with a date that falls within thirty days of the new hire’s commencement of services for the new employer.

The Medicare rules generally permit physicians, NPP’s and physician and NPP organizations to retrospectively bill for services rendered up to thirty days prior to the effective date of enrollment. 42 C.F.R. § 424.521(a)(1). If the effective date assigned for the new hire’s Medicare billing privileges is no more than thirty days after his or her first date of employment, the group practice will be able to bill retrospectively for all of the physician’s Medicare-covered services performed for the group, beginning with the first date of service. The same thirty-day deadline and retrospective billing opportunity applies to a physician or NPP who must enroll in the Medicare program for the first time. Missing the deadline will preclude payment for services rendered more than thirty days prior to the effective date of Medicare enrollment.

Trap: CMS may deactivate the Medicare billing privileges of a provider or supplier who fails to submit a reimbursement claim for twelve consecutive calendar months. Medicare payment will be lost for any services performed after the twelve-month period of non-billing.

CMS has the discretion to deactivate the billing privileges of a provider or supplier who fails to submit any Medicare claims for twelve consecutive calendar months. If a provider or supplier is enrolled in Medicare at multiple practice or service locations, program instructions require the MAC to deactivate the billing privileges applicable only to the non-billing location.

Medicare beneficiaries have no financial responsibility for any expense incurred by a provider or supplier for otherwise covered items and services furnished after deactivation. The attempt to collect payment from a Medicare patient may result in criminal liability. § 424.555.   

Trap: The Medicare program will not pay for certain items and services unless they are ordered by a physician or qualified NPP who is enrolled in the Medicare program

Upon receipt of a patient referral for home health services, the home health agency should confirm that the ordering physician is enrolled in Medicare. Similarly, a clinical laboratory, imaging services supplier or a supplier of durable medical equipment, prosthetics, orthotics and supplies (“DMEPOS supplier”) should check the enrollment status of the ordering physician or qualified NPP. If the National Provider Identifier shown on the reimbursement claim for the ordering physician or NPP does not correspond to an enrolled individual, the MAC will deny payment to the home health agency, clinical laboratory, imaging services supplier or DMEPOS supplier. § 424.507.

Trap: An application for Medicare enrollment may be denied if the applicant, or any owner of the applicant, has not repaid a Medicare overpayment.

Under the Medicare rules, enrollment may be denied to a physician or NPP who has not repaid a Medicare overpayment. § 424.530(a)(6). Enrollment may also be denied to any provider or supplier if the applicant’s owner has not repaid an overpayment. Implicitly, however, an applicant owner’s overpayment will impede enrollment only if the applicant has disclosed the owner in the Form 855 application. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Buchalter | Attorney Advertising

Written by:


Buchalter on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.