[Federal Register Volume 77, Number 82 (Friday, April 27, 2012)]
[Rules and Regulations]
[Pages 25284-25318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9994]



[[Page 25283]]

Vol. 77

Friday,

No. 82

April 27, 2012

Part III





Department of Health and Human Services





-----------------------------------------------------------------------





Centers for Medicare & Medicaid Services





-----------------------------------------------------------------------





42 CFR Parts 424 and 431





Medicare and Medicaid Programs; Changes in Provider and Supplier 
Enrollment, Ordering and Referring, and Documentation Requirements; and 
Changes in Provider Agreements

  Federal Register / Vol. 77 , No. 82 / Friday, April 27, 2012 / Rules 
and Regulations  

[[Page 25284]]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 424 and 431

[CMS-6010-F]
RIN 0938-AQ01


Medicare and Medicaid Programs; Changes in Provider and Supplier 
Enrollment, Ordering and Referring, and Documentation Requirements; and 
Changes in Provider Agreements

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule finalizes several provisions of the Affordable 
Care Act implemented in the May 5, 2010 interim final rule with comment 
period. It requires all providers of medical or other items or services 
and suppliers that qualify for a National Provider Identifier (NPI) to 
include their NPI on all applications to enroll in the Medicare and 
Medicaid programs and on all claims for payment submitted under the 
Medicare and Medicaid programs. In addition, it requires physicians and 
other professionals who are permitted to order and certify covered 
items and services for Medicare beneficiaries to be enrolled in 
Medicare. Finally, it mandates document retention and provision 
requirements on providers and supplier that order and certify items and 
services for Medicare beneficiaries.

DATES: Effective June 26, 2012 the interim final rule amending 42 CFR 
parts 424 and 431 that published on May 5, 2010 (75 FR 24437) is 
confirmed as final with changes.

FOR FURTHER INFORMATION CONTACT: 

Katie Mucklow Lehman, (410) 786-0537, for Medicare issues.
Donna Schmidt, (410) 786-5532 for Medicaid issues.

SUPPLEMENTARY INFORMATION:

I. Background

    The Medicare program, title XVIII of the Social Security Act (the 
Act), is the primary payer of health care for approximately 50 million 
beneficiaries. Under section 1802 of the Act, a beneficiary may obtain 
health services from an individual or organization qualified to 
participate in the Medicare program.
    Providers and suppliers furnishing services must comply with the 
Medicare requirements stipulated in the Act and in implementing 
regulations. These requirements are meant to promote the furnishing of 
quality care, while protecting the integrity of the program. As 
Medicare program expenditures have grown, the Centers for Medicare & 
Medicaid Services (CMS) has increased its efforts to ensure that only 
qualified individuals or organizations are allowed to enroll in 
Medicare and maintain Medicare billing privileges.
    The Medicaid program, established under title XIX of the Act pays 
for medical benefits to tens of millions of people. Medicaid is a joint 
Federal and State health care program for eligible low-income 
individuals. The Medicaid program works within a broad Federal 
framework and States have considerable flexibility in how the program 
is administered.
    The Patient Protection and Affordable Care Act (Pub. L. 111-148) as 
amended by the Health Care and Education Reconciliation Act of 2010 
(Pub. L. 111-152) (collectively known as the Affordable Care Act) makes 
many changes to the Medicare and Medicaid programs, some of which 
involve strengthening tools for quality and integrity. To maintain 
program integrity and ensure quality, we must make certain that only 
qualified providers and suppliers participate in the programs and that 
they bill accurately for their services. With respect to Medicaid, our 
regulations provide States with considerable flexibility. However, the 
Federal framework includes some key requirements to ensure program 
integrity while providing quality care. For example, Medicaid providers 
must generally meet all State licensing and scope-of-practice 
requirements, and may be subject to additional Federal and State 
quality standards. Additionally, the Medicare and Medicaid regulations 
require timely filing of claims by providers.
    In the May 5, 2010 Federal Register (75 FR 24437), we published an 
interim final rule with comment period (IFC) that implemented several 
provisions of the Affordable Care Act regarding provider and supplier 
enrollment, ordering and referring; documentation requirements, and 
changes in provider agreements.

II. Provisions of the Interim Final Rule With Comment Period and 
Summary of Responses to Comments

    In this section of the final rule, we provide the following for 
each of the provisions of the May 5, 2010 IFC:
     Background.
     Statutory changes based on the Affordable Care Act.
     The provisions of the IFC.
     Summary of the comments and responses to the public 
comments received on the IFC. We received approximately 224 timely 
comments on the May 5, 2010 IFC.
    With regard to the Medicare provisions, we also note that the term 
``provider,'' as used throughout the IFC and in this final rule, has 
the meaning specified in Sec.  400.202.
    For Medicaid, the term ``provider,'' as used throughout the IFC and 
in this final rule, has the meaning specified in Sec.  400.203. That 
is, for purposes of this rule provider means any individual or entity 
furnishing Medicaid services under an agreement with the Medicaid 
agency.
    We also note that the use of the term ``supplier,'' in the IFC and 
in this final rule, as defined at Sec.  400.202, with regard to the 
Medicare provisions, is ``a physician or other practitioner, or an 
entity other than a provider that furnishes health care services under 
Medicare.'' In portions of this final rule, the commenters and CMS may 
only use the term ``provider(s)'' or ``supplier(s).'' However, the 
reader should consider these terms as relating to both providers and 
suppliers, unless explicitly stated otherwise. The regulatory text, 
however, uses precise language.
    Finally, throughout this final rule, we have attempted to remain 
consistent with our terminology regarding the term ``resident.'' We 
draw the reader's attention to Sec.  413.75(b) where a resident is 
defined as ``* * * an intern, resident, or fellow who participates in 
an approved medical residency program, including programs in 
osteopathy, dentistry, and podiatry, as required in order to become 
certified by the appropriate specialty board.'' We want to be explicit 
in stating that the term ``resident'' incorporates interns, residents, 
and fellows and we will use this term to refer to all three 
professionals throughout this final rule.

A. Inclusion of the National Provider Identifier (NPI) on All Medicare 
and Medicaid Enrollment Applications and Claims

1. Background
    Historically, we have identified vulnerabilities in Medicare 
enrollment procedures that have permitted the enrollment of providers 
and suppliers whose qualifications for meeting all of our enrollment 
standards were sometimes questionable. This raised concerns that 
certain providers and suppliers in our program may be under- qualified 
or even fraudulent and has led us to increase our efforts to establish 
more stringent controls on provider and

[[Page 25285]]

supplier entry into the Medicare program. These efforts include the 
publication of the following rules:
     A final rule with comment titled, ``Additional Supplier 
Standards'' (October 11, 2000, 65 FR 60366).
     A final rule titled, ``Requirements for Providers and 
Suppliers to Establish and Maintain Medicare Enrollment'' (April 21, 
2006, 71 FR 20754).
     A final rule titled, ``Medicare Program; Revisions to 
Payment Policies, Five-Year Review of Work Relative Value Units, 
Changes to the Practice Expense Methodology Under the Physician Fee 
Schedule, and Other Changes to Payment Under Part B; Revisions to the 
Payment Policies of Ambulance Services Under the Fee Schedule for 
Ambulance Services; and Ambulance Inflation Factor Update for CY 2007'' 
(December 1, 2006, 71 FR 69624).
     A final rule titled, ``Competitive Acquisition for Certain 
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies 
(DMEPOS)'' (April 10, 2007, 72 FR 17992).
     A final rule titled, ``Medicare Program; Revisions to 
Payment Policies Under the Physician Fee Schedule, and Other Part B 
Payment Policies for CY 2008; Revisions to the Payment Policies of 
Ambulance Services Under the Ambulance Fee Schedule for CY 2008; and 
the Amendment of the E-Prescribing Exemption for Computer Generated 
Facsimile Transmissions; Final Rule'' (72 FR 66222).
     A final rule titled, ``Appeals of CMS or CMS Contractor 
Determinations When a Provider or Supplier Fails to Meet the 
Requirements for Medicare Billing Privileges'' (June 27, 2008, 73 FR 
36448).
     A final rule with comment titled, ``Payment Policies Under 
the Physician Fee Schedule and Other Revisions to Part B for CY 2009; 
E-Prescribing Exemption for Computer Generated Facsimile Transmissions; 
and Payment for Certain Durable Medical Equipment, Prosthetics, 
Orthotics, and Supplies (DMEPOS)'' (November 19, 2008, 73 FR 69726).
     A final rule titled, ``Medicare Program; Surety Bond 
Requirement for Suppliers of Durable Medical Equipment, Prosthetics, 
Orthotics, and Supplies (DMEPOS); Final Rule'' (January 2, 2009, 74 FR 
166).
     A final rule titled, ``The National Provider Identifier 
Rule'' (January 23, 2004, 69 FR 3434).
     A final rule titled ``Medicare, Medicaid, and Children's 
Health Insurance Programs; Additional Screening Requirements, 
Application Fees, Temporary Enrollment Moratoria, Payment Suspensions 
and Compliance Plans for Providers and Suppliers'' (February 2, 2011, 
76 FR 5862).
    The NPI provisions of this final rule are an extension of the 
aforementioned program integrity initiatives, consistent with the 
direction of the Affordable Care Act as described later in this 
section, designed to ensure that only legitimate providers and 
suppliers that meet and maintain our standards can be enrolled and/or 
paid by the Medicare program.
    Similarly, consistent with the NPI final rule and subsequent 
guidance from the Secretary, beginning May 23, 2008, Medicaid providers 
have also been required to report their NPIs on their Medicaid claims.
2. Provisions of the Affordable Care Act
    Section 6402(a) of the Affordable Care Act added a new section 
1128J of the Act, titled ``Medicare and Medicaid Program Integrity 
Provisions.'' Section 1128J(e) of the Act requires the Secretary to 
promulgate a regulation that requires, not later than January 1, 2011, 
all providers of medical or other items or services and suppliers under 
the programs under titles XVIII and XIX that qualify for an NPI to 
include their NPI on all applications to enroll in such programs and on 
all claims for payment submitted under such programs. In Medicaid, 
there is no Federally required ``enrollment application,'' although all 
Medicaid providers are required to enter into a provider agreement with 
the State as a condition of participating in the program under section 
1902(a)(27) of the Act. Therefore, in the Medicaid context we are 
including the submission of an NPI to the State agency as a requirement 
under the provider agreement. The NPI requirements in this final rule 
are thus applicable to the reporting of NPIs--(1) pursuant to Medicaid 
provider agreements; (2) for inclusion in Medicare enrollment records; 
and (3) on Medicare and Medicaid claims.
3. Requirements Established by the IFC
a. NPI and the Medicare Program
(1) NPI and the Medicare Program Requirements Established by IFC
    For the Medicare program, we established the following:
     At Sec.  424.506(a), the definition of ``eligible 
professional'' refers to any of the professionals specified in section 
1848(k)(3)(b) of the Act.
     At Sec.  424.506(b), requirements that a provider or 
supplier who is eligible for an NPI must report the NPI on the Medicare 
enrollment application; and, if the provider or supplier enrolled in 
Medicare prior to obtaining an NPI and the NPI is not in the provider's 
or supplier's enrollment record, the provider or supplier must report 
the NPI to Medicare in an enrollment application so that the NPI will 
be added to the provider's or supplier's enrollment record in PECOS.
     At Sec.  424.506(c)(1), a requirement that a provider or 
supplier who is enrolled in fee-for-service (FFS) Medicare report its 
NPI, as well as the NPI of any other provider or supplier who is 
required to be identified in those claims, on any electronic or paper 
claims that the provider or supplier submits to Medicare.
     At Sec.  424.506(c)(2) that a claim submitted by a 
Medicare beneficiary contain the legal name and, if the beneficiary 
knows the NPI, the NPI of any provider or supplier who is required to 
be identified in that claim. If a Medicare beneficiary does not know 
the NPI of a provider or supplier who is required to be identified in 
the claim that he or she is submitting, the beneficiary may submit the 
claim without the NPI(s) as long as the claim contains the legal 
name(s) of the health care provider(s). If a beneficiary so desires, he 
or she can obtain a provider's or a supplier's NPI by requesting it 
directly from the provider or supplier or from a member of his or her 
office staff, or by looking it up in the NPI Registry at https://nppes.cms.gov/NPPES/NPIRegistryHome.do.
     At Sec.  424.506(c)(3), a Medicare claim from a provider 
or a supplier will be rejected if it does not contain the required 
NPI(s).
(2) Summary of and Responses to the IFC Comments Regarding the NPI and 
the Medicare Program
(a) Effective/Implementation Date
    Comment: A commenter noted that the preamble states that the NPI 
requirements set forth in the IFC, referencing section 6402(a) of the 
Affordable Care Act, requires the Secretary to promulgate a regulation 
to implement the NPI requirement no later than January 2011. Therefore, 
there is confusion as to why July 6, 2010 is the effective date for NPI 
requirements.
    Response: Section 6402(a) of the Affordable Care Act requires the 
Secretary to promulgate rules implementing the NPI requirement no later 
than January 2011. However, we have had existing regulations since 
2008, as mentioned in the IFC, requiring the use of NPIs on all 
enrollment applications and claims forms, if NPIs were assigned to the 
provider. The NPI requirements set forth in the IFC are necessary to 
implement the data

[[Page 25286]]

reporting requirements in section 1128J(e) of the Act, as added by 
section 6402(a) of the Affordable Care Act, which require that the 
Secretary promulgate a regulation to implement this requirement no 
later than January 2011. Moreover these NPI requirements are needed to 
implement the Medicare ordering and certifying requirements specified 
in section 6405 of the Affordable Care Act (discussed in section 
II.B.2. of this final rule) that are effective July 1, 2010. Section 
6406 of the Affordable Care Act (discussed in section II.B.4.a. of this 
final rule) was effective January 1, 2010. It was imperative that the 
NPI regulatory provisions be set forth as soon as possible to deliver 
the guidance necessary to enact the document retention provisions. For 
this reason, the NPI requirement was included in the IFC published on 
May 5, 2010, with an effective date of July 6, 2010.
(b) Deactivation
    Comment: A commenter suggested that CMS permit the use of 
Electronic File Interface (EFI), which is used for submitting NPI 
applications to the National Plan and Provider Enumeration System 
(NPPES), to reactivate Medicare Provider Transaction Access Numbers 
(PTANs) that have been deactivated for non-billing for 12 consecutive 
months. This would reduce the burden on physicians and other providers 
and suppliers who must submit enrollment applications to re-enroll in 
Medicare if they have been deactivated due to non-billing.
    Response: We appreciate the commenter's concerns and desire to use 
a fully electronic mechanism for reenrollment after deactivation. 
Currently, all enrollees must sign their paper enrollment application 
or the Certification Statement for their Internet-based PECOS 
application. We continue to work with our Medicare contractors to 
reduce the delays in the enrollment process. We believe these measures 
will alleviate the concerns of the commenter.
    After review of the public comments received, we are retaining the 
provisions regarding the NPI for the Medicare program with the 
modification specified in this section and in section III. of this 
final rule.
    To clarify, it is not necessary for the providers and suppliers to 
fill out an entire enrollment application simply to provide an NPI, we 
have revised the language in existing Sec.  424.506(b)(2), which has 
been redesignated as Sec.  424.506(b)(1)(ii), to specify that providers 
and suppliers that are eligible for an NPI must update their enrollment 
records with this information. NPIs must be provided to the Medicare 
contractors by using a CMS-855 paper form or through Internet-based 
PECOS.
    After consideration of the comments, we are finalizing our policy 
as it relates to the NPI and the Medicare definitions, enrollment, and 
claims reporting with a few modifications. We made some technical 
changes to the language by redesignating and revising language, 
specifically in Sec.  424.506(b). Section 424.506(b)(3) was 
redesignated as Sec.  424.506(b)(2) and revised to clarify that opt-out 
physicians and nonphysician practitioners will not be required to 
submit an enrollment application for any reason, including to order and 
certify. We also revised Sec.  424.506(c)(1) to specifically address 
and clarify the NPIs that were required on the claims.
b. NPI and the Medicaid Program
(1) NPI Requirements for the Medicaid Program Established by IFC
    Consistent with the requirements of section 6402(a) of the 
Affordable Care Act, we added a new (b)(5)(i) and (ii) to Sec.  431.107 
to require that the provider agreement between a State agency and each 
provider delivering services under the State plan include a requirement 
that the provider furnish to the State agency its NPI (if eligible for 
an NPI); and include its NPI on all claims submitted under the Medicaid 
program. In Medicaid, under section 1902(a)(77) of the Act, States are 
required to comply with the provider screening, oversight, and 
reporting requirements outlined in section 1902(kk) of the Act 
including the process for screening providers established under section 
1866(j) of the Act. In addition, there are new Federal regulatory 
requirements for provider enrollment and screening, published in the 
February 2, 2011 Federal Register (76 FR 5862). The requirements under 
section 1902(a)(77) of the Act and under these new Federal regulatory 
requirements for provider enrollment and screening provide guidance for 
certain aspects of provider enrollment but do not provide Federal 
requirements for the entire process. However, providers are required to 
enter into a provider agreement with the State as a condition of 
participating in the program under section 1902(a)(27) of the Act. For 
purposes of the IFC, we interpreted the Affordable Care Act's reference 
to ``applications to enroll'' to refer to provider agreements in the 
Medicaid context. Additionally, we required that the NPI be submitted 
on all claims for payment to the Medicaid program on and after July 6, 
2010.
(2) Summary of and Responses to the Public Comments Related to the NPI 
and the Medicaid Program
    Comment: A commenter requested clarification regarding NPIs on 
pharmacy claims specifically when a pharmacy submits a prescriber Drug 
Enforcement Administration (DEA) number or State license number in lieu 
of the NPI. Is it expected that the pharmacy and physician NPIs are 
submitted on the claim for payment? Should the claims processor reject 
the claim if one or both provider identification numbers are not NPIs?
    Response: The statute and this regulation require that NPIs be 
included on all claims for payment for Medicaid, including pharmacy 
claims. The requirement for an NPI does not replace the function of the 
DEA number, which must appear on all prescriptions for scheduled drugs, 
or the State license number, which is issued by an applicable State 
licensing authority; however, these numbers have different purposes and 
are not to be used to identify the prescriber when billing a claim at 
point of sale. The NPI was adopted to identify a health care provider 
as a health care provider in standard transactions adopted under the 
HIPAA. Effective July 6, 2010, NPI numbers are required on pharmacy 
claims.
    Comment: A commenter stated that if pharmacy claims must include 
the NPI of the prescriber, the July 6, 2010 date will be impossible to 
meet due to the systems changes that would need to be made. The 
commenter believed that the date of January 1, 2011, which is the date 
in the Affordable Care Act, would be a more realistic compliance date.
    Response: We believe the commenter is inquiring about the 
requirement that the NPI of the ordering or referring provider be 
included on all Medicaid claims for payment. This requirement was 
finalized in a February 2, 2011 final rule (76 FR 5862) and was 
effective March 25, 2011. Thus, this comment is outside the scope of 
this final rule, which, for purposes of Medicaid, only requires that 
the NPI of the provider furnishing the services/submitting the claim 
(for example, the pharmacy) be included on the claim.
    Comment: A commenter requested clarification on the process for 
physician assistants (PAs) under different State Medicaid programs. PAs 
qualify for NPIs and are providers of medical services in some State 
Medicaid programs. However, not all States enroll PAs and in some 
States, the PA's NPI is not included on the claim form. Will this rule 
mean a change in policy and

[[Page 25287]]

procedure and that all States will now be required to include the PA's 
NPI on claims?
    Response: If a PA is independently licensed to practice in a State 
and that State has included PAs as a provider type under the Medicaid 
State plan, the NPI number for that PA is required to be included on 
all claims for payment and pursuant to the PA's provider agreement. If 
the PA is not independently licensed within the State but rather is 
under the supervision of the physician, and/or is not described as a 
provider type that bills for Medicaid services under the State Plan, 
the NPI of the PA is irrelevant since the PA is not directly billing 
Medicaid; however, the supervising physician must have an NPI on 
submitted claims for payment and pursuant to the provider agreement.
    Comment: Commenters expressed concern that adding and using NPI 
numbers on claims could result in burdensome investigations or 
liability for dentists in cases where their NPI numbers could be used 
fraudulently or criminally. These commenters requested procedures to 
protect practitioners from any unreasonable additional compliance 
burden that may be incident to the misuse of their NPIs by others.
    Other commenters acknowledged that the NPI registry permits anyone 
with a computer and internet access to look up a provider's NPI by 
name. The commenters inquired how CMS is able to determine whether the 
NPI that is on a claim was put there by a physician who meant to order 
the test, or by someone who simply downloaded the NPI from the open 
file, thereby identifying attempts at theft and fraud?
    Response: Under Medicaid, a claim submitted for payment that does 
not include the provider's NPI will be denied. In cases where claims 
submitted for payment do include an NPI number, the State's Medicaid 
Management Information System will match NPI numbers for providers with 
other data included in the State's provider enrollment file to ensure 
the provider's identity. This cross-checking with other data within the 
State ensures that the NPI number is valid and that it matches with all 
data in the provider enrollment file in an effort to verify each 
provider's identity. Additionally, this cross-checking is done at the 
State level and does not impose any additional compliance burdens on 
providers.
    Comment: A commenter requested clarification regarding whether 
States need only to collect NPIs through the usual annual agreements 
and no additional actions for physicians will be required this year to 
report NPIs.
    Response: NPIs must be added pursuant to provider agreements for 
new providers effective July 6, 2010. Existing providers must submit 
their NPIs pursuant to their provider agreements at the time in which 
they are revalidated or at the time in which changes are made to 
existing provider agreements. The NPI for all providers in Medicaid 
must be included on all claims submitted for payment effective July 6, 
2010. We wish to note that since provider NPIs must be submitted on all 
claims for payment under Medicaid effective July 6, 2010, it may make 
sense for all providers (new and existing) to consider adding NPIs 
pursuant to provider agreements at the time in which they also submit a 
claim for payment.
    Comment: A commenter questioned patient access and home health 
agencies' requests for payments for dual Medicaid/Medicare patients in 
the following scenario--a patient has been admitted to Medicaid Home 
Health after meeting the Medicaid homebound criteria, but not Medicare 
homebound criteria at the level of receiving skilled nursing care (for 
example wound care). The patient regresses, and now meets Medicare 
homebound criteria. A new Medicare Start of Care begins, and claims can 
be submitted to Medicare. What would the process be if this patient's 
physician is not enrolled in PECOS?
    Response: Under the Medicaid program, the provider is required to 
include an NPI number on all claims for payment and pursuant to the 
provider agreement with the State. If the home health agency submits a 
claim to Medicare for home health services and the certifying physician 
is not enrolled in Medicare or has not validly opted-out, as required 
by the provisions of this rule, the claim will be denied by Medicare 
once the automated edits are activated.
    After consideration of the comments, we are finalizing our policy 
as it relates to the NPI and Medicaid claims; that is, the effective 
date for the inclusion of the NPI on all Medicaid claims for payment 
remains July 6, 2010. The effective date for submission of NPIs 
pursuant to provider agreements for new providers also remains July 6, 
2010. However, we are revising our policy as it relates to the NPI 
pursuant to provider agreements for existing providers; that is, the 
effective date for inclusion of the submission of NPIs pursuant to 
provider agreements for existing providers will be upon the next date 
that a change must be made to the provider agreement or upon the date 
of revalidation. This policy revision does not impact the regulatory 
text (Sec.  431.107(b)(5)) as specified in the IFC (75 FR 24437). 
Therefore, we are not amending the regulatory text in this final rule.

B. Ordering and Referring Covered Items and Services for Medicare 
Beneficiaries

1. Background
    Section 1833(q) of the Act requires that claims for items or 
services for which payment may be made under Part B and for which there 
was a referral by a referring physician shall include the name and the 
unique identification number of the referring physician. Physicians are 
doctors of medicine and osteopathy, optometry, podiatry, dental 
medicine, dental surgery, and chiropractic.
    In the past, prior to the Medicare implementation of the NPI on May 
23, 2008, physicians and eligible professionals were identified in 
claims as ordering or referring suppliers by their Unique Physician 
Identification Numbers (UPINs). Further discussion on Medicare's use of 
UPINs can be found in the IFC (75 FR 24441 and 24442). Physicians and 
eligible professionals applied for and were assigned UPINs as part of 
the process of enrolling in the Medicare program; therefore, physicians 
and eligible professionals were expected to be identified in claims as 
ordering or referring suppliers by their UPINs.
    Analysis of Medicare claims data prior to 2008 (UPINs were not 
permitted to be used in Medicare claims after May 23, 2008) revealed 
that unauthorized and incorrect use of UPINs was widespread and, as a 
result, we had reason to believe that many physicians and eligible 
professionals were unaware of the requirement that their assigned UPINs 
were intended to uniquely identify them as ordering or referring 
suppliers and, more importantly, that they needed to apply for UPINs. 
As a result, Medicare may have paid claims for covered ordered and 
referred items and services that may have been ordered or referred by 
professionals who were not of a profession eligible to order and refer; 
by physicians or eligible professionals who were not enrolled in the 
Medicare program; or by physicians or eligible professionals who were 
not in an approved Medicare enrollment status (for example, they were 
sanctioned, their licenses were suspended or revoked, their billing 
privileges were terminated, or they were deceased).
    With the Medicare implementation of the NPI in May 2008, Medicare 
discontinued the assignment of UPINs and no longer allowed UPINs to be 
used in Medicare claims. Because physicians

[[Page 25288]]

and non physician practitioners are eligible for NPIs, only the NPI may 
be used in Medicare claims to identify ordering and referring 
suppliers. To ensure the unique identification of ordering and 
referring suppliers and that they were qualified to order and refer, 
Medicare implemented claims edits in 2009 that require the ordering and 
referring suppliers identified in Part B claims for items of DMEPOS and 
services of laboratories, imaging suppliers, and specialists be 
identified by their legal names and their NPIs and that they have 
enrollment records in PECOS. The claims edits implemented in 2009 do 
not result in nonpayment. However, claims edits are under development 
to ensure that claims for Part B covered items and services 
(specifically DMEPOS, imaging and clinical laboratory services) and 
Part A and Part B home health services covered under this final rule 
identify the physicians and eligible professionals who ordered the item 
or services by their legal names and their NPIs and that those 
physicians and eligible professionals have enrollment records in 
Medicare.
2. Provisions of the Affordable Care Act
    Section 6405(a) of the Affordable Care Act amended section 
1834(a)(11)(B) of the Act to specify, with respect to suppliers of 
durable medical equipment, that payment may be made under that 
subsection only if the written order for the item has been communicated 
to the DMEPOS supplier by a physician who is enrolled under section 
1866(j) of the Act or an eligible professional under section 
1848(k)(3)(B) who is enrolled under section 1866(j) before delivery of 
the item. Section 1128J(e) of the Act requires that he or she be 
identified by his or her NPI in claims for those services. Medicare 
requires the ordering supplier (the physician or the eligible 
professional) to be identified by legal name and NPI in the claim 
submitted by the supplier of DMEPOS.
    Section 6405(b) of the Affordable Care Act, as amended by section 
10604 of the Affordable Care Act, amended the Act, and establishes new 
requirements for home health services. These provisions amended: (1) 
Section 1814(a)(2) of the Act and specifies, with respect to home 
health services under Part A, that payment may be made to providers of 
services if they are eligible and only if a physician enrolled under 
section 1866(j) of the Act certifies (and recertifies, as required) 
that the services are or were required in accordance with section 
1814(a)(1)(C) of the Act; and (2) section 1835(a)(2) of the Act 
specifies, with respect to home health services under Part B, that 
payments may be made to providers of services if they are eligible and 
only if a physician enrolled under section 1866(j) of the Act certifies 
(and recertifies, as required) that the services are or were medically 
required in accordance with section 1835(a)(1)(B) of the Act. Section 
1128J(e) of the Act requires that the physician be identified by his or 
her NPI in claims for those services. Medicare requires the ordering 
supplier (the physician) to be identified by legal name and NPI in the 
claim submitted by the provider of home health services.
    In addition, section 6405(c) of the Affordable Care Act gives the 
Secretary the authority to extend the requirements made by subsections 
(a) and (b) to all other categories of items or services under title 
XVIII of the Social Security Act, including covered Part D drugs as 
defined in section 1860D-2(e) of the Act, that are ordered, prescribed, 
or referred by a physician enrolled under section 1866(j) of the Act or 
an eligible professional under section 1848(k)(3)(B) of the Act. 
Section 1128J(e) of the Act requires that he or she be identified by 
his or her NPI in claims for those services. Medicare requires the 
ordering or referring supplier (the physician or the eligible 
professional) to be identified by legal name and NPI in the claims 
submitted by the suppliers of laboratory, imaging, and specialist 
services. These amendments are effective on or after July 1, 2010.
3. IFC Requirements Regarding Ordering and Referring of Covered Items 
and Services for Medicare Beneficiaries
a. Claims From Providers and Suppliers for Ordered/Referred Part B 
DMEPOS, Imaging, Laboratory, Specialist Items/Services (Sec.  
424.507(a)(1))
    The IFC required that claims from Part B providers and suppliers 
for covered ordered or referred items or services (excluding home 
health services and Part B drugs) meet the following requirements:
     The Part B items and services must have been ordered or 
referred by a physician or, when permitted by regulation or law, by an 
eligible professional.
     The claim from the Part B provider or supplier must 
contain the legal name and the NPI of the physician or the eligible 
professional who ordered or referred the item or service.
     The physician or the eligible professional who ordered the 
Part B item or service must have an approved enrollment record or a 
valid opt-out record in PECOS.
    The IFC also required that if the Part B items or services were 
ordered or referred by a resident or an intern, the claim must identify 
the teaching physician as the ordering or referring supplier, and the 
teaching physician must be identified in the claim by his or her legal 
name and NPI, and he or she must have an approved enrollment record or 
a valid opt-out record in PECOS.
b. Claims From Medicare Beneficiaries for Ordered/Referred Part B 
DMEPOS, Imaging, Laboratory, Specialist Items/Services (Sec.  
424.507(a)(2))
    The IFC stated that claims from Medicare beneficiaries for ordered 
or referred covered Part B items and services (excluding home health 
services and Part B drugs) must meet the following requirements:
     The Part B items and services must have been ordered or 
referred by a physician or, when permitted by regulation or law, an 
eligible professional.
     The claim must contain the legal name of the physician or 
the eligible professional who ordered or referred the item or service.
     The physician or the eligible professional who ordered or 
referred the item or service must have an approved enrollment record or 
a valid opt-out record in PECOS.
    The IFC stated that if the Part B items or services were ordered or 
referred by a resident or an intern, the claim must identify the 
teaching physician as the ordering or referring supplier, and the 
teaching physician must be identified in the claim by his or her legal 
name, and he or she must have an approved enrollment record or a valid 
opt-out record in PECOS.
c. Claims From Providers for Ordered Part A and Part B Home Health 
Services (Sec.  424.507(b)(1))
    The IFC stated that claims from home health agencies for covered 
Part A or Part B home health services must meet these requirements:
     The Part A or Part B home health services must have been 
ordered by a physician.
     The claim must contain the legal name and the NPI of the 
physician who ordered the service.
     The physician who ordered the service must have an 
approved enrollment record or a valid opt-out record in PECOS.
    The IFC stated that if the Part A or Part B home health services 
are ordered by a resident or an intern, the claim must identify the 
teaching physician as the ordering or referring supplier. The teaching 
physician must be identified in the claim by his or her legal name and

[[Page 25289]]

NPI, and he or she must have an approved enrollment record or a valid 
opt-out record in PECOS.
d. Claims From Beneficiaries for Ordered Part A and Part B Home Health 
Services (Sec.  424.507(b)(2))
    The IFC required that claims from Medicare beneficiaries for 
ordered covered Part A or Part B home health services must meet the 
following requirements:
     The Part A or Part B home health services must have been 
ordered by a physician.
     The claim must contain the legal name of the physician who 
ordered the services.
     The physician who ordered the services must have an 
approved enrollment record or a valid opt-out record in PECOS.
    The IFC stated that if the Part A or Part B home health services 
are ordered by a resident or an intern, the claim must identify the 
teaching physician as the ordering or referring supplier, and the 
teaching physician must be identified in the claim by his or her legal 
name, and he or she must have an approved enrollment record or a valid 
opt-out record in PECOS.
e. Rejecting Claims From a Provider or Supplier That Do Not Meet the 
Requirements (Sec.  424.507(a)(1) or Sec.  424.507(b)(1) Through Sec.  
424.507(c))
    The IFC provided that a Medicare contractor will reject a claim 
from a provider or a supplier for covered ordered or referred items and 
services described in Sec.  424.507(a) and (b) if the claim does not 
meet the requirements of Sec.  424.507(a)(1) (for Part B items and 
services except Part B home health services and Part B drugs) and Sec.  
424.507(b)(1) (for Part A and Part B home health services).
f. Denying Claims From Medicare Beneficiaries That Do Not Meet the 
Ordering/Referring Supplier Requirements (Sec.  424.507(d))
    The IFC stated that a Medicare contractor may deny a claim from a 
Medicare beneficiary for covered ordered or referred items and services 
described in Sec.  424.507(a) and (b) if the claim does not meet the 
requirements of Sec.  424.507(a)(2) (for Part B items and services 
except Part B home health services and Part B drugs) and Sec.  
424.507(b)(2) (for Part A and Part B home health services).
4. Summary of and Responses to Public Comments Regarding Ordering and 
Referring of Covered Items and Services for Medicare Beneficiaries
    As a point of clarification, we use the term ``ordering/referring 
provider'' in this preamble because that is the terminology used in the 
implementation specifications for the standard Part B claim format and 
in the Part B paper claim to denote the individual (the person) who 
ordered, referred, or certified an item or service reported in that 
claim. The term ``ordering/referring provider'' is used in several 
contexts in this final rule. The term ``order'' for instance, refers to 
a provider who orders non physician items or services for the 
beneficiary, such as DMEPOS, clinical laboratory services, or imaging 
services. A ``certifying'' provider generally means a person who 
orders/certifies home health services for a beneficiary.
    The terms ``ordered,'' ``referred,'' ``certified,'' and ``ordering 
or referring'' and ``ordered or referred'' are often used 
interchangeably within the health care industry and were used 
interchangeably by parties that commented on the IFC. Generally, we 
have used the terms applicable to this final rule, which are 
``ordered'' when referring to items of DMEPOS, imaging and clinical 
laboratory services, and ``certified'' when referring to home health 
services. However, to be technically correct in every instance of the 
use of these terms in this preamble would require that we qualify every 
use in each instance. We believe that would be cumbersome and 
unnecessary and, therefore, did not do so. However, the regulatory text 
uses the technically correct terms.
a. Technical, Administrative, and Procedural Modifications and 
Corrections
    Comment: Several commenters suggested that the agency did not 
provide a valid rationale for avoiding the procedural safeguards 
specified in sections 1871(a)(2) and (b)(1) of the Act, which address 
rulemaking. Moreover, they stated that the statute (at section 6405(a) 
of the Affordable Care Act) merely authorized the Secretary to require 
a PECOS enrollment date of July 1, 2010 but did not require it.
    Response: Section 6405 of the Affordable Care Act requires 
physicians or eligible professionals who order or refer DMEPOS or home 
health services be enrolled in Medicare under section 1866(j) of the 
Act, and authorizes the Secretary to extend those requirements to other 
Medicare services. Section 6405(d) of the Affordable Care Act states 
that the amendments made by section 6405 of the Affordable Care Act 
``shall apply to written orders and certifications made on or after 
July 1, 2010.'' We find section 6405(d) of the Affordable Care Act to 
be a clear statutory imperative.
    Section 6406 of the Affordable Care Act requires physicians to 
retain necessary documentation and provide access to records for 
orders, referrals, and certifications for home health services, DMEPOS, 
and other items and services as designated by the Secretary, upon 
request. Section 6406(d) of the Affordable Care Act states ``the 
amendments made by this section shall apply to orders, certifications, 
and referrals made on or after January 1, 2010.''
    These two provisions fall within the exception to section 1871 of 
the Act that generally requires us to issue a notice of proposed 
rulemaking prior to issuing a final rule under the Medicare program.
    Section 1871(b)(1)(b) of the Act provides that the Secretary is not 
required to issue a notice of proposed rulemaking before issuing a 
final rule if ``a statute establishes a specific deadline and the 
deadline is less than 150 days after the date of enactment of the 
statute in which the deadline is contained.'' Section 6405 of the 
Affordable Care Act establishes an effective date of July 1, 2010, 100 
days after March 23, 2010, and section 6406 of the Affordable Care Act 
established an effective date of January 1, 2010 that passed before the 
Affordable Care Act was enacted. Additionally, implementing section 
6402(a) of the Affordable Care Act, which adds section 1128J(e) to the 
Act and requires the use of the NPI on all enrollment applications and 
claims, does not add significant new burdens because the Medicare and 
Medicaid programs had already required the NPI on claims, applications, 
and agreements. The Affordable Care Act instructed the Secretary to 
promulgate a rule that adds this requirement no later than January 1, 
2011, and the IFC executed that authority. Finally, a delay in 
implementing these provisions would be contrary to the public interest 
and to our efforts to reduce and eliminate fraud and abuse in the 
Medicare and Medicaid programs. For these reasons, we found good cause 
to waive the notice of proposed rulemaking and to issue these 
provisions on an interim final basis.
    Additionally, the IFC carried a 60-day public comment period, to be 
followed by the publication of a final rule, as would a proposed rule. 
As a result, the public was afforded an opportunity to comment.

[[Page 25290]]

    Comment: A commenter stated that the Affordable Care Act names 
DMEPOS and home health services as the only ordered or referred items 
or services to which the statutory requirements apply. While the law 
allows CMS to expand the scope, which CMS did by including laboratory 
services, there is no compelling reason for CMS to have done so.
    Response: As stated by the commenter, section 6405(c) of the 
Affordable Care Act permits the Secretary to extend the requirement to 
all other categories of items or services under title XVIII of the Act, 
including covered Part D drugs as defined in section 1866(j) of Act. As 
noted in the regulation text at Sec.  424.507(a), this regulation has 
extended the requirements to both laboratories and imaging services. We 
believe that in the past, some laboratories have abused the reporting 
of the ordering or referring provider by reporting surrogate UPINs for 
the ordering or referring providers in all of their claims, when UPINs 
were permitted to be used in Medicare claims, instead of reporting 
UPINs that had been assigned to specific physicians or other eligible 
professionals. These laboratories have also used a single (the same) 
NPI to identify the ordering or referring providers in all of their 
claims, having had earlier claims paid when using that NPI. Later, many 
laboratories used their own NPIs as the NPI of the ordering or 
referring providers even though the NPI Registry and the NPPES 
downloadable file were readily available for determining the NPI of the 
ordering or referring provider. We believe that these are compelling 
reasons to impose ordering or referring provider edits on clinical 
laboratory service claims.
    Additional efforts to ensure accuracy of claims has also led us to 
impose NPI requirements on Part D sponsors through the final rule with 
comment period titled, ``Changes to the Medicare Advantage and the 
Medicare Prescription Drug Benefit Program for Contract Year 2013'' 
published in the April 12, 2012 Federal Register. This rule requires 
Part D plan sponsors to submit an active and valid individual 
prescriber NPI on all prescription drug event (PDE) records submitted 
to CMS. This rule does not require all physician prescribers to enroll 
in Medicare. Rather, it mandates that PDE records include active and 
valid individual prescriber identifiers effective for January 1, 2013 
dates of service and later.
    Comment: A commenter noted that laboratory services were not 
subject to the provisions of the Affordable Care Act; therefore, if CMS 
exercises its statutorily-given discretion and determines that they 
must meet the requirements of the IFC, CMS should give laboratories 
until January 3, 2011 to be in compliance and must allow laboratories 
to continue to use their own NPI as the ordering or referring 
provider's NPI until that date.
    Response: As stated previously, section 6405(c) of the Affordable 
Care Act permits the Secretary to extend the requirement to all other 
categories of items or services, including laboratories. The NPI is the 
primary metric for us to verify Medicare enrollment and for that reason 
the two requirements are being implemented simultaneously, as described 
in the preamble of this final rule. We have been validating the 
ordering or referring providers reported in clinical laboratory claims 
since October 2009 to ensure they are properly identified in the claims 
and have enrollment records in PECOS or in a Medicare legacy system as 
of the claim receipt date. Such claims have not been denied or rejected 
due to the lack of the ordering or referring provider's enrollment 
record. However, our revalidation of the enrollment records in PECOS or 
a Medicare legacy system has allowed us to alert these providers that 
they do not have an enrollment record. Clinical laboratories have 
information available to them that will indicate the NPI of the 
physicians and other eligible professionals who order services from 
them. Therefore, we will not permit clinical laboratories to report 
their own NPIs as the NPIs of the ordering or referring providers. We 
have not modified the compliance date.
    Comment: A commenter stated that the Affordable Care Act does not 
give the Secretary the authority to determine who may order or refer 
items or services that are not covered and for which payment will not 
be made under a Federal insurance plan. The commenter stated that State 
medical practice acts determine the scope of practice of professionals, 
and that this regulation is creating a Federalism issue.
    Response: We agree with the commenter in so far as this rule does 
not establish who may order or refer items or services that are not 
covered and for which payment will not be made under a Federal 
insurance plan. Although this rule finalizes conditions of payment for 
ordered items and services, it does not address broader payment policy 
questions. Rather, this rule implements the statutory requirement that 
individuals who order and certify particular Medicare-covered services 
be enrolled in the Medicare program. The Medicaid provisions relating 
to ordering and referring were finalized in a February 2, 2011 final 
rule (76 FR 5862).
    Comment: Several commenters noted that the word ``must'' was 
omitted from the regulatory text at Sec.  424.506(c), there was a 
typographical error in another word in Sec.  424.506(c), and noted the 
omission of the word ``claim'' in the regulatory text at Sec.  
424.507(a)(1).
    Response: We have corrected these errors.
    Comment: Several commenters indicated that the preamble discussed 
requirements for those who order DMEPOS, laboratory, imaging, and 
specialist services, whereas the text at Sec.  424.507 indicates that 
the requirements apply to ``Part B items and services (excluding home 
health services and Part B drugs),'' which is broader in scope than 
what was discussed in the preamble.
    Response: We have revised the regulatory text in this final rule at 
Sec.  424.507 to be consistent with the language in the preamble with 
respect to clinical laboratory and imaging services. Further, 
specialist services are discussed in greater detail later in this final 
rule.
b. Terminology
    Comment: A commenter stated that under Federal law, claims for 
which payment may be made under Part B and for which there was a 
referral by a physician must include the name and the UPIN of the 
referring physician. The commenter stated that this provision 
incorporates the Stark law definition of ``referral,'' and the preamble 
suggests the term ``referral'' should be interpreted in that manner.
    Response: Based upon review of the public comments received, we 
have decided to remove specialist services from the requirements of 
this rule. The covered items and services for this final rule include 
imaging and clinical laboratory services, DMEPOS, and home health. The 
terms ``ordered'' and ``certified'' more accurately reflect these 
covered items and services. Therefore, we have removed reference to 
``referrals'' in our regulatory text, due to the exclusion of 
specialist services from this final rule.
    Comment: Several commenters requested that CMS define ``specialist 
services,'' as there is no requirement that a Medicare beneficiary 
obtain a referral from a physician to receive services from another 
physician, particularly since Medicare no longer pays for 
consultations. Another commenter stated that, because patients can 
determine for themselves the need to see a specialist, it will be 
difficult for Medicare claims contractors to

[[Page 25291]]

determine that a referring physician should have been reported on a 
claim. Also, the commenters questioned how a contractor would know that 
the visit to the specialist was not based on the patient's own decision 
and not that of another physician.
    Response: We agree with the commenters that there are a number of 
operational issues associated with a requirement that services of a 
specialist be ordered or referred. We have removed such requirements 
from this rule.
    Comment: Several commenters questioned what is meant by ``imaging 
services'' and ``imaging suppliers.'' Commenters questioned if the term 
applies only to the technical component of imaging services (or global 
services) or if it also applies to the professional component. They 
also requested clarification on whether claims for imaging services 
provided in the hospital outpatient setting would be affected, if 
independent diagnostic testing facilities (IDTFs) and portable x-ray 
suppliers are considered ``imaging suppliers'', and if ``services'' 
apply to claims for routine x-rays performed in a physician's own 
office.
    Response: The IFC and this final rule specifically refer to the 
technical components of imaging services that are: (1) Ordered by 
physicians and, where permitted, other eligible professionals; (2) 
furnished by IDTFs, mammography centers, portable X-ray facilities, and 
radiation therapy centers that are enrolled in Medicare via the CMS-
855B; and (3) billed by these Part B suppliers to the Part B claims 
system (MCS) on an X12N 837P or a paper form CMS-1500.
    Comment: A commenter stated that dentists order few clinical 
laboratory tests but frequently submit orders to dental laboratories, 
and the items and services provided by dental laboratories are unlikely 
to be covered by Medicare; thus, such orders and services would pose 
little risk of waste and abuse of Medicare funds. The commenter urged 
CMS to define ``laboratory'' as to exclude dental laboratories in order 
to clarify dentists' compliance requirements and to relieve dentists of 
an unnecessary compliance burden.
    Response: We do not believe that dental laboratories should be 
excluded from the requirements of this final rule. We decline to define 
laboratories in this final rule; however, dental laboratories are, in 
fact, laboratories. These laboratories, from time to time, provide 
covered services under the limited circumstances in which dental 
services are covered by Medicare.
c. Beneficiary Submissions
    Comment: Several commenters noted that the IFC contains 
requirements for beneficiary-submitted claims for home health services. 
These commenters stated that Medicare home health payments may only be 
made to Medicare certified home health agencies under assignment, not 
to beneficiaries.
    Response: The commenter is correct in that beneficiaries do not 
submit claims to Medicare for home health services. This is because 
home health agencies are obligated by their institutional provider 
agreement to do all of the billing for services that may potentially be 
covered by Medicare. Therefore, we are removing the requirement that 
was added at Sec.  424.507(b)(2) of the IFC and have revised the 
language in other sections of this rule in accordance with this change.
    Comment: A commenter stated that there is no mechanism for ordered 
or referred items and services to be billed to a beneficiary when the 
beneficiary requests that the provider or supplier submit a claim to 
Medicare (which providers and suppliers are required to do under 
Medicare rules) in situations where the provider or supplier is aware 
that the ordering or referring provider does not have an approved 
enrollment record or a valid opt-out record in PECOS.
    Response: We adhere to a longstanding position that if a 
beneficiary receives services that are certified by a physician who is 
not enrolled in Medicare and if that certifying physician refuses to 
enroll so that a proper claim can be submitted on the beneficiary's 
behalf, then the beneficiary cannot be charged for those services. A 
provider or supplier may be able to avoid the circumstances described 
in the comment if they ask the ordering or certifying provider if they 
are enrolled in Medicare before the ordered or certified services have 
been provided.
d. Effective/Implementation Dates
    Comment: A commenter pointed out that the preamble stated that CMS 
expects that most, if not all, enrolled physicians and other eligible 
professionals who do not have enrollment records in PECOS, would have 
submitted enrollment applications by the end of 2010. Therefore, having 
an effective date of July 6, 2010 for claims to be rejected if they do 
not have records in PECOS is very confusing.
    Response: The statement in the preamble was meant to convey the 
historical transition and progression of program enrollment 
requirements that occurred prior to the passage of the Affordable Care 
Act, and that physicians and eligible professionals had been complying 
with the previously stated deadline of January 3, 2011. However, it 
does not preempt the effective date stated in the IFC. The effective 
date for the provisions contained in sections 6405 and 6406 of the 
Affordable Care Act, remains July 6, 2010. Because this rule was issued 
as an interim final rule with comment period, the provisions that 
implemented the statutory provisions became effective 2 months after 
the publication in the Federal Register. That interim final rule 
remains in effect until modified and finalized by this final rule.
    Comment: A commenter stated that the Affordable Care Act gives CMS 
the authority and discretion to maintain the original published 
deadline of January 3, 2011 and urged CMS to adhere to that previously 
announced deadline.
    Response: As stated in an earlier response, section 6405(d) of the 
Affordable Care Act states that the amendments made by section 6405 
``shall apply to written orders and certifications made on or after 
July 1, 2010.'' We find section 6405(d) of the Affordable Care Act to 
be a clear statutory imperative.
    Comment: Multiple commenters expressed concern that the July 1, 
2010 date provided 6 months less time to implement these requirements 
than previously stated by CMS. Commenters believed that the date leaves 
inadequate time for CMS to notify the affected physicians (especially 
those who order home health services) and eligible professionals of the 
requirement to establish an enrollment record in PECOS if one does not 
already exist. These commenters believed the July 6, 2010 date created 
an undue burden on many providers, especially large medical groups, 
because many of their physicians and other professionals are affected 
by this requirement, creating an enormous workload on them, as well as 
the CMS contractors. Other commenters believe that the Medicare 
enrollment application for physicians is lengthy and complex and takes 
a great deal of time to complete, and requires details and supporting 
documents that only the physician would be able to provide. The 
commenters also stated that there are postal delays when mailing 
applications, and that physicians and their staff schedule vacations 
around that time of year.
    Response: The commenters have referenced an announcement during an 
open door forum in February of 2010 wherein we noted a delay of in the 
enforcement of the requirement to enroll

[[Page 25292]]

in PECOS to January 2011. However, this delay was preempted by the new 
statutory effective date in the Affordable Care Act, passed on March 
23, 2010. The Affordable Care Act includes amendments to the Act that 
apply to written orders and certifications made on or after July 1, 
2010. Because we must follow the statutory effective date, we have 
instituted these regulations accordingly.
    To provide the physician and eligible professional communities with 
the opportunity to comply with this regulation, we have made some 
modifications to the final rule which we believe will assist in that 
effort. The Affordable Care Act mandated that physicians and eligible 
professionals who order and refer must be enrolled in Medicare, the 
program. This final rule mandates the same, mirroring the statutory 
language. The IFC required an enrollment in PECOS, our data repository 
system for storing enrollment records. The Medicare legacy systems 
predate the PECOS system. However, those systems are being phased out 
and in the near future will no longer be used. At this time, the only 
way to enroll in Medicare is to establish an enrollment record in 
PECOS. We have been working towards fully populating PECOS and 
transferring those providers and suppliers in the legacy systems over 
to PECOS. This is being done by requiring that providers and suppliers 
revalidate their enrollment records, which we have separate and 
established authority to do. By revalidating, providers and suppliers 
will then have an enrollment record in PECOS. Those physicians and 
eligible professionals who only have an enrollment record in a local 
legacy system have been asked to revalidate first, so that they may be 
included on the Ordering Referring Report (explained in subsequent 
responses). We have made it clear to the physician and eligible 
professional communities that we would not turn on the automated edits 
that would cause a claim not to be paid until all physicians and 
eligible professionals have been asked to revalidate and have been 
given the opportunity to complete that process through their respective 
Medicare Administrative Contractors (MACs). In this final rule, 
although we have expanded our requirement from requiring enrollment in 
PECOS to one requiring enrollment in Medicare, which includes 
enrollment in PECOS or the local legacy systems, our requirements have 
not practically changed.
    We believe that the aforementioned modification of the IFC will not 
create an additional burden because information will be gathered 
through the normal revalidation process. To address the commenters' 
concerns regarding the lengthy enrollment forms, we have modified the 
enrollment process for those enrolling only to order and certify. The 
CMS-855O form is available now for use and is significantly shorter 
than the original enrollment forms. Additionally, although those 
physicians and eligible professionals who wish to enroll in Medicare to 
order and certify, but do not wish to bill the Medicare program, will 
need to provide information to us via the CMS-855O form, they will not 
be required to submit financial information, including filling out a 
CMS-588 Electronic Funds Transfer (EFT) form. We believe that these 
modifications have addressed the concerns raised by these commenters.
    Comment: A commenter suggested that CMS should delay implementation 
of these requirements until 5 percent or fewer physicians and other 
eligible professionals lack approved enrollment records or valid opt-
out records in PECOS.
    Response: The Affordable Care Act requires that physicians who 
order certain items or services must be enrolled in Medicare. As 
previously stated, we have changed the enrollment requirement from one 
mandating enrollment in PECOS to one requiring enrollment in Medicare--
including PECOS or other legacy Medicare enrollment systems. In 
addition, as we have indicated in this final rule and in open door 
forums, we have not yet activated the automated edits that would cause 
claims for services or supplies not to be paid for lack of an approved 
enrollment record in Medicare. We will provide advance notice of 
activation of the automated edits. We believe these changes alleviate 
the concerns of the commenter.
    Comment: A commenter suggested that if the July 6, 2010 date 
remains in effect, consideration should be given to processing and 
paying claims if the ordering or referring provider has an enrollment 
application in process at a CMS contractor.
    Response: We have changed the enrollment requirement from one 
requiring enrollment in PECOS to one requiring enrollment in Medicare--
including PECOS or other legacy Medicare enrollment systems. However, 
physicians and eligible professionals must have an approved enrollment 
record in Medicare, not a pending record in Medicare to order and 
certify services for Medicare beneficiaries.
    Comment: Several commenters questioned whether the practice of 
providers billing for services after July 6, 2010 and the ordering or 
referring provider's failure to have a record in PECOS at that time, 
could trigger liability under the False Claim Act.
    Response: The False Claims Act (FCA), 31 U.S.C. 3729 through 3733, 
imposes civil liability for the knowing submission of a false or 
fraudulent claim for payment and the Department of Justice investigates 
and litigates alleged FCA violations. Therefore, any question related 
to FCA liability is beyond the scope of this rule.
    Comment: Another commenter asked if providers that submitted claims 
between July 2010 and December 2010 that fail the edits because the 
ordering or referring provider or eligible professional did not have an 
enrollment record in PECOS may eventually be held liable for non-
compliance and could face rejected claims and recoupment by Zone 
Program Integrity Contractors (ZPICs), Contractor Error Rate Testing 
(CERT), Durable Medical Equipment Medicare Administrative Contractors 
(DME MACs), and Recovery Audit Contractors (RACs), and other 
contractors at any point after July 1, 2010, noting that a tremendous 
number of claims would have failed those edits during that timeframe.
    Response: We have delayed the implementation of automated edits 
that would cause a claim not to be paid due to the lack of an approved 
enrollment record in Medicare for the ordering or certifying physician 
or eligible professional. This final rule does not in any way provide 
relief to providers whose claims would be subject to recoupment by any 
CMS contractor, including ZPICs, RACs, and MACs, as well as any law 
enforcement partner, due to improper payments resulting from any other 
reason unrelated to the ordering or certifying requirements. We always 
retain the right to pursue fraud and recoup money for claims that did 
not meet the requirements of the IFC. However, for operational reasons, 
we do not believe it would be a prudent use of resources to pursue 
large-scale recoveries against claims with dates of service from July 
2010 until such time as we activate prepayment edits that identify 
claims that do not have proper documentation of enrolled ordering and/
or certifying suppliers.
    Comment: Commenters stated that claims for home health services are 
reimbursed on a 60-day episode basis, and claims submitted on or after 
July 6, 2010 would be for services provided in April, May, and June. 
The commenters stated that because the IFC was published on May 5, 
2010, it may apply to home health services ordered before

[[Page 25293]]

May 5, and would not be fair to require retroactive compliance with a 
new regulation.
    Response: We will provide advance notice to providers and suppliers 
of the date we plan to activate the automated edits that would cause a 
claim not to be paid for the lack of an enrollment record in Medicare. 
No part of this final rule will require retroactive compliance for 
periods of time before July 6, 2010. Further, the edits will apply to 
only those claims with a date of service on or after the date the edits 
are activated.
    Comment: Commenters argued that the July 6, 2010 date should apply 
only to orders and referrals for DMEPOS and home health services, as 
those are the only ordered or referred items or services specifically 
named in the Affordable Care Act, and that those who order or refer 
imaging, laboratory and specialist services (which are not named in the 
law but CMS names in the IFC) should have been given until January 3, 
2011 to enroll/re-enroll. Similarly, another commenter stated that 
laboratory services were not subject to the provisions of the 
Affordable Care Act; therefore, if CMS exercises its statutorily-given 
discretion and determines that they must meet the requirements of the 
IFC, CMS should have given laboratories until January 3, 2011 to be in 
compliance.
    Response: Extending the ordering and referring enrollment 
requirements to other providers and suppliers is permitted by statutory 
provisions in 6405(c) of the Affordable Care Act, including laboratory 
and imaging services. However, as noted in the responses to comments, 
we have eliminated from the final rule the requirements related to 
referrals to physician specialists. The statutory effective date is 
binding for all applicable provisions of this rule, including those 
specifically mandated in the Affordable Care Act provisions, as well as 
those added at the discretion of the Secretary. Therefore, we are not 
able to make the suggested change.
    Comment: Several commenters stated that CMS should flag claims with 
a date of service after July 6, 2010 that have been rejected due to the 
ordering or referring provider not having an enrollment record in PECOS 
and that CMS should then communicate this information to the billing 
provider and CMS should use this information to target outreach to non-
PECOS ordering or referring providers. Some commenters stated that 
physicians do not understand why other providers/suppliers, instead of 
CMS, are notifying them of the need to have records in PECOS.
    Response: As stated previously, Medicare contractors have 
communicated in writing with enrolled physicians and nonphysician 
practitioners who do not have enrollment records in PECOS and have 
urged them to establish those records through revalidation. Suppliers 
who have submitted claims for items and services ordered and referred 
by non-enrolled physicians have been receiving informational messages 
that these claims are not in compliance with the enrollment 
requirements but are not being denied at this time. We are aware that 
some suppliers have been communicating with those individuals who 
ordered and referred items and services about the requirement to enroll 
in Medicare and we encourage all suppliers to do so. We believe that 
our outreach documents and messages provided at our provider open door 
forums are clear, comprehensive, and continue to stress the importance 
of having an enrollment record in PECOS. We will continue our direct 
outreach with these communities as we implement this final rule.
    Comment: Due to the short timeframe for complying with the new 
provisions, several commenters questioned that we allow the effective 
date for ordering home health services by newly enrolling physicians be 
the date the physician mails the signed CMS-855 Certification Statement 
to the Medicare contractor.
    Response: The statute requires that enrollment must be valid based 
on the date of the order or referral. As noted in the preamble of this 
final rule, the final rule requires enrollment based on the date of 
service, not the mailing date of the CMS-855 Certification Statement. 
In order for a physician or non physician practitioner to be enrolled 
in Medicare, the Medicare contractor must process the enrollment 
application to a final approved status. This process could take 
approximately 45 days or more, depending upon various factors. To allow 
physicians and eligible professionals sufficient time to enroll to 
order and certify, we will provide ample notice of our plans to 
activate the automated edits that will cause a claim not to be paid due 
to the lack of an approved enrollment record in Medicare to order and 
certify.
    Comment: A commenter stated that because CMS recently implemented 
the Outcome and Assessment Information Set (Oasis C) for home health 
agencies, making the effective date of July 6, 2010 in the IFC would be 
even more onerous and difficult to implement due to such short notice.
    Response: The effective date for the enrollment requirements for 
physicians and eligible professionals who order and certify covered 
items and services was mandated by statute. Consequently, we are not 
able to change the effective date.
e. Enrollment Records, PECOS, FISS, NPPES, and the Ordering Referring 
Report
    Comment: A few commenters questioned why CMS needs PECOS when there 
is already an NPI database.
    Response: PECOS is a Medicare enrollment repository and the ``NPI 
database'' (NPPES) is the repository of information about health care 
providers who have been assigned NPIs and their assigned NPIs. Any 
health care provider who has an NPI has a record in NPPES. Not all 
health care providers in NPPES are in PECOS, because not all health 
care providers with NPIs are enrolled in the Medicare program. Please 
see the CMS NPI Web page for more information about NPIs and NPPES 
www.cms.gov/NationalProvIdentStand/.
    Comment: A commenter did not understand why an ordering physician 
had to have an enrollment record in PECOS when the physician already 
has an NPI.
    Response: Having an NPI does not mean that a physician is enrolled 
in the Medicare program or that the physician has an enrollment record 
in PECOS or in Medicare. The Affordable Care Act requires that 
physicians who order certain items or services must be enrolled in 
Medicare. We have changed the enrollment requirement language from one 
requiring enrollment in PECOS to one requiring enrollment in Medicare--
including PECOS or other legacy Medicare enrollment systems. This final 
rule requires that physicians report an NPI on new enrollment records 
and on submitted claims for payment. We will use our existing authority 
to revalidate enrolled providers, which will require the reporting of 
the NPI on an enrollment application.
    Comment: A commenter recommended that CMS consider a bi-directional 
interface between PECOS and NPPES to permit both systems to contain the 
information necessary for a provider to verify that the ordering or 
referring physician is a qualified provider of Medicare services.
    Response: While we appreciate the commenter's point of view, NPPES 
is an entirely separate entity from Medicare and PECOS. NPPES simply 
assigns NPIs and collects the corresponding information for those 
numbers. NPPES does not collect Medicare enrollment information. PECOS 
collects Medicare enrollment information, as do CMS's

[[Page 25294]]

legacy systems. Medicare verifies the credentials of its enrolling 
providers and suppliers as part of the provider and supplier enrollment 
process that occurs when Medicare contractors process Medicare 
enrollment applications. This verification does not occur when health 
care providers apply for and are assigned NPIs by NPPES.
    Comment: A commenter stated that providers and suppliers, including 
practitioners, may not know whether they have NPIs in their enrollment 
records in PECOS, or what they need to do in order to comply with the 
NPI requirement to submit the NPIs to CMS by July 6, 2010.
    Response: We have established a number of ways for providers and 
suppliers to inquire about their status with Medicare.
     Providers and suppliers may start by referring to the NPI 
Registry online to search for their NPI. Those eligible for an NPI, who 
are enrolled in Medicare, must establish an NPI and update their 
enrollment records with Medicare.
     Providers and suppliers may also refer to the Ordering 
Referring Report to verify their enrollment records. The Ordering 
Referring Report is a report published by CMS that reflects the 
approval status of all physician and non physician practitioners who 
have applied to order and refer. The report will show all practitioners 
who have an approved record in PECOS to order and refer and 
practitioners who have an application that has been received and is 
pending approval. The report is available via the following link: 
http://www.cms.gov/MedicareProviderSupEnroll/06_MedicareOrderingandReferring.asp#TopOfPage.
     Providers and suppliers may also use Internet-based PECOS 
to view their enrollment records. This will also enable the user to 
determine whether their NPI is included in their enrollment record in 
PECOS.
    Comment: Several commenters, noting that not all Medicare providers 
and suppliers who have enrollment records in PECOS have NPIs in those 
records, believed that the requirement for such providers and suppliers 
to submit, by July 6, 2010, enrollment applications that contain the 
NPI would overwhelm the Medicare contractors, as this would be an 
additional burden on the contractors that already have backlogs of 
enrollment applications to process. They recommended that CMS issue 
guidance to its contractors for establishing a process for those who 
need to establish enrollment records in PECOS, as well as those who 
need to add their NPIs to their enrollment records, and to hold such 
providers and suppliers harmless for failure to submit the required 
enrollment applications or add their NPIs to their enrollment records 
prior to having been notified to do so by their designated Medicare 
contractors.
    Response: The Medicare provider/supplier enrollment Web site 
assists providers and suppliers in determining whether they have 
enrollment records in PECOS and also provides information on how to 
enroll. We will continue to convey these messages, as appropriate, via 
our provider/supplier open door forums, in CMS provider listserv 
messages, in Medicare Learning Network products, and in our 
conversations and discussions with national provider and supplier 
organizations.
    As stated previously, we will provide ample notice of our plans to 
activate the automated edits that will cause a claim not to be paid due 
to the lack of an approved enrollment record in Medicare to order and 
certify. Therefore, there is no reason for us to hold providers 
harmless for failing to be compliant with this requirement.
    Comment: Many commenters stated that physicians' practices do not 
understand the PECOS system and that CMS help is difficult to obtain. 
The commenter stated that the help number is only available 4 hours per 
day and providers cannot get through. Another commenter believed the 
PECOS process to be quite difficult and time consuming.
    Response: We have provided PECOS instructional guides for 
physicians, nonphysicians and DMEPOS suppliers available at: http://www.cms.gov/MedicareProviderSupEnroll/04_InternetbasedPECOS.asp.
    The CMS End User Services (EUS) Help Desk operates under our 
direction and is equipped to respond to operational systems issues 
related to Internet-based PECOS that are reported by providers and 
suppliers. Examples of issues that should be reported to the CMS EUS 
Help Desk include access problems (for example, user ID and password do 
not work, forgotten User ID or password, help in setting set up User ID 
or password), difficulty in understanding how to follow the screens in 
the application process, error messages, and system performance issues. 
The telephone number of the CMS EUS Help Desk is 1-866-484-8049 (TTY/
TDD 1-866-523-4759); the email address is [email protected]. The CMS 
EUS Help Desk days and hours of operation are Monday through Friday, 7 
a.m. to 7 p.m. Eastern Time. The CMS EUS Help Desk is unable to answer 
enrollment policy questions; those questions must be directed to the 
Medicare contractors. Medicare provider enrollment contact information 
for each State can be found in the download section of http://www.cms.gov/MedicareProviderSupEnroll/. We will investigate all reports 
of slowness or similar systems problems that Internet-based PECOS users 
may experience and report to the CMS EUS Help Desk.
    Providers and suppliers with questions regarding the use of PECOS 
for the enrollment process should contact their jurisdiction's MAC. 
Although each MAC's hours of operation may vary, their normal business 
hours are generally established at 8 hours daily. Each MAC is required 
to comply with certain training exercises; therefore, there may be 
times when the hours of operation are shortened to 4 hours. The MACs 
may also be closed on Federal holidays. We do not believe that these 
limited interruptions significantly impact the MAC's ability to provide 
assistance related to PECOS due to these limited periods of 
interruption.
    Comment: A commenter stated that CMS has confused physicians 
unnecessarily by referring to PECOS interchangeably as both an 
enrollment repository and as a Web site. They think that when they 
``sign up'' to use the Web site, they have enrolled, only to find out 
that they still need to submit an application, a much more cumbersome 
process.
    Response: Internet-based PECOS is a secure Web site providers can 
log into and then submit an application to enroll. In order to use 
Internet-based PECOS, a provider or supplier must log in by entering 
his or her User ID and password or register to obtain log in 
information in the PECOS Identity and Access (I&A) System. Logging on 
or registering is not enrolling or updating an enrollment record. After 
access to Internet-based PECOS is granted, the user must complete and 
then submit the enrollment application electronically; then the user 
must print the Certification Statement and have it signed and dated by 
the appropriate individual, gather any required supporting paper 
documentation, and send this material to the designated Medicare 
contractor. After the designated contractor receives the signed and 
dated Certification Statement and any additional paper documentation, 
it begins to process the enrollment application to an approved 
(approved or opt-out) or disapproved status. Once the application is 
approved, the provider or supplier will have an approved enrollment 
record or

[[Page 25295]]

a valid opt-out record in PECOS. We have revised some of the material 
on the Medicare provider/supplier enrollment Web site in an attempt to 
clarify requirements and processes to address the concerns expressed by 
the commenter. PECOS can be accessed here: https://pecos.cms.hhs.gov/pecos/login.do.
    We offer additional information on internet-based PECOS on our Web 
site. This information includes several Medicare Learning Network (MLN) 
articles that provide providers and suppliers with in-depth information 
to assist them in navigating the enrollment process.
    Comment: A commenter stated that the ``find a doctor'' link on the 
Medicare.gov Web site does not inform beneficiaries of the PECOS 
requirements or indicate whether the physicians it suggests to patients 
are PECOS enrolled. Another commenter noted that it will be difficult 
for Medicare beneficiaries to know if their physician has an enrollment 
record in PECOS. The commenter also stated that if the physician does 
not have an approved record in PECOS, and he/she orders or refers, and 
the provider or supplier refuses to furnish the item or service, the 
beneficiary will develop further health problems, causing more problems 
for the beneficiary as well as the taxpayer and the provider. Another 
commenter stated that beneficiaries should be made aware of the impact 
of these requirements on their ability to access subsequent care.
    Response: We use a number of communication vehicles to communicate 
with beneficiaries about Medicare including the annual Medicare and You 
Handbook describing the program, which refers to the requirements that 
physicians and eligible professionals, were applicable, who order and 
certify Medicare services for beneficiaries must be enrolled in 
Medicare. The Medicare.gov Web site uses PECOS as the source of the 
information it displays about physicians. We are continually updating 
the information in PECOS to be sure that it is complete and accurate. 
The Affordable Care Act requires that physicians who order certain 
items or services must be enrolled in Medicare. We recognize that this 
requirement may pose issues for beneficiaries who need care and who are 
unsure whether their physician is enrolled in Medicare. As mentioned 
earlier in this preamble, there are a number of ways a beneficiary can 
determine whether a physician is actually enrolled in Medicare, 
including to ask the physician whether he or she is enrolled. In 
addition, for ease of access, we have created the Ordering Referring 
Report that provides the public, including beneficiaries, information 
on who is enrolled in Medicare to order and certify (available at 
http://www.cms.gov/MedicareProviderSupEnroll/06_MedicareOrderingandReferring.asp). To ensure that Medicare 
beneficiaries are aware of the need for the providers and suppliers 
from whom they receive items and services to be enrolled in Medicare 
(even if only to order and certify, when permitted) or to have validly 
opted-out of Medicare, we will continue to share information with 
senior citizens' organizations and create special messages for Medicare 
beneficiaries about these issues and processes. We believe all of these 
changes reduce the risk that beneficiaries will be disadvantaged by 
implementation of the statutory requirements.
    Comment: Many commenters stated that the Affordable Care Act 
requires physicians who order or refer DMEPOS and home health services 
to be enrolled in Medicare but does not require them to have enrollment 
records in PECOS, whereas the IFC requires the latter. The commenters 
suggested that CMS should focus on ensuring that those who order and 
refer DMEPOS and home health services and who have never enrolled in 
Medicare, must enroll in Medicare, and CMS should have let those who 
are enrolled and not yet in PECOS have until January 2011 to get their 
enrollment information into PECOS. This could help reduce the strain on 
the enrollment contractors.
    Response: The Affordable Care Act requires that physicians who 
order certain items or services must be enrolled in Medicare. In 
response to comments, we have changed the enrollment requirement 
language from one requiring enrollment in PECOS to one requiring 
enrollment in Medicare--including PECOS or other legacy Medicare 
enrollment systems. However, as we explained in this preamble, we will 
be transitioning all legacy system enrollees to PECOS via our 
revalidation process and will delay the activation of the automated 
edits. Once implemented, these edits will cause a claim, for the lack 
of an approved enrollment record in Medicare for the ordering or 
certifying physician or other eligible professional, not to be paid. 
These edits will not be activated until the revalidation process is 
completed for the relevant supplier groups that order and certify. The 
Affordable Care Act does not authorize the Secretary to arbitrarily 
implement this rule for certain providers and suppliers who enroll to 
order and certify. We believe that the delay of the automated edits 
alleviates the commenters' concerns. We require that providers and 
suppliers be enrolled in the Medicare program or that they have validly 
opted out of the Medicare program as of the date of service, beginning 
with dates of service of July 6, 2010. However, as already stated, we 
will provide advance notice of the activation of the automated edits 
that pertain to these claims.
    Comment: A commenter stated that physicians who have attempted to 
enroll in order to get their enrollment data into PECOS have had their 
applications returned to them with instructions that there is no need 
for their applications to be updated at this time.
    Response: We understand that there has been some confusion in the 
past and have instructed our Medicare contractors to process these 
applications. Our instructions to the enrollment contractors also state 
specifically that physicians who are currently enrolled in PECOS and 
have an NPI in their records need not resubmit an application to enroll 
to meet the statutory requirements addressed in this final rule. Our 
enrollment contractors receive on-going training to address these types 
of issues and we do not expect any confusion in the future.
    Comment: Several commenters stated that physicians have used 
Internet-based PECOS to enroll but their names are not in the Ordering 
Referring Report available on the CMS Web site at www.cms.gov/MedicareProviderSupEnroll.
    Response: We are evaluating the reasons why physicians or other 
eligible professionals do not appear on the Ordering Referring Report. 
If a physician or other eligible professional believes that he or she 
has been omitted from this report in error, we encourage them to 
contact their respective Medicare contractor for assistance.
    Comment: A commenter asked CMS to define what is meant by an 
``approved enrollment record in PECOS.'' Further, the commenter thought 
that Medicare contractors should retroactively approve each enrollment 
application found in PECOS to the date the application was initially 
submitted to CMS. The commenter believed this would be consistent with 
the effective date of enrollment in Medicare for physicians, non 
physician practitioners, and physician and non physician practitioner 
organizations, which is defined at Sec.  424.520(d) as the latter of 
the first date the individual began furnishing services at a new

[[Page 25296]]

practice location or the date of filing of the application that is 
subsequently approved.
    Response: For purposes of this final rule, an ordering or 
certifying provider must be enrolled in Medicare in an approved or a 
valid opt-out status as of the date of service on the claim. As the 
commenter stated, under Sec.  424.520(d), the effective date of 
Medicare billing privileges for physicians and practitioners is the 
date of filing of a Medicare enrollment application that is 
subsequently approved or the date an enrolled physician or non 
physician practitioner first began furnishing services at a new 
location, whichever is later. The provider may begin ordering or 
certifying items and services as of the effective date of his/her 
Medicare billing privileges.
    Comment: Some commenters suggested that CMS provide more 
information about the Medicare legacy claims system and how providers 
can access it, as the legacy claims system is another way that ordering 
or referring providers can be in compliance with existing ordering or 
referring provider requirements.
    Response: Providers are not permitted to access the Medicare legacy 
claims systems and there is no need for them to do so. In earlier 
responses, we have explained numerous ways for providers to access the 
records that provide the information sought by the commenters.
    Comment: Several commenters noted that the Ordering Referring 
Report that is available on the CMS provider/supplier enrollment Web 
page is difficult to use effectively.
    Response: We revised this report so that it is more user-friendly. 
The Ordering Referring Report is now available on the Medicare 
provider/supplier enrollment Web site in two formats: PDF and CSV. The 
PDF format enables a person to search for a particular physician or 
other eligible professional, either by NPI or by name. We believe these 
changes have alleviated the problems associated with conducting 
searches and we will continue working to improve the quality of search 
capabilities.
    Comment: Some commenters requested that the report be made 
available more frequently, such as daily.
    Response: The Ordering Referring Report is replaced at a minimum of 
once per week. We do not believe that more frequent availability 
(daily, real-time) is necessary or practical. As mentioned in a 
previous response, a report of physicians and other eligible 
professionals whose enrollment applications are in process is also 
available on the same Web site.
    Comment: A commenter stated it has no way of knowing when an 
enrolled physician establishes an enrollment record in PECOS in order 
to resubmit a claim that had been submitted but had failed the ordering 
or referring provider edit.
    Response: The Ordering Referring Report is updated at a minimum of 
once per week and is available in two formats, as noted earlier. By 
comparing information in a provider's or supplier's previously 
submitted claims to the information in this file, it is possible to 
determine if the ordering or certifying providers identified in 
previously submitted claims are enrolled in Medicare in an approved 
status or have validly opted-out.
    Comment: A commenter stated that PECOS must be updated daily or 
patients will be incorrectly denied services.
    Response: PECOS, the national Medicare FFS provider and supplier 
enrollment system, is updated daily, and an extract of PECOS enrollment 
data is transmitted electronically each night to the Medicare claims 
systems.
    Comment: A commenter stated that a physician who received an 
enrollment letter from CMS could not be found on the Ordering Referring 
Report.
    Response: There were some errors in the generation of the Ordering 
Referring Reports that were produced in the late spring of 2010 that 
resulted in the omission of some physicians and other eligible 
professionals from the Ordering Referring Report. We have corrected the 
errors.
    Comment: Several commenters stated that home health agencies should 
be given the capability to access the Fiscal Intermediary Standard 
System (FISS) to research the enrollment status of enrolled and opt-out 
physicians, as FISS is updated daily.
    Response: As stated in an earlier response, providers and suppliers 
may not access the claims systems. Information regarding a provider or 
supplier's enrollment status is available by checking the files we post 
on the Medicare provider/supplier enrollment Web site, or by inquiring 
with the ordering or certifying providers.
f. Enrollment Applications and Processing
    Comment: Commenters stated that Medicare enrollment contractors are 
not processing enrollment applications in a timely manner, are not 
providing accurate information to inquiring physicians and others, are 
not responding timely to questions, and that this made it impossible 
for those physicians and other practitioners to have enrollment records 
in PECOS by July 6, 2010. A commenter asserted that it has taken a 
total of 90 days or more for contractors to process enrollment 
applications and for CMS to include the physician in the Ordering 
Referring Report, making the July 6, 2010 date unacceptable. The 
commenter also suggested that the new future deadline will put even 
more of a strain on the Medicare enrollment contractors, who are 
already behind in processing enrollment applications.
    Response: Additional resources have been allocated to Medicare 
contractors to enable the processing of increased numbers of enrollment 
applications. Furthermore, we have undertaken many activities to 
streamline the process and assist the provider and supplier communities 
in complying with this rule. These include: (1) Modifying the 
enrollment requirement language from one requiring enrollment in PECOS 
to one requiring enrollment in Medicare-- including PECOS or other 
Medicare enrollment systems; (2) not immediately activating the 
automated edits that would cause claims for items or services not to be 
paid for lack of an approved enrollment record in Medicare; and (3) 
providing a streamlined application for those providers and suppliers 
who wish to enroll to order and certify (CMS-855O). We have worked with 
the provider and supplier community to be responsive to application 
processing concerns and are continuously working to make the enrollment 
process faster and easier for the provider and supplier communities.
    Comment: Many commenters suggested that CMS increase resources to 
contractors to ensure that customer service lines are answered promptly 
including the Internet-based PECOS call center and the NPI Enumerator 
call center. The commenter also noted that customer service training 
should be improved, and that information submitted by physicians should 
not be lost.
    Response: We agree with the commenter. We have taken a number of 
steps to address the commenter's first concern. The CMS EUS Help Desk 
(the Internet-based PECOS call center) is hiring more staff and is more 
thoroughly educating its employees on how to properly handle issues and 
problems related to Internet-based PECOS. We have made improvements in 
the language used on the screens in Internet-based PECOS to help 
eliminate confusion. We have also taken steps to ensure the system 
operates more smoothly and consistently. The NPI Enumerator call center 
remains fully staffed and funded to assist those

[[Page 25297]]

physicians and other eligible professionals who need to obtain or 
establish NPIs, as well as those who have lost or forgotten their NPPES 
User IDs and passwords to enable them to use Internet-based PECOS. In 
addition, we are continuing to make major revisions to the enrollment 
process that will significantly reduce delays and other problems 
associated with PECOS enrollment.
    Comment: A commenter stated that a Medicare contractor requires 
physicians to submit multiple CMS-855I and 855R forms, one for each 
Medicare-assigned Provider Transaction Access Number (PTAN). The 
commenter was concerned that this is resource-intensive on the 
physician and the contractor.
    Response: We do not require physicians or other eligible 
professionals to submit multiple enrollment applications (CMS-855I 
forms) in situations where they have more than one PTAN unless the 
PTANs represent practice locations that exist in more than one Medicare 
contractor jurisdiction. In that situation, a physician or other 
eligible professional would need to submit an enrollment application to 
each Medicare contractor; a Medicare contractor has access only to the 
PECOS enrollment records with practice locations within that 
contractor's jurisdiction. The 855R form is not an enrollment 
application, as such. This form is used to reassign benefits to another 
provider or supplier, such as a physician group practice. This has a 
very different function than the standard enrollment forms. 
Additionally, in an effort to streamline our enrollment for this final 
rule, we have developed the new CMS-855O form. This form will be 
available to those physician and nonphysician practitioners who wish to 
submit an enrollment application just for the purposes of ordering and 
certifying.
    Comment: A commenter stated that the enrollment processing time 
should be more reasonable, such as 7 to 14 days.
    Response: Many of the applications submitted to the Medicare 
contractors are processed in as little as 14 days. However, Medicare 
contractors must verify information reported in the Web-based and paper 
enrollment applications, and sometimes need to obtain additional 
information or clarification from enrolling providers and suppliers. 
Providers and suppliers are not always timely in furnishing the 
requested clarifications or additional information, which may add 
substantially to the processing time and, if the requested information 
is not furnished within the timeframe required by the Medicare 
contractor, it may cause an enrollment application to be rejected. 
Paper enrollment applications take longer to arrive at the Medicare 
contractors and take longer to process than those submitted via 
Internet-based PECOS for several possible reasons related to paper 
applications that may be missing required data; may contain illogical 
dates or incorrect, incomplete, missing addresses or telephone numbers; 
or may be missing required supporting documentation. The increased 
volume of enrollment applications has resulted in slightly longer 
processing times. However, since we changed the enrollment requirement 
from one requiring enrollment in PECOS to one requiring enrollment in 
Medicare--including PECOS or other Medicare enrollment systems, we 
believe we have eliminated some of those possible problems and delays 
in processing during the revalidation process. This change has ensured 
that claims of existing approved Medicare providers have not been 
disrupted.
    Comment: A commenter stated that CMS should make available data 
regarding enrollment applications submitted due to these new 
requirements and detail the success of the Medicare contractors in 
processing the applications within the required timeframes.
    Response: We make available on the Medicare provider/supplier 
enrollment Web site a report showing the legal names and NPIs of 
physicians and other eligible professionals who have enrollment 
applications being processed by the Medicare contractors. For purposes 
of this final rule, we do not believe it appropriate to include the 
enrollment application processing times of the Medicare contractors. 
Many factors influence the time it takes to process an enrollment 
application, including the method (Web or paper) by which the 
enrollment application was submitted and the completeness of the 
application. Medicare contractors have several methods available to 
them for managing their workloads successfully. However, we do monitor 
application processing activities for timeliness and other performance 
variables.
    Comment: A commenter stated that the IFC expanded the scope of the 
statute by including radiology and pathology services as ordered or 
referred items and services. The commenter asserted that many more 
physicians order these services than order DMEPOS, and that CMS has not 
permitted adequate time for physicians to become aware of this 
expansion and, if necessary, establish enrollment records in PECOS. The 
commenter asked that CMS determine the number of physicians who must 
establish enrollment records in PECOS and then establish manageable 
timeframes for processing the revalidations. The commenter suggested 
that CMS also consider having the Medicare contractors create special 
processing units to process only voluntary revalidation applications.
    Response: Section 6405(c) of the Affordable Care Act permits the 
Secretary to extend the requirement to all other categories of items or 
services, including imaging services and clinical laboratory services. 
We have a general sense of the pool of affected physicians and other 
eligible professionals who must establish enrollment records in 
Medicare and have established manageable timeframes for processing the 
revalidations. Additionally, we have engaged in outreach efforts with 
the impacted medical communities. As a result, those who order imaging 
services and clinical laboratory services should be fully aware that 
they need to be enrolled in Medicare or have validly opted- out of 
Medicare to continue to order those services. We do not believe there 
is a need to provide additional time for those who order imaging 
services and clinical laboratory services to enroll in Medicare.
    By ``voluntary revalidation applications,'' we believe the 
commenter is referring to enrollment applications submitted by enrolled 
physicians and other eligible professionals absent the receipt of a 
revalidation letter from a Medicare contractor. Revalidation requests 
are generated by Medicare contractors, and providers and suppliers are 
given a specific period of time in which to submit their enrollment 
applications. Medicare contractors give priority to processing all 
initial enrollment applications and to those who are enrolling just to 
order and certify. We do not accept voluntary revalidation applications 
and we do not intend to in the future.
g. CMS Outreach Activities and Education
    Comment: Commenters stated that home health agencies, who learned 
of these requirements when reading the IFC, need time to educate 
physician and hospital communities on the dual issues of the physician 
status in PECOS and potential adverse impact on access to post-acute 
care services for their patients. A commenter requested that if the 
July 6, 2010 date for the ordering or referring supplier requirement 
for physicians is not moved to January 3, 2011, CMS should--(1) Fund

[[Page 25298]]

enrollment contractors for physician outreach and enrollment 
application processing; (2) direct contractors to set up dedicated 
lines to expedite inquiries and resolve problems related to enrollment 
and PECOS; and (3) send out messages through electronic means, set up 
open door meetings, and utilize other DHHS communications tools to 
ensure physicians are aware of the accelerated deadline and have the 
ability to meet it.
    Response: We agree that provider communication and information is 
central to the success of the requirements mandated by this final rule. 
We have implemented a communications plan for the requirements. 
Furthermore, the delay in the activation of the automated edits and the 
changes made in this final rule will assist the provider and supplier 
communities in complying with this rule. We will continue to convey 
these messages via open door forums, Medicare Learning Network 
articles, and other venues.
    Comment: Many commenters stated that CMS should develop an 
aggressive outreach enrollment campaign for physicians, as they may be 
unaware of the need to establish enrollment records in PECOS if they 
are enrolled and do not have records in PECOS, and they may be unaware 
of the requirement to report their NPI on a Medicare enrollment 
application if they were enrolled and later obtained their NPI and have 
not yet reported it to Medicare on a Medicare enrollment application.
    Response: As previously stated, we have changed the enrollment 
requirements on mandating enrollment in PECOS to one requiring 
enrollment in Medicare--including PECOS or other legacy Medicare 
enrollment systems. We have pursued an aggressive outreach initiative 
to educate the provider and supplier communities on the ordering and 
referring requirements even before the IFC was published on May 5, 
2010. Upon publication of this final rule, we plan to disseminate 
guidance on specific provisions of the final rule by producing a 
Medicare Learning Network product, placing additional or revised 
information on the Medicare provider/supplier enrollment Web site, 
making announcements at CMS provider/supplier open door forums, and 
releasing messages via CMS provider/supplier listservs and to national 
senior citizens' organizations.
    Comment: A commenter stated that CMS should engage in special 
outreach efforts to hospital clinics that may not understand that the 
physician, as well as the clinic, must have an enrollment record in 
PECOS.
    Response: Enrollment has been a longstanding requirement. However, 
we will be sure to address this in an upcoming update of the applicable 
informational documents that are available on the Medicare provider/
supplier enrollment Web site and we will also continue our outreach 
efforts to educate the provider and supplier communities.
    Comment: A commenter suggested that CMS prepare a model letter and 
make it available to the supplier community so that the suppliers can 
forward the letter to those who order items and services who do not 
have approved enrollment records or valid opt-out records in PECOS.
    Response: We have and will continue to reach out to the provider 
and supplier community by providing educational material using a number 
of different media. On June 28, 2010, we announced through a Medicare 
Learning Network article that Medicare contractors would be mailing 
letters to physicians and non physician practitioners who are enrolled 
in Medicare but who do not have enrollment records in PECOS. Our 
numerous announcements at our provider/supplier open door forums 
continue to remind physicians and other eligible professionals of our 
goal of ultimately having all FFS providers and suppliers in PECOS. We 
believe that these, and other outreach efforts, make it unnecessary to 
generate a model letter at this time.
    Comment: Many commenters suggested that CMS work collaboratively 
with the medical community to ensure physicians clearly understand 
their enrollment responsibilities.
    Response: We have frequent communications with national medical 
associations and other groups and organizations. We also deliver 
provider/supplier enrollment information and messages at the regularly 
scheduled CMS provider/supplier open door forums. In addition, we have 
sponsored several open door forums dedicated to Medicare provider/
supplier enrollment and will continue to do so as the need arises. We 
have created, and continue to create, special documents to inform the 
provider/supplier community of the Medicare enrollment requirements and 
to assist them in complying with those requirements.
h. Patient Care Implications and Access
    Comment: A commenter suggested that the new deadline could 
potentially cause serious disruption in payments and claim resolution 
and could adversely affect millions of patients across the United 
States. Another commenter stated that CMS is placing an enrollment 
requirement above the interests of Medicare beneficiaries, and the 
effective date should remain January 2011.
    Response: We have taken action to address the commenter's concern 
by not activating the automated edits that would cause a claim to not 
be paid due to the lack of an approved enrollment record in Medicare. 
In addition, we have made other changes in this final rule to reduce 
the risk that Medicare beneficiaries will not have access to quality 
care. Also, our enrollment requirements are an essential program 
integrity function that permits us to screen providers and suppliers to 
ensure that beneficiaries are receiving care from licensed, legitimate 
providers and suppliers. The effective date is mandated by the 
Affordable Care Act.
i. Impact on Individual Medical Communities
    Comment: Commenters suggested that with the July 6, 2010 date, 
suppliers will be compelled to either furnish the ordered or referred 
items and services at their own cost or that of the beneficiary or to 
hold their claims until the ordering or referring supplier has an 
approved enrollment record or valid opt-out record in PECOS. Both 
scenarios are unfair to suppliers and beneficiaries because neither 
have control over physician enrollments in PECOS.
    Response: In response to public comment, we changed the enrollment 
requirement language from one requiring enrollment in PECOS to one 
requiring enrollment in Medicare, including PECOS or other legacy 
Medicare enrollment systems, so that those suppliers enrolled in a 
legacy system can continue to order and certify during the revalidation 
process. This will alleviate much of the commenters' concern. In 
addition, we will provide notice well in advance of activation of the 
automated edits that would cause claims for services or supplies not to 
be paid for lack of an approved enrollment record in Medicare. At the 
time we activate the edits, all eligible suppliers will have been given 
the opportunity to enroll or revalidate enrollment for the purpose of 
meeting the ordering and certifying requirement. Billing providers and 
suppliers should continue to assess their business practices of taking 
orders and certifications from non-Medicare enrolled providers and 
proceed accordingly. In addition, as stated earlier in this preamble, 
we have provided alternative approaches for providers and suppliers to 
verify the enrollment status of individuals who order and certify 
Medicare services. We

[[Page 25299]]

will continue with our extensive outreach efforts so that physicians 
and eligible professionals have the opportunity to educate themselves 
on these requirements.
    Comment: Several commenters noted that there is no direct incentive 
to have an enrollment record in PECOS because those who are enrolled, 
but who do not have records in PECOS, continue to be paid. Some 
commenters stated that some enrolled physicians told them they will 
take no action to establish enrollment records in PECOS. Commenters 
complained that the burden lies on the billing provider or supplier who 
furnished the ordered or referred items and services to confirm the 
ordering or referring provider's PECOS status and educate them if they 
do not have enrollment records in PECOS. Many commenters added that 
DMEPOS suppliers ultimately have no control over what referring 
physicians do, yet the DMEPOS suppliers find their livelihoods and 
businesses, not those of the physicians, to be at risk by this IFC. 
Another commenter stated that CMS should, in a first phase, only reject 
the claims from physicians who do not have enrollment records in PECOS 
and then, once they establish their records in PECOS, in a second 
phase, reject claims from providers who furnish ordered or referred 
items or services whose claims identify ordering or referring providers 
who do not have enrollment records in PECOS.
    Response: Section 6405 of the Affordable Care Act, which this final 
rule implements, does not address payment or nonpayment of claims from 
physicians or eligible professionals who are not enrolled in Medicare. 
However, we understand the concerns that the commenters raised about 
physicians being enrolled only in PECOS. Consequently, we modified the 
PECOS requirement and now will permit enrollment in Medicare. We 
believe that the modification of the PECOS requirement will reduce the 
likelihood that providers and suppliers will have claims denied that 
were ordered or certified by a physician without a valid record in 
PECOS. Generally, physicians who are not enrolled in Medicare would not 
have their claims paid. However, this final rule deals only with the 
requirement that services or supplies provided by rendering/billing 
providers and suppliers must have been ordered or referred by a 
provider or supplier with an approved enrollment record in Medicare or 
the provider or supplier must have validly opted-out of Medicare. 
Therefore, the commenter's phased-in approach would not work within the 
context of this rule. However, Medicare has developed a simplified 
enrollment process (form CMS-855O) for those who want to enroll in 
Medicare solely for the purpose of ordering and certifying.
    Comment: A commenter stated that the inability of a provider or 
supplier to identify the correct teaching physician could cause that 
provider or supplier to choose not to submit a claim for a medically 
necessary item or service that is already furnished, meaning the 
provider or supplier would not receive payment to which it is entitled.
    Response: We understand that the implementation of new policy 
requires providers and suppliers to adapt their processes. To assist in 
this effort, we have modified the provision in this final rule to 
permit individuals who are enrolled in an accredited graduate medical 
education program in a State that licenses or otherwise enables such 
individuals to practice or order and certify services, to enroll in 
Medicare to order and certify. In situations where States do not 
license or otherwise permit such individuals to practice or order and 
certify services, the teaching physician's full legal name and NPI must 
be included on the claim for services. In this last circumstance, the 
claim will not be paid unless the ordering and certifying physician, in 
this case, the teaching physician, is listed on the claim as the 
ordering or certifying physician.
    Comment: Some commenters stated that CMS should sanction or 
otherwise penalize physicians who do not comply with the request to 
establish enrollment records in PECOS but who order or refer and cause 
the claims of other suppliers and providers to fail the ordering or 
referring provider edits and be rejected by Medicare. Another commenter 
asked that CMS modify this regulation by stating that beneficiaries 
and/or DMEPOS suppliers who were adversely affected by a physician's 
non-compliance should be able to initiate a complaint against the 
physician and submit evidence in support of the complaint.
    Response: As stated previously, in light of our decision to modify 
the requirement that the ordering or referring providers must have 
enrollment records in PECOS, we believe the likelihood of claims being 
denied is greatly reduced because those physicians and eligible 
professionals in our legacy systems have been able to order and refer 
during the revalidation process. Further, we will not turn on the 
ordering and certifying automated edits that will cause a claim not to 
be paid for the lack of an enrollment record until those entitled to 
order and certify have been notified of their need to revalidate. We 
have been working with suppliers, providers, and beneficiaries to 
educate them about the requirements of enrollment for ordering and 
certifying.
    The provider or supplier can avoid a situation like the one 
described by the commenters by ensuring--prior to furnishing the 
service or item in question--that the physician is enrolled. The 
relationship that the commenters describe is between the physician and 
the provider or supplier whose claims were denied. We cannot serve as 
an intermediary in whatever dispute may arise between these parties 
concerning the physician's failure to be enrolled. The matter must be 
resolved between the parties themselves.
    Comment: A commenter stated that it could potentially lose referral 
sources if it does not provide the services referred by physicians who 
do not have enrollment records in PECOS.
    Response: As stated previously, we have changed the enrollment 
requirement from one mandating enrollment in PECOS to one requiring 
enrollment in Medicare--including PECOS or other Medicare systems. We 
believe this modification will largely alleviate the problem raised by 
the commenter. We will continue to engage in provider and supplier 
outreach and education on this issue. The Affordable Care Act imposed 
the ordering and referring requirement in section 6405 and we hope that 
physicians and eligible professionals will enroll in the interest of 
being able to order and certify items and services for their Medicare 
patients. As previously stated, we encourage rendering providers and 
suppliers to verify the ordering or certifying practitioners' 
enrollment status prior to rendering services.
    Comment: A commenter noted that all of the services furnished by 
hospital- based radiologists are referred and that they have no way, 
within the short time frame between publication of the IFC and July 6, 
2010, to inform and verify that referring providers have records in 
PECOS. Commenters also stated that because the billing provider will 
not be paid if the referring provider is not in PECOS, there will be a 
huge reduction in payments, resulting in the possibility of missing 
filing deadlines with insurance plans, and the patient will not be 
protected, and hospital-based radiology medical groups will have no 
income, no payroll, and no ability to maintain services for patients.
    Response: Due to the comments received, we are removing the 
ordering or referring provider requirements on claims for physician 
specialists' services. In-hospital services that are

[[Page 25300]]

covered by the hospital inpatient prospective payment system (IPPS) 
payments will also not be subject to the requirements of this rule. 
However, in- hospital diagnostic testing services that are not paid as 
part of PPS (for example, imaging services furnished by an IDTF or 
another entity) must be ordered by Medicare enrolled providers. We have 
further clarified that we will provide ample notice to these providers 
when we decide to activate the edits that will cause a claim not to be 
paid for the lack of an approved enrollment record in Medicare or valid 
opt-out record in Medicare.
    Comment: Commenters were concerned because pharmacies are required 
by law to include the name of the prescriber in prescriptions. 
Commenters described the administrative difficulties that would be 
present in trying to link a resident to his/her teaching physician in 
order to comply with the stated requirements in the IFC and the issues 
with respect to pharmacies that need to record, by law, the actual 
prescriber, who could be a resident. A commenter stated that not all 
pharmacy systems may allow the use of more than one identifier in a 
claim which would be necessary if a resident or intern ordered the item 
and the teaching physician needs to be identified as the ordering or 
referring provider. The commenter asked that CMS clarify the logistics 
and processes for pharmacists and pharmacy systems to identify, verify, 
and submit claims for intern/resident-generated orders and to identify 
teaching physician information. A commenter stated that because interns 
and residents move frequently among rotations, it will be difficult if 
not impossible for the pharmacies to contact the interns and residents 
in order to obtain the identity of the teaching physician.
    Response: Neither the IFC, nor this final rule places requirements 
on prescribers identified in claims for drugs. As noted in the IFC, the 
ordering requirement in this final rule does not apply to Part B or D 
drugs.
    Comment: A commenter stated that CMS should thoroughly consider the 
implications of new policies such as the ordering or referring provider 
edits before public release in order to thoroughly identify potential 
pitfalls beforehand.
    Response: We agree with the commenter and have been sharing 
information with the public about these issues since 2009. In addition, 
the IFC published May 2010 offered an opportunity to comment on all 
aspects of the Affordable Care Act requirements. We believe it is 
important to continue this kind of communication with the public and 
will continue to do so. Moreover, we will provide advance notice of the 
activation of the automated edits pertaining to these claims.
    Comment: Commenters stated that nonprofit home health providers 
will be financially vulnerable because their core mission is to serve 
all patients regardless of their ability to pay. These commenters 
stated that nonprofit home health agencies have limited budgets and 
limited information technology (IT) support and personnel resources; 
thus, they are unable to quickly compare individuals in the Ordering 
Referring Report with their own list of ordering physicians or quickly 
disseminate the PECOS requirement to the physicians who order home 
health services from them. The commenters further stated that there is 
inadequate time for nonprofit home health agencies to learn about and 
efficiently use the ``complex PECOS.''
    Response: In order to do business with Medicare, all home health 
agencies, whether or not they are nonprofit, must submit claims that 
comply with our regulations in order to be paid for the home health 
services they provide. We believe the commenter is referring to 
Internet-based PECOS in using the term ``the complex PECOS.'' We make 
available at no charge the names and NPIs of those who are permitted to 
order and certify, who have approved enrollment records in PECOS, and 
who have validly opted out of the Medicare program. Also, a home health 
agency can and should ask the ordering/certifying physicians if they 
are enrolled in Medicare or have opted out of Medicare prior to 
accepting the order and/or certification.
    Comment: Some commenters stated that home health agencies stand to 
suffer severe financial hardships because of reduced patient admissions 
and the costs associated with issuing Advanced Beneficiary Notices of 
Noncoverage (ABNs), causing patient dissatisfaction, which is long-
lasting and rebuilding the relationship can take years.
    Response: We understand these concerns. However, after 
consideration of our program integrity needs and the statutory mandate 
to implement this provision, we are moving forward with this final 
rule.
    Comment: A commenter asked that CMS share the impact of this 
regulation on all areas of practice--the physicians who order home 
health, the HHAs, and the patients.
    Response: We have interpreted this comment to suggest that we 
should educate these distinct communities on how this rule will impact 
them individually. As stated previously, we will continue to provide 
additional information, education, resources, and guidance on this 
final rule across the spectrum of affected parties.
j. Claims Submission and Edits
    Comment: Several commenters requested an explanation of potential 
future claim edits for over-ordering and over-referring items of home 
health and DMEPOS. The commenters were unaware of any statutory basis 
for such edits except to identify violations of the Stark law. Another 
commenter stated CMS should be required to state how it determines 
whether services are being ``over-ordered.''
    Response: The commenters are referring to a statement on the middle 
of page 24444 of the IFC which stated that based on the new NPI 
requirements, '' * * * if appropriate, we could establish edits to 
check for over-ordering specific items or services * * *'' We have 
removed all references to these edits in the final rule. However, we 
will continue to utilize our oversight functions that do not involve 
edits, to monitor statistically anomalous ordering, certifying, and/or 
billing patterns and investigate when appropriate.
    Comment: A commenter asked what is meant by the date of the written 
order or certification. The commenter asked if it is the date the 
referral or order was verbally received from the physician, or the date 
the physician signed the order.
    Response: The language in the IFC used the term ``date of written 
order or certification.'' We intended that term to mean the date the 
physician signed the order or certification. Public comment indicated 
that often times written orders are signed well after the service is 
provided. We intended to mandate that the ordering and/or certifying 
practitioner be enrolled at the time the service is performed. 
Therefore, in response to public comment and for the purposes of this 
final rule, we have changed our terminology and will use the ``date of 
service'', not the date of written orders or certifications. This 
change fully captures the purpose of this rule. Additionally, the date 
of service is much more accurate for claims and record retention 
purposes.
    Comment: A commenter asked if the ordering and referring 
requirements for the Part B services mentioned in the IFC apply to such 
services when furnished in hospitals and billed using the Uniform Bill 
(UB-04). Another commenter asked if the IFC applied to Part A 
providers, such as hospitals or other entities, such as IDTFs and

[[Page 25301]]

freestanding imaging centers which provide services paid under Part B 
(submitted on the UB-04 claim form).
    Response: The requirements in this final rule are applicable to the 
following ordered or certified items and services billed to Medicare by 
Part B suppliers of DMEPOS, clinical laboratory and imaging services, 
and for Part A and Part B home health claims:
     Part A and Part B home health services, submitted in 
claims from home health agencies to the Part A claims system at fiscal 
intermediaries and A/B MACs in ANSI X12N 837I or UB-94 formats.
     Part B clinical laboratory services, submitted in claims 
from independent clinical laboratories to the Part B claims system at 
carriers and A/B MACs in ANSI X12N 837P or CMS-1500 formats.
     Part B imaging services, submitted in claims from 
independent diagnostic testing facilities, portable X-ray suppliers, 
mammography centers, and radiation therapy centers to the Part B claims 
system at carriers and A/B MACs in ANSI X12N 837P or CMS-1500 formats.
     Part B items of DMEPOS, submitted by DMEPOS suppliers to 
DME MACs in ANSI X12N 837P, or CMS-1500 formats.
    The requirements of this final rule are applicable to the following 
ordered items billed to Medicare by Medicare beneficiaries:
     Part B clinical laboratory services.
     Part B imaging services.
     Part B items of DMEPOS.
    With the exception of claims for home health services that are 
submitted by home health agencies, this final rule does not affect the 
following:
     Claims submitted to the Part A claims system at fiscal 
intermediaries and A/B MACs.
     Claims for drugs.
     Part B claims from physician specialists.
     Claims from beneficiaries for home health services 
(beneficiaries are not permitted to submit claims for those services).
    Comment: Two commenters were concerned that the ordering and 
referring provider edits on Medicare DMEPOS claims are not item-
specific and that there are limitations in the claims processing system 
which may result in Medicare claims for Part B drugs being denied if 
the prescribers do not have approved enrollment records or valid opt-
out records in PECOS. Specifically, the commenters stated that claims 
that are submitted in the National Council for the Prescription Drug 
Programs (NCPDP) 1.1 batch format are not subject to the ordering and 
referring provider edits, whereas claims submitted using the allowable 
ANSI X12N 837P format are subject to the ordering and referring 
provider edits. The commenter also stated that because the claims are 
not edited based on the items in the claim, Medicare will reject claims 
for Part B DMEPOS drugs if the physician who prescribed the Part B 
DMEPOS drugs does not have an enrollment record in PECOS. The commenter 
is asking that Medicare not edit the ordering and referring provider 
(the prescriber) of Part B drugs regardless of which claim format is 
used.
    Response: This final rule does not change the allowances permitted 
under HIPAA that allow retail pharmacies to submit claims on either the 
NCPDP format or the 837P format. However, as the commenter correctly 
points out, claims submitted in the NCPDP standard formats are not 
subject to the ordering and referring provider edits at this time. If 
an ANSI X12N 837P claim format is used to report drugs and DMEPOS and 
there is no EY modifier on the claim or if the claim reports only drugs 
and no EY modifier on the claim, the claim will be subject to the 
ordering and referring requirements of this rule. An EY modifier is a 
specific designation in the 837P format when, for example, the pharmacy 
knows the claim will be denied so that it may then use the Medicare 
denial for filing with secondary insurances that may allow for the 
payment of the item or service. We acknowledge that we will need to 
adjust claims payment processing to accommodate this rule. We are 
working towards making these necessary changes. However, in the 
interim, retail pharmacy claims that combine Part B drugs and DMEPOS 
supplies may be submitted using the NCPDP format to avoid this 
situation.
    Comment: A commenter indicated that pharmacies that are also DMEPOS 
suppliers may submit and be reimbursed for claims for ordered or 
referred items after receiving an indication from the ordering 
physician that he/she has an enrollment record in PECOS. If it is later 
determined that the physician did not have an enrollment record in 
PECOS, will the pharmacy be liable or at risk?
    Response: As noted in earlier responses, the Affordable Care Act 
requires that physicians who order certain items or services must be 
enrolled in Medicare. It is the billing provider or supplier's 
responsibility to ensure that the ordering or certifying physician or 
eligible professional has a valid enrollment record or has validly 
opted out. We have mentioned numerous ways billing providers and 
suppliers can ensure compliance with this rule.
    Comment: A commenter asked that pharmacies be provided with the 
normal Part B timely filing period in order to re-submit claims that 
fail the requirements of this regulation. The commenter then asks that 
pharmacies have 1 year in which to re-bill if the failure of the claim 
to pass the edits was beyond the control of a pharmacy. Another 
commenter asked that CMS permit suppliers to re-bill claims that were 
denied for PECOS edits for up to 1 year, and not apply the truncated 
120 days normally provided for denied claims. Another commenter stated 
that when a DMEPOS supplier claim would be rejected for failing to meet 
the edit that the ordering or referring provider have an enrollment 
record in PECOS, it would fail a ``front end'' edit. Failing a front 
end edit means that the claim does not go to a DME Medicare 
Administrative Contractor (MAC) for adjudication. As a result, neither 
a remittance advice nor a Medicare Summary Notice would be produced, 
and appeal rights are not offered with proof that the ordering or 
referring provider is currently a Medicare provider. The commenter 
requested that the regulation be changed to allow (1) beneficiary 
liability using a proper ABN taking into consideration certain factors; 
(2) the claim to be processed beyond the ``front end'' so that the 
claim can be returned as unprocessable, which could enable the 
beneficiary community to prompt their physicians or other eligible 
professionals to establish their enrollment records in PECOS; or (3) 
deny (not reject) the claim using Adjustment Reason Code 52: ``The 
referring/prescribing/rendering provider is not eligible to refer/
prescribe/order/perform the service billed.''
    Response: Unless specified otherwise, in addressing these comments 
we are assuming that the commenters are referring to DMEPOS claims. 
This rule does not change any of the existing requirements for the 
resubmission of claims for payment. Although the IFC stated that we 
would reject, not deny, claims from providers and suppliers that do not 
comply with the requirements that those who order and refer services or 
supplies must be enrolled in Medicare or validly opt out, we have 
determined in this final rule that we will deny such claims. As stated 
in previous responses, we have not yet activated the automated edits 
that would cause a claim not to be paid because a physician or, where 
applicable, eligible professional who ordered or certified the service 
does not

[[Page 25302]]

have an approved enrollment record in Medicare, and we will provide 
ample notice prior to activating the edits. However, the resubmission 
and payment of a claim by pharmacies would not be possible under the 
commenter's scenario because the physician or eligible professional was 
not enrolled in Medicare or did not have a valid opt-out record on the 
date of service.
    Comment: Many commenters requested that CMS generate more 
meaningful explanations as to why claims failed the ordering and 
referring provider edits. For example, they want to know if the 
rejection codes will be different for claims that fail the ordering and 
referring supplier edits because the ordering or referring supplier is 
a physician or other eligible professional but does not have an 
enrollment record in PECOS and claims that fail the ordering or 
referring supplier edits because the ordering or referring supplier is 
not a physician or other eligible professional.
    Response: We agree with these comments and we are in the process of 
developing more descriptive informational messages. We will provide new 
informational messages that provide these details and will describe 
these new messages to the provider and supplier communities in a 
Medicare Learning Network article shortly after publication of this 
final rule.
    Comment: A commenter stated that Medicare beneficiaries are limited 
to the submission of one DMEPOS claim per lifetime. The commenter, 
therefore, requests that a beneficiary-submitted claim for DMEPOS items 
be rejected, not denied, if it fails the edits, in order to avoid 
``wasting'' the once-per-lifetime claim benefit.
    Response: The permissive, once-in-a-beneficiary's-lifetime, payment 
of a beneficiary-submitted claim for an item of DME, or of a Medicare-
covered supply, is intended to apply only to incidental items that a 
beneficiary might obtain from an entity that a beneficiary might 
reasonably assume was enrolled in Medicare but was, in fact, not so 
enrolled. This limited exception to the general rule furnishes notice 
to the beneficiary of the supplier enrollment requirement (and the 
beneficiary's duty to inquire of the supplier's Medicare enrollment 
status in the future), while holding the beneficiary harmless for his 
or her ignorance of the rule, this single time. Beneficiaries are able 
to submit claims from enrolled Medicare suppliers as is necessary, and 
are not in danger of ``wasting'' the once in a lifetime benefit under 
this final rule.
    Regardless of the applicability of the comment, claims from 
beneficiaries will be denied, not rejected, to afford them appeals 
rights. Under Medicare, a claim is rejected when the claim filing has a 
defect or impropriety such that it cannot be processed. A claim that 
was ordered by a non-enrolled physician or eligible professional is a 
claim where a required element of the furnishing of the item to the 
beneficiary does not meet Medicare requirements, and it must be denied, 
not rejected.
    Comment: Many commenters stated that home health agency providers 
would have to discharge many home health patients because the IFC 
requirement that certifying physicians have enrollment records in PECOS 
by July 6, 2010 could not be met. The commenter stated that home health 
patients would then end up in hospitals or other acute facilities. The 
commenters wanted such home health agencies to be held harmless from 
claim denials if they submitted claims for their services in order to 
avoid putting beneficiaries into this situation.
    Response: While efforts were underway to enroll physicians and 
eligible professionals who order and refer prior to the passage of the 
Affordable Care Act, the implementation date is statutorily mandated. 
We conducted significant outreach on this effort and will continue to 
do so when implementing this final rule. As already stated, we have 
taken steps to help mitigate these circumstances; for instance, we have 
not yet activated the automated edits that would cause claims for 
services or supplies not to be paid for lack of an approved enrollment 
record in Medicare. Consequently, we do not believe it is necessary to 
hold home health agencies harmless if the ordering/certifying provider 
reported in their claims is not enrolled in Medicare in an approved 
status or has not validly opted out of Medicare.
    Comment: Several commenters wanted assurance that home health 
agencies would not face a retroactive recovery based on the application 
of the ``without fault'' provision if they submitted claims in good 
faith, believing that the physician had an approved enrollment record 
in PECOS or had attempted to enroll in the Medicare program before 
submitting the claim. They did not want the provision of home health 
services to patients whose physicians do not have enrollment records in 
PECOS to be considered a violation of any Medicare rule if the home 
health agency has documented its efforts to determine if the physician 
has an enrollment record in PECOS.
    Response: The ``without fault'' provision under section 1870 of the 
Act is not applicable in this scenario, as that provision refers to the 
collection of overpayments. The billing provider has an affirmative 
responsibility under this final rule to ensure that the physician has a 
valid enrollment record or has validly opted-out. Additionally, records 
for the orders and certification of home health must be maintained by 
the ordering/certifying physician(s) and the home health agency that 
bills for these services. Submitting a claim in good faith does not 
meet our requirements and will be denied if the ordering/certifying 
physicians do not have a valid enrollment or opt-out record. We note 
that home health payment is always contingent on whether eligibility 
requirements, including the requirement that a patient be under the 
care of a physician, continue to be met. Typically, ``under the care of 
a physician'' would require active physician involvement with updating 
orders. It is difficult to envision a scenario where the patient could 
be under the care of physician unless that physician is able to order 
services. As such, as part of our eligibility requirements, the patient 
must be under the care of a Medicare enrolled physician, because only 
an enrolled physician can order home health services. HHAs are 
responsible for coordinating patient care, as defined in Conditions of 
Participation defined in 42 CFR Part 484. They are also responsible for 
ensuring that all eligibility criteria, such as the need for a patient 
being under the care of a physician, are met.
    Additionally, we have modified the definition of ``enrolled in 
Medicare'' to include PECOS and existing legacy Medicare claims payment 
systems. We have also delayed the automated edits that will cause a 
claim not to be paid for the lack of an approved enrollment record in 
Medicare or a valid opt-out status. Of course, such claims are subject 
to all other Medicare requirements, such as, coverage and medical 
necessity. These changes will reduce the risk to home health suppliers 
of having claims denied on the basis of enrollment of the ordering or 
certifying physician. We have made the Ordering Referring Report, 
containing the NPIs and legal names of physicians and other eligible 
professionals who have approved enrollment or valid opt-out records in 
PECOS, available and are encouraging suppliers to view this report. 
However, documentation that a home health agency has done so does

[[Page 25303]]

not fulfill the requirements of this final rule. We also make available 
four reports within the Ordering Referring Report that include the 
following:
     Physicians who are approved to order and refer.
     Other eligible professionals who are approved to order and 
refer.
     Physicians who have pending Medicare enrollment 
applications.
     Other eligible professionals who have pending Medicare 
enrollment applications.
    These reports, collectively referred to as the Ordering Referring 
Report, are available on the Medicare provider/supplier enrollment Web 
page at (www.cms.gov/MedicareProviderSupEnroll). This information makes 
it easier for home health agencies to determine the enrollment or opt-
out status of physicians who have ordered home health services prior to 
submitting their claims.
    Comment: A commenter indicated that while home health agencies 
would attempt to secure the NPI of the ordering or referring provider 
and report that NPI in claims, the information needed to do so is not 
fully available and will not be provided by CMS in a manner that 
assures providers and suppliers access to the most up-to-date 
information when they are determining whether or not to accept a 
referral from a physician. Other commenters expressed concern that the 
requirement to report the NPIs of ordering and referring providers and 
suppliers in claims may penalize billing providers if the ordering or 
referring provider has not obtained an NPI or does not furnish the NPI 
to the billing provider, and that such a penalty would disadvantage 
otherwise compliant billing providers.
    Response: If a home health agency provider or a supplier receives 
an order or a certification from a physician or other eligible 
professional and the NPI is not on the order or certification, the 
provider or supplier can ask the physician or other eligible 
professional to disclose his or her NPI. If that is not feasible, the 
provider or supplier can use the NPI Registry (https://nppes.cms.hhs.gov/NPPES/NPIRegistryHome.do) to obtain the NPI. High-
volume providers and suppliers may wish to download the NPPES file each 
month (http://nppes.viva-it.com/NPI_Files.html) and import it into its 
claims and/or business processes to pull the NPIs from it and use them 
in electronic processes. Ultimately, if a billing provider or supplier 
who furnishes items or services based on orders or certifications is 
unable to obtain this information from the ordering and certifying 
provider, the billing provider should carefully consider, as part of 
its business policy, whether or not it will accept an order or a 
certification from a physician or other eligible professional who does 
not have, or who refuses to obtain, an NPI.
    Comment: A few commenters questioned if a full episode of home 
health care would be paid if a physician terminates enrollment before 
the end of a 60-day home health episode.
    Response: Yes, this regulation requires enrollment in Medicare or a 
valid opt-out status that would be assessed based upon the date of the 
order and the date of the certification, for dates of service beginning 
July 6, 2010. In the situation described by the commenter, Medicare 
would not deny payment (for the lack of an approved enrollment or opt-
out record) for any portion of the full 60 days if the ordering 
physician were to terminate enrollment or otherwise become not enrolled 
in Medicare. However, Medicare may deny these claims based upon other 
factors unrelated to enrollment status of the ordering or certifying 
supplier.
    Comment: A few commenters questioned if Medicare would pay a home 
health claim if the certifying physician does not have an approved 
enrollment record or a valid opt-out record in PECOS at the start of 
care, but does establish such a record during the course of the episode 
of care and prior to the submission of the claim from the home health 
agency.
    Response: Consistent with the provisions of this final rule, the 
ordering/certifying physician(s) would have to be enrolled in Medicare 
in an approved status or have validly opted- out of the Medicare 
program as of the date of service in order for the home health agency's 
claim to be paid.
    Comment: A few commenters questioned if the ordering and referring 
provider edit will be on the home health request for anticipated 
payment (RAP), final claim, or both. A few commenters questioned if a 
corrected RAP, final claim, or both could be submitted if a provider or 
supplier submitted an incorrect ordering or referring provider name and 
NPI in a claim but later learned the correct information.
    Response: Home health episodes are paid in two pieces: A 
anticipated payment amount at the beginning of the 60-day episode, and 
the balance in the final claim at the end of the 60-day episode. The 
RAP is the first submission of the claim. Therefore, the ordering/
certifying physician(s) must be in compliance with our regulations on 
the date of service (that is, the date of the order or certification). 
A RAP cannot be adjusted once it has been processed, but it can be 
cancelled and resubmitted with corrected information including provider 
name or NPI. If a home health agency learned that data on a RAP was in 
error, the home health agency could cancel the RAP and resubmit it. 
This is also the case for the home health final claim. Therefore, the 
edit will apply to both the RAP and the final claim.
    Comment: A commenter expressed concern that it is not always 
possible for a home health agency to know for certain at the start of 
care which physician will certify home care services. This commenter 
questions whether only PECOS enrolled physicians will be able to make 
referrals and certify home health episodes of care.
    Response: In most cases the same physician would refer the patient 
to home health, order the home health services, certify the 
beneficiary's eligibility to receive Medicare home health services, and 
sign the Plan of Care. It is the NPI of the ordering/certifying 
physician that is required on the claim and in the medical record. 
However, we recognize that in certain scenarios one physician may not 
perform all of these functions. An example of such a scenario would be 
a patient who is admitted to home health upon hospital discharge. While 
we would still expect that in most cases, a patient's primary care 
physician would be the physician who refers and orders home health 
services, certifies eligibility, and signs the plan of care, there are 
valid circumstances when this is not feasible for the post-acute 
patient. For example, some post-acute home health patients have no 
primary care physician. In other cases, the inpatient physician assumes 
primary responsibility for the patient's care during the acute stay, 
and may (or may not) follow the patient for a period of time post-
acute. In circumstances such as these, it is not uncommon for the 
inpatient physician to refer a patient to home health, initiate orders 
and a Plan of Care, and certify the patient's eligibility for home 
health services. In the patient's hospital discharge plan, if the 
inpatient physician would not be the one to follow up for the duration 
of the home health service, he or she would identify the community 
physician who would be assuming primary care responsibility for the 
patient upon discharge. It would be appropriate for the physician who 
assumes responsibility for the patient to sign the plan of care. The 
patient would thus be considered ``under the care'' of that community/
personal physician

[[Page 25304]]

throughout the time the patient is receiving home health services.
    In a scenario such as this, if the inpatient physician certifies 
the patient's home health eligibility and initiates the orders for 
services, that physician would need to be a Medicare enrolled 
physician, and that physician's NPI would be in the medical record and 
on the first home health claim. To be compliant with all Medicare home 
health coverage and payment rules, the community physician who assumes 
responsibility for the patient during the home health episode (updating 
orders, signing the plan of care, etc.) would also need to be a 
Medicare enrolled provider, and this NPI would also be documented in 
the medical record and on the appropriate home health claim.
    Comment: Given that the process by which home health care services 
are ordered and because the process used for such referrals 
(electronic, fax, telephone) almost never includes direct communication 
from a physician to a home health agency, a commenter suggested that 
Medicare require only that physicians who certify home health services 
be required to be enrolled in PECOS. This commenter also asked that 
claims that lack a PECOS-enrolled physician's NPI be rejected rather 
than denied.
    Response: The statute specifically references orders and 
certifications for home health services. Therefore, we disagree that 
only the physician who certifies the home health services be required 
to be identified in the claim for home health services and meet the 
requirement to be enrolled in Medicare in an approved status or have 
validly opted out of Medicare. Claims from home health agencies that do 
not meet the requirement that the ordering/certifying physician be 
identified by legal name and NPI will be denied, not rejected, as noted 
earlier in this final rule.
    Comment: Several commenters stated that beneficiary notification of 
nonpayment for home health services was not addressed in the IFC. The 
commenter noted that home health agencies are required to notify 
Medicare beneficiaries of noncoverage of all services through a Notice 
of Medicare Noncoverage (Expedited Determination Notice), and that home 
health agencies are required to notify patients of their right to 
appeal a noncoverage determination while continuing services if orders 
are in place from a physician through a Home Health Advance Beneficiary 
Notice (HHABN). The commenters believe that beneficiaries will be 
prevented from continuing to receive medically necessary services under 
self-payment or other payment sources that are secondary to Medicare in 
cases where expedited appeal decisions are delayed or are not in the 
beneficiaries' favor. The commenters recommended that CMS permit the 
HHABN to be used when home health services are not covered because the 
order was written by a physician who does not have an enrollment record 
in PECOS.
    Response: As the commenter stated, HHABNs are for notification of 
noncovered services. The home health services themselves are still 
considered ``covered services'' if they meet the Medicare medical 
necessity and benefit requirements, even if the ordering/certifying 
physician is not enrolled in, or opted out of, Medicare. However, the 
claim will be denied due to noncompliance with this regulation if the 
ordering/certifying physician is not enrolled in Medicare or does not 
have a valid opt-out status. The denial of a claim for lack of an 
approved enrollment records in Medicare is not a coverage 
determination; hence the HHABN is not applicable.
k. NPI Data and Requirements
    Comment: A commenter asked how CMS would know that an NPI on a 
claim was put there by a physician who meant to order the test and not 
by someone who simply downloaded the NPI from the open file.
    Response: Our systems are equipped to check for these types of 
compromised numbers and initiate an investigation based upon the data. 
While we understand the concerns of the commenter, verification of the 
NPI is just one tool we use to validate a claim. Access to NPIs and the 
associated names are crucial pieces of information to individuals 
providing services and supplies. Penalties for this type of activity 
can range from false claims liability to other criminal and civil 
sanctions. CMS and law enforcement actively monitor this type of 
activity and regularly engage in investigation and follow-up 
activities, as appropriate.
    Comment: A commenter believed that the widespread dissemination of 
physicians' and other eligible professionals' NPIs could increase the 
risk of fraudulent use of NPIs and urged CMS to implement procedures to 
protect practitioners from any unreasonable additional compliance 
burden that may be incident to the misuse of their NPIs by others.
    Response: Providers and suppliers must determine if the ordering 
and certifying physician or eligible professional is enrolled in 
Medicare at least to order and certify. Inclusion of this information 
on the claim is necessary for the payment of claims. We must provide 
this information publicly so that service providers can ensure that 
physicians and eligible professionals are enrolled in Medicare to order 
and certify. If a health care provider suspects misuse of an NPI, that 
health care provider should report the issue to law enforcement 
authorities including, when appropriate, to the DHHS Office of 
Inspector General (OIG). The OIG Hotline is 1-800-HHS-TIPS (1-800-447-
8477). Providers and suppliers can also report suspected misuse of an 
NPI to 1-800-Medicare.
    Comment: Several commenters noted the following:
     There is no required OMB approved form for ordering home 
health services.
     The plan of care content requirements are based on the 
Home Health Content of Plan of Care.
     We have removed from our online manual the detailed 
guidance on the required Content of the Plan of Care.
     Inclusion of the physician's NPI on a Home Health Plan of 
Care and interim orders has never been a requirement.
    Response: The Secretary has adopted a standard electronic referral 
transaction. However, most health plans have not implemented the 
adopted electronic referral standard and continue to use their own 
paper formats and issue their own instructions for the use of the paper 
referral formats. The absence of the Plan of Care guidance in the 
online manual does not impact the requirements of this final rule.
    Regulation text at Sec.  424.516 currently requires that the NPI of 
the physician who orders/certifies the home health services be part of 
the documentation of the service in the medical record. It does not 
stipulate that the NPI be included on the Plan of Care or 
certification. Content requirements for the Home Health Plan of Care 
are detailed in Sec.  484.18(a). So long as the NPI is part of the 
medical record, and can be provided to CMS or a Medicare contractor 
upon request, the home health agency will have met this requirement.
l. Legal Name Requirements
    Comment: A commenter sought clarification as to whether the IFC 
required that the provider of the service must also provide its legal 
name and NPI on the claim.
    Response: We are interpreting this question as asking whether the 
IFC required the billing provider to list its NPI and legal name on the 
claim. The requirement for the billing or rendering provider to list 
its NPI was effective March 1, 2008. There is no requirement that the 
legal business name of the

[[Page 25305]]

billing provider be explicitly listed on the CMS-1500 claim form. Note 
that the IFC established a requirement that the eligible ordering and/
or referring supplier's legal name be listed on the claim. Those 
requirements are now incorporated in Sec.  424.506 (rendering or 
billing provider NPI on claims) and Sec.  424.507 (ordering and 
certifying supplier NPI).
    Comment: A commenter stated that ordering or referring suppliers do 
not always write their legal names on their prescriptions or orders, 
and thus it is a burden on the billing provider to do the research to 
determine the legal name so that it can be included on the claim.
    Response: Providers and suppliers who furnish items and services 
based on orders or certifications should have business operations in 
place to ensure that they collect the information necessary to submit a 
proper claim for payment for those items and services. This would 
include collecting the legal name of the individual who ordered or 
certified these items or services.
    Comment: A commenter stated that several medical practices have 
contacted CMS about the name of the ordering or referring supplier 
reported in their claim not matching CMS records, and were told that 
the name on the claim had to match the name in NPPES. Several other 
commenters stated that the NPI of the ordering or referring provider 
should be sufficient to match PECOS records and that the legal name is 
unnecessary.
    Response: The only name that should be used for an enrollment 
application or on a claim form should be the individual practitioner's 
legal name that matches the name and NPI of record from NPPES. Those 
records match the practitioner's legal name from the Social Security 
Administration (SSA). The use of this name will ensure there is no 
confusion at the time of enrollment and claims processing.
    Existing regulations and policies require the reporting of the 
legal name if the NPI is required to be reported. Requiring the name 
that corresponds to the NPI further ensures the validity of the 
ordering or certifying provider and eliminates the indiscriminate and 
repeated use of any valid NPI simply to enable a claim to pass an edit. 
The health care claim standard and the Medicare paper claims forms 
capture three fields for a name: last name, first name, and middle 
initial. The Medicare provider/supplier enrollment application also 
captures those same three name fields. For the purposes of this rule 
only, these three name fields (last name, first name, and middle 
initial) constitute an individual's legal name.
    Comment: Some commenters stated that CMS should eliminate the first 
name match because many systems reference a physician by a nickname; 
and only use the surname and NPI to match.
    Response: As previously described, our rules require the full legal 
name (that is, first name, middle initial, and last name). Reporting a 
nickname in a Medicare enrollment application will likely cause that 
enrollment application to fail the social security number verification, 
which would delay the processing of the enrollment application or cause 
it to be rejected. Similarly, use of a nickname on claims will likely 
cause the claim to be denied.
    Comment: Another commenter was concerned about name changes, 
resulting from marriage, in which a physician's surname in PECOS is no 
longer consistent with the married name being used in orders and 
referrals.
    Response: Any enrolled Medicare provider and supplier whose name 
changes is required to report that change to the designated Medicare 
contractor within 90 days of the effective date of the change. Other 
appropriate files and systems are also updated with any new 
information.
m. Enrolling in Medicare Just to Order and Refer
    Comment: A commenter stated that the PECOS enrollment system does 
not have flexibility to permit Department of Veterans Affairs (DVA) 
employed physicians to enroll. Another commenter stated that a 
representative of a Veterans Affairs hospital stated that their 
physicians who order and refer items and services for Medicare 
beneficiaries will not be enrolling in Medicare because they do not 
send claims to Medicare. Another commenter stated that CMS should 
develop a simplified enrollment process for dentists and others who do 
not submit claims to Medicare. Another commenter stated that physicians 
who care for patients in institutional settings will refer for home 
care and DMEPOS, as do physicians in training (residents and fellows) 
who are not eligible to enroll in Medicare. Several commenters 
suggested that CMS simplify the enrollment process for those who must 
enroll just to order and refer. Another commenter asked that DVA 
providers be excluded from the requirement to enroll in PECOS in order 
to continue to order and refer items and services for Medicare 
beneficiaries.
    Response: We agree with the previous commenters regarding the 
development of a simplified process for individuals who enroll just to 
order and certify. DVA and other professionals cannot be excluded from 
the enrollment requirement because the statute requires that those who 
order DMEPOS and who order/certify home health services be enrolled in 
Medicare. We have had numerous detailed discussions with DVA officials, 
as well as officials at the Department of Defense (DoD), the United 
States Public Health Service (PHS), Indian Health Service (IHS), and 
other Federal agencies whose physician employees order and certify 
Medicare services or supplies but do not bill Medicare directly.
    We have developed the CMS-855O enrollment form for eligible 
providers and suppliers who wish to enroll only to order and certify. 
The ordering and certifying suppliers who use the CMS-855O form may not 
bill Medicare and submit claims. Those suppliers who wish to bill 
Medicare for services and submit claims must fill out the CMS-855I 
form. Internet-based PECOS has the capability to handle enrollment 
applications from these physicians and other eligible professionals who 
wish to enroll in Medicare just to order and certify. The CMS-855O form 
has been approved by Office of Management and Budget (OMB) and has been 
available for use since July 1, 2011. Additionally, information about 
enrolling only to order and certify is available on the Medicare 
provider/supplier enrollment Web site (http://www.cms.gov/MedicareProviderSupEnroll).
    Examples of physicians and other eligible professionals who may 
wish to enroll in Medicare only to order and certify, and not to submit 
claims to Medicare for payment, include those who are one of the 
following:
     Employed by the PHS, DOD, DVA.
     Employed by Medicare-enrolled Federally qualified health 
centers (FQHCs), rural health clinics (RHCs), and critical access 
hospitals (CAHs).
     Pediatricians who traditionally have very few Medicare 
patients and, therefore, only order or certify items for Medicare 
beneficiaries.
     Doctors of dental medicine or dental surgery whose 
services are generally not covered by Medicare.
     Residents, as defined in Sec.  413.75 (to include interns 
and fellows), who are appointed by teaching hospitals and academic 
medical centers who generally do not enroll in Medicare because their 
services are not directly billed to Medicare. (Please see the 
information under the ``residents'' section of this final rule.)
    Comment: A few commenters stated that officials at DVA facilities 
stated

[[Page 25306]]

they were unaware that their physicians needed to enroll in Medicare. 
Some commenters stated that DVA physicians have told them that they 
cannot enroll in Medicare until ordered to do so by the DVA.
    Response: We have communicated with the DVA and expect that their 
physicians and other eligible professionals will enroll in Medicare 
just to order and certify if they wish to continue to order or certify 
items or services for Medicare beneficiaries.
    Comment: Several commenters stated that CMS should consider how 
best to communicate with physician practices, including those in the 
PHS, DoD, and DVA, as well as dental and pediatric practice settings 
and teaching physicians and those who have opted out of Medicare to 
ensure they understand the new requirements.
    Response: We have been in communication with the PHS, DoD, DVA, and 
the American Dental Association (ADA) about the requirements of the 
Affordable Care Act that we are implementing with this final rule. We 
anticipate additional communication in CMS provider/supplier open door 
forums and in our regular conference calls with national provider/
supplier associations and organizations. We will be creating additional 
outreach documents when we publish this final rule. Largely based on 
provider and supplier concerns and in an effort to accommodate these 
concerns we have created a new enrollment form, the CMS-855O. This form 
is specifically designed for those providers and suppliers who want to 
enroll in Medicare for the purpose of ordering and certifying only. We 
believe this shortened form will streamline the enrollment process, 
especially for this segment of the supplier communities.
    Comment: A commenter suggested that there should be a longer phase-
in time for dentists and other eligible professionals who rarely refer 
or order under Medicare.
    Response: We have created a streamlined application process that 
reduces the time it will take for dentists and other professionals to 
enroll, since they generally do not bill Medicare but who need to 
enroll in Medicare just to order and certify. The CMS-855O may be used 
by providers and suppliers who simply wish to order and certify and who 
do not wish to submit claims to Medicare. These changes, including the 
new CMS-855O enrollment form, the change from the requirement to be 
enrolled in PECOS to a requirement to be enrolled in Medicare, and the 
delay in the activation of the automated edits that would cause a claim 
to not be paid due to lack of an approved enrollment record in 
Medicare, have simplified compliance for these types of professionals.
n. Interns, Residents, Fellows, and Teaching Physicians
    Comment: A commenter supported the requirement that interns who are 
not licensed, and therefore unable to enroll in Medicare should order 
or refer through the teaching physician. The same commenter also asked 
that CMS allow licensed residents to order or refer under their own 
name (not the name of the teaching physician) to avoid artificially 
increasing the ordering or referring patterns of teaching physicians. 
The commenter did not believe this would have a negative impact on the 
Medicare program and would still enable CMS to track ordered and 
referred items and services. Another commenter stated that many 
residents are licensed physicians who are qualified to practice 
independently and who are undergoing specialty training. The commenter 
believed that these residents should not be limited in their ability to 
order and refer because of perceived shortcomings with PECOS's ability 
to accommodate them.
    Response: Physicians and eligible professionals must have an 
appropriate State license in order to enroll in Medicare, and licensure 
is determined by State laws. Based on provisions included in this final 
rule, physicians and other eligible professionals who order/certify 
DMEPOS, home health services, clinical laboratory, and imaging services 
for Medicare beneficiaries must be enrolled in Medicare or have validly 
opted out. The term ``resident'' is defined in Sec.  413.75 as `` * * * 
an intern, resident, or fellow who participates in an approved medical 
residency program, including programs in osteopathy, dentistry, and 
podiatry, as required in order to become certified by the appropriate 
specialty board.'' Licensed residents, as defined in Sec.  413.75, 
usually do not enroll in Medicare because they do not bill the Medicare 
program; their services are included in the hospitals' PPS claims and 
Medicare reimburses the hospitals. We agree with the concerns expressed 
by commenters and have modified the requirements of this final rule so 
that if States allow residents who have a provisional license, or are 
otherwise permitted by State law to practice or order and certify 
services, we will permit them to enroll in Medicare to order and 
certify, at the direction of their teaching institution. In situations 
where States do not offer licensure or otherwise permit such 
individuals to practice or order and certify services, the teaching 
physician's legal name and NPI must be included on the claim for 
services. In this latter circumstance, the claims will not be paid 
unless the ordering and certifying physician, in this case, the 
teaching physician, is listed on the claim as the ordering or 
certifying physician.
    Comment: Some commenters expressed concern about the amount of 
resources that would be required by hospitals and academic medical 
centers to enroll licensed residents and fellows so that they may 
continue to order and certify. A commenter stated that a hospital-wide 
process must be developed for residents to note their supervising 
physician on orders, which adds a significant layer of complexity to 
hospital operations. Another commenter believed that reporting the 
teaching physician's name and NPI as the ordering or referring supplier 
when a resident or intern orders or refers sounds like a practical 
solution, but the administrative burden placed on teaching hospitals to 
ensure a proper link between a resident and a teaching physician in 
order to submit these claims is a huge cultural and administrative 
paradigm switch that will take time to develop, communicate, and put 
into operation.
    Response: As stated previously, in order to comply with the 
requirements of section 6405 of the Affordable Care Act, a Medicare-
enrolled physician must be identified for orders or certifications for 
items and services that will be billed to Medicare. As stated in the 
previous response, we have modified the final rule to accommodate 
teaching hospitals by providing them the option of either enrolling 
individuals enrolled in an accredited graduate medical education 
program (when State law permits) or by identifying the teaching 
physician in the claim. We have developed these options in an effort to 
avoid disruption of existing practices in teaching institutions as much 
as possible.
    Comment: A commenter stated that physicians in training work in a 
cost-efficient fashion under the supervision of attending physicians 
and that to require that every order in a large teaching service be 
written by an enrolled physician (an attending physician) or a mid-
level practitioner will place a considerable financial burden on 
teaching hospitals and medical schools, many of which are struggling 
financially. The commenter stated that these facilities would need to 
have a large cadre of Medicare-enrolled physicians or mid-level 
providers available at all hours, and that this

[[Page 25307]]

requirement will dilute the training experience of resident physicians 
because they will be unable to independently order even the simplest 
diagnostic test.
    Another commenter believed that the requirements will make it 
virtually impossible for resident physicians and fellows to order 
diagnostic procedures, testing, and consults for Medicare 
beneficiaries. Residents and fellows who are reasonably well supervised 
will deliver less costly care than poorly trained residents. The 
commenter contended that those who have never had to think 
independently will become very costly suppliers because they will try 
to compensate for their lack of clinical judgment with over-testing.
    Response: We believe that the modifications we made to the final 
rule should diminish the concerns of the commenter. As stated 
previously, we have provided options for the teaching hospitals to 
enroll individuals in an accredited graduate medical education program 
in Medicare if permitted by State law or regulation.
    Comment: Several commenters stated that residents who are licensed 
physicians should be allowed to enroll in Medicare and order home 
health services.
    Response: Licensed residents are physicians and, as such, are 
eligible to enroll in Medicare. Medicare regulations state that only 
physicians who are doctors of medicine, osteopathy, or podiatry may 
certify home health services.
    Comment: Several commenters stated that CMS should consider 
categorizing fellows who do not bill Medicare to be ``residents'' so 
that the teaching physicians would be reported in the claim as the 
ordering or referring provider. By doing so, the Medicare contractors 
would have fewer enrollment applications to have to process, which 
could help reduce their workload.
    Response: We agree with the commenters' suggestion and have 
modified this final rule to permit individuals who are enrolled in an 
accredited graduate medical education program in a State that licenses 
or otherwise enables such individuals to practice or order and certify 
services to enroll in Medicare to order and certify. In situations 
where States do not license or otherwise permit such individuals to 
practice or order and certify services, the teaching physician's full 
legal name and NPI must be included on the claim for services. In this 
latter circumstance, the claims will not be paid unless the ordering 
and certifying physician, in this case, the teaching physician, is 
listed on the claim as the ordering or certifying physician. Therefore, 
recategorizing fellows is unnecessary and we defer to State scope of 
practice laws and regulations on who may order and certify.
    Comment: A commenter suggested that CMS allow residents to enroll 
and to be identified in PECOS as residents. Teaching hospitals could 
enroll their residents using a new code to reflect this status. Because 
this would take some time to implement, the commenter suggested that 
CMS further delay (beyond the commenter's suggested implementation date 
of January 3, 2011) the requirement that ordering or referring 
providers have enrollment records in PECOS.
    Response: The applicable statutory and regulatory provisions do not 
permit Medicare to enroll an unlicensed physician. However, if States 
provide provisional licenses or otherwise permit residents to practice 
or order and certify services, we are allowing them to enroll to order 
and certify, consistent with State law. Further, the timing of 
licensure of a resident is determined by States and because we are now 
permitting licensed residents to enroll in Medicare, it is not 
necessary and may be duplicative, to develop an additional code in the 
enrollment systems.
    Comment: Commenters stated that it would be extremely difficult for 
teaching hospitals to comply with the July 6, 2010 date because of its 
timing with the start of the new academic year. Teaching hospitals are 
focused on activities regarding the turnover of what is often 25 
percent of their residents and there is no time to suddenly add a new 
and disruptive component to those ongoing activities. They express 
concern about ensuring that their graduates are prepared to practice or 
continue with additional training and that the new residents are 
appropriately credentialed so they can begin their training on July 1, 
2010.
    Response: We have been working closely with these institutions to 
ensure effective compliance with our regulations by the statutorily 
mandated effective date. We clarified in this final rule the 
circumstances under which individuals enrolled in accredited graduate 
medical education programs can enroll in Medicare to order or certify 
Medicare services. Those residents, as defined in Sec.  413.75, who are 
licensed may enroll in Medicare to order and certify in the same way 
other as physicians and other eligible professionals. This final rule 
states that if State law provides residents, as defined in Sec.  
413.75, a provisional license, or otherwise permits them to practice or 
order and certify services, we will enroll them to order and certify. 
If State law does not provide licensure for residents, or otherwise 
permit them to practice or order and certify services, claims for 
services provided must identify the teaching physician as the ordering 
or certifying physician by his or her legal name and NPI. This 
modification from the IFC will provide these teaching institutions with 
options to accommodate the policies mandated by the Affordable Care Act 
and this final rule.
o. Deactivation
    Comment: Many commenters noted that physicians and other eligible 
professionals who will enroll just to order and refer and not to submit 
claims to Medicare will be deactivated if they fail to send claims to 
Medicare for 12 consecutive months, and that after deactivation, they 
would then need to re-enroll in order to continue to order and refer. 
Some of the commenters indicated that Sec.  424.540 states that CMS 
``may'' deactivate the enrollment of a provider or supplier if no claim 
is submitted for a year. They suggest that the use of ``may,'' gives 
CMS discretion. These commenters suggested that CMS use this discretion 
and exempt from this deactivation process dentists and others who would 
be enrolling just to order and refer.
    Response: Deactivation for non-billing does not apply to those 
physicians and eligible professionals who have enrolled just to order 
and certify.
    Comment: A commenter asked that CMS terminate NPIs, not Medicare-
assigned PTANs, when a physician's billing privileges are deactivated. 
The commenter pointed out that a physician may have multiple PTANs in 
his/her PECOS enrollment record, and that if one PTAN is deactivated 
voluntarily or due to non-billing, that physician is no longer eligible 
to order and refer although the physician is still enrolled in Medicare 
and is still sending claims with, or being identified in claims as the 
rendering provider by his/her NPI. The commenter suggested that the 
NPI, not the PTAN, should be the driver of ordering and referring 
eligibility.
    Response: The commenter is correct that a physician can have 
multiple PTANs and currently deactivation for non-billing is driven by 
PTAN rather than NPI. More than one PTAN may be assigned to a physician 
if the physician reassigns his Medicare benefits to more than one 
medical group (a PTAN for each reassignment), or works at multiple/
different practice locations (a PTAN for each practice location). Any 
provider or supplier, including a

[[Page 25308]]

physician, whose billing privileges are deactivated for 12 consecutive 
months of non-billing is deactivated by his or her PTAN. However, the 
deactivation of one PTAN does not deactivate all PTANs. If the 
physician or other eligible professional has more than one PTAN, and 
not all PTANs were deactivated due to non-billing, he or she will 
remain enrolled in Medicare to bill using the active PTANs and will 
also remain on the Ordering Referring Report. In this situation, claims 
in which he or she is identified as the ordering and referring provider 
would not be denied because of one deactivated PTAN.
p. Validly Opting Out
    Comment: A few commenters stated that Medicare contractors do not 
enter opt-out physicians in PECOS. Another commenter stated that opt-
out physicians have records in PECOS only in situations where they were 
first enrolled in Medicare and then opted out.
    Response: Based on the Affordable Care Act provisions requiring 
that ordering and referring physicians must be enrolled in Medicare, we 
have instituted a consistent process for entering physicians who opt 
out into PECOS. When processing an opt-out affidavit, Medicare 
contractors may require, and the opting out physician or other 
practitioner must provide, the NPI as well as other information that 
may be requested by the Medicare contractor. Physicians and other 
practitioners do not have to enroll in Medicare before opting out. 
Those who opt out must submit opt-out affidavits every 2 years and all 
who have opted out of Medicare will have opt-out records in PECOS.
    Beneficiaries and other providers and suppliers may visit the 
Physician Compare Web site at http://www.medicare.gov/find-a-doctor/provider-search.aspx to see if their physicians or other practitioners 
are enrolled in Medicare. If the beneficiary's physician or other 
practitioner is not enrolled in Medicare and has not opted out, the 
beneficiary may wish to find another physician or practitioner. For 
more information on opting out of Medicare, the public may refer to our 
applicable regulations at Sec.  405.425, titled ``Effects of opting-out 
of Medicare.''
    Comment: Some commenters requested that CMS make available a list 
of physicians and other eligible professionals who have opted out of 
Medicare.
    Response: Physicians and other practitioners who have validly opted 
out of the Medicare program have opt-out records in PECOS. Physicians 
and non physician practitioners who have validly opted out of the 
Medicare program, and elect to order and certify, will be on the 
Ordering Referring Report. The Ordering Referring Report does not 
distinguish those who have opted out from those who have approved 
enrollment records because both, if listed in the Ordering Referring 
Report, may order and certify items and services for Medicare 
beneficiaries.
q. Public Comments Outside the Scope of the IFC Provisions Regarding 
Ordering and Referring Covered Items and Services
    Comment: A commenter noted that the preamble in the IFC states that 
CMS believes its enrollment requirements will promote quality health 
care services for Medicare beneficiaries because their credentials will 
have been verified as part of the Medicare enrollment process. The 
commenter states that physicians' credentials have already been 
verified by State licensure boards. The commenter believes that 
additional verification by Medicare is redundant and a waste of 
taxpayers' money and professionals' time.
    Response: While we believe that additional verification is 
necessary to ensure quality care is provided to Medicare beneficiaries, 
this comment is outside of the scope of this final rule. This rule does 
not modify or impose additional screening requirements needed for 
enrollment in Medicare.
    Comment: A commenter stated that dentists, who merely order and 
refer, may be further burdened if they will be required, as a condition 
of enrollment, to establish a compliance plan.
    Response: Neither the IFC nor this final rule addresses the issue 
of ``compliance plans.'' This comment is out of scope of this 
regulation. We solicited comments related to compliance plans in the 
September 23, 2010 proposed rule (75 FR 58204) titled ``Additional 
Screening Requirements, Application Fees, Temporary Enrollment 
Moratoria, Payment Suspensions and Compliance Plans for Providers and 
Suppliers.''
    Comment: A commenter who supports the new requirement to be 
enrolled in Medicare to order and refer suggested that CMS develop a 
program that rewards physicians for making appropriate referrals to the 
lowest cost providers as a good second step in cost containment. The 
commenter noted that there is no incentive for a physician to consider 
costs in the referral process.
    Response: This comment is outside the scope of this regulation and, 
as such, is not addressed in this final rule.
    Comment: A commenter referenced the professionals listed in the IFC 
who are permitted to order and refer covered Part B DMEPOS, imaging, 
laboratory, and specialist items/services and stated that certified 
registered nurse anesthetists (CRNAs) should be eligible to order and 
refer some of those items and services. The commenter stated that CRNAs 
order blood work and electrocardiograms as part of the pre-anesthetic 
assessment, order medications for the purpose of administering them 
perioperatively, and also have occasion to order chest X-rays for 
patients in the recovery room prior to the removal of the patient's 
breathing tube. The commenter further stated that the November 27, 2006 
final rule (71 FR 68683) titled ``Hospital Conditions of 
Participation'' acknowledged CRNAs as ordering providers.
    Response: This regulation does not change eligibility to order and 
certify for any provider type and only addresses enrollment for those 
professionals eligible to order and certify under existing law. 
Therefore, this suggestion is outside the scope of this final rule.
    Comment: A few commenters questioned if enforcement of the enrolled 
physician requirement would be limited to payment prohibitions for 
ordered and referred items and services only, or if there would be 
survey and certification implications for a home health agency that is 
furnishing home health services based on a certification from a 
physician who is licensed but who does not have an approved enrollment 
record or a valid opt-out record in PECOS.
    Response: Nothing in the IFC or this final rule changes our current 
survey and certification policies.
r. Summation and Final Decisions
    After reviewing the public comments summarized in this section 
(section II.B.4. a. through q. of this final rule), we are finalizing 
the provisions regarding ordering and certifying of covered items and 
services for Medicare beneficiaries with several modifications. We want 
to start by clarifying two major modifications to this final rule from 
the IFC. First, we stated in the IFC that we would reject, not deny, 
claims from providers and suppliers that do not comply with these 
ordering and certifying requirements. After reviewing the comments, we 
have determined that we will deny such claims to provide the suppliers, 
providers, and beneficiaries with appeal rights. However, until further 
notice, we will not activate the automated edits that would cause a 
claim not to be paid for lack of an approved enrollment record in 
Medicare

[[Page 25309]]

or a valid opt-out status. We want to assure the beneficiary, provider, 
and supplier communities that we will provide advance notice before 
activating the edits by conducting appropriate outreach through our 
established channels including listservs, Medicare Learning Network 
(MLN) articles, and open door forums.
    Second, we modified this final rule to permit residents, as defined 
in Sec.  413.75, who are enrolled in an accredited graduate medical 
education program in a State that licenses or otherwise enables such 
individuals to practice or order these items or services to enroll in 
Medicare to order and certify. In situations where States do not 
license or otherwise permit such individuals to practice or order and 
certify services, the teaching physician's full legal name and NPI must 
be included on the claim as the person who ordered or certified the 
service. In this latter circumstance, the claims will not be paid 
unless the ordering and certifying physician, in this case, the 
teaching physician, is listed on the claim as the ordering or 
certifying physician. We made this change to assist teaching hospitals, 
as well as the providers and suppliers who render the items and 
services in complying with this rule.
    Among the other changes to this section and in response to numerous 
comments received, we have changed the enrollment requirement language 
from one requiring enrollment in PECOS to one requiring enrollment in 
Medicare--including PECOS or other Medicare enrollment systems. We 
believe that this will reduce the number of claims that are denied or 
rejected and enable more currently enrolled physicians and 
practitioners to order or certify services.
    We clarified our language in this provision to refer to the 
specific items and services the rule covers. After review of the public 
comments we received, we removed the language referring to ``ordered or 
referred covered Part B items and services (excluding home health 
services described in Sec.  424.507(b) and Part B drugs).'' In this 
final rule, we specifically designate the covered items and services as 
follows: DMEPOS items, clinical laboratory, imaging, and home health 
services. Note that we have removed specialist services from the 
requirements of this rule.
    We have also clarified our language with respect to the home health 
provision of this final rule. The IFC stated that physicians who order 
home health services must be listed on the claim for payment. However, 
to be technically correct, we have clarified our language in this final 
rule to state that those who order/certify must be listed on the claim 
for payment. A commenter noted that these physicians may be one single 
physician or separate physicians. To that end, we have clarified our 
regulatory language to accommodate this public comment. Further, the 
statutory language at section 6405 of the Affordable Care Act 
specifically mentions application to the ordering and certifying 
physician. Therefore, we have clarified this language to be precise and 
more in conformity with the statutory language.
    Finally, as more of a technical correction, we have removed all 
references to beneficiary-submitted home health claims. After 
considering comments received on this topic, we now agree that home 
health claims cannot be submitted by beneficiaries and thus, should not 
be included in this final rule.

C. Requirement for Physicians, Other Suppliers, and Providers to 
Maintain and Provide Access to Documentation on Referrals to Programs 
at High Risk of Waste and Abuse

1. Background
    We believe it is imperative to establish accountability measures to 
ensure compliance with the ordering and referring provisions. To this 
end, the IFC implemented an Affordable Care Act provision by adding a 
new provision at Sec.  424.516(f) that required providers and suppliers 
to maintain ordering and referring documentation, including the NPI, 
received from a physician or eligible non physician practitioner for 7 
years from the date of service. The IFC also established in Sec.  
424.535(a)(10) that failure to comply with the documentation 
requirements specified in Sec.  424.516(f) is a reason for revocation.
2. Provisions of the Affordable Care Act
    Section 6406 of the Affordable Care Act amended section 1842(h) of 
the Act by adding a new paragraph which states, ``The Secretary may 
revoke enrollment, for a period of not more than one year for each act, 
for a physician or supplier under section 1866(j) if such physician or 
supplier fails to maintain and, upon request of the Secretary, provide 
access to documentation relating to written orders or requests for 
payment for durable medical equipment, certifications for home health 
services, or referrals for other items or services written or ordered 
by such physician or supplier under this title, as specified by the 
Secretary.''
    Section 6406(b)(3) of the Affordable Care Act amends section 
1866(a)(1) of the Act to require that providers and suppliers maintain 
and, upon request, provide to the Secretary, access to written or 
electronic documentation relating to written orders or requests for 
payment for durable medical equipment, certifications for home health 
services, or referrals for other items or services written or ordered 
by the provider as specified by the Secretary. Section 6406(b)(3) does 
not limit the authority of the Office of Inspector General to fulfill 
the Inspector General's responsibilities in accordance with applicable 
Federal law.
3. Requirements Established by the IFC
    The IFC amended paragraph (f) of Sec.  424.516 to require the 
following:
     A provider or supplier that furnishes covered ordered 
items of DMEPOS or home health, laboratory, imaging, or specialist 
services, to maintain written and electronic documentation (to include 
the NPI of the ordering or referring physician or eligible 
professional) relating to written orders and requests for payments for 
those items or services for 7 years from the date of service, and 
provide CMS or a Medicare contractor access to that documentation.
     A physician who ordered home health services and a 
physician or an eligible professional who ordered or referred DMEPOS, 
laboratory, imaging, and specialist services to maintain documentation 
relating to the written orders and requests for payments for those 
items or services for 7 years from the date of the order, 
certification, or referral and, upon request of CMS or a Medicare 
contractor, provide access to that documentation.
    The IFC added paragraph (10) to Sec.  424.535(a) to state that the 
Secretary may revoke Medicare enrollment and billing privileges for a 
period of not more than 1 year for each act of noncompliance for 
failure of a provider or supplier, including physicians and other 
eligible professionals, to comply with the document retention and 
access to documentation requirements at Sec.  424.516(f).
4. Summary of and Responses to Public Comments on the Medicare 
Requirement for Physicians, Other Suppliers, and Providers to Maintain 
and Provide Access to Documentation on Referrals to Programs at High 
Risk of Waste and Abuse
a. Document Retention
    Comment: A commenter asked if a home health agency would be

[[Page 25310]]

considered to have forged documentation if the documentation to be 
required could not be produced by the physician but could be found in 
the home health agency's documentation.
    Response: This final rule places the responsibility for the 
maintenance of records on both the ordering and certifying physician 
and the provider and supplier. We require that a good faith effort is 
made to comply with this rule. However, we understand that from time to 
time situations arise that are outside of the control of these 
custodians. In such a case, we may conduct an analysis based on the 
specific facts and circumstances involved in a particular case.
    Comment: A commenter noted that it will take some time for eligible 
professionals who will be enrolling in Medicare only to order and refer 
to fully understand their compliance obligations. In addition, dentists 
with practice management software and/or electronic records may be 
required to consult with their vendors and reconfigure their systems in 
order to comply with the documentation and disclosure requirements.
    Response: Dentists and others who will be enrolling only to order 
should be fully aware of the documentation retention and disclosure 
requirements beforehand. We have already published considerable 
information about these requirements and have communicated directly and 
in numerous open door forums about these requirements. We will publish 
additional guidance, as appropriate, via a Medicare Learning Network 
product, messages in our provider/supplier listservs, and presentations 
at our provider/supplier open door forums. We will also continue to 
provide information directly to the ADA, DoD, DVA, PHS, and other 
affected employers of physicians and other eligible professionals who 
enroll in Medicare just to order and certify.
    Comment: A commenter requested that CMS create exceptions to the 
penalty for non-compliance with the documentation retention and 
disclosure requirements. The commenter stated that there could be 
situations where documentation is destroyed or lost prior to the end of 
the 7-year required retention period, despite a provider's good faith 
efforts, due to circumstances beyond the provider's control, such as a 
systems malfunction or a natural disaster. The commenters stated that 
such providers or suppliers should not be penalized in the same manner 
as a provider or supplier who intentionally or carelessly disregards 
the documentation requirements. The commenter noted that the Act gives 
the Secretary the authority to modify the penalties, as it states that 
``* * * the Secretary may revoke enrollment, for a period of not more 
than one year for each act.'' (Italics added for emphasis.) The 
commenter believed that blanket penalties may be inequitable in 
practice and may create a potential disincentive to participate in 
Medicare.
    Response: Medical documentation must be stored in a manner 
consistent with applicable security and privacy rules. However, we 
recognize that there could be circumstances in which an event could 
occur as indicated by the commenter. Therefore, as provided in Sec.  
424.535(a), a revocation action is discretionary and we would base a 
revocation decision on a complete analysis of the facts and 
circumstances prior to making a determination.
    Comment: A commenter stated that a referral to home health care or 
for DMEPOS at a hospital or nursing home discharge would typically be 
retained in that hospital's or nursing home's records, not by the 
physician in his/her records.
    Response: The physician or other eligible professional who signed 
the order or certification is responsible for maintaining and 
disclosing the documentation. We will provide further guidance on this 
after the publication of this final rule.
    Comment: A commenter suggested that CMS only require document 
retention related to billable services for home health services by 
physicians (that is, the certification documents and, when care plan 
oversight reimbursement is sought, supporting documentation of time 
spent on such activities). The commenter stated that the documentation 
retained by physicians who are employed by providers or suppliers is 
governed by the requirements of the provider or supplier, not the 
physician. The commenter also stated that while revocation in Medicare 
of the physician may be appropriate for evidence of fraud or abuse, it 
would not be appropriate if a physician's employer lost or misfiled 
records. Several commenters stated that the added documentation 
requirements for DMEPOS and home health services are not clear and do 
not specify the specific kinds of documents that must be retained. 
Another commenter asked for specifics concerning the preferred format 
of retained information.
    Response: This rule does not address the content or format of 
documentation that must be maintained and disclosed. However, for 
purposes of clarification, we suggest that a reasonable approach is for 
providers and suppliers to retain documentation that supports the 
payment of the claim. This could include laboratory or other test 
results or findings and office visit notes in addition to copies of 
signed orders and certifications. We note that this documentation 
requirement applies to paper and electronic documents, as indicated in 
the statute and this final rule.
    Comment: A commenter questioned whether the documentation 
requirements require that a supplier use electronic medical records. 
The commenter states that if a supplier is going to be required to use 
electronic medical records, the financial burden would put many small 
suppliers out of business.
    Response: The requirements at Sec.  424.516 does not require 
providers and suppliers to use electronic medical records.
    Comment: A commenter questioned if the failure of a physician to 
retain a copy of the CMS-485 could lead to denial of claims and 
recoupment of prior payments from home health agencies.
    Response: As stated earlier, this rule does not modify or address 
the content requirements for documents to be retained. Therefore, this 
comment is outside of the scope of this final rule.
    Comment: Some commenters requested that CMS to specifically 
identify the entities or individuals to whom such documentation must be 
disclosed (for example, CMS or its contractors, an Administrative Law 
Judge, a DMEPOS supplier, and a beneficiary).
    Response: Disclosure is required to be made, upon request, to CMS 
or CMS contractors. Disclosure may also be requested by DHHS OIG for 
fulfillment of the Inspector General's responsibilities and under its 
independent authority. However, this list is not exhaustive and other 
agencies such as the Department of Justice (DOJ) and the Internal 
Revenue Service (IRS) have separate authority to request documentation.
    Comment: A commenter stated that interns and residents may be 
responsible for creating, and the dental school clinic may be 
responsible for retaining, the records required to comply with section 
Sec.  424.516(f)(2); and that other dentists, such as locum tenens 
dentists and those who are employed by a government agency or a group 
practice, may not be capable of maintaining independent documentation 
of orders and referrals and may not be able to grant CMS or a Medicare 
contractor access to those records. This commenter asked CMS to

[[Page 25311]]

clarify how the requirements in this section would apply to dentists. 
This commenter also urged that a dentist who is unable to comply with a 
disclosure request because another person or entity has control over 
the documentation not be subject to revocation of enrollment and 
billing privileges in Medicare under Sec.  424.535(a)(10).
    Response: The requirements of Sec.  424.516(f)(2) apply to interns, 
residents, and dentists in the same way they apply to enrolled 
physicians and to other eligible professionals. We will provide further 
guidance on this during the implementation of the provisions contained 
in this final rule.
    Comment: Several commenters stated that the document retention 
requirements vary considerably depending on different parts of the 
Medicare program. Physicians do not know how long they need to retain 
certain records. We should provide education to physicians on document 
retention requirements for various parts of the Medicare program.
    Response: This final rule does not address documentation 
requirements (for example, those found in Sec.  420.300 through Sec.  
420.304) for other parts of the Medicare program other than 
documentation retention and provision requirements related to 
particular items and services that are ordered and certified. Some 
aspects of this comment are outside the scope of this final rule. We 
are requiring that documentation pertaining to ordered and certified 
services and supplies be retained for 7 years, as specified in Sec.  
424.516(f). We will continue to provide educational material to the 
public as we implement the specific provisions in this final rule.
    Comment: Several commenters stated that the documentation 
requirements should apply only to the imaging facility (the technical 
component provider) and not the ordering or referring provider or the 
interpreting physician. To require the ordering or referring provider 
or the interpreting physician to maintain documentation is unnecessary 
and is a duplication of effort and expense, and many such providers are 
currently ill-equipped to do this. Ordering physicians do not 
differentiate between the technical and professional components of 
their order; they assume both will occur.
    Response: We are not placing documentation requirements on 
physicians who interpret imaging tests. Section 1866(a)(1)(W) of the 
Act authorizes the Secretary to extend these requirements to other 
items and services. Section 424.516(f)(1) and at Sec.  424.535(a)(10) 
apply to home health agencies, DMEPOS suppliers, clinical laboratories, 
imaging centers, and those physicians and other eligible professionals 
who ordered or certified home health, DMEPOS, clinical laboratory, and 
imaging services.
    Comment: Many commenters stated that Sec.  424.516 should not 
require maintenance of documentation related to requests by a physician 
that the patient see another physician. Section 424.516 should apply 
only to items and services for which Medicare requires a written order 
or referral (such as DMEPOS, home health, laboratory, and diagnostic 
tests).
    Response: As stated earlier in this preamble, we have removed 
requirements for specialist services in Sec.  424.507 and Sec.  424.516 
from this final rule.
    Comment: Several commenters recommended that Sec.  424.535 be 
revised to reflect less severe penalties for failure to retain and/or 
disclose documentation of orders and referrals. They suggested that 
allowing the recovery of applicable Medicare payments and the 
establishment of and compliance with a corrective action plan be the 
required penalties for noncompliance.
    Response: This regulation implements section 6406 of the Affordable 
Care Act which amended section 1843(h) of the Act. Section 1842(h)(9) 
of the Act states,

    The Secretary may revoke enrollment, for a period of not more 
than one year for each act, for a physician or supplier under 
section 1866(j) if such physician or supplier fails to maintain and, 
upon request of the Secretary, provide access to documentation 
relating to written orders or requests for payment for durable 
medical equipment, certifications for home health services, or 
referrals for other items or services written or ordered by such 
physician or supplier under this title, as specified by the 
Secretary.

We believe that the penalties to be imposed are appropriate and in 
accordance with the statute.
    Comment: A commenter recommended that the stated documentation 
requirements at Sec.  424.516(f) be revised to limit physician 
documentation requirements to a copy of the home health Plan of Care 
and the certification/recertification forms, and not to require 
retention of interim orders except when they are for added billable 
services and not to require a physician's NPI on the certification/
recertification form or interim orders for added billable services 
until CMS issues detailed guidance for the content of the Plan of Care, 
including specific physician's NPI requirements.
    Response: As noted in earlier responses, this final rule does not 
provide an exhaustive list of the documentation to be retained and 
produced if requested. However, any documentation that supports the 
payment of the claim should be retained and must be made available upon 
request. The NPI of the ordering or certifying provider must be 
included in the retained documentation.
b. Technical, Administrative, and Procedural Modifications and 
Corrections
    Comment: Several commenters noted that the requirements added at 
Sec.  424.507 apply to Part B items and services (excluding Part B 
drugs) and Part A and Part B home health services, whereas the 
documentation requirements added at Sec.  424.516 apply to a narrower 
set of services (that is, Sec.  424.516 specifically states DMEPOS, 
home health, laboratory, imaging, and specialist services). The 
commenters stated that CMS should apply the document retention 
requirements and the ordering or referring provider enrollment 
requirements to the same types of orders and referrals.
    Response: We have revised the regulatory text for consistency. The 
ordering and certifying requirements and the documentation requirements 
apply to the same items and services, specifically: DMEPOS, imaging and 
clinical laboratory services, and home health services.
c. Public Comments Outside the Scope of the Requirement To Maintain and 
Provide Access to Documentation of Referrals
    Comment: A commenter stated that the documentation requirement 
could have a significant impact on patients who present for services or 
supplies with an order that is not signed. The patient may be delayed 
in receiving medically necessary care while the provider or supplier 
who would furnish the item or service requests a signed order. 
Obtaining the signature places a burden on the provider or supplier who 
would furnish the service.
    Response: We believe this comment is outside of the scope of this 
final rule because we are not modifying requirements for orders to be 
signed.
    Comment: A commenter stated that the need to produce I-9 forms for 
foreign born suppliers is administratively burdensome on large provider 
groups.
    Response: Production of an I-9 form for foreign born suppliers is 
not a requirement of this final rule and therefore outside of the scope 
of issues to be addressed.

[[Page 25312]]

d. Summation and Final Decisions
    After review of the all of public comments presented this section 
(section II.C.4. a. through c. of this final rule), we are finalizing 
the document retention requirements with several modifications. We are 
revising the provisions to follow the ordering and certifying 
provisions' covered items and services to include DMEPOS, laboratory, 
and imaging services, and home health services. We have also clarified 
that document maintenance and affording access to documentation, with 
regard to the home health provision, applies to orders and 
certifications. This provision has been clarified for the same reasons 
we clarified Sec.  424.507, as described herein.
    We have clarified that documents must be retained from the date of 
service, rather than the date of the order or certification- as 
specified in the IFC. Specialist services are no longer included in 
either the ordering and referring provision of Sec.  424.507 or the 
document retention provision in Sec.  424.516.
    Section 424.535 remains unchanged in the fact that a provider or 
supplier that does not meet the requirements of Sec.  424.516 is 
subject to revocation for not more than 1 year for each act of 
noncompliance. Finally, as a technical correction, we removed a 
provision in Sec.  424.535 that references section 1866(j) of the Act.

III. Provisions of the Final Rule

    In this section of the final rule, we discuss the changes made from 
the IFC. We are finalizing the provisions of the IFC with the 
modifications based on our response to comments and other statutory and 
technical changes stated in this section of the final rule.
    In section II.A. of this final rule, we discuss the inclusion of 
the NPI on all Medicare enrollment applications, pursuant to Medicaid 
provider agreements, and on Medicare and Medicaid claims. We note that 
the main objectives of that section remain constant from the IFC to 
this final rule in that providers and suppliers must provide their NPIs 
as a part of their enrollment record. Furthermore, this NPI must be 
reported on any claims for payment, along with the NPI of any other 
provider or supplier listed on the claim form. We made a few 
modifications to the NPI provisions included in the IFC. In Sec.  
424.506, we made the following changes:
     Revised paragraph (b)(1) to include the text of paragraph 
(b)(2).
     Removed the existing paragraph (b)(2) and redesignated 
paragraph (b)(3) and paragraph (b)(2).
     Paragraph (c)(1) was revised to insert the word ``must'' 
between the words ``Medicare'' and ``include'' because the word was 
inadvertently omitted in this requirement in the IFC.
    In section II.B. of this final rule, we discuss our provisions 
regarding ordering and certifying covered items and services for 
Medicare beneficiaries. In that section of this final rule, set forth 
are specific provider and supplier mandates for enrolling in Medicare 
to order and certify certain, specified items or services including 
DMEPOS, laboratory and imaging services, and home health services. We 
stress that this rule finalizes conditions of payment for ordered items 
and services, and it does not address broader payment policy questions. 
It neither changes eligibility requirements that permit certain 
provider types to order or certify, nor does it detail which items or 
services they are permitted to order or certify. This rule, in its 
applicable sections, only addresses the enrollment requirements for 
those eligible professionals who are permitted to order and certify 
under existing rules. We are making the following modifications 
regarding ordering and certifying covered items and services for 
Medicare beneficiaries:
     In Sec.  424.507, we made the following changes:
    ++ Revised the introductory text for paragraph (a) to clarify the 
items and services to which this paragraph applies (covered Part B 
DMEPOS items and clinical laboratory and imaging services). We also 
deleted the reference to specialist services.
    ++ Revised paragraph (a)(1) by inserting the word ``claim'' between 
the words ``supplier's'' and ``must.''
    ++ Revised paragraph (a)(1)(iii) to state that the physician or 
other eligible professional, when permitted, must be enrolled in 
Medicare in an approved status or have validly opted- out of the 
Medicare program.
    ++ Revised paragraph (a)(1)(iv) to require that claims identify the 
teaching physician as the ordering or certifying provider when an 
unlicensed resident or a non-enrolled licensed resident orders or 
certifications. We are also providing the option of enrollment if 
residents possess a provisional license or are otherwise permitted by 
their State to practice or order and certify.
    ++ Revised paragraph (a)(2)(iii) to be consistent with paragraph 
(a)(1)(iii).
    ++ Revised paragraph (a)(2)(iv) to be consistent with paragraph 
(a)(1)(iv) by requiring that claims identify the teaching physician as 
the ordering or certifying provider when an unlicensed resident or a 
non-enrolled licensed resident orders or certifications. We are also 
providing the option of enrollment if residents possess a provisional 
license or are otherwise permitted by their State to practice or order 
and certify.
    ++ Revised paragraph (b)(3) (formerly paragraph (b)(1)(iii)) to be 
consistent with paragraph (a)(1)(iii) by requiring that home health 
claims identify the teaching physician as the ordering/certifying 
provider when an unlicensed resident or a non-enrolled licensed 
resident certifies. We are also providing the option of enrollment if 
residents possess a provisional license or are otherwise permitted by 
their State to order/certify or practice.
    ++ Removed the requirements for home health claims submitted by 
Medicare beneficiaries in paragraph (b)(2). This change resulted in the 
rewording of the title of paragraph (b) to read: ``Conditions for 
payment of claims from home health providers for covered home health 
services'' and the renumbering of the requirements in paragraph (b).
    ++ Revised paragraph (b) by removing the word ``ordered'' from the 
provision. This change will result in the wording as follows: ``To 
receive payment for covered Part A or Part B home health services, a 
provider's home health services claim must meet all of the following 
requirements:''
    ++ Revised paragraph (b)(1) and (b)(2) (formerly paragraph (b)(1)) 
to include certifications, not simply orders for home health.
    ++ Revised paragraph (c) to state that we will deny a claim from a 
provider or supplier for covered services described in Sec.  424.507(a) 
and Sec.  424.507(b) if the claim does not meet the requirements of 
Sec.  424.507(a)(1) and Sec.  424.507(b), respectively. We also changed 
the reference from Sec.  424.507(b)(1) to Sec.  424.507(b).
    ++ Revised paragraph (d) to remove the references to sections that 
relate to home health services and home health claims, as Medicare 
beneficiaries do not submit claims for home health services.
    In section II.C. of this final rule, we discuss the IFC provisions 
regarding document retention requirements. We are finalizing these 
requirements with the following modifications:
     In Sec.  424.516, we made the following changes:
    ++ Removed the words ``specialist services'' in paragraph (f)(1) 
and we more specifically described the items and services to which the 
final rule applies.
    ++ Revised paragraph (f)(2) to more specifically describe the items 
and services to which this final rule applies.

[[Page 25313]]

    ++ Revised paragraphs (f)(1) and (f)(2) to more explicitly describe 
the home health events to which this final rule applies by specifically 
referring to orders and certifications.
     In Sec.  424.535(a)(10)(i), we removed the reference to 
section 1866(j) of the Act.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 30-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.

A. ICRs Regarding National Provider Identifier (NPI) on All Medicare 
Enrollment Applications and Claims (Sec.  424.506)

    Section 424.506(b)(1) states that providers and suppliers who are 
eligible for NPIs be required to report their NPIs on their enrollment 
applications for Medicare. Similarly, Sec.  424.506 (b)(2) states that 
if providers or suppliers enrolled in Medicare prior to obtaining NPIs 
and their NPIs are not in their enrollment records, they must submit 
enrollment applications containing their NPIs.
    The burden associated with the requirements in Sec.  424.506(b) is 
the time and effort necessary for a provider or a supplier to apply for 
an NPI and the time and effort necessary to report the NPIs on their 
enrollment applications for Medicare.
    Sections Sec.  424.510 and Sec.  424.515 state that providers and 
suppliers must submit enrollment information on the applicable 
enrollment application and update, resubmit, and recertify the accuracy 
of their enrollment information every 5 years. In addition, Sec.  
424.516 lists reporting requirements for providers and suppliers. To 
submit enrollment information for an initial application (even if 
enrolling just to order and certify), a change of information, or to 
respond to a revalidation request, a provider or supplier must complete 
and submit the applicable CMS-855 form or complete and submit the form 
over the Internet using Internet-based PECOS. Although we are unable to 
quantify the number, we do not believe that a significant number of 
physicians and eligible professionals will enroll in Medicare just to 
order and certify. The burden associated with the enrollment 
requirements found in Sec.  424.510, Sec.  424.515, and Sec.  424.516 
is the time and effort necessary to complete and submit applicable 
Medicare form. While this burden is subject to the PRA, it is currently 
approved under existing OMB control numbers (OCN). Specifically, the 
burden associated with obtaining an NPI is currently approved under OCN 
0938-0931. The burden associated with submitting initial Medicare 
enrollment applications and updating Medicare enrollment information to 
include NPI is approved under OCN 0938-0685 (Applications CMS-855 A, B, 
I, and R) 0938-1056 (Application CMS-855 S).
    Section 424.506(b)(1) states that providers and suppliers who are 
enrolled in Medicare must report their NPIs and the NPIs of any other 
providers or suppliers who are required to be identified in their 
claims on all paper and electronic claims that they send to Medicare. 
The burden associated with this requirement is the time and effort 
necessary to complete and submit a claim form. The burden associated 
with this collection is accounted for under OCN 0938-0999. We are 
currently seeking reinstatement of the control number.

B. ICRs Regarding Ordering and Referring Covered Items and Services for 
Medicare Beneficiaries (Sec.  424.507)

    Section 424.507 states that to receive payment for covered Part A 
or Part B home health services, the claim must contain the legal name 
and the NPI of the ordering physician; and to receive payment for 
covered items of DMEPOS, and certain other covered Part B items or 
services (excluding Part B drugs), the claim must contain the legal 
name and the NPI of the ordering or certifying physician or eligible 
professional. The burden associated with these requirements is the time 
and effort necessary to submit a claim with the required information. 
The burden associated with this collection is accounted for under OCN 
0938-0999. We are currently seeking reinstatement of the control 
number.

C. ICRs Regarding Additional Provider and Supplier Requirements for 
Enrolling and Maintaining Active Enrollment Status in the Medicare 
Program (Sec.  424.516)

    Section 424.516(f)(1) discusses the documentation requirements for 
providers and suppliers. A provider or supplier is required for 7 years 
from the date of service to maintain and upon request of CMS or a 
Medicare contractor, provide access to documentation, including the NPI 
of the physician or the eligible professional who ordered or certified 
the item or service, relating to written orders or requests for 
payments for items of DMEPOS, home health, laboratory, and imaging 
services. Similarly, Sec.  424.516(f) discusses the documentation 
requirements for providers and suppliers. At Sec.  424.516(f)(1), 
providers and suppliers are required for 7 years from the date of 
service to maintain and, upon request of CMS or a Medicare contractor, 
provide access to documentation, including the NPI of the physician or 
the eligible professional who ordered or certified the item or service, 
relating to written orders or requests for payments for items of 
DMEPOS, home health, laboratory, and imaging services. At Sec.  
424.516(f)(2), physicians and eligible professionals are required for 7 
years from the date of service to maintain and, upon request of CMS or 
a Medicare contractor, provide access to written and electronic 
documentation relating to written orders or certifications for items of 
DMEPOS, home health, laboratory, and imaging services.
    The burden associated with the requirements in Sec.  424.516(f) is 
the time and effort necessary to both maintain documentation on file 
and to furnish the information upon request to CMS or a Medicare 
contractor. While the requirement is subject to the PRA, we believe the 
associated burden is exempt. As discussed in the November 19, 2008 
final rule (73 FR 69726), we believe the burden associated with 
maintaining documentation and furnishing it upon request is a usual and 
customary business practice and thereby exempt from the PRA under 5 CFR 
1320.3(b)(2).

D. ICRs Regarding the Reporting of National Provider Identifier by 
Medicaid Providers (Sec.  431.107(b)(5))

    Section 431.107(b)(5) states that a Medicaid provider has to 
furnish its NPI (if eligible for an NPI) to its State agency and 
include its NPI on all claims submitted under the Medicaid program. The 
burden associated with the Medicaid requirements in

[[Page 25314]]

Sec.  431.107(b)(5) is the time and effort necessary for a provider to 
report the NPIs to the State agency and on claims submitted to the 
Medicaid program.
1. Enrollment Applications
    We have considered the burden associated with enrollment 
applications for Medicaid by estimating the number of providers. 
Specifically--
     There will be 56,250 Medicaid and CHIP providers in a 
given 12-month period that seek to enroll in Medicaid; and
     According to State Program Integrity Assessment data for 
FFYs 2007 and 2008, there has been an average of 1,855,070 existing 
Medicaid and CHIP providers nationally over the 2-year period of FFYs 
2007 and 2008. Of these 1,855,070 providers, approximately one-fifth of 
them, or 371,014 (1,855,070 x .20), would be required to revalidate 
their enrollment each year under Sec.  431.107(b).
    For purposes of this paperwork burden assessment only, we assumed 
that 427,264 providers (56,250 + 371,014) will either initially enroll 
in or be required to revalidate their enrollment in Medicaid and, as 
part of this, be required to report their NPI.
    We recognize that not all of these providers will have NPIs to 
report; a very small percentage of them may be exempt from having to 
obtain an NPI. We further understand that: (1) Some States may choose 
to allow (or even require) providers to submit their NPIs via 
mechanisms that are potentially less burdensome than submitting an 
initial enrollment or revalidation application; and (2) the previous 
figures include CHIP providers, who are not subject to the requirements 
of Sec.  431.107(b). However, we chose to utilize the 427,264 figure 
and the application reporting mechanism for this paperwork burden 
assessment, so as not to underestimate the potential burden of this 
particular requirement. We estimated that it will take an average of 
less than 1 minute (or 0.01666 hours) for a medical technician to 
report a Medicaid provider's NPI to the State agency on an enrollment 
or reenrollment application. However, we assumed 1 minute for purposes 
of this burden. This results in an annual hour burden of 7,118 hours 
(or 427,264 x 0.01666). At a per hour cost of $14.51, according to the 
Bureau of Labor Statistics (BLS) for May 2011 for the mean hourly wage 
of a medical assistant, we projected a total annual cost of $103,282.
2. Claims
    In FY 2008, approximately 2.5 billion Medicaid claims were 
submitted. This number has remained relatively constant since then.
    As of May 23, 2008, and consistent with 45 CFR 162.410, the NPI has 
been required for all HIPAA-standard transactions. This means that 
Medicaid providers have been required since that date to disclose their 
NPI on all HIPAA-standard transactions, which we estimate to represent 
about 95 percent of all Medicaid claim submissions. We arrived at this 
percentage because we polled 10 States and using their individual 
percentage of electronic claims submission compiled an average of 95 
percent. We then applied that percentage to the nation since 10 States 
we polled represent a sample of small and large States as well as 
States with a low and high Medicaid population and therefore we believe 
can be considered an adequate sample.
    We will not be furnishing an estimated burden for the requirement 
that a provider furnish its NPI on claims because this requirement 
already applies to the vast majority of Medicaid claims under Sec.  
431.107(b)(5), and 45 CFR 162.410. The burden we estimate here will be 
for those claims--in general, paper claims--that are not HIPAA-standard 
transactions but that now must contain the NPI per Sec.  431.107(b)(5). 
It is true that some States have been requiring the submission of the 
NPI on all Medicaid claims, even those that are not subject to Sec.  
431.107(b)(5). However, no burden has been prepared for this. We do so 
in this final rule.
    We projected that 5 percent of the 2.5 billion claims previously 
referenced--or 125 million--will not qualify as HIPAA-standard 
transactions. These claims will need to contain the provider's NPI. We 
estimate that it will take the provider/medical assistant less than 1 
minute to add the NPI to the claim but for purposes of the burden we 
estimated 1 minute--or 0.01666 hours--to furnish its NPI on the claim. 
This results in an annual burden of 2,082,500 hours. At a per hour cost 
of $14.51, we project the annual cost of this requirement to add the 
NPI to paper or non-HIPAA standard transactions to be $30,317,075. We 
wish to point out that as a result of this final rule, all claims will 
be required to have an NPI so as States implement these requirements, 
the burden will continue to decrease. Of note, while we received no 
comments on the burden for appending the NPI to the Medicaid provider 
agreement and/or the Medicaid claims for payment, we have updated these 
estimates to account for a medical assistant rather than a medical 
technician, since we believe a medical assistant is more likely to 
provide administrative support to the provider and to account for the 
May 2011 BLS mean hourly wage of a medical assistant rather than the 
2008 mean hourly wage of the medical technician.
    Table 1 indicates the paperwork burden associated with the 
requirements of this final rule. The only two requirements listed are 
those involving the Medicaid NPI provisions described in Sec.  
431.107(b)(5). The remaining requirements, as explained above, are 
either exempt from the PRA requirement or the burden for them has been 
addressed in other PRA packages/assessments.

                                            Table 1--Estimated Average Annual Reporting/Recordkeeping Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Hourly
                                                                                  Burden      Total    labor cost  Total labor     Total
       Regulation section        OMB Control No.    Respondents     Responses      per       annual        of        cost of      capital/    Total cost
                                                                                 response    burden     reporting   reporting   maintenance      ($)
                                                                                 (hours)     (hours)       ($)         ($)       costs ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
431.107(b)(5)--Enrollment......  0938-New.......         427,264       427,264    0.01666        7118       14.51      103,282            0      103,282
431.107(b)(5)--Claims..........  0938-New.......   2,500,000,000   125,000,000    0.01666   2,082,500       14.51   30,217,075            0   30,217,075
                                ------------------------------------------------------------------------------------------------------------------------
    Total......................  ...............   2,500,427,264   125,427,264  .........   2,089,618  ..........  ...........  ...........   30,320,357
--------------------------------------------------------------------------------------------------------------------------------------------------------

    If you comment on these information collection and recordkeeping 
requirements, please submit your comments to the Office of Information 
and Regulatory Affairs, Office of Management and Budget,
    Attention: CMS Desk Officer, CMS-6010-F.
    Fax: (202) 395-6974; or

[[Page 25315]]

    Email: [email protected].
    In response to our solicitation of comments on these issues, we 
received the following comments:
    Comment: A commenter believed that CMS should re-estimate the 
actual burden of completing the CMS-855I enrollment applications with 
respect to the burden required by this final rule, including contractor 
processing time and the interruption of Medicare reimbursement for the 
physician.
    Response: With respect to the completion of CMS-855 form pursuant 
to the final rule, we believe that the overall burden will, in general, 
be increased only by the number of individuals who are enrolling just 
to order and certify via the new CMS-855O form, as most other 
physicians and eligible professionals who order and certify have 
already enrolled in Medicare via the CMS-855I. In other words, the new 
burden relates to the CMS-855O, not the CMS-855I. As explained later in 
this section, the burden associated with completing the new CMS-855O 
form was addressed in the Paperwork Reduction Act (PRA) package for 
that form.
    Comment: A commenter stated that the costs of preparing and filing 
correspondence and records (paper, or scanned from paper and put into 
an electronic record) would be astronomical, with no evidence of 
benefit in fraud prevention or detection.
    Response: This final rule does not address the format, context, or 
mode of documentation. However, for purposes of clarification, we do 
not require that paper documentation be converted into electronic 
format in order to meet the documentation and disclosure requirements 
of this final rule. Moreover, we believe that such document retention 
is a normal and customary business practice. As such, we do not foresee 
additional costs associate with a practice that is already in existence 
for many providers.
    Comment: Several commenters questioned what is meant by the phrase 
``providing access to that documentation.'' If this means that 
physician specialty practices will have to allow CMS or its contractor 
access to their patient records, it would be burdensome and disruptive 
to the practices and could create potential patient privacy problems. 
This would be even more difficult for electronically maintained 
records.
    Response: CMS, its contractors, and/or the DHHS OIG may request 
access to required documentation. It is the responsibility of the 
provider and supplier, and of the physician or other eligible 
professional, or their provider/supplier employers, where appropriate 
and as discussed earlier, to determine the method of storage of the 
required documentation, the location of the stored required 
documentation, and the means by which it will disclose the required 
documentation to CMS, its contractors, and/or the DHHS OIG in order to 
comply with this final rule. Medical practices and other employers that 
are responsible for the documentation and disclosure requirements must 
ensure that they can meet these requirements in order to remain active 
in the Medicare program.
    Comment: Several commenters stated that the IFC does not include an 
adequate analysis of the impact of the expanded documentation 
requirement for physicians. Repeated audits over a 7-year period of 
time is not part of a regular administrative work flow and will cause 
considerable financial burden, absorb staff time, and require 
investment in the maintenance of documentation. Small medical practices 
do not have the necessary resources to do this.
    Response: We do not foresee providers, suppliers, physicians, etc., 
being subjected to ``repeated'' audits. To the contrary, such audits 
will, in general: (1) Be performed only as an ``as needed'' basis, and 
(2) merely involve requests for limited numbers of documents. Moreover, 
we believe that such infrequent audits are, like documentation 
retention, normal business practices. It is not altogether uncommon, 
for example, for a private health insurance plan--as part of an 
investigation--to request certain documentation from a supplier in 
order to support the need for a particular service that was provided.

V. Regulatory Impact Analysis

A. Statement of Need

    This final rule is necessary to finalize provisions of the May 5, 
2010 IFC. As discussed earlier, the IFC implemented several provisions 
of the Affordable Care Act:
     Section 6402(a), which requires all Medicare and Medicaid 
providers of medical or other items or services and suppliers that 
qualify for a National Provider Identifier (NPI) to include the NPI on 
all Medicaid provider agreements, Medicare enrollment records, and 
Medicare and Medicaid claims for payment.
     Section 6405, which requires physicians or eligible 
professionals who order and/or certify Medicare services to be enrolled 
in Medicare.
     Section 6406, which requires physicians and suppliers to 
maintain and provide access to documentation relating to written orders 
or requests for payment for DMEPOS, HHA, and other services as 
specified by the Secretary.
    We also believe that this final rule is needed to help ensure that 
(1) accurate claims are submitted; (2) the Medicare items and services 
being ordered and/or certified are valid and necessary; and (3) 
appropriate records of orders and certifications for Medicare items and 
services are maintained.

B. Overall Impact

    We have examined the impact of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulations and Regulatory review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the 
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), 
Executive Order 13132 on Federalism (August 4, 1999), and the 
Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 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 single 
year). As discussed in more detail later in this section, we believe 
that the savings resulting from this final rule will exceed $100 
million in each of the next 10 fiscal years, beginning in fiscal year 
(FY) 2013. Therefore, this is an economically significant rule based 
upon section 3(f)(1) of Executive Order 12866.
    The Regulatory Flexibility Act (RFA) requires agencies to analyze 
options for regulatory relief for small entities, if a rule has a 
significant impact on a substantial number of small entities. For 
purposes of the RFA, we estimate that small entities include small 
businesses, nonprofit organizations, and small governmental 
jurisdictions. The great majority of hospitals and most other health 
care providers and suppliers are small entities, either by being 
nonprofit organizations or by meeting the SBA definition of a small 
business (having revenues of less than $7.0 million to $34.5 million in 
any one year.

[[Page 25316]]

Individuals and States are not included in the definition of a small 
entity. As we stated in the IFC, we do not believe that this rule will 
have a significant economic impact on a substantial number of small 
entities. Nonetheless, we recognize that the potential effects of this 
final rule could impact some providers of covered imaging, clinical 
laboratory, DMEPOS, and home health items and services. We have 
therefore, elected to prepare a voluntary RFA analysis. As many of the 
requirements of the RFA are contained in our RIA, this RIA section also 
constitutes the RFA. 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 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 100 beds. We are not preparing an 
analysis for section 1102(b) of the Act. The Secretary has determined 
that this final rule will 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 (UMRA) 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. In 2011, that 
threshold is approximately $136 million. This final rule does not 
mandate expenditures by either the governments mentioned or the private 
sector; therefore, no analysis is required.
    Executive Order (EO) 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 does not impose significant costs 
on State or local governments, the requirements of E.O. 13132 are not 
applicable.

C. Anticipated Effects

    As previously stated, we project, based on internal CMS data, that 
the total savings to the Federal government resulting from this final 
rule will exceed $100 million in each of the next 10 fiscal years. The 
total savings at the end of this 10-year period is estimated to be 
$1.59 billion. This figure accounts for our estimates that: (1) 
Approximately 5 percent of physicians will not be enrolled; (2) such 
physicians have only 50 percent as many Medicare enrollees as other 
physicians; and (3) 10 percent of patients of those physicians will not 
seek out enrolled physicians. The product of these is inflated by 25 
percent to account for other providers who could potentially order 
services. The net result is roughly a 0.3 percent--or $1.59 billion--
reduction in DMEPOS, imaging and clinical laboratory services, and Part 
A and Part B home health costs over the next 10 years attributable to 
patients who will choose not to seek out an enrolled physician to 
obtain such services. In addition, some claims without proper 
documentation will be denied, including some fraudulent claims, but we 
do not have a basis for quantifying the value of such claims.
    Table 2 outlines the year-by-year projected savings to the Federal 
government over the next decade.

                       Table 2--Projected Savings
------------------------------------------------------------------------
                                                         Savings *  (in
                     Fiscal year                           $millions)
------------------------------------------------------------------------
2013.................................................                110
2014.................................................                120
2015.................................................                130
2016.................................................                140
2017.................................................                150
2018.................................................                160
2019.................................................                180
2020.................................................                190
2021.................................................                200
2022.................................................                210
                                                      ------------------
    Total............................................              1,590
------------------------------------------------------------------------
* In actual dollars for the years presented.

    We believe that the rule's other effects will be minimal. With 
respect to Sec.  424.506, practically all providers and suppliers that 
wish to enroll in Medicare and Medicaid programs have already obtained 
NPIs and are currently meeting requirements regarding the need to 
report their NPIs on, as applicable, enrollment applications and 
claims. Regarding Sec.  424.516(f), we believe that most providers and 
suppliers already retain such documentation as a usual and customary 
business practice.

D. Alternatives Considered

    Since this final rule is a codification of statutory provisions 
found in the Affordable Care Act, we did not consider alternatives to 
the overall processes described in the IFC. We did consider the 
possibility of including additional items and services on the list of 
those affected by this final rule. However, while we have the authority 
under section 6405(c) of the Affordable Care Act to expand the 
requirements of section 6405(a) and (b) of the Affordable Care Act to 
all other categories of items or services under Title XVIII of the Act, 
we chose to expand these requirements only to clinical laboratory and 
imaging services, rather than to many other types of services. 
(Specialist services, moreover, are no longer covered by the 
requirements of this final rule.) We believe that the application of 
these requirements to limited categories of items and services will 
ease the overall burden on the provider and supplier communities. 
Moreover, in response to comments on the IFC, we considered and adopted 
the following alternatives that we believe will further the impact of 
these provisions.
    First, we state in Sec.  424.507 that in order for a claim to be 
paid, the ordering physician/practitioner must be enrolled in Medicare 
in an approved status or must have validly opted-out of the Medicare 
program. The IFC required that the ordering physician/practitioner have 
an approved enrollment record in PECOS. However, we have changed the 
enrollment requirement language from one requiring enrollment in PECOS 
to one requiring enrollment in Medicare--including PECOS or other 
Medicare enrollment systems. We believe that this will reduce the 
number of claims that are denied or rejected and enable more currently 
enrolled physicians and practitioners to order or certify for services.
    Second, we will provide ample advanced notice of our intention to 
activate the automated edits that would cause a claim to not be paid 
for the lack of a valid: (1) Enrollment record to order and certify; or 
(2) a valid opt-out record in Medicare.
    For Medicaid, again, we codified the statutory provisions found in 
the Affordable Care Act. However, we considered alternatives to the 
statute, since the provision requires all providers of medical or other 
items or services and supplies to include their NPI on all 
applications. Medicaid, until recently, had no Federally required 
process for provider enrollment outside of the requirement to enter 
into a provider agreement with the State. Further, Medicaid has no 
Federal process for applications to enroll in the Medicaid program. 
Thus, in order to comply with the statutory requirement outlined in 
6402 of the Affordable Care Act to append the NPI to the application 
for enrollment, Medicaid considered codifying additional regulatory 
requirements outlining a Federal process for the application to enroll 
in Medicaid. Because of the Administration's goal to provide for 
greater administration simplification, we determined that Medicaid 
would not

[[Page 25317]]

prepare additional regulatory requirements but would provide that the 
NPI must be appended to the provider agreement. Since entering into a 
provider agreement with the State is currently a requirement in the 
Medicaid program, we believe this option provides States and providers 
with an alternative that is less burdensome.
    Again, the main purpose of this final rule is to implement the 
previously referenced provisions of the Affordable Care Act. However, 
we also believe that these requirements will help to ensure that 
Medicare and Medicaid payments are correctly and properly made.

E. Accounting Statement

    As required by OMB Circular A-4 (available at link http://www.whitehouse.gov/sites/default/files/omb/assets/regulatory_matters_pdf/a-4.pdf), we have prepared an accounting statement. In calculating 
the annualized savings in the accounting statement, we applied the 7 
and 3 percent discount rates to the full 10-year period assessed.

                                          Table 3--Accounting Statement
                                                 [In $millions]
----------------------------------------------------------------------------------------------------------------
                                       Primary                      Discount rate
             Category                 estimate      Year  dollars     (percent)            Period covered
----------------------------------------------------------------------------------------------------------------
Transfers from Providers to the            $136.8            2012               7  FYs 2013-2022.
 Federal government.
                                            139.1            2012               3  FYs 2013-2022.
----------------------------------------------------------------------------------------------------------------

    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare, Reporting and recordkeeping requirements.

42 CFR Part 431

    Grant programs--health, Health facilities, Medicaid, Privacy, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services is confirming as final the interim final rule 
amending 42 CFR parts 424 and 431 that published on May 5, 2010 (75 FR 
24437) with the following changes:

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
1. The authority citation for part 424 continues to read as follows:

    Authority:  Sec. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).


0
2. Section 424.506 is amended by revising paragraphs (b) and (c)(1) to 
read as follows:


Sec.  424.506  National Provider Identifier (NPI) on all enrollment 
applications and claims.

* * * * *
    (b) Enrollment requirements. (1) A provider or a supplier that is 
eligible for an NPI must do the following:
    (i) Report its NPI on its Medicare enrollment application.
    (ii) If the provider or supplier was in the Medicare program before 
obtaining an NPI and the provider's or the supplier's NPI is not in the 
provider's or supplier's Medicare enrollment record, the provider or 
supplier must update its Medicare enrollment record by submitting its 
NPI using either of the following:
    (A) The applicable paper CMS-855 form.
    (B) Internet-based PECOS.
    (2) A physician or eligible professional who has validly opted-out 
of the Medicare program is not required to submit a Medicare enrollment 
application for any reason, including to order or certify.
    (c) * * *
    (1) A provider or supplier that is enrolled in Medicare and submits 
a paper or an electronic claim must include its NPI and the NPI(s) of 
any other provider(s) or supplier(s) identified on the claim.
* * * * *

0
3. Section 424.507 is revised to read as follows:


Sec.  424.507  Ordering covered items and services for Medicare 
beneficiaries.

    (a) Conditions for payment of claims for ordered covered imaging 
and clinical laboratory services and items of durable medical 
equipment, prosthetics, orthotics, and supplies (DMEPOS).
    (1) Ordered covered imaging, clinical laboratory services, and 
DMEPOS item claims. To receive payment for ordered imaging, clinical 
laboratory services, and DMEPOS items (excluding home health services 
described in Sec.  424.507(b), and Part B drugs), a provider or 
supplier must meet all of the following requirements:
    (i) The ordered covered imaging, clinical laboratory services, and 
DMEPOS items (excluding home health services described in paragraph (b) 
of this section, and Part B drugs) must have been ordered by a 
physician or, when permitted, an eligible professional (as defined in 
Sec.  424.506(a) of this part).
    (ii) The claim from the provider or supplier must contain the legal 
name and the National Provider Identifier (NPI) of the physician or the 
eligible professional (as defined in Sec.  424.506(a) of this part) who 
ordered the item or service.
    (iii) The physician or, when permitted, other eligible 
professional, as defined in Sec.  424.506(a), who ordered the item or 
service must--
    (A) Be identified by his or her legal name;
    (B) Be identified by his or her NPI; and
    (C)(1) Be enrolled in Medicare in an approved status; or
    (2) Have validly opted-out of the Medicare program.
    (iv) If the item or service is ordered by--
    (A) An unlicensed resident (as defined in Sec.  413.75), or by a 
non-enrolled licensed resident (as defined in Sec.  413.75), the claim 
must identify a teaching physician, who must be enrolled in Medicare in 
an approved status, as follows:
    (1) As the ordering supplier.
    (2) By his or her legal name.
    (3) By his/her NPI.
    (B) A licensed resident (as defined in Sec.  413.75), he or she 
must have a provisional license or be otherwise permitted by State law, 
where the resident is enrolled in an approved graduate medical 
education program, to practice or order such items and services, the 
claim must identify by legal name and NPI the--
    (1) Resident, who is enrolled in Medicare in an approved status to 
order; or
    (2) Teaching physician, who is enrolled in Medicare in an approved 
status.

[[Page 25318]]

    (2) Part B beneficiary claims. To receive payment for ordered 
covered items and services listed at Sec.  424.507(a), a beneficiary's 
claim must meet all of the following requirements:
    (i) The physician or, when permitted, other eligible professional 
(as defined Sec.  424.506(a)) who ordered the item or service must--
    (A) Be identified by his or her legal name; and
    (B)(1) Be enrolled in Medicare in an approved status; or
    (2) Have validly opted out of the Medicare program.
    (ii) If the item or service is ordered by--
    (A) An unlicensed resident (as defined in Sec.  413.75) or a non-
enrolled licensed resident, (as defined in Sec.  413.75) the claim must 
identify a teaching physician, who must be enrolled in Medicare in an 
approved status as follows:
    (1) As the ordering supplier.
    (2) By his or her legal name.
    (B) A licensed resident (as defined in Sec.  413.75), he or she 
must have a provisional license or are otherwise permitted by State 
law, where the resident is enrolled in an approved graduate medical 
education program, to practice or to order such items and services, the 
claim must identify by legal name the--
    (1) Resident, who is enrolled in Medicare in an approved status to 
order; or
    (2) Teaching physician, who is enrolled in Medicare in an approved 
status.
    (b) Conditions for payment of claims for covered home health 
services. To receive payment for covered Part A or Part B home health 
services, a provider's home health services claim must meet all of the 
following requirements:
    (1) The ordering/certifying physician must meet all of the 
following requirements:
    (i) Be identified by his or her legal name.
    (ii) Be identified by his or her NPI.
    (iii)(A) Be enrolled in Medicare in an approved status; or
    (B) Have validly opted-out of the Medicare program.
    (2) If the services were ordered/certified by--
    (i) An unlicensed resident, as defined in Sec.  413.75, or by a 
non-enrolled licensed resident, as defined in Sec.  413.75, the claim 
must identify a teaching physician who must be enrolled in Medicare in 
an approved status--
    (A) As the ordering/certifying supplier;
    (B) By his or her legal name; and
    (C) By his or her NPI.
    (ii) A licensed resident (as defined in Sec.  413.75), he or she 
must have a provisional license or are otherwise permitted by State 
law, where the resident is enrolled in an approved graduate medical 
education program, to practice or to order/certify such items and 
services, the claim must identify by legal name and NPI the--
    (A) Resident, who is enrolled in Medicare in an approved status to 
order; or
    (B) Teaching physician, who is enrolled in Medicare in an approved 
status.
    (c) Denial of provider- or supplier-submitted claims. 
Notwithstanding Sec.  424.506(c)(3), a Medicare contractor denies a 
claim from a provider or a supplier for covered items and services 
described in paragraph (a) or (b) of this section if the claim does not 
meet the requirements of paragraphs (a)(1) and (b) of this section, 
respectively.
    (d) Denial of beneficiary-submitted claims. A Medicare contractor 
denies a claim from a Medicare beneficiary for covered items or 
services described in paragraphs (a) and (b) of this section if the 
claim does not meet the requirements of paragraph (a)(2) of this 
section.

0
4. Section 424.516 is amended by revising paragraphs (f)(1) and (2) to 
read as follows:


Sec.  424.516  Additional provider and supplier requirements for 
enrolling and maintaining active enrollment status in the Medicare 
program.

* * * * *
    (f) * * *
    (1)(i) A provider or a supplier that furnishes covered ordered 
items of DMEPOS, clinical laboratory, imaging services, or covered 
ordered/certified home health services is required to--
    (A) Maintain documentation (as described in paragraph (f)(1)(ii) of 
this section) for 7 years from the date of service; and
    (B) Upon the request of CMS or a Medicare contractor, to provide 
access to that documentation (as described in paragraph (f)(1)(ii) of 
this section).
    (ii) The documentation includes written and electronic documents 
(including the NPI of the physician who ordered/certified the home 
health services and the NPI of the physician or, when permitted, other 
eligible professional who ordered items of DMEPOS or clinical 
laboratory or imaging services) relating to written orders and 
certifications and requests for payments for items of DMEPOS and 
clinical laboratory, imaging, and home health services.
    (2)(i) A physician who orders/certifies home health services and 
the physician or, when permitted, other eligible professional who 
orders items of DMEPOS or clinical laboratory or imaging services is 
required to--
    (A) Maintain documentation (as described in paragraph (f)(2)(ii) of 
this section) for 7 years from the date of the service; and
    (B) Upon request of CMS or a Medicare contractor, to provide access 
to that documentation (as described in paragraph (f)(2)(ii) of this 
section).
    (ii) The documentation includes written and electronic documents 
(including the NPI of the physician who ordered/certified the home 
health services and the NPI of the physician or, when permitted, other 
eligible professional who ordered the items of DMEPOS or the clinical 
laboratory or imaging services) relating to written orders or 
certifications or requests for payments for items of DMEPOS and 
clinical laboratory, imaging, and home health services.


Sec.  424.535  [Amended]

0
5. In Sec.  424.535, paragraph (a)(10)(i) is amended by removing the 
parenthetical phrase ``(as described in section 1866(j) of the Act)''.

    Authority: (Catalog of Federal Domestic Assistance Program No. 
93.773, Medicare--Hospital Insurance; Program No. 93.774, Medicare--
Supplementary Medical Insurance Program; and Program No. 93.778, 
Medical Assistance Program)

    Dated: January 18, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: March 29, 2012.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2012-9994 Filed 4-24-12; 8:45 am]
BILLING CODE 4120-01-P