CMS Calls on States to Submit Medicaid Provider Revalidation Strategies: What Providers Need to Know

Key Takeaways

• The Centers for Medicare and Medicaid Services has directed states to expedite Medicaid provider revalidation, requiring two-year revalidation strategies within 30 days and focusing on high-risk providers not screened in the past 12 months.
• Providers with outdated enrollment information or gaps in National Provider Identifiers use may face deactivation, denied claims, or payment holds if they cannot respond quickly to revalidation requests.
• Change of ownership transactions will likely trigger enhanced scrutiny; buyers and sellers should confirm revalidation status and build appropriate risk allocations into deal documents.

The Centers for Medicare and Medicaid Services (“CMS”) administrator Mehmet Oz formally requested two-year provider revalidation strategies that include a description of how each state ensures the accuracy of provider enrollment data through revalidation and other oversight approaches from all state governors and Medicaid directors. This request represents a significant escalation of CMS’ fraud-prevention efforts and indicates heightened scrutiny for providers, particularly those in high-risk categories.

The April 23 letter requires states to notify CMS within 10 days of their plans to revalidate high-risk providers and to submit comprehensive two-year revalidation strategies within 30 days. States must also increase oversight of high-risk providers through more frequent revalidation intervals beyond the standard five-year minimum and prioritize providers not screened in the past 12 months.

As a result, state Medicaid agencies are expected to tighten screening, increase revalidation frequency for high-risk provider types, and use data analytics to confirm enrolled providers remain eligible. Providers with outdated enrollment information or gaps in National Provider Identifier (“NPI”) use may face deactivation, denied claims, or payment holds if they cannot respond quickly to revalidation requests.

Implications for Changes of Ownership

Providers contemplating or undergoing a change of ownership (“CHOW”) should pay especially close attention to these developments. CMS has tightened CHOW screening requirements, particularly for high-risk providers such as home health agencies, hospices, durable medical equipment (“DME”) suppliers, and skilled nursing facilities (“SNFs”). Outstanding revalidation requests can delay CHOW processing, and the 36-month rule (now applicable to hospices as well as home health agencies) may require new owners to enroll as new providers rather than assume existing billing privileges. State-by-state Medicaid enrollment variations can also create billing gaps. Buyers and sellers should confirm revalidation status before finalizing any transaction and build appropriate risk allocations into their deal documents.

What Providers Should Do Now

Providers should take several proactive steps:

1. verify that all enrollment data in PECOS and with state Medicaid agencies is current and accurate;
2. report any changes in ownership or legal business structure within 30 days;
3. before finalizing any transaction, confirm revalidation status with the applicable MAC and state Medicaid agency; and
4. high-risk category providers should prepare for enhanced screening upon any ownership change, including site visits and fingerprinting.

Medicaid provider enrollment integrity is a top enforcement priority for CMS. For providers, particularly those in high-risk categories or navigating a change of ownership, staying ahead of these requirements is essential to protecting billing privileges and ensuring continuity of care.

For more information, please contact AGG CHOW attorneys Hedy Rubinger or Maggie Callahan.

The Arnall Golden Gregory Change of Ownership (“CHOW”) team leads all regulatory aspects of healthcare transactions for investors, operators, managers, capital partners, and developers of every size in all 50 states. The team streamlines the regulatory process so that clients close their transactions on or ahead of schedule. Whether obtaining licensure and Medicare/Medicaid approvals, structuring transactions to expedite closings, anticipating issues to minimize cash flow disruption, negotiating regulatory terms in deal documents, creatively resolving diligence issues, or advising on CHOW guidelines and compliance, the team provides extensive experience and practical solutions. To date, the CHOW team has served as primary regulatory counsel in transactions valued at more than $35 billion.​​