[Federal Register Volume 59, Number 136 (Monday, July 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17219]


[[Page Unknown]]

[Federal Register: July 18, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 421

[BPO-105-P]
RIN 0938

 

Medicare Program; Part B Advance Payments to Suppliers Furnishing 
Items or Services under Medicare Part B

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

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SUMMARY: This rule would establish requirements and procedures for 
advance payments to suppliers of Medicare Part B services. An advance 
payment would be made only if the carrier is unable to process a claim 
timely, the supplier requests advance payment, and we determine that 
payment of interest is insufficient to compensate the supplier for loss 
of the use of the funds and approve the advance payment.
    These rules are necessary to correct deficiencies noted by the 
General Accounting Office in its report of a review of current 
procedures for making advance payments.
    The intent of this proposal is to ensure more efficient and 
effective administration of this aspect of the Medicare program.

DATES: Written comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5:00 p.m. on 
September 16, 1994.

ADDRESSES: Mail written comments to the following address: Health Care 
Financing Administration, Department of Health and Human Services, 
Attention: BPO-105-P, P.O. Box 26688, Baltimore, MD 21207.
    If you prefer, you may deliver your written comments to one of the 
following addresses: Room 309-G, Hubert H. Humphrey Building, 200 
Independence Ave., SW., Washington, DC 20201, or, Room 132, East High 
Rise Building, 6325 Security Boulevard, Baltimore, MD 21207.
    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPO-105-P. Comments received timely will be available for 
public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in Room 309-G of 
the Department's offices at 200 Independence Ave., SW., Washington, DC, 
on Monday through Friday of each week from 8:30 a.m. to 5:00 p.m. 
(phone: 202-690-7890).
    For comments that relate to information collection requirements, 
mail a copy of comments to: Allison Herron Eydt, HCFA Desk Officer, 
Office of Information and Regulatory Affairs, Room 10235, New Executive 
Office Building, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Jim O'Shea, (410) 966-7521.

SUPPLEMENTARY INFORMATION:

I. Background

A. General

    The Medicare Supplementary Medical Insurance (SMI or Part B) 
program is a voluntary program that pays all or part of the costs for 
physicians' services; outpatient hospital services; certain home health 
services; services furnished by rural health clinics, ambulatory 
surgical centers and comprehensive outpatient rehabilitation 
facilities; and certain other items or medical and hospital health 
services not covered by the Medicare Hospital Insurance program.

B. Use of Carriers

    Statutory Basis--Under section 1842(a) of the Social Security Act 
(the Act), public and private organizations and agencies may 
participate in the administration of the Medicare program under 
contracts entered into with the Secretary. These Medicare contractors, 
known as ``carriers,'' process and pay Part B claims.
    Usually, these payments are made on a claim-by-claim basis. 
Regulations at 42 CFR Part 421, Subpart C--Carriers, set forth the 
functions performed by Medicare carriers, which include:
     Determining the eligibility status of a beneficiary.
     Determining whether the services for which payment is 
claimed is covered under Medicare, and if so, the correct payment 
amounts.
     Making correct payment to the beneficiary or the supplier 
of the items or services, as appropriate.
    Carriers must also observe the ``prompt payment'' requirements set 
forth in section 1842(c) of the Act. As amended by section 13568 of the 
Omnibus Budget Reconciliation Act of 1993, Public Law 103-66, enacted 
on August 10, 1993, this provision currently requires interest to be 
paid on all ``clean'' claims for which payment is not issued within 30 
calendar days.
    Advance Payments to Suppliers--Under Part B, a carrier makes an 
advance partial payment to a supplier if the carrier is not able to 
process a claim. (For purposes of the Medicare program, Sec. 400.202 of 
the HCFA rules defines ``supplier'' as a physician or other 
practitioner, or an entity other than a provider, that furnishes health 
care services under Medicare, and ``services'' as medical care or 
services and items, such as medical diagnosis and treatment, drugs and 
biologicals, supplies, appliances, and equipment, medical social 
services, and use of hospital or SNF facilities.) An advance payment is 
made to a supplier eligible to receive Medicare payments.
    In rare instances, such as when major administrative changes are 
made in processing Part B claims, a backlog of pending claims may 
occur. To avoid or reduce payment of interest on claims that are not 
processed timely, we sometimes authorize advance payments for pending 
backlogged claims, subject to later recoupment, once the claims are 
processed. However, since generally, Medicare Part B payments are made 
after a claim is processed, there are no regulations or guidelines for 
making advance payments.

II. General Accounting Office Report Finding--''HCFA Should Improve 
Internal Controls Over Part B Advance Payments''

    As a result of administrative changes made in processing Part B 
claims at two carriers in two States during 1988, a large backlog of 
pending claims occurred. In order to minimize the effects of these 
disruptions on suppliers, in 1989 we authorized the two carriers to 
make advance payments for pending backlogged claims, subject to later 
recoupment, once the claims were actually processed. The difficulties 
experienced by the suppliers resulted in the General Accounting Office 
(GAO) investigating these two carriers and their claims processing 
systems. This investigation led the GAO to question whether we had 
sufficient guidelines and safeguards in place to ensure that advance 
payments were promptly recouped.
    The GAO found that inconsistencies in handling occurred and 
administrative problems resulted from the lack of specific regulations 
and guidelines. The criteria for approving advance payments by these 
two carriers differed, as did progress in recouping these payments. One 
carrier made advance payments only to medical equipment suppliers. It 
based these advances on the level of payments the suppliers had 
received in the previous year. Another carrier, in contrast, made 
advance payments to all suppliers. It based the advance payment on the 
value of claims that had been on hand at the carrier for more than 14 
days.
    In August 1989, one carrier began to recoup advance payments either 
through repayments from suppliers or by withholding a portion of 
subsequent payments to them. By February 1990, the carrier had recouped 
about 94 percent of the $1.3 million it had advanced to the suppliers; 
by September 1990, $17,071 was outstanding, including $14,592 owed by 
one supplier that the carrier was unable to contact.
    The second carrier recouped advance payments by withholding 25 
percent of subsequent payments to medical equipment suppliers and 50 
percent of payments to other suppliers. In February 1990, when the 
carrier began more aggressive efforts to recoup advance payments, about 
$34 million of the $80 million it had advanced to the suppliers was 
still outstanding. By September 1990, $14 million (about 18 percent of 
the amount advanced) had not yet been recouped. Suppliers who had not 
repaid their advances had, in effect, received an interest-free loan 
from the Medicare Trust Fund.
    The carrier encountered particular difficulty in recouping advances 
made to suppliers that used more than one Medicare billing number. Some 
of these suppliers had obtained an advance under one number and later 
billed Medicare exclusively under the other number, frustrating efforts 
to offset new payments to collect the advance payment. The carrier 
noted this problem in January 1990 and began to identify suppliers who 
had used multiple billing numbers to obtain payments. The carrier then 
identified other related numbers the suppliers used for billing 
Medicare and withheld payments from these claims.
    As a result of its review of these cases, the GAO recommended that 
we determine whether it is appropriate for carriers to make advance 
payments to suppliers and that we be in compliance with the Federal 
Manager's Financial Integrity Act (31 U.S.C. 3512) when making these 
determinations.
    The Federal Managers' Financial Integrity Act requires Federal 
agencies to establish internal control systems that provide reasonable 
assurance that agency expenditures are consistent with laws and 
regulations. The Comptroller General, in implementing this Act, has 
prescribed internal control standards for agency use. These standards 
require that significant transactions must be ``authorized and executed 
only by persons acting within the scope of their authority.'' In 
applying this standard to Part B advance payments, the GAO expressed 
the opinion that HCFA, rather than the carriers, should authorize 
advance payments, to be executed by the carriers. In addition, the GAO 
asserted that we should clearly communicate our approval to make 
advance payments to carriers and include the terms under which these 
payments must be made. Therefore, the GAO recommended that we develop 
regulations and instructions for carriers regarding Part B advance 
payments to suppliers. (GAO report, GAO/HRD-91-81 (April 1991), 
entitled: ``Medicare: HCFA Should Improve Internal Controls Over Part B 
Advance Payments'')

III. Provisions of the Proposed Regulations

    In response to the GAO report and recommendation, we are adding 
Sec. 421.214 (``Advance payments to suppliers of Part B services'') to 
part 421, subpart C of this chapter.
    New Sec. 421.214 would ensure the smooth and uniform issuance and 
recoupment of Part B advance payments that may be authorized from time 
to time to counter the negative consequences of disruptions in Medicare 
Part B claims processing. The regulation would be entirely self-
contained. Advance payments would be made when a carrier is unable to 
process a claim timely, not when delay is the result of late or 
incomplete submittal of a claim by a supplier. Processing delays would 
be highlighted to us to ensure that payment disruptions and risks to 
the Medicare Trust Fund would be minimized.
    There are some entities with provider agreements under section 1866 
of the Act that are paid for certain Part B services from the Part B 
Trust Fund through intermediaries (performing as a carrier when making 
Part B payments). These providers generally have access to the existing 
accelerated payment provisions under Sec. 413.64(g). The purpose of 
this proposed regulation is to create a Part B advance payment 
procedure for suppliers, not to supplant the existing Part A advance 
payment procedure for some providers. Therefore, this section does not 
apply to claims for Part B items or services that are furnished by 
entities with provider agreements under section 1866 of the Act that 
receive payments from intermediaries.
    In new Sec. 421.214(b), we would define the term ``advance 
payment'' to mean a carrier's conditional partial payment to a supplier 
on a Part B claim that the carrier is unable to process within the 
prescribed time limits.
    Section 421.214(c) would specify that an advance payment may be 
made if the carrier is unable to process claims timely, we determine 
that the prompt payment interest provision in section 1842(c) of the 
Act is insufficient to make claimants whole, and if expressly approved 
by us in writing. The prompt payment interest provision currently 
requires us to pay interest on clean claims when the carrier is unable 
to make payment within 30 calendar days. The determination to issue 
advance payments must take into consideration elements that are, or may 
be, subject to changes such as legislation related to prompt payment; 
system enhancements; severity of system malfunctions; regulatory 
changes; change in contractors; and any number of other factors that 
may necessitate the issuance of advance payments. Our ability to 
respond appropriately and timely would be restricted if we were 
required to publish criteria regarding a threshold through the 
rulemaking procedure. Therefore, we would implement the threshold 
criterion or criteria through manual instructions to the carriers. This 
would give us the flexibility to respond promptly to providers without 
going through the rulemaking process each time a unique situation 
occurs. We specifically request public comments on this approach. In 
making changes, we would ensure that advance payments would be made in 
a way that would ensure budget neutrality.
    Section 421.214(d) would specify that no advance payment may be 
made to any supplier delinquent in repaying a Medicare overpayment, has 
been advised of being under active medical review or program integrity 
investigation, has not submitted any claims, or has not accepted 
claims' assignments within the most recent 180-day period preceding the 
system malfunction.
    In Sec. 421.214, paragraph (e)(1) would specify that a supplier 
must request, in writing, an advance payment for providing Part B items 
or services. Paragraph (e)(2) would specify that a supplier must accept 
an advance payment as a conditional payment subject to adjustment, 
recoupment, or both based on an eventual determination of the actual 
amount due on the claim, and subject to the other rules found in 
Sec. 421.214.
    In Sec. 421.214, paragraph (f)(1) would state that a carrier will 
calculate an advance payment at no more than 80 percent of historical 
assigned claims payment data paid a supplier. Historical data is 
defined as a representative 90-day assigned claims payment trend within 
the most recent 180-day experience before the system malfunction. Based 
on this amount and the number of claims pending for the supplier, the 
carrier will determine and issue advance payments not to exceed 80 
percent of the average per claim amount paid during the 90-day trend 
period, times the number of assigned claims pending. If historical data 
are not available or if backlogged claims cannot be identified, the 
carrier will determine and issue advance payments based on some other 
methodology approved by us. Advance payments would be made no more 
frequently than once every 2 weeks to a supplier.
    In Sec. 421.214, paragraph (f)(2) would specify that generally, a 
supplier will not receive advance payments for more assigned claims 
than were paid, on a daily average, for the 90 days before the system 
malfunction. This is to prevent and discourage suppliers from 
submitting assigned claims that may lack merit in order to maximize the 
receipt of advance payments. However, an example of a permissible 
exception would be when a supplier does not receive payments from a 
carrier for services during the early months of the year when 
beneficiary deductibles are being met. In this case, the carrier would 
use more representative payment months for the suppliers' daily 
average.
    In Sec. 421.214, paragraph (f)(3) would specify that a carrier 
recovers an advance payment by applying it against the amount due on 
the claim on which the advance was made. If the advance payment exceeds 
the Medicare Payment amount, the carrier applies the unadjusted balance 
of the advance payment against further Medicare payments due the 
supplier.
    It is not our intent to permit repayment of an advance payment by 
an option that could delay the recovery process or that would create a 
duplicate payment or an overpayment. A supplier, of Part B services, 
could not elect to receive full payment for a claim and repay the 
advance payment separately at some other time.
    In Sec. 421.214, paragraph (f)(4) would specify that in accordance 
with our instructions, a carrier must maintain financial records in 
accordance with the Statement of Federal Financial Accounting Standards 
to track advance payments and to recoup them expeditiously.
    In Sec. 421.214, paragraph (g)(1) would permit us to waive the 
requirements of paragraph (e)(1) if we determine it is appropriate to 
make advance payments to all affected suppliers. Paragraph (g)(2) would 
specify that if adjusting Medicare payments fails to recover an advance 
payment, we may authorize the use of any other recoupment method 
available (for example, lump sum repayment or an extended repayment 
schedule). Paragraph (g)(2) also allows an unpaid balance from a past 
advance payment to be converted into an overpayment. In the unlikely 
event that after the adjustment process is completed more money has 
been advanced to the supplier than was due, we would consider that 
amount to be an overpayment. We would attempt to recover the 
overpayment under the Medicare recovery procedures in part 401, subpart 
F and part 405, subpart C.
    In Sec. 421.214, paragraph (h) would clarify that the advance 
payment is to be considered a payment that would satisfy the ``prompt 
payment'' requirements of section 1842(c) of the Act for the amount of 
the advance. Therefore, if an advance payment is made before the 
``prompt payment'' time limit and the actual amount of payment for the 
claim is determined after the time limit, interest would be paid only 
on the balance due the supplier after the carrier deducts the amount of 
the advance. (Of course, no interest would accrue if the amount of the 
advance exceeds the actual payment amount to be made on the claim. If 
the advance payment is issued after the time limit, interest would 
accrue on the advance (or on the amount of the claim, which ever is 
smaller) up to the date that the advance payment is issued, and on the 
balance due the supplier, if any, up to the date of payment.
    In Sec. 421.214, paragraph (i) would explain that the decision to 
advance payments and the determination of the amount to be advanced on 
any given claim are committed to agency discretion and are not subject 
to review or appeal. However, the carrier would notify the supplier 
receiving the advance payment about the amounts advanced and recouped, 
and how any Medicare payment amounts have been adjusted. If the 
supplier believes the carrier's reconciliation of the amounts advanced 
and recouped is incorrectly computed, it may request an administrative 
review from the carrier. If a review is requested, the carrier would 
provide a written explanation of the adjustments. This review and 
explanation is separate from a supplier's right to appeal the amount 
and computation of benefits paid on the claim, as provided at 42 CFR 
part 405, subpart H. The carrier's reconciliation of amounts advanced 
and recouped is not an initial determination as defined at 
Sec. 405.803, and any written explanation of such reconciliation is not 
subject to further administrative review. We expect that this review 
process will help to eliminate unnecessary appeals that might result 
from errors in computation.

IV. Regulatory Impact Statement

    We generally prepare an initial regulatory flexibility analysis 
that is consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601 through 612), unless the Secretary certifies that a rule would not 
have a significant economic impact on a substantial number of small 
entities. For purposes of the RFA, we consider all suppliers that 
provide services under Medicare Part B to be small entities. We do not 
consider carriers to be small entities.
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis for any rule that may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. This analysis must conform to the provisions of section 603 
of the RFA. For purposes of section 1102(b) of the Act, we define a 
small rural hospital as a hospital that is located outside of a 
Metropolitan Statistical Area and has fewer than 50 beds.
    This proposed rule would amend Medicare regulations to ensure that 
when carriers make advance payments to suppliers and those payments are 
greater than the amounts actually due after the claim is processed, the 
excess payments are recovered promptly. We expect this proposed rule 
would result in marginal administrative savings to carriers and 
suppliers. In addition, we do not believe this regulation would have a 
negative effect on the economy. Therefore, the overall benefits are 
positive and indeed provide stability during potentially disruptive 
claims processing delays.
    We have determined, and the Secretary certifies, that this proposed 
rule would not have a significant economic impact on a substantial 
number of small entities or a significant impact on the operations of a 
substantial number of small rural hospitals. Therefore, we have not 
prepared analyses for either the RFA or small rural hospitals.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

V. Collection of Information

    Section 421.214(f)(4), (g)(2), and (i)(3) of this document contain 
information collection and recordkeeping requirements that are subject 
to review by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). These 
reporting and recordkeeping requirements are not effective until a 
notice of OMB's approval is published in the Federal Register. The 
information collection requirements in Sec. 421.214(f)(4) require that 
a carrier maintain a financial system of data in accordance with the 
Statement of Federal Financial Accounting Standards for tracking each 
advance payment and its recoupment. We estimate that it would take a 
carrier 4 minutes for entry of an advance payment into the tracking 
system and 2 minutes for any update (including recoupment).
    The reporting requirements in Sec. 421.214(g)(2) may require a 
carrier to send a written notice to the supplier converting any unpaid 
balances of advance payments to overpayments if adjusting Medicare 
payments fails to recover an advance payment. We estimate that it would 
take a carrier 5 minutes to issue a computer-generated letter with an 
attached worksheet detailing adjustments to the advance payment and any 
resulting overpayment.
    Section 421.214(i)(3) would require a carrier to provide a written 
explanation of the adjustments if the supplier requests an 
administrative review because it believes the carrier's reconciliation 
of the amounts advanced and recouped is incorrectly computed. We 
estimate this written explanation would require 5 minutes using a 
computer-generated letter.
    Organizations and individuals desiring to submit comments on the 
information collection and recordkeeping requirements should direct 
them to the OMB official whose name appears in the ADDRESSES section of 
this preamble.

VI. Response to Public Comments

    Because of the large number of items of correspondence we normally 
receive on a proposed rule, we are unable to acknowledge or respond to 
them individually. However, we will consider all comments that we 
receive by the date and time specified in the ``Dates'' section of this 
preamble, and we will respond to comments in the preamble to the final 
rule.

List of Subjects in 42 CFR Part 421

    Administrative practice and procedure, Health facilities, Health 
professions, Medicare, Reporting and recordkeeping requirements.

    42 CFR part 421 would be amended as follows:

PART 421--INTERMEDIARIES AND CARRIERS

    1. The authority citation for Part 421, Subpart C continues to read 
as follows:

    Authority: Secs. 1102, 1815, 1816, 1833, 1834(a) and (h), 1842, 
1861(u), 1871, 1874, and 1875 of the Social Security Act (42 U.S.C. 
1302, 1395(g), 1395h, 1395l, 1395m(a) and (h), 1395u, 1395x(u), 
1395hh, 1395kk, and 1395ll), and 42 U.S.C. 1395b-1.

Subpart C--Carriers

    2. A new Sec. 421.214 is added to Subpart C to read as follows:


Sec. 421.214  Advance payments to suppliers furnishing items or 
services under Part B.

    (a) Scope and applicability. This section provides for the 
following:
    (1) Sets forth requirements and procedures for the issuance and 
recovery of advance payments to suppliers of Part B services and the 
rights and responsibilities of suppliers under the payment and recovery 
process.
    (2) Does not limit HCFA's right to recover unadjusted advance 
payment balances.
    (3) Does not affect suppliers' rights under part 405, subpart H of 
this chapter relating to substantive determinations on suppliers' 
claims.
    (4) Does not apply to claims for Part B services furnished by 
suppliers that have in effect provider agreements under section 1866 of 
the Act and part 489 of this chapter, and are paid by intermediaries.
    (b) Definition. As used in this section, advance payment means a 
conditional partial payment made by the carrier in response to a claim 
that it is unable to process within established time limits.
    (c) When advance payments may be made. An advance payment may be 
made if all of the following conditions are met:
    (1) The carrier is unable to process the claim timely.
    (2) HCFA determines that the prompt payment interest provision 
specified in section 1842(c) of the Act is insufficient to make a 
claimant whole.
    (3) HCFA approves, in writing to the carrier, the making of an 
advance payment by the carrier.
    (d) When advance payments are not made. Advance payments are not 
made to any supplier that meets any of the following conditions:
    (1) Is delinquent in repaying a Medicare overpayment.
    (2) Has been advised of being under active medical review or 
program integrity investigation.
    (3) Has not submitted any claims.
    (4) Has not accepted claims' assignments within the most recent 
180-day period preceding the system malfunction.
    (e) Requirements for suppliers. (1) Except as provided for in 
paragraph (g)(1) of this section, a supplier must request, in writing 
to the carrier, an advance payment for providing Part B items or 
services.
    (2) A supplier must accept an advance payment as a conditional 
payment subject to adjustment, recoupment, or both based on an eventual 
determination of the actual amount due on the claim, and subject to the 
other rules found in this section.
    (f) Requirements for carriers. (1) A carrier must calculate an 
advance payment at no more than 80 percent of historical assigned 
claims payment data paid a supplier. Historical data is defined as a 
representative 90-day assigned claims payment trend within the most 
recent 180-day experience before the system malfunction. Based on this 
amount and the number of claims pending for the supplier, the carrier 
must determine and issue advance payments not to exceed 80 percent of 
the average per claim amount paid during the 90-day trend period times 
the number of assigned claims pending. If historical data are not 
available or if backlogged claims cannot be identified, the carrier 
must determine and issue advance payments based on some other 
methodology approved by HCFA. Advance payments can be made no more 
frequently than once every 2 weeks to a supplier.
    (2) Generally, a supplier will not receive advance payments for 
more assigned claims than were paid, on a daily average, for the 90 
days before the system malfunction.
    (3) A carrier must recover an advance payment by applying it 
against the amount due on the claim on which the advance was made. If 
the advance payment exceeds the Medicare payment amount, the carrier 
must apply the unadjusted balance of the advance payment against future 
Medicare payments due the supplier.
    (4) In accordance with HCFA instructions, a carrier must maintain a 
financial system of data in accordance with the Statement of Federal 
Financial Accounting Standards for tracking each advance payment and 
its recoupment.
    (g) Requirements for HCFA. (1) HCFA may determine that 
circumstances warrant the issuance of advance payments to all affected 
suppliers furnishing Part B items or services except that no advance 
payments may be made to any supplier furnishing Part B items or 
services that meets any of the conditions in paragraph (d) of this 
section. HCFA may waive the requirement in paragraph (e)(1) of this 
section as part of that determination.
    (2) If adjusting Medicare payments fails to recover an advance 
payment, HCFA may authorize the use of any other recoupment method 
available (for example, lump sum repayment or an extended repayment 
schedule) including, upon written notice from the carrier to the 
supplier, converting any unpaid balances of advance payments to 
overpayments. Overpayments are resolved in accordance with part 401, 
subpart F of this chapter concerning claims collection and compromise 
and part 405, subpart C of this chapter concerning recovery of 
overpayments.
    (h) Prompt payment interest. An advance payment is a ``payment'' 
under section 1842(c)(2)(C) of the Act for purposes of meeting the time 
limit for the payment of clean claims, to the extent of the advance 
payment.
    (i) Notice, review, and appeal rights. (1) The decision to advance 
payments and the determination of the amount of any advance payment are 
committed to agency discretion and are not subject to review or appeal.
    (2) The carrier must notify the supplier receiving an advance 
payment, about the amounts advanced and recouped, and how any Medicare 
payment amounts have been adjusted.
    (3) The supplier may request an administrative review from the 
carrier if it believes the carrier's reconciliation of the amounts 
advanced and recouped is incorrectly computed. If a review is 
requested, the carrier must provide a written explanation of the 
adjustments.
    (4) The review and explanation described in paragraph (i)(3) of 
this section is separate from a supplier's right to appeal the amount 
and computation of benefits paid on the claim, as provided at part 405, 
subpart H of this chapter. The carrier's reconciliation of amounts 
advanced and recouped is not an initial determination as defined at 
Sec. 405.803 of this chapter, and any written explanation of a 
reconciliation is not subject to further administrative review.

Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance and No. 93.774 Supplementary Medical 
Insurance Program)

    Dated: October 19, 1993.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
    Approved: April 7, 1994.
Donna Shalala,
Secretary.
[FR Doc. 94-17219 Filed 7-15-94; 8:45 am]
BILLING CODE 4120-01-P