The Centers for Medicare & Medicaid Services (CMS) recently announced implementation of validation edits in the Medicare enrollment system that may cause claim denials. These validation edits will apply to hospital outpatient prospective payment system (OPPS) providers that operate multiple service locations and will be fully implemented in July 2019. Full details of the information can be found here. The edits require that all supplier service locations on record with Medicare exactly match claims submitted by providers. The validations use the Provider Enrollment, Chain and Ownership System (PECOS) file to compare service locations with addresses reported on claims.

The changes in Medicare processing rules stem from the Bipartisan Budget Act of 2015 and resulting CMS “site-neutral” payment policies. Specifically, non-excepted services provided at an off-campus provider-based department (PBD) of a hospital are paid under the Medicare physician fee schedule (MPFS) rates — not the OPPS rates — based on a “relativity adjuster” to the OPPS rate. To determine the applicable payment method, Medicare systems use the service facility information, including address, on an institution claim.

Under the new validation edits, claims submitted by off-campus PBDs that contain even slight discrepancies in service facility location will be denied. CMS originally rolled out these edits in 2017, but they remained inactive with respect to claim denials while CMS conducted several rounds of testing. Beginning in July 2019, however, CMS will direct Medicare administrative contractors (MACs) to permanently implement these validation edits and return such claims that contain facility locations that are not an exact match to the provider.

In light of these changes, providers should take these immediate steps to avoid claim denials.

Identify Even Slight Discrepancies in Listed Facility Locations Now

The validation edits require that facility addresses listed on claims be exact matches to the addresses listed on PECOS or Form CMS-855B. Even slight discrepancies will result in a claim denial. Examples of such discrepancies may include spelling variations such as “Road” versus “Rd.” or “Suite” versus “Ste.” Other examples of discrepancies may include slight spelling errors or mismatched suite numbers.

If Discrepancies Exist, Correct Submitted Claims or Immediately Submit an updated CMS‑855B via PECOS

Providers can make necessary changes to addresses reported on claims so that there is an exact match. If, however, providers need to add a new or correct an existing practice location address in PECOS, they will need to submit a new or change Form CMS-855B enrollment application in PECOS. Providers should take immediate corrective action when necessary to avoid delays in claim processing.

Ensure That Billing Staff Is Aware of Address Listing Protocols

Once a provider confirms all addresses are appropriate, providers should ensure that CMS rules and protocols are followed for including addresses on all future claim forms. Providers should be certain that all billing systems containing location records exactly match the location addresses on file in the Medicare enrollment record.


Providers should closely examine, review and continue to monitor their systems to ensure accuracy in billing. This includes easily missed but correctable information such as the facility’s address and suite number. Providers must stay vigilant or, in the case of hospital outpatient departments, face costly denied claims.

All providers/suppliers have a direct responsibility to report any changes to their Medicare enrollment record. Ownership changes, location changes, adverse legal actions must be reported within 30 days. Other changes must be reported within 90 days. Maintenance of a provider/supplier enrollment record is the sole responsibility of the enrolled organization or provider.