Imagine that an administrator in your organization has stolen hundreds of thousands of dollars. Then, years later, your organization loses its Medicare number because of the crime.

Sound far-fetched? It shouldn’t.

Whenever there is a change in the information that you provide on the Medicare 855 form, you are required to notify the Centers for Medicare & Medicaid Services (CMS). Failure to report any adverse action against a provider, owner, or manager is merely one item on a long list of omissions that permit Medicare to revoke your billing number. Once CMS has revoked billing privileges, the provider/supplier is barred from re-enrollment for at least one year and potentially up to three years, based on the severity of the non-compliance. 

To prevail on an appeal, you typically must prove that the event didn’t occur. Simply begging for forgiveness for the failure to update the form doesn’t provide a basis for reinstatement. 

What if one of your physicians has some issues with prescription drugs? Say he is convicted of a misdemeanor for forging a prescription. That also triggers the reporting obligation. Failure to update the 855 form within 30 days can result in the total loss of Medicare billing privileges. It should not surprise you that moving the location of your office or adding a new location requires submitting a notice. I was shocked, however,  to discover that if you change the location where you store your medical records, you must tell CMS. Once again, failure to do so can result in the loss of your billing number for a year. 

Most changes in ownership also must be reported. For example, a change of 5 percent or more of ownership of an entity must be reported within 30 days. This means that anytime anyone buys or sells an “equal” ownership interest when there are fewer than 20 owners, the transaction triggers an obligation to submit an 855. That means that adding or losing a shareholder in most physician practices triggers the need to report.  

Someone in your organization must have an intimate understanding of the 855 form and then maintain a watchful eye on your activities. The list of items requiring a report is too long to include here. The easiest thing to do is to review the forms themselves.

You may find some information about enrollment online at – though the page is far from user-friendly.

To get the forms themselves, you can go online to the CMS forms webpage and type “855” in the filter box.   

Whenever you have any situation that would result in one of your prior answers on the form changing, you must correct it. Regular readers know that one of my favorite things to do is take a situation in which a medical organization expects to pay a large sum back to Medicare and find a legal argument that eliminates the liability. We have had considerable success getting people out of jams in which they thought they would be burdened with a large refund or overpayment. 

Unfortunately, when there is a problem with an 855 form, it is often impossible to develop a creative legal argument to save the day. By far the most effective defense to an 855 situation is to avoid having made it in the first place. It is difficult to get excited about any forms or paperwork, but understanding and monitoring these forms is vitally important. 

It is a rare situation in which minor clerical mistakes can result in loss of all billing privileges, but 855 issues may be the biggest problem in the healthcare industry of which many have never heard. 

About the Author

David M. Glaser, Esq., is a shareholder in Fredrikson & Byron’s Health Law Group. David helps clinics, hospitals, and other healthcare entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David’s goal is to explain the government’s enforcement position and to analyze whether the law supports this position. David is a popular panelist on Monitor Mondays and is a member of the RACmonitor editorial board.

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