CMS Unveils Anti-Fraud Rules to Block Bad Actors from Returning to Medicare

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Rules issued today will help CMS keep fraudulent providers and suppliers away from Medicare, following a series of crackdowns in "hot spots" around the country.

Physicians and other healthcare providers with bad debts or records of abusive billing practices will not be permitted to re-enter Medicare under new fraud prevention rules unveiled by CMS today.

The changes announced by CMS Administrator Marilyn Tavenner are expected to save taxpayers more than $327 million a year, the agency announced in a statement.

“CMS has removed nearly 25,000 providers from Medicare, and the new rules help us stop bad actors from coming back in as we continue to protect our patients,” said Shantanu Agrawal, MD, CMS deputy administrator and director, Center for Program Integrity.

“For years, some providers tried to game the system and dodge rules to get Medicare dollars,” he said. “Today, this final rule makes it much harder for bad actors that were removed from the program to come back in.”


According to CMS, the Affordable Care Act (ACA) gives the agency additional powers to clamp down on fraud in Medicare. CMS has used this new authority to issue temporary moratoria on certain ambulance and home health providers in 7 fraud hot spots nationwide, and increase measures such as fingerprinting and criminal background checks. Permanent removal will have a tremendous impact on savings, the agency said.

Published reports earlier this year said CMS had cracked down on Medicare fraud in Chicago, Miami, and Houston, and earlier anti-fraud efforts as far back as 2009 targeted providers in those cities as well as in Detroit.

For CMS, questionable spending is not just a problem in Medicare. This week, a series by Pulitzer Prize winners Wendy Ruderman and Barbara Laker of the Philadelphia Daily News has looked at the $70 million that Medicaid spends each year in that city on outpatient addiction services, including having clients watch movies such as “Caddyshack.”

Medicare changes announced today will let CMS:

  • Bar providers, suppliers, and owners connected to any entity that has unpaid Medicare debt from taking part in the program. This will keep out persons who attempt to exit the program under 1 name and re-enroll under another name.
  • Revoke or bar enrollment of providers or suppliers if a significant manager is convicted of a felony that CMS deems detrimental of Medicare beneficiaries. Background checks will give the agency more information about convictions and high-risk providers and suppliers.
  • Revoke enrollments of those participants found to engage in fraud and abuse if they demonstrate such patterns.

Around the Web

Final Rule on the Federal Register

Healthcare Fraud Leads to Enrollment Moratoria in Hot Spots

“Caddyshack” is therapy for drug abusers