A Simple Fix to Preserve the Status Quo in Light of Escobar

The Supreme Court’s ruling in Escobar creates a new tension between CMS’s historical “pay and chase” framework and the idea that when the government continues to pay claims when it has information regarding potential fraud, the conduct involved is not material to the payment decision. Admittedly, it would be premature to commence administrative proceedings to debar providers at the inception of an investigation. However, we humbly suggest a relatively simple and straightforward solution that allows both sides (CMS and providers) to maintain the status quo during an investigation.

When facts are brought to light that, if supported, may be material to CMS’s decision to pay, the agency should issue a notice to the entity submitting the claims:

This communication is notice to your organization that we are in possession of information regarding conduct which, if established, may be material to the decision to reimburse your organization and other individuals or organizations impacted by these reimbursement decisions for claims submitted by you or on your behalf. You are on notice that past and future claims for reimbursement are impacted by this information. This notice also applies to any entities contributing to the claims for reimbursement submitted by you or on your behalf to CMS.