[Federal Register Volume 78, Number 147 (Wednesday, July 31, 2013)]
[Notices]
[Pages 46339-46347]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18394]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-6048-N]
Medicare, Medicaid, and Children's Health Insurance Programs:
Announcement of Temporary Moratoria on Enrollment of Ambulances
Suppliers and Providers and Home Health Agencies in Designated
Geographic Areas
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the imposition of a temporary moratorium
on the enrollment of home health agencies in Miami-Dade and Cook
counties as well as selected surrounding
[[Page 46340]]
areas, and on the enrollment of new ambulance suppliers and providers
in Harris County and surrounding counties to prevent and combat fraud,
waste, and abuse.
DATES: Effective Date: July 30, 2013.
FOR FURTHER INFORMATION CONTACT: August Nemec, (410) 786-0612.
News media representatives must contact our Public Affairs Office
at (202) 690-6145 or email them at [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
A. CMS' Authority To Impose Temporary Enrollment Moratoria
Under 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),
the Congress provided the Secretary with new tools and resources to
combat fraud, waste, and abuse in Medicare, Medicaid, and the
Children's Health Insurance Program (CHIP). Section 6401(a) of the
Affordable Care Act added a new section 1866(j)(7) to the Social
Security Act (the Act) to provide the Secretary with authority to
impose a temporary moratorium on the enrollment of new fee-for-service
(FFS) Medicare, Medicaid or CHIP providers and suppliers, including
categories of providers and suppliers, if the Secretary determines a
moratorium is necessary to prevent or combat fraud, waste, or abuse
under these programs. Section 6401(b) of the Affordable Care Act added
specific moratorium language applicable to Medicaid at section
1902(kk)(4) of the Act, requiring States to comply with any moratorium
imposed by the Secretary unless the state later determines that the
imposition of such moratorium would adversely impact Medicaid
beneficiaries' access to care. Section 6401(c) of the Affordable Care
Act amended section 2107(e)(1) of the Act to provide that all of the
Medicaid provisions in sections 1902(a)(77) and 1902(kk) are also
applicable to CHIP.
In the February 2, 2011 Federal Register (76 FR 5862), CMS
published a final rule with comment period 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,'' which implemented section 1866(j)(7) of the Act by
establishing new regulations at 42 CFR 424.570. Under Sec.
424.570(a)(2)(i) and (iv), CMS, or CMS in consultation with the
Department of Health and Human Services Office of Inspector General
(HHS-OIG) or the Department of Justice (DOJ), or both, may impose a
temporary moratorium on newly enrolling Medicare providers and
suppliers if CMS determines that there is a significant potential for
fraud, waste, or abuse with respect to a particular provider or
supplier type or particular geographic areas or both. At Sec.
424.570(a)(1)(ii), CMS stated that it would announce a temporary
moratorium in a Federal Register notice that includes the rationale for
the imposition of the temporary enrollment moratorium. The rationale
will include the factors for imposing a moratorium on a case by case
basis. This notice fulfills that requirement.
In accordance with section 1866(j)(7)(B) of the Act, there is no
judicial review under sections 1869 and 1878 of the Act, or otherwise,
of the decision to impose a temporary enrollment moratorium. However, a
provider or supplier may use the existing appeal procedures at 42 CFR
Part 498 to administratively appeal a denial of billing privileges
based on the imposition of a temporary moratorium, though the scope of
any such appeal would be limited solely to assessing whether the
temporary moratorium applies to the provider or supplier appealing the
denial. Under Sec. 424.570(c), CMS denies the enrollment application
of a provider or supplier if the provider or supplier is subject to a
moratorium. If the provider or supplier was required to pay an
application fee, the application fee will be refunded if the
application was denied as a result of the imposition of a temporary
moratorium (Sec. 424.514(d)(2)(v)(C)).
B. Determination of the Need for a Moratorium
In imposing these enrollment moratoria, CMS considered both
qualitative and quantitative factors suggesting a high risk of fraud,
waste, or abuse. CMS relied on its and law enforcement's longstanding
experience with ongoing and emerging fraud trends and activities
through civil, criminal, and administrative investigations and
prosecutions. Our determination of high risk areas of fraud in these
provider and supplier types and geographic areas was then confirmed by
our data analysis, which relied on factors CMS identified as strong
indicators of fraud risk.
Because fraud schemes are highly migratory and transitory in
nature, many of our program integrity authorities and anti-fraud
activities are designed to allow the agency to adapt to emerging fraud
in different areas. The laws and regulations governing our moratoria
authority give us flexibility to use any and all relevant criteria for
future moratoria and CMS retains the authority to impose any future
moratorium on a case-by-case basis.
1. Application to Medicaid and the Children's Health Insurance Program
(CHIP)
The February 2, 2011 final rule also implemented section
1902(kk)(4) of the Act, establishing new Medicaid regulations at Sec.
455.470. Under Sec. 455.470(a)(1) through (3), the Secretary \1\ may
impose a temporary moratorium, in accordance with Sec. 424.570, on the
enrollment of new providers or provider types after consulting with any
affected State Medicaid agencies. The State Medicaid agency will impose
a temporary moratorium on the enrollment of new providers or provider
types identified by the Secretary as posing an increased risk to the
Medicaid program unless the state later determines that the imposition
of a moratorium would adversely affect Medicaid beneficiaries' access
to medical assistance and so notifies the Secretary. The final rule
also implemented section 2107(e)(1)(D) of the Act by providing, at
Sec. 457.990 of the regulations, that all of the provisions that apply
to Medicaid under sections 1902(a)(77) and 1902(kk) of the Act, as well
as the implementing regulations, also apply to CHIP.
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\1\ The Secretary has delegated to CMS authority to administer
Titles XVIII, XIX, and XXI of the Act. For more information see the
September 6, 1984 Federal Register (49 FR 35247) and the December
16, 1997 Federal Register (62 FR 65813).
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Section 1866(j)(7) of the Act authorizes imposition of a temporary
enrollment moratorium for Medicare, Medicaid and/or CHIP, ``if the
Secretary determines such moratorium is necessary to prevent or combat
fraud, waste, or abuse under either such program.'' While there may be
exceptions, CMS believes that generally, a category of providers or
suppliers that poses a risk to the Medicare program also poses a
similar risk to Medicaid and CHIP. Many of the new anti-fraud
provisions in the Affordable Care Act reflect this concept of
``reciprocal risk'' in which a provider that poses a risk to one
program poses a risk to the other programs. For example, section 6501
of the Affordable Care Act titled, ``Termination of Provider
Participation under Medicaid if Terminated Under Medicare or Other
State Plan,'' which amends section 1902(a)(39) of the Act, requires
State Medicaid agencies to terminate the participation of any
individual or entity if such individual
[[Page 46341]]
or entity is terminated under Medicare or any other State Medicaid
plan.\2\ Additional provisions in title VI, Subtitles E and F of the
Affordable Care Act also support the determination that categories of
providers and suppliers pose the same risk to Medicaid as to Medicare.
Section 6401(a) of the Affordable Care Act required us to establish
levels of screening for categories of providers and suppliers based on
the risk of fraud, waste and abuse determined by the Secretary. Section
6401(b) of the Affordable Care Act required State Medicaid agencies to
screen providers and suppliers based on the same levels established for
the Medicare program. This reciprocal concept is also reflected in the
Medicare moratorium regulations at Sec. 424.570(a)(2)(ii) and (iii),
which permit CMS to impose a Medicare moratorium based solely on a
state imposing a Medicaid moratorium. Therefore, CMS has determined
that there is a reasonable basis for concluding that a category of
providers or suppliers that poses a risk to Medicare also poses a
similar risk to Medicaid and CHIP, and that a moratorium in all of
these programs is necessary to effectively combat this risk.
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\2\ Although section 6501 of Affordable Care Act does not
specifically state that individuals or entities that have been
terminated under Medicare or Medicaid must also be terminated from
CHIP, we have required CHIP, through federal regulation, to take
similar action regarding termination of a provider that is also
terminated or had its billing privileges revoked under Medicare or
any State Medicaid plan.
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2. Consultation With Law Enforcement
In consultation with the HHS-OIG and the Department of Justice
(DOJ), CMS identified two provider and supplier types in three
geographic areas that warrant temporary enrollment moratoria. CMS
reached this determination based in part on the federal government's
experience with the Health Care Fraud Prevention and Enforcement Action
Team (HEAT), a joint effort between DOJ and HHS to prevent fraud, waste
and abuse in the Medicare and Medicaid programs. The Medicare Fraud
Strike Force teams are a key component of HEAT and operate in nine
cities nationwide.\3\ Each Medicare Fraud Strike Force team combines
the programmatic and administrative action capabilities of CMS, the
analytic and investigative resources of the FBI and HHS-OIG, and the
prosecutorial resources of DOJ's Criminal Division's Fraud Section and
the United States Attorneys Offices. The Strike Force teams use
advanced data analysis techniques to identify high billing levels in
health care fraud hotspots so that interagency teams can target
emerging or migrating schemes along with chronic fraud by criminals
masquerading as health care providers or suppliers. The locations of
the Strike Force teams are identified by analyzing where Medicare
claims data reveal aberrant billing patterns and intelligence data
analysis suggests that fraud may be occurring.
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\3\ The Medicare Strike Force operates in Miami, FL; Los
Angeles, CA: Detroit, MI; Houston, TX; Brooklyn, NY; Baton Rouge,
LA; Tampa, FL; Chicago, IL; and Dallas, TX.
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It is important to note that all of the moratoria target areas
identified in this notice--Miami, Houston, and Chicago--are Strike
Force cities, and each of these areas has experienced intense,
sustained criminal prosecution activity with respect to the provider
and supplier types subject to these moratoria. In addition, CMS's own
administrative investigations and oversight have been equally intense
in these areas. Through CMS's own anti-fraud activities, in addition to
the federal government's coordinated HEAT efforts, CMS has determined
that home health agencies in Miami and Chicago and the surrounding
areas, and ambulance companies in Houston and the surrounding area pose
a significant risk of fraudulent activity.
As a part of ongoing antifraud efforts, the HHS-OIG and CMS have
learned that some fraud schemes are viral, meaning they replicate
rapidly within communities, and that health care fraud also migrates--
as law enforcement cracks down on a particular scheme, the criminals
may redesign the scheme or relocate to a new geographic area.\4\ As a
result, CMS has determined that it is necessary to extend these
moratoria beyond the target counties to bordering counties, unless
otherwise noted, to prevent potentially fraudulent providers and
suppliers from enrolling their practices in a neighboring county with
the intent of providing services in a moratorium-targeted area. CMS
will monitor the surrounding counties, as well as the entirety of each
affected state, by reviewing claims utilization and activity, for
indicia of activity designed to evade these moratoria. Throughout the
duration of these moratoria, CMS will continue to consult with law
enforcement, to assess and address the spread of any significant risk
of fraud beyond the moratorium areas.
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\4\ Testimony of the Inspector General, ``Preventing Health Care
Fraud: New Tools and Approaches to Combat Old Challenges.'' See
http://www.hhs.gov/asl/testify/2011/03/t20110302i.html.
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3. Data Analysis
The scope of the data analysis included reviewing Medicare and
Medicaid enrollment and claims data. CMS identified all counties across
the nation with 200,000 or more Medicare beneficiaries (``comparison
counties''), and analyzed certain key metrics which we believe to be
strong indications of potential fraud risk. These metrics included
factors such as: the number of providers or suppliers per 10,000
Medicare FFS beneficiaries; the compounded annual growth rate in
provider or supplier enrollments; and the ``churn rate''--the rate of
providers entering and exiting the program--as measured by the percent
of the target provider or supplier community continuously receiving
Medicare payments since 2008. We know that when some providers and
suppliers incur a substantial debt to Medicare, they then exit the
Medicare program or shut down operations altogether, and attempt to re-
enroll through another vehicle or under a new business identity. The
moratoria are intended to curtail this churning of providers to new
enrollments. CMS also reviewed the 2012 FFS Medicare payments to
providers and suppliers in the target areas based on the average amount
spent per beneficiary who used services furnished by the targeted
provider and supplier types.
The three areas subject to the temporary enrollment moratoria are
the only counties that contain Strike Force cities that also
consistently ranked near the top for the aforementioned metrics among
counties with at least 200,000 Medicare beneficiaries in 2012. This
analysis helps confirm the federal government's previously described
experience in its HEAT and Strike Force activities, and provides
further support for CMS' determination that the moratoria are
appropriate in these areas. See Tables 1 and 2 of this notice for a
summary of the moratoria areas and some of the metrics examined.
4. Beneficiary Access to Care
Beneficiary access to care in Medicare, Medicaid and CHIP is of
critical importance to CMS and our state partners, and CMS carefully
evaluated access for the three target moratoria areas. To determine if
the moratoria would create an access to care issue for Medicaid and
CHIP beneficiaries in the targeted areas and surrounding counties, CMS
consulted with the appropriate State Medicaid Agencies and State
Departments of Emergency Medical Services. All of our state partners
were supportive of our analysis and
[[Page 46342]]
proposals, and together with CMS, have determined that these moratoria
will not create access of care issues for Medicaid or CHIP
beneficiaries.
In order to determine if the moratoria would create an access to
care issue for Medicare beneficiaries, CMS reviewed its own data
regarding the number of providers and suppliers in the target and
surrounding counties, and confirmed that there are no reports to CMS of
access to care issues for these provider and supplier types. CMS also
reviewed recent reports by the Medicare Payment Advisory Commission
(MedPAC), an independent Congressional agency established by the
Balanced Budget Act of 1997 to advise Congress on issues affecting the
Medicare program. MedPAC has a Congressional mandate to monitor
beneficiaries' access to care and publishes its review of Medicare
expenditures annually. Based on our analysis of each target market and
review of MedPAC's March 2013 report (finding no access issues to
Medicare home health services \5\), and its June 2013 report (finding
no access issues to Medicare ambulance services \6\), CMS does not
believe these moratoria will cause an access to care issue for Medicare
beneficiaries.
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\5\ MedPAC, March 2013, ``Report to Congress: Medicare Payment
Policy, Chapter 9 home health services.'' http://www.medpac.gov/documents/Mar13_entirereport.pdf.
\6\ MedPAC, June 2013, ``Chapter 7, Mandated Report: Medicare
payment for ambulance services.'' http://www.medpac.gov/chapters/Jun13_Ch07.pdf
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In the March report, MedPAC also recommended that CMS use its
authorities under current law to examine providers with aberrant
patterns of utilization for possible fraud and abuse. With regard to
home health services, MedPAC stated that a moratorium on the enrollment
of new HHAs would prevent new agencies from entering markets that may
already be saturated.\7\ CMS will continuously monitor for reductions
in the number of HHA providers and Part B ambulance suppliers, as well
as beneficiary complaints, and will continue consultation with the
states, for any indication of a potential access to care issue.
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\7\ MedPAC, March 2013, ``Report to Congress: Medicare Payment
Policy, Chapter 9 home health services.'' http://www.medpac.gov/documents/Mar13_entirereport.pdf.
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5. When a Temporary Moratorium Does Not Apply
Under Sec. 424.570(a)(1)(iii), a temporary moratorium does not
apply to changes in practice locations, changes to provider or supplier
information such as phone number, address, or changes in ownership
(except changes in ownership of HHAs that require initial enrollments
under Sec. 424.550). Also, in accordance with Sec. 424.570(a)(1)(iv),
the moratorium does not apply to an enrollment application that a CMS
contractor has already approved, but has not yet entered into the
Provider Enrollment Chain and Ownership System (PECOS) at the time the
moratorium is imposed.
6. Lifting a Temporary Moratorium
In accordance with Sec. 424.570(b), these temporary enrollment
moratoria will remain in effect for 6 months. If CMS deems it
necessary, the moratoria may be extended in 6-month increments. CMS
will evaluate whether to extend or lift the moratoria before the end of
the initial 6-month period and, if applicable, any subsequent
moratorium periods. If one or more of the moratoria are extended, CMS
will publish notice of such extensions in the Federal Register.
As provided in Sec. 424.570(d), CMS may lift a moratorium at any
time if the President declares an area a disaster under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act, circumstances
warranting the imposition of a moratorium have abated, the Secretary
has declared a public health emergency, or in the judgment of the
Secretary, the moratorium is no longer needed.
Once a moratorium is lifted, provider or supplier types that were
unable to enroll because of the moratorium will be designated to CMS'
high screening level under Sec. 424.518(c)(3)(iii) and Sec.
455.450(e)(2) for 6 months from the date the moratorium was lifted.
II. Home Health Moratoria--Geographic Areas
Under its authority at Sec. 424.570(a)(2)(i) and (a)(2)(iv), CMS
is implementing a temporary moratorium on the Medicare enrollment of
HHAs in the geographic areas discussed in this section. Under
regulations at Sec. 455.470 and Sec. 457.990, this moratorium will
also apply to the enrollment of HHAs in Medicaid and CHIP.
A. Moratorium on Enrollment of Home Health Agencies in the Florida
Counties of Miami-Dade and Monroe
CMS has determined that there are factors in place that warrant the
imposition of a temporary Medicare enrollment moratorium for HHAs in
Miami-Dade County (which contains the City of Miami), as well as
extending the moratorium to one bordering county--Monroe. Florida has
divided the state into 11 home health ``licensing districts,'' that
prevent a home health agency from providing services outside its own
licensing district. Monroe is the only bordering county within the same
licensing district as Miami-Dade. CMS has determined that it is
necessary to extend this moratorium to Monroe to prevent potentially
fraudulent HHAs from enrolling their practices in a neighboring county
to avoid the moratorium. In this instance, it is not necessary to
extend the moratorium to the other counties that border Miami-Dade
because of the state's home health licensing rules that prevent
providers enrolling in these counties from serving beneficiaries in
Miami-Dade. CMS has also consulted with the State Medicaid Agency and
reviewed available data, and determined that the moratorium will also
apply to Medicaid and CHIP.
Beginning on the effective date of this notice, no new HHAs will be
enrolled into Medicare, Medicaid or CHIP with a practice location in
the Florida counties of Miami-Dade or Monroe, unless their enrollment
application has already been approved, but not yet entered into PECOS
or the State Enrollment System at the time the moratorium is imposed.
1. Consultation With Law Enforcement
Consistent with Sec. 424.570(a)(2)(iv), CMS has consulted with
both the HHS-OIG and DOJ regarding the imposition of a moratorium on
new HHAs in Miami-Dade and Monroe counties. Both HHS-OIG and DOJ agree
that a significant potential for fraud, waste, or abuse exists with
respect to HHAs in the affected geographic areas. The HHS-OIG has
previously identified Miami-Dade as an HHA fraud-prone area because it
is a Strike Force location where individuals have been charged with
billing potentially fraudulent home health services, and is located in
a state that had a high percentage of HHAs with questionable billing
identified by the HHS-OIG.\8\ There has also been considerable Strike
Force and law enforcement activity in this area of the country. Since
2011, the U.S. Attorney's Office for the Southern District of Florida
has filed 41 home health fraud cases and charged 98 individuals that
have resulted in 85 guilty pleas and 8 trial convictions. For example,
in May 2013, a patient recruiter for a Miami
[[Page 46343]]
health care company was sentenced to serve 37 months in prison for his
participation in a $20 million Medicare fraud scheme.\9\ In February
2013, the owners and operators of two Miami health care agencies were
sentenced to 9 years and more than 4 years in prison, respectively, and
ordered to pay millions in restitution for their participation in a $48
million Medicare fraud scheme that billed for unnecessary home health
care and therapy services.\10\ Also, in August 2012, the owner and
operator of a Miami health care agency pleaded guilty for his
participation in a $42 million Medicare home health fraud scheme.\11\
In April 2012, the U.S. District Court in Miami sentenced the three
owners of a Miami home health care agency to 120 months, 87 months, and
87 months, respectively for their participation in a $60 million
Medicare home health care fraud scheme. CMS program integrity
contractors are also actively investigating home health agencies in
this area.
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\8\ Office of Inspector General Report, ``CMS and Contractor
Oversight of Home Health Agencies.'' (OEI-04-11-00220). See https://oig.hhs.gov/oei/reports/oei-04-11-00220.pdf. The HHS-OIG defines an
``HHA fraud-prone area'' as those that are--(1) Strike Force Cities;
(2) Strike Force cities where individuals have been charged with
billing potentially fraudulent home health services; and (3) located
in a state that had a high percentage of HHAs with questionable
billing identified by the HHS-OIG.
\9\ Department of Justice, ``Patient Recruiter of Miami Home
Health Company Sentenced to 37 Months in Prison for Role in $20
Million Health Care Fraud Scheme.'' See http://www.justice.gov/opa/pr/2013/May/13-crm-510.html.
\10\ Department of Justice, ``Owners of Miami Home Health
Companies Sentenced to Prison in $48 million Health Care Fraud
Scheme.'' See http://www.justice.gov/opa/pr/2013/February/13-crm-243.html.
\11\ Department of Health and Human Services and Department of
Justice, ``Health Care Fraud and Abuse Control Program Annual Report
for Fiscal Year 2012.'' See http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2012.pdf.
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2. Data Analysis
a. Medicare Data Analysis
CMS' data show that in 2012, there were 26 U.S. counties
nationally, including Miami-Dade, with at least 200,000 Medicare
beneficiaries. CMS excluded Miami-Dade County, and used the remaining
25 counties as ``comparison counties.'' In the comparison counties,
there was an average of 1.8 HHAs per 10,000 Medicare FFS
beneficiaries.\12\ In Miami-Dade County, there were 37.6 HHAs per
10,000 Medicare FFS beneficiaries. This means that the ratio of HHAs to
Medicare FFS beneficiaries was 1,960 percent greater in Miami-Dade
County than in the comparison counties. Miami-Dade County had the
highest ratio of HHAs to Medicare FFS beneficiaries compared to the
comparison counties.
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\12\ Throughout this notice, the ``comparison counties'' data
also excludes New York County, New York because of the unique local
conditions, such as that county's high density, compact geography,
and high real estate costs, very few HHAs that serve the large
number of beneficiaries in the county are located within the county.
We believe this outlier would have biased the average to be
artificially low, and could potentially over-represent the
difference in ratios between the target county and the comparison
counties.
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CMS' data show that from 2008 through 2012, the total number of
operational HHAs in Miami-Dade County increased from 385 to 662. The
compounded annual growth rate of HHAs in Miami-Dade County is 15
percent, more than double the national average of 7 percent. In
addition, of the 662 HHAs active in Miami-Dade County in 2012, 56
percent of these HHAs have not been billing continuously--a strong
indicator of churn--since 2008, while only 32 percent of HHAs in 2012
had not been continuously billing since 2008 in the average comparison
county.
CMS' data show that in 2012, HHAs in Miami-Dade County were
receiving payments of $10,287 per average Medicare home health user per
year, compared to HHAs in the comparison counties, which received
payments of $5,783. Payments to HHAs in Miami-Dade were 77 percent
greater than the average for the comparison counties. Miami-Dade had
the highest payments to HHAs compared to the comparison counties. High
outlier payments to Miami-Dade home health agencies have persisted for
several years despite CMS' efforts to limit outlier payments through
policy changes. In 2010, CMS implemented a home health agency-level cap
on outlier payments so that, in any given year, an individual HHA would
receive no more than 10 percent of its total home health prospective
payment system (HH PPS) payments in outlier payments. Before the policy
change, HHAs in Miami-Dade County were receiving average annual
Medicare payments per home health beneficiary that were nearly 400
percent greater than the comparison counties in 2008 ($20,801 compared
to $5,935). While this policy has been successful in reducing costs in
Miami-Dade, CMS believes more needs to be done.
b. Medicaid Data Analysis
As discussed previously in section I.B.1. of this notice, CMS
believes that generally, a category of providers or suppliers that
poses a risk to the Medicare program also poses a similar risk to
Medicaid and CHIP. In addition, the data also show a significantly
higher concentration of home health providers per Medicaid
beneficiaries in Miami-Dade County than elsewhere in the state. CMS
compared Miami-Dade against the entire state because Medicaid policies
are not uniform across different states. Specifically, in 2010,\13\
Miami-Dade County, which is home to just 16 percent of all Florida
Medicaid home health beneficiaries, is nevertheless home to 45 percent
of all the home health providers in the state. This disproportionate
supply in Miami-Dade County, compared to the rest of the state, is
reflected in the number of providers per Medicaid beneficiary: Miami-
Dade County has 96 home health providers per 1,000 Medicaid
beneficiaries--a provider density rate close to 3 times the Florida-
wide provider density of 35 home health providers per 1,000 Medicaid
beneficiaries.
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\13\ CMS used 2010 data from the Medicaid Statistical
Information System (MSIS) because it was the most recent data
available for all three states in this notice.
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2. Beneficiary Access to Care
Based upon CMS' consultation with the State Medicaid agency, CMS
has concluded that imposing this temporary moratorium will not create
an access to care issue for Medicaid or CHIP beneficiaries in Miami-
Dade or the surrounding counties at this time. Accordingly, under Sec.
455.470 and Sec. 457.990, this moratorium will apply to the enrollment
of HHAs in Medicaid and CHIP, unless the State later determines that
imposition of the moratorium would adversely impact beneficiary access
to care and so notifies CMS under Sec. 455.470(a)(3).
CMS reviewed Medicare data for the target and surrounding counties,
and found that there are no problems with access to home health
agencies in Miami-Dade or surrounding counties. In addition, as
described in section I.B.4. of this notice, MedPAC has not reported any
problems with Medicare beneficiary access to home health care. While
CMS has determined there are no access to care issues for Medicare
beneficiaries, nevertheless, the agency will continuously monitor these
areas under a moratorium for changes such as an uptick in beneficiary
complaints to ensure there is no access to care issue.
As a result of law enforcement consultation and consideration of
the factors described previously, CMS has determined that a temporary
enrollment moratorium is needed to combat fraud in this area.
B. Moratorium on Enrollment of Home Health Agencies in the Illinois
Counties of Cook, DuPage, Kane, Lake, McHenry, and Will
CMS has determined that there are factors in place to warrant the
imposition of a temporary enrollment moratorium for HHAs in Cook County
(which contains the City of Chicago).
[[Page 46344]]
CMS has determined that it is necessary to extend this moratorium to
the surrounding counties to prevent potentially fraudulent HHAs from
enrolling their practices in a neighboring county to avoid the
moratorium. To this end, CMS is extending the moratorium to five
surrounding counties--DuPage, Kane, Lake, McHenry, and Will.
Beginning on the effective date of this notice, no new HHAs will be
enrolled into Medicare, Medicaid or CHIP with a practice location in
Illinois counties of Cook, DuPage, Kane, Lake, McHenry, and Will,
unless their enrollment application has already been approved, but not
yet entered into PECOS or the State Enrollment System at the time the
moratorium is imposed.
1. Consultation With Law Enforcement
Consistent with Sec. 424.570(a)(2)(iv), CMS has consulted with
both the HHS-OIG and DOJ regarding the imposition of a moratorium on
new HHAs in Cook County and the surrounding counties. Both HHS-OIG and
DOJ agree that a significant potential for fraud, waste, or abuse
exists with respect to HHAs in the affected geographic areas. HHS-OIG
has identified Chicago as a Strike Force location where individuals
have been charged with billing potentially fraudulent home health
services.\14\ Since July 2011, the U.S. Attorney's Office for the
Northern District of Illinois has filed approximately 11 home health
fraud cases and charged 45 individuals that have resulted in 15 trial
convictions. For example, in May 2013, two individuals were charged in
separate home health fraud schemes in Chicago as part of a Medicare
Fraud Strike Force operation.\15\ In December 2012, the co-owner of a
former home health care business was sentenced to 10 years in federal
prison for defrauding Medicare of more than $2.9 million by submitting
tens of thousands of false claims annually that misrepresented medical
services provided to beneficiaries.\16\ In August 2012, a home health
care agency in suburban Chicago, two nurses who are part owners of the
company and a third nurse affiliated with them, along with two
marketers, were indicted on Federal charges for allegedly participating
in a conspiracy to pay and receive kickbacks in exchange for the
referral of Medicare patients for home health care services.\17\
Additionally, CMS program integrity contractors are also actively
investigating home health agencies in this area.
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\14\ Office of Inspector General Report, ``CMS and Contractor
Oversight of Home Health Agencies.'' (OEI-04-11-00220). See https://oig.hhs.gov/oei/reports/oei-04-11-00220.pdf.
\15\ Federal Bureau of Investigation, ``Federal Medicare Fraud
Strike Force Charges Chicago-Area Defendants with Defrauding
Medicare and Other Health Insurers.'' See http://www.fbi.gov/chicago/press-releases/2013/federal-medicare-fraud-strike-force-charges-chicago-area-defendants-with-defrauding-medicare-and-other-health-insurers.
\16\ Department of Justice, ``Owner of Former South Suburban
Home Health Care Business Sentenced to 10 Years in Prison for $2.9
million Medicare Fraud.'' See http://www.justice.gov/usao/iln/pr/chicago/2012/pr1220_01.pdf.
\17\ HHS and DOJ, ``Health Care Fraud and Abuse Control Program
Annual Report for Fiscal Year 2012.'' See http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2012.pdf.
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2. Data Analysis
a. Medicare Data Analysis
CMS' data show that in 2012, there were 26 U.S. counties
nationally, including Cook, with at least 200,000 Medicare
beneficiaries. CMS excluded Cook County, and used the remaining 25
counties as ``comparison counties.'' In 2012, there was an average of
1.8 HHAs per 10,000 Medicare FFS beneficiaries. In Cook County, there
were 7.7 HHAs per 10,000 Medicare FFS beneficiaries. This means that
the ratio of HHAs to Medicare FFS beneficiaries was 327 percent greater
in Cook County than in the comparison counties.
CMS' data show that from 2008 through 2012, the total number of
operational HHAs in Cook County increased from 301 to 509. Cook
County's compounded annual growth rate of HHAs is 14 percent, double
the national average of 7 percent. The number of HHAs in Cook County
was 280 percent greater than the comparison counties in 2012.
CMS' data show that in 2012, HHAs in Cook County were receiving
payments of $6,884 per average Medicare home health user per year,
compared to HHAs in the comparison counties, which received payments of
$5,900. In 2012, payments to HHAs in Cook County were 17 percent higher
than HHAs in the comparison counties. Payments remain some of the
highest nationally as compared to the 25 comparison counties, and CMS
is taking action through this moratoria to address the potential fraud
risk here.
b. Medicaid Data Analysis
As discussed previously in section I.B.1. of this notice, CMS
believes that generally, a category of providers or suppliers that
poses a risk to the Medicare program also poses a similar risk to
Medicaid and CHIP. In addition, the data also show a markedly higher
annual utilization of Medicaid home health services in Cook County
compared to the entire state. CMS compared Cook County against the
entire state because Medicaid policies are not necessarily uniform
across different states. In 2010 \18\ in Cook County, Medicaid spent
$2,721 per home health user annually, or 57 percent more than the
$1,728 per home health user that Medicaid spent in the state as a
whole. On the provider side, the average Medicaid home health provider
in Cook County received total annual payments of $92,356, or 51 percent
more than the $60,991 the average Illinois provider received.
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\18\ The most recent data available.
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3. Beneficiary Access to Care
After consulting with the State Medicaid agency and reviewing
available data, CMS has concluded that imposing this temporary
moratorium will not create an access to care issue for Medicaid or CHIP
beneficiaries in Cook County or the surrounding counties at this time.
Accordingly, under Sec. 455.470 and Sec. 457.990, this moratorium
will apply to the enrollment of HHAs in Medicaid and CHIP, unless the
state later determines that imposition of the moratorium would
adversely impact beneficiary access to care and so notifies us under
Sec. 455.470(a)(3).
CMS reviewed Medicare data for the target and surrounding counties,
and found that there are no problems with access to home health
agencies in Cook County or surrounding counties. In addition, as
described in section I.B.4. of this notice, MedPAC has not reported any
problems with Medicare beneficiary access to home health care. While
CMS has also determined there are no access to care issues for Medicare
beneficiaries, nevertheless, the agency will continuously monitor these
areas under a moratorium for changes, such as any uptick in beneficiary
complaints, to ensure there is no access to care issue.
As a result of the factors and consultation previously described,
CMS has determined that a temporary enrollment moratorium is needed to
combat fraud in this area.
III. Ambulance Moratorium--Geographic Area
Under its authority at Sec. 424.570(a)(2)(i) and (a)(2)(iv), CMS
is implementing a temporary moratorium on the Medicare Part B
enrollment of ambulance suppliers in the geographic area discussed in
this section. The moratorium does not apply to provider-based Medicare
ambulances, which are owned and/or operated by a Medicare provider (or
furnished under arrangement with a provider) such as a
[[Page 46345]]
hospital, critical access hospital, skilled nursing facility,
comprehensive outpatient rehabilitation facility, home health agency,
or hospice program,\19\ and are not required to enroll separately as a
supplier in Medicare Part B.\20\
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\19\ Medicare Claims Processing Manual, CMS Pub. No. 100-04,
Chapter 15, ``Ambulance.'' See http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c15.pdf.
\20\ Medicare Program Integrity Manual, Chapter 15, Medicare
Enrollment. See http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pim83c15.pdf.
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Under regulations at Sec. 455.470 and Sec. 457.990, this
moratorium will also apply to Medicaid and CHIP. In contrast to
Medicare enrollment rules, the Texas Health and Human Service
Commission requires provider-based ambulance companies to enroll as
ambulance providers,\21\ therefore this moratorium applies to both
independent and provider-based ambulances attempting to newly enroll in
Medicaid and CHIP. The moratorium does not apply to air ambulances
attempting to enroll in Medicare, Medicaid or CHIP.
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\21\ Texas Medicaid Provider Procedures Manual, Ambulance
Services Handbook. See http://www.tmhp.com/tmppm/2011/Vol2_Ambulance_Services_Handbook.pdf.
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A. Moratorium on Enrollment of Ambulance Suppliers in the Texas
Counties of Harris, Brazoria, Chambers, Fort Bend, Galveston, Liberty,
Montgomery, and Waller
CMS has determined that the imposition of a temporary enrollment
moratorium for ambulance suppliers that in enroll in Medicare Part B,
and Medicaid or CHIP ambulance providers in Harris County (which
contains the City of Houston) is warranted, and is extending the
moratorium to seven surrounding counties--Brazoria, Chambers, Fort
Bend, Galveston, Liberty, Montgomery, and Waller. CMS has determined
that it is necessary to extend this moratorium to the surrounding
counties to prevent potentially fraudulent ambulance suppliers and
providers from enrolling their practices in a neighboring county to
avoid the moratorium. CMS has also consulted with the State Medicaid
Agency and reviewed available data and has determined that the
moratorium will also apply to Medicaid and CHIP.
Beginning on the effective date of this notice, no new ambulance
suppliers will be enrolled into Medicare Part B, and no new ambulance
providers will be enrolled in Medicaid or CHIP with a practice location
in the Texas Counties of Harris, Brazoria, Chambers, Fort Bend,
Galveston, Liberty, Montgomery, or Waller unless their enrollment
application has already been approved, but not yet entered into PECOS
or the State Enrollment System at the time the moratorium is imposed.
The moratorium does not apply to air ambulance service suppliers and
providers attempting to enroll in Medicare, Medicaid and CHIP.
1. Consultation With Law Enforcement
Consistent with Sec. 424.570(a)(2)(iv), CMS has consulted with
both the HHS-OIG and DOJ regarding the imposition of a moratorium on
new Medicare ambulance suppliers and new Medicaid or CHIP providers in
Harris County and surrounding counties. Both the HHS-OIG and DOJ agree
that a significant potential for fraud, waste or abuse exists with
respect to ambulance companies in the affected geographic areas.
Houston is also a Strike Force location. The HHS-OIG previously found
that the Medicare ambulance transport benefit may be highly vulnerable
to abuse in areas with high utilization, such as Harris County and
surrounding areas.\22\ There has also been considerable Strike Force
and law enforcement activity in this area of the country. Since April
2012, the US Attorney's Office for the Southern District of Texas has
filed 6 cases in Houston alleging that the companies submitted
fraudulent claims totaling over $9.5 million to Medicare for ambulance
transports, and 7 individuals have been charged in connection with
these cases resulting in 3 guilty pleas and 1 trial conviction. For
example, in March 2013, the owner and operator of a Houston-area
ambulance company was convicted by a federal jury in Houston of
multiple counts of health care fraud for submitting false and
fraudulent claims to Medicare.\23\ In October 2012, as part of the
Medicare Fraud Strike Force activity in Houston, the administrator of a
Houston-based ambulance company, pleaded guilty to charges that he
submitted approximately $1,734,550 in fraudulent claims to
Medicare.\24\ In May 2012, the owners and operators of four different
ambulance companies were charged in Houston for billing Medicare for
ambulance rides that were medically unnecessary as part of a nationwide
Medicare Fraud Strike Force takedown.\25\ Additionally, CMS program
integrity contractors are also actively investigating ambulance
suppliers in this area.
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\22\ Office of Inspector General Report, ``Medicare Payments for
Ambulance Transports.'' (OEI-05-02-0590). See http://oig.hhs.gov/oei/reports/oei-05-02-00590.pdf.
\23\ Department of Justice, ``Owner and Operator of Houston-Area
Ambulance Service Convicted in Medicare Fraud Scheme.'' See http://www.justice.gov/opa/pr/2013/March/13-crm-273.html.
\24\ Department of Justice press release, ``Houston Ambulance
Company Pleads Guilty to Fraud,'' See http://www.justice.gov/opa/pr/2012/October/12-crm-1242.html.
\25\ Department of Justice, ``Medicare Fraud Strike Force
Charges 107 individuals for approximately $452 million in False
Billing.'' See http://www.justice.gov/opa/pr/2012/May/12-ag-568.html.
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2. Data Analysis
a. Medicare Data Analysis
CMS' data show that in 2012, there were 26 U.S. counties
nationally, including Harris, with at least 200,000 Medicare
beneficiaries. CMS excluded Harris County, and used the remaining 25
counties as ``comparison counties.'' In the comparison counties in
2012, there was an average of 0.8 ambulance suppliers per 10,000
Medicare FFS beneficiaries. In Harris County, there were 9.5 ambulance
suppliers per 10,000 Medicare FFS beneficiaries. This means that the
ratio of ambulance suppliers to Medicare FFS beneficiaries was 1,065
percent greater in Harris County than in the 25 comparison counties.
Harris County had the highest ratio of ambulance suppliers to Medicare
FFS beneficiaries compared to the comparison counties.
The number of ambulance suppliers in Harris County was also 848
percent greater than the comparison counties in 2012. In addition, of
the 275 ambulance suppliers active in Harris County, 66 percent have
not been continuously billing--a strong indicator of churn--since 2008,
compared to the average comparison county where only 19 percent of
ambulance suppliers in 2012 had not been continuously billing since
2008. Harris County had the highest number of providers not
continuously billing since 2008 compared to all of the comparison
counties.
b. Medicaid Data Analysis
As discussed previously in section I.B.1. of this notice, CMS
believes that generally, a category of providers or suppliers that
poses a risk to the Medicare program also poses a similar risk to
Medicaid and CHIP. In addition, the number of Medicaid ambulance
providers per Medicaid ambulance patient in Harris County is
extraordinarily high, compared to other areas in the state of Texas.
Specifically, Harris County has more than twice the number of ambulance
providers per Medicaid ambulance patient as the rest of Texas. (Harris
County: 19.1 suppliers per 1,000 Medicaid ambulance recipients versus
7.8 suppliers per 1,000 Medicaid ambulance recipients in the rest of
Texas).
[[Page 46346]]
3. Beneficiary Access to Care
After consulting with the Texas State Medicaid agency and the State
Department of Health Emergency Medical Services and reviewing available
data, CMS has concluded that imposing this temporary moratorium will
not create an access to care issue for Medicaid or CHIP beneficiaries
in Harris County or the surrounding counties at this time. Accordingly,
under Sec. 455.470 and Sec. 457.990, this moratorium will apply to
the enrollment of ambulance providers in Medicaid and CHIP, unless the
state later determines that imposition of the moratorium would
adversely impact beneficiary access to care and so notifies CMS under
Sec. 455.470(a)(3).
CMS reviewed Medicare data for the target and surrounding counties,
and found that there are no problems with access to ambulance suppliers
in Harris County or surrounding counties. In addition, as described in
section I.B.4. of this notice, MedPAC has not reported any problems
with Medicare beneficiary access to ambulance services. While CMS has
determined that this temporary moratorium will not create an access to
care issue for Medicare beneficiaries in Harris County or the
surrounding counties at this time, nevertheless, the agency will
continuously monitor these areas under a moratorium for changes, such
as any uptick in beneficiary complaints, to ensure there is no access
to care issue. As a result of the factors and consultation described
previously, CMS has determined that a temporary enrollment moratorium
is needed to combat fraud in this area.
IV. Summary of the Moratoria Areas
CMS is executing its authority under sections 1866(j)(7),
1902(kk)(4), and 2107(e)(1)(D) of the Act to implement a moratorium in
the following counties for these providers and suppliers (see Tables 1
and 2):
Table 1--Home Health Agency Moratoria
----------------------------------------------------------------------------------------------------------------
Ratio of HHAs to
Medicare FFS
beneficiaries as
Target city and state Counties HEAT Strike Force compared to Medicaid data (2010)
city comparison
counties \1\
(2012)
----------------------------------------------------------------------------------------------------------------
Miami, FL.................... Miami-Dade, Monroe... Yes.............. 1,960 percent Ratio of HHAs to
higher. Medicaid
beneficiaries was 3
times higher than
rest of state.
Chicago, IL.................. Cook, Dupage, Kane, Yes.............. 327 percent Spending per home
Lake, McHenry, Will. higher. health users was 57
percent more than
the state as a
whole.
----------------------------------------------------------------------------------------------------------------
\1\ CMS data shows that in 2012, there were 26 U.S. counties nationally, including Miami-Dade County, Florida,
Cook County, Illinois and Harris County, Texas, but excluding New York County, New York, with at least 200,000
Medicare beneficiaries. In the ``comparison counties'' (when either Miami-Dade County or Cook County were
excluded) there was an average of 1.8 HHAs per 10,000 Medicare FFS beneficiaries.
Table 2--Ambulance Moratorium
----------------------------------------------------------------------------------------------------------------
Ratio of
ambulance
suppliers to
HEAT Strike Force Medicare FFS
Target City and State Counties city beneficiaries as Medicaid data (2010)
compared to
comparison \1\
counties (2012)
----------------------------------------------------------------------------------------------------------------
Houston, TX.................. Brazoria, Chambers, Yes.............. 1,065 percent Ratio of ambulance
Fort Bend, higher. providers to
Galveston, Harris, Medicaid
Liberty, Montgomery, beneficiaries was 2
Waller. times higher than
rest of state.
----------------------------------------------------------------------------------------------------------------
\1\ CMS data shows that in 2012, there were 26 U.S. counties nationally, including Miami-Dade County, Florida;
Cook County, Illinois; and Harris County, Texas, but excluding New York County, New York, with at least
200,000 Medicare beneficiaries. In the ``comparison counties,'' which also excluded Harris County, there was
an average of 0.8 ambulance suppliers per 10,000 Medicare FFS beneficiaries.
V. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 35).
VI. Regulatory Impact Statement
We have examined the impact of this notice as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security 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 direct 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 regulatory
actions with economically significant effects ($100 million or more in
any 1 year). This notice will prevent the enrollment of new home health
providers and ambulance suppliers in Medicare, and ambulance providers
in Medicaid and CHIP. Though savings may accrue by denying enrollments,
the monetary amount cannot be quantified. Additionally, CMS is unable
to estimate
[[Page 46347]]
how many providers and suppliers will submit applications for
enrollment during the moratoria, although it anticipates that most
providers and suppliers will not submit applications during the
moratoria period. Therefore, this notice does not reach the economic
threshold and thus is not considered a major action.
The RFA requires agencies to analyze options for regulatory relief
of small entities. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$7.0 million to $35.5 million in any 1 year. Individuals and states are
not included in the definition of a small entity. CMS is not preparing
an analysis for the RFA because it has determined, and the Secretary
certifies, that this notice will not have a significant economic impact
on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if an action 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, CMS defines a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area for Medicare payment regulations and has fewer than
100 beds. CMS is not preparing an analysis for section 1102(b) of the
Act because it has determined, and the Secretary certifies, that this
notice 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 also
requires that agencies assess anticipated costs and benefits before
issuing any regulatory action whose mandates require spending in any 1
year of $100 million in 1995 dollars, updated annually for inflation.
In 2013, that threshold is approximately $141 million. This notice will
have no consequential effect on state, local, or tribal governments or
on the private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed regulatory action (and
subsequent final action) that imposes substantial direct requirement
costs on state and local governments, preempts state law, or otherwise
has Federalism implications. Since this notice does not impose any
costs on state or local governments, the requirements of Executive
Order 13132 are not applicable.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh) and 44 U.S.C. Chapter 35; Sec. 1103 of the
Social Security Act (42 U.S.C. 1302).
Dated: July 25, 2013
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2013-18394 Filed 7-26-13; 4:15 pm]
BILLING CODE 4120-01-P