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Volume 22.06

For several years we have cautioned health care providers that Medicare billing privileges could be deactivated if the provider did not submit any Medicare claims for twelve (12) consecutive months.  This deactivation is provided for at 42 CFR §424.540(a)(1).  According to 42 CFR §424.540(a)(1), the twelve (12) month period begins on the 1st day of the 1st month without a claim submission through the last day of the 12th month without a submitted claim.

As of today, we are not currently aware of any of our clients that have had billing privileges deactivated because of the application of this regulation; however, the Total Health Law Blog reported on May 4, 2022, (https://www.totalhealthlaw.com/what-to-do-if-your-medicare-privileges-are-deactivated/) that recent communications with CMS indicated a new project was being initiated wherein it is systematically deactivating providers that did not bill in the last year.  Recently, we were informed by NAHC that they were now aware of the deactivation efforts, referred to as “Organization Deactivation Project 2022” and they are attempting to secure additional information regarding this CMS effort.

If deactivation is in accordance with the rules, the provider can apply for reactivation.  According to 42 CFR §424.540(b)(2), “Provider and suppliers deactivated for non-submission of a claim are required to recertify that the enrollment information currently on file with Medicare is correct and furnish any missing information as appropriate.  The provider or supplier must meet all current Medicare requirements in place at the time of reactivation and must be prepared to submit a valid claim.  CMS may, for any reason, require a deactivated provider or supplier to submit a complete Form CMS-855 to secure reactivation.

42 CFR §424.540(c) provides that “Deactivation of Medicare billing privileges is considered an action to protect the provider or supplier from misuse of its billing number and to protect the Medicare Trust Funds from unnecessary overpayments.  The deactivation of Medicare billing privileges does not have any effect on a provider or supplier’s participation agreement or any conditions of participation”.

A provider may also have billing privileges deactivated for failure to report changes to Medicare enrollment information timely and a failure to report complete and accurate information on a timely basis.

Deactivation of Medicare billing privileges is different from a revocation of enrollment in the Medicare program as provided in 42 CFR §424.535.  A revocation represents the termination of the provider agreement with the Medicare program and is categorized as an adverse action which can have long-term consequences for both the provider and individuals associated with the provider.

While deactivation does not generally impact the provider’s agreement with the Medicare program, a significant issue for further clarification is the impact on the ability to bill non-Medicare payors for services when those payors require Medicare certification as a prerequisite for billing.  This is common for home health agencies in certain states where the ability to bill for services to Medicaid beneficiaries includes the prerequisite.  Some providers only secure and maintain Medicare certification to enable the billing to non-Medicare patients.

We will continue to monitor this new effort by CMS.  Although any impact on hospices would be minimal compared to other provider types, coverage will be included in our upcoming educational programming for hospices.  Providers that have filed “No Utilization” cost reports should be monitoring this CMS effort closely.


Early registration for the 2022 Hospice Financial Management Academy will be ending July 15, 2022.  We are very excited about the interest in this program, which is scheduled for September 19-20, 2022, at one of our favorite properties, the Hotel Monteleone, New Orleans.  The two-day program is set; however, additional topical coverage will continually be added up-to the program date as events transpire.  Special room rates have been secured with the hotel ($189/night).  Space is limited to enhance the interactive nature of the program.  Registration, hotel, and other information is available here.  We hope to see you in New Orleans.