Application Fees and Additional Screening Requirements

 Application Fees and Additional Screening Requirements 

Application Fees 

A.   Background  

Pursuant to 42 CFR §424.514 - and with the exception of physicians, non-physician practitioners, physician group practices and non-physician group practices – institutional providers that are (1) initially enrolling in Medicare, (2) adding a practice location, or (3) revalidating their enrollment information per 42 CFR §424.515 (regardless of whether the revalidation application was requested by CMS or voluntarily submitted by the provider or supplier), must submit with their application:  

• An application fee in an amount prescribed by CMS, and/or 

• A request for a hardship exception to the application fee. 

This requirement applies to applications that the contractor receives on or after March 25, 2011.  For purposes of this requirement, the term “institutional provider,” as defined in 42 CFR §424.502, means any provider or supplier that submits a paper Medicare enrollment application using the Form CMS-855A, Form CMS-855B (not including physician and non-physician practitioner organizations), Form CMS-855S or associated Internet-based Provider Enrollment, Chain and Ownership System (PECOS) enrollment application.  

A physician, non-physician practitioner, physician group, or non-physician practitioner group that is enrolling as a supplier of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) via the Form CMS-855S application must submit the required application fee with its Form CMS-855S form.  

B.   Fee  

1.  Amount  

The application fee must be in the amount prescribed by CMS for the calendar year (1) in which the application is submitted (for Internet-based PECOS applications) or (2) of the postmark date (for paper applications).  

The fee for March 25, 2011 through December 31, 2011 was $505.00.  The fee for January 1, 2016 through December 31, 2016 is $554.00.  Fee amounts for future years will be adjusted by the percentage change in the consumer price index (for all urban consumers) for the 12-month period ending on June 30 of the prior year.  

CMS will give the contractor and the public advance notice of any change in the fee amount for the coming calendar year.  2.   Non-Refundable  Per 42 CFR §424.514(d)(2)(v), the application fee is non-refundable, except if it was submitted with one of the following:  

a. A hardship exception request that is subsequently approved;  

b. An application that was rejected prior to the contractor’s initiation of the screening process, or 

c. An application that is subsequently denied as a result of the imposition of a  temporary moratorium under 42 CFR §424.570.  

(For purposes of (B)(2)(b) above, the term “rejected” includes applications that are returned pursuant to section 15.8.1 of this chapter.)  In addition, the fee should be refunded if:  

• It was not required for the transaction in question (e.g., the provider submitted a fee with its application to report a change in phone number).  

• It was not part of an application submission.  3.   Format  The provider or supplier must submit the application fee electronically through https://pecos.cms.hhs.gov/pecos/feePaymentWelcome.do , either via credit card, debit card, or check.  Also, with respect to the application fee requirement:  

• The fee is based on the Form CMS-855 application submission, not on how enrollment records are created in PECOS.  For instance, suppose a hospital submits an initial Form CMS-855A.  In section 2A2 of the application, the hospital indicates that it has a psychiatric unit and a rehabilitation unit.  

Separate PECOS enrollment records must be created for each unit. However, only one application fee is required because only one Form CMS-855A application was submitted.  

• A physician/non-physician practitioner clinic or group practice enrolling via the Form CMS-855B is exempt from the fee even if it is: (1) tribally-owned/operated or (2) hospital-owned.  However, if a hospital is adding a physician/non-physician practitioner clinic or group practice to its Form CMS-855A enrollment, a fee is required because the hospital is adding a practice location. 

C.   Hardship Exception 

1.   Background  

A provider or supplier requesting a hardship exception from the application fee must include with its enrollment application a letter (and any supporting documentation) that describes the hardship and why the hardship justifies an exception.  

If a paper Form CMS-855 application is submitted, the hardship exception letter must accompany the application; if the application is submitted via Internet-based PECOS, the hardship exception letter must accompany the certification statement.  Hardship exception letters shall not be considered if they were submitted separately from the application or certification statement, as applicable.  

If the contractor receives a hardship exception request separately from the application or certification statement, it shall: (1) return it to the provider, and (2) notify the provider via letter, e-mail or telephone that it will not be considered.  

2.   Criteria for Determination  

The application fee generally should not represent a significant burden for an adequately capitalized provider or supplier.  Hardship exceptions should not be granted when the provider simply asserts that the imposition of the application fee represents a financial hardship.  The provider must instead make a strong argument to support its request, including providing comprehensive documentation (which may include, without limitation, historical cost reports, recent financial reports such as balance sheets and income statements, cash flow statements, tax returns, etc.).  

Other factors that may suggest that a hardship exception is appropriate include the following:   

(a) Considerable bad debt expenses,  

(b) Significant amount of charity care/financial assistance furnished to patients,   

(c) Presence of substantive partnerships (whereby clinical, financial integration are present) with those who furnish medical care to a disproportionately low-income population;  

(d) Whether an institutional provider receives considerable amounts of funding  through disproportionate share hospital payments, or 

(e) Whether the provider is enrolling in a geographic area that is a Presidentially-declared disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act).  

Upon receipt of a hardship exception request with the application or certification statement, the contractor shall send the request and all documentation accompanying the request via regular mail, fax, or e-mail to its CMS Provider Enrollment & Oversight Group Business Function Lead (PEOG BFL).  

CMS has 60 calendar days from the date of the contractor’s receipt of the hardship exception request to determine whether it should be approved; during this period, the contractor shall not commence processing the provider’s application.  

CMS will communicate its decision to the provider and the contractor via letter, after which the contractor shall carry out the applicable instructions in section 19.1(D) below.  If the provider fails to submit appropriate documentation to support its request, the contractor is not required to contact the provider to request it.  

The contractor can simply forward the request “as is” to its PEOG BFL.  Ultimately, it is the provider’s responsibility to furnish the necessary supporting evidence at the time it submits its hardship exception request.  

D.   Receipt  

Upon receipt of a paper application (or, if the application is submitted via Internet-based PECOS, upon receipt of a certification statement) from a provider or supplier that is otherwise required to submit an application fee, the contractor shall first determine whether the application is an initial enrollment, a revalidation, or involves the addition of a practice location.  

If the application does not fall within any of these categories, the contractor shall process the application as normal.  If it does fall within one of these categories, the contractor shall undertake the following: 

a.   Determine whether the provider has: 

(1) paid the application fee via Pay.gov, and/or 

(2) included a hardship exception request with the application or certification statement.  

b.   If the provider: 

i. Has neither paid the fee nor submitted the hardship exception request, the contractor shall send a letter to the provider notifying it that it has 30 days from the date of the letter to pay the application fee via Pay.gov, and that failure to do so will result in the rejection of the provider’s application (for initial enrollments and new practice locations) or revocation of the provider’s Medicare billing privileges (for revalidations).  

The letter shall also state that because a hardship exception request was not submitted with the original application, CMS will not consider granting a hardship exception in lieu of the fee. 

During this 30-day period, the contractor shall determine whether the fee has been paid via Pay.gov.  If the fee is paid within the 30-day period, the contractor may begin processing the application as normal.  

If the fee is not paid within the 30-day period, the contractor shall reject the application (initial enrollments and new locations) under 42 CFR §424.525(a)(3) or revoke the provider’s Medicare billing privileges under 42 CFR §424.535(a)(6) (revalidations).  

If, at any time during this 30-day period, the provider submits a Pay.gov receipt as proof of payment, the contractor shall begin processing the application as normal. 

ii. Has paid the fee but has not submitted a hardship exception request, the contractor shall begin processing the application as normal.  

iii. Has submitted a hardship exception request but has not paid a fee, the contractor shall send the request and all documentation accompanying the request via regular mail, fax, or e-mail to its PEOG BFL.  

If CMS: 

a.  Denies the hardship exception request, it will notify the provider in the decision letter (on which the contractor will be copied) that the application fee must be paid within 30 calendar days from the date of the letter.  During this 30-day period, the contractor shall determine whether the fee has been submitted via Pay.gov.  

If the fee is not paid within 30 calendar days, the contractor shall deny the application (initial enrollments and new locations) pursuant to 42 CFR §424.530(a)(9) or revoke the provider’s Medicare billing privileges under 42 CFR §424.535(a)(6) (revalidations). 

If, at any time during this 30-day period, the provider submits a Pay.gov receipt as proof of payment, the contractor shall begin processing the application as normal. 

b.  Approves the hardship exception request, it will notify the provider of such in the decision letter (on which the contractor will be copied).  The contractor shall begin processing the application as normal. 

iv. Has submitted a hardship exception request and has paid a fee, the contractor shall send the request and all documentation accompanying the request via regular mail, fax, or e-mail to its PEOG BFL.  

As the fee has been paid, the contractor shall begin processing the application as normal. 

In all cases, the contractor shall not begin processing the provider’s application until: 

(1) the fee has been paid, or 

(2) the hardship exception request has been approved.  

E.   Year-to-Year Transition  

There may be isolated instances where, at the end of a calendar year, an institutional provider pays the fee amount for that year (Year 1), yet the submission date (for Internet-based PECOS applications) or the application postmark date (for paper applications)  falls in the beginning of the following year (Year 2). 

Assuming that Year 2’s fee is higher than Year 1’s, the provider will be required to pay the Year 2 fee.  The contractor shall not begin processing the application until the entire fee amount has been paid. 

Accordingly, the contractor shall (1) send an e-mail to its PEOG BFL requesting a full refund of the fee and including any pertinent documentation in support of the request, and (2) send a letter to the provider notifying it that it has 30 days from the date of the letter to pay the correct fee amount (i.e., the Year 2 amount) via Pay.gov, and that failure to do so will result in the rejection of the provider’s application (for initial enrollments and new practice locations) or revocation of the provider’s Medicare billing privileges (for revalidations).  

The letter shall also state that because a hardship exception request was not submitted with the original application, CMS will not consider granting a hardship exception in lieu of the fee. 

During this 30-day period, the contractor shall determine whether the correct fee has been paid via Pay.gov.  If it has been, the contractor may begin processing the application as normal.  If it is not paid within the 30-day period, the contractor shall reject the application (initial enrollments and new locations) under 42 CFR §424.525(a)(3) or revoke the provider’s Medicare billing privileges under 42 CFR §424.535(a)(6) (revalidations).  

If, at any time during this 30-day period, the provider submits a Pay.gov receipt as proof that the correct fee amount (i.e., the Year 2 amount) has been paid, the contractor shall begin processing the application as normal.  

F.   Appeals of Hardship Determinations 

A provider may appeal CMS’ denial of its hardship exception request via the procedures outlined below:  

1. If the provider is dissatisfied with CMS’ decision to deny a hardship exception request, it may file a written reconsideration request with CMS within 60 calendar days from receipt of the notice of initial determination (e.g., CMS’ denial letter).  The request must be signed by the individual provider or supplier, a legal representative, or any authorized official within the entity. 

Failure to file a reconsideration request within this timeframe is deemed a waiver of all rights to further administrative review.  The reconsideration request should be mailed to:  Centers for Medicare & Medicaid Services Center for Program Integrity Provider Enrollment & Oversight Group 7500 Security Boulevard Mailstop: AR-18-50   Baltimore, MD 21244-1850 

Notwithstanding the filing of a reconsideration request, the contractor shall still carry out the post-hardship exception request instructions in subsections (D)(b)(iii)(a) and (iv) above, as applicable.  A reconsideration request, in other words, does not stay the execution of the instructions in section 19.1(D) above.  CMS has 60 calendar days from the date of the reconsideration request to render a decision.  

The reconsideration shall be: 

(a) Conducted by a CMS staff person who was independent from the initial decision to deny the hardship exception request.  

(b) Based on CMS’ review of the original letter and documentation submitted by the provider. 

Upon receipt of the reconsideration, CMS will send a letter to the provider or supplier to acknowledge receipt of its request.  In its acknowledgment letter, CMS will advise the requesting party that the reconsideration will be conducted and a determination issued within 60 days from the date of the request.  If CMS denies the reconsideration, it will notify the provider of this via letter, with a copy to the contractor.  

If CMS approves the reconsideration request, it will notify the provider of this via letter, with a copy to the contractor, after which the contractor shall process the application as normal, or, to the extent applicable:  

i. If the application has already been rejected, request that the provider resubmit the application without the fee, or   

ii. If Medicare billing privileges have already been revoked, reinstate said billing privileges in accordance with existing instructions and request that the provider resubmit the application without the fee. 

Corrective Action Plans (CAPs) may not be submitted in lieu of or in addition to a request for reconsideration of a hardship exception request denial.  

2.   If the provider is dissatisfied with the reconsideration determination regarding the application fee, it may request a hearing before an Administrative Law Judge (ALJ).  Such an appeal must be filed, in writing, within 60 days from receipt of the reconsideration decision. 

ALJ requests should be sent to:   

Department of Health and Human Services Departmental Appeals Board (DAB) Civil Remedies Division, Mail Stop 6132 330 Independence Avenue, S.W. Cohen Bldg, Room G-644 Washington, D.C. 20201 ATTN: CMS Enrollment Appeal  

Failure to timely request an ALJ hearing is deemed a waiver of all rights to further administrative review. 

If the ALJ reverses PEOG’s reconsideration decision and approves the hardship exception request, and the application has already been rejected, the contractor – once PEOG informs it of the ALJ’s decision - shall notify the provider via letter, e-mail or telephone that it may resubmit the application without the fee.  If the provider’s Medicare billing privileges have already been revoked, the contractor shall reinstate said billing privileges in accordance with existing instructions and request that the provider resubmit the application without the fee. 

3. If the provider is dissatisfied with the ALJ’s decision, it may request Board review by the Departmental Appeals Board (DAB). Such request must be filed within 60 days after the date of receipt of the ALJ‘s decision.  Failure to timely request a review by the DAB is deemed a waiver of all rights to further administrative review. 

If the DAB reverses the ALJ’s decision and approves the hardship exception request, and the application has already been rejected, the contractor - once PEOG informs it of the DAB’s decision - shall notify the provider via letter, e-mail or telephone that it may resubmit the application without the fee.  

If the provider’s Medicare billing privileges have already been revoked, the contractor shall reinstate said billing privileges in accordance with existing instructions and request that the provider resubmit the application without the fee. To the extent permitted by law, a provider or supplier dissatisfied with a DAB decision may seek judicial review by timely filing a civil action in a United States District Court. Such request shall be filed within 60 days from receipt of the notice of the DAB‘s decision.  

G.   Miscellaneous  

The contractor shall abide by the following: 

1.   Paper Checks Submitted Outside of Pay.gov – As stated earlier, all payments must be made via Pay.gov.  Should the provider submit an application with a paper check or any other hard copy form of payment (e.g., money order), the contractor shall not deposit the instrument.  

It shall instead treat the situation as a non-submission of the fee and follow the instructions in (D)(b)(i) or (iii) above (depending on whether a hardship exception request was submitted).  When sending the applicable letter requesting payment within 30 days, the contractor shall explain that all payments must be made via.Pay.gov , stamp the submitted paper check "VOID," and include the voided paper check with the letter. 

2.   Practice Locations – DMEPOS suppliers, federally qualified health centers (FQHCs), and independent diagnostic testing facilities (IDTFs) must individually enroll each site.  Consequently, the enrollment of each site requires a separate fee.  For all other providers and suppliers (except physicians, non-physician practitioners, and physician and non-physician practitioner groups, none of which are required to submit the fee), a fee must accompany any application that adds a practice location.  (This includes the addition of a hospital unit – such as a psychiatric unit – in section 4 of the Form CMS-855A.)  

If multiple locations are being added on a single application, however, only one fee is required.  The fee for providers and suppliers other than DMEPOS suppliers, FQHCs, and IDTFs is based on the application submission, not the number of locations being added on a single application. 

3.   Other Application Submissions – A provider or supplier need not pay an application fee if the application is:  

• Reporting a change of ownership via the Form CMS-855B or Form CMS-855S. (For providers and suppliers reporting a change of ownership via the Form CMS-855A, the ownership change does not necessitate an application fee if the change does not require the provider or supplier to enroll as a new provider or supplier.) 

• Reporting a change in tax identification number (whether Part A, Part B, or DMEPOS).  

• Requesting a reactivation of the provider’s Medicare billing privileges unless the provider had been deactivated for failing to respond to a revalidation request, in which case the resubmitted application constitutes a revalidation (not a reactivation) application, hence requiring a fee. 

• Changing the physical location of an existing practice location (as opposed to reporting an additional/new practice location).  

The application fee requirement is separate and distinct from the 

site visit requirement and risk categories discussed below. 

Physicians, non-physician practitioners, physician groups and non-physician practitioner groups are exempt from the application fee even if they fall within the “high” level of categorical screening per section 15.19.2.5 of this chapter.  Similarly, physical therapists enrolling as individuals or group practices need not pay an application fee even though they fall within the “moderate” level of categorical screening and are subject to a site visit. 

4.   Non-Payment of the Fee - If the application is rejected or denied due to non-payment of the fee, the contractor shall:  

• Enter the application into PECOS, with the receipt date being the date on which the contractor received the application in its mailroom.  

• Indicate in PECOS that a developmental request was made.   

• Switch the enrollment record to a “denied” or “rejected” status (as applicable) per section 15.19.1(D). 

• Notify the applicant of the rejection or denial in accordance with section 15.19.1(D). 

5.   Refund Requests – Unless otherwise approved by CMS, the provider must request a refund no later than 150 days from the date it submitted its application.  In its request, the provider shall include documentation acceptable to process the refund request. 

For credit card refunds, the provider shall include its Pay.gov receipt or the Pay.gov tracking ID number; if the fee was paid via ACH Debit, a W-9 is required.