What are the reasons why an application may be denied?

Answer:
Per 42 CFR §424.530(a) and Pub 100-08, Chapter 15, Section 8.4, contractors can simply deny an enrollment application if any of the situations described below are present. If an application is denied, the supplier will receive a letter detailing why the application was denied and explaining the appeal options available.

Denial Reason 1 (42 CFR §424.530(a)(1))

The supplier is determined not to be in compliance with the enrollment requirements in subpart P (of Part 424) or in the enrollment application applicable to its supplier type and has not submitted a plan of corrective action as outlined in part 488 of this chapter. Such non-compliance includes, but is not limited to, the following situations:
 
a.  The provider or supplier does not have a physical business address where services can be rendered. 

  • The provider or supplier does not have a place where patient records are stored to determine the amounts due such provider or other person. 
  • The provider or supplier is not appropriately licensed. 
  • The provider or supplier is not authorized by the federal/state/local government to perform the services that it intends to render. 
  • The provider or supplier does not meet CMS regulatory requirements for the specialty that it seeks to enroll as.  (See section 15.4.8 of this chapter for examples of suppliers that are not eligible to participate.)  This includes compliance with all DMEPOS Supplier Standards. 
  • 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.

b.  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 (e.g., marriage counselors.)) 
 
c.  The provider or supplier does not otherwise meet general enrollment requirements.

Denial Reason 2 (42 CFR §424.530(a)(2))

The supplier, any owner, managing employee, authorized or delegated official, medical director, supervising physician, or other health care personnel of the provider or supplier who is required to be reported on the CMS 855 is: 

  • Excluded from the 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
  • Debarred, suspended or otherwise excluded from participating in any other federal procurement or nonprocurement program or activity in accordance with section 2455 of the Federal Acquisition Streamlining Act

Denial Reason 3 (42 CFR §424.535(a)(3))

The supplier or any owner of the supplier was, within the 10 years preceding enrollment or revalidation of enrollment, convicted of a federal or state felony offense that CMS has determined to be detrimental to the best interests of the program and its beneficiaries. Offenses include:

  • 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 
  • 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 
  • Any felony that placed the Medicare program or its beneficiaries at immediate risk, such as a malpractice suit that results in a conviction of criminal neglect or misconduct 
  • Any felonies outlined in section 1128 of the Social Security Act.  

While, as discussed in section 15.27.2(D) of this chapter, a re-enrollment bar will be established for providers and suppliers whose billing privileges are revoked, this does not preclude the contractor from denying re-enrollment to a provider or 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. 
 
Denial Reason 4 (42 CFR §424.530(a)(4))

The supplier certified as 'true' false or misleading information on the enrollment application to be enrolled or maintain enrollment in the Medicare program.

Denial Reason 5 (42 CFR §424.530(a)(5))

CMS determines, upon onsite review or other reliable evidence, the supplier is not operational to furnish Medicare covered items or services, or does not meet Medicare enrollment requirements to furnish Medicare covered items or services.
 
42 C.F.R. 424.502 defines operational as follows:
 
"Operational means the provider or supplier has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered) to furnish these items or services." 

Denial Reason 9 (42 CFR §424.530(a)(9))

The supplier’s hardship exception request is not granted, and the supplier does not submit the required application fee within 30 days of notification that the hardship exception request was not approved.
 
42 CFR §424.530(a)(1) will be used as a basis for denial if the supplier: 

  • Does not submit a hardship exception request and fails to submit the application fee within the prescribed timeframes, or 
  • Submits the fee, but it cannot be deposited into a government-owned account.)

Denial Reason 10 (42 CFR §424.530(a)(10))
 
The 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.)
 
 
Denial Reason 11 (42 CFR §424.530(a)(11)) 

  • A physician or eligible professional's Drug Enforcement Administration (DEA) Certificate of Registration to dispense a controlled substance is currently suspended or revoked; or 
  • 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 drugs, and such suspension or revocation is in effect on the date the physician or eligible professional submits his or her enrollment application to the Medicare contractor.

Contact NSC

Email National Supplier Clearinghouse

Contact a specific NSC department

Telephone: 866-238-9652

IVR: 866-238-9652

Address:

National Supplier Clearinghouse

Palmetto GBA, AG-495

P.O. Box 100142

Columbia, SC 29202-3142

Other Palmetto GBA Sites

Palmetto GBA Home

DMEPOS Competitive Bidding Program

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