Retroactive revocations top concerns in proposed rule

YARMOUTH, Maine – A proposal from the Centers for Medicare & Medicaid Services (CMS) to recoup payments retroactive to the date of noncompliance for all enrollment revocations would significantly increase the risk exposure of durable medical equipment (DME) providers, regulatory experts say.

Under current regulations, some Medicare enrollment revocations take effect prospectively, becoming effective 30 days after CMS or its contractor mails notice of the revocation to the affected provider. Others take effect retroactively to the date of the provider's noncompliance.

CMS is now proposing to make all revocations retroactive to the date of noncompliance.

“What’s hard about this is they’re looking to make all revocations retroactive,” said Melanie Ewald, vice president of payer relations and reimbursement for VGM Group. “That retroactive revocation could be problematic, depending on how far it goes back and the size and amount of the overpayment. It raises their risk profile significantly.”

The proposal is one of several DME-related provisions included in CMS's 2027 Home Health Prospective Payment System proposed rule, released July 1.

Ewald also raised concerns about how CMS and its contractors would determine the date of noncompliance.

“It’s going to depend on the reason for the noncompliance and how it shows up,” she said. “Losing a license from the state is different than changing majority ownership. Those are two different things and how you identify them is different. There’s also risk there.”

Ewald and Mina Uehara, senior director of regulatory affairs for AAHomecare, highlighted several other DME-related provisions in the proposed rule:

CMS proposes clarifying that temporary moratoriums will become effective on the date the notice is filed with the Office of the Federal Register, rather than the date it is published in the Federal Register.

The proposal immediately raised concerns among stakeholders, particularly in light of the current six-month moratorium on new provider enrollments. In that instance, the notice was filed two days before its publication.

“The concept of this is quite concerning,” Uehara said. “How do you have an effective date when the industry may not even be aware of it? What if a provider opened a new location (in the time between the notice and the publication), they wouldn’t be able to do anything about it.”

CMS proposes revising Form C, the reporting form used in its competitive bidding program, to add a new "country of origin" field for lead items furnished by contract suppliers.

Uehara said the proposal may be driven in part by the current administration's efforts to bolster U.S.-based manufacturing. She noted that research from Harvard College and Georgetown University found previous rounds of competitive bidding led to a sharp decline in new U.S. manufacturers entering the market and increased reliance on outsourced production.

“This matches what we’ve been seeing for years,” she said. “There is an impact on quality.”

CMS proposes that replacement items would not require a new face-to-face encounter when the replacement falls under the same HCPCS code.

Ewald characterized the change primarily as a clarification but said providers should ensure referral sources understand when face-to-face requirements still apply.

“On its face, this is fairly straightforward,” Ewald said. “The challenge may become if there are instances where referrals don’t understand the coding system.”