Beware: NSC jumps on HMEs slow to fix supplier infractions

Monday, February 28, 2005

COLUMBIA, S.C. - HMEs who have their Medicare provider numbers deactivated could end up with an unanticipated cash crunch even after the National Supplier Clearinghouse reinstates them.

In the past, once the NSC reactivated a provider’s supplier number, he generally could bill retroactively to the date of deactivation. That is no longer the case, say industry attorneys.

“They have changed the policy, and it has hurt a lot of people because in good faith they continued to provide service, and they will be out for those services provided in the interim,” said Denise Fletcher, a healthcare attorney with Brown & Fortunato in Amarillo, Texas.

Early last year, HMEs complained that the NSC was aggressively deactivating provider numbers for even minor infractions of the 21 supplier standards. The NSC eventually backed off that “draconian” enforcement, much to the industry’s relief, but its new crack down on retroactive billing has touched another nerve.

If the NSC deactivates a supplier number, and the provider goes through the appeals process, it can take 60 to 90 days to get the number reactivated. If the supplier can’t bill retroactively “that could be a significant amount of money,” Fletcher said.

According to Brown & Fortunato, the NSC most often deactivates a supplier number because the HME failed to verify insurance or is out of compliance with state or federal regulations.

In the past, providers would be able to bill retroactively after correcting one of these relatively minor infractions, but now that is often not the case, say industry watchers.

Fortunately, most providers know not to accept Medicare business if their number has been deactivated. In cases where the service is ongoing, like home respiratory therapy, whether or not a provider continues services during the deactivation period is not that cut and dry. They can’t just discontinue a patient’s home respiratory therapy, Fletcher said.

Typically, suppliers the NSC deems to be non-compliant with one or more of the 21 supplier standards are given 15 days to prove compliance or lose their supplier number. As of April 15, 2004, the NSC began notifying suppliers with issues of non-compliance not considered egregious that they have 21 days to prove compliance before the 15-day revocation action begins.

Because all situations are different, the NSC declined to say what it considers non-egregious.

When it comes to billing retroactively, the best defense is to fix the problem before deactivation kicks in, said attorney Neil Caesar, president of the Health Law Center in Greenville, S.C.

“When you are comfortable that you were legal at the right time, and you communicated to them that fact, you will have a good shot at billing retroactively if they deactivate your number,” Caesar said. “That is your first line of defense. Otherwise, keep your fingers crossed,” he said.
NSC Director Nancy Parker replies:
When a revoked or inactivated supplier has shown compliance with the twenty-one standards, the supplier number is reinstated. The reinstatement date is effective the date the supplier is determined to be in compliance with the supplier standards. Retroactive reinstatement is dependent upon the reason for the inactivation and the ability of the supplier to show compliance. This is not a new policy of the NSC, nor is this a newly enforced policy. Regulations at 42 CFR 424.57(c) established standards that suppliers shall meet in order to obtain and retain a Medicare supplier billing number. These standards were effective December 11, 2000.