Overview
The Centers for Medicare & Medicaid Services’ (CMS) 2025 Home Health Prospective Payment System final rule (Final Rule) expanded the scope of providers subject to a provisional period of enhanced oversight (PPEO) to include providers reactivating their Medicare enrollment and billing privileges after being in a deactivated status. Previously, a PPEO was limited to providers and suppliers that were newly enrolling in Medicare (starting July 13, 2023), undergoing a change of ownership under 42 CFR 489.18, or undergoing a 100% ownership change that does not fall under 42 CFR 489.18. Currently, qualifying hospices in Arizona, California, Nevada, and Texas are subject to a PPEO. Hospices in these states, which now includes hospices seeking reactivation, can expect a closer review by CMS on claim submissions from between 30 days to one year, effective when the provider submits its first claim.
In Depth
Under Section 1866(j)(3)(A) of the Social Security Act of 1935, the US Secretary of the Department of Health and Human Services (HHS) has the authority to establish procedures for a PPEO over Medicare providers and suppliers. A PPEO can last between 30 days and one year and allows CMS to take actions such as prepayment medical review and payment caps. CMS has utilized this authority to place new hospices in Arizona, California, Nevada, and Texas on a PPEO. The HHS Secretary may establish a PPEO by program instruction or other subregulatory guidance.
A new provider or supplier for purposes of a PPEO is defined as a newly enrolling Medicare provider or supplier, a certified provider or certified supplier undergoing a change of ownership consistent with the principles of 42 CFR 489.18, or a provider or supplier (including a home health agency or hospice) undergoing a 100% change of ownership via a change of information request under 42 CFR § 424.516. CMS has stated that the effective date of a PPEO is the date the new provider submits its first claim as opposed to date of enrollment.
In the Final Rule, CMS included providers that are reactivating their Medicare billing privileges under 42 CFR 424.540(b) in the definition of a “new provider or supplier” as it relates to a PPEO authority. CMS stated in commentary to the Final Rule that reactivation is effectively establishing a new provider or supplier for purposes of Medicare. CMS declined to respond to the majority of submitted comments about the scope and duration of a PPEO, stating that such comments were out of scope.
KEY TAKEAWAYS
The inclusion of reactivating providers as eligible providers for a PPEO shows CMS’s consistent focus on combatting fraud and abuse through the use of a PPEO as well as its continued focus on hospices. Applicable Medicare Administrative Contractors publish pre-payment review results for hospices subject to a PPEO with the reports identifying the number of providers subject to review, the number of providers deemed compliant and removed from review, and the number of providers deemed noncompliant and subject to subsequent probe reviews. These reports also identify the top denial reasons and guidance on how to avoid such denials.
Hospices in Arizona, California, Nevada, and Texas that are newly enrolling in Medicare, undergoing a change of ownership under 42 CFR 489.18, undergoing a 100% ownership change, or reactivating their enrollment and billing privileges should review these published reports and audit their documentation to ensure compliance with Medicare billing requirements. Other Medicare providers should monitor CMS reports that expand the scope of providers subject to a PPEO, including hospices in other states and providers outside of hospice.
