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Why CMS is cracking down on some "direct to Medicare" startups following billing boom

Why CMS is cracking down on some "direct to Medicare" startups following billing boom

CMS is suspending payments to companies built on chronic care management and navigation codes. What's being targeted, and how to stay out of it.
• 6 min read •

Direct to consumer care companies be warned: some companies that bill monthly for certain Medicare care management services are getting hit with payment suspensions as part of a broader federal crackdown on fraud.

Health tech startups that operate in this market are “freaking out,” according to Adam Rattner, a health care compliance attorney.

Medicare billing codes designed to reimburse providers for helping patients navigate complex health needs have created lucrative opportunities for startups. Now, federal regulators are auditing companies suspected of abusing them. Not every company in the space is operating like a bad actor, but experts note that there are those taking advantage of a small subset of codes.

The most notable company that bills these codes is Solace Health, which recently raised $130 million for its series C to connect patients with patient advocates covered by insurance. But many others have popped up in subsequent years, each taking a variety of approaches. Not all of these companies have caught the attention of CMS, and as we'll explain it all comes down to intended use.

In this article we discuss:

  • What codes CMS is targeting.
  • Why direct-to-consumer startups are particularly vulnerable.
  • Tips on what you can do to get compliant.
  • How the rules are poised to change and the financial stakes.

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