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  • April 10, 2019

    CMS Preclusion List Now in Effect

    The CMS Preclusion List – a list of providers who are prohibited from being paid for services provided to Medicare Parts C and D beneficiaries – is now in effect. Scott Taebel, James Junger, and Julie Lappas discuss this list and offer tips for attorneys who advise health care providers.

    Scott W. Taebel, T. James Junger, Julie K. Lappas

    The already complicated world of health law just got a little more challenging. On April 1, 2019, the Centers for Medicare and Medicaid Services (CMS) Preclusion List went into effect.

    Thus, Medicare Part C and D plans, PACE organizations, and 1876 cost contract plans (Plans) will be required to deny payment for services rendered or prescriptions ordered by any provider on the Preclusion List.1

    Scott Taebel Scott Taebel, American University 1986, is a shareholder with Hall Render in Milwaukee, where he practices in regulatory compliance matters, serving as primary compliance counsel for many of the firm’s clients.

    James Junger T. James Junger, U.W. 2014, is an associate with Hall Render in Milwaukee, where he practices in health care compliance, including false claims act, anti-kickback, and Stark-related concerns.

    Julie Lappas Julie Lappas, George Washington 2009, is a shareholder with Hall Render in Indianapolis, where she practices in regulatory, compliance, and reimbursement matters.

    Providers who are not enrolled in Medicare will be able to be paid for services provided to Plan beneficiaries unless they are on the Preclusion List.

    Given the potential impact of the Preclusion List to organizations across the health care industry, attorneys who advise individual providers, hospitals, health systems, Plans, pharmacies, and pharmacy benefit managers should carefully review the Preclusion List requirements to help their clients respond to its implementation.


    Under prior law, health care providers and suppliers were required to enroll in Medicare in order to be paid for items, services, or drugs provided to patients covered by a Plan.

    In April 2018, CMS rescinded this enrollment requirement and created the Preclusion List in its place.

    The Preclusion List is a list of providers (Listed Providers) – both individuals and entities –who fall into one of the following categories:

    • providers whose Medicare program participation is currently revoked, who are under an active enrollment bar, and whose conduct is determined by CMS to be detrimental to the Medicare program, or

    • providers who would meet the criteria above if they had been enrolled in Medicare when they engaged in the conduct at issue.

    The Preclusion List is different from the Office of Inspector General’s List of Excluded Individuals and Entities (LEIE), and CMS has stated that there will not be complete overlap between the Preclusion List and the LEIE. While the lists serve similar purposes, the criteria for being precluded and excluded are not identical.

    Listed Providers remain on the Preclusion List for as long as the enrollment bar is in place (or, in the case of a Listed Provider who was never enrolled, would be in place). Notably, CMS will distribute the Preclusion List only to Plans; other providers cannot access the Preclusion List. Because of this, entities such as hospitals, health systems, pharmacies, and physician groups are not obligated to screen employees or contractors against the Preclusion List.

    Impact on Plans

    CMS prohibits Plans from paying for Part D drugs and Part C items and services that are prescribed or provided by a Listed Provider. As of April 1, 2019, Plans must deny payments for such services. This means that Listed Providers (or those who bill for services they provide) are at risk for nonpayment of Part C claims. In the Part D context, patients will not be able to fill prescriptions written by Listed Providers using their Part D drug benefit, as Plans and/or their pharmacy benefit managers must deny such claims at the point of service.

    CMS will update the Preclusion List each month and distribute it to Plans through a secure online portal. Plans will be responsible for updating their systems to include the most up-to-date information. Plans that pay for services ordered by a Listed Provider are subject to sanctions under existing CMS regulations, which can include civil monetary penalties, intermediate sanctions (e.g., suspension of marketing, enrollment, or payment) and termination.

    When a Plan determines that a Listed Provider is included in its network, it must remove the Listed Provider as soon as possible. It must also notify any beneficiary who has received care from the Listed Provider in the last 12 months. CMS has advised plans to give beneficiaries 60 days’ advance notice before denying claims from Listed Providers.

    Impact on Providers

    When CMS determines that a provider meets the Preclusion List criteria, it will send an email to the provider using the email address on file in the Provider Enrollment, Chain and Ownership System (PECOS) or the National Provider Plan and Enumeration System (NPPES). CMS or the MAC will follow up with a letter sent through the mail.

    Providers can appeal CMS’s decision to place them on the Preclusion List by filing a request for reconsideration within 60 days. Providers’ appeal rights are governed by CMS’s appeal regulations at 42 C.F.R. Part 498. Communications from CMS will contain additional information regarding the provider’s appeal rights.

    If the provider appeals CMS’s decision, they will not be placed on the Preclusion List until the first level of their appeal is complete (i.e., until CMS has issued a decision on reconsideration). If the provider does not appeal, they will be placed on the Preclusion List at the end of their 60-day appeal period.


    While Plans and Listed Providers will feel the Preclusion List’s most direct impact, providers of all types will have to act to ensure they are adequately protected.

    Attorneys advising them should be aware of the Preclusion List and its requirements, and should consider whether contracting templates, employment agreements, and internal policies and procedures should be updated to account for this new rule.

    The Health Law Section is offering four scholarships to section members to attend this year's Health Labor and Employment Law Institute, Aug. 15-16, 2019, in Wisconsin Dells. For more information, see the HLE 2019 Scholarship application on Applications must be submitted by June 27, 2019.


    1 PACE organizations provide comprehensive medical and social services to certain frail, elderly people still living in the community. Most PACE participants are dually eligible for Medicare and Medicaid. 1876 cost contract plans are paid based on the reasonable costs incurred by delivering Medicare-covered services to plan members, pursuant to Section 1876 of the Social Security Act.


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