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What Is a Provider Entity?

January 28, 2020

According to the Centers for Medicare and Medicaid Services (CMS), a provider entity is a health care provider or supplier who bills Medicare or Medicaid for services rendered and has a National Provider Identifier (NPI) number. Similarly, a Provider-led entity (PLE) is a national professional medical specialty society or organization that is comprised primarily of providers or practitioners, who, either within the organization or outside the organization, provide direct patient care while also having an NPI number.

NPI numbers are a unique 10-digit identification number that covered health care providers use in administrative and financial transactions.

Here’s what you need to know about provider entities and provider-led entities, why provider entities need to be carefully screened for compliance, and how Verisys helps ensure that bad actors don’t jeopardize health care organizations’ enrollment in Medicare and Medicaid.

Why It Is Important to Screen Provider Entities for Compliance

Any health care organization that receives government funds from Medicare or Medicaid must be screened for compliance to receive those funds. If the organization is found to be in noncompliance, they are at risk for having their enrollment with Medicare or Medicaid revoked, meaning they can no longer receive reimbursement for services provided to Medicaid or Medicare patients.

Each year it is not uncommon to see a number of news stories in the headlines about provider entities fined for defrauding Medicare, Medicaid, Tricare, as well as other benefit programs. The following example of a provider entity who was caught and fined for fraudulent behavior is the reason that the US government has actively implemented ways to crack down on abuse and fraud to recoup money lost to fraudulent claims.

A Virginia Beach doctor was sentenced to over two years in prison and fined over $1 million to settle civil claims after defrauding Medicare, Medicaid, and Tricare.

The CMS Final Rule Cracks Down on Provider Entity Requirements

The CMS Final Rule recently passed new enforcements to reduce fraud, waste, and abuse in health care by identifying criminal behavior from providers, suppliers, and organizations currently billing Medicare, Medicaid, and CHIP.

This new rule carries serious implications for all health care organizations who are currently employing fraudulent providers and billing Medicare and Medicaid for services rendered from those fraudulent providers or suppliers. Affiliation with a fraudulent provider can put a health care organization at risk for having their enrollment with Medicaid or Medicare revoked, meaning they can no longer receive reimbursement for services provided to Medicaid or Medicare patients.

According to CMS, they use the following recommended two questions to identify provider entities:

  1. Does the person, business, or agency furnish, bill, or receive payment for health care in the normal course of business?
  2. Does the person, business, or agency transmit (send) any covered transactions electronically?

Answering yes to both questions means the entity is a covered provider entity or qualified PLE.

With CMS actively working to crack down on fraudulent behavior in Medicare and Medicaid, we can clearly see the impact they are making against fraud, waste, and abuse. In 2019 between April and September, CMS’s investigative work “led to $2.74 billion in expected investigative recoveries, 388 criminal actions, 364 assessments of monetary penalties, and 1,347 exclusions of individuals and entities from Federal health care programs”, according to a recent report. This is a much larger number than in 2018 and signals the seriousness with which CMS is taking action against fraud, waste, and abuse, with 2020 shaping up to be more of the same.

Under the CMS Final Rule, CMS can disenroll a provider entity based on affiliation with a fraudulent provider or supplier for up to the past five years. This means that a current or newly enrolled organization can have their Medicare, Medicaid, and CHIP enrollment denied or revoked if they have an owner or managing employee who is affiliated with another organization that:

  • has uncollected debt.
  • has been, or is, subject to a payment suspension under a federal health care program.
  • has been, or is, excluded by the Office of Inspector General (OIG) from Medicare, Medicaid, or CHIP.
  • had its Medicare, Medicaid, or CHIP billing privileges denied or revoked

This isn’t the case just for doctors; affiliation extends to pharmacists and other suppliers as well. Providers who care about their CMS enrollment status must be exceptionally vigilant to avoid getting lumped in with criminals and noncompliant affiliates.

Verisys Screens Provider Entities for Full Compliance Under the CMS Final Rule

Medicare and Medicaid accounted for a combined 37% of total national health expenditures in 2018. That’s a percentage of revenue that health care providers can’t afford to lose out on. Maintaining provider enrollment is important for serving a large portion of the patient population.

Verisys screens provider entities and provider-led entities for compliance under the CMS Final Rule so health care organizations can maintain their enrollment and receive funds from Medicare and Medicaid. In fact, Verisys currently has the only market-ready solution to track provider entities and affiliates’ current and historical data. Verisys screens all who are affiliated with a health care organization to ensure compliance by including providers, pharmacists, and suppliers when screening for fraud.

Medicare and Medicaid fraud is a $2 billion industry. If your organization isn’t ready or able to screen affiliates properly, you could be at risk of revocation or denial of your CMS program enrollment. Ensure that the affiliates you’re doing business with have a clean history to keep your enrollment and avoid penalties.

Heather Lynn GillmanWritten by Heather Lynn Gillman
Director of Healthcare Communications
Problem Solver. Designer. Wine Maker. Writer.
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