Medicare physician enrollment screening overlooks questionable addresses, license reviews

Nearly a quarter of physicians enrolled in Medicare list a potentially ineligible address thanks to weaknesses in the Centers for Medicare & Medicaid's (CMS) provider screening process, according to a report by the Government Accountability Office (GAO). Additionally, CMS systems failed to identify 147 physicians with adverse actions against their medical license.

CMS requires physicians to report the physical address of their practice location when enrolling in the Provider Enrollment, Chain and Ownership System (PECOS). However, the GAO found that in 2013, 22 percent of practice locations were potentially ineligible because the CMS system failed to flag UPS store mailboxes, or addresses that were vacant or invalid. In at least one instance, the GAO found a physician's address actually belonged to a fast-food franchise.

The GAO used United States Postal Service software to flag commercial mailboxes, vacant or invalid addresses within the PECOS system. Of the 980,974 addresses submitted, 105,234 came back invalid. The GAO then reviewed a sample size of 496 and confirmed that 120 were ineligible, 92 of which the agency referred to CMS.

A CMS spokesperson told the Wall Street Journal that of those referred cases, 65 had already been corrected, deactivated or revoked, 15 were legitimate providers and the remaining 12 had their enrollment revoked following the report.

"Historically, provider enrollment has been a broken process, and it hasn't received enough funding or attention," Ryan Stumphauzer, a former federal prosecutor and a partner at the Miami law firm O'Quinn Stumphauzer & Sloman, told the WSJ. "That is the first opportunity to keep bad providers out, before they ever submit a fraudulent claim."

The GAO report also found that a small portion of physicians enrolled in Medicare had slipped through the system despite having an adverse action on their state medical license. Although CMS improved license reviews in 2014, the GAO determined that 147 physicians had received a final adverse action from a state medical board for a felony or financial crime. Between March 2003 and March 2013, 47 of those physicians were paid $2.6 million when they should have been barred from enrollment.

The GAO recommended that CMS incorporate flags into its software to better identify questionable addresses, and collect additional state license information. The Department of Health and Human Services concurred with those recommendations, but disagreed with the agency's recommendation to revise the 2014 guidance for verifying practice locations.

In 2014, CMS instituted new rules requiring certain providers to undergo fingerprint-based background checks in an effort to root out "bad actors." Medicare and Medicaid have long been identified by the GAO as high risk programs for fraud, and in June, the agency pointed to gaps in the Medicaid program that made some information in the PECOS system inaccessible to states.

For more:
- here's the GAO report
- read The Wall Street Journal article