CMS Pub. 100-08, ch. 10, § 10.4.2.2

A. Denial Reason 1– Not in Compliance with Medicare Requirements (42 CFR

§424.530(a)(1))

“The provider or supplier is determined not to be in compliance with the enrollment

requirements in this Title 42 or on the enrollment application applicable to its provider or

supplier type and has not submitted a plan of corrective action as outlined in 42 CFR part 488.”

Such non-compliance includes, but is not limited to, the following situations:

i. The provider or supplier does not have a physical business address or mobile unit where

services can be rendered.

ii. The provider or supplier does not have a place where patient records are stored to determine

the amounts due such provider or other person.

iii. The provider or supplier is not appropriately licensed.

iv. The provider or supplier is not authorized by the federal/state/local government to perform

the services that it intends to render.

v. The provider or supplier does not meet CMS regulatory requirements for the specialty that it

seeks to enroll as. (See section 10.2.8 of this chapter for examples of suppliers that are not

eligible to participate.)

vi. The provider or supplier does not have a valid social security number (SSN) or employer

identification number (EIN) for itself, an owner, partner, managing organization/employee,

officer, director, medical director, and/or authorized or delegated official.

vii. The applicant does not qualify as a provider of services or a supplier of medical and health

services. (For instance, the applicant is not recognized by any federal statute as a Medicare

provider or supplier (see section 10.2.8 of this chapter.)) An entity seeking Medicare payment

must be able to receive reassigned benefits from physicians in accordance with the Medicare

reassignment provisions in § 1842(b)(6) of the Act (42 U.S.C. 1395u(b)).

viii. The provider or supplier does not otherwise meet general enrollment requirements.

(With respect to (v) above – and, as applicable, (iii) and (iv) - the contractor’s denial letter shall

cite the appropriate statutory and/or regulatory citation(s) containing the specific

licensure/certification/authorization requirement(s) for that provider or supplier type. For a

listing of some of these statutes and regulations, refer to section 10.2 et seq. of this chapter.)

NOTE: The contractor must identify in its denial letter the exact provision within said

statute(s)/regulation(s) with which the provider/supplier is non-compliant.

(NOTE: For (a)(1) denials involving an individual practitioner who is not appropriately licensed

due to a disciplinary action, PEOG -- rather than the contractor -- will make all denial

determinations for this noncompliance requirement).

B. Denial Reason 2– Excluded/Debarred from Federal Program (42 CFR § 424.530(a)(2))

(i) “The provider or supplier, or any owner, managing employee, managing organization, officer,

director, authorized or delegated official, medical director, supervising physician, or other health

care or administrative or management services personnel (such as a billing specialist, accountant,

or human resources specialist) furnishing services payable by a federal health care program, of

the provider or supplier is—

(A) Excluded from Medicare, Medicaid, or any other federal health care program, as defined in

42 CFR § 1001.2, in accordance with section 1128, 1128A, 1156, 1842, 1862, 1867 or 1892 of

the Social Security Act, or

(B) Debarred, suspended, or otherwise excluded from participating in any other Federal

procurement or non-procurement program or activity in accordance with section 2455 of the

Federal Acquisition Streamlining Act.”

(ii) The individuals and organizations identified in paragraph (a)(2)(i) of this section include, but

are not limited to, W–2 employees and contracted individuals and organizations of the provider

or supplier.

(Unless stated otherwise in section 10.6.6 of this chapter or in another CMS directive, the

contractor need not review the OIG exclusion list for any “health care or administrative or

management services personnel” who are not otherwise required to be reported on the enrollment

application.)

C. Denial Reason 3 – Felony Conviction (42 CFR § 424.530(a)(3))

“The provider, supplier, or any owner, managing employee, managing organization, officer,

director, of the provider or supplier was, within the preceding 10 years, convicted (as that term is

defined in 42 CFR § 1001.2) of a federal or state felony offense that CMS determines to be

detrimental to the best interests of the Medicare program and its beneficiaries.

(i) Offenses include, but are not limited in scope and severity to:

A. Felony crimes against persons, such as murder, rape, assault, and other similar crimes for

which the individual was convicted, including guilty pleas and adjudicated pretrial

diversions.

B. Financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud and

other similar crimes for which the individual was convicted, including guilty pleas and

adjudicated pretrial diversions.

C. Any felony that placed the Medicare program or its beneficiaries at immediate risk, such as a

malpractice suit resulting in a conviction of criminal neglect or misconduct.

D. Any felonies outlined in section 1128 of the Social Security Act.

(ii) Denials based on felony convictions are for a period to be determined by the Secretary, but

not less than 10 years from the date of conviction if the individual has been convicted on one

previous occasion for one or more offenses.

(iii) The individuals and organizations identified in paragraph (a)(3) of this section include, but

are not limited to, W–2 employees and contracted individuals and organizations of the provider

or supplier.”

While a reenrollment bar is established for revoked providers/suppliers, this does not preclude

the contractor from denying reenrollment to a provider/supplier that was convicted of a felony

within the preceding 10-year period or that otherwise does not meet all of the criteria necessary

to enroll in Medicare.

Note that if an MDPP coach meets the above felony requirements, this would not itself warrant a

denial of the MDPP supplier under § 424.535(a)(3). This is because the coach, not the MDPP

supplier, has the felony conviction. The MDPP supplier could, however, be denied enrollment

under § 424.530(a)(1) (non-compliance with enrollment requirements) for having an ineligible

coach.

As explained in section 10.6.6 of this chapter, the contractor shall submit all felonies found on

Form CMS-855 and CMS-20134 applications to PEOG for review via

ProviderEnrollmentRevocations@cms.hhs.gov. (See section 10.6.6 for more information.)

D. Denial Reason 4– False or Misleading Information on Application (42 CFR §

424.530(a)(4))

“The provider or supplier submitted false or misleading information on the enrollment

application to gain enrollment in the Medicare program.”

E. Denial Reason 5– On-Site Review/Other Reliable Evidence that Requirements Not Met

(42 CFR §424.530(a)(5))

“Upon onsite review or other reliable evidence, CMS determines that the provider or supplier:

(i) Is not operational to furnish Medicarecovered items or services; or

(ii) Otherwise fails to satisfy any Medicare enrollment requirement.”

F. Denial Reason 6– Medicare Debt (42 CFR § 424.530(a)(6))

1. Background

Consistent with 42 CFR § 424.530(a)(6), an enrollment application may be denied if:

(i) The provider, supplier, or owner thereof (as defined in § 424.502) has an existing Medicare

debt:

(ii) The enrolling provider, supplier, or owner (as defined in § 424.502) thereof was previously

the owner of a provider or supplier that had a Medicare debt that existed when the latter's

enrollment was voluntarily terminated, involuntarily terminated, or revoked, and all the

following criteria are met:

(A) The owner left the provider or supplier with the Medicare debt within 1 year before or after

that provider or supplier's voluntary termination, involuntary termination, or revocation.

(B) The Medicare debt has not been fully repaid.

(C) CMS determines that the uncollected debt poses an undue risk of fraud, waste, or abuse. In

making this determination [under § 424.530(a)(6)(ii)], CMS considers the following factors:

(1) The amount of the Medicare debt.

(2) The length and timeframe that the enrolling provider, supplier, or owner thereof was an

owner of the prior entity.

(3) The percentage of the enrolling provider, supplier, or owner's ownership of the prior entity.

(4) Whether the Medicare debt is currently being appealed.

(5) Whether the enrolling provider, supplier, or owner thereof was an owner of the prior entity at

the time the Medicare debt was incurred.”

In addition, a denial of Medicare enrollment under paragraph (a)(6)(ii) can be avoided if the

enrolling provider, supplier, or owner thereof does either of the following: (1) satisfies the

criteria set forth in § 401.607 and agrees to a CMSapproved extended repayment schedule for the

entire outstanding Medicare debt; or (2) repays the debt in full.

2. Contractor’s Determination of Overpayment

When processing a Form CMS-855A, CMS-855B, CMS-855I, CMS-855S, or CMS-20134 initial

or change of ownership application (if applicable), the contractor shall determine – using a

system generated monthly listing – whether the provider, supplier, or any owner listed in Section

5 or 6 of the application has an existing or delinquent Medicare overpayment, as described in

section 10.4.2.2(F)(1) above and § 424.530(a)(6). If such an overpayment exists, the contractor

shall deny the application, using 42 CFR §424.530(a)(6) as the basis. However, prior PEOG

approval is required before proceeding with the denial. The contractor shall under no

circumstances deny an application under § 424.530(a)(6) without receiving PEOG approval to do

so.

3. Examples

Example #1: Dr. X, a sole proprietor, has a $70,000 overpayment. Three months later, Dr. X

joins Group Y and becomes a 50 percent owner thereof. Group Y submits an initial enrollment

application two months thereafter. Group Y’s enrollment could be denied because Dr. X is an

owner.

Example #2: Dr. Smith’s practice (“Smith Medicine”) is set up as a sole proprietorship. Dr.

Smith incurs a $50,000 overpayment. Dr. Smith terminates Medicare enrollment. Six months

later, Dr. Smith tries to enroll as a sole proprietorship; the practice is named “JS Medicine.” A

denial is warranted because § 424.530(a)(6) applies to physicians and the $50,000 overpayment

was attached to Dr. Smith as the sole proprietor.

Example #3 - Same scenario as example #2 but assume that Dr. Smith’s new practice is an LLC

of which Dr. Smith is only a 30 percent owner. A denial is still warranted because Dr. Smith is

an owner of the enrolling supplier and the $50,000 overpayment was attached to Dr. Smith.

Example #4 - Smith is a nurse practitioner in a solo practice. The practice (“Smith Medicine”) is

set up as a closely held corporation, of which Smith is the 100 percent owner. Smith Medicine is

assessed a $20,000 overpayment. Smith terminates the Medicare enrollment. Nine months later,

Smith submits a Form CMS-855I application to enroll Smith as a new individual supplier. The

business will be established as a sole proprietorship. A denial is not warranted because the

$20,000 overpayment was attached to Smith Medicine, not to Smith.

In each of these examples, however, denial could be avoided if (1) the party with the

overpayment is on a Medicare-approved plan of repayment or (2) the overpayments in question

are currently being offset or being appealed.

4. Additional Considerations Involving § 424.530(a)(6)

The contractor shall also observe the following with respect to § 424.530(a)(6):

a. In determining whether an overpayment exists, the contractor need only review its own

records; it need not contact other contractors to determine whether the person or entity has an

overpayment in those contractor jurisdictions.

b. The instructions in this section 10.4.2.2(F) apply only to (i) initial enrollments and (ii) new

owners in a change of ownership.

c. The term “owner” under § 424.502 means any individual or entity that has any partnership

interest in, or that has 5 percent or more direct or indirect ownership of, the provider or supplier

as defined in sections 1124 and 1124A(A) of the Act.

d. If the person or entity had an overpayment at the time the application was filed but repaid it in

full by the time the contractor performed the review described in this section 10.4.2.2(F), the

contractor shall not deny the application based on § 424.530(a)(6).

G. Denial Reason 7– Medicare or Medicaid Payment Suspension (42 CFR § 424.530(a)(7))

(i) The provider or supplier, or any owning or managing employee or organization of the

provider or supplier, is currently under a Medicare or Medicaid payment suspension as defined

in §§ 405.370 through 405.372 or in § 455.23 of this chapter.

(ii) CMS may apply the provision in this paragraph (a)(7) to the provider or supplier under any

of the provider's, supplier's, or owning or managing employee's or organization's current or

former names, numerical identifiers, or business identities or to any of its existing enrollments.

(iii) In determining whether a denial is appropriate, CMS considers the following factors:

(A) The specific behavior in question.

(B) Whether the provider or supplier is the subject of other similar investigations.

(C) Any other information that CMS deems relevant to its determination.

H. Denial Reason 8– Home Health Agency (HHA) Capitalization (42 CFR § 424.530(a)(8))

An HHA submitting an initial application for enrollment:

a. Cannot, within 30 days of a CMS or Medicare contractor request, furnish supporting

documentation verifying that the HHA meets the initial reserve operating funds requirement in

42 CFR § 489.28(a); or

b. Fails to satisfy the initial reserve operating funds requirement in 42 CFR § 489.28(a).

I. Denial Reason 9– Hardship Exception Denial and Fee Not Paid (42 CFR § 424.530(a)(9))

“The institutional provider’s (as that term is defined in 42 CFR § 424.502) hardship exception

request is not granted, and the institutional provider does not submit the required application fee

within 30 days of notification that the hardship exception request was not approved.”

(This denial reason should only be used when the institutional provider fails to submit the

application fee after its hardship request was denied. The contractor shall use § 424.530(a)(1) as

a basis for denial when the institutional provider: (a) does not submit a hardship exception

request and fails to submit the application fee within the prescribed timeframes; or (b) submits

the fee, but it cannot be deposited into a government-owned account.)

J. Denial Reason 10– Temporary Moratorium (42 CFR § 424.530(a)(10))

“The provider or supplier submits an enrollment application for a practice location in a

geographic area where CMS has imposed a temporary moratorium.” (This denial reason applies

to initial enrollment applications and practice location additions.)

K. Denial Reason 11 – Prescribing Authority (42 CFR § 424.530(a)(11))

“1. A physician or eligible professional's Drug Enforcement Administration (DEA) Certificate of

Registration to dispense a controlled substance is currently suspended or revoked or is

surrendered in response to an order to show cause; or

2. The applicable licensing or administrative body for any state in which a physician or eligible

professional practices has suspended or revoked the physician or eligible professional's ability to

prescribe one or more drugs, and such suspension or revocation is in effect on the date the

physician or eligible professional submits the enrollment application to the Medicare contractor.”

(Except as otherwise stated in this chapter or in another CMS directive, the contractor need not

verify whether an individual’s DEA certificate was surrendered in response to a show cause

order.)

NOTE: With respect to (a)(11), PEOG -- rather than the contractor – will make all

determinations regarding whether this provision applies.

L. Denial Reason 12 (42 CFR § 424.530(a)(12) - Revoked Under Different Name,

Numerical Identifier, or Business Identity)

“The provider or supplier is currently revoked under a different name, numerical identifier, or

business identity, and the applicable reenrollment bar period has not expired. In making its

determination, CMS considers the following factors:

(i) Owning and managing employees and organizations (regardless of whether they have been

disclosed on the Form CMS-855 [or CMS-20134] application);

(ii) Geographic location;

(iii) Provider or supplier type;

(iv) Business structure; or

(v) Any evidence indicating that the two parties [the revoked provider/supplier and the newly-enrolling provider/supplier] are similar or that the provider or supplier was created to circumvent

the revocation or reenrollment bar.”

NOTE: With respect to (a)(12), PEOG – rather than the contractor – will make all determinations

regarding whether a provider or supplier was revoked under a different name, numerical

identifier or business identity.

M. Denial Reason 13 (42 CFR § 424.530(a)(13) - Affiliation that Poses an Undue Risk)

“The provider or supplier has or has had an affiliation under 42 CFR § 424.519 (specifically, the

factors listed in 42 CFR § 424.519(f)) that poses an undue risk of fraud, waste, and abuse to the

Medicare program.”

An affiliation is defined as any of the following:

(i) A 5 percent or greater direct or indirect ownership interest that an individual or entity has

in another organization.

(ii) A general or limited partnership interest (regardless of the percentage) that an individual

or entity has in another organization.

(iii) An interest in which an individual or entity exercises operational or managerial control

over, or directly or indirectly conducts, the day-to-day operations of another organization

(including, for purposes of § 424.519 only, sole proprietorships), either under contract or through

some other arrangement, regardless of whether or not the managing individual or entity is a W–2

employee of the organization.

(iv) An interest in which an individual is acting as an officer or director of a corporation.

(v) Any reassignment relationship under § 424.80.

NOTE: With respect to (a)(13), PEOG -- rather than the contractor – will make all

determinations regarding whether a provider or supplier has an affiliation per 42 CFR § 424.519

that poses an undue risk of fraud, waste and abuse.

N. Denial Reason 14 (42 CFR § 424.530(a)(14) – Other Program Termination or

Suspension)

“(1) The provider or supplier is currently terminated or suspended (or otherwise barred) from

participation in a state Medicaid program or any other federal health care program; or (2) the

provider or supplier’s license is currently revoked or suspended in a state other than that in which

the provider or supplier is enrolling.”

In determining whether a denial under § 424.530(a)(14) is appropriate, CMS considers the

following factors:

a. The reason(s) for the termination, suspension, or revocation;

b. Whether, as applicable, the provider or supplier is currently terminated or suspended (or

otherwise barred) from more than one program (for example, more than one state's Medicaid

program), has been subject to any other sanctions during its participation in other programs or by

any other state licensing boards, or has had any other final adverse actions (as that term is

defined in § 424.502) imposed against it; and

c. Any other information that CMS deems relevant to its determination.”

NOTE: With respect to (a)(14), PEOG -- rather than the contractor – will make all

determinations regarding whether a provider or supplier has a termination or suspension from

another program or has a license that is currently revoked or suspended in a state other than that

in which the provider or supplier is enrolling.

O. Denial Reason 15 (42 CFR § 424.530(a)(15) – Patient Harm)

“The physician or other eligible professional has been subject to prior action from a state

oversight board, federal or state health care program, Independent Review Organization (IRO)

determination(s), or any other equivalent governmental body or program that oversees, regulates,

or administers the provision of health care with underlying facts reflecting improper physician or

other eligible professional conduct that led to patient harm. In determining whether a denial is

appropriate, CMS considers the following factors:

(A) The nature of the patient harm

(B) The nature of the physician's or other eligible professional's conduct

(C) The number and type(s) of sanctions or disciplinary actions that have been imposed against

the physician or other eligible professional by a state oversight board, IRO, federal or state health

care program, or any other equivalent governmental body or program that oversees, regulates, or

administers the provision of health care. Such actions include, but are not limited to, procedures

or practices; (ii) required compliance appearances before state oversight board members; (iii)

license restriction(s) regarding the ability to treat certain types of patients; (iv)

administrative/monetary penalties; and (v) formal reprimand(s).

(D) If applicable, the nature of the IRO determination(s).

(E) The number of patients impacted by the physician's or other eligible professional's conduct

and the degree of harm thereto or impact upon.”

Section 424.530(a)(15) does not apply to actions or orders pertaining exclusively to either of the

following: (i) required participation in rehabilitation or mental/behavioral health programs; or (ii)

required abstinence from drugs or alcohol and random drug testing.

NOTE: With respect to (a)(15), PEOG -- rather than the contractor – will make all

determinations regarding whether this provision applies.

P. Denial Reason 17 – False Claims Act Judgment (42 CFR § 424.530(a)(17))

“(i) The provider or supplier, or any owner, managing employee or organization, officer, or

director of the provider or supplier, has had a civil judgment under the False Claims Act (31

U.S.C. 3729 through 3733) imposed against them within the previous 10 years.

(ii) In determining whether a denial under this paragraph is appropriate, CMS considers the

following factors:

(A) The number of provider or supplier actions that the judgment incorporates (for example, the

number of false claims submitted)

(B) The types of provider or supplier actions involved

(C) The monetary amount of the judgment

(D) When the judgment occurred

(E) Whether the provider or supplier has any history of final adverse actions (as that term is

defined in § 424.502)

(F) Any other information that CMS deems relevant to its determination.”

NOTE: With respect to (a)(17), PEOG -- rather than the contractor – will make all

determinations regarding whether this provision applies.

Q. Denial Reason 18 – Standard or Condition Violation (42 CFR § 424.530(a)(18))

(i) The independent diagnostic testing facility is non-compliant with any provision in 42 CFR

410.33(g).

(ii) The DMEPOS supplier is non-compliant with any provision in § 424.57(c).

(iii) The opioid treatment program is non-compliant with any provision in § 424.67(b) or (e).

(iv) The home infusion therapy supplier is non-compliant with any provision in § 424.68(c) or

(e).

(v) The Medicare diabetes prevention program is non-compliant with any provision in §

424.205(b) or (c).

(All denials based wholly, or in part, on § 424.530(a)(18) shall be sent to PEOG to obtain

approval of both the denial action itself and the denial letter. The contractor’s denial letter shall

cite the exact statutory and/or regulatory citation(s) containing the specific standard/condition

with which the provider/supplier is non-compliant. For a listing of some of these statutes and

regulations, refer to section 10.2 et seq. of this chapter.)

(See section 10.4.2.3 for more information regarding § 424.530(a)(18).)