[Federal Register Volume 72, Number 225 (Friday, November 23, 2007)]
[Proposed Rules]
[Pages 65686-65692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-22773]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 455
[CMS-2271-P]
RIN 0938-AO97
Medicaid Integrity Program; Eligible Entity and Contracting
Requirements for the Medicaid Integrity Audit Program
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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[[Page 65687]]
SUMMARY: Section 1936 of the Social Security Act (the Act) (as added by
section 6034 of the Deficit Reduction Act of 2005 (DRA)) established
the Medicaid Integrity Program to promote the integrity of the Medicaid
program by requiring CMS to enter into contracts with eligible entities
to: Review the actions of individuals or entities furnishing items or
services (whether on a fee-for-service, risk, or other basis) for which
payment may be made under an approved State plan and/or any waiver of
such plan approved under section 1115 of the Act; audit claims for
payment of items or services furnished, or administrative services
rendered, under a State plan; identify overpayments to individuals or
entities receiving Federal funds; and educate providers of services,
managed care entities, beneficiaries, and other individuals with
respect to payment integrity and quality of care.
This proposed rule would provide requirements for an eligible
entity to enter into a contract under the Medicaid integrity audit
program. The proposed rule would also establish the contracting
requirements for eligible entities. The requirements would include
procedures for identifying, evaluating, and resolving organizational
conflicts of interest that are generally applicable to Federal
acquisition and procurement; competitive procedures to be used; and
procedures under which a contract may be renewed.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on December 24,
2007.
ADDRESSES: In commenting, please refer to file code CMS-2271-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (no duplicates,
please):
1. Electronically. You may submit electronic comments on specific
issues in this regulation to http://www.cms.hhs.gov/eRulemaking. Click
on the link ``Submit electronic comments on CMS regulations with an
open comment period.'' (Attachments should be in Microsoft Word,
WordPerfect, or Excel; however, we prefer Microsoft Word.)
2. By regular mail. You may mail written comments (one original and
two copies) to the following address ONLY: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Attention:
CMS-2271-P, P.O. Box 8010, Baltimore, MD 21244-1850. Please allow
sufficient time for mailed comments to be received before the close of
the comment period.
3. By express or overnight mail. You may send written comments (one
original and two copies) to the following address only: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-2271-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to one of the following addresses. If you
intend to deliver your comments to the Baltimore address, please call
telephone number (410) 786-8148 in advance to schedule your arrival
with one of our staff members. Room 445-G, Hubert H. Humphrey Building,
200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security
Boulevard, Baltimore, MD 21244-1850.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.) Comments
mailed to the addresses indicated as appropriate for hand or courier
delivery may be delayed and received after the comment period.
Submission of comments on paperwork requirements. You may submit
comments on this document's paperwork requirements by mailing your
comments to the addresses provided at the end of the ``Collection of
Information Requirements'' section in this document.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Barbara Rufo, 410-786-5589 or Crystal
High, 410-786-8366.
SUPPLEMENTARY INFORMATION:
Submitting Comments: We welcome comments from the public on all
issues set forth in this rule to assist us in fully considering issues
and developing policies. You can assist us by referencing the file code
CMS-2271-P.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.cms.hhs.gov/eRulemaking. Click on the link ``Electronic Comments on
CMS Regulations'' on that Web site to view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
I. Background
A. Current Law
States and the Federal government share in the responsibility for
safeguarding Medicaid program integrity. States must comply with
Federal requirements designed to ensure that Medicaid funds are
properly spent (or recovered, when necessary). CMS is the primary
Federal agency responsible for providing oversight of States'
activities and facilitating their program integrity efforts.
B. Medicaid Integrity Program
Section 6034 of the Deficit Reduction Act (DRA) of 2005 (Pub. L.
109-171, enacted on February 8, 2006) added a new section 1936 to the
Act that established the Medicaid Integrity Program, referenced as the
``Program'' hereafter, to combat Medicaid fraud and abuse. The Program
is intended to identify, recover, and prevent Medicaid overpayments. It
is also intended to support the efforts of the State Medicaid agencies
through a combination of oversight and technical assistance.
Although individual States work to ensure the integrity of their
respective Medicaid programs, the Program represents CMS' first
national strategy to detect and prevent Medicaid fraud and abuse. The
Program would provide CMS with the ability to more directly ensure the
accuracy of Medicaid payments and to deter those who would exploit the
program.
Section 6034 of the DRA amends title XIX of the Act by
redesignating the former section 1936 as section 1937; and inserting
the new 1936 ``Medicaid Integrity Program.'' The new section 1936
states the Secretary will promote the integrity of the Medicaid program
by entering into contracts with eligible
[[Page 65688]]
entities to carry out the following activities:
Review of actions of individuals or entities furnishing items or
services (whether on a fee-for-service, risk, or other basis) for which
payment may be made under the State plan approved under title XIX (or
under any waiver of such plan approved under section 1115 of the Act)
to determine whether fraud, waste, or abuse has occurred, or is likely
to occur, or whether such actions have a potential for resulting in an
expenditure of funds under title XIX in a manner which is not intended
under the provisions of title XIX.
Audit of claims for payment for items or services furnished, or
administrative services rendered, under a State plan under title XIX,
including cost reports, consulting contracts, and risk contracts under
section 1903(m) of title XIX.
Identification of overpayments to individuals or entities receiving
Federal funds under title XIX.
Education of providers of services, managed care entities,
beneficiaries, and other individuals with respect to payment integrity
and quality of care.
Section 1936 of the Act also mandates that the Secretary will by
regulation establish procedures which will include the following:
Procedures for identifying, evaluating, and resolving
organizational conflicts of interest that are generally applicable to
Federal acquisition and procurement.
Competitive procedures to be used when entering into new
contracts under this section; when entering into contracts that may
result in the elimination of responsibilities under section 202(b) of
the Health Insurance Portability and Accountability Act of 1996; and
any other time considered appropriate by the Secretary.
Procedures under which a contract under this section may
be renewed without regard to any provision of law requiring competition
if the contractor has met or exceeded the performance requirements
established in the current contract.
CMS has determined not to address in this proposed rule the above
bullet that references the Health Insurance Portability and
Accountability Act of 1996 (HIPAA). We have determined that section
202(b) of HIPAA addressed certain Medicare contracting issues which,
because of structural differences between the Medicare and Medicaid
programs, such as the fact that the Federal government does not utilize
carriers or fiscal intermediaries in the Federal administration of the
Medicaid program, do not pertain to the Medicaid contracting
environment. Moreover, we have also determined that the provisions of
the Social Security Act established by section 202(b) of HIPAA have
since been repealed by section 911 of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003. We invite public comment on
this approach.
II. Provisions of the Proposed Regulations
In accordance with section 1936 of the Act, we would, through this
proposed rule at new subpart D, Sec. 455.200, define eligible entities
that may enter into contracts under this Program to carry out
activities as described above as well as establish contracting
requirements for such entities. The approach taken in this proposed
rule is consistent with a similar approach taken in the Medicare
Integrity Program, which has very similar statutory requirements.
A. Basis and Scope
Following the mandate of section 1936 of the Act, this proposed
rule, in subpart C, Sec. 455.200(b), Basis and Scope, would add
additional language stating that part of the Medicaid Integrity
Program's scope is to carry out the Medicaid integrity audit functions.
Subpart C would apply to entities that seek to compete for, or receive
an award of, a contract under section 1936 of the Act.
B. Definition of Eligible Entity
In accordance with section 1936 of the Act, the proposed Sec.
455.230 would describe that an eligible entity may enter into a
Medicaid integrity audit program contract if it:
Demonstrates the capability to carry out the contractor
activities;
In carrying out such activities, agrees to cooperate with
the Inspector General of the Department of Health and Human Services,
the Attorney General, and other law enforcement agencies, as
appropriate, in the investigation and deterrence of fraud and abuse in
relation to title XIX and in other cases arising out of such
activities;
Maintains an appropriate written code of conduct and
compliance policies that include, without limitation, an enforced
policy on employee conflicts of interest;
Complies with such conflict of interest standards as are
generally applicable to Federal acquisition and procurement; and,
Meets other requirements the Secretary may impose.
It would not be possible to identify in this rule every possible
contractor requirement that may appear in a future solicitation. In
order to permit maximum flexibility to tailor our contractor
eligibility requirements to specific solicitations while satisfying
section 1936 of the Act, any additional requirements would be contained
in the applicable solicitation.
In addition, we propose that a contractor under section 1936 of the
Act may perform any or all of the contractor functions as are listed
and described under ``contractor functions.''
C. Contractor Functions
In accordance with section 1936 of the Act, section 455.232 would
identify the functions of the Medicaid integrity audit program
contractor as follows:
Review of the actions of individuals or entities
furnishing items or services (whether on a fee-for-service, risk, or
other basis) for which payment may be made under a State plan approved
under title XIX (or under any waiver of such plan approved under
section 1115 of the Act) to determine whether fraud, waste, or abuse
has occurred, is likely to occur, or whether such actions have the
potential for resulting in an expenditure of funds under title XIX in a
manner which is not intended under the provisions of title XIX.
Audit of claims for payment for items or services
furnished, or administrative services rendered, under a State plan
under title XIX, including (a) cost reports; (b) consulting contracts;
and (c) risk contracts under section 1903(m) of the Act.
Identification of overpayments to individuals or entities
receiving Federal funds under title XIX.
Educating providers of service, managed care entities,
beneficiaries, and other individuals with respect to payment integrity
and quality of care.
D. Competitive Procedures and Requirements
Section 455.234 would specify that a Medicaid integrity audit
contract will be awarded in accordance with 48 CFR chapters 1 and 3
(the Federal Acquisition Regulation (FAR) and the Health and Human
Services Acquisition Regulation, respectively), this subpart, and all
other applicable laws and regulations. In accordance with section 1936
of the Act, we would specify that these competitive procedures and
requirements will be used as follows:
When entering into new contracts under this section.
At any other time considered appropriate by the Secretary.
In addition, we propose to specify in Sec. 455.234 that an entity must
meet the eligibility requirements established in proposed Sec. 455.230
to become eligible to
[[Page 65689]]
be awarded a Medicaid integrity audit program contract.
E. Renewal of Contracts
Renewing a contract, when appropriate, results in continuity for
both CMS and the contractor and can be in the best interest of the
Program. If a contract is not renewed, we must ensure that sufficient
time is provided to transfer and reassign the Medicaid integrity audit
program functions as described in this subpart. Therefore, in Sec.
455.236, we would specify that an initial contract term will be defined
in the Medicaid integrity audit program contract and a renewal clause
may be included in the contract. We also would specify that we may, but
are not required to, renew the Medicaid integrity audit program
contracts without regard to any provision of law requiring competition
if the contractor has met or exceeded the performance requirements
established in the current contract.
In accordance with sections 1936(c)(2) and (3) of the Act, we would
specify in Sec. 455.236(b) that we may renew a Medicaid integrity
audit program contract without competition if the contractor continues
to meet all requirements of the proposed subpart C, the contractor
meets or exceeds the performance requirements established in its
current contract, and it is in the best interest of the government.
At Sec. 455.236(a) we propose that if CMS does not renew a
contract, the contract will end in accordance with its terms. The
contractor will not have a right to a hearing or judicial review
regarding our renewal decision.
F. Conflict of Interest
This proposed rule would establish at Sec. 455.238 the process for
identifying, evaluating, and resolving conflicts of interest as
mandated by sections 1936(c)(2) and (3) of the Act. Establishing such a
process would ensure that business arrangements of potential
contractors do not inhibit competition between providers, suppliers, or
other types of business related to the Medicaid program, or have the
potential of harming the government's interests.
We would adhere to the requirements of the FAR's organizational
conflict of interest requirements found at 48 CFR subpart 9.5 when
soliciting contracts for the Medicaid integrity audit program. Due to
the sensitive nature of the work to be performed under the contract,
the need to preserve public trust, and the history of fraud and abuse
in the Medicaid program, we would maintain the presumption that each
prospective contract involves a significant potential organizational
conflict of interest.
Prior to awarding a Medicaid integrity audit program contract, the
contracting officer will draft an organizational conflict of interest
clause specific to the contractor for inclusion in the contract. In
general we would not enter into a Medicaid integrity audit program
contract with an offeror or an existing Medicaid integrity audit
program contractor that has been determined to have, or that has the
potential for, an unresolved organizational conflict of interest.
At Sec. 455.238(a), we would specify that an offeror for a
Medicaid integrity audit program contract is, and the Medicaid
integrity audit program contractors are, subject to the conflict of
interest standards and requirements of the FAR organizational conflict
of interest guidance found at 48 CFR subpart 9.5, and the requirements
and standards that are contained in each individual contract awarded to
perform the functions described under section 1936 of the Act.
In Sec. 455.238(b), we would include post award discussions. We
would specify that we consider that a post award conflict of interest
has developed if, during the term of the contract, the contractor or
any of its employees, agents, or subcontractors received, solicited, or
arranged to receive any fee, compensation, gift, payment of expenses,
offer of employment, or any other thing of value from any entity that
is reviewed, audited, investigated, or contacted during the normal
course of performing activities under a Medicaid integrity audit
program contract. We incorporate the definition of ``gift'' from the
Standards of Ethical Conduct for Employees of the Executive Branch [5
CFR 2635.203(b)].
In addition, in Sec. 455.238(c) we propose that if CMS has
determined that a contractor's activities are creating a conflict, then
a conflict of interest has occurred during the term of the contract. If
such an event has occurred, among other actions, we may, as we deem
appropriate:
Not renew the contract for an additional term;
Modify the contract; or
Terminate the contract.
The proposed provisions do not describe all of the information that
may be required, or the level of detail that would be required. We wish
to have the flexibility to tailor the requirements to each individual
procurement. Because potential offerors may have questions about
whether information submitted in response to a solicitation, including
information regarding potential conflicts of interest, may be
redisclosed under the Freedom of Information Act (FOIA), we provide the
following information.
To the extent that a proposal containing information is submitted
to us as a requirement of a competitive solicitation under 41 U.S.C.
Chapter 4, Subchapter IV, we would withhold the proposal when requested
under the FOIA. This withholding is based upon 41 U.S.C. 253b(m).
However, there is one exception to this policy. It involves any
proposal that is set forth or incorporated by reference in the contract
awarded to the proposing offeror. Such a proposal may not receive
categorical protection. Rather, we would withhold, under 5 U.S.C.
552(b)(4), information within the proposal that is required to be
submitted that constitutes trade secrets or commercial or financial
information that is privileged or confidential, provided the criteria
established by National Parks & Conservation Association v. Morton, 498
F.2d 765 (D.C. Cir. 1974), as applicable, are met. For any such
proposal, we would follow pre-disclosure notification procedures set
forth at 45 CFR 5.65(d).
Any proposal containing the information submitted to us under an
authority other than 41 U.S.C. Chapter 4, Subchapter IV, and any
information submitted independent of a proposal would be evaluated
solely on the criteria established by National Parks & Conservation
Association v. Morton and other appropriate authorities to determine if
the proposal in whole or in part contains trade secrets or commercial
or financial information that is privileged or confidential and
protected from disclosure under 5 U.S.C. 552(b)(4). Again, for any such
proposal, we would follow pre-disclosure notification procedures set
forth at 45 CFR 5.65(d) and will also invoke 5 U.S.C. 552(b)(6) to
protect information that is of a highly sensitive personal nature. It
should be noted that the protection of proposals under FOIA does not
preclude us from releasing contractor proposals when necessitated by
law, such as in the case of a lawful subpoena.
G. Conflict of Interest Resolution
We propose to describe at Sec. 455.240(a) how a conflict of
interest may be resolved. We would state that a Conflicts of Interest
Review Board may be established and convened at any time during the
term of the contract, as well as during the procurement process, to
evaluate and assist the contracting officer in resolving conflicts of
interest. We would determine when or if the Board will be convened. We
would, at Sec. 455.240(b), specify that a resolution of
[[Page 65690]]
an organizational conflict of interest is a determination by the
contracting officer that:
The conflict is mitigated;
The conflict precludes award of a contract to the offeror;
The conflict requires that we modify an existing contract;
The conflict requires that we terminate an existing
contract; or
It is in the best interest of the government to contract
with the offeror or contractor even though the conflict of interest
exists.
An offeror's or contractor's method of mitigating conflicts of
interest will be evaluated on a case by case basis. We have provided
examples of methods an offeror or contractor may use to mitigate
organizational conflicts of interest. The examples are not an all-
inclusive list of possible methods of mitigation nor are we obligated
to approve a mitigation method that uses one of the provided examples.
Possible methods of mitigation include:
Divestiture, or reduction in the amount, of the financial
relationship the organization has in another organization to a level
acceptable to us and appropriate for the situation.
If shared responsibilities create the conflict, a plan,
subject to our approval, to separate lines of business and management
or critical staff from work on the Medicaid integrity audit program
contract.
If the conflict exists because of the amount of financial
dependence upon the Federal Government, negotiating a phasing out of
other contracts or grants that continue in effect at the start of the
Medicaid integrity audit program contract.
If the conflict exists because of the financial
relationships of individuals within the organization, divestiture of
the relationships by the individual involved.
If the conflict exists because of an individual's indirect
interest, divestiture of the interest to levels acceptable to us or
removal of the individual from the work under the Medicaid integrity
audit program contract.
By providing a process for the identification, evaluation, and
resolution of conflicts of interest, we not only protect the
government's interests but help to ensure that the contractors do not
hinder competition in their service areas by misusing their position as
a Medicaid integrity audit program contractor.
III. Collection of Information Requirements
This document does not impose any information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 35).
IV. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
V. Regulatory Impact Statement
[If you wish to comment on issues in this section, please include
the caption ``Regulatory Impact Statement'' at the beginning of your
comments.]
We have examined the impact of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 directs agencies to assess all costs and benefits
of available regulatory alternatives and, if regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety effects,
distributive impacts, and equity). A regulatory impact analysis (RIA)
must be prepared for major rules with economically significant effects
($100 million or more in any 1 year). This rule would not reach the
economic threshold and thus is not considered a major rule.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$6.5 million to $31.5 million in any 1 year. Individuals and States are
not included in the definition of a small entity. We are not preparing
an analysis for the RFA because we have determined, and the Secretary
certifies, that this rule would not have a significant economic impact
on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us 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 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 Core-Based
Statistical Area and has fewer than 100 beds. We are not preparing an
analysis for section 1102(b) of the Act because we have determined, and
the Secretary certifies, that this rule would not have a significant
impact on the operations of a substantial number of small rural
hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. That threshold
level is currently approximately $120 million. This proposed rule would
not exceed this established threshold level. This rule would have no
consequential effect on State, local, or tribal governments or on the
private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. Since this regulation would not impose any costs on State
or local governments, the requirements of E.O. 13132 are not
applicable.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects in Part 455
Fraud, Grant programs--health, Health facilities, Health
professions, Investigations, Medicaid, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services would amend 42 CFR chapter IV as set forth below:
PART 455--PROGRAM INTEGRITY; MEDICAID
1. The authority citation for part 455 continues to read as
follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
2. A new Sec. 455.200 is added to read as follows:
[[Page 65691]]
Sec. 455.200 Basis and scope.
(a) Statutory basis. This subpart implements section 1936 of the
Act that establishes the Medicaid Integrity Program, under which the
Secretary will promote the integrity of the program by entering into
contracts with eligible entities to carry out the activities under this
subpart C.
(b) Scope. This subpart provides for the limitation on a
contractor's liability to carry out a contract under the Medicaid
Integrity Program and to carry out the Medicaid integrity audit program
functions.
3. A new Sec. 455.230 is added to read as follows:
Sec. 455.230 Eligibility requirements.
CMS may enter into a contract with an entity to perform the
activities described at Sec. 455.232, if it meets the following
conditions:
(a) The entity has demonstrated capability to carry out the
activities described below.
(b) In carrying out such activities, the entity agrees to cooperate
with the Inspector General of the Department of Health and Human
Services, the Attorney General, and other law enforcement agencies, as
appropriate, in the investigation and deterrence of fraud and abuse in
relation to Title XIX of the Social Security Act and in other cases
arising out of such activities.
(c) Maintains an appropriate written code of conduct and compliance
policies that include, without limitation, an enforced policy on
employee conflicts of interest.
(d) The entity complies with such conflict of interest standards as
are generally applicable to Federal acquisition and procurement.
(e) The entity meets such other requirements the Secretary may
impose.
4. A new Sec. 455.232 is added to read as follows:
Sec. 455.232 Medicaid integrity audit program contractor functions.
The contract between CMS and a Medicaid integrity audit program
contractor specifies the functions the contractor will perform. The
contract may include any or all of the following functions:
(a) Review of the actions of individuals or entities furnishing
items or services (whether on a fee-for-service, risk, other basis) for
which payment may be made under a State Plan approved under title XIX
of the Act (or under any waiver of such plan approved under section
1115 of the Act) to determine whether fraud, waste, or abuse has
occurred, is likely to occur, or whether such actions have the
potential for resulting in an expenditure of funds under title XIX in a
manner which is not intended under the provisions of title XIX.
(b) Auditing of claims for payment for items or services furnished,
or administrative services rendered, under a State Plan under title XIX
to ensure proper payments were made. This includes: Cost reports,
consulting contracts, and risk contracts under section 1903(m) of the
Act.
(c) Identifying if overpayments have been made to individuals or
entities receiving Federal funds under title XIX.
(d) Educating providers of service, managed care entities,
beneficiaries, and other individuals with respect to payment integrity
and quality of care.
5. A new Sec. 455.234 is added to read as follows:
Sec. 455.234 Awarding of a contract.
(a) CMS awards and administers Medicaid integrity audit program
contracts in accordance with acquisition regulations set forth at 48
CFR chapters 1 and 3, this subpart, and all other applicable laws and
regulations. These competitive procedures and requirements for awarding
Medicaid integrity audit program contracts are to be used as follows:
(1) When entering into new contracts under this section.
(2) At any other time considered appropriate by the Secretary.
(b) An entity is eligible to be awarded a Medicaid integrity audit
program contract only if it meets the eligibility requirements
established in Sec. 455.202, 48 CFR chapter 3, and all other
applicable laws and requirements.
6. A new Sec. 455.236 is added to read as follows:
Sec. 455.236 Renewal of a contract.
(a) CMS specifies the initial contract term in the Medicaid
integrity audit program contract. CMS may, but is not required to,
renew a Medicaid integrity audit program contract without regard to any
provision of law requiring competition if the contractor has met or
exceeded the performance requirements established in the current
contract.
(b) CMS may renew a Medicaid integrity audit program contract
without competition if all of the following conditions are met:
(1) The Medicaid integrity audit program contractor continues to
meet the requirements established in this subpart.
(2) The Medicaid integrity audit program contractor meets or
exceeds the performance requirements established in its current
contract.
(3) It is in the best interest of the government.
(c) If CMS does not renew a contract, the contract will end in
accordance with its terms. The contractor will not have a right to a
hearing or judicial review regarding CMS' renewal or non-renewal
decision.
7. A new Sec. 455.238 is added to read as follows:
Sec. 455.238 Conflict of interest.
(a) Offerors for Medicaid integrity audit program contracts, and
Medicaid integrity audit program contractors, are subject to the
following requirements:
(1) The conflict of interest standards and requirements of the
Federal Acquisition Regulation organizational conflict of interest
guidance, found under 48 CFR subpart 9.5.
(2) The standards and requirements that are contained in each
individual contract awarded to perform activities described under
section 1936 of the Act.
(b) Post-award conflicts of interest: CMS considers that a post-
award conflict of interest has developed if, during the term of the
contract, one of the following occurs:
(1) The contractor or any of its employees, agents, or
subcontractors received, solicited, or arranged to receive any fee,
compensation, gift (defined at 5 CFR 2635.203(b)), payment of expenses,
offer of employment, or any other thing of value from any entity that
is reviewed, audited, investigated, or contacted during the normal
course of performing activities under the Medicaid integrity audit
program contract.
(2) CMS determines that the contractor's activities are creating a
conflict of interest.
(c) If CMS determines that a conflict of interest exists during the
term of the contract, among other actions, CMS may:
(1) Not renew the contract for an additional term.
(2) Modify the contract.
(3) Terminate the contract.
8. A new Sec. 455.238 is added to read as follows:
Sec. 435.240 Conflict of interest resolution.
(a) Review Board: CMS may establish a Conflicts of Interest Review
Board to assist in resolving organizational conflicts of interest.
(b) Resolution: Resolution of an organizational conflict of
interest is a determination by the contracting officer that:
(1) The conflict is mitigated.
(2) The conflict precludes award of a contract to the offeror.
(3) The conflict requires that CMS modify an existing contract.
(4) The conflict requires that CMS terminate an existing contract.
[[Page 65692]]
(5) It is in the best interest of the government to contract with
the offeror or contractor even though the conflict of interest exists
and a request for waiver is approved in accordance with 48 CFR 9.503.
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
Dated: June 15, 2007.
Leslie V. Norwalk,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: August 20, 2007.
Michael O. Leavitt,
Secretary.
[FR Doc. E7-22773 Filed 11-21-07; 8:45 am]
BILLING CODE 4120-01-P