What to do if Your Medicare Privileges are “Deactivated”

Medicare-Money-square_7_0-300x300There are numerous adverse actions that can be taken against a provider’s Medicare ordering and referring or billing privileges.  In general, however, deactivation is not considered such an “adverse action” that will reflect on the providers PECOS; however, it does “stop” your ability to use your Medicare privileges.  If you have experienced an adverse action on your privileges, such as your privileges being revoked or excluded, please investigate yourself or call counsel to understand the rules and strict deadlines around what to do to preserve your right to appeal the decision.  This blog post covers “deactivation” only.  If you have questions regarding this blog post or wish to discuss your Medicare privileges, you may contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@hamillittle.com. You may also learn more about our law firm by visiting www.hamillittle.com.

What is a Deactivation of Medicare Privileges?  

The Medicare code defines “Deactivate” as “the provider or supplier’s billing privileges were stopped but can be restored upon the submission of updated information.”  42 C.F.R. § 424.502.  Importantly, “[t]he deactivation of Medicare billing privileges does not have any effect on a provider’s or supplier’s participation agreement or any conditions of participation,” but “[a] provider or supplier may not receive payment for services or items furnished while deactivated.”  42 C.F.R. §§ 424.540(c), (e).   Generally, on PECOS, the deactivation will not appear as an adverse action, but may appear in the history tab.

Why Were My Privileges Deactivated?

One of the main reasons providers are currently being deactivated is for “not submit[ting] any Medicare claims for 12 consecutive calendar months.”  42 C.F.R. § 424.540(a)(1).  Through recent communications with CMS, our firm learned that CMS has a new project wherein which it is systematically deactivating privileges for providers who have not billed in the last year.  Although it has always had the ability to do this, it has not systematically done so until recently.  Our firm expects a large number of providers to be impacted by this CMS initiative.   Your privileges can also be deactivated if you fail to “report a change in information supplied on the enrollment application within the applicable time period” or “furnish complete and accurate information and all supporting documentation within 90 calendar days of receipt of notification from CMS to submit an enrollment application.” 42 C.F.R. § 424.540(a)(2), (3).  Furthermore, CMS can deactivate your privileges if you are “not in compliance with all enrollment requirements.”  42 C.F.R. § 424.540(a)(4).  Importantly, noncompliance with enrollment requirements and certain failures to report can justify a revocation of privileges, which is an adverse action with potentially lasting consequences.  Here is an example of when a deactivation v. revocation may be proper: If you surrender a state license because you no longer wish to practice in that state (which we would likely counsel against), then that could potentially lead to deactivation.  If you surrender your state license in lieu of disciplinary action, then that may qualify as a Final Adverse Action that you must report.  Failure to report the surrender in this case could lead to revocation.

Should I Rebut the Decision or Apply to Reactivate My Privileges?

Each Medicare Administrative Contractor (“MAC”) may deal with the deactivation differently, but likely will include on the notice letter an explanation of your right to rebut or challenge the decision.  Novitas Solutions, for instance, allows a provider to rebut if the rebuttal is received within 15 calendar days of the date of the letter of deactivation.  This is one reason why it is important to always notify CMS with your updated address because the letter will likely be sent via mail to your last known address.  If you miss the deadline, then your potential options become more limited.  To rebut with Novitas, for example, you must state the issues or findings of fact with which you disagree and the reason for disagreement.

If the deactivation was proper under the rules and you believe you have since fixed the issue leading to the deactivation, then you can apply for reactivation.  To reactivate, “the provider or supplier must recertify that its enrollment information currently on file with Medicare is correct, furnish any missing information as appropriate, and be in compliance with all applicable enrollment requirements.”  42 C.F.R. § 424.540(b)(1).  To reactivate, you may be required to submit a new application, on which you can mark “reactivate” as the reason for applying.  Note, there is generally no reenrollment bar from a deactivation (like there may be for a revocation).

If you have questions regarding this blog post or wish to discuss your Medicare privileges, you may contact us at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@hamillittle.com. You may also learn more about our law firm by visiting www.hamillittle.com.


*Disclaimer: Thoughts shared here do not constitute legal advice.

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