AMARILLO, TX – For DMEPOS suppliers and other Medicare-enrolled providers, the loss of a Medicare Provider Transaction Access Number (“PTAN”) is much more than an administrative inconvenience. A PTAN revocation can immediately disrupt cash flow, trigger enrollment bars, and, in some cases, result in substantial overpayment demands based on a retroactive revocation date. Understanding the revocation process, available appeal rights, and strategies for addressing related overpayments is essential to protecting the supplier’s business and preserving Medicare enrollment.
What Is a PTAN Revocation? When CMS revokes a supplier’s Medicare enrollment, the supplier loses its billing privileges and may no longer submit claims to Medicare. Revocation is different from deactivation. A deactivated supplier can usually reactivate its billing privileges by submitting a new CMS 855S enrollment form. However, a revoked PTAN means the supplier loses its enrollment and will be subject to a reenrollment bar that prevents it from enrolling in Medicare for a specified period.
Grounds for revocation include failure to comply with Medicare Supplier Standards. Some common violations of the Supplier Standards include:
- Failure to maintain required licensure.
- Failure to maintain accreditation.
- Failure to maintain liability insurance.
- Submission of false or misleading enrollment information.
To avoid revocations, suppliers must proactively monitor their compliance with the Supplier Standards and take immediate corrective action if they find an area that is not in compliance. Suppliers should also be proactive in providing information to the National Provider Enrollment (“NPE”) contractors. This means regularly providing the NPEs with copies of any new or updated items such as licensure and insurance. It also means proactively reviewing the information in the provider enrollment record and promptly making appropriate changes. Waiting until the NPE finds a discrepancy is a sure-fire way to have a PTAN revoked.
Another tool that CMS has is to use a stay of enrollment which serves as a temporary pause in a supplier’s Medicare enrollment when the provider is out of compliance with an enrollment requirement but can correct the deficiency by submitting additional information. Unlike deactivation or revocation, the provider remains enrolled in Medicare during the stay. However, claims for items or services furnished during the stay period are generally rejected until the provider returns to compliance. A stay is limited to a maximum of 60 days and ends either when CMS or its contractor determines whether the provider has corrected the deficiency or when the stay period expires, whichever occurs first.
The Immediate Consequences of Revocation
Once revocation becomes effective, Medicare will not pay claims with dates of service on or after the revocation effective date. The practical consequences include:
- Loss of Medicare billing privileges.
- Reenrollment bar.
- Disruption of cash flow and operations.
- Increased scrutiny of enrollment records.
- Exposure to retroactive overpayment liability.
If a PTAN is revoked retroactively, there will be an overpayment determination for claims that were paid after the effective date. CMS will begin immediate collection efforts which will cause additional stress for a supplier dealing with the revocation.
Understanding Retroactive Revocation
Many suppliers assume that revocation becomes effective only when the contractor sends the revocation letter. Unfortunately, that is not always the case. Certain revocation authorities permit CMS to assign an effective date that predates the revocation notice. For example, when a supplier is revoked for not having valid insurance, the effective date will be the date the insurance lapsed rather than the date of the revocation notice. This means, that if a supplier has not updated the insurance information on file since its last revalidation, the revocation could go back several years. This is why it is important to regularly provide copies of insurance and licensure renewals as they are updated.
The Medicare Enrollment Appeal Process
A supplier receiving a revocation notice should act quickly because appeal deadlines are short and missing a deadline can result in loss of the appeal and no other options to reinstate the PTAN.
Corrective Action Plan (CAP)
For revocations based on noncompliance under 42 C.F.R. § 424.535(a)(1), suppliers may generally submit a Corrective Action Plan (“CAP”). CMS guidance allows a CAP to be used to demonstrate that deficiencies have been corrected. A CAP must generally be submitted within 35 calendar days of the revocation notice. A CAP may be particularly useful where the supplier can quickly cure the issue, such as obtaining missing insurance coverage or updating enrollment records. Generally, if a CAP is approved it will be effective the date of revocation. However, this is not always the case. For example, if a supplier has a gap in surety bond coverage, the PTAN will only be reinstated back to the date of the new surety bond leaving a gap in the supplier’s ability to submit claims.
Reconsideration Request
A supplier may also file a reconsideration request seeking reversal of the revocation determination. The reconsideration stage allows the supplier to submit evidence and legal arguments showing the revocation was incorrect at the time of the revocation. This must be submitted within 65 days of the date of the revocation notice. It is important to note that filling of a CAP does not toll the filing deadline for a reconsideration request meaning that even if a decision has not been issued on the CAP, the reconsideration request must be filed within 65 days.
ALJ Appeal and Further Review
If reconsideration is unsuccessful, suppliers may proceed to an Administrative Law Judge (“ALJ”) appeal and, potentially, further review by the Departmental Appeals Board. At the ALJ level, CMS will assign an attorney to represent it in the appeal. Because this is a more formal proceeding, it is suggested that you work with your attorney or a consultant familiar with enrollment appeals at this level.
Overpayments Caused by Retroactive Revocation
A retroactive revocation can have devastating financial consequences because CMS will immediately begin trying to collect any overpayment and without being able to submit claims, this burden will create additional stress on the supplier.
Suppliers should not ignore an overpayment demand that follows a PTAN revocation. There are several avenues available to address these demands. First the overpayment demand letter will allow for filing of a rebuttal. A rebuttal allows the supplier to explain why immediate recoupment should not occur. Although rebuttals do not challenge the validity of the overpayment itself, they provide an opportunity to request administrative relief from immediate collection efforts.
Suppliers are also likely to receive notice from its surety company that CMS has made a claim against the surety bond. It is very important to work with the surety company on this issue and ensure that the surety company understands what is going on and where the appeals process is heading. A supplier may be able to work with the surety company to delay payment from the surety company while the appeal is pending. If that is not the case, the supplier will want to work with the surety company to ensure its bond is not cancelled thereby avoiding further issues with its enrollment.
The most important strategy is to quickly pursue the enrollment appeal because if the supplier succeeds in reversing the revocation or obtaining reinstatement without a billing gap, the overpayment determination will be reversed and the claims reprocessed.
Practical Recommendations for Suppliers
When facing a PTAN revocation and associated overpayment demand, suppliers should:
- Carefully review the stated basis for revocation.
- Confirm the accuracy of the effective revocation date.
- Gather all records relating to insurance, licensure, accreditation, surety bonds, and enrollment updates.
- Calendar all CAP, reconsideration, rebuttal, and appeal deadlines immediately.
- Appeal both the revocation and any overpayment determination when warranted.
Most importantly, suppliers should recognize that a retroactive revocation date can be just as significant as the revocation itself. A successful challenge to the effective date may substantially reduce or eliminate overpayment exposure.
Conclusion
The loss of a Medicare PTAN can create a cascade of operational and financial problems. A revocation terminates billing privileges and creates a reenrollment bar. It can expose suppliers to substantial overpayment liability when CMS applies a retroactive effective date. Fortunately, suppliers are not without recourse.
The Medicare enrollment appeal process, including CAPs, reconsiderations, and ALJ appeals, provides important opportunities to challenge both the revocation and its effective date. When overpayments arise from retroactive revocations, suppliers should carefully coordinate their enrollment and claims appeals, seeking to preserve all available rights while challenging the factual and legal basis of the revocation. In many cases, success in the enrollment appeal can significantly reduce, or even eliminate, the resulting overpayment liability.
For DMEPOS suppliers in particular, being proactive and avoiding a PTAN revocation is the best policy. Review your Medicare enrollment records often, update as appropriate and self-audit for compliance with the supplier standards. Any deficiency should be quickly cured. Being proactive will prevent the unimaginable and allow a supplier to focus on its business not handling a revocation.
Denise M. Leard, Esq., is an attorney with the Health Care Group of Brown & Fortunato, a law firm with a national health care practice based in Texas. Leard represents HME companies, pharmacies, and other health care providers throughout the United States. Leard has authored numerous articles and is a frequent lecturer throughout the country. She is licensed in Idaho, Oklahoma, Oregon, Texas, and Washington and is Board Certified in Health Law by the Texas Board of Legal Specialization. Leard earned a B.A. from the University of Washington and received her law degree from the University of Oklahoma College of Law. She can be reached at (806)345-6318 or [email protected].