[Federal Register Volume 61, Number 232 (Monday, December 2, 1996)]
[Rules and Regulations]
[Pages 63740-63749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30057]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Parts 401, 403, 405, 411, 413, 447, and 493
[BPO-118-FC]
RIN 0938-AC99
Medicare Program; Changes Concerning Suspension of Medicare
Payments, and Determinations of Allowable Interest Expenses
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Final rule with comment period.
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SUMMARY: We are revising the Medicare regulations concerning suspension
of Medicare payments and determination of allowable interest expenses.
These changes are being made to conform the regulations with law and
established policy, to provide necessary clarification, and to protect
the Government's interests.
DATES: Effective date: These regulations are effective January 2, 1997.
Comment Date: We are providing a comment period on the issues
described in section V of this preamble. Written comments will be
considered if we receive them at the appropriate address, as provided
below, no later than 5 p.m. on January 31, 1997.
ADDRESSES: Mail written comments (an original and three copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: BPO-118-FC, P.O. Box 26688,
Baltimore, MD 21207.
If you prefer, you may deliver your written comments (an original
and three copies) to one of the following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue SW.,
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.
Because of staffing and resource limitations, we cannot accept comments
by facsimile (Fax) transmission. In commenting, please refer to file
code BPO-118-FC. 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 p.m. (phone:
(202) 690-7890).
[[Page 63741]]
FOR FURTHER INFORMATION CONTACT: James Conrad (suspension of payments,
fraud and abuse), (410) 786-6976; Ward Pleines (all other provisions),
(410) 786-4528.
SUPPLEMENTARY INFORMATION:
I. Suspension of Medicare Payments
A. Background
Sections 1815 (a) and (d) and 1833(j) of the Social Security Act
(the Act) and the Federal Claims Collection Act of 1966, as amended,
(31 U.S.C. 3711) allow a Medicare contractor (that is, an intermediary
or carrier) that has the opportunity to offset an overpayment to do so.
This provision is set forth in existing regulations at 42 CFR 401.607
(a) and (d) and 405.1803(c). In addition, existing Sec. 405.370
provides that payments authorized to be made to providers and suppliers
under the Medicare program may be suspended, in whole or in part, by a
Medicare contractor when the contractor has determined that the
provider or supplier has been overpaid or when the contractor has
reliable evidence that either an overpayment exists or that the
payments to be made may not be correct. Existing Sec. 405.370(b),
however, requires that, in order to proceed with a suspension of
payment, the contractor must have determined that ``the suspension of
payments, in whole or in part, is needed to protect the program against
financial loss.'' Section 405.370 does not specify the disposition of
suspended payments, nor do the regulations address how long payment may
be suspended. Also, the existing regulations do not differentiate
between the terms ``suspension of payments,'' ``offset,'' and
``recoupment.''
In addition, the existing regulations do not clearly specify the
procedures applicable when fraud is suspected; they merely provide that
payment may be suspended without advance notice and that the provider
or supplier will be notified of the suspension and the reasons for it.
(When the existing regulations were published (May 27, 1972, 37 FR
10723), the HHS Office of Inspector General (OIG), which is responsible
for conducting investigations involving fraud and willful
misrepresentation, had not been created, and the Social Security
Administration (SSA) administered the Medicare program. Suspension of
Medicare payment based on fraud or abuse was accomplished by Medicare
contractors in consultation with SSA, at the direction of the Bureau of
Health Insurance, the SSA component then responsible for Medicare.
Therefore, the regulations reflect only the role of intermediaries and
carriers.)
Under current law and delegations of authority, HCFA is responsible
for operating the Medicare program. The OIG is responsible for
conducting investigations and identifying wrongdoers and abusers of HHS
programs so appropriate remedies can be applied, as well as identifying
weaknesses or problems in the management of HHS programs. (See the
Statements of Organization, Function, and Delegations of Authority, for
HCFA and for OIG (49 FR 35247, published September 6, 1984, and 54 FR
46775, published November 7, 1989, respectively).)
B. Provisions of Proposed Rule
On August 22, 1988, we published a proposed rule, at 53 FR 31888,
in which we proposed to eliminate the requirement that, before
suspension of payment, the contractor make a determination that
suspension of payments to a provider or supplier is needed to protect
the program against financial loss. We also proposed clarifying our
policy regarding the disposition of suspended payments. As proposed,
suspended funds would first be applied to liquidate, in whole or in
part, overpayments that are the basis for the suspension. Any remaining
suspended funds would be applied to any other determined Medicare
overpayments. In the absence of a further obligation to HHS (such as
Medicaid overpayments) or other legal requirement (such as civil money
penalties or an Internal Revenue Service levy), the excess would be
released to the provider or supplier. Readers who are interested in the
details of our proposals are referred to the proposed rule.
(Note that, in order to expedite certain changes that were contained in
the August 1988 proposed rule, that is, proposed changes pertaining to
the assessment of interest charges on overpayments and underpayments,
we proceeded with them in a separate final rule, published in the
Federal Register on July 10, 1991, at 56 FR 31332. The provisions of
the July 1991 rule appear at Sec. 405.376. The remaining proposed
changes are contained in this final rule.)
C. Summary of and Responses to Public Comments
In response to the proposed rule, we received 12 items of
correspondence, each containing comments on the issue of suspension of
Medicare payments. The commenters included health care facilities,
health care associations, a Medicare contractor, and an accounting
firm. Three commenters believed that the changes would make suspension
more effective, would reduce administrative costs, and would have
little effect on current practice. The other commenters were primarily
concerned with the cash flow problems that could result from the
suspension of payment without a 30-day notice. Their specific concerns
are presented below. Note that, unless otherwise indicated, references
in our responses to sections of the regulations are to the sections in
this final rule.
Comment: Several commenters expressed concern that the proposed
changes concerning suspension of Medicare payments in cases of
overpayments would allow an intermediary or carrier to withhold all
payment to a provider or supplier without notification until an
overpayment was recouped and that this could have a devastating effect
on the cash flow of providers and suppliers, possibly even causing
bankruptcies.
Response: There appears to be some confusion and misunderstanding
of the scope of the changes we proposed to make in this area. We
generally do not intend to suspend payments without at least a 15-day
notice of this action to the provider or supplier. (There are three
exceptions to giving prior notice: (1) When a suspension is imposed in
accordance with section 1815(a) or section 1833(e) of the Act because
the provider or supplier, respectively, has failed to submit
information requested by the Medicare contractor that is needed to
determine the amounts due the provider or supplier; (2) when we or the
Medicare contractor determines that the Medicare Trust funds would be
harmed by giving prior notice; and (3) at our discretion in cases
involving fraud or misrepresentation.) Our proposal merely intended to
eliminate the requirement for a separate determination that a
suspension of payments is necessary to protect Medicare against
financial loss before contractors can proceed with the suspension. In
addition, in this final rule, we clarify that at least a 15-day notice
to the provider or supplier is given in cases of recoupment or offset,
terms that are defined in this rule.
Payment is recouped or offset in those cases in which the amount of
an overpayment has been determined, and any future payment to a
provider or supplier will be offset (that is, applied) against the
identified overpayment generally until the amount of the overpayment is
recovered. Offset or recoupment constitutes constructive payment to the
provider or supplier. Payment is suspended if we or the
[[Page 63742]]
Medicare contractor has determined that the provider or supplier has
been overpaid but the actual amount of the overpayment has not yet been
determined. Therefore, additional effort is required before the amount
of the overpayment can be determined. We believe that the notice
requirement provides ample time for providers and suppliers to submit
evidence to the intermediary or carrier to prevent suspension,
recoupment, or offset and to avoid cash flow problems. However, in
response to the commenters' concerns and in an effort to eliminate
confusion, in this final rule we have--
Added, at Sec. 405.370, the following definitions of
``suspension of payment,'' ``offset,'' and ``recoupment.''
Offset. The recovery by Medicare of a non-Medicare debt by reducing
present or future Medicare payments and applying the amount withheld to
the indebtedness. (Examples are Public Health Service debts or Medicaid
debts recovered by HCFA).
Recoupment. The recovery by Medicare of any outstanding Medicare
debt by reducing present or future Medicare payments and applying the
amount withheld to the indebtedness.
Suspension of payment. The withholding of payment by an
intermediary or carrier from a provider or supplier of an approved
Medicare payment amount before a determination of the amount of the
overpayment exists.
Reorganized and revised the provisions related to
suspension of payment in order to set forth our policy more clearly
(see Sec. 405.372, ``Proceeding for suspension of payment''). These
changes from the proposed rule have been made to improve the
readability of the regulations and to clearly set forth the existing
process and policy; we have not made any substantive changes that were
not included in our proposed rule or that are not being made in
response to public comment. (Note that, because of the restructuring of
the provisions related to suspension, it was necessary to also
reorganize and revise other provisions set forth in existing
Secs. 405.370 through 405.373. Again, in accomplishing this
reorganization, we have not made any substantive changes that were not
included in our proposed rule or that are not being made in response to
public comment.) We will, however, consider timely comments from anyone
who believes that, in making these changes, we have unintentionally
altered the meaning.
Revised existing Sec. 405.374, ``Collection and compromise
of claims for overpayment'' by changing the section heading to
``Suspension and termination of collection action and compromise of
claims for overpayment'' to better describe the section's contents (and
redesignated it as Sec. 405.376). For the same reason, we have revised
the headings of paragraph (e) (from ``Basis for terminations'' to
``Basis for termination of collection action'') and paragraph (f) (from
``Basis for suspension'' to ``Basis for suspension of collection
action'').
Revised existing Sec. 405.375, ``Withholding Medicare
payments to recover Medicaid overpayments'' (and redesignated it as
Sec. 405.377), to clarify our policy with regard to withholding
Medicare payments to offset Medicaid overpayments.
We are also taking this opportunity to create two separate
provisions to address two separate situations concerning failure to
furnish information. Current regulations at Sec. 405.371(d) (``Failure
to furnish information requested'') provide for suspending payments in
all situations in which information is not supplied, including when a
provider fails to file a cost report. It has been our long-standing
policy that, if a provider has failed to timely file an acceptable cost
report, payment is immediately suspended until an acceptable cost
report is filed. This regulation and policy are based on sections
1815(a) and 1833(e) of the Act. Section 1815(a) provides, in part, that
``no * * * payments shall be made to any provider unless it has
furnished such information as the Secretary may request in order to
determine the amounts due such provider under this part [Medicare Part
A] for the period with respect to which the amounts are being paid or
any prior period.'' Section 1833(e) of the Act contains similar
language with respect to payments made under Part B of Medicare.
In this final rule we set forth a separate provision, new
Sec. 405.371(c), specifically addressing the suspension of payments in
the case of unfiled cost reports. Section 405.371(c) specifies that, if
a provider has failed to timely file an acceptable cost report, payment
to the provider is immediately suspended until a cost report is filed
and determined by the intermediary to be acceptable. This section
further specifies that, in the case of an unfiled cost report, the
provisions of Sec. 405.372 (``Proceeding for suspension of payment'')
do not apply. We believe that this is consistent with the above-cited
mandate that ``no payment shall be made * * * unless it has furnished
such information * * *.''
In addition, we are retaining, with editorial modifications, the
provision in current regulations at Sec. 405.371(d) to apply to all
instances of failure to supply information except those in which a cost
report is not filed. This provision is set forth at Sec. 405.372(a)(2)
in this final rule. As in the current regulations, it specifies that
the prior notice and rebuttal provisions do not apply if the provider
failed to submit evidence requested by the intermediary that is needed
to determine the amounts due the provider under the Medicare program.
However, unlike new Sec. 405.371(c) (``Suspension in the case of
unfiled cost reports''), the time limitation on suspension established
by this final rule, and discussed in the response to the following
comment, applies.
Comment: Since immediate suspension of payments could cause great
hardship to many Medicare providers and suppliers, one commenter
believed it only fair to continue the requirement of a separate
determination that suspension is needed to protect the program from
financial loss.
Response: As discussed above, all providers and suppliers will
generally receive prior notification of the suspension, recoupment, or
offset action and have at least 15 days to reply. The notification of
overpayment will state that, if there is no reply within the timeframe
specified in the notification, the Medicare contractor will then begin
action. If no reply is received from the provider or supplier, we
believe that suspension is required to protect a program such as
Medicare or Medicaid from financial loss and that it is not necessary
to make a separate determination on that fact. Even if a reply is
received, suspension may be required, and a separate determination is
unnecessary.
If the provider or supplier submits a statement as to why a
suspension of payment, recoupment, or offset should not be put into
effect, the intermediary or carrier will have 15 days from the date the
statement is received to consider the statement and make a
determination whether the facts justify a suspension, or removal of a
suspension already initiated. Suspension, however, will not be delayed
in order to review any statement submitted.
In further response to the concerns expressed by the commenters, we
have decided to impose a limitation upon how long we will suspend
payment pending a determination whether or not an overpayment exists
and in matters involving fraud or willful misrepresentation. The
purpose of suspending payment is to verify whether, and how much,
payment was
[[Page 63743]]
actually due the provider for past claims and to ensure that, if a
provider or supplier was overpaid, sufficient funds are available to
recover the overpayment. These actions are clearly necessary to protect
the Trust Funds from loss. It is implicit that, when payment is
suspended, determinations of overpayment, or of fraud or willful
misrepresentation, should be made promptly. Accordingly, because it is
appropriate that a provider or supplier receive a prompt determination
so that it may receive any balances actually due after application of
recoupment or offset, we have decided to limit suspension of Medicare
payment to 180 days, with a possible extension of up to 180 additional
days being granted to the intermediary, carrier, or OIG by HCFA. This
period will enable us or the carrier or intermediary, as the case may
be, to investigate and to determine the amounts of any Medicare
overpayments or, in cases involving the OIG, for the OIG to complete
its investigation, while protecting the Medicare Trust Funds. At the
same time, providers and suppliers have the security of knowing that
the suspension may culminate in an appealable determination within a
specific period of time if the claims are subsequently denied. (A
decision to suspend payment is not an initial determination subject to
appeal under Secs. 405.704, 405.803, or 405.1803.)
In addition, we recognize that there may be special circumstances
in which the specified time limit (that is, 180 days plus up to 180
additional days) may not be sufficient. Therefore, we may grant an
exception to the time limits in the following situations:
The case has been referred to, and is being considered by,
the OIG for administrative action, that is, civil money penalties.
The Department of Justice, generally through the United
States Attorney with jurisdictional responsibility, submits a written
request to HCFA that the suspension be continued based on the ongoing
investigation and anticipated filing of criminal and/or civil actions.
At a minimum, the request must include the following:
*Identification of the entity under suspension.
*The amount of time needed for continued suspension in order to
implement the criminal and/or civil proceedings.
*A statement of why and/or how criminal and/or civil actions may be
affected if the requested extension is not granted.
Once a determination is made, any overpayments will be recouped or
offset, first from suspended funds, then from any other monies owed the
debtor in accordance with usual Medicare program rules. (See, for
example, Sec. 401.607(a)). Note that, in contrast to the decision to
suspend payment, an overpayment determination is an initial
determination, subject to appeal, but that appeals do not delay
recoupment. Also note that, as defined in this final rule at
Sec. 405.370, recoupment may constitute 100 percent of any monies due
if the debt to Medicare is equal to or greater than the amounts
payable. Nonetheless, for the very reasons raised by the commenters,
Medicare usually does not impose 100 percent recoupment in the absence
of a basis for doing so, such as the debtor's failure to respond to a
demand letter.
Under current law and delegations of authority, HCFA is responsible
for operating the Medicare program. This includes making determinations
whether to suspend payment. In cases of suspected fraud or willful
misrepresentation, the determination whether to suspend is generally
made after consultation with the OIG, the Medicare contractor, U.S.
Attorney, and other law enforcement agencies as appropriate to the
case. Where the OIG or other law enforcement agency requests
suspension, the requesting agency must advise us of the basis for the
request. Thus, although the OIG is responsible for identifying,
investigating, and pursuing matters of fraud and abuse, HCFA is
responsible for determining whether there is reliable evidence of an
overpayment, whether to suspend payment, and, if the decision is to
suspend payment, whether advance notice of the suspension should be
given. (If advance notice is to be given, we usually direct the
Medicare contractor to give the notice.) The Medicare contractor is
responsible for promptly determining the overpayment. Once the amount
of an overpayment is determined, the suspended payments are applied to
recoup the overpayment. Although the Medicare contractor may implement
a suspension, offset, or recoupment, HCFA is the real party in interest
and is responsible for the actions.
This final rule clarifies that our decision regarding whether to
suspend payment may be based on information provided by the
intermediary, carrier, a law enforcement agency, or other source. We
will normally provide at least a 15-day delay before suspension is
imposed. However, when it appears that the Medicare Trust Funds would
be harmed by providing this notice or in matters involving fraud or
misrepresentation, suspension may be imposed without prior notice. (We
believe, however, that suspension without prior notice would be the
exception.)
II. Determination of Allowable Interest Expense
A. Background
Under the Medicare program, health care providers not subject to
the prospective payment system generally are paid for the reasonable
costs of the covered items and services they furnish to Medicare
beneficiaries. Section 1861(v)(1)(A) of the Act defines reasonable
costs as the cost actually incurred, excluding any cost unnecessary in
the efficient delivery of needed health services. Section 1861(v)(1)(A)
also provides that reasonable costs be determined in accordance with
regulations that establish the methods to be used and the items to be
included for purposes of determining which costs are allowable for
various types or classes of institutions, agencies, and services.
Providers may generally include interest expense (the cost incurred
for the use of funds borrowed for patient care-related purposes) in
allowable costs, but, under existing Sec. 413.153(b)(2)(iii), allowable
interest expense must be reduced by investment income. Additionally,
this section of the regulations provides that investment income from
gifts and grants (whether restricted or unrestricted) is not used to
reduce interest expense if the gift and grant funds are held separate
and not commingled with other funds. The latter provision was intended
to ensure that providers maintain the discrete nature of the grant
funds and to facilitate the intermediaries' application of proper
payment principles to the resulting investment income.
Section 1134 of the Act, which was added by section 901 of the
Omnibus Reconciliation Act of 1980 (ORA '80), Public Law 96-499,
provides that, in the case of nonprofit hospitals, interest income from
grants, gifts, or endowments, that have not been designated by the
donor to be used to defray specific operating costs, is not to be
offset against interest income.
The provisions of section 901 of ORA '80, as well as our
established position on commingling of funds, were incorporated in
Transmittal No. 279 issued in January 1983. This transmittal, which
revised section 202.6 of the Provider Reimbursement Manual (HCFA Pub.
15-1), permits the pooling of funds for investment purposes, provided
adequate records are maintained to enable the proper identification of
funds
[[Page 63744]]
and investment income applicable to each.
Existing Sec. 413.153(b)(2)(iii) excludes the following types of
income from the interest expense offset requirements:
Investment income from separately held and noncommingled
gifts and grants.
Income from a provider's funded depreciation.
Income from qualified employee pension funds.
Interest received as a result of judicial review by a
Federal court.
Under our current operating policy, investment income from a
provider's deferred compensation funds and self-insurance funds that
meet the program's qualifying compensation plans provided in section
2140 of the Provider Reimbursement Manual and the qualifying criteria
for self-insurance funds described in subsection 2162.7 of the Manual
must become part of those funds and, as such, is unavailable for offset
against interest expense.
B. Provisions of the Proposed Regulations
We proposed to revise Sec. 413.153(b)(2)(iii) to modify the
restriction against commingling to permit the pooling of grant, gift,
or endowment funds for investment purposes for all providers, rather
than only the nonprofit hospitals referenced in section 1134 of the
Act. This change was proposed to conform the regulations to our current
operating policy as set forth in section 202.6 of the Provider
Reimbursement Manual (HCFA Pub. 15-1).
As a conforming change, we also proposed to remove the regulations
text located at Sec. 413.5(c)(3). This section contains outdated
statements concerning offsetting of restricted grants, gifts, and
income from endowments and ceased being effective with cost reporting
periods beginning on or after October 1, 1983.
We also proposed to make a technical change to the regulations at
Sec. 413.90(b)(2) to remove the provision that required the offset of
research grant funds (used for usual patient care purposes in
conjunction with basic medical and hospital research) against usual
patient care costs. This provision became obsolete with cost reporting
periods beginning on or after October 1, 1983.
We further proposed to clarify Sec. 413.153(b)(2)(iii) by adding to
the exclusions from interest expense offset investment income on--
A provider's deferred compensation plans; and
Self-insurance trust funds.
Because established program policy has always required that
investment income earned on a provider's deferred compensation fund
(Provider Reimbursement Manual, section 2140 ff.) or self-insurance
fund (section 2162.7) become part of those funds, it is unavailable for
offset against interest expense. We simply proposed to add these
exclusions from interest expense offset to the regulations text to
conform it to the established policy.
C. Analyses of and Responses to Public Comments
We received a comment on these proposals with the following
concern:
Comment: The commenter requested that the proposed clarification of
Sec. 413.153(b)(2)(iii) to permit the pooling of funds from grants and
gifts be further modified to explicitly include monies from funded
depreciation for nonprofit hospitals.
Response: Section 413.153(b)(2)(iii) never prohibited the
commingling of funded depreciation monies for investment purposes by
either proprietary or nonprofit providers. Therefore, we believe that
the change suggested by the commenter is unnecessary.
III. Provisions of the Final Rule
This final rule with comment period incorporates those provisions
of the August 1988 proposed rule that were not incorporated into the
regulations by the July 10, 1991 final rule, with the changes listed
below. The rationale for these changes has been discussed above in our
responses to comments.
We include definitions of the terms ``offset,''
``recoupment,'' and ``suspension of payment.'' (See Sec. 405.370.)
We clarify that at least a 15-day notice to the provider
or supplier is given in cases of recoupment or offset, as well as in
cases of suspension of payment. (See Sec. 405.374(a).)
We limit the duration of a suspension of payment. (See
Sec. 405.372(d).)
We clarify the procedures applicable to suspension of
payment when fraud or willful misrepresentation is suspected. (See
Sec. 405.372 (a) and (e).)
In addition to the above changes, which were discussed in the
responses to comments, we make the following clarifying, conforming,
and technical changes:
We revise Sec. 401.601, which sets forth the basis and
scope of subpart F (Claims Collection and Compromise) of part 401
(General Administrative Requirements). Paragraph (d) of this section
identifies, as related regulations, HHS regulations applicable to HCFA
that generally implement the Federal Claims Collection Act (FCCA) for
the Department and are located at 45 CFR part 30. We add a statement to
paragraph (d) to clarify that those regulations apply only to the
extent HCFA regulations do not address a situation.
We revise Sec. 401.607 (Claims collection). Paragraph
(d)(1) of this section states that ``[i]n conformity with 4 CFR 102.3,
HCFA may offset, where possible, the amount of a claim against the
amount of * * * monies that a debtor is receiving or is due from the
Federal government.'' The ``conformity'' phrase was included to reflect
that offset of Medicare debts is consistent with general FCCA
regulations. It was not intended to impose additional requirements not
included in HCFA's FCCA regulations. It has come to our attention,
however, that this phrase has caused confusion. Therefore, in order to
eliminate this confusion, we remove the phrase.
In Sec. 405.1803, ``Intermediary determination and notice
of amount of program reimbursement,'' we revise paragraph (c),
currently titled ``Use of notice as basis for recovery of
overpayments,'' to conform it to the terminology and process this rule
establishes in Secs. 405.370 through 405.377. First, we change the word
``recovery'' wherever it appears in paragraph (c) to ``recoupment''.
Second, we replace the phrase ``including the suspending of further
payments to the provider in order to recover, or to aid in the recovery
of,'' with ``including recoupment under Sec. 405.373 from ongoing
payment to the provider of''. Third, we make a minor editorial change
to break the existing first sentence into two sentences. Finally,
because the cross reference made by the last sentence is no longer
correct and we believe a cross reference is not necessary, we remove
the last sentence.
We make a number of technical changes (such as revising
cross-reference citations because of the redesignations made by this
final rule) that do not affect the substance of the provisions.
IV. Regulatory Impact Statement
Consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612), we prepare a regulatory flexibility analysis unless the
Secretary certifies that a final rule with comment period will not have
a significant economic impact on a substantial number of small
entities. For purposes of the RFA, all providers and suppliers are
considered to be small entities.
[[Page 63745]]
In addition, section 1102(b) of the Act requires the Secretary to
prepare a regulatory impact analysis if a rule 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 604
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.
Elimination of the requirement at existing Sec. 405.370(b) that an
intermediary or carrier make a prior determination that a suspension of
payment is needed to protect the Medicare program against financial
loss may have an adverse economic effect on some providers and
suppliers. However, we do not believe that this policy will affect a
significant number of providers and suppliers. Additionally, the time
limits on suspension established by this final rule may mitigate the
adverse effect of our modifications to Sec. 405.370(b).
In addition to the changes previously discussed in the notice of
proposed rulemaking, we have made certain clarifying changes. We do not
anticipate any economic effects resulting from our clarifications of
already existing policy.
For these reasons, we are not preparing analyses for either the RFA
or section 1102 of the Act since we have determined, and the Secretary
certifies, that this rule will not result in a significant economic
impact on a substantial number of small entities and will not have a
significant impact on the operations of a substantial number of small
rural hospitals.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
V. Public Comment Period
We have made certain changes from the proposed rule to improve the
readability of the regulations and to clearly set forth the existing
process and policy. In doing so, we have not made any substantive
changes to existing regulations that were not included in our proposed
rule or that are not being made in response to public comment on the
proposed rule. While a prior public comment period is not required in
this case, we are granting the public an opportunity to comment on
these changes. As stated earlier, we are providing 60-day comment
period on the following:
(1) The differences between suspension, recoupment, and offset.
(2) The fact that suspension or offset or recoupment will not be
delayed beyond the date stated in the notice from the intermediary or
carrier in order to review any statement submitted.
(3) The inclusion of time limits on the period during which payment
may be suspended.
(4) The clarification of applicable procedures in the case of
suspension of payment if fraud or willful misrepresentation is
suspected.
(5) The creation of two separate provisions concerning suspension
of payment for failure to furnish information.
(6) The reorganization of the provisions.
Because of the large number of items of correspondence we normally
receive on regulations, we cannot acknowledge or respond to them
individually. We will, however, consider all comments concerning the
issues noted directly above that are received by the date and time
specified in the ``DATES'' section of this preamble. If we proceed with
a subsequent document, we will respond to the comments in the preamble
to that document.
List of Subjects
42 CFR Part 401
Claims, Freedom of information, Health facilities, Medicare,
Privacy.
42 CFR Part 403
Health insurance, Hospitals, Intergovernmental relations, Medicare,
Reporting and recordkeeping requirements.
42 CFR Part 405
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medicare, Reporting and recordkeeping
requirements, Rural areas, X-rays.
42 CFR Part 411
Kidney diseases, Medicare, Physician referral, Reporting and
recordkeeping requirements.
42 CFR Part 413
Health facilities, Kidney diseases, Medicare, Puerto Rico,
Reporting and recordkeeping requirements.
42 CFR Part 447
Accounting, Administrative practice and procedure, Drugs, Grant
programs--health, Health facilities, Health professions, Medicaid,
Reporting and recordkeeping requirements, Rural areas.
42 CFR Part 493
Grant programs--health, Health facilities, Laboratories, Medicaid,
Medicare, Reporting and recordkeeping requirements.
42 CFR chapter IV is amended as follows:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
A. Part 405 is amended as set forth below:
Subpart C--Suspension of Payment, Recovery of Overpayments, and
Repayment of Scholarships and Loans
1. The authority citation for subpart C continues to read as
follows:
Authority: Secs. 1102, 1815, 1833, 1842, 1866, 1870, 1871, 1879
and 1892 of the Social Security Act (42 U.S.C. 1302, 1395g, 1395l,
1395u, 1395cc, 1395gg, 1395hh, 1395pp and 1395ccc) and 31 U.S.C.
3711.
2. The undesignated center heading preceding Sec. 405.370 is
revised to read as follows:
SUSPENSION AND RECOUPMENT OF PAYMENT TO PROVIDERS AND SUPPLIERS AND
COLLECTION AND COMPROMISE OF OVERPAYMENTS
3. Sections 405.370 through 405.373 are redesignated as
Secs. 405.371 through 405.374, respectively, and current Secs. 405.374
through 405.376 are redesignated as Sec. 405.376 through 405.378,
respectively.
4. New Secs. 405.370 and 405.375 are added, and redesignated
Secs. 405.371 through 405.374 are revised, to read as follows:
Sec. 405.370 Definitions.
For purposes of this subpart, the following definitions apply:
Offset. The recovery by Medicare of a non-Medicare debt by reducing
present or future Medicare payments and applying the amount withheld to
the indebtedness. (Examples are Public Health Service debts or Medicaid
debts recovered by HCFA).
Recoupment. The recovery by Medicare of any outstanding Medicare
debt by reducing present or future Medicare payments and applying the
amount withheld to the indebtedness.
Suspension of payment. The withholding of payment by an
intermediary or carrier from a provider or supplier of an approved
Medicare payment amount before a determination of the amount of the
overpayment exists.
[[Page 63746]]
Sec. 405.371 Suspension, offset, and recoupment of Medicare payments
to providers and suppliers of services.
(a) General. Medicare payments to providers and suppliers, as
authorized under this subchapter (excluding payments to beneficiaries),
may be--
(1) Suspended, in whole or in part, by HCFA, an intermediary, or a
carrier if HCFA, the intermediary, or the carrier possesses reliable
information that an overpayment or fraud or willful misrepresentation
exists or that the payments to be made may not be correct, although
additional evidence may be needed for a determination; or
(2) Offset or recouped, in whole or in part, by an intermediary or
a carrier if the intermediary, carrier, or HCFA has determined that the
provider or supplier to whom payments are to be made has been overpaid.
(b) Steps necessary for suspension of payment, offset, and
recoupment. Except as provided in paragraph (c) of this section, HCFA,
the intermediary, or carrier suspends payments only after it has
complied with the procedural requirements set forth at Sec. 405.372.
The intermediary or carrier offsets or recoups payments only after it
has complied with the procedural requirements set forth at
Sec. 405.373.
(c) Suspension of payment in the case of unfiled cost reports. If a
provider has failed to timely file an acceptable cost report, payment
to the provider is immediately suspended until a cost report is filed
and determined by the intermediary to be acceptable. In the case of an
unfiled cost report, the provisions of Sec. 405.372 do not apply. (See
Sec. 405.372(a)(2) concerning failure to furnish other information.)
Sec. 405.372 Proceeding for suspension of payment.
(a) Notice of intention to suspend--(1) General rule. Except as
provided in paragraphs (a)(2) through (a)(4) of this section, if the
intermediary, carrier, or HCFA has determined that a suspension of
payments under Sec. 405.371(a)(1) should be put into effect, the
intermediary or carrier must notify the provider or supplier of the
intention to suspend payments, in whole or in part, and the reasons for
making the suspension.
(2) Failure to furnish information. The notice requirement of
paragraph (a)(1) of this section does not apply if the intermediary or
carrier suspends payments to a provider or supplier in accordance with
section 1815(a) or section 1833(e) of the Act, respectively, because
the provider or supplier has failed to submit information requested by
the intermediary or carrier that is needed to determine the amounts due
the provider or supplier. (See Sec. 405.371(c) concerning failure to
file timely acceptable cost reports.)
(3) Harm to Trust Funds. A suspension of payment may be imposed
without prior notice if HCFA, the intermediary, or carrier determines
that the Medicare Trust Funds would be harmed by giving prior notice.
HCFA may base its determination on an intermediary's or carrier's
belief that giving prior notice would hinder the possibility of
recovering the money.
(4) Fraud or misrepresentation. If the intended suspension of
payment involves suspected fraud or misrepresentation, HCFA determines
whether to impose the suspension and if prior notice is appropriate.
HCFA directs the intermediary or carrier as to the timing and content
of the notification to the provider or supplier. HCFA is the real party
in interest and is responsible for the decision. HCFA may base its
decision on information from the intermediary, carrier, law enforcement
agencies, or other sources. HCFA determines whether the information is
reliable.
(b) Rebuttal--(1) If prior notice is required. If prior notice is
required under paragraph (a) of this section, the intermediary or
carrier must give the provider or supplier an opportunity for rebuttal
in accordance with Sec. 405.374. If a rebuttal statement is received
within the specified time period, the suspension of payment goes into
effect on the date stated in the notice, and the procedures and
provisions set forth in Sec. 405.375 apply. If by the end of the period
specified in the notice no statement has been received, the suspension
goes into effect automatically, and the procedures set forth in
paragraph (c) of this section are followed.
(2) If prior notice is not required. If, under the provisions of
paragraphs (a)(2) through (a)(4) of this section, a suspension of
payment is put into effect without prior notice to the provider or
supplier, the intermediary or carrier must, once the suspension is in
effect, give the provider or supplier an opportunity to submit a
rebuttal statement as to why the suspension should be removed.
(c) Subsequent action. If a suspension of payment is put into
effect, the intermediary, carrier, or HCFA takes timely action after
the suspension to obtain the additional evidence it may need to make a
determination as to whether an overpayment exists or the payments may
be made. The intermediary, carrier, or HCFA makes all reasonable
efforts to expedite the determination. As soon as the determination is
made, the intermediary or carrier informs the provider or supplier and,
if appropriate, the suspension is rescinded or any existing recoupment
or offset is adjusted to take into account the determination.
(d) Duration of suspension of payment--(1) General rule. Except as
provided in paragraphs (d)(2) and (d)(3) of this section, a suspension
of payment is limited to 180 days, starting with the date the
suspension begins.
(2) 180-day extension. (i) An intermediary, a carrier, or, in cases
of fraud and misrepresentation, OIG or a law enforcement agency, may
request a one-time only extension of the suspension period for up to
180 additional days if it is unable to complete its examination of the
information or investigation, as appropriate, within the 180-day time
limit. The request must be submitted in writing to HCFA.
(ii) Upon receipt of a request for an extension, HCFA notifies the
provider or supplier of the requested extension. HCFA then either
extends the suspension of payment for up to an additional 180 days or
determines that the suspended payments are to be released to the
provider or supplier.
(3) Exceptions to the time limits. (i) The time limits specified in
paragraphs (d)(1) and (d)(2) of this section do not apply if the case
has been referred to, and is being considered by, the OIG for
administrative action (for example, civil money penalties).
(ii) HCFA may grant an extension in addition to the extension
provided under paragraph (d)(2) of this section if the Department of
Justice submits a written request to HCFA that the suspension of
payment be continued based on the ongoing investigation and anticipated
filing of criminal and/or civil actions. At a minimum, the request must
include the following:
(A) Identification of the entity under suspension.
(B) The amount of time needed for continued suspension in order to
implement the criminal and/or civil proceedings.
(C) A statement of why and/or how criminal and/or civil actions may
be affected if the requested extension is not granted.
(e) Disposition of suspended payments. Payments suspended under the
authority of Sec. 405.371(b) are first applied to reduce or eliminate
any overpayments determined by the intermediary, carrier, or HCFA,
including any interest assessed under the provisions of Sec. 405.378,
and then applied to reduce any other obligation
[[Page 63747]]
to HCFA or to HHS. In the absence of a legal requirement that the
excess be paid to another entity, the excess is released to the
provider or supplier.
Sec. 405.373 Proceeding for offset or recoupment.
(a) General rule. Except as specified in paragraph (b) of this
section, if the intermediary, carrier, or HCFA has determined that an
offset or recoupment of payments under Sec. 405.371(a)(2) should be put
into effect, the intermediary or carrier must--
(1) Notify the provider or supplier of its intention to offset or
recoup payment, in whole or in part, and the reasons for making the
offset or recoupment; and
(2) Give the provider or supplier an opportunity for rebuttal in
accordance with Sec. 405.374.
(b) Paragraph (a) of this section does not apply if the
intermediary, after furnishing a provider a written notice of the
amount of program reimbursement in accordance with Sec. 405.1803,
recoups payment under paragraph (c) of Sec. 405.1803. (For provider
rights in this circumstance, see Secs. 405.1809, 405.1811, 405.1815,
405.1835, and 405.1843.)
(c) Actions following receipt of rebuttal statement. If a provider
or supplier submits, in accordance with Sec. 405.374, a statement as to
why an offset or recoupment should not be put into effect on the date
specified in the notice, the intermediary or carrier must comply with
the time limits and notification requirements of Sec. 405.375.
(d) No rebuttal statement received. If, by the end of the time
period specified in the notice, no statement has been received, the
recoupment or offset goes into effect automatically.
(e) Duration of recoupment or offset. If a recoupment or offset is
put into effect, it remains in effect until the earliest of the
following:
(1) The overpayment and any assessed interest are liquidated.
(2) The intermediary or carrier obtains a satisfactory agreement
from the provider or supplier for liquidation of the overpayment.
(3) The intermediary or carrier, on the basis of subsequently
acquired evidence or otherwise, determines that there is no
overpayment.
Sec. 405.374 Opportunity for rebuttal.
(a) General rule. If prior notice of the suspension of payment,
offset, or recoupment is given under Sec. 405.372 or Sec. 405.373, the
intermediary or carrier must give the provider or supplier an
opportunity, before the suspension, offset, or recoupment takes effect,
to submit any statement (to include any pertinent information) as to
why it should not be put into effect on the date specified in the
notice. Except as provided in paragraph (b) of this section, the
provider or supplier has at least 15 days following the date of
notification to submit the statement.
(b) Exception. The intermediary or carrier may for cause--
(1) Impose a shorter period for rebuttal; or
(2) Extend the time within which the statement must be submitted.
Sec. 405.375 Time limits for, and notification of, administrative
determination after receipt of rebuttal statement.
(a) Submission and disposition of evidence. If the provider or
supplier submits a statement, under Sec. 405.374, as to why a
suspension of payment, offset, or recoupment should not be put into
effect, or, under Sec. 405.372(b)(2), why a suspension should be
terminated, HCFA, the intermediary, or carrier must within 15 days,
from the date the statement is received, consider the statement
(including any pertinent evidence submitted), together with any other
material bearing upon the case, and determine whether the facts justify
the suspension, offset, or recoupment or, if already initiated, justify
the termination of the suspension, offset, or recoupment. Suspension,
offset, or recoupment is not delayed beyond the date stated in the
notice in order to review the statement.
(b) Notification of determination. The intermediary or carrier must
send written notice of the determination made under paragraph (a) of
this section to the provider or supplier. The notice must--
(1) In the case of offset or recoupment, contain rationale for the
determination; and
(2) In the case of suspension of payment, contain specific findings
on the conditions upon which the suspension is initiated, continued, or
removed and an explanatory statement of the determination.
(c) Determination is not appealable. A determination made under
paragraph (a) of this section is not an initial determination and is
not appealable.
5. In redesignated Sec. 405.376, the heading of the section,
paragraph (a), and the headings of paragraphs (e) and (f) are revised
to read as follows:
Sec. 405.376 Suspension and termination of collection action and
compromise of claims for overpayment.
(a) Basis and purpose. This section contains requirements and
procedures for the compromise of, or suspension or termination of
collection action on, claims for overpayments against a provider or a
supplier under the Medicare program. It is adopted under the authority
of the Federal Claims Collection Act (31 U.S.C. 3711). Collection and
compromise of claims against Medicare beneficiaries are explained at 20
CFR 404.515.
* * * * *
(e) Basis for termination of collection action.
* * * * *
(f) Basis for suspension of collection action.
* * * * *
6. Redesignated Sec. 405.377 is revised to read as follows:
Sec. 405.377 Withholding Medicare payments to recover Medicaid
overpayments.
(a) Basis and purpose. This section implements section 1885 of the
Act, which provides for withholding Medicare payments to certain
Medicaid providers that have not arranged to repay Medicaid
overpayments as determined by the Medicaid State agency or have failed
to provide information necessary to determine the amount (if any) of
overpayments.
(b) When withholding may be used. HCFA may withhold Medicare
payment to offset Medicaid overpayments that a Medicaid agency has been
unable to collect if--
(1) The Medicaid agency has followed the procedure specified in
Sec. 447.31 of this chapter; and
(2) The institution or person is one described in paragraph (c) of
this section and either--
(i) Has not made arrangements satisfactory to the Medicaid agency
to repay the overpayment; or
(ii) Has not provided information to the Medicaid agency necessary
to enable the agency to determine the existence or amount of Medicaid
overpayment.
(c) Institutions or persons affected. Withholding under paragraph
(b) of this section may be made with respect to any of the following
entities that has or had in effect an agreement with a Medicaid agency
to furnish services under an approved Medicaid State plan:
(1) An institutional provider that has in effect an agreement under
section 1866 of the Act. (Part 489 (Provider and Supplier Agreements)
implements section 1866 of the Act.)
(2) A physician or supplier that has accepted payment on the basis
of an assignment under section 1842(b)(3)(B)(ii) of the Act. (Section
424.55 sets forth the conditions a supplier agrees to in accepting
assignment.)
[[Page 63748]]
(d) Amount to be withheld. (1) HCFA contacts the appropriate
intermediary or carrier to determine the amount of Medicare payment to
which the institution or person is entitled.
(2) HCFA may require the intermediary or carrier to withhold
Medicare payments to the institution or person by the lesser of the
following amounts:
(i) The amount of the Medicare payments to which the institution or
person would otherwise be entitled.
(ii) The total Medicaid overpayment to the institution or person.
(e) Notice of withholding. If HCFA intends to withhold payments
under this section, it notifies by certified mail, return receipt
requested, the institution or person and the appropriate intermediary
or carrier of the intention to withhold Medicare payments and follows
the procedure in Sec. 405.374. The notice includes--
(1) Identification of the institution or person; and
(2) The amount of Medicaid overpayment to be withheld from payments
to which the institution or person would otherwise be entitled under
Medicare.
(f) Termination of withholding. HCFA terminates the withholding
if--
(1) The Medicaid overpayment is completely recovered;
(2) The institution or person enters into an agreement satisfactory
to the Medicaid agency to repay the overpayment; or
(3) The Medicaid agency determines that there is no overpayment
based on newly acquired evidence or a subsequent audit.
(g) Disposition of funds withheld. HCFA releases amounts withheld
under this section to the Medicaid agency to be applied against the
Medicaid overpayment made by the State agency.
Subpart R--Provider Reimbursement Determinations and Appeals
7. The authority citation for part 405, subpart R continues to read
as follows:
Authority: Secs. 205, 1102, 1814(b), 1815(a), 1833, 1861(v),
1871, 1872, 1878, and 1886 of the Social Security Act (42 U.S.C.
405, 1302, 1395(b), 1395g(a), 1395l, 1395x(v), 1395hh, 1395ii,
1395oo, and 1395ww).
8. In Sec. 405.1803, paragraph (c) is revised to read as follows:
Sec. 405.1803 Intermediary determination and notice of amount of
program reimbursement.
* * * * *
(c) Use of notice as basis for recoupment of overpayments. The
intermediary's determination contained in its notice is the basis for
making the retroactive adjustment (required by Sec. 413.64(f) of this
chapter) to any program payments made to the provider during the period
to which the determination applies, including recoupment under
Sec. 405.373 from ongoing payments to the provider of any overpayments
to the provider identified in the determination. Recoupment is made
notwithstanding any request for hearing on the determination the
provider may make under Sec. 405.1811 or Sec. 405.1835.
PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE SERVICES; OPTIONAL PROSPECTIVELY DETERMINED
PAYMENT RATES FOR SKILLED NURSING FACILITIES
B. Part 413 is amended as set forth below:
1. The authority citation for part 413 continues to read as
follows:
Authority: Sec. 1102, 1861(v)(1)(A), and 1871 of the Social
Security Act (42 U.S.C. 1302, 1395x(v)(1)(A), and 1395hh).
Sec. 413.5 [Amended]
2. In Sec. 413.5, paragraph (c)(3) is removed and reserved.
3. In Sec. 413.90, paragraph (b)(2) is revised to read as follows:
Sec. 413.90 Research costs.
* * * * *
(b) Application. (1) * * *
(2) If research is conducted in conjunction with, and as a part of,
the care of patients, the costs of usual patient care and studies,
analyses, surveys, and related activities to serve the provider's
administrative and program needs are allowable costs in the
determination of payment under Medicare.
4. In Sec. 413.153, paragraph (a)(1) introductory text is
republished, and paragraphs (a)(1)(ii) and (b)(2) are revised to read
as follows:
Sec. 413.153 Interest expense.
(a)(1) Principle. Necessary and proper interest on both current and
capital indebtedness is an allowable cost. However, interest costs are
not allowable if incurred as a result of--
(i) * * *
(ii) An interest assessment on a determined overpayment (as
described in Sec. 405.377 of this chapter); or
* * * * *
(b) Definitions. (1) * * *
(2) Necessary. Necessary interest is interest that meets the
following requirements:
(i) It is incurred on a loan made to satisfy a financial need of
the provider. Loans that result in excess funds or investments are not
considered necessary.
(ii) It is incurred on a loan made for a purpose reasonably related
to patient care.
(iii) It is reduced by investment income except income from--
(A) Gifts, grants, and endowments, whether held separately or
pooled with other funds;
(B) Funded depreciation that meets the program's qualifying
criteria;
(C) The provider's qualified pension funds;
(D) The provider's deferred compensation funds that meet the
program's qualifying criteria; and
(E) The provider's self-insurance trust funds that meet the
program's qualifying criteria.
(iv) It is not reduced by interest received as a result of judicial
review by a Federal court (as described in Sec. 413.64(j)).
* * * * *
C. Technical Amendments.
PART 401--GENERAL ADMINISTRATIVE REQUIREMENTS
1. The authority citation for part 401 is revised to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh). Subpart F is also issued under the
authority of the Federal Claims Collection Act (31 U.S.C. 3711).
Sec. 401.601 [Amended]
2. In Sec. 401.601, the following changes are made:
a. The following sentence is added at the end of paragraph (d)(1):
``These regulations apply only to the extent HCFA regulations do not
address a situation.''
b. In paragraph (d)(2)(iii), the phrase ``Secs. 405.374 and
405.376'' is removed, and the phrase ``Secs. 405.377 and 405.378'' is
added in its place.
Sec. 401.607 [Amended]
3. In Sec. 401.607, in paragraph (d)(1), the phrase ``In conformity
with 4 CFR 102.3,'' is removed.
PART 403--SPECIAL PROGRAMS AND PROJECTS
4. The authority citation for part 403 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Sec. 403.310 [Amended]
5. In Sec. 403.310, in the last sentence of paragraph (a), the
citation ``Sec. 405.376'' is
[[Page 63749]]
removed, and the citation ``Sec. 405.378'' is added in its place.
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
Subpart G--Reconsiderations and Appeals Under Medicare Part A
6. The authority citation for part 405, subpart G continues to read
as follows:
Authority: Secs. 1102, 1151, 1154, 1156, 1869(b), 1871, 1872,
and 1879 of the Social Security Act (42 U.S.C. 1302, 1320c, 1320c-3,
1320c-4, 1395ff(b), 1395hh, 1395ii, and 1395pp).
Sec. 405.705 [Amended]
7. In Sec. 405.705, in paragraph (d), the following changes are
made:
a. The citation ``(31 U.S.C. 951-953)'' is removed, and the
citation ``(31 U.S.C. 3711)'' is added in its place.
b. The citation ``Sec. 405.374'' is removed, and the citation
``Sec. 405.376'' is added in its place.
Sec. 405.1801 [Amended]
8. In Sec. 405.1801, in paragraph (a)(4), the citation
``Sec. 405.374'' is removed, and the citation ``Sec. 405.376'' is added
in its place.
PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE
PAYMENT
9. The authority citation for part 411 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Sec. 411.28 [Amended]
10. In Sec. 411.28, in paragraph (b), the citation ``Sec. 405.374''
is removed, and the citation ``Sec. 405.376'' is added in its place.
Sec. 413.20 [Amended]
11. In Sec. 413.20, in paragraph (e), the citation
``Sec. 405.371(a)'' is removed wherever it appears (twice), and the
citation ``Sec. 405.372(a)'' is added in place of the first appearance,
and ``Sec. 405.372(b)'' is added in place of the second appearance.
Sec. 413.153 [Amended]
2. In Sec. 413.153, in paragraph (a)(1)(iii), the citation
``Sec. 405.376'' is removed, and the citation ``Sec. 405.378'' is added
in its place.
PART 447--PAYMENTS FOR SERVICES
13. The authority citation for part 447 continues to read as
follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
Sec. 447.31 [Amended]
14. In Sec. 447.31, in paragraph (a), the citation ``Sec. 405.375''
is removed, and the citation ``Sec. 405.377'' is added in its place.
PART 493--LABORATORY REQUIREMENTS
15. The authority citation for part 493 continues to read as
follows:
Authority: Sec. 353 of the Public Health Service Act, secs.
1102, 1861(e), the sentence following 1861(s)(11), 1861(s)(12),
1861(s)(13), 1861(s)(14), 1861(s)(15), and 1861(s)(16) of the Social
Security Act (42 U.S.C. 263a, 1302, 1395x(e), the sentence following
1395x(s)(11), 1395(s)(12), 1395(s)(13), 1395(s)(14), 1395(s)(15),
and 1395(s)(16)).
Sec. 493.1834 [Amended]
16. In Sec. 493.1834, in paragraph (i)(1)(ii), the citation
``Sec. 405.376(d)'' is removed, and the citation ``Sec. 405.378(d)'' is
added in its place.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: July 30, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: August 16, 1996.
Donna E. Shalala,
Secretary.
[FR Doc. 96-30057 Filed 11-29-96; 8:45 am]
BILLING CODE 4120-01-P