Date: March 3, 2023Attorney: Mohamed H. Nabulsi, Alexis Goldberger and Mena R. Francis

In April of 2022, the Biden-Harris Administration announced that Americans with Medicare Part B, including those enrolled in a Medicare Advantage plan (“Medicare Beneficiaries”), were eligible for up to eight Food and Drug Administration approved, authorized, or cleared over-the-counter COVID-19 test kits per month at no cost under this new program (the “Program”), distributable to the applicable beneficiaries by eligible providers (“Participants”) for the duration of the COVID-19 public health emergency.  In return for such test kits, Participants are entitled to reimbursement from Medicare.

It appears that the Centers for Medicare and Medicaid Services (“CMS”), through its Unified Program Integrity Contractors (“UPICs”), has begun taking action against Participants in connection with the Program, including the suspension of all Medicare payments to Participants, without prior notice, allegedly based on “credible allegations of fraud.”  In some cases, CMS has cited testimony from less than a handful of Medicare Beneficiaries, who claimed not to have ordered the test kits, to constitute the “credible allegations of fraud.”

Fortunately, providers are constitutionally entitled to appeal a CMS payment suspension subject to a timely filing requirement. To that end, we have begun challenging CMS on the validity of its investigative/auditing practices that culminate in the finding of the requisite “credible allegations of fraud”, as well as the propriety of a full-scale payment suspension as an interim remedial measure despite the existence of other, less drastic measures that are equally protective of Medicare program funds, such as a partial payment suspension applicable to OTC COVID-19 test kits (instead of a blanket suspension affecting other items and services that are not the subject of the fraud allegation), a prepayment edit, or provider education.  Additionally, our appeals are also challenging what appears to be CMS’s enforcement of rules that are not expressly prescribed in applicable Program guidance. 

Given the deleterious effects a payment suspension can have on a provider’s viability, and the potential that a payment suspension may be only a precursor to more severe adverse actions by CMS (e.g., revocation of Medicare billing privileges), it is imperative that Participants thoroughly rebut CMS’s allegations when exercising their appeal rights in an effort to decrease the duration of the suspension period and the likelihood of further adverse action by CMS.  Additionally, for Participants who have not been the subject of an adverse action by CMS vis-à-vis the Program, having the proper safeguards and documentation in place is key to avoiding CMS scrutiny/mitigating the risk of an adverse action.  It behooves Participants to self-audit their policies and procedures related to the Program to ensure compliance with the relevant Program guidance/take corrective actions. For example, Participants should: (i) avoid proactively contacting beneficiaries (either directly or through an outside vendor), (ii) not offer an “auto-ship” option, and (iii) ensure that beneficiaries are presented with the option to order less than eight OTC COVID-19 test kits for the applicable month. Although implementation of safeguards may impose additional burdens and expenses on Participants, we view them as necessary in light of the current aggressive enforcement climate. 

How Mandelbaum Barrett PC ‘s Healthcare Team Can Help

If you have received a notice from CMS or any of its UPICs or contractors, including SafeGuard Services or Novitas, related to your participation in the Program/billing for OTC COVID-19 test kits, requesting medical records, or informing you of a payment suspension or other action, or otherwise would like to discuss your policies and procedures related to the Program, please contact Mohamed Nabulsi at