CMS barred 11 DME suppliers from Medicare Advantage using the Preclusion List. The notice goes to your PECOS address, and most practices never check it.
Last Tuesday, CMS announced it had barred 11 durable medical equipment suppliers from receiving Medicare Advantage and Part D payments, tied to more than $3.4 billion in suspected fraudulent billing across 2025 and 2026. The coverage went exactly where you’d expect: claims for patients who were already dead, a Florida supplier that submitted $18.4 million in catheter claims in two days, beneficiaries who had never heard of the company billing for their braces.
It’s a good story. It’s also not the part of the announcement that should matter to a practice that has never billed a fraudulent claim in its life.
Two lines further down are the ones worth reading twice. Four of the eleven suppliers had already been revoked from Original Medicare and simply moved over to billing Medicare Advantage plans. And the tool CMS used to close that door is one most practices have never thought about: the Preclusion List.
The headline versus the plumbing
The headline is “CMS catches DME fraudsters.” The plumbing is how the Preclusion List actually works, and it’s worth understanding because it doesn’t only apply to fraudsters.
The list isn’t public. You can’t look yourself up. Only Medicare Advantage plans and Part D sponsors see it. Once an individual or entity is on it, MA plans deny payment for items and services they furnish, and pharmacies reject Part D prescriptions they write. Plans are required to warn affected patients before those denials begin, which means your patients can receive a letter about you before you’ve figured out anything is wrong.
Before anyone is added, CMS sends notice by email and letter explaining the reason, the effective date, and the appeal rights. That notice goes to the address on file in PECOS or NPPES. A provider is added once a first-level appeal is denied or the window to file one runs out.
Read that last paragraph again. The entire due-process protection runs through an address field.
Why this is a credentialing problem before it’s a compliance problem
Nobody running an honest practice thinks they’re headed for preclusion, and almost none of them are. The exposure isn’t that you commit fraud. It’s three quieter things happening at once.
First, the gap between Original Medicare and Medicare Advantage is closing. For years, a revocation on the fee-for-service side didn’t automatically follow a bad actor into MA. This announcement is CMS demonstrating that it will. Enforcement now follows the data across programs, and cross-program data is only as clean as your enrollment records.
Second, your NPI travels without you. Every DME claim needs an ordering provider. In the Texas case CMS described, beneficiaries told investigators they didn’t know the ordering providers on their claims. Somebody’s NPI was sitting in that field. When a supplier gets investigated, the ordering providers get records requests, and those requests go where every other CMS correspondence goes.
Third, enrollment addresses go stale in completely ordinary ways. The practice moved suites. The old billing company’s address is still on the PECOS record. A credentialing contractor you stopped using entered their own mailing address three years ago. A physician left the group and nobody updated anything. None of that is misconduct. All of it means a letter with an appeal deadline can land somewhere no one reads, and the clock runs whether or not anyone opens the envelope.
The way most practices would discover this isn’t a letter. It’s MA denials they can’t explain and a patient calling because the pharmacy wouldn’t fill a prescription.
The analytics don’t know you’re honest
CMS credited data analytics for stopping payments, in its words, “before the check clears.” One of the markers it called out: these suppliers had submitted no claims at all before 2025.
Pattern detection doesn’t measure intent. It measures deviation. A new practice, a newly enrolled provider, a service line launched this year, a sudden jump in volume on a code you’ve never billed before: statistically, all of those look like a new entrant. The overwhelming majority won’t end in preclusion. But more honest practices are going to meet prepayment review, records requests, and slower MA payment as these filters get more aggressive, and the practices that handle it well will be the ones whose enrollment data and documentation were already in order.
What to actually do with this
- Pull the PECOS and NPPES record for every rendering, ordering, and referring provider in your practice this week. Look specifically at the correspondence address and email. Ask one question for each: does a real person at this practice open mail sent there? If the answer involves a former office, a former vendor, or a personal email of a provider who left, fix it now.
- Assign an owner for CMS and MAC correspondence. Not a shared inbox, not “whoever gets the mail.” A named person who knows that anything with an appeal deadline gets escalated the day it arrives.
- Treat unfamiliar ordering activity as an alarm, not an annoyance. A records request for DME you don’t remember ordering, a patient asking about braces you never prescribed, a supplier faxing over an order to sign for someone you haven’t seen. Each of those is a signal your NPI may be in use somewhere it shouldn’t be. Document it and report it.
- Make enrollment updates part of offboarding. When a provider leaves or you change billing or credentialing partners, PECOS and NPPES updates belong on the same checklist as returning the laptop, not on a someday list.
- If you’re launching a new service line or growing volume fast, build the documentation before you scale. Assume the first months of billing will be looked at harder than the rest.
A note on last week
The comment period on the CY 2027 Physician Fee Schedule proposed rule, including the RPM and RTM direct-employment proposal, closed yesterday. The final rule typically lands in early November. If your remote monitoring program runs through a vendor, the staffing question from last week’s issue doesn’t pause while you wait for it.
The 2030 view
Last week’s thread was CMS narrowing the space between who bills a service and who performs it. This week’s is the same instinct pointed somewhere new: narrowing the space between programs. A bad actor revoked in Original Medicare can no longer count on Medicare Advantage as a fallback, and the mechanism that makes that possible is enrollment data flowing across both sides.
That changes what credentialing is. For most practices it has been paperwork, something you finish to get paid and revisit when a payer forces you to. By 2030 it looks a lot more like a revenue control. The practices that get hurt by this era of enforcement mostly won’t be the fraudsters. Those get caught. It’ll be honest groups whose enrollment records quietly drifted out of date while the systems reading them got much faster and much less forgiving.
When did someone at your practice last log into PECOS and read the correspondence address on file, and does mail sent there still get opened?
One quiet plumbing problem a week: the CMS deadline, payer behaviour or code change that reaches your claims before it reaches the headlines. Written by Mihir Rajput, Founder & CEO of Medalyze Medtech.
Healthcare 2030 is a weekly LinkedIn newsletter by Mihir Rajput.
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