Medicare ineligible providers are those healthcare providers who, due to various reasons, do not meet the eligibility requirements to receive reimbursement from Medicare. These providers range from hospitals, nursing homes, and home health agencies to physicians and other healthcare practitioners.
It is crucial to understand the intricacies of Medicare ineligible providers, the reasons behind their ineligibility, and the consequent impact on the long-term care industry. But to fully understand the complexities of Medicare ineligible providers, we must first cover the basics of Medicare.
Who is Medicare designed for? Medicare, in essence, is a U.S. federal government health insurance program that most prominently benefits individuals aged 65 or older. However, it also covers certain younger people with disabilities and individuals with End-Stage Renal Disease (ESRD).
The program helps to reduce the cost of medical care and is divided into several parts:
- Medicare Part A (Hospital and SNF care)
- Medicare Part B (Medically necessary services and preventive services
- Medicare Part C (Medicare Advantage)
- Medicare Part D (Prescription Drug Coverage)
What does Medicare cover? Medicare covers skilled nursing facility care for a limited time if certain conditions are met, including a qualifying hospital stay and the need for skilled nursing services. It can also cover home health services and hospice care under specific circumstances.
What doesn’t Medicare cover? Medicare does not cover most long-term care or custodial care, such as help with bathing, dressing, and using the bathroom, when this is the only care needed.
As such, while Medicare provides essential support for certain services, long-term care facilities must also navigate other financial sources, including Medicaid, private insurance, and out-of-pocket payments by residents.
Why are some providers ineligible for Medicare? To participate in the Medicare program and receive reimbursements, healthcare providers must meet specific eligibility requirements. A provider may be deemed ineligible for:
- Licensing and Certification Issues: If a provider is not licensed or certified according to state and federal regulations, they will be ineligible to receive Medicare payments.
- Non-compliance with Medicare Regulations: Medicare has multiple rules and regulations that providers must adhere to. This can include quality reporting, acceptance of Medicare-approved payment amounts, and ensuring patient rights and safety. Non-compliance with these rules can lead to ineligibility.
- Fraudulent Activities: If a provider has been found guilty of fraudulent activities, such as overbilling, misrepresentation of services, or illegal referrals, they can be excluded from the Medicare program.
- Criminal Convictions: Healthcare providers convicted of felonies related to healthcare or controlled substances within the last ten years are ineligible for Medicare.
- Failure to Repay Overpayments: If a provider has received overpayments from Medicare and fails to return them, they can become ineligible.
The CMS Preclusion List
So what happens when a provider becomes ineligible for receiving Medicare funding? They end up on the CMS preclusion list. Since its implementation in 2019, the CMS Preclusion List has revolutionized how payments for Medicare Advantage (MA) items and services or Part D drugs are handled.
This list consists of the names of providers and prescribers who are barred from receiving such payments, thereby creating a robust system to ensure the integrity of Medicare services. Recognizing providers at the Tax Identification Number (TIN) level, the list only includes individuals or entities if their Medicare enrollments are labeled as “revoked” or “inactive.”
The inception of this list was a strategic move to prevent problematic prescribers from receiving payment for Part D drugs. This reduces the burden on Part D and Medicare Advantage providers and helps maintain the program’s integrity. Above all, it safeguards patients and Trust Funds from problematic prescribers and Medicare ineligible providers.
One should note that the CMS Preclusion List is updated every 30 days. Providers can find themselves on the list for reasons such as:
- Revocation from Medicare
- Being under an active re-enrollment bar
- Engaging in behavior detrimental to the Medicare Program’s best interests
- Being convicted of a federal or state felony within the last ten years
While the list isn’t publicly accessible, the CMS sends notifications to providers who have been excluded. This notification is sent via email and letter to the provider’s PECOS or NPPES address and includes the reason for preclusion, the effective date, and the rights to appeal.
Contact us here if you would like to demo EHR software that can verify the Medicare eligibility of your residents in minutes.
The Medicare Preclusion List and Navigating Ineligibility
The Medicare preclusion list by the CMS is an essential resource for long-term care facilities. Some long-term care providers tend to outsource certain services (such as physical therapy), but still need to be able to distinguish Medicare ineligible providers from those who are not on the Medicare exclusion list.
This is especially true for SNFs, due to the CMS’ consolidated billing practice. Therefore, some actions that facilities can take to protect themselves and their financials include:
- Vigilantly vetting care providers before outsourcing care services
- Regularly monitoring the CMS preclusion list
- Effectively communicating with residents and their families by informing them when a service provider is Medicare ineligible
- Planning contingencies, just in case a service provider is added to the Medicare exclusion list, and you quickly need a different provider to provide care for a resident
Electronic Health Record (EHR) software, like Experience Care’s intuitive system, can be a great advantage when managing Medicare ineligible providers. It assists with monitoring providers regularly, managing resident information transparently, and supporting accurate billing processes. Through our data management capabilities, our EHR can track providers’ services, making it easier to identify and isolate those provided by Medicare ineligible individuals. This streamlines billing processes and helps ensure compliance with Medicare regulations.
The Path Forward for Medicare Ineligible Providers
Medicare ineligible providers can include adult day care centers, assisted living facilities, and some mental health and substance abuse treatment providers. Though these healthcare providers are essential in delivering care, they may sometimes struggle financially as a result of losing Medicare eligibility. That is why they must diversify their funding sources.
Alternatives include billing other public insurance programs like Medicaid (where applicable) or private insurance companies. Grants from federal, state, local governments, and private foundations can also be crucial in supporting these providers.
Providers can also lobby for legislative changes that expand Medicare eligibility to more provider types. This would require considerable effort, as it involves changing established policies, but collective action can be decisive and potentially create significant, systemic change.
Peering into the future, we expect increased regulatory scrutiny, greater demands for transparency, and the expanding role of technology, particularly EHRs, in managing this issue. Despite the challenges, equipping oneself with knowledge and the right tools can make the journey smoother.
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