[Federal Register Volume 81, Number 40 (Tuesday, March 1, 2016)]
[Proposed Rules]
[Pages 10720-10753]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04312]
[[Page 10719]]
Vol. 81
Tuesday,
No. 40
March 1, 2016
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 405, 424, 455, et al.
Medicare, Medicaid, and Children's Health Insurance Programs; Program
Integrity Enhancements to the Provider Enrollment Process; Proposed
Rule
Federal Register / Vol. 81 , No. 40 / Tuesday, March 1, 2016 /
Proposed Rules
[[Page 10720]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 424, 455, and 457
[CMS-6058-P]
RIN 0938-AS84
Medicare, Medicaid, and Children's Health Insurance Programs;
Program Integrity Enhancements to the Provider Enrollment Process
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement sections of the Affordable
Care Act that require Medicare, Medicaid, and Children's Health
Insurance Program (CHIP) providers and suppliers to disclose certain
current and previous affiliations with other providers and suppliers.
This proposed rule would also provide CMS with additional authority to
deny or revoke a provider's or supplier's Medicare enrollment. In
addition, this proposed rule would require that to order, certify,
refer or prescribe any Part A or B service, item or drug, a physician
or, when permitted, an eligible professional must be enrolled in
Medicare in an approved status or have validly opted-out of the
Medicare program.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on April 25, 2016.
ADDRESSES: In commenting, please refer to file code CMS-6058-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
proposed rule to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address only: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-6058-P, P.O. Box 8013,
Baltimore, MD 21244-8013.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address only: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-6058-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. Alternatively, you may deliver (by hand or
courier) your written comments only to the following addresses prior to
the close of the comment period:
a. For delivery in Washington, DC--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, Room 445-G, Hubert
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC
20201.
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
call telephone number (410) 786-9994 in advance to schedule your
arrival with one of our staff members.
Comments erroneously mailed to the addresses indicated as
appropriate for hand or courier delivery may be delayed and received
after the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Frank Whelan, (410) 786-1302.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Need for Regulatory Action
This proposed rule would implement a provision of the Affordable
Care Act that requires Medicare, Medicaid, and Children's Health
Insurance Program (CHIP) providers and suppliers to disclose any
current or previous direct or indirect affiliation with a provider or
supplier that--(1) has uncollected debt; (2) has been or is subject to
a payment suspension under a federal health care program; (3) has been
excluded from Medicare, Medicaid or CHIP; or (4) has had its Medicare,
Medicaid or CHIP billing privileges denied or revoked. This provision
permits the Secretary to deny enrollment based on affiliations that the
Secretary determines pose an undue risk of fraud, waste or abuse. Also,
this proposed rule would revise various provider enrollment provisions
in 42 CFR part 424, subpart P.
As discussed in greater detail in section II of this rule, our
proposed provisions are necessary to address various program integrity
issues and vulnerabilities that require regulatory action. We believe
that our proposals would help make certain that entities and
individuals who pose risks to the Medicare program are removed from and
kept out of Medicare for extended periods of time; in particular, the
rule would crack down on providers and suppliers who attempt to
circumvent Medicare requirements through name and identity changes as
well as through elaborate, inter-provider relationships. In short, the
rule would enable us to take action against unqualified and potentially
fraudulent entities and individuals, which in turn could deter other
parties from engaging in improper behavior.
The following are the five principal legal authorities for our
proposed provisions:
Sections 1102 and 1871 of the Social Security Act (the
Act), which provide general authority for the Secretary to prescribe
regulations for the efficient administration of the Medicare program.
Section 1866(j) of the Act, which provides specific
authority with respect to the enrollment process for providers and
suppliers.
[[Page 10721]]
Section 1866(j)(5) of the Act, as amended by section
6401(a)(3) of the Affordable Care Act, which states that a provider or
supplier that submits a Medicare, Medicaid or CHIP application for
enrollment or a revalidation application must disclose any current or
previous affiliation (direct or indirect) with a provider or supplier
that--(1) has uncollected debt; (2) has been or is subject to a payment
suspension under a federal health care program; (3) has been excluded
from participation in Medicare, Medicaid or CHIP; or (4) has had its
billing privileges denied or revoked, and permits the Secretary to deny
enrollment based on affiliations that the Secretary determines pose an
undue risk of fraud, waste or abuse.
Section 1902(kk)(3) of the Act,\1\ as amended by section
6401(b) of the Affordable Care Act, which mandates that states require
providers and suppliers to comply with the same disclosure requirements
established by the Secretary under section 1866(j)(5) of the Act.\2\
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\1\ Because section 6401(b) of the Affordable Care Act
erroneously added a duplicate section 1902(ii) of the Act, the
Congress enacted a technical correction in the Medicare and Medicaid
Extenders Act of 2010 (MMEA) (Pub. L. 111-309) to redesignate
section 1902(ii) of the Act as section 1902(kk) of the Act, a
designation we will use in this proposed rule.
\2\ Section 1304 of the Health Care and Education Reconciliation
Act (Pub. L. 111-152) added a new paragraph (j)(4) to section 1866
of the Act, thus redesignating the subsequent paragraphs.
Accordingly, we are interpreting the reference in section
1902(kk)(3) of the Act to ``disclosure requirements established by
the Secretary under section 1866(j)(4)'' of the Act to mean the
disclosure requirements described in section 1866(j)(5) of the Act.
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Section 2107(e)(1) of the Act, as amended by section
6401(c) of the Affordable Care Act, which makes the requirements of
section 1902(kk) of the Act, including the disclosure requirements,
applicable to CHIP.
2. Summary of the Major Provisions
The major provisions in this proposed rule would do the following:
Implement a provision of the Affordable Care Act that
requires certain Medicare, Medicaid, and CHIP providers and suppliers
to disclose if a provider or supplier has any current or previous
direct or indirect affiliation with a provider or supplier that has
uncollected debt; has been or is subject to a payment suspension under
a federal health care program; has been excluded from Medicare,
Medicaid or CHIP; or has had its Medicare, Medicaid or CHIP billing
privileges denied or revoked, and that permits the Secretary to deny
enrollment based on an affiliation that the Secretary determines pose
an undue risk of fraud, waste or abuse.
+ Describe the terms ``affiliation'', ``disclosable event,''
``uncollected debt,'' and ``undue risk'' as they pertain to this
Affordable Care Act provision.
Provide CMS with the authority to do the following:
++ Deny or revoke a provider's or supplier's Medicare enrollment if
CMS determines that the provider or supplier is currently revoked under
a different name, numerical identifier or business identity, and the
applicable reenrollment bar period has not expired.
++ Revoke a provider's or supplier's Medicare enrollment--including
all of the provider's or supplier's practice locations, regardless of
whether they are part of the same enrollment--if the provider or
supplier billed for services performed at or items furnished from a
location that it knew or should have known did not comply with Medicare
enrollment requirements.
++ Revoke a physician's or eligible professional's Medicare
enrollment if he or she has a pattern or practice of ordering,
certifying, referring or prescribing Medicare Part A or B services,
items or drugs that is abusive, represents a threat to the health and
safety of Medicare beneficiaries or otherwise fails to meet Medicare
requirements.
++ Increase the maximum reenrollment bar from 3 to 10 years, with
exceptions.
++ Prohibit a provider or supplier from enrolling in the Medicare
program for up to 3 years if its enrollment application is denied
because the provider or supplier submitted false or misleading
information on or with (or omitted information from) its application in
order to gain enrollment in the Medicare program.
++ Revoke a provider's or supplier's Medicare enrollment if the
provider or supplier has an existing debt that CMS refers to the United
States Department of Treasury.
++ Require that to order, certify, refer or prescribe any Part A or
B service, item or drug, a physician or, when permitted under state
law, an eligible professional must be enrolled in Medicare in an
approved status or have validly opted-out of the Medicare program.
Also, the provider or supplier furnishing the Part A or B service, item
or drug, as well as the physician or eligible professional who ordered,
certified, referred or prescribed the service, item or drug, would have
to maintain documentation for 7 years from the date of the service and
furnish access to that documentation upon a CMS or Medicare contractor
request.
++ Deny a provider's or supplier's Medicare enrollment application
if--(1) the provider or supplier is currently terminated or suspended
(or otherwise barred) from participation in a particular state Medicaid
program or any other federal health care program; or (2) the provider's
or supplier's license is currently revoked or suspended in a state
other than that in which the provider or supplier is enrolling.
3. Summary of Costs and Benefits
As explained in greater detail in sections III. and V. of this
proposed rule, we estimate an average annual cost to providers and
suppliers of $289.8 million in each of the first 3 years of this rule.
This cost involves the information collection burden associated with
the following proposals:
The requirement that Medicare, Medicaid and CHIP providers
and suppliers disclose certain current and prior affiliations.
The requirement that a physician or, when permitted under
state law, an eligible professional, be enrolled in Medicare in an
approved status or have opted-out of the Medicare program to order,
certify, refer or prescribe a Part A or B service, item or drug.
Other potential costs which we are unable to calculate are
discussed in sections III. and V. of this proposed rule.
We believe there would be benefits, although unquantifiable,
associated with this rule, because problematic providers would be kept
out of or removed from Medicare, Medicaid, and CHIP, thus saving
program dollars.
B. General Overview
1. Medicare
The Medicare program (title XVIII of the Act) is the primary payer
of health care for approximately 54 million enrolled beneficiaries.
Under section 1802 of the Act, a beneficiary may obtain health services
from an individual or an organization qualified to participate in the
Medicare program. Qualifications to participate are specified in
statute and in regulations (see, for example, sections 1814, 1815,
1819, 1833, 1834, 1842, 1861, 1866, and 1891 of the Act; and 42 CFR
chapter IV, subchapter G of the regulations, which concerns standards
and certification requirements).
Providers and suppliers furnishing services must comply with the
Medicare requirements stipulated in the Act and in our regulations.
These requirements are meant to confirm compliance with applicable
statutes, as well as to promote the furnishing of high quality care. As
Medicare program expenditures
[[Page 10722]]
have grown, we have increased our efforts to make certain that only
qualified individuals and organizations are allowed to enroll in and
maintain their enrollment in Medicare.
2. Medicaid and CHIP
The Medicaid program (title XIX of the Act) is a joint federal and
state health care program that covers nearly 70 million low-income
individuals. States have considerable flexibility in how they
administer their Medicaid programs within a broad federal framework,
and programs vary from state to state. CHIP (title XXI of the Act) is a
joint federal and state health care program that provides health care
coverage to more than 7.7 million children. In operating Medicaid and
CHIP, states historically have permitted the enrollment of providers
who meet the state requirements for program enrollment as well as any
applicable federal requirements (such as those in 42 CFR part 455).
C. General Background on the Enrollment Process
1. The 2006 Provider Enrollment Final Rule
In the April 21, 2006 Federal Register (71 FR 20754), we published
a final rule titled, ``Medicare Program; Requirements for Providers and
Suppliers to Establish and Maintain Medicare Enrollment.'' The final
rule set forth certain requirements in 42 CFR part 424, subpart P that
providers and suppliers must meet in order to obtain and maintain
Medicare billing privileges. We cited in that rule sections 1102 and
1871 of the Act as general authority for our establishment of these
requirements, which were designed for the efficient administration of
the Medicare program.
2. The 2011 Provider Enrollment Final Rule
In the February 2, 2011 Federal Register (76 FR 5861),we 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.'' This
final rule implemented various Affordable Care Act provisions,
including the following:
Submission of application fees by institutional providers
and suppliers as part of the Medicare, Medicaid, and CHIP provider
enrollment processes.
Establishment of Medicare, Medicaid, and CHIP provider
enrollment screening categories and corresponding screening
requirements.
Imposition of temporary moratoria on the enrollment of new
Medicare, Medicaid, and CHIP providers and suppliers of a particular
type (or the establishment of new practice locations of a particular
type) in a geographic area.
3. Form CMS-855--Medicare Enrollment Application
Under Sec. 424.510, a provider or supplier must complete, sign,
and submit to its assigned Medicare contractor the appropriate Form
CMS-855 (OMB Control No. 0938-0685) application in order to enroll in
the Medicare program and obtain Medicare billing privileges. The Form
CMS-855, which can be submitted via paper or electronically through the
Internet-based Provider Enrollment, Chain, and Ownership System (PECOS)
process, captures information about the provider or supplier that is
needed for CMS or its contractors to determine whether the provider or
supplier meets all Medicare requirements. The enrollment process helps
ensure that unqualified and potentially fraudulent individuals and
entities do not bill Medicare and that the Medicare Trust Funds are
accordingly protected. Data collected during the enrollment process
include, but are not limited to--(1) general identifying information
(for example, legal business name, tax identification number); (2)
licensure data; (3) practice locations; and (4) information regarding
the provider's or supplier's owning and managing individuals and
organizations. The application is used for a variety of provider
enrollment transactions, including the following:
Initial enrollment--The provider or supplier is--(1)
enrolling in Medicare for the first time; (2) enrolling in another
Medicare contractor's jurisdiction; or (3) seeking to enroll in
Medicare after having previously been enrolled.
Change of ownership--The provider or supplier is reporting
a change in its ownership.
Revalidation--The provider or supplier is revalidating its
Medicare enrollment information in accordance with Sec. 424.515.
Reactivation--The provider or supplier is seeking to
reactivate its Medicare billing privileges after it was deactivated in
accordance with Sec. 424.540.
Change of information--The provider or supplier is
reporting a change in its existing enrollment information in accordance
with Sec. 424.516.
Besides the aforementioned 2006 and 2011 final rules, we have made
several other regulatory changes to 42 CFR part 424, subpart P to
address various payment safeguard issues that have arisen.
D. Statutory Background on Medicare Requirements for Physicians and
Eligible Professionals Who Order or Certify Services or Items
The Affordable Care Act addressed the problem of certain Medicare
services and items being ordered or certified by physicians or eligible
professionals (as the latter term is defined in section 1848(k)(3)(B)
of the Act) who may not be qualified to do so. The Affordable Care Act
included the following provisions:
Section 6405(a) of the Affordable Care Act amended section
1834(a)(11)(B) of the Act to specify, with respect to DME suppliers,
that payment may be made under section 1834(a)(11)(B) of the Act only
if the written order for the item has been communicated to the DMEPOS
supplier by a physician or eligible professional who is enrolled under
section 1866(j) of the Act before delivery of the item.
Section 6405(b) of the Affordable Care Act, as amended by
section 10604 of the Affordable Care Act, amended sections 1814(a)(2)
and 1835(a)(2) of the Act and specifies, with respect to Part A home
health services, 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. Section 1835(a)(2) of the Act specifies, with respect to
Part B home health services, 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 6405(c) of the Affordable Care Act gives the
Secretary the authority to extend the requirements of subsections (a)
and (b) to all other categories of items or services under title XVIII
of the 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 or eligible professional enrolled under section 1866(j) of
the Act.
In addition, section 6406(b)(3) of the Affordable Care Act amended
section 1866(a)(1) of the Act to require that providers maintain and,
upon request, provide to the Secretary, access to
[[Page 10723]]
written or electronic documentation relating to written orders or
requests for payment for DME, certifications for home health services
or referrals for other items or services written or ordered by the
provider as specified by the Secretary. Under section 6406(a) of the
Affordable Care Act, which amended section 1842(h) of the Act, the
Secretary may revoke a physician's or supplier's enrollment if the
physician or supplier fails to adhere to these requirements. .
E. Background on Disclosure of Affiliations for Medicare, Medicaid, and
CHIP (Section 1866(j)(5) of the Act)
As previously mentioned, providers and suppliers must complete and
submit (via paper or through Internet-based PECOS) a Form CMS-855
application to their Medicare contractor in order to enroll or
revalidate their enrollment in the Medicare program. The Form CMS-855
requires the provider or supplier to disclose certain information, such
as general identifying data (for example, legal business name), the
provider's or supplier's practice locations, and the provider's or
supplier's owning and managing employees and organizations.
In operating Medicaid and CHIP, states may have somewhat different
enrollment processes, although all states must comply with the federal
requirements in 42 CFR part 455, subparts B and E. Under 42 CFR part
455, subpart B, providers and disclosing entities must furnish
disclosures regarding ownership and control of the provider or supplier
entity, certain business transactions, and criminal convictions related
to federal health care programs. States must also comply with their
individual medical programs and procurement laws and rules, which may
include additional provider or supplier disclosures.
Section 6401(a)(3) of the Affordable Care Act, which amended
section 1866(j) of the Act to add new paragraph (5), states that a
provider or supplier that submits an enrollment application or a
revalidation application shall disclose (in a form and manner and at
such time as determined by the Secretary) any current or previous
affiliation (directly or indirectly) with a provider or supplier that
has uncollected debt; has been or is subject to a payment suspension
under a federal health care program (as defined in section 1128B(f) of
the Act); has been excluded from participation from Medicare, Medicaid
or CHIP; or has had its billing privileges denied or revoked. The
Secretary may deny an application under section 1866(j)(5)(B) of the
Act if the Secretary determines that the affiliation poses an undue
risk of fraud, waste or abuse.
We mentioned earlier that section 6401(b) of the Affordable Care
Act added a new section 1902(kk)(3) to the Act, mandating that states
require providers and suppliers to comply with the same disclosure
requirements established by the Secretary under section 1866(j)(5) of
the Act. Section 6401(c) of the Affordable Care Act amended section
2107(e)(1) of the Act to make the requirements of section 1902(kk) of
the Act, including the disclosure requirements, applicable to CHIP.
II. Provisions of the Proposed Regulations
A. Disclosure of Affiliations
We propose to carry out the legislative mandate of section
1866(j)(5) of the Act as previously discussed in section I.A. of this
proposed rule.
Consistent with the text of section 1866(j)(5) of the Act, we
believe that implementing these disclosure provisions would help combat
fraud, waste, and abuse by enabling CMS and the states to: (1) Better
track current and past relationships between and among different
providers and suppliers; and (2) identify and take action on
affiliations among providers and suppliers that pose an undue risk to
Medicare, Medicaid, and CHIP. While the Form CMS-855 captures
information on parties that have ownership or managerial interests in
the enrolling or enrolled provider or supplier, it does not collect
data about prior affiliations or about entities in which the provider
or supplier (or its owning or managing individuals or organizations)
has or had an interest. We believe that our knowledge of these
affiliations and interests would greatly assist our program integrity
efforts, for such data could reveal inter-provider schemes involving
inappropriate behavior and lead to the denial or revocation of
enrollment.
In November 2008, the Department of Health and Human Services
Office of Inspector General (OIG) issued an Early Alert Memorandum
titled ``Payments to Medicare Suppliers and Home Health Agencies
Associated with `Currently Not Collectible' Overpayments'' (OEI-06-07-
00080). The memorandum stated that anecdotal information from OIG
investigators and Assistant United States Attorneys indicated that
DMEPOS suppliers with outstanding Medicare debts may inappropriately
receive Medicare payments by, among other means, operating businesses
that are publicly fronted by business associates, family members or
other individuals posing as owners. In its study, the OIG selected a
random sample of 10 DMEPOS suppliers in Texas that each had Medicare
debt of at least $50,000 deemed currently not collectible (CNC) by CMS
during 2005 and 2006. The OIG found that 6 of the 10 reviewed DMEPOS
suppliers were associated with 15 other DMEPOS suppliers or home health
agencies (HHAs) that received Medicare payments totaling $58 million
during 2002 through 2007. Most associated DMEPOS suppliers had lost
billing privileges by January 2005 and had accumulated a total of $6.2
million of their own CNC debt to Medicare. The OIG also found that most
of the reviewed DMEPOS suppliers were connected to other DMEPOS
suppliers and HHAs through shared owners or managers.
On March 2, 2011, the OIG testified before the Congress that fraud
schemes in South Florida often rely on the use of networks of
affiliations among fraudulent owners.\3\ In those schemes, Medicare
providers and suppliers disguise true ownership by the use of nominee
owners in order to bill Medicare fraudulently on a temporary basis in
order to evade detection. Providers and suppliers will--(1) hide their
true ownership through the use of nominee owners; (2) bill the Medicare
program for millions of dollars; and (3) close down and then take over
another company, and then repeat the process in another location. In
addition to OIG reports, our experience has found that networks of
individuals and entities can be behind widespread fraud schemes; in
some instances, shared owners were behind multiple providers and
suppliers engaging in improper billings.
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\3\ https://oig.hhs.gov/testimony/docs/2011/perez_testimony_03022011.pdf.
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We have long shared these and other concerns the OIG has expressed
regarding individuals and entities that enroll in Medicare (or own or
operate Medicare providers or suppliers), accumulate large debts or
otherwise engage in inappropriate activities, and depart the Medicare
program voluntarily or involuntarily, yet continue their behavior by--
(1) reentering the program in some capacity (for instance, as an
owner); and/or (2) shifting their activities to another enrolled
Medicare provider or supplier with which they are affiliated. To
illustrate, a provider or supplier may engage in inappropriate billing,
exit Medicare prior to detection, and then change its name or business
identity in
[[Page 10724]]
order to reenroll in Medicare under this new identity. Another example
involves an entity that owns or manages several Medicare providers and
suppliers. One of the providers or suppliers may be involved in abusive
behavior with the approval or at the instigation of that owner or
managing entity. In this example, if the abusive provider's enrollment
is revoked, the owning/managing entity shifts its behavior to another
of its enrolled entities.
In these situations, and absent the owning or managing individual's
or organization's felony conviction, exclusion from Medicare by the OIG
or debarment from participating in any federal procurement or non-
procurement program, CMS does not currently have a regulatory basis to
prevent such individuals or entities from continuing their activities
through other enrolled or newly enrolling providers and suppliers. Put
another way, providers and suppliers currently can be denied, revoked
or terminated from participating in Medicare, Medicaid or CHIP; but
absent a felony conviction, exclusion or debarment, their owners and
managers can often remain as direct or indirect participants in these
programs. Consider this illustration: Individual X owns 100 percent of
three enrolled DMEPOS suppliers, each of which has submitted a
revalidation application to Medicare. Individual X completes each
application. He submits false information on one application in order
to retain that supplier's Medicare enrollment, but not on the other two
applications. CMS revokes the first DMEPOS supplier's enrollment under
Sec. 424.535(a)(4). However, we cannot revoke the other two suppliers
because false information was not submitted on their applications; this
means that two Medicare suppliers whose owner has furnished false
information to Medicare are still enrolled in the program.
We believe that we must address this and similar situations. In
many cases, the owners and managers of fraudulent entities hide behind
the organizational structure itself when in fact they are, for purposes
of their behavior, one in the same. This proposed rule would allow CMS
to take immediate action against such persons and entities to ensure
that they do not continue to use the provider or supplier organization
as a shield for their conduct. If finalized, the proposal would help
protect the Medicare Trust Funds, the taxpayers, Medicare
beneficiaries, and honest and legitimate Medicare providers and
suppliers. The changes described later in this section serve these
goals by implementing section 1866(j)(5) of the Act. We further propose
applying these changes to Medicaid and CHIP, such that states must
require providers and suppliers to comply with the same disclosure
requirements established by the Secretary.
1. Medicare
a. Definition of Affiliation
In Sec. 424.502, we propose to define ``affiliation'' as meaning,
for purposes of applying Sec. 424.519, any of the following:
A 5 percent or greater direct or indirect ownership
interest that an individual or entity has in another organization.
A general or limited partnership interest (regardless of
the percentage) that an individual or entity has in another
organization.
An interest in which an individual or entity exercises
operational or managerial control over or directly or indirectly
conducts the day-to-day operations of another organization (including,
for purposes of Sec. 424.519 only, sole proprietorships), either under
contract or through some other arrangement, regardless of whether or
not the managing individual or entity is a W-2 employee of the
organization.
An interest in which an individual is acting as an officer
or director of a corporation.
Any reassignment relationship under Sec. 424.80.
The first four types of interests are consistent with the
definitions of--(1) ``owner'' and ``managing employee'' in Sec.
424.502; and (2) ``ownership or control interest'' in section
1124(a)(3) of the Act. We also note that consistent with sections 1124
and 1124A of the Act, entities and individuals that have one or more of
these four interests in an enrolling or enrolled Medicare provider or
supplier must be reported on the provider's or supplier's Form CMS-855
enrollment application. Likewise, reassignment relationships must be
reported to Medicare via the Form CMS-855R (OMB Control No. 0938-1179);
this form facilitates the reassignment of benefits from a physician or
non-physician practitioner to another Medicare provider or supplier. To
make certain that there is uniformity with these other reporting
requirements and that we are aware of prior and current relationships
that could present risks of fraud, waste or abuse, we believe that the
``affiliation'' definition should include these five interests.
We believe there is a sufficiently close relationship between the
reassignor (the physician or practitioner) and the reassignee (the
provider or supplier) to warrant including reassignments within the
definition of ``affiliation''. Indeed, a W-2 employee or independent
contractor may have a closer day-to-day relationship with the entity or
person he or she works for and reassigns benefits to than, for
instance, an indirect owner has with an entity in which he or she has a
5 percent ownership interest. We request comment on the regularity of
close reassignor and reassignee relationships and whether inclusion of
these relationships is likely to lead to additional information that
may prevent fraud, waste and abuse.
b. Disclosable Events (Sec. 424.519)
In new Sec. 424.519, we propose in paragraph (b) that a provider
or supplier that is submitting an initial or revalidating Form CMS-855
application must disclose whether it or any of its owning or managing
employees or organizations (consistent with the terms ``owner'' and
``managing employee'' as defined in Sec. 424.502) has or, within the
previous 5 years, has had an affiliation with a currently or formerly
enrolled Medicare, Medicaid or CHIP provider or supplier that--
Currently has an uncollected debt to Medicare, Medicaid or
CHIP, regardless of--(1) the amount of the debt; (2) whether the debt
is currently being repaid (for example, as part of a repayment plan);
or (3) whether the debt is currently being appealed. For purposes of
Sec. 424.519 only, and as stated in proposed Sec. 424.519(a), the
term ``uncollected debt'' only applies to--
++ Medicare, Medicaid or CHIP overpayments for which CMS or the
state has sent notice of the debt to the affiliated provider or
supplier;
++ Civil money penalties (CMP) (as defined in Sec. 424.57(a)); and
++ Assessments (as defined in Sec. 424.57(a)).
Has been or is subject to a payment suspension under a
federal health care program (as that term is defined in section
1128B(f) of the Act), regardless of when the payment suspension
occurred or was imposed;
Has been or is excluded from participation in Medicare,
Medicaid or CHIP, regardless of whether the exclusion is currently
being appealed or when the exclusion occurred or was imposed (although
section 1866(j)(5) of the Act states ``has been excluded,'' we believe
it is appropriate to clarify that a current exclusion is also a
disclosable event); or
Has had its Medicare, Medicaid or CHIP enrollment denied,
revoked or terminated, regardless of--(1) the reason for the denial,
revocation or
[[Page 10725]]
termination; (2) whether the denial, revocation or termination is
currently being appealed; or (3) when the denial, revocation or
termination occurred or was imposed. For purposes of Sec. 424.519
only, and as stated in proposed paragraph (a), the terms ``revoked,''
``revocation,'' ``terminated,'' and ``termination'' would include
situations where the affiliated provider or supplier voluntarily
terminated its Medicare, Medicaid or CHIP enrollment to avoid a
potential revocation or termination.
Regarding proposed Sec. 424.519(b), it is important to note that
the affiliated provider or supplier need not have been enrolled in
Medicare, Medicaid or CHIP when the disclosing party had its
relationship with the affiliated provider or supplier. To illustrate,
assume Provider A sold its 30 percent interest in an affiliated
provider in January 2016. In March 2016, the affiliated provider
enrolled in Medicare yet had its enrollment revoked in September 2016.
In April 2017, Provider A applied for Medicare enrollment. If we
limited the reporting of affiliations to periods when the affiliated
provider was enrolled in Medicare, Medicaid or CHIP, Provider A would
not have to report--and we would perhaps not learn of--its relationship
with a provider that was revoked only 8 months after the affiliation
ended. We believe that such information would be valuable in helping us
determine whether the affiliation poses an undue risk of fraud, waste
or abuse.
We also propose that the Sec. 424.519(b) event (hereafter referred
to as the ``disclosable event'') could have occurred or been imposed
either before the affiliation began or after it ended. If disclosure of
an affiliation were restricted to the time period of the disclosing
party's relationship with the affiliated provider, we might remain
unaware of situations where, for instance--(1) a disclosing party sold
its majority interest in an affiliated provider or supplier that was
terminated from Medicaid 2 months after the sale; and (2) a 40 percent
owner of a Medicare-enrolled affiliated provider engages in
questionable billing practices, sells its share, and seeks to
separately enroll in Medicare, shortly after which the affiliated
provider is notified that it has a large Medicare debt that must be
repaid. We are particularly concerned about the latter scenario; as
previously mentioned, we have seen instances where providers and
suppliers with significant overpayments close down their businesses and
attempt to enroll under other business identities.
All affiliations that meet the requirements of Sec. 424.519(b)
would have to be reported. To illustrate, suppose a revalidating
Medicare provider has three owners: A, B, and C. Owner A had an
affiliation 30 months ago with a revoked Medicare provider. Owner B had
an affiliation 2 years ago with a terminated Medicaid provider. Owner C
currently serves as a management company for a CHIP provider with an
uncollected debt. Each of these three affiliations would have to be
disclosed on the revalidating provider's Form CMS-855 application.
We believe the actions identified in Sec. 424.519(b) should be
reported regardless of whether an appeal is pending. We want to avoid
situations where an initially enrolling provider or supplier would not
have to disclose, for example, an affiliated provider that was revoked
from Medicare 6 months ago (based on a felony conviction) because the
revocation is under appeal; without this information, the provider or
supplier in question might become enrolled in Medicare without CMS
knowing of its relationship with a recently convicted affiliated
provider or supplier. Conversely, actions that are overturned on appeal
or otherwise reversed need not be reported. For purposes of this rule
only, the reversal of a disclosable event would effectively nullify
said event.
Section 1866(j)(5) of the Act refers to the disclosure of current
or previous affiliations ``directly or indirectly.'' We believe this
concept should apply to ownership interests. Consequently, affiliations
involving a 5 percent or greater indirect ownership interest must be
disclosed to the same extent as those involving direct ownership.
Consider the following example: A newly-enrolling provider listed in
section 2 of the Form CMS-855A (OMB Control No. 0938-0685) application
is wholly (100 percent) owned by Company A. Company B wholly owns
Company A. Companies C and D each own 50 percent of Company B. Here,
Company A is considered a direct owner of the newly-enrolling provider
because it actually owns the assets of the business. Companies B, C,
and D are considered indirect owners of the provider. Unlike Company A,
they do not own the provider's assets. However, Company B directly owns
Company A's assets, while Companies C and D own Company B's assets.
We believe that the disclosure of indirect ownership interests is
important. We have seen cases where the direct owner of the provider or
supplier is a mere holding company, while the actual management and
control of the provider or supplier is exercised by the provider's or
supplier's indirect owner(s). Restricting the disclosure requirements
to direct owners could deprive CMS of important information about the
entities that are actually running the provider's or supplier's
operations.
We are proposing a ``look-back'' period of 5 years for previous
affiliations. A sufficient look-back period is necessary because a past
affiliation could be an indicator of a disclosing party's future
behavior. For instance, suppose a physician who is enrolling in
Medicare was a 50 percent owner of an affiliated provider from July
2013 through December 2013. In October 2013, the affiliated provider's
Medicare enrollment was revoked for falsifying information on a Form
CMS-855 change of information request. Considering the physician's
degree of involvement with the affiliated provider, we believe this
scenario would raise questions regarding the level of risk posed to the
Medicare program. In short, a 5-year look-back period would divulge to
us past situations that could present future concerns. We believe that
a 5-year look-back period would be less onerous for providers and
suppliers than, for instance, a 10-year period, while still providing
us with enough information to make a proper decision as to whether an
undue risk of fraud, waste or abuse exists. For purposes of this rule,
the look-back period would be the 5-year timeframe prior to the date on
which the disclosing provider or supplier submits its Form CMS-855;
thus, the affiliation must have occurred within the 5-year period
preceding the date on which the application is submitted. However, we
note that only part of the affiliation period would have to have
occurred inside the 5-year timeframe; the entire affiliation (from
beginning to end) need not fall within the 5-year window. To
illustrate, if an affiliation began 8 years prior to enrollment and
ended 4 years before enrollment, it would have to be reported because
at least part of the affiliation occurred within the previous 5 years.
While we propose to limit disclosure to affiliations that occurred
within the previous 5 years, the event triggering the disclosure (for
example, a revocation) could have occurred or been imposed more than 5
years previously. In other words, we are proposing a 5-year look-back
period for the affiliation; but we are not proposing a specific look-
back period for when the disclosable event occurred or was imposed.
Consider the following examples:
A provider is submitting an initial Form CMS-855A
application in May 2017. The provider was the owner of a
[[Page 10726]]
Medicaid-enrolled group practice from August 2014 to January 2015. The
group practice had its Medicaid enrollment terminated in January 2010.
Although the disclosable event (the termination) was imposed more than
5 years ago, it must be reported because the affiliation occurred
within the previous 5 years.
A supplier is submitting a Form CMS-855B (OMB Control No.
0938-0685) revalidation application. The supplier currently has a
managerial interest in an ambulance company that was subject to a
Medicare payment suspension 8 years ago. The affiliation and the
payment suspension must be disclosed even though the latter was imposed
outside of the 5-year affiliation look-back period.
Our proposed 5-year look-back limit for affiliation disclosures, as
already indicated, is partly intended to reduce the burden on providers
and suppliers. Yet we believe that a similar time restriction on the
underlying event that is triggering the disclosure could present
program integrity concerns. To illustrate, assume Individual X
purchased Medicare Provider Y in 2007. In 2009, Provider Y was revoked
from Medicare for falsifying information on its Form CMS-855A
revalidation application. In 2017, Provider Z submits a Form CMS-855A
initial application; Individual X (which still owns revoked Provider Y)
is the sole owner of Provider Z. If we restricted the look-back period
for disclosable events to 5 years rather than having an unlimited
period, we may not learn that the sole owner of an enrolling provider
was (and remains) the owner of another provider that was revoked for
furnishing false information to Medicare. Even if the action happened
more than 5 years ago, it could still raise concerns about the
potential risk the newly enrolling provider poses. For this reason, we
must retain the flexibility to address a variety of factual scenarios,
regardless of when the underlying event occurred or was imposed.
If the affiliated provider or supplier had its Medicare, Medicaid
or CHIP enrollment denied, revoked or terminated, this must be reported
regardless of the reason for the denial, revocation or termination.
Since all denial, revocation, and termination reasons are of concern to
us, we do not believe certain reasons should be excluded from
disclosure. Nonetheless, we seek comment on whether disclosure should
be restricted to certain denial, revocation and termination reasons
and, if so, what those reasons should be.
We also propose to define the term ``uncollected debt'' in proposed
Sec. 424.519(b) as--
++ Medicare, Medicaid or CHIP overpayments for which CMS or the
state has sent notice of the debt to the affiliated provider or
supplier;
++ CMPs (as defined in Sec. 424.57); and
++ Assessments (as defined in Sec. 424.57).
We are proposing this definition, which is included in proposed
Sec. 424.519(a), because it is consistent with our requirements for
DMEPOS surety bond coverage under Sec. 424.57(d). Under Sec.
424.57(d)(5), a DMEPOS supplier's surety bond must guarantee that the
surety will--within 30 days of receiving written notice from CMS
containing sufficient evidence to establish the surety's liability
under the bond of unpaid claims, CMPs or assessments--pay CMS a total
of up to the full penal amount of the bond in the amounts described in
Sec. 424.57(d)(5)(i). We believe it is appropriate to use a concept of
unpaid debt for which there is precedent in 42 CFR part 424. However,
we seek comment on the following issues regarding our proposed
definition of ``uncollected debt'': (1) Whether there should be a
threshold for the level of debt that would need to be reported; (2)
whether a provider or supplier should be exempt from reporting an
uncollected debt if it is complying with a repayment plan; and (3)
whether the level of reporting burden is low enough to merit collection
of this information without any threshold or exemption.
Section 1866(j)(5)(B) of the Act states that if an undue risk of
fraud, waste or abuse is found, the Secretary shall deny the
application in question. Revocation of enrollment is not mentioned.
However, we believe that section 1866(j)(5)(A) of the Act's reference
to a revalidation application, which can only be submitted by an
enrolled provider or supplier, suggests that a provider's or supplier's
Medicare enrollment may be revoked if an undue risk is found.
Furthermore, we believe that having the ability to revoke the
enrollment of providers or suppliers with affiliations that we have
determined to pose an undue risk is necessary to protect the integrity
of the Medicare program. Therefore, we are proposing to use our general
rulemaking authority in sections 1102 and 1871 of the Act to--(1)
require the submission of a Form CMS-855 change of information request
to report a new or changed affiliation (per proposed Sec. 424.519(h));
and (2) permit revocation (per proposed Sec. 424.519(i)) if an undue
risk is found outside of the provider's or supplier's submission of an
initial, revalidating or change of information application.
We believe that the terms ``revoked,'' ``revocation,''
``terminated,'' and ``termination,'' for purposes of disclosure under
Sec. 424.519(b), should include situations where the affiliated
provider or supplier voluntarily terminated its Medicare, Medicaid or
CHIP enrollment to avoid a potential revocation or termination; this is
referenced in proposed Sec. 424.519(a). As explained in more detail in
section II.B.11. of this proposed rule, we have seen instances where
the provider or supplier engages in inappropriate behavior, recognizes
that its enrollment may soon be revoked, and then voluntarily withdraws
from Medicare prior to the imposition of a revocation so as to avoid
the revocation itself as well as a subsequent reenrollment bar under
Sec. 424.535(c). (See section II.B.4. of this proposed rule for more
information on reenrollment bars.) Since the provider or supplier is
not revoked from Medicare, it could immediately reenroll in Medicare
without having to wait until the reenrollment bar expires. We believe
such behavior poses a risk to the Medicare program in that the provider
or supplier is seeking to avoid Medicare rules and, in the process,
possibly reenter the Medicare program to continue its improper
activities. We thus believe that for purposes of Sec. 424.519(b), such
actions should be included within the category of ``revocations'' and
``terminations.''
c. Affiliation Data, ``Reasonableness'' Standard, and Mechanism of
Disclosure
In Sec. 424.519(c), we propose to require the disclosure of the
following information about the affiliation:
General identifying data about the affiliated provider or
supplier. This would include the following:
++ Legal name as reported to the Internal Revenue Service or the
Social Security Administration (if the affiliated provider or supplier
is an individual).
++ ``Doing business as'' name (if applicable).
++ Tax identification number.
++ National Provider Identifier (NPI).
Reason for disclosing the affiliated provider or supplier
(for example, uncollected Medicare debt or Medicaid payment
suspension).
Specific data regarding the relationship between the
affiliated provider or supplier and the disclosing party. Such data
would include the--(1) length of the relationship; (2) type of
relationship (for example, an owner of the initially enrolling provider
or supplier was a managing employee of the affiliated provider or
supplier); and (3) degree of affiliation (for example,
[[Page 10727]]
percentage of ownership; whether the ownership interest was direct or
indirect; the individual's specific managerial position; the scope of
the individual's or entity's managerial duties; whether the partnership
interest was general or limited).
If the affiliation has ended, the reason for the
termination.
We believe the information in proposed Sec. 424.519(c) is
necessary so that we can--(1) conclusively identify the affiliated
provider or supplier and the disclosing party's relationship therewith;
and (2) assess the risk of fraud, waste or abuse that the affiliation
poses.
However, we also believe it is appropriate to build a
``reasonableness'' standard into Sec. 424.519(b) and (c), such that we
would require particular information to be reported only if the
disclosing provider or supplier knew or should reasonably have known of
said data. For instance, while we believe a provider or supplier would
typically know of a past affiliation, it may not necessarily know
whether a Sec. 424.519(b) action occurred or was imposed after the
affiliation ended. We will review each situation on a case-by-case
basis in determining whether the disclosing entity knew or should have
known of the information.
d. Affiliation and Disclosure Examples, Methodology, and Consequences
of Non-Disclosure
(1) Examples
The following are examples of when the information described in
Sec. 424.519 would or would not have to be disclosed.
Example 1: Physician Group X was a 10 percent indirect owner of
a medical provider (the affiliated provider) between January 2015
and March 2015. The affiliated provider was not enrolled in Medicare
during this timeframe because its Medicare enrollment had been
revoked in December 2014. Physician Group X is revalidating its
Medicare enrollment in January 2017. Though the affiliated provider
was not enrolled in Medicare during the period of affiliation,
Physician Group X would need to disclose the affiliation as part of
its revalidation because--(1) it was a 5 percent or greater owner of
a formerly enrolled Medicare provider; (2) the formerly enrolled
Medicare provider had its Medicare enrollment revoked; and (3) the
affiliation occurred within the previous 5 years.
Example 2: Ambulance Company X had a limited partnership
interest in a Medicaid provider (the affiliated provider) between
February 2015 and April 2015. The affiliated provider voluntarily
terminated its Medicaid enrollment in May 2015. In June 2015, the
state notified the affiliated provider that it had a large Medicaid
overpayment that must be repaid. In September 2017, Ambulance
Company X is enrolling in Medicare for the first time. The
affiliated provider's debt is still outstanding. Ambulance Company X
must report the affiliation as part of its initial Medicare
enrollment because--(1) it had a partnership interest in an
affiliated Medicaid provider; (2) the formerly enrolled Medicaid
provider has an uncollected debt; and (3) the affiliation occurred
within the previous 5 years.
Example 3: In February 2017, Provider X is preparing to submit
a Form CMS-855 application to enroll in Medicare. Between January
2014 and June 2014, one of its owners, Owner Y, functioned as a
managing company for Home Health Agency Z (the affiliated provider).
Home Health Agency Z attempted to enroll in Medicare in December
2013, but its application was denied. Provider X would have to
disclose this information as part of its enrollment because--(1) one
of its 5 percent or greater owners (Owner Y) was a managing employee
(as that term is defined in Sec. 424.502) of Home Health Agency Z,
whose Medicare enrollment application was denied; and (2) the
affiliation occurred within the previous 5 years.
Example 4: In March 2017, Physician Group X is revalidating its
Medicare enrollment information. X was a 50 percent owner of a
Medicaid provider (the affiliated provider) between January 2008 and
December 2008. The affiliated provider's enrollment was revoked in
April 2009. Physician Group X would not need to disclose this
information because the affiliation ended more than 5 years ago.
Example 5: In June 2017, Provider Y is initially enrolling in
Medicare. Between May 2014 and July 2014, Provider Y had a 25
percent ownership interest in a medical group (the affiliated
provider) whose Medicare enrollment was revoked in August 2014.
However, the revocation was reversed on appeal prior to Provider Y's
application submission. Though the affiliation occurred within the
previous 5 years, Provider Y need not report it because the
revocation was overturned on appeal.
Considering the statute's explicit flexibility regarding disclosure
methodology, we are interested in comments on proposed Sec. 424.519(b)
and (c), particularly:
Whether the types of disclosable affiliations should
include additional ownership or managerial interests or other
relationships;
Whether 5 years is an appropriate look-back period for
affiliations;
Whether exclusions, denials and revocations that are being
appealed should be exempt from disclosure.
Whether we should establish a ``reasonableness'' test,
whereby we explain what constitutes a sufficient effort to obtain
information in the context of the ``should reasonably have known''
standard;
If we establish such a test, what the specific elements of
this standard should be (for example, what constitutes a reasonable
inquiry; the minimum steps that the provider must undertake in
researching information); and
Whether there should be a lookback period for disclosable
events and, if so, how long (for example, 15 years, 10 years, 7 years).
(2) Methodology and Non-Disclosure
In Sec. 424.519(d), we propose that the information required under
Sec. 424.519 be furnished to CMS or its contractors via the Form CMS-
855 application (paper or the Internet-based PECOS enrollment process).
This is to ensure that all enrollment information continues to be
reported via a single vehicle.
In Sec. 424.519(e), we propose that the disclosing provider's or
supplier's failure to fully and completely furnish the information
specified in Sec. 424.519(b) and (c) when the provider or supplier
knew or should reasonably have known of this information may result in
either of the following:
The denial of the provider's or supplier's initial
enrollment application under Sec. 424.530(a)(1) and, if applicable,
Sec. 424.530(a)(4).
The revocation of the provider's or supplier's Medicare
enrollment under Sec. 424.535(a)(1) and, if applicable, Sec.
424.535(a)(4).
e. Undue Risk
In Sec. 424.519(f), we propose that upon receiving the information
described in Sec. 424.519(b) and (c) (and consistent with section
1866(j)(5)(B) of the Act), we would determine whether any of the
disclosed affiliations poses an undue risk of fraud, waste or abuse.
The following factors would be considered:
The duration of the disclosing party's relationship with
the affiliated provider or supplier.
Whether the affiliation still exists and, if not, how long
ago it ended.
The degree and extent of the affiliation (for example,
percentage of ownership).
If applicable, the reason for the termination of the
affiliation.
Regarding the disclosable event--
++ The type of action (for example, payment suspension);
++ When the action occurred or was imposed;
++ Whether the affiliation existed when the action (for example,
revocation) occurred or was imposed;
++ If the action is an uncollected debt--(1) the amount of the
debt; (2) whether the affiliated provider or supplier is repaying the
debt; and (3) to whom the debt is owed (for example, Medicare); and
++ If a denial, revocation, termination, exclusion or payment
[[Page 10728]]
suspension is involved, the reason for the action (for example, felony
conviction; failure to submit complete information).
Any other evidence that CMS deems relevant to its
determination.
In summary, these factors would focus largely, though not
exclusively, on--(1) the length and period of the affiliation; (2) the
nature and extent of the affiliation; and (3) the type of disclosable
event and when it occurred. A closer, longer, and more recent
affiliation involving, for instance, an excluded provider or a large
uncollected debt might pose a greater risk to the Medicare program than
a brief affiliation that occurred 5 years ago. Yet it should not be
assumed that the latter situation would never pose an undue risk. We
are not prepared in this proposed rule to make specific conclusions as
to what would constitute an undue risk. Affiliations vary widely. For
this reason, we must retain the flexibility to deal with each situation
on a case-by-case basis, utilizing the aforementioned factors. We do,
nevertheless, solicit comment on the following issues related to these
factors:
Whether additional factors should be considered.
Which, if any, of the proposed factors should not be
considered.
Which, if any, factors should be given greater or lesser
weight than others.
In Sec. 424.519(g), we propose that a CMS determination that a
particular affiliation poses an undue risk of fraud, waste or abuse
would result in, as applicable, the denial of the provider's or
supplier's initial enrollment application under new Sec.
424.530(a)(13) or the revocation of the provider's or supplier's
Medicare enrollment under new Sec. 424.535(a)(19). We stress that an
actual finding of fraud, waste or abuse would not be necessary for
Sec. 424.519(g) to be invoked. Only a determination that an ``undue
risk'' of fraud, waste or abuse exists would be required.
On December 5, 2014, we published in the Federal Register (79 FR
72499) a final rule titled ``Medicare Program; Requirements for the
Medicare Incentive Reward Program and Provider Enrollment.'' In that
rule, we finalized new Sec. 424.530(a)(6)(ii), which states that CMS
may deny enrollment if the enrolling provider, supplier or owner (as
defined in Sec. 424.502) thereof was previously the owner of a
provider or supplier that had a Medicare debt that existed when the
latter's enrollment was voluntarily terminated, involuntarily
terminated or revoked, and all of the following criteria are met:
The owner left the provider or supplier with the Medicare
debt within 1 year before or after that provider or supplier's
voluntary termination, involuntary termination or revocation.
The Medicare debt has not been fully repaid.
CMS determines that the uncollected debt poses an undue
risk of fraud, waste or abuse.
We are not proposing to modify this provision in this rule. Our
proposed affiliation provision would supplement but not supplant Sec.
424.530(a)(6)(ii). We would be able to deny enrollment under Sec.
424.530(a)(6)(ii), Sec. 424.530(a)(13) or both if the conditions for
the denial reason(s) are met.
f. Additional Affiliation Provisions
In Sec. 424.519, we propose in paragraph (h)(1) that providers and
suppliers must report new or changed information regarding existing
affiliations, consistent with our requirement in Sec. 424.516 to
submit changes in enrollment information; this would include the
reporting of new affiliations. However, under paragraph (h)(2)
providers and suppliers would not be required to report either of the
following:
New or changed information regarding past affiliations
(except as part of a Form CMS-855 revalidation application).
Affiliation data in that portion of the Form CMS-855 that
collects affiliation information if the same data is being reported in
the ``owning or managing control'' (or its successor) section of the
Form CMS-855.
We believe that requiring providers and suppliers to report new or
changed information regarding past affiliations would impose an
unnecessarily excessive burden; providers and suppliers would have to
constantly monitor and track information changes involving parties with
whom they, their owners or their managers no longer have a
relationship. Regarding the second exception, we believe this would
limit duplicate reporting and ease the burden on providers and
suppliers.
In Sec. 424.519(i), we propose that CMS may apply proposed Sec.
424.530(a)(13) or Sec. 424.535(a)(19) (as applicable) to situations
where a disclosable affiliation poses an undue risk of fraud, waste or
abuse, but the provider or supplier has not yet disclosed or is not
required at that time to disclose the affiliation to CMS. We believe
that section 1866(j)(5) of the Act is aimed at protecting Medicare,
Medicaid and CHIP against undue risks of fraud, waste or abuse at all
times, not merely upon a provider's or supplier's initial enrollment,
revalidation or reporting of new or changed affiliation information.
There may be time lapses between these events during which a particular
affiliation poses an undue risk based on changed circumstances.
Consider the following examples:
Example 1: An enrolled disclosing provider had an affiliation
with Supplier Q that ended on January 1. On May 1, Q's Medicare
enrollment was revoked. As this is a past affiliation, the provider
under Sec. 424.519(h) need not disclose the revocation as part of a
Form CMS-855 change of information. However, we should have the
authority to consider whether, in light of Q's revocation--(1) the
recently terminated affiliation poses an undue risk of fraud, waste
or abuse; and (2) the provider's enrollment should accordingly be
revoked.
Example 2: Three months after Sec. 424.519's effective date
but before the Form CMS-855 is updated to capture affiliation data,
we receive information that Medicare-enrolled Provider X owns 35
percent of a Medicaid supplier that--(1) was recently terminated
under Sec. 455.106(c)(2) for concealing information that must be
disclosed per Sec. 455.106(a), and (2) up until 4 months ago, owned
one-half of a Medicare supplier whose enrollment was recently
revoked. Although X need not report this information until the Form
CMS-855 is revised, we should not have to wait to take action under
Sec. 424.519. Permitting a provider or supplier with an affiliation
that we know poses an undue risk of fraud, waste or abuse to enroll
or remain enrolled in Medicare would be inconsistent with section
1866(j)(5) of the Act.
As with all other Medicare denials and revocations, these providers
and suppliers would be notified if their enrollment is denied or
revoked per Sec. 424.519(i).
g. Conclusion
To summarize, the process for disclosing information under Sec.
424.519 would be as follows.
First, the provider or supplier must determine whether it or any of
its owning or managing individuals or organizations has or has had an
affiliation (as defined in Sec. 424.502).
Second, if an affiliation exists or existed within the applicable
5-year timeframe, the provider or supplier must determine whether a
disclosable event in Sec. 424.519(b) has occurred. If it has, it must
be disclosed.
Third, we would determine whether the affiliation poses an undue
risk of fraud, waste or abuse. If it does, the provider's or supplier's
application would be denied or, if applicable, the provider's or
supplier's enrollment would be revoked. The provider or supplier may
appeal the denial or revocation under Sec. 405.874 or part 498,
respectively.
[[Page 10729]]
2. Medicaid
Consistent with our discussion in section II.A.1.a. of this
proposed rule and for the reasons stated therein, we propose to revise
the Medicaid provisions in 42 CFR part 455.
In Sec. 455.101, we propose to add the same definition of
``affiliation'' that we are proposing to add to Sec. 424.502, with the
exception of the paragraph regarding ``reassignment.'' Section Sec.
424.80 only applies to Medicare. However, we propose to include payment
assignments under Sec. 447.10(g) within the definition of
``affiliation'' in Sec. 455.101. Under Sec. 447.10(g), payment for
services provided by an individual practitioner may be made to--
++ The employer of the practitioner, if the practitioner is
required as a condition of employment to turn over his fees to the
employer;
++ The facility in which the service is provided, if the
practitioner has a contract under which the facility submits the claim;
or
++ A foundation, plan or similar organization operating an
organized health care delivery system, if the practitioner has a
contract under which the organization submits the claim.
As with Medicare reassignments, we believe that the relationships
described in Sec. 447.10(g) are sufficiently close to warrant their
inclusion within the definition of ``affiliation'' in Sec. 455.101;
again, a W-2 employee or independent contractor may have a closer day-
to-day relationship with the individual or organization he or she works
for than, for instance, an indirect owner has with an entity in which
he or she has a 5 percent ownership interest. We also note that these
provisions are similar to those in Sec. 424.80.
In revised Sec. 455.103, we propose that a state plan must provide
that the requirements of Sec. Sec. 455.104 through 455.107 are met.
Section 455.103 currently only references Sec. Sec. 455.104 through
455.106. Our revision would include a reference to new Sec. 455.107.
In new Sec. 455.107, we propose several paragraphs.
In paragraph (b), we propose that a provider that is submitting an
initial or revalidating Medicaid application must disclose whether it
or any of its owning or managing employees or organizations (consistent
with the definitions of ``person with an ownership or control
interest'' and ``managing employee'' in Sec. 455.101) has or, within
the previous 5 years, has had an affiliation with a currently or
formerly enrolled Medicare, Medicaid or CHIP provider or supplier
that--
Currently has an uncollected debt to Medicare, Medicaid or
CHIP, regardless of--(1) the amount of the debt; (2) whether the debt
is currently being repaid (for example, as part of a repayment plan);
or (3) whether the debt is currently being appealed. For purposes of
Sec. 455.107 only, and as stated in proposed Sec. 455.107(a), the
term ``uncollected debt'' only applies to--
++ Medicare, Medicaid or CHIP overpayments for which CMS or the
state has sent notice of the debt to the affiliated provider or
supplier;
++ CMPs (as defined in Sec. 424.57(a)); and
++ Assessments (as defined in Sec. 424.57(a));
Has been or is subject to a payment suspension under a
federal health care program (as that latter term is defined in section
1128B(f) of the Act), regardless of when the payment suspension
occurred or was imposed;
Has been or is excluded from participation in Medicare,
Medicaid or CHIP, regardless of whether the exclusion is currently
being appealed or when the exclusion occurred or was imposed; or
Has had its Medicare, Medicaid or CHIP enrollment denied,
revoked or terminated, regardless of--(1) the reason for the denial,
revocation or termination; (2) whether the denial, revocation or
termination is currently being appealed; or (3) when the denial,
revocation or termination occurred or was imposed. For purposes of
Sec. 455.107 only, the terms ``revoked,'' ``revocation,''
``terminated,'' and ``termination'' would include situations where the
affiliated provider or supplier voluntarily terminated its Medicare,
Medicaid or CHIP enrollment to avoid a potential revocation or
termination. This clarification is included in proposed Sec.
455.107(a).
In paragraph (c), we propose that the following information about
the affiliation must be disclosed:
General identifying data about the affiliated provider or
supplier. This would include the following:
++ Legal name as reported to the Internal Revenue Service or the
Social Security Administration (if the affiliated provider or supplier
is an individual).
++ ``Doing business as'' name (if applicable).
++ Tax identification number.
++ NPI.
++ Reason for disclosing the affiliated provider or supplier (for
example, uncollected CHIP debt; payment suspension).
++ Specific data regarding the affiliation relationship. Such data
would include the--(1) length of the relationship; (2) type of
relationship; and (3) degree of affiliation.
++ If the affiliation has ended, the reason for the termination.
In paragraph (d), we propose that the information described in
Sec. 455.107(b) and (c) must be furnished to the state in a manner
prescribed by the state.
In paragraph (e), we propose that the disclosing provider's failure
to fully and completely furnish the information in Sec. 455.107(b) and
(c) when the provider knew or should reasonably have known of this
information may result in--
The denial of the provider's initial enrollment
application; or
The revocation of the provider's Medicaid or CHIP
enrollment.
In paragraph (f), we propose that upon receiving the information
described in Sec. 455.107(b) and (c), the state, in consultation with
CMS, would determine whether any of the disclosed affiliations poses an
undue risk of fraud, waste or abuse. The state, in consultation with
CMS, would consider the following factors in its determination:
The duration of the disclosing party's relationship with
the affiliated provider or supplier.
Whether the affiliation still exists and, if not, how long
ago it ended.
The degree and extent of the affiliation.
If applicable, the reason for the termination of the
affiliation.
Regarding the affiliated provider's or supplier's
disclosable event--
++ The type of action;
++ When the action occurred or was imposed; and
++ Whether the affiliation existed when the action occurred or was
imposed.
++ If the action is an uncollected debt--(1) the amount of the
debt; (2) whether the affiliated provider or supplier is repaying the
debt; and (3) to whom the debt is owed (for example, Medicare);
If a denial, revocation, termination, exclusion or payment
suspension is involved, the reason for the action; and
Any other evidence that the state, in consultation with
CMS, deems relevant to its determination.
In paragraph (g), we propose that a determination that a particular
affiliation poses an undue risk of fraud, waste or abuse results in, as
applicable, the denial of the provider's initial enrollment application
or the termination of the provider's Medicaid or CHIP enrollment.
In paragraph (h), we propose the following:
Providers would be required to report new or changed
information regarding existing affiliations. This would include the
reporting of any new affiliations.
[[Page 10730]]
Providers would not be required to report new or changed
information regarding past affiliations (except as part of a
revalidation application).
In paragraph (i), we propose that the state, in consultation with
CMS, may apply paragraph (g) to situations where a reportable
affiliation poses an undue risk of fraud, waste or abuse, but the
provider has not yet disclosed or is not required at that time to
disclose the affiliation to the state.
c. CHIP
Section 2107(e) of the Act states that sections 1902(a)(77) and
(kk) of the Act (which relate to Medicaid provider screening,
oversight, and reporting requirements) apply to CHIP to the same extent
that they apply to Medicaid. Therefore, we would apply our proposed
Medicaid affiliation disclosure requirements to CHIP providers for two
principal reasons. First, section 1866(j)(5) of the Act specifically
references the need to disclose current and prior affiliations with
CHIP providers. We believe it logically follows that CHIP providers
should have to disclose similar affiliation information. Second, and
for reasons already explained, the disclosure of affiliation
information would assist our efforts in deterring fraud, waste, and
abuse in CHIP.
Section 457.990(a) states that part 455, subpart P, applies to a
state under Title XXI in the same manner as it applies to a state under
Title XIX. We propose to revise Sec. 457.990(a) such that Sec.
455.107 would also apply to Title XXI. Paragraph (a) would thus read:
``(a) part 455, subpart E and Sec. 455.107, of this chapter.''
B. Other Proposed Regulations Affecting the Medicare Program Only
Except as stated otherwise, the legal authorities for our proposals
in section II.B, are as follows. First, sections 1102 and 1871 of the
Act give the Secretary the authority to establish requirements for the
efficient administration of the Medicare program. Second, section
1866(j) of the Act states that the Secretary shall establish by
regulation a process for the enrollment of providers of services and
suppliers.
1. Revoked Under Different Name, Numerical Identifier or Business
Identity
We propose in new Sec. 424.530(a)(12) that CMS may deny a
provider's or supplier's Medicare enrollment application if CMS
determines that the provider or supplier is currently revoked under a
different name, numerical identifier or business identity, and the
applicable reenrollment bar period has not expired. Likewise, we
propose in new Sec. 424.535(a)(18) that CMS may revoke a provider's or
supplier's Medicare enrollment if CMS determines that the provider or
supplier is revoked under a different name, numerical identifier or
business identity.
As discussed in section II.A.1.a. of this proposed rule, we have
identified instances in which a provider or supplier has its Medicare
enrollment revoked but tries to evade the revocation and reenrollment
bar by opening a new provider or supplier organization to effectively
``replace'' the revoked entity. The OIG indicated in the previously-
mentioned memorandum that some providers and suppliers operate
``fronts,'' whereby associates, family members or other individuals
pose as owners or managers of the entity on behalf of the persons who
actually operate, run or profit from the business. We believe that such
behavior must be stemmed, hence our proposed additions of Sec. Sec.
424.530(a)(12) and 424.535(a)(18).
In determining whether a provider or supplier is in fact a
currently revoked provider or supplier under a different name,
numerical identifier or business identity, CMS would investigate the
degree of commonality by considering the following factors:
Owning and managing employees and organizations,
regardless of whether they have been disclosed on the Form CMS-855
application (for the definitions of ``owner'' and ``managing employee''
in Sec. 424.502 do not require the individual or organization to be
listed on the Form CMS-855 in order to qualify as such).
Geographic location (for example, same city or county).
Provider or supplier type (for example, same provider
type).
Business structure.
Any evidence indicating that the two parties are similar
or that the provider or supplier was created to circumvent the
revocation or the reenrollment bar.
It should not be assumed that having different owners, locations or
business structures would automatically result in a finding that the
two are not the same. CMS would consider any evidence indicating
whether the entities are effectively identical or that the new entity
was established to evade the revocation or reenrollment bar. Therefore,
even if several factors suggest that the entities may be distinct, we
would reserve the right to apply Sec. Sec. 424.530(a)(12) or
424.535(a)(18) if we find evidence of evasion.
Unlike with Sec. 424.519(f), no finding of ``undue risk'' would be
required in a determination under Sec. Sec. 424.530(a)(12) or
424.535(a)(18). We could invoke the latter two provisions even if there
is no finding that the revoked entity, the newly enrolling entity or
the currently enrolled entity (as applicable) poses an undue risk of
fraud, waste or abuse. This is because we are not relying upon section
1866(j)(5) of the Act as authority for these two provisions. We are
instead relying upon our general rulemaking authority in sections 1102
and 1871, as well as 1866(j) of the Act, which provides specific
authority with respect to the enrollment process for providers and
suppliers.
2. Non-Compliant Practice Location
We propose in new Sec. 424.535(a)(20) that we may revoke a
provider's or supplier's Medicare enrollment--including all of the
provider's or supplier's practice locations, regardless of whether they
are part of the same enrollment--if the provider or supplier billed for
services performed at or items furnished from a location that it knew
or should have known did not comply with Medicare enrollment
requirements.
CMS has identified examples of providers or suppliers operating
from multiple practice locations (either as part of the same enrollment
or, for DMEPOS suppliers and independent diagnostic testing facilities
(IDTFs), through separately enrolled locations), of which one or more
of the locations does not meet Medicare enrollment requirements. For
instance, a particular location may not be operational, does not comply
with certain DMEPOS or IDTF supplier standards or is otherwise
noncompliant, yet the provider or supplier continues to perform
services at or furnish items from this location (or claims to do so)
when it knows or should know that the location does not meet Medicare
enrollment requirements. We have seen this with providers and suppliers
that operate locations that either do not exist or are false
storefronts, meaning that the location appears legitimate from the
outside but is in fact a vacant site or a nonmedical business.
We have conducted site visits uncovering several similar situations
and revocations of providers and suppliers locations have accordingly
ensued. However, we believe more must be done. Dishonest providers and
suppliers must realize that if they submit claims for services or items
furnished at or from non-compliant locations, they risk not only the
revocation of that location but also of their other locations. As an
illustration,
[[Page 10731]]
assume that a DMEPOS supplier has four separately enrolled locations.
The supplier shifts one of its locations without notifying Medicare,
and the new site is a false storefront. The supplier furnishes no items
from this location, but it submits bills for DME allegedly provided
from this site. Under our proposal, CMS could revoke this location as
well as the three other sites. Even if the other sites had different
numerical identifiers, legal business names or ownership, we could take
action against them if there is evidence to suggest that they are
effectively under the control of similar parties. This is to ensure
that suppliers do not attempt to circumvent Sec. 424.535(a)(20) by
opening locations under different identities or with different ``front
men'' (such as family members).
We would consider the following factors when determining whether
and how many of the provider's or supplier's other locations should be
revoked:
The reason(s) for and facts behind the location's non-
compliance (for example, false storefront; otherwise non-operational;
other violation of supplier standards).
The number of additional locations involved.
Whether the provider or supplier has any history of final
adverse actions (as that term is defined in Sec. 424.502) or Medicare
or Medicaid payment suspensions.
The degree of risk that the location's continuance poses
to the Medicare Trust Funds.
The length of time that the non-compliant location was
non-compliant.
The amount that was billed for services performed at or
items furnished from the non-compliant location.
Any other evidence that we deem relevant to our
determination.
We emphasize that our proposal is primarily designed to identify
and pursue providers and suppliers that knowingly operate fictitious or
otherwise non-compliant locations in order to circumvent CMS policies.
3. Improper Ordering, Certifying, Referring or Prescribing of Part A or
B Services, Items or Drugs
In the previously mentioned December 5, 2014 final rule, we
finalized Sec. 424.535(a)(8)(ii), which states that we may revoke a
provider's or supplier's Medicare billing privileges if the provider or
supplier has a pattern or practice of submitting claims that fail to
meet Medicare requirements such as, but not limited to, the requirement
that the service be reasonable and necessary. This provision is
intended to place providers and suppliers on notice that they have a
legal obligation to always submit correct and accurate claims; the
provider's or supplier's repeated failure to do so poses a risk to the
Medicare Trust Funds.
On May 23, 2014 we published a final rule in the Federal Register
(79 FR 29843) titled ``Medicare Program; Contract Year 2015 Policy and
Technical Changes to the Medicare Advantage and the Medicare
Prescription Drug Benefit Programs.'' Under Sec. 424.535(a)(14), we
may revoke a physician's or eligible professional's Medicare billing
and prescribing privileges if we determine that he or she has a pattern
or practice of prescribing Part D drugs that falls into one of the
following categories:
The pattern or practice is abusive, represents a threat to
the health and safety of Medicare beneficiaries or both.
The pattern or practice of prescribing fails to meet
Medicare requirements.
In the January 10, 2014 Federal Register proposed rule (79 FR
1917), which resulted in the aforementioned May 23, 2014 final rule, we
expressed our view that the concept behind proposed Sec.
424.535(a)(8)(ii) should extend to revoking Medicare enrollment for
Part D prescribers who engage in abusive prescribing practices. We
explained that if a physician or eligible professional consistently
fails to exercise reasonable judgment in his or her prescribing
practices, we should be able to remove such individuals from the
Medicare program in order to protect beneficiaries' safety and health,
as well as the Medicare Trust Funds.
However, neither Sec. 424.535(a)(14) nor Sec. 424.535(a)(8)(ii)
address the improper ordering or certifying of Medicare services and
items or the prescribing of Part B drugs. We have received numerous
reports of physicians and eligible professionals engaging in abusive or
otherwise inappropriate ordering. While the particular circumstances of
each case have varied, they frequently fall within one or more of the
following categories: (1) The ordered service or item was not
reasonable, not necessary or both; or (2) the physician or eligible
professional misrepresents his or her diagnosis to justify the service
or test.
Such behavior increases the risk of improper payment for
inappropriate services, items or Part B drugs. It also endangers
Medicare beneficiaries by unnecessarily exposing them to potentially
harmful services and tests. As with the threats that abusive
prescribing and billing pose, we believe that the risks of improper
ordering, certifying, referring, and prescribing of Part B drugs must
be stemmed in order to protect the Medicare program.
Accordingly, we propose in new Sec. 424.535(a)(21) that CMS may
revoke a physician's or eligible professional's Medicare enrollment (as
the term ``enrollment'' is defined in Sec. 424.502) if he or she has a
pattern or practice of ordering, certifying, referring or prescribing
Medicare Part A or B services, items or drugs that is abusive,
represents a threat to the health and safety of Medicare beneficiaries
or otherwise fails to meet Medicare requirements. Recognizing that not
all patterns and practices involve inappropriate behavior, we would
consider the following factors in determining whether a pattern or
practice of improper ordering, certifying, referring or prescribing
exists:
Whether the physician's or eligible professional's
diagnoses support the orders, certifications, referrals or
prescriptions in question.
Whether there are instances where the necessary evaluation
of the patient for whom the service, item or drug was ordered,
certified, referred or prescribed could not have occurred (for example,
the patient was deceased or out of state at the time of the alleged
office visit).
The number and type(s) of disciplinary actions taken
against the physician or eligible professional by the licensing body or
medical board for the state or states in which he or she practices, and
the reason(s) for the action(s).
Whether the physician or eligible professional has any
history of final adverse actions (as that term is defined in Sec.
424.502).
The length of time over which the pattern or practice has
continued.
How long the physician or eligible professional has been
enrolled in Medicare.
The number and type(s) of malpractice suits that have been
filed against the physician or eligible professional related to
ordering, certifying, referring or prescribing that have resulted in a
final judgment against the physician or eligible professional or in
which the physician or eligible professional has paid a settlement to
the plaintiff(s) (to the extent this can be determined).
Whether any state Medicaid program or any other public or
private health insurance program has restricted, suspended, revoked or
terminated the physician's or eligible professional's ability to
practice medicine, and the reason(s) for any such restriction,
suspension, revocation or termination.
[[Page 10732]]
Any other information that we deem relevant to our
determination.
We emphasize that we are focused on egregious patterns of ordering,
certifying, referring or prescribing that fall well outside standard,
acceptable practices.
4. Reenrollment Bar Period
Under Sec. 424.535(c), if a provider, supplier, owner or managing
employee has their billing privileges revoked, they are barred from
participating in Medicare from the date of the revocation until the end
of the reenrollment bar. The reenrollment bar begins 30 days after CMS
or its contractor mails notice of the revocation and lasts a minimum of
1 year, but not greater than 3 years, depending on the severity of the
basis for revocation.
We are proposing the following changes to Sec. 424.535(c).
First, we propose to incorporate the existing version of Sec.
424.535(c) into a new paragraph (1) that would increase the current
maximum reenrollment bar from 3 years to 10 years (with the exception
of the situations described in new paragraphs (c)(2) and (c)(3),
discussed later in this section). We believe it would be reasonable in
certain cases to prevent a provider or supplier from participating in
Medicare for longer than 3 years. Indeed, certain behavior could prove
so harmful to Medicare, its beneficiaries, and/or the Trust Funds that
a very lengthy bar from Medicare is warranted. We believe that a 10-
year maximum period is appropriate, both to ensure that providers and
suppliers that engage in such activities are kept out of Medicare and
to deter others from potentially duplicating this behavior. We chose 10
years because there is precedent for this timeframe; under Sec.
424.535(a)(3)(iii), it constitutes the minimum revocation period for
providers that have been convicted of multiple felonies. However, we do
not expect to impose longer reenrollment bars for certain existing
revocation reasons. For instance, revocations that currently involve
only a 1-year reenrollment bar would not necessarily result in a longer
period under new Sec. 424.535(c)(1).
Second, we propose in new Sec. 424.535 paragraph (c)(2) that CMS
may add up to 3 more years to the provider's or supplier's reenrollment
bar (even if such period exceeds the maximum period otherwise allowable
under paragraph (c)(1)) if CMS determines that the provider or supplier
is attempting to circumvent its existing reenrollment bar by enrolling
in Medicare under a different name, numerical identifier or business
identity. We believe that such efforts to avoid Medicare rules warrant
the provider's or supplier's prohibition from Medicare for a longer
period than was originally imposed.
The affected provider or supplier could appeal CMS' imposition of
additional years to the provider's or supplier's existing reenrollment
bar under Sec. 424.535(c)(2). These appeals rights would be governed
by 42 CFR part 498. However, they would not extend to the imposition of
the original enrollment bar under Sec. 424.535(c)(1); they would be
limited to the additional years imposed under Sec. 424.535(c)(2).
Third, we propose in new Sec. 424.535 paragraph (c)(3) that CMS
may impose a reenrollment bar of up to 20 years if the provider or
supplier is being revoked from Medicare for the second time. Multiple
revocations indicate that the provider or supplier cannot be considered
a reliable partner of the Medicare program. The reenrollment bar under
paragraph (c)(3) would be in lieu of the reenrollment bar described in
paragraph (c)(1). We would determine the bar's length by considering
the following factors: (1) The reasons for the revocations; (2) the
length of time between the revocations; (3) whether the provider or
supplier has any history of final adverse actions (other than Medicare
revocations) or Medicare or Medicaid payment suspensions; and (4) any
other information that CMS deems relevant to its determination. We
could apply paragraph (c)(3) even if the two revocations occurred under
different names, numerical identifiers or business identities so long
as we can determine that the two actions effectively involved the same
provider or supplier.
Fourth, we propose in new Sec. 424.535(c)(4) that a reenrollment
bar would apply to a provider or supplier under any of its current,
former or future business names, numerical identifiers or business
identities. This would help ensure that revoked providers and suppliers
do not attempt to circumvent a revocation and reenrollment bar by
changing their name, identity, business structure, etc.
We recognize that some providers and suppliers may be concerned
about our reenrollment bar proposals. Our sole objective is to ensure
that unscrupulous providers and suppliers are kept out of Medicare for
as long as possible. Longer bars of 10 and 20 years would be reserved
for egregious cases of fraudulent, dishonest or abusive behavior.
5. Reapplication Bar
We propose in new Sec. 424.530(f) that CMS may prohibit a
prospective provider or supplier from enrolling in Medicare for up to 3
years if its enrollment application is denied because the provider or
supplier submitted false or misleading information on or with (or
omitted information from) its application in order to gain enrollment
in Medicare. This ``reapplication'' bar would apply to the individual
or organization under any current, former or future name, numerical
identifier or business identity.
The purpose of this provision is to keep untrustworthy providers
and suppliers from entering the Medicare program and to forestall
future efforts to enroll. We believe the submission of false
information or the withholding of information relevant to the
provider's or supplier's enrollment eligibility represents a
significant program integrity risk. For this reason, and to provide
consequences for such behavior, we believe that our proposed
reapplication bar is warranted.
When determining the reapplication bar's length, we would consider
the following factors: (1) The materiality of the information in
question; (2) whether there is evidence to suggest that the provider or
supplier purposely furnished false or misleading information or
deliberately withheld information; (3) whether the provider or supplier
has any history of final adverse actions or Medicare or Medicaid
payment suspensions; and (4) any other information that we deem
relevant to our determination.
6. Referral of Debt to the United States Department of Treasury
The Debt Collection Improvement Act of 1996 requires federal
agencies to refer eligible delinquent debt to the United States
Department of Treasury-designated Debt Collection Center (DCC) for
cross-servicing and offset. CMS must refer all eligible debt over 120
days delinquent for cross-servicing and offset. Prior to sending a debt
to the Department of Treasury, CMS attempts to recoup it via the
procedures outlined in CMS Publication 100-06, chapter 4. Generally
speaking, we refer a debt to the Department of Treasury only if it
cannot recover the debt through its existing procedures. However, in
all cases, a provider or supplier is given adequate opportunity to
repay the debt or make arrangements to do so (for example, via a
repayment plan) before the debt is sent to the Department of Treasury.
We believe that referral to the Department of Treasury may indicate
the provider's or supplier's unwillingness to repay a debt, which
consequently brings into doubt whether
[[Page 10733]]
the provider or supplier can be a reliable partner of the Medicare
program. Accordingly, we propose in new Sec. 424.535(a)(17) that CMS
may revoke a provider's or supplier's Medicare enrollment if the
provider or supplier has an existing debt that CMS refers to the
Department of Treasury. In determining whether a revocation is
appropriate, we would consider the following factors:
The reason(s) for the failure to fully repay the debt (to
the extent this can be determined).
Whether the provider or supplier has attempted to repay
the debt.
Whether the provider or supplier has responded to our
request(s) for payment.
Whether the provider or supplier has any history of final
adverse actions or Medicare or Medicaid payment suspensions.
The amount of the debt.
Any other information that we deem relevant to our
determination.
7. Failure To Report
Section 424.535(a)(9) permits CMS to revoke the Medicare enrollment
of a physician, non-physician practitioner, physician group or non-
physician practitioner group if the provider or supplier fails to
comply with Sec. 424.516(d)(1)(ii) or (iii), which require the
provider or supplier to report a change in its practice location or
final adverse action status within 30 days of the change.
We propose to expand Sec. 424.535(a)(9) in two ways. First, we
propose that CMS may apply Sec. 424.535(a)(9) to all of the reporting
requirements in Sec. 424.516(d), not merely those in Sec.
424.516(d)(1)(ii) and (iii). Thus, we could revoke the Medicare
enrollment of a physician, non-physician practitioner, physician group
or non-physician practitioner group if the supplier fails to report
either of the following:
A change of ownership, final adverse action or practice
location within 30 days of the change (as required under Sec.
424.516(d)(1)(i), (ii) and (iii), respectively).
Any other change in enrollment data within 90 days of the
change (as required under Sec. 424.516(d)(2)).
Second, we propose that CMS may apply Sec. 424.535(a)(9) to the
reporting requirements in Sec. 410.33(g)(2) (pertaining to IDTFs),
Sec. 424.57(c)(2) (pertaining to DMEPOS suppliers), and Sec.
424.516(e) (pertaining to all other provider and supplier types).
Consequently, we could revoke a provider or supplier under Sec.
424.535(a)(9) if any of the following occur:
An IDTF fails to report a change in ownership, location,
general supervision or final adverse action within 30 days of the
change or fails to report any other change in its enrollment data
within 90 days of the change.
A DMEPOS supplier fails to submit any change in its
enrollment information within 30 days of the change.
A provider or supplier other than a physician, non-
physician practitioner, physician group, non-physician practitioner
group, IDTF or DMEPOS supplier fails to report any of the following:
++ A change in ownership or control within 30 days of the change.
++ A revocation or suspension of a federal or state license or
certification within 30 days of the revocation or suspension.
++ Any other change in its enrollment data within 90 days of the
change.
We do not believe our revocation authority under Sec.
424.535(a)(9) should be restricted to certain provider and supplier
types that have omitted reporting a change in practice location or
final adverse action. Any failure to report changed enrollment data,
regardless of the provider or supplier type involved, is of concern to
us. We must have complete and accurate data on each provider and
supplier to help confirm that the provider or supplier still meets all
Medicare requirements and that Medicare payments are made correctly.
Inaccurate or outdated information puts the Medicare Trust Funds at
risk.
While we would retain the discretion to revoke a provider's or
supplier's enrollment for any failure to meet the reporting
requirements in Sec. 424.516(d) or (e), Sec. 410.33(g)(2) or Sec.
424.57(c)(2), our proposal is focused on egregious cases of non-
reporting. For instance, a provider's belated omission to report a ZIP
code change until 120 days after the change does not represent the
level of program integrity risk of a complete failure to report a new
practice location. We would consider the following factors in
determining whether a Sec. 424.535(a)(9) revocation is appropriate:
(1) Whether the data in question was reported; (2) if the data was
reported, how belatedly; (3) the materiality of the data in question;
and (4) any other information that we deem relevant to our
determination.
8. Payment Suspensions
Section 424.530(a)(7) permits the denial of a provider's or
supplier's Medicare enrollment application if the current owner,
physician or non-physician practitioner has been placed under a
Medicare payment suspension in accordance with Sec. Sec. 405.370
through 405.372. Under Sec. 405.371, a Medicare payment suspension may
be imposed if CMS determines that a credible allegation of fraud
against a provider or supplier exists. The general purpose of a payment
suspension is to temporarily halt the payment of Trust Fund dollars to
a provider or supplier pending the resolution of a particular matter,
such as an investigation as to whether the provider or supplier has
engaged in fraudulent activity.
We propose several revisions to Sec. 424.530(a)(7) and one
revision to Sec. 405.371.
First, we propose to expand Sec. 424.530(a)(7)'s applicability to
all provider and supplier types and to any owning or managing employee
or organization of the provider or supplier. We believe the existing
scope of Sec. 424.530(a)(7), which is limited to owners, physicians,
and non-physician practitioners, does not address the continuum of
program vulnerabilities in this area; providers and suppliers other
than physicians and non-physician practitioners are currently not
prohibited from enrolling in Medicare based on a payment suspension.
Furthermore, a managing individual or entity often has as much (or
more) day-to-day control over a provider or supplier as an owner. In
our view, permitting a provider or supplier to enroll in Medicare even
though one of its managing officials or organizations is under a
payment suspension poses a risk to Medicare and its beneficiaries.
Second, we propose to include Medicaid payment suspensions within
the scope of Sec. 424.530(a)(7). Under Sec. 455.23, the state
Medicaid agency must suspend all Medicaid payments to a provider or
supplier after the agency determines there is a credible allegation of
fraud for which a Medicaid investigation is pending (unless the agency
has good cause to not suspend payments). We see no significant
difference between Medicare and Medicaid payment suspensions in terms
of the threat posed to federal health care program integrity; indeed,
potentially fraudulent behavior in the Medicaid program could be
repeated in the Medicare program. As such, we must be able to prevent
such providers and suppliers from entering Medicare.
Third, we propose to incorporate these revised provisions into a
new Sec. 424.530(a)(7)(i).
Fourth, we propose to establish a new Sec. 424.530(a)(7)(ii) that
would permit
[[Page 10734]]
CMS to apply Sec. 424.530(a)(7) to the following:
Any of the provider's or supplier's or owning or managing
employee's or organization's current or former names, numerical
identifiers or business identities.
Any of the provider's or supplier's existing enrollments.
This reflects our desire to ensure that questionable parties are
unable to reenter the Medicare program (be it as a provider, supplier,
owner or manager) by using alternate identifiers. We are also concerned
about situations where the provider or supplier has multiple
enrollments, including those under different business structures, tax
identification numbers, etc.
We would consider the following factors in determining whether a
denial is appropriate:
The specific behavior in question.
Whether the provider or supplier is the subject of other
similar investigations.
Any other information that we deem relevant to our
determination.
Fifth, we propose to expand Sec. 405.371 to state that a Medicare
payment suspension may be imposed if a state Medicaid program suspends
payment pursuant to Sec. 455.23(a)(1). Again, we are concerned that
possible fraudulent behavior in the Medicaid program might be repeated
in the Medicare program.
9. Other Federal Program Termination
To further protect Medicare from inappropriate activities occurring
in other programs, we propose two changes regarding denials and
revocations.
(a) Denials
We propose in new Sec. 424.530(a)(14) that CMS may deny a
provider's or supplier's Medicare enrollment application if the
provider or supplier is currently terminated or suspended (or otherwise
barred) from participation in a particular state Medicaid program or
any other federal health care program, or the provider's or supplier's
license is currently revoked or suspended in a state other than that in
which the provider or supplier is enrolling. We note that under Sec.
455.416(c), a Medicaid state agency must deny a provider's or
supplier's enrollment application if the provider or supplier is
presently revoked from Medicare; Sec. 424.530(a)(14) would help ensure
consistency with the framework of Sec. 455.416(c). As mentioned
previously, we are concerned that a provider's or supplier's improper
behavior in another federal health care program may be duplicated in
Medicare. Similarly, we believe that a Medicare provider's or
supplier's actions that led to a licensure revocation or suspension in
one state could be repeated with respect to its prospective enrollment
in another state.
We believe that the presence of a relevant suspension warrants
additional scrutiny for providers or suppliers attempting to enroll in
Medicare, for the conduct underlying the suspension could raise
questions as to the prospective provider's or supplier's ability to be
a dependable Medicare participant. We recognize that licensure and
federal program suspensions are generally temporary rather than
permanent actions. However, under certain conditions, license
suspensions may be imposed for extended periods and involve serious
transgressions. We believe that under conditions indicating significant
risks to program integrity, we should consider such conduct and
determine the risk it poses before allowing the provider or supplier to
enroll.
We note that Sec. 424.530(a)(14) could apply regardless of whether
any appeals are pending. Under current Sec. 424.535(a)(12)(ii), we may
not revoke a provider's or supplier's Medicare enrollment based on a
Medicaid termination unless the provider or supplier has exhausted all
applicable appeal rights regarding the Medicaid termination. We do not
believe a similar clause should apply to Sec. 424.530(a)(14). Akin to
what we stated in the previous paragraph, we believe it would be
inappropriate to permit a Medicaid-terminated provider or supplier (or
a provider or supplier terminated under any federal program) into
Medicare simply because the provider or supplier has not yet exhausted
its appeal rights. Indeed, such a clause might encourage the provider
or supplier to file a frivolous appeal in order to enroll in Medicare
prior to the exhaustion of its appeal rights.
In determining whether to invoke Sec. 424.530(a)(14) in a
particular case, we would consider the following factors:
The reason(s) for the termination, revocation or
suspension.
Whether, as applicable, the provider or supplier is
currently terminated or suspended (or otherwise barred) from more than
one program (for example, more than one state's Medicaid program), has
been subject to any other sanctions during its participation in other
programs or by any other state licensing boards or has had any other
final adverse actions imposed against it.
Any other information that we deem relevant to our
determination.
Consistent with our discussion throughout this proposed rule, we
further propose that Sec. 424.530(a)(14) would apply to the provider
or supplier under any of its current or former names, numerical
identifiers or business identities.
(b) Revocations
Under Sec. 424.535(a)(12), Medicare may revoke a provider's or
supplier's enrollment if a state Medicaid agency terminates the
provider's or supplier's Medicaid enrollment. Similar to our discussion
concerning Sec. 424.530(a)(14), we propose to expand Sec.
424.535(a)(12)(i) such that CMS may revoke a provider's or supplier's
Medicare enrollment if the provider or supplier is terminated or
revoked (or otherwise barred) from participation in any other federal
health care program. In determining whether a revocation is
appropriate, CMS would consider the following factors:
The reason(s) for the termination or revocation.
Whether the provider or supplier is currently terminated,
revoked or otherwise barred from more than one program (for example,
more than one state's Medicaid program) or has been subject to any
other sanctions during its participation in other programs.
Any other information that we deem relevant to our
determination.
Section 424.535(a)(12)(ii) states that Medicare may not terminate a
provider's or supplier's enrollment unless and until a provider or
supplier has exhausted all applicable appeal rights. We are not
proposing to modify this provision. We would not revoke a provider's or
supplier's enrollment under paragraph (a)(12)(i) unless all applicable
appeal rights have been exhausted.
Also, for reasons previously explained, we propose to add new Sec.
424.535(a)(12)(iii) under which we may apply Sec. 424.535(a)(12)(i) to
the provider or supplier under any of its current or former names,
numerical identifiers or business identities.
10. Extension of Revocation
We propose in new Sec. 424.535(i) that CMS may revoke any and all
of a provider's or supplier's Medicare enrollments--including those
under different names, numerical identifiers or business identities and
those under different types (for example, an entity is enrolled as a
group practice via the Form CMS-855B and as a DMEPOS supplier via the
Form CMS-855S (OMB Control No. 0938-1056))--if the provider or supplier
is revoked under Sec. 424.535(a).
[[Page 10735]]
This provision is designed to ensure that individuals and entities
that are revoked for inappropriate behavior are not permitted to remain
enrolled in Medicare in any capacity. Consider the following examples:
A physician's State X enrollment is revoked because his
license in X was revoked. Under Sec. 424.535(i), we also could revoke
the physician's state Y enrollment even if he is still licensed in Y.
An entity has two enrollments: One via the Form CMS-855A
as a certified supplier, another via the Form CMS-855B as a group
practice. The entity's Form CMS-855A enrollment is revoked under Sec.
424.535(a)(4). Under Sec. 424.535(i), CMS could also revoke the
organization's Form CMS-855B enrollment, even if that enrollment is in
another state.
A non-physician practitioner is enrolled via the Form CMS-
855I (OMB Control No. 0938-0685)) as an individual supplier and as a
DMEPOS supplier via the Form CMS-855S. The individual's Form CMS-855I
enrollment is revoked for abusive billing practices. Under Sec.
424.535(i), CMS could also revoke her Form CMS-855S enrollment.
In determining whether to revoke a provider's or supplier's other
enrollments under Sec. 424.535(i), we would consider the following
factors:
The reason for the revocation and the facts of the case.
Whether any final adverse actions have been imposed
against the provider or supplier regarding its other enrollments (for
example, licensure suspensions imposed by the state, prior revocations,
payment suspensions).
The number and type(s) of other enrollments (for instance,
Form CMS-855B).
Any other information that we deem relevant to our
determination.
This provision would be applied in highly exceptional cases where
the provider's or supplier's conduct was particularly egregious or the
maintenance of the provider's or supplier's other enrollments would
jeopardize the Medicare Trust Funds. Moreover, Sec. 424.535(i) would
not be an ``all or nothing'' provision, meaning that we would not be
required to revoke all of the provider's or supplier's enrollments if
we chose to invoke Sec. 424.535(i). We would apply the previously
listed factors to each enrollment in determining whether it should be
revoked.
11. Voluntary Termination Pending Revocation
As mentioned in section II.A. of this proposed rule, we have seen
instances of providers and suppliers failing to meet Medicare
requirements or otherwise engaging in improper behavior, and then
voluntarily terminating their Medicare enrollment in order to avoid a
potential revocation of their enrollment and a consequent reenrollment
bar. For instance, assume that we perform a site visit of a provider's
lone location. The location does not comply with our requirements.
Knowing that its Medicare enrollment may soon be revoked, the provider
submits a Form CMS-855 to voluntarily terminate its enrollment; the
purpose, again, is to depart Medicare to avoid a formal revocation and
reenrollment bar and any other consequences stemming therefrom.
We believe that such attempts to circumvent the revocation process
represent a risk to the Medicare program. Not only do these actions
reflect dishonesty on the provider's or supplier's part, but also that
the provider or supplier may be deliberately taking advantage of
program vulnerabilities because no reenrollment bar has been imposed.
To this end, we propose in new Sec. 424.535(j)(1) that we may revoke a
provider's or supplier's Medicare enrollment if we determine that the
provider or supplier voluntarily terminated its Medicare enrollment in
order to avoid a revocation under Sec. 424.535(a) that CMS would have
imposed had the provider or supplier remained enrolled in Medicare. In
making our determination, we would consider all of the following:
If there is evidence to suggest that the provider knew or
should have known that it was or would be out of compliance with
Medicare requirements.
If there is evidence to suggest that the provider knew or
should have known that its Medicare enrollment would be revoked.
If there is evidence to suggest that the provider
voluntarily terminated its Medicare enrollment in order to circumvent
such revocation.
Any other evidence or information that CMS deems relevant
to its determination.
In new paragraph (j)(2), we propose that a revocation under Sec.
424.535(j)(1) would be effective the day before the Medicare contractor
receives the provider's or supplier's Form CMS-855 voluntary
termination application. This date is appropriate because the
provider's or supplier's submission of the voluntary termination
application is the basis for a revocation under paragraph (j)(1);
procedurally, the voluntary termination would be reversed (if the
Medicare contractor processed the application to completion) and then
the provider's or supplier's enrollment would be revoked.
12. Enrollment for Ordering/Certifying/Referring/Prescribing of All
Part A and B Services, Items, and Drugs; Maintenance of Documentation.
a. Enrollment
We stated earlier that section 6405(c) of the Affordable Care Act
gives the Secretary the authority to extend 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 (including covered Part
D drugs) that are ordered, prescribed or referred by a physician or
eligible professional enrolled under section 1866(j) of the Act. Under
this authority, Sec. 424.507(a) and (b) collectively state that to
receive payment for ordered imaging services, clinical laboratory
services, DMEPOS items or home health services, the service or item
must have been ordered or certified by a physician or, when permitted,
an eligible professional who--(1) is enrolled in Medicare in an
approved status; or (2) has a valid opt-out affidavit on file with an
A/B MAC.
Sections 424.507(a) and (b) were implemented via an April 27, 2012
final rule titled: ``Medicare and Medicaid Programs; Changes in
Provider and Supplier Enrollment, Ordering and Referring, and
Documentation Requirements; and Changes in Provider Agreements'' (77 FR
25284). Also, in the previously mentioned May 23, 2014 final rule (79
FR 29843), we finalized provisions under which the prescriptions of a
physician or eligible professional who is not enrolled in Medicare and
does not have a valid opt-out affidavit on file with an A/B MAC would
not be covered under the Part D program.
The purpose of the provider enrollment process is to ensure that
providers and suppliers that furnish services and items to Medicare
beneficiaries meet all Medicare requirements. Section 424.507(a) and
(b) were designed to help us confirm that individuals who order or
certify certain types of Medicare services and items were qualified to
do so. Indeed, without the enrollment process, we cannot determine
whether these persons meet all Medicare requirements. There could be
situations where an unqualified individual is ordering numerous
Medicare services other than those currently listed in Sec. 424.507
(such as tests) that are potentially dangerous to beneficiaries.
Moreover, unnecessary services and items could result in
[[Page 10736]]
wasted Medicare expenditures. In short, we must be able to screen all
physicians and eligible professionals to ensure that Medicare
requirements are met, and that Medicare beneficiaries and the Trust
Funds are protected.
We believe that the importance of confirming that all physicians
and eligible professionals who order, certify, refer or prescribe Part
A or B services, items or drugs (and not simply those services and
items described in Sec. 424.507) are qualified to do so dictates that
we expand the purview of Sec. 424.507. To this end, we propose the
following changes to Sec. 424.507(a) and (b):
The heading to paragraph (a) currently reads: ``Conditions for
payment of claims for ordered covered imaging and clinical laboratory
services and items of durable medical equipment, prosthetics,
orthotics, and supplies (DMEPOS).'' We propose to change this to state:
``Conditions for payment of claims for ordered, certified, referred or
prescribed covered Part A or B services, items or drugs.''
The heading to existing paragraph (a)(1) reads: ``Ordered covered
imaging, clinical laboratory services, and DMEPOS item claims.'' We
propose to change this to state: ``Ordered, certified, referred or
prescribed covered Part A or B services, items or drugs.''
The opening sentence in paragraph (a)(1) currently states in part:
``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)''. We propose to change this language to
read: ``To receive payment for ordered, certified, referred or
prescribed covered Part A or B services, items or drugs''.
Paragraph (a)(1)(i) states in part: ``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''. We propose to change this language to:
``The ordered, certified, referred or prescribed covered Part A or B
service, item or drug must have been ordered, certified, referred or
prescribed by''.
In paragraph (a)(2), we propose to change the heading from ``Part B
beneficiary claims'' to ``Part A and B beneficiary claims.'' We also
propose to change the language that states ``To receive payment for
ordered covered items and services listed at Sec. 424.507(a)'' to ``To
receive payment for ordered, certified, referred or prescribed covered
Part A or B services, items or drugs''.
In paragraphs (a)(1)(ii), (a)(1)(iii), and (a)(2)(i), we propose to
change the language that reads ``who ordered the item or service'' to
``who ordered, certified, referred or prescribed the Part A or B
service, item or drug''.
We propose to change the existing language in paragraphs (a)(1)(iv)
and (a)(2)(ii) that reads ``If the item or service is ordered by'' to
``If the Part A or B service, item or drug is ordered, certified,
referred or prescribed by''.
We propose to revise the existing language in paragraphs
(a)(1)(iv)(A)(1) and (a)(2)(ii)(A)(1) from ``As the ordering supplier''
to ``As the ordering, certifying, referring or prescribing supplier''.
We propose to change the current language in paragraphs
(a)(1)(iv)(B) and (a)(2)(ii)(B) that reads ``order such items and
services'' to ``order, certify, refer or prescribe such services,
items, and drugs''.
In paragraphs (a)(1)(iv)(B)(1) and (a)(2)(ii)(B)(1), we propose to
replace the word ``order'' with ``order, certify, refer or prescribe''.
We propose to delete the existing version of paragraph (b), which
deals with home health services. Such services would be addressed in
revised paragraph (a). We propose to redesignate current paragraph (c)
as revised paragraph (b). We also propose in this paragraph to--
Change the language that reads ``covered items and
services'' to ``ordered, certified, referred or prescribed Part A or B
services, items or drugs;''
Delete ``or (b)'' and ``and (b)'', since the existing
version of paragraph (b) would be replaced;
Change ``paragraphs (a)(1)'' to ``paragraph (a)(1)''; and
Delete ``respectively.''
We propose to redesignate current paragraph (d) as revised
paragraph (c). We also propose in this paragraph to do the following:
Change the language that reads ``covered items or
services'' to ``ordered, certified, referred or prescribed covered Part
A or B services, items or drugs''.
Change the language that states ``paragraphs (a) and (b)''
to ``paragraph (a).''Delete paragraph (d).
Our proposal would include drugs that are covered under Part B.
This, combined with Sec. 423.120(c), would help confirm that all
prescribers of Medicare drugs are thoroughly vetted for compliance with
Medicare requirements.
We further propose that our changes to Sec. 424.507 would become
effective on January 1, 2018, in order to give sufficient time for--(1)
providers and suppliers to complete the enrollment or opt-out process;
(2) stakeholders (including CMS and its contractors) to prepare for,
operationalize, and implement these requirements; and (3) provider and
beneficiary education. The current version of Sec. 424.507 would
remain in effect through December 31, 2017.
In the April 27, 2012 final rule (77 FR 25291), we agreed with
commenters that there were a number of operational issues associated
with a requirement that services of a specialist be ordered or
referred, and we removed that requirement. However, with the successful
implementation of the current version of Sec. 424.507, we believe that
the expansion of Sec. 424.507 to include other services can be fully
operationalized.
b. Maintenance of Documentation
In the November 19, 2008 Federal Register, we published a final
rule with comment period titled, ``Medicare Program; 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'' (73 FR 69726). In that rule, we
established Sec. 424.516(f) stating that--(1) a provider or supplier
is required 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; and (2) physicians
and non-physician practitioners are required to maintain written
ordering and referring documentation for 7 years from the date of
service.
Section 6406(b)(3) of the Affordable Care Act amended 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. Under section 6406(a) of
the Affordable Care Act, which amended section 1842(h) of the Act, the
Secretary may revoke a physician's or supplier's enrollment if the
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
[[Page 10737]]
other items or services written or ordered by such physician or
supplier, as specified by the Secretary.
Consistent with the authority given to the Secretary in sections
6406(a) and (b)(3) of the Affordable Care Act, we revised Sec.
424.516(f) in the previously referenced April 27, 2012 final rule to
state as follows:
Under paragraph (f)(1), a provider or supplier that
furnishes covered ordered items of DMEPOS, clinical laboratory, imaging
services or covered ordered/certified home health services is required
to maintain documentation for 7 years from the date of service, and
provide access to that documentation upon the request of CMS or a
Medicare contractor.
Under paragraph (f)(2), 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 maintain documentation for 7 years
from the date of service, and provide access to that documentation upon
the request of CMS or a Medicare contractor.
The documentation in paragraphs (f)(1) and (2) 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.
We propose to expand these requirements in Sec. 424.516(f) to
include all Part A and Part B services, items, and drugs that are
ordered, certified, referred or prescribed by a physician or, when
permitted, eligible professional. Thus, the provider or supplier
furnishing the Part A or B service, item or drug, as well as the
physician or, when permitted, eligible professional who ordered,
certified, referred or prescribed the service, item or drug, would have
to maintain documentation for 7 years from the date of the service and
furnish access to that documentation upon a CMS or Medicare contractor
request. The documentation would include written and electronic
documents (including the NPI of the ordering/certifying/referring/
prescribing physician or, when permitted, eligible professional)
relating to written orders, certifications, referrals, prescriptions,
and requests for payments for a Part A or B service, item or drug.
We believe it is important that our expansion of Sec. 424.516(f)
include all Part A and B services, items, and drugs be consistent with
our proposed revisions to Sec. 424.507. Both provisions are intended
to help make certain that payments for Part A and B services, items,
and drugs are made correctly. To require all persons who order,
certify, refer, and prescribe Part A and B services, items or drugs to
enroll in Medicare without requiring them (or the billing provider) to
retain supporting documentation would undercut the effectiveness of
Sec. 424.507. Without being able to review this documentation, we may
lack the ability to confirm that the order, certification, referral or
prescription was proper and that the ordering, certifying, referring or
prescribing individual was qualified.
13. Opt-Out Physicians and Practitioners
As previously mentioned, no Medicare payment (either directly or
indirectly) will be made for services furnished by opt-out physicians
or practitioners, except as permitted in accordance with Sec.
405.435(c) and Sec. 405.440. The effects of opting-out are described
in Sec. 405.425. Section 405.425(i) states that an opt-out physician
or practitioner who has not been excluded under sections 1128, 1156 or
1892 of the Act may order, certify the need for or refer a beneficiary
for Medicare-covered items and services, provided he or she is not paid
directly or indirectly for such services (except as provided in Sec.
405.440). Under Sec. 405.425(j), an excluded physician or practitioner
may not order, prescribe or certify the need for Medicare-covered items
and services except as provided in 42 CFR 1001.1901, and must otherwise
comply with the terms of the exclusion in accordance with 42 CFR
1001.1901.
We propose to revise Sec. 405.425(i) and (j) by including opt-out
physicians and practitioners who are revoked under Sec. 424.535. Thus,
a revoked opt-out physician or practitioner would be unable to order,
prescribe, and certify the need for or refer a beneficiary for
Medicare-covered services and items except as otherwise provided in
those paragraphs.
We are concerned that revoked physicians and practitioners who have
opted-out could, through inappropriate ordering and certifying
practices, pose a risk to Medicare beneficiaries. Our concern is
heightened because opt-out physicians and practitioners are not subject
to the same stringent enrollment and verification processes that
enrolled physicians and practitioners are. Therefore, we believe that
these proposed changes are necessary.
14. Moratoria
Under Sec. 424.570(a), CMS may impose a temporary moratorium on
the enrollment of new Medicare providers and suppliers of a particular
type or the establishment of new practice locations of a particular
type in a particular geographic area. Per Sec. 424.570(a)(2)(i), a
moratorium is imposed when CMS determines that there is a significant
potential for fraud, waste or abuse with respect to a particular
provider or supplier type or a particular geographic area or both.
Consistent with this authority, we have published several Federal
Register documents announcing the imposition of a temporary moratorium
on the enrollment of HHAs and ambulance suppliers. (See, for example,
the July 31, 2013 (78 FR 46339) and February 4, 2014 (79 FR 6475)
Federal Register.)
We are proposing several changes to Sec. 424.570(a).
a. Change in Practice Location
Section 424.570(a)(1)(iii) states that a temporary moratorium does
not apply to changes in practice locations, changes in provider or
supplier information (such as phone numbers) or changes in ownership
(except changes in ownership of HHAs that would require an initial
enrollment under Sec. 424.550)).
We are proposing three revisions to Sec. 424.570(a)(1)(iii).
The first proposal would divide the current version of Sec.
424.570(a)(1)(iii) into paragraphs (A), (B), and (C) so that each
requirement mentioned in paragraph (iii) could be addressed
individually.
Secondly, we would clarify in paragraph (a)(1)(iii)(A), which would
address practice locations, that a temporary moratorium applies to
situations in which a provider or supplier is changing a practice
location from a location outside the moratorium area to a location
inside the moratorium area. We see no difference between this situation
and one in which a provider or supplier is opening a brand new practice
location in the moratorium area. In both cases, an additional site is
being established in the moratorium area, something the moratorium is
designed to prevent. Therefore, we believe this change is necessary.
Lastly, we would clarify the existing policy in paragraph
(a)(1)(iii)(C) by removing the language ``under Sec. 424.550''. Under
Sec. 489.18(c), if an HHA changes ownership as specified in Sec.
489.18(a), the existing provider agreement is automatically assigned to
[[Page 10738]]
the new owner. However, if the new owner declines to accept the assets
and liabilities of the HHA and refuses assignment of the provider
agreement, Sec. 489.18(c) does not apply and the HHA must enroll as a
new provider, that is, via an initial enrollment. The existing
reference to Sec. 424.550 in paragraph (a)(1)(iii) may have caused
some confusion on this point. Accordingly, we are proposing to remove
this reference in order to clarify current policy.
b. Application of Moratorium
Section 424.570(a)(1)(iv) currently states that a temporary
enrollment moratorium does not apply to any enrollment application that
has been approved by the enrollment contractor but not yet entered into
PECOS at the time the moratorium is imposed. We propose to revise this
paragraph to state that a temporary moratorium does not apply to any
enrollment application that has been received by the Medicare
contractor prior to the date the moratorium is imposed.
In the moratoria that have been imposed, some providers and
suppliers have spent many thousands of dollars preparing for enrollment
only to have their Form CMS-855 applications denied near the end of the
enrollment process because of the sudden imposition of a moratorium.
This has been especially problematic for HHAs--(1) whose Form CMS-855A
applications have been recommended for approval by the contractor; (2)
that have successfully completed a state survey; and (3) whose
applications and survey results have been forwarded by the state to the
CMS regional office for final review. This entire process can take a
substantial amount of time, and the considerable resources the provider
or supplier may have expended by this point are effectively lost when
CMS imposes a moratorium.
We believe this has been an unintended consequence of the
moratoria. In our view, the overall objective of the moratoria--the
need to reduce the potential for fraud, waste or abuse in certain
geographic areas--can be equally satisfied by applying a moratorium to
applications submitted after the moratorium is imposed. Thus, we
believe that our proposed ``prior to the moratorium date'' threshold is
appropriate.
We also propose in Sec. 424.570(a)(1)(iv) to change the term
``enrollment contractor'' to ``Medicare contractor.'' We believe the
latter term is more consistent with CMS' use of Medicare Administrative
Contractors.
15. Surety Bonds
Since 2009, certain DMEPOS suppliers have been required under Sec.
424.57(d) to obtain, submit, and maintain a surety bond in an amount of
at least $50,000 as a condition of enrollment. Paragraph (d)(5)(i)
states that the surety bond must guarantee that the surety will, within
30 days of receiving written notice from CMS containing sufficient
evidence to establish the surety's liability under the bond of unpaid
claims, CMPs or assessments, pay CMS a total of up to the full penal
amount of the bond in the following amounts: (1) The amount of any
unpaid claim, plus accrued interest, for which the DMEPOS supplier is
responsible; and (2) the amount of any unpaid claims, CMPs or
assessments imposed by CMS or the OIG on the DMEPOS supplier, plus
accrued interest. Further, paragraph (d)(5)(ii) states that the surety
bond must provide that the surety is liable for unpaid claims, CMPs or
assessments that occur during the term of the bond.
We have specific procedures for collecting monies from sureties in
accordance with Sec. 424.57(d)(5) and have recouped several million
dollars via these procedures. However, we have encountered instances
where the surety has failed to submit payment to CMS, notwithstanding
its obligation to do so under both Sec. 424.57(d)(5) and the surety
bond's terms. We do not believe we should permit a DMEPOS supplier to
use that particular surety when the latter has not fulfilled its legal
responsibilities to us as the obligee under the surety bond. We thus
propose in new Sec. 424.57(d)(16) that CMS may reject an enrolling or
enrolled DMEPOS supplier's new or existing surety bond if the surety
that issued the bond has failed to make a required payment to CMS in
accordance with Sec. 424.57(d). This means that we could reject any
and all surety bonds furnished by the surety to enrolling or enrolled
DMEPOS suppliers under Sec. 424.57(d), not just the surety bond(s) on
which the surety refused to make payment. If we reject a surety bond
under proposed Sec. 424.57(d)(16), the enrolling or enrolled DMEPOS
supplier would have to obtain a bond from a new surety in order to
enroll in or maintain its enrollment in Medicare.
To illustrate how Sec. 424.57(d)(16) would operate, suppose a
surety has issued surety bonds for DMEPOS suppliers W, X, Y, and Z, all
of which are enrolled in Medicare. CMS sought to collect from the
surety on the bond issued for Supplier X, but the surety failed to make
payment. We would have the discretion to--(1) reject the bonds for W,
X, Y, and Z, thus requiring the suppliers to obtain new bonds from a
different surety; and (2) refuse to accept future bonds issued to
DMEPOS suppliers by the non-compliant surety. In making a determination
under items (1) and (2) in the previous sentence, CMS would consider
the following several factors:
The total number of Medicare-enrolled DMEPOS suppliers to
which the surety has issued surety bonds.
The total number of instances in which the surety has
failed to make payment to CMS.
The reason(s) for the surety's failure(s) to pay.
The percentage of instances in which the surety has failed
to pay.
The total amount of money that the surety has failed to
pay.
Any other information that CMS deems relevant to its
determination.
Although CMS would reserve the right to reject all of a surety's
existing bonds with Medicare-enrolled DMEPOS suppliers if the surety
failed to make even one required payment, CMS would take into account
the circumstances surrounding the surety and its failure to make
payment per the aforementioned factors.
16. Reactivation
Under Sec. 424.540(a), a provider's or supplier's Medicare billing
privileges may be deactivated if the provider or supplier fails to--(1)
submit any Medicare claims for 12 consecutive calendar months; (2)
report a change to its Medicare enrollment information within 90
calendar days (or, for changes in ownership or control, within 30
days); or (3) furnish complete and accurate information and all
supporting documentation within 90 calendar days of receipt of
notification from CMS to submit an enrollment application and
supporting documentation, or to resubmit and certify the accuracy of
its enrollment information. To reactivate its billing privileges, the
provider or supplier must follow the requirements of Sec. 424.540(b).
Specifically--
Section 424.540 paragraph (b)(1) states that if the
provider or supplier is deactivated for any reason other than non-
submission of a claim, the provider or supplier must submit a new
enrollment application or, when deemed appropriate, recertify that the
enrollment information currently on file with Medicare is correct; and
Paragraph (b)(2) states that if the provider or supplier
is deactivated for non-submission of a claim, it must recertify that
the enrollment information currently on file with Medicare is
[[Page 10739]]
correct and furnish any missing information as appropriate.
We propose to revise subsection (b) in two ways. Paragraph (1)
would state that in order for a deactivated provider or supplier to
reactivate its Medicare billing privileges, it must recertify that its
enrollment information currently on file with Medicare is correct and
furnish any missing information as appropriate. Paragraph (2) would
state that notwithstanding paragraph (1), CMS may for any reason
require a deactivated provider or supplier to submit a complete Form
CMS-855 application as a prerequisite for reactivating its billing
privileges:
There are several reasons for these proposed changes. First, the
existing language in Sec. 424.540(b)(1) has been a source of confusion
to providers and suppliers because it does not articulate what the
phrase ``when deemed appropriate'' means; there also is some repetition
between paragraphs (b)(1) and (b)(2), for both indicate that a
recertification is acceptable. Our proposed version of paragraph
(b)(1), which combines parts of existing paragraphs (b)(1) and (b)(2),
would clarify that a provider or supplier may use recertification--
regardless of the deactivation reason--as a means of reactivation.
Second, we believe CMS should have the discretion to require at any
time the submission of a complete Form CMS-855 reactivation application
irrespective of the deactivation reason. The Form CMS-855 captures
information about the provider or supplier that, in the case of a
reactivation, would help us determine whether the provider or supplier
is still in compliance with Medicare enrollment requirements. A
recertification, meanwhile, generally only consists of a statement from
the provider or supplier that the information on file is correct and,
if necessary, the submission of Form CMS-855 pages containing updated
information. Therefore, the Form CMS-855 collects more information than
the recertification submission, and there may be situations where CMS
determines that a complete application must be submitted. These could
include, but are not limited to, the following:
The provider or supplier was deactivated for failing to
submit a claim for 12 consecutive months and has been deactivated for
at least 6 months.
The provider or supplier does not have access to Internet-
based PECOS.
The provider or supplier was deactivated for failing to
report a change of information.
In these circumstances, respectively, the provider or supplier--(1)
has not submitted a claim for at least 18 months; (2) cannot view its
existing enrollment data and thus may be unable to determine the
accuracy of this information; and (3) previously failed to comply with
Medicare requirements by not timely reporting changed enrollment data.
Such instances, in our view, raise questions as to the validity of the
provider's or supplier's current enrollment information and possibly
its compliance with existing Medicare requirements, thus warranting a
complete Form CMS-855 if we deem it necessary. We stress that we could
request a complete application in any reactivation situation, not
simply those outlined in this proposed section. However, we solicit
comments on whether we should restrict the reasons for which CMS may
request a complete reactivation application and, if so, what those
reasons should be.
While we propose to revise Sec. 424.540(b)(1) and (2) as
previously described, we are not proposing any changes to Sec.
424.540(b)(3).
17. Changes to Definition of Enrollment
We propose several additional changes to 42 CFR part 424 to address
the general concept of enrollment as it pertains to the Form CMS-855O
(OMB Control No. 0938-1135), which is used by physicians and eligible
professionals seeking to enroll in Medicare solely to order and certify
certain items or services and/or prescribe Part D drugs.
a. Definition of ``Enroll/Enrollment'' (Sec. 424.502)
We propose several revisions of the existing definition of
``Enroll/Enrollment'' in Sec. 424.502.
First, the opening sentence of the definition currently states:
``Enroll/Enrollment means the process that Medicare uses to establish
eligibility to submit claims for Medicare-covered items and services,
and the process that Medicare uses to establish eligibility to order or
certify Medicare-covered items and services.'' We propose to change
this to read: ``Enroll/Enrollment means the process that Medicare uses
to establish eligibility to submit claims for Medicare-covered items
and services, and the process that Medicare uses to establish
eligibility to order, certify, refer or prescribe Medicare-covered Part
A or B services, items or drugs or to prescribe Part D drugs.'' There
are two reasons for this change. One is to align this definition with
the language in our proposed revisions to Sec. 424.507(a) and (b).
(See section II.A.12. of this proposed rule.) The second is to address
in this definition the enrollment provisions in Sec. 423.120(c)(6)
relating to Part D drugs. In both cases, we are clarifying that the
enrollment process includes a physician's or eligible professional's
completion of the Form CMS-855O in order to meet the requirements of
Sec. Sec. 424.507(a) and (b) and 423.120(c)(6).
Second, the current version of paragraph (2) of the definition of
``Enroll/Enrollment'' states: ``Except for those suppliers that
complete the Form CMS-855O form, CMS-identified equivalent, successor
form or process for the sole purpose of obtaining eligibility to order
or certify Medicare-covered items and services, validating the provider
or supplier's eligibility to provide items or services to Medicare
beneficiaries.'' We propose to change this to read: ``Except for those
suppliers that complete the Form CMS-855O, CMS-identified equivalent,
successor form or process for the sole purpose of obtaining eligibility
to order, certify, refer or prescribe Medicare-covered Part A or B
services, items or drugs or to prescribe Part D drugs, validating the
provider's or supplier's eligibility to provide items or services to
Medicare beneficiaries.'' This revision is to clarify that a supplier's
completion of the Form CMS-855O solely to obtain eligibility to order,
certify, refer or prescribe Medicare-covered Part A or B services,
items or drugs or to prescribe Part D drugs, does not convey Medicare
billing privileges to the supplier.
Third, and for reasons similar to those involving our proposed
change to paragraph (2) of the definition of ``Enroll/Enrollment,'' we
propose to revise paragraph (4) thereof. The new version of paragraph
(4) would read: ``Except for those suppliers that complete the Form
CMS-855O, CMS-identified equivalent, successor form or process for the
sole purpose of obtaining eligibility to order, certify, refer or
prescribe Medicare-covered Part A or B services, items or drugs or to
prescribe Part D drugs, granting the Medicare provider or supplier
Medicare billing privileges.''
b. Revision to Sec. 424.505
We also propose to replace the language in Sec. 424.505 that
states ``to order or certify Medicare-covered items and services'' with
``to order, certify, refer or prescribe Medicare-covered Part A or B
services, items or drugs or to prescribe Part D drugs.'' This is to
clarify that completion of the Form CMS-855O does not convey Medicare
billing privileges to the supplier.
[[Page 10740]]
c. Revision to Sec. 424.510(a)(3)
Section 424.510(a)(3) currently reads: ``To be enrolled solely to
order and certify Medicare items or services, a physician or non-
physician practitioner must meet the requirements specified in
paragraph (d) of this section except for paragraphs (d)(2)(iii)(B),
(d)(2)(iv), (d)(3)(ii), and (d)(5), (6), and (9) of this section.'' We
propose to revise this to state: ``To be enrolled solely to order,
certify, refer or prescribe Medicare-covered Part A or B services,
items or drugs or to prescribe Part D drugs, a physician or non-
physician practitioner must meet the requirements specified in
paragraph (d) of this section except for paragraphs (d)(2)(iii)(B),
(d)(2)(iv), (d)(3)(ii), and (d)(5), (6), and (9) of this section.''
This change is intended to include within the purview of Sec.
424.510(a)(3) those suppliers who are enrolling via the Form CMS-855O
pursuant to Sec. 423.120(c)(6) or pursuant to our proposed revisions
to Sec. 424.507(a) and (b).
d. Revision to Sec. 424.535(a)
We also propose to change the term ``billing privileges'' in the
opening paragraph of Sec. 424.535(a) to ``enrollment.'' The paragraph
would thus read: ``CMS may revoke a currently enrolled provider's or
supplier's Medicare enrollment and any corresponding provider agreement
or supplier agreement for the following reasons''. This is to clarify
that the revocation reasons in Sec. 424.535(a) apply to all enrolled
parties, including suppliers who are enrolled solely to order, certify,
refer or prescribe Medicare-covered Part A or B services, items or
drugs, or to prescribe Part D drugs; the reasons are not limited to
providers and suppliers that have Medicare billing privileges. Thus,
for instance, a Part D prescriber's Medicare enrollment may be revoked
if one of the revocation reasons in Sec. 424.535(a) applies.
We note also that the opening paragraph of Sec. 424.530(a), which
deals with denials, uses the term ``enrollment'' as well. Our change to
Sec. 424.535(a) would achieve consistency with Sec. 424.530(a) in
this regard.
III. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-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.
Concerning our affiliation proposal (Sec. Sec. 424.519 and
455.107), and in the following discussion, the principal burden would
come from completion of the applicable enrollment application sections
and the time involved in researching data. However, we do solicit
public comment and feedback regarding these burdens.
There are also burdens associated with our remaining proposals as
discussed later in this section.
A. ICRs Related to Affiliations (Sec. Sec. 424.519 and 455.107)
Proposed Sec. Sec. 424.519 and 455.107 require, respectively, that
a Medicare, Medicaid or CHIP provider or supplier disclose information
about present and past affiliations with certain currently or formerly
enrolled Medicare, Medicaid or CHIP providers and suppliers. Medicare
providers and suppliers would need to furnish this information via the
paper or Internet-based version of the Form CMS-855 application. Though
the specific vehicle for collecting this data from Medicaid and CHIP
providers and suppliers would be left to the state's discretion, we
anticipate that the information would be provided on an existing
enrollment form or through a separate form created by the state. The
principal burden involved with this collection would be the time and
effort needed to--(1) obtain this information; and (2) complete and
submit the appropriate section of the applicable form.
1. Medicare
a. Initially Enrolling Providers and Suppliers (Sec. 424.519(b))
Based on CMS data, an average of approximately 70,000 providers and
suppliers seek to initially enroll in the Medicare program in any given
12-month period. This includes physicians; physician groups; non-
physician practitioners; non-physician practitioner groups; Part A
certified providers; Part B certified suppliers; Part B non-certified
suppliers; and DMEPOS suppliers. Each of these providers and suppliers
would be required to furnish the information described in Sec. 424.519
on the appropriate Form CMS-855 enrollment application.
We estimate that it would take each provider or supplier an average
of 10 hours to obtain and furnish this information. We believe this is
a high-end estimate because providers and suppliers will generally
know, or be able to research, their present and past affiliations and
their relationship with Medicare, Medicaid, and CHIP. Also, many
enrolling physicians, non-physician practitioners, and other small
providers and suppliers will have few, if any, reportable affiliations
due to, for example, the limited number of owners and managing
employees they may have or have had. However, we do not wish to
underestimate the potential burden and we acknowledge that there may be
instances where the provider or supplier would need to contact the
affiliated provider or supplier regarding certain information. With a
10-hour burden for 70,000 providers and suppliers, we estimate that the
annual hourly burden for compliance with Sec. 424.519 would be 700,000
hours.
Based on our experience, we believe that the reporting provider's
or supplier's administrative staff (for example, officer managers and
support staff) would be responsible for securing and listing
affiliation data on the Form CMS-855. According to the most recent wage
data provided by the Bureau of Labor Statistics (BLS) for May 2014, the
mean hourly wage for the general category of ``Office and
Administrative Support Occupations'' is $17.08 per hour (see http://www.bls.gov/oes/current/oes_nat.htm#43-0000 With fringe benefits and
overhead, the per hour rate is $34.16.
Using this per hour rate, we estimate the annual ICR cost burden
for initially enrolling providers and suppliers to be $23,912,000
(700,000 hours x $34.16).
b. Revalidating Providers and Suppliers (Sec. 424.519(b))
Medicare providers and suppliers, other than DMEPOS suppliers, are
required to revalidate their Medicare enrollment every 5 years. (DMEPOS
suppliers must revalidate every 3 years.) There are approximately 1.5
million providers and suppliers enrolled in the Medicare program; of
this figure, roughly 87,000 are DMEPOS suppliers. For purposes of this
ICR statement only, we project that future revalidations will be
performed in relative accordance with the previously-referenced 5-year
and 3-year periods.
[[Page 10741]]
Table 1--Estimated Number of Non-DMEPOS Supplier Revalidations: 2017-
2021
------------------------------------------------------------------------
Number of
Calendar year revalidations
------------------------------------------------------------------------
2017................................................... 300,000
2018................................................... 300,000
2019................................................... 300,000
2020................................................... 300,000
2021................................................... 300,000
------------------------------------------------------------------------
Table 2--Estimated Number of DMEPOS Supplier Revalidations: 2017-2021
------------------------------------------------------------------------
Number of
Calendar year revalidations
------------------------------------------------------------------------
2017................................................... 29,000
2018................................................... 29,000
2019................................................... 29,000
2020................................................... 29,000
2021................................................... 29,000
------------------------------------------------------------------------
Table 3--Estimated Number of Revalidations: 2015-2019 *
------------------------------------------------------------------------
Number of
Calendar year revalidations
------------------------------------------------------------------------
2017................................................... 329,000
2018................................................... 329,000
2019................................................... 329,000
2020................................................... 329,000
2021................................................... 329,000
------------------------------------------------------------------------
* Table 3 combines the figures in Tables 1 and 2.
We note that we have the authority to perform ``off-cycle''
revalidations under Sec. 424.515(e), that is, revalidations occurring
more frequently than the 5-year and 3-year periods. Also, certain years
may see fewer revalidations than others, for example, as a result of
higher levels of attrition during a previous year. Since we cannot
predict the exact number of revalidations (off-cycle or otherwise) that
may occur in future, the figures in Table 2 represent our best
estimates.
Through the revalidation process, providers and suppliers generally
need to provide the same information as initially enrolling providers
and suppliers. Hence, we estimate it would take revalidating providers
and suppliers 10 hours to obtain and furnish affiliation information,
and the work would be performed by administrative staff.
Using our estimate of 329,000 affected providers and suppliers each
year, we project an annual ICR cost burden of $112,386,400 (329,000 x
10 hours x $34.16).
c. New and Changed Affiliations (Sec. 424.519(h))
Generally speaking, the Form CMS-855 does not presently collect
information regarding the provider's or supplier's (or the provider's
or supplier's owning or managing individuals' and organizations')
interests in other Medicare providers and suppliers. As such, we cannot
reasonably estimate the number of providers and suppliers that would
submit Form CMS-855 change of information applications reporting a new
or changed affiliation based on historical data. However, we project
that it would take approximately 30 minutes (or .5 hours) for a
provider or supplier to report and submit new or changed affiliation
information to its Medicare contractor. We request comment on how often
reportable affiliations are created or are changed, therefore
necessitating reporting to CMS.
We estimate a total annual ICR burden on Medicare providers and
suppliers from Sec. 424.519 of 3,990,000 hours (700,000 + 3,290,000)
at a cost of $136,298,400 ($23,912,000 + $112,386,400).
2. Medicaid and CHIP
a. Initially Enrolling Providers and Suppliers (Sec. 455.107(b))
Based on existing data, we estimate that 56,250 providers and
suppliers in a given 12-month period seek to enroll in the Medicaid
program or CHIP. As stated before, the mechanism for collecting the
data required under Sec. 455.107 would lie within the state's
discretion. While burden may vary depending on the specific collection
vehicle, we estimate it would take each provider or supplier an average
of 10 hours to obtain and furnish this information, similar to our
estimate for Medicare providers and suppliers. This would result in an
annual ICR hour burden of 562,500 hours. At a per hour rate of $34.16,
we estimate the annual cost burden to be $19,215,000 (562,500 hours x
$34.16).
b. Revalidating Providers and Suppliers (Sec. 455.107(b))
According to State Program Integrity Assessment data, there are
approximately 1.9 million Medicaid-enrolled and CHIP-enrolled providers
nationwide. These providers must revalidate their enrollments every 5
years in accordance with Sec. 455.414. For purposes of this ICR
statement, we project that an average of one-fifth or 380,000 (1.9
million x 0.20), of existing Medicaid and CHIP providers would be
required to revalidate their enrollment each year and, consequently,
furnish the information required under Sec. 455.107(b). This would
result in an annual ICR hour burden of 3,800,000 hours. Using an hourly
rate of $34.16, we estimate the annual ICR cost burden for revalidating
Medicaid and CHIP providers suppliers to be $129,808,000 (3,800,000
hours x $34.16).
c. New and Changed Affiliations (Sec. 455.107(h))
Some states do not collect information regarding the provider's (or
the provider's owning or managing individuals' and organizations')
interests in other Medicaid or CHIP providers or Medicare providers or
suppliers. Therefore, we cannot reasonably estimate the number of
Medicaid and CHIP providers that would report data regarding new or
changed affiliations. We have no past data on which to base such a
projection. However, we project that it would take approximately 30
minutes (or 0.5 hours) for a provider or supplier to report and submit
new or changed affiliation information. We are soliciting comments on
how often reportable affiliations are created or changed therefore
necessitating reporting to the states.
We estimate a total annual ICR burden on Medicaid and CHIP
providers and suppliers from Sec. 455.107 of 4,362,500 hours at a cost
of $149,023,000 ($19,215,000 + $129,808,000).
3. Collection of Information From States
It is possible that states may be required to report to CMS certain
information regarding its processing of data submitted pursuant to
Sec. 455.107. This could include, for example, the number of
applications in which an affiliation was reported and the number of
cases in which the state determined that an affiliation posed an undue
risk. However, we are unable to estimate the possible ICR burden
because we do not know whether, to what extent, and by what vehicle
data concerning Sec. 455.107 would be reported to CMS.
4. Total Burden
We estimate a total annual ICR hour burden on Medicare, Medicaid,
and CHIP providers and suppliers from our proposal of 8,352,500 hours
at a cost of $285,321,400.
B. ICRs Related to Different Name, Numerical Identifier or Business
Identity (Sec. Sec. 424.530(a)(12) and 424.535(a)(18))
We do not have historical data to predict the number of instances
in which we would determine that a
[[Page 10742]]
revoked provider or supplier is attempting to enroll in Medicare or is
enrolled under a different name, numerical identifier or business
identity. Since evidence of these activities are confined to the
results of unique investigations, we believe the examples cited in the
preamble text cannot form the basis of a representative sample from
which to inform projections. Consequently, we cannot estimate the ICR
burden that may result from such denials and revocations, which would
primarily involve the submission of Form CMS-855 applications following
denials or following the expiration of reenrollment bars. To enhance
our ability to formulate an estimate of the ICR burden associated with
this provision, we are soliciting comment on--(1) whether an annual
figure of 8,000 potentially affected providers and suppliers could
serve as a reasonable approximation; and (2) the potential cost burden
to providers and suppliers. However, we stress that this is not an
estimate because we do not have sufficient data to provide an estimate
at this time.
C. ICRs Related To Billing for Non-Compliant Location (Sec.
424.535(a)(20))
We do not have sufficient historical data to form an estimate of
the potential ICR burden of this proposal, which would primarily
involve the submission of Form CMS-855 applications following the
expiration of reenrollment bars. While there is data concerning the
number of locations that are terminated from Medicare for non-
compliance each year, we cannot predict the number of ``additional''
locations that would be terminated due to Sec. 424.535(a)(20). In
other words, if a provider or supplier has five locations and one is
terminated for non-compliance, we have no way to predict whether any or
all of the remaining four locations would be terminated. This is
because each provider's and supplier's circumstances are different.
Consequently, we are unable to project the total number of terminated
locations.
D. ICRs Related to Abusive Ordering, Certifying, Referring or
Prescribing of Part A or B Services, Items or Drugs (Sec.
424.535(a)(21))
As this is a new provision for which there is no historical data,
we cannot project the number of instances in which we would revoke
enrollment under Sec. 424.535(a)(21). Therefore, we are unable to
estimate the total potential ICR burden associated with this proposal,
which would primarily involve the submission of Form CMS-855
applications following the expiration of reenrollment bars. To enhance
our ability to formulate an estimate of the ICR burden associated with
this provision, we are soliciting comment on--(1) whether an annual
figure of 4,000 potentially affected physicians and eligible
professionals could serve as a reasonable approximation; and (2) the
potential cost burden to physicians and eligible professionals.
However, we stress that this is not an estimate since we do not have
sufficient data on which to make an estimate at this time.
E. ICRs Related to Changes in Maximum Reenrollment Bars (Sec.
424.535(c))
We do not anticipate any collection burden resulting from our
revisions to Sec. 424.535(c). In fact, the burden may actually
decrease because certain providers and suppliers may be barred from
Medicare for a longer period of time and thus would submit Form CMS-855
applications less frequently.
F. ICRs Related to Reapplication Bar (Sec. 424.530(f))
We do not anticipate any collection burden resulting from our
addition of Sec. 424.530(f). Additional applications would not be
submitted because of our proposal.
G. ICRs Related to Revocation for Referral of Debt to the United States
Department of Treasury (Sec. 424.535(a)(17))
Each year on average, roughly 2,000 Medicare providers and
suppliers have debts that are referred to the Department of Treasury.
However, we are unable to predict the number of revocations that would
result from our proposal because the circumstances of each case would
be different. We believe that any ICR burden associated with this
proposal would principally involve the submission of Form CMS-855
applications following the expiration of reenrollment bars. We note
that as with several of our other proposals, Sec. 424.535(a)(17) is a
new provision for which there is no historical data, and it cannot be
assumed that all 2,000 providers and suppliers would have their
Medicare enrollments revoked. Therefore, to enhance our ability to
formulate an estimate of the ICR burden associated with this provision,
we are soliciting comment on--(1) whether 2,000 potentially impacted
providers and suppliers could serve as a reasonable approximation; and
(2) the potential cost burden on providers and suppliers. However, we
stress that this is not an estimate since we do not have sufficient
data on which to make an estimate at this time.
H. ICRs Related to Reporting Requirements (Sec. 424.535(a)(9))
We believe there would be an increase in the number of revoked
providers and suppliers resulting from our expansion of Sec.
424.535(a)(9). However, we cannot estimate this number, for the
specific facts of each case would be different. As such, we cannot
project the potential collection burden associated with this proposal,
which would primarily involve the submission of Form CMS-855
applications following the expiration of reenrollment bars. To enhance
our ability to formulate a projection of potential collection burden
associated with this proposal, we are soliciting comment on--(1)
whether an annual figure of 10,000 potentially impacted providers and
suppliers could serve as a reasonable approximation; and (2) the
potential cost burden to providers and suppliers.
I. ICRs Related to Payment Suspensions (Sec. 424.530(a)(7) and Sec.
405.371)
We are unable to estimate the total ICR burden of these provisions,
for we cannot predict the number of instances in which we would deny
enrollment under Sec. 424.530(a)(7) or suspend payment under Sec.
405.371. Nor do we have sufficient historical data on which we can
estimate the burden of payment suspensions, which would consist mostly
of potential lost payments the amount of which we are unable to
quantify; the principal ICR burden associated with Sec. 424.530(a)(7)
would be the submission of Form CMS-855 applications following denials.
To enhance our ability to formulate an estimate of the burden
associated with this provision, we are soliciting comment on--(1)
whether an annual figure of 1,000 potentially affected providers and
suppliers could serve as a reasonable approximation; and (2) the
potential cost burden to providers and suppliers. However, we stress
that this is not an estimate since we do not have sufficient data on
which to make an estimate at this time.
J. ICRs Related to Denials and Revocations for Other Federal Program
Termination or Suspension (Sec. 424.530(a)(14))
The principal ICR burden associated with this provision would
involve the submission of Form CMS-855 applications following denials
or following the expiration of reenrollment bars. However, we cannot
project the total ICR burden associated with these new provisions
because we cannot predict the number of instances in which we would
deny or revoke
[[Page 10743]]
enrollment. To enhance our ability to formulate projections of the ICR
burden associated with this provision, we are soliciting comment on--
(1) whether an annual figure of 2,500 potentially impacted providers
and suppliers could serve as a reasonable approximation; and (2) the
potential cost burden to providers and suppliers. However, we stress
that this is not an estimate since we do not have sufficient data on
which to make an estimate at this time.
K. ICRs Related to Extension of Revocation (Sec. 424.535(i))
As this is a new prevision and there is no historical data on which
to make an estimate, we cannot predict the number of instances in which
we would revoke enrollment for this reason or the number of locations
or enrollments that would be involved; thus, we are unable to estimate
the total potential collection burden, which would mostly involve the
submission of Form CMS-855 applications following the expiration of
reenrollment bars To enhance our ability to formulate an estimate of
the ICR burden associated with this provision, we are soliciting
comment on--(1) whether annual figures of 5,000 potentially impacted
providers and suppliers and 12,000 potentially revoked enrollments and
terminated practice locations could serve as reasonable approximations;
and (2) the potential cost burden to providers and suppliers. However,
we stress that this is not an estimate since we do not have sufficient
data on which to make an estimate at this time.
L. Voluntary Termination Pending Revocation (Sec. 424.535(j))
As this is a new provision and there is no historical data on which
to base a projection, we are unable to predict the number of instances
in which we would revoke enrollment. Therefore, we cannot estimate the
potential collection burden associated with Sec. 424.535(j), which
would principally involve the submission of Form CMS-855 applications
following the expiration of reenrollment bars. Moreover, since evidence
of these activities is confined to the results of unique
investigations, we believe the examples cited in the preamble text
cannot form the basis of a representative sample from which to inform
projections. However, to enhance our ability to project of the ICR
burden associated with this provision, we are soliciting comment on--
(1) whether an annual figure of 2,000 potentially impacted providers
and suppliers could serve as a reasonable approximation; and (2) the
potential cost burden to providers and suppliers. However, we stress
that this is not a projection since we do not have sufficient data on
which to make a projection at this time.
M. ICRs Related to Part A/B Ordering, Certifying, Referring, and
Prescribing (Sec. Sec. 424.507 and 424.516)
1. Enrollment
The principal burden associated with this proposal would involve
the completion of the applicable Form CMS-855.
Based on CMS statistics, we estimate that approximately 200,000
non-enrolled and non-opted out physicians and, when eligible under
state law, non-physician practitioners, are ordering, certifying,
referring or prescribing Part A or B services, items or drugs. Per
revised Sec. 424.507, these individuals would be required to enroll in
or opt-out of Medicare by January 1, 2018.
We believe that these persons, assuming they do not opt-out, would
complete the Form CMS-855O in lieu of the Form CMS-855I because the
former application is shorter and the applicants are not seeking
Medicare Part B billing privileges. As we are unable to precisely
determine the percentage of the 200,000-individual universe that
consists of physicians as opposed to non-physician practitioners, we
will assume that 100,000 physicians and 100,000 non-physician
practitioners would be affected, though we welcome comments on this
estimate.
Because of the relative brevity of the Form CMS-855O, we believe
that physicians and non-physician practitioners would themselves
complete the application, rather than delegating this task to staff.
According to the most recent wage data provided by the Bureau of Labor
Statistics (BLS) for May 2014 (see http://www.bls.gov/oes/current/oes_nat.htm#43-0000), the mean hourly wage for the general category of
``Physicians and Surgeons'' is $93.74, and the mean hourly wage for the
general BLS category of ``Health Diagnosing and Treating Practitioners,
All Other'' is $40.89. With fringe benefits and overhead, the
respective per hour rates are $187.48 and $81.78.
On average, we project that it takes individuals approximately .5
hours to complete and submit the Form CMS-855O (OMB Control No. 0938-
1135) or an opt-out affidavit. This results in an ICR burden for
physicians of $9,374,000 (50,000 hours x $187.48). The burden for non-
physician practitioners would be $4,089,000 (50,000 hours x $81.78).
The total ICR burden would thus be 100,000 hours at a cost of
$13,463,000. We believe this burden would generally be incurred in
2017, prior to the January 1, 2018 effective date.
2. Documentation
We are also proposing in revised Sec. 424.516(f) that a provider
or supplier furnishing a Part A or B service, item or drug, as well as
the physician or, when permitted, eligible professional who ordered,
certified, referred or prescribed the Part A or B service, item or drug
must maintain documentation for 7 years from the date of the service
and furnish access to that documentation upon a CMS or Medicare
contractor request.
The burden associated with the requirements in Sec. 424.516(f)
would be 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 negligible. As discussed in the
previously referenced November 19, 2008 final rule (73 FR 69915) and
the April 27, 2012 final rule (77 FR 25313), we believe the burden
associated with maintaining documentation and furnishing it upon
request is a usual and customary business practice.
N. ICRs Related to Temporary Moratorium (Sec. 424.570)
We are unable to estimate the number of applications that would be
approved or denied as a result of our changes to Sec. 424.570, for we
have insufficient data on which to base a precise projection.
Consequently, we cannot estimate the ICR burden of these revisions;
which would mostly involve the submission of Form CMS-855 applications
by previously denied providers and suppliers following the lifting of a
moratorium. To enhance our ability to formulate an estimate of the ICR
burden associated with this provision, we are soliciting comment on--
(1) whether an annual figure of 2,000 potentially impacted providers
and suppliers could serve as a reasonable approximation; and (2) the
potential cost burden to providers and suppliers. However, we stress
that this is not an estimate since we do not have sufficient data on
which to make an estimate at this time.
O. ICRs Related to Surety Bonds (Sec. 424.57(d))
We believe that CMS may reject some new and existing surety bonds
based on surety non-payment, which would require the DMEPOS supplier to
obtain a new surety bond in order to enroll in or maintain its
enrollment in Medicare. This would require a supplier to do additional
paperwork to obtain and
[[Page 10744]]
submit a new surety bond and to report this information to Medicare via
the Form CMS-855S. This burden is approved under OMB Control Number
0938-1065 and is estimated to take 3 hours to complete. However, we do
not have adequate data to help us estimate the number of suppliers
whose bonds would be rejected, or the number that would obtain new
bonds, though we welcome public feedback regarding the possible burden.
P. ICRs Related to Reactivations (Sec. 424.540(b))
We are unable to project the number of certifications that would be
submitted versus the number of complete Form CMS-855 applications;
therefore, we cannot predict the number of instances in which a Form
CMS-855 would be requested. To enhance our ability to formulate a
projection of the ICR burden associated with this provision, we are
soliciting comment on--(1) whether an annual figure of 10,000 instances
in which a Form CMS-855 would be requested could serve as a reasonable
approximation; and (2) the potential cost burden to providers and
suppliers. However, we stress that this is not an estimate since we do
not have sufficient data on which to make an estimate at this time.
Q. Revision to Definition of Enrollment (Sec. Sec. 424.502; 424.505;
424.510; 424.535(a))
As these revisions are primarily technical in nature, we do not
foresee an associated ICR burden.
R. Total ICR Overall Burden
Based on the foregoing, Table 4 estimates the total ICR hour and
Table 5 estimates the total ICR cost burdens in the first 3 years of
this rule. For purposes of this estimate, the burden for revised Sec.
424.507 would be incurred in the first year (projected to be 2017).
Table 4--Estimated Annual Reporting/Recordkeeping Hour Burden
----------------------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 3
----------------------------------------------------------------------------------------------------------------
Affiliations.................................................... 8,352,500 8,352,500 8,352,500
Sec. 424.507.................................................. 100,000 0 0
-----------------------------------------------
Total....................................................... 8,452,500 8,352,500 8,352,500
----------------------------------------------------------------------------------------------------------------
Table 5--Estimated Annual Reporting/Recordkeeping Cost Burden
----------------------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 3
----------------------------------------------------------------------------------------------------------------
Affiliations.................................................... $285,321,400 $285,321,400 $285,321,400
Sec. 424.507.................................................. 13,463,000 0 0
-----------------------------------------------
Total....................................................... 298,784,400 285,321,400 285,321,400
----------------------------------------------------------------------------------------------------------------
Since 3 years is the maximum length of an OMB approval, we must
average these totals over a 3-year period. This results in an annual
burden of 8,385,833 hours at a cost of $289,809,067.
We welcome comments on all aspects of and estimates in our ICR
section.
If you comment on these information collection and recordkeeping
requirements, please do either of the following:
1. Submit your comments electronically as specified in the
ADDRESSES section of this proposed rule; or
2. Submit your comments to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Attention: CMS Desk Officer,
[CMS-6058-P], Fax: (202) 395-6974; or Email:
[email protected].
IV. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
V. Regulatory Impact Analysis
A. Statement of Need
As previously stated, this proposed rule is necessary to implement
sections 1866(j)(5) and 1902(kk)(3) of the Act, which require providers
and suppliers to disclose information related to any current or
previous affiliation with a provider or supplier that has uncollected
debt; has been or is subject to a payment suspension under a federal
health care program; has been excluded from participation under
Medicare, Medicaid or CHIP; or has had its billing privileges denied or
revoked. This proposed rule is also necessary to address other program
integrity issues that have arisen. We believe that all of these
provisions would--(1) enable CMS and the states to better track current
and past relationships involving different providers and suppliers; and
(2) assist our efforts to stem fraud, waste, and abuse, hence
protecting the Medicare Trust Funds.
B. Overall Impact
1. Background
We have examined the impacts of this rule 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) and Executive Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act (5 U.S.C. 804(2)).
Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action that is likely to result in a rule--
(1) having an annual effect on the economy of $100 million or more in
any 1 year, or adversely and materially affecting a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or state, local or tribal governments or communities
(also referred to as ``economically significant''); (2) creating a
serious inconsistency or otherwise interfering with an action taken or
[[Page 10745]]
planned by another agency; (3) materially altering the budgetary
impacts of entitlement grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities or the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year). The costs of our proposals would exceed $100 million in each of
the first 3 years of this proposed rule. (See sections III. and V.C. of
this proposed rule.) We estimate that this rulemaking is ``economically
significant'' as measured by the $100 million threshold, and thus also
a major rule under the Congressional Review Act. Accordingly, we have
prepared a Regulatory Impact Analysis, which to the best of our ability
presents the costs and benefits of the rulemaking. Therefore, OMB has
reviewed these proposed regulations, and the Departments have provided
the following assessment of their impact.
2. Impact
There are several categories of costs that would be associated with
this rule.
First, providers and suppliers would incur costs in completing all
or part of the applicable Form CMS-855. Those costs that we are able to
estimate are outlined in section III. of this proposed rule.
Second, denied and revoked suppliers could incur costs associated
with potential lost billings and the filing of appeals of denials and
revocations. However, no estimate is possible because--(1) we cannot
project the number of providers and suppliers that would be denied or
revoked, as these are new provisions for which there is no precedent
upon which to base an estimate; and (2) each provider and supplier and
their billing amounts are different.
Third, we believe that CMS, Medicare contractors, and the states
would incur costs, in implementing and enforcing our proposed
affiliation disclosure provision. These could include information
technology system changes and provider education. We have no means of
predicting these costs, as these are new provisions for which there is
little precedent upon which to base cost estimates; moreover, each
state Medicaid program varies in terms of size, system needs, and
provider outreach activities. We solicit comment, however, on the types
of costs that may be incurred and the potential amount of those costs.
We believe this rule would have benefits resulting from the denial
or revocation of providers and suppliers that pose program integrity
risks to Medicare, Medicaid, and CHIP. However, we are unable to
project the resultant potential savings to these programs.
This rule would not involve transfers from providers and suppliers
to the federal government.
C. Anticipated Effects
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organization, and small governmental
jurisdictions. Most entities and most other providers and suppliers are
small entities, either by nonprofit status or by having revenues less
than $7.5 million to $38.5 million in any 1 year. Individuals and
states are not included in the definition of a small entity.
For several reasons, we do not believe that this proposed rule
would have a significant economic impact on a substantial number of
small businesses. First, the furnishing of affiliation data and the
completion of the Form CMS 855O would be required very infrequently, in
many cases either only one time or once every several years. The cost
burden per provider or supplier (only 0.5 hours for the Form CMS-855O
and 10 hours for affiliation data, the latter of which is a high end
estimate) would be less than $1,000, which would not be a significant
burden on a provider or supplier. (See section III. of this proposed
rule.) Second, it is true that some small businesses could be denied
enrollment or have their enrollments revoked under our provisions. Yet
the number of denials and revocations per year is currently--and would
continue to be under our new provisions--very small when compared to
the total number of enrolled providers and suppliers nationwide.
Therefore, we do not believe that our new denial and revocation reasons
would impact a substantial number of small businesses.
D. Effects on Small Rural Hospitals
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. We are not preparing an
analysis for section 1102(b) of the Act because we have determined, and
therefore the Secretary has determined, that this proposed rule would
not have a significant impact on the operations of a substantial number
of small rural hospitals.
E. Unfunded Mandates
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 2015, that
is approximately $144 million. This rule does not mandate any
requirements for state, local or tribal governments or for the private
sector, although we noted earlier the possibility that states may incur
costs associated with system changes, provider education, and reporting
data to CMS concerning Sec. 455.107.
F. Executive Order 13132
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law or otherwise has federalism
implications. Since this regulation does not impose any costs on state
or local governments, the requirements of Executive Order 13132 are not
applicable.
G. Accounting Statement and Table
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a0004/a-4/pdf), in Table 6 we have
prepared an accounting statement showing estimates, over the first 3
years of the rule's implementation, of the total cost burden to
providers and suppliers for reporting data using, respectively, 7
percent and 3 percent annualized discount rates.
[[Page 10746]]
Table 6--Accounting Statement Classification of Estimated Costs
[$ in millions]
----------------------------------------------------------------------------------------------------------------
Units
------------------------------------------------------------
Category Costs * Estimates Discount rate
Year dollar (90%) Period covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($million/ 289.8 2015 7 FY 2017-FY 2019
year). 289.8 2015 3 FY 2017- FY 2019
----------------------------------------------------------------------------------------------------------------
* Cost associated with the information collection requirements.
H. Alternatives Considered
We considered and adopted several alternatives to reduce the
overall burden of our provisions.
First, we contemplated a 10-year timeframe for the affiliation
``look-back'' period, but we propose to limit the timeframe to 5 years.
We believe this would ease the burden on Medicare, Medicaid, and CHIP
providers and suppliers by restricting the volume of information that
must be reported. Similarly, we propose that changed data regarding
past affiliations need not be reported.
Second, we proposed a ``knew or should reasonably have known''
standard for disclosing affiliations. We believe this would reduce the
burden on providers and suppliers in terms of researching and
investigating information on entities and individuals with whom they
have or have had a relationship. We recognize that providers and
suppliers may occasionally experience difficulty in obtaining certain
affiliation data if, for instance, they must contact a previously
affiliated provider or supplier for the information. We have also
decided to solicit feedback from the public concerning whether we
should establish a ``reasonableness'' test, whereby we explain what
constitutes a sufficient effort to obtain information in the context of
the ``should reasonably have known'' standard.
Third, we have established a January 1, 2018 effective date for
compliance with revised Sec. 424.507. We contemplated possible
effective dates in 2017, but we believe that a January 1, 2018 date
would help give providers and suppliers sufficient time to enroll in or
opt-out of Medicare.
Although we considered 5-year and 10-year lookback periods for
disclosable events, we are not proposing a specific lookback period.
Even if a particular action occurred more than 5 or years ago, it could
still raise concerns about the potential risk a newly enrolling
provider poses. For this reason, we must retain the flexibility to
address a variety of factual scenarios. Nonetheless, we recognize that
a definitive lookback period would be less burdensome (in terms of
researching and reporting information) than an unlimited period, and
have solicited public comment regarding whether a specific period
should be used and, if so, the appropriate length.
I. Uncertainties
There are two principal uncertainties associated with this proposed
rule.
First, we have no means of projecting the number of providers and
suppliers that would be denied or revoked under our new and revised
provisions. This is because we have little historical data on which we
can base a precise estimate.
Second, we are uncertain as to the number of physicians or non-
physician practitioners who would be required to enroll in or opt-out
of Medicare pursuant to revised Sec. 424.507. The figures we used in
sections III.L. of this proposed rule are merely rough estimates, and
we would appreciate comments from providers and suppliers regarding the
potential number of affected parties.
In accordance with the provisions of Executive Order 12866, this
rule was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 405
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases. Medical devices, Medicare Reporting and
recordkeeping requirements, Rural areas, X-rays.
42 CFR Part 424
Emergency medical services, Health facilities, Health professions,
Medicare, Reporting and recordkeeping requirements.
42 CFR Part 455
Fraud, Grant programs--health, Health facilities, Health
professions, Investigations, Medicaid Reporting and recordkeeping
requirements.
42 CFR Part 457
Administrative practice and procedure, Grant programs--health,
Health insurance, Reporting and recordkeeping requirements.
For the reasons stated in the preamble of this proposed rule, the
Centers for Medicare & Medicaid Services proposes to amend 42 CFR
Chapter IV as follows:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
0
1. The authority citation for part 405 continues to read as follows:
Authority: Secs. 205(a), 1102, 1861, 1862(a), 1869, 1871, 1874,
1881, and 1886(k) of the Social Security Act (42 U.S.C. 405(a),
1302, 1395x, 1395y(a), 1395ff, 1395hh, 1395kk, 1395rr and
1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C.
263a).
0
2. Amend Sec. 405.371 by--
0
a. Revising paragraph (a) introductory text.
0
b. Amending paragraph (a)(1) by removing the ``;'' at the end of the
paragraph and adding in its place ``.''
0
c. Amending paragraph (a)(2) by removing ``; or'' at the end of
paragraph and adding in its place ``.''.
0
d. Adding a new paragraph (a)(4).
The revision and addition read as follows.
Sec. 405.371 Suspension, offset, and recoupment of Medicare payments
to providers and suppliers of services.
(a) General rules--Medicare payments to providers and suppliers, as
authorized under this subchapter (excluding payments to beneficiaries),
may be one of the following:
* * * * *
(4) Suspended, in whole or in part, by CMS or a Medicare contractor
if the provider or supplier has been subject to a Medicaid payment
suspension under Sec. 455.23(a)(1) of this chapter.
* * * * *
[[Page 10747]]
0
3. Amend Sec. 405.425 by revising paragraphs (i) and (j) to read as
follows:
Sec. 405.425 Effects of opting--out of Medicare.
* * * * *
(i) The physician or practitioner who has not been excluded under
sections 1128, 1156 or 1892 of Social Security Act or whose Medicare
enrollment is not revoked under Sec. 424.535 of this chapter may
order, certify the need for, or refer a beneficiary for Medicare--
covered items and services, provided the physician or practitioner is
not paid, directly or indirectly, for such services (except as provided
in Sec. 405.440).
(j) The physician or practitioner who is excluded under sections
1128, 1156 or 1892 of the Social Security Act or whose Medicare
enrollment is revoked under Sec. 424.535 of this chapter may not
order, prescribe or certify the need for Medicare-covered items and
services except as provided in Sec. 1001.1901 of this title, and must
otherwise comply with the terms of the exclusion in accordance with
Sec. 1001.1901 effective with the date of the exclusion.
PART 424--CONDITIONS FOR MEDICARE PAYMENT
0
4. The authority citation for part 424 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
5. Amend Sec. 424.57 by adding paragraph (d)(16) to read as follows:
Sec. 424.57 Special payment rules for items furnished by DMEPOS
suppliers and issuance of DMEPOS supplier billing privileges.
* * * * *
(d) * * *
(16) Surety non-payment. CMS may reject an enrolling or enrolled
DMEPOS supplier's new or existing surety bond if the surety that issued
the bond has failed to make a required payment to CMS under paragraph
(d) of this section. In making its determination, CMS considers the
following factors:
(i) The total number of Medicare-enrolled DMEPOS suppliers to which
the surety has issued surety bonds.
(ii) The total number of instances in which the surety has failed
to make payment to CMS.
(iii) The reason(s) for the surety's failure(s) to pay.
(iv) The percentage of instances in which the surety has failed to
pay.
(v) The total amount of money that the surety has failed to pay.
(vi) Any other information that CMS deems relevant to its
determination.
* * * * *
0
6. Amend Sec. 424.502 by adding the definitions of ``Affiliation'',
``NPI'', and ``PECOS'' in alphabetical order, and by amending the
definition of ``Enroll/Enrollment'' by revising the introductory text
and paragraphs (2) and (4) to read as follows:
Sec. 424.502 Definitions.
* * * * *
Affiliation means, for purposes of applying Sec. 424.519, any of
the following:
(1) A 5 percent or greater direct or indirect ownership interest
that an individual or entity has in another organization.
(2) A general or limited partnership interest (regardless of the
percentage) that an individual or entity has in another organization.
(3) An interest in which an individual or entity exercises
operational or managerial control over or directly or indirectly
conducts the day-to-day operations of another organization (including,
for purposes of this provision, sole proprietorships), either under
contract or through some other arrangement, regardless of whether or
not the managing individual or entity is a W-2 employee of the
organization.
(4) An interest in which an individual is acting as an officer or
director of a corporation.
(5) Any reassignment relationship under Sec. 424.80.
* * * * *
Enroll/Enrollment means the process that Medicare uses to establish
eligibility to submit claims for Medicare-covered items and services,
and the process that Medicare uses to establish eligibility to order,
certify, refer or prescribe Medicare-covered Part A or B services,
items or drugs, or to prescribe Part D drugs.
* * * * *
(2) Except for those suppliers that complete the Form CMS-855O,
CMS-identified equivalent, successor form or process for the sole
purpose of obtaining eligibility to order, certify, refer, or prescribe
Medicare-covered Part A or B services, items or drugs, or to prescribe
Part D drugs, validating the provider's or supplier's eligibility to
provide items or services to Medicare beneficiaries.
* * * * *
(4) Except for those suppliers that complete the Form CMS-855O,
CMS-identified equivalent, successor form or process for the sole
purpose of obtaining eligibility to order, certify, refer or prescribe
Medicare-covered Part A or B services, items or drugs, or to prescribe
Part D drugs, granting the Medicare provider or supplier Medicare
billing privileges.
* * * * *
NPI stands for National Provider Identifier.
* * * * *
PECOS stands for Internet--based Provider Enrollment, Chain, and
Ownership System.
* * * * *
0
7. Revise Sec. 424.505 to read as follows:
Sec. 424.505 Basic enrollment requirement.
To receive payment for covered Medicare items or services from
either Medicare (in the case of an assigned claim) or a Medicare
beneficiary (in the case of an unassigned claim), a provider or
supplier must be enrolled in the Medicare program. Except for those
suppliers that complete the Form CMS-855O or CMS-identified equivalent,
successor form or process for the sole purpose of obtaining eligibility
to order, certify, refer, or prescribe Medicare-covered Part A or B
services, items or drugs, or to prescribe Part D drugs, once enrolled
the provider or supplier receives billing privileges and is issued a
valid billing number effective for the date a claim was submitted for
an item that was furnished or a service that was rendered. (See 45 CFR
part 162 for information on the NPI and its use as the Medicare billing
number.)
0
8. Revise Sec. 424.507 to read as follows:
Sec. 424.507 Ordering, certifying, referring and prescribing covered
services, items, and drugs for Medicare beneficiaries.
(a) Conditions for payment of claims for ordered, certified,
referred, or prescribed covered Part A or B services, items or drugs--
(1) Ordered, certified, referred, or prescribed covered Part A or B
services, items or drugs. To receive payment for ordered, certified,
referred, or prescribed covered Part A or B services, items or drugs, a
provider or supplier must meet all of the following requirements:
(i) The ordered, certified, referred, or prescribed covered Part A
or B service, item or drug must have been ordered, certified, referred
or prescribed by a physician or, when permitted, an eligible
professional (as defined in Sec. 424.506(a)).
(ii) The claim from the provider or supplier must contain the legal
name and the NPI of the physician or the eligible professional (as
defined in Sec. 424.506(a)) who ordered, certified, referred or
prescribed the Part A or B service, item or drug.
(iii) The physician or, when permitted, other eligible
professional, as defined in Sec. 424.506(a), who ordered,
[[Page 10748]]
certified, referred, or prescribed the Part A or B service, item or
drug 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 Part A or B service, item or drug is ordered,
certified, referred, or prescribed by--
(A) An unlicensed resident (as defined in Sec. 413.75 of this
chapter), or by a non-enrolled licensed resident (as defined in Sec.
413.75 of this chapter), the claim must identify a teaching physician,
who must be enrolled in Medicare in an approved status, as follows:
(1) As the ordering, certifying, referring or prescribing supplier.
(2) By his or her legal name.
(3) By his/her NPI.
(B) A licensed resident (as defined in Sec. 413.75 of this
chapter), 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 to order, certify,
refer or prescribe such services, items, and drugs, the claim must
identify by legal name and NPI either of the following:
(1) Resident, who is enrolled in Medicare in an approved status to
order, certify, refer or prescribe.
(2) Teaching physician, who is enrolled in Medicare in an approved
status.
(2) Part A and B beneficiary claims. To receive payment for
ordered, certified, referred, or prescribed covered Part A or B
services, items or drugs, a beneficiary's claim must meet all of the
following requirements:
(i) The physician or, when permitted, other eligible professional
(as defined in Sec. 424.506(a)) who ordered, certified, referred, or
prescribed the Part A or B service, item or drug 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 Part A or B service, item or drug is ordered,
certified, referred or prescribed by--
(A) An unlicensed resident (as defined in Sec. 413.75 of this
chapter) or a non-enrolled licensed resident, (as defined in Sec.
413.75 of this chapter) the claim must identify a teaching physician,
who must be enrolled in Medicare in an approved status as follows:
(1) As the ordering, certifying, referring or prescribing supplier.
(2) By his or her legal name.
(B) A licensed resident (as defined in Sec. 413.75 of this
chapter), 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,
refer, or prescribe such services, items or drugs, the claim must
identify by legal name the--
(1) Resident, who is enrolled in Medicare in an approved status to
order, certify, refer or prescribe; or
(2) Teaching physician, who is enrolled in Medicare in an approved
status.
(b) 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 ordered, certified, referred or
prescribed Part A or B covered services, items or drugs described in
paragraph (a) of this section if the claim does not meet the
requirements of paragraph (a)(1) of this section.
(c) Denial of beneficiary-submitted claims. A Medicare contractor
denies a claim from a Medicare beneficiary for ordered, certified,
referred or prescribed covered Part A or B services, items or drugs as
described in paragraph (a) of this section if the claim does not meet
the requirements of paragraph (a)(2) of this section.
0
9. Amend Sec. 424.510 by revising paragraph (a)(3) to read as follows:
Sec. 424.510 Requirements for enrolling in the Medicare program.
(a) * * *
(3) To be enrolled solely to order, certify, refer or prescribe
Medicare-covered Part A or B services, items or drugs, or to prescribe
Part D drugs, a physician or non-physician practitioner must meet the
requirements specified in paragraph (d) of this section except for
paragraphs (d)(2)(iii)(B), (d)(2)(iv), (d)(3)(ii), and (d)(5), (6), and
(9) of this section.
* * * * *
0
10. Amend Sec. 424.516 by revising paragraphs (f)(1)(i) introductory
text, (f)(1)(ii), (f)(2)(i) introductory text, and (f)(2)(ii) 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,
certified, referred, or prescribed Part A or B services, items or drugs
is required to--
* * * * *
(ii) The documentation includes written and electronic documents
(including the NPI of the physician or, when permitted, other eligible
professional who ordered, certified, referred, or prescribed the Part A
or B service, item or drug) relating to written orders, certifications,
referrals, prescriptions, and requests for payments for Part A or B
services, items or drugs.
(2)(i) A physician or, when permitted, an eligible professional who
orders, certifies, refers, or prescribes Part A or B services, items or
drugs is required to--
* * * * *
(ii) The documentation includes written and electronic documents
(including the NPI of the physician or, when permitted, other eligible
professional who ordered, certified, referred, or prescribed the Part A
or B service, item or drug) relating to written orders, certifications,
referrals, prescriptions or requests for payments for Part A or B
services, items, or drugs.
0
11. Add Sec. 424.519 to read as follows:
Sec. 424.519 Disclosure of affiliations.
(a) Definitions. For purposes of this section only, the following
terms apply:
(1) ``Uncollected debt'' only applies to the following:
(i) Medicare, Medicaid or CHIP overpayments for which CMS or the
state has sent notice of the debt to the affiliated provider or
supplier.
(ii) Civil money penalties (as defined in Sec. 424.57(a)).
(iii) Assessments (as defined in Sec. 424.57(a)).
(2) ``Revoked,'' ``Revocation,'' ``Terminated,'' and
``Termination'' include situations where the affiliated provider or
supplier voluntarily terminated its Medicare, Medicaid or CHIP
enrollment to avoid a potential revocation or termination.
(b) General. A provider or supplier that is submitting an initial
or revalidating Form CMS-855 enrollment application (via paper or
Internet--based PECOS) must disclose whether it or any of its owning or
managing employees or organizations (consistent with the terms
``owner'' and ``managing employee'' as defined in Sec. 424.502) has
or, within the previous 5 years, has had an affiliation with a
currently or formerly enrolled Medicare, Medicaid or CHIP provider or
supplier that has or had any of the following:
(1) Currently has an uncollected debt to Medicare, Medicaid or
CHIP, regardless of the following:
[[Page 10749]]
(i) The amount of the debt.
(ii) Whether the debt is currently being repaid.
(iii) Whether the debt is currently being appealed.
(2) Has been or is subject to a payment suspension under a federal
health care program (as that term is defined in section 1128B(f) of the
Act), regardless of when the payment suspension occurred or was
imposed.
(3) Has been or is excluded from participation in Medicare,
Medicaid or CHIP, regardless of whether the exclusion is currently
being appealed or when the exclusion occurred or was imposed.
(4) Has had its Medicare, Medicaid or CHIP enrollment denied,
revoked or terminated, regardless of the following:
(i) The reason for the denial, revocation or termination.
(ii) Whether the denial, revocation or termination is currently
being appealed.
(iii) When the denial, revocation or termination occurred or was
imposed.
(c) Information. The provider or supplier must disclose the
following information about each reported affiliation:
(1) General identifying data about the affiliated provider or
supplier. This includes:
(i) Legal name as reported to the Internal Revenue Service or the
Social Security Administration (if the affiliated provider or supplier
is an individual).
(ii) ``Doing business as'' name (if applicable).
(iii) Tax identification number.
(iv) NPI.
(2) Reason for disclosing the affiliated provider or supplier.
(3) Specific data regarding the affiliation relationship, including
the following:
(i) Length of the relationship.
(ii) Type of relationship.
(iii) Degree of affiliation.
(4) If the affiliation has ended, the reason for the termination.
(d) Mechanism. The information required to be disclosed under
paragraphs (b) and (c) this section must be furnished to CMS or its
contractors via the Form CMS-855 application (paper or the Internet-
based PECOS enrollment process).
(e) Denial or revocation. The failure of the provider or supplier
to fully and completely disclose the information specified in
paragraphs (b) and (c) of this section when the provider or supplier
knew or should reasonably have known of this information may result in
either of the following:
(1) The denial of the provider's or supplier's initial enrollment
application under Sec. 424.530(a)(1) and, if applicable, Sec.
424.530(a)(4).
(2) The revocation of the provider's or supplier's Medicare
enrollment under Sec. 424.535(a)(1) and, if applicable, Sec.
424.535(a)(4).
(f) Undue risk. Upon receiving the information described in
paragraphs (b) and (c) of this section, CMS determines whether any of
the disclosed affiliations poses an undue risk of fraud, waste or abuse
by considering the following factors:
(1) The duration of the affiliation.
(2) Whether the affiliation still exists and, if not, how long ago
it ended.
(3) The degree and extent of the affiliation.
(4) If applicable, the reason for the termination of the
affiliation.
(5) Regarding the affiliated provider's or supplier's action under
paragraph (b) of this section:
(i) The type of action.
(ii) When the action occurred or was imposed.
(iii) Whether the affiliation existed when the action occurred or
was imposed.
(iv) If the action is an uncollected debt:
(A) The amount of the debt.
(B) Whether the affiliated provider or supplier is repaying the
debt.
(C) To whom the debt is owed.
(v) If a denial, revocation, termination, exclusion or payment
suspension is involved, the reason for the action.
(6) Any other evidence that CMS deems relevant to its
determination.
(g) Determination of undue risk. A determination by CMS that a
particular affiliation poses an undue risk of fraud, waste or abuse
will result in, as applicable, the denial of the provider's or
supplier's initial enrollment application under Sec. 424.530(a)(13) or
the revocation of the provider's or supplier's Medicare enrollment
under Sec. 424.535(a)(19).
(h) New or changed information. (1) A provider or supplier must
report the following:
(i) New or changed information regarding existing affiliations.
(ii) Information regarding new affiliations.
(2) A provider or supplier is not required to do either of the
following:
(i) Report new or changed information regarding past affiliations
(except as part of a Form CMS-855 revalidation application).
(ii) Report affiliation data in that portion of the Form CMS-855
application that collects affiliation information if the same data is
being reported in the ``owning or managing control'' (or its successor)
section of the Form CMS-855 application.
(i) Undisclosed affiliations. CMS may apply Sec. 424.530(a)(13) or
Sec. 424.535(a)(19) to situations where a disclosable affiliation (as
described in Sec. 424.519(b) and (c)) poses an undue risk of fraud,
waste or abuse, but the provider or supplier has not yet reported or is
not required at that time to report the affiliation to CMS.
0
12. Amend Sec. 424.530 by revising paragraph (a)(7) and adding
paragraphs (a)(12), (13), (14), and (f) to read as follows:
Sec. 424.530 Denial of enrollment in the Medicare program.
(a) * * *
(7) Payment suspension. (i) The provider or supplier, or any owning
or managing employee or organization of the provider or supplier, is
currently under a Medicare or Medicaid payment suspension as defined in
Sec. Sec. 405.370 through 405.372 or in Sec. 455.23, of this chapter.
(ii) CMS may apply this provision to the provider or supplier under
any of the provider's, supplier's, or owning or managing employee's or
organization's current or former names, numerical identifiers, or
business identities or to any of its existing enrollments.
(iii) In determining whether a denial is appropriate, CMS considers
the following factors:
(A) The specific behavior in question.
(B) Whether the provider or supplier is the subject of other
similar investigations.
(C) Any other information that CMS deems relevant to its
determination.
* * * * *
(12) Revoked under different name, numerical identifier or business
identity. The provider or supplier is currently revoked under a
different name, numerical identifier or business identity, and the
applicable reenrollment bar period has not expired. In determining
whether a provider or supplier is a currently revoked provider or
supplier under a different name, numerical identifier or business
identity, CMS investigates the degree of commonality by considering the
following factors:
(i) Owning and managing employees and organizations (regardless of
whether they have been disclosed on the Form CMS-855 application).
(ii) Geographic location.
(iii) Provider or supplier type.
(iv) Business structure.
(v) Any evidence indicating that the two parties are similar or
that the provider or supplier was created to circumvent the revocation
or reenrollment bar.
(13) Affiliation that poses undue risk of fraud. CMS determines
that the
[[Page 10750]]
provider or supplier has or has had an affiliation under Sec. 424.519
that poses an undue risk of fraud, waste or abuse to the Medicare
program.
(14) Other program termination or suspension. (i) The provider or
supplier is currently terminated or suspended (or otherwise barred)
from participation in a particular State Medicaid program or any other
federal health care program, or the provider's or supplier's license is
currently revoked or suspended in a State other than that in which the
provider or supplier is enrolling. In determining whether a denial
under this paragraph is appropriate, CMS considers the following
factors:
(A) The reason(s) for the termination, suspension or revocation.
(B) Whether, as applicable, the provider or supplier is currently
terminated or suspended (or otherwise barred) from more than one
program (for example, more than one State's Medicaid program), has been
subject to any other sanctions during its participation in other
programs or by any other State licensing boards or has had any other
final adverse actions imposed against it.
(C) Any other information that CMS deems relevant to its
determination.
(ii) CMS may apply paragraph (a)(14)(i) of this section to the
provider or supplier under any of its current or former names,
numerical identifiers or business identities, and regardless of whether
any appeals are pending.
* * * * *
(f) Reapplication bar. CMS may prohibit a prospective provider or
supplier from enrolling in Medicare for up to 3 years if its enrollment
application is denied because the provider or supplier submitted false
or misleading information on or with (or omitted information from) its
application in order to gain enrollment in the Medicare program.
(1) The reapplication bar applies to the prospective provider or
supplier under any of its current, former, or future names, numerical
identifiers or business identities.
(2) CMS determines the bar's length by considering the following
factors:
(i) The materiality of the information in question.
(ii) Whether there is evidence to suggest that the provider or
supplier purposely furnished false or misleading information or
deliberately withheld information.
(iii) Whether the provider or supplier has any history of final
adverse actions or Medicare or Medicaid payment suspensions.
(iv) Any other information that CMS deems relevant to its
determination.
0
13. Amend Sec. 424.535 by--
0
a. In paragraph (a) introductory text by removing the term ``billing
privileges'' and adding in its place the phrase ``enrollment''.
0
b. Revising paragraphs (a)(9) and (12).
0
c. Adding and reserving paragraphs (a)(15) and (16).
0
d. Adding paragraphs (a)(17) through (21).
0
e. Revising paragraph (c).
0
f. Adding paragraphs (i) and (j).
The additions and revisions read as follows:
Sec. 424.535 Revocation of enrollment in the Medicare program.
* * * * *
(a) * * *
(9) Failure to report. The provider or supplier did not comply with
the reporting requirements specified in Sec. 424.516(d) or (e), Sec.
410.33(g)(2) of this chapter or Sec. 424.57(c)(2). In determining
whether a revocation under this paragraph is appropriate, CMS considers
the following factors:
(i) Whether the data in question was reported.
(ii) If the data was reported, how belatedly.
(iii) The materiality of the data in question.
(iv) Any other information that CMS deems relevant to its
determination.
* * * * *
(12) Other program termination. (i) The provider or supplier is
terminated, revoked or otherwise barred from participation in a
particular Medicaid program or any other federal health care program.
In determining whether a revocation under this paragraph is
appropriate, CMS considers the following factors:
(A) The reason(s) for the termination or revocation.
(B) Whether the provider or supplier is currently terminated,
revoked or otherwise barred from more than one program (for example,
more than one State's Medicaid program) or has been subject to any
other sanctions during its participation in other programs.
(C) Any other information that CMS deems relevant to its
determination.
(ii) Medicare may not terminate unless and until a provider or
supplier has exhausted all applicable appeal rights.
(iii) CMS may apply paragraph (a)(12)(i) of this section to the
provider or supplier under any of its current or former names,
numerical identifiers or business identities.
* * * * *
(15)-(16) [Reserved]
(17) Debt referred to the United States Department of Treasury. The
provider or supplier has an existing debt that CMS refers to the United
States Department of Treasury. In determining whether a revocation
under this paragraph is appropriate, CMS considers the following
factors:
(i) The reason(s) for the failure to fully repay the debt (to the
extent this can be determined).
(ii) Whether the provider or supplier has attempted to repay the
debt.
(iii) Whether the provider or supplier has responded to CMS'
requests for payment.
(iv) Whether the provider or supplier has any history of final
adverse actions or Medicare or Medicaid payment suspensions.
(v) The amount of the debt.
(vi) Any other evidence that CMS deems relevant to its
determination.
(18) Revoked under different name, numerical identifier or business
identity. The provider or supplier is currently revoked under a
different name, numerical identifier or business identity, and the
applicable reenrollment bar period has not expired. In determining
whether a provider or supplier is a currently revoked provider or
supplier under a different name, numerical identifier or business
identity, CMS investigates the degree of commonality by considering the
following factors:
(i) Owning and managing employees and organizations (regardless of
whether they have been disclosed on the Form CMS-855 application).
(ii) Geographic location.
(iii) Provider or supplier type.
(iv) Business structure.
(v) Any evidence indicating that the two parties are similar or
that the provider or supplier was created to circumvent the revocation
or reenrollment bar.
(19) Affiliation that poses an undue risk. CMS determines that the
provider or supplier has or has had an affiliation under Sec. 424.519
that poses an undue risk of fraud, waste or abuse to the Medicare
program.
(20) Billing from non-compliant location. CMS may revoke a
provider's or supplier's Medicare enrollment, including all of the
provider's or supplier's practice locations regardless of whether they
are part of the same enrollment, if the provider or supplier billed for
services performed at or items furnished from a location that it knew
or should have known did not comply with Medicare enrollment
requirements. In determining whether and how many of the provider's or
supplier's other locations should be revoked, CMS considers the
following factors:
[[Page 10751]]
(i) The reason(s) for and the specific facts behind the location's
non-compliance.
(ii) The number of additional locations involved.
(iii) Whether the provider or supplier has any history of final
adverse actions or Medicare or Medicaid payment suspensions.
(iv) The degree of risk that the location's continuance poses to
the Medicare Trust Funds.
(v) The length of time that the non-compliant location was non-
compliant.
(vi) The amount that was billed for services performed at or items
furnished from the non-compliant location.
(vii) Any other evidence that CMS deems relevant to its
determination.
(21) Abusive ordering, certifying, referring, or prescribing of
Part A or B services, items or drugs. The physician or eligible
professional has a pattern or practice of ordering, certifying,
referring or prescribing Medicare Part A or B services, items or drugs
that is abusive, represents a threat to the health and safety of
Medicare beneficiaries or otherwise fails to meet Medicare
requirements. In making its determination as to whether such a pattern
or practice exists, CMS considers the following factors:
(i) Whether the physician's or eligible professional's diagnoses
support the orders, certifications, referrals or prescriptions in
question.
(ii) Whether there are instances where the necessary evaluation of
the patient for whom the service, item or drug was ordered, certified,
referred or prescribed could not have occurred (for example, the
patient was deceased or out of state at the time of the alleged office
visit).
(iii) The number and type(s) of disciplinary actions taken against
the physician or eligible professional by the licensing body or medical
board for the state or states in which he or she practices, and the
reason(s) for the action(s).
(iv) Whether the physician or eligible professional has any history
of final adverse actions (as that term is defined in Sec. 424.502).
(v) The length of time over which the pattern or practice has
continued.
(vi) How long the physician or eligible professional has been
enrolled in Medicare.
(vii) The number and type(s) of malpractice suits that have been
filed against the physician or eligible professional related to
ordering, certifying, referring or prescribing that have resulted in a
final judgment against the physician or eligible professional or in
which the physician or eligible professional has paid a settlement to
the plaintiff(s) (to the extent this can be determined).
(viii) Whether any State Medicaid program or any other public or
private health insurance program has restricted, suspended, revoked or
terminated the physician's or eligible professional's ability to
practice medicine, and the reason(s) for any such restriction,
suspension, revocation or termination.
(ix) Any other information that CMS deems relevant to its
determination.
* * * * *
(c) Reapplying after revocation. (1) After a provider or supplier
has had their enrollment revoked, they are barred from participating in
the Medicare program from the effective date of the revocation until
the end of the reenrollment bar. The reenrollment bar--
(i) Begins 30 days after CMS or its contractor mails notice of the
revocation and lasts a minimum of 1 year, but not greater than 10 years
(except for the situations described in paragraphs (c)(2) and (3) of
this section), depending on the severity of the basis for revocation.
(ii) Does not apply in the event a revocation of Medicare
enrollment is imposed under paragraph (a)(1) of this section based upon
a provider's or supplier's failure to respond timely to a revalidation
request or other request for information.
(2)(i) CMS may add up to 3 more years to the provider's or
supplier's reenrollment bar (even if such period exceeds the 10-year
period identified in paragraph (c)(1) of this section) if it determines
that the provider or supplier is attempting to circumvent its existing
reenrollment bar by enrolling in Medicare under a different name,
numerical identifier or business identity.
(ii) A provider's or supplier's appeal rights regarding paragraph
(c)(2)(i) of this section--
(A) Are governed by part 498 of this chapter; and
(B) Do not extend to the imposition of the original reenrollment
bar under paragraph (c)(1) of this section; and
(C) Are limited to any additional years imposed under paragraph
(c)(2)(i) of this section.
(3) CMS may impose a reenrollment bar of up to 20 years on a
provider or supplier if the provider or supplier is being revoked from
Medicare for the second time. In determining the length of the
reenrollment bar under this paragraph (c)(3), CMS considers the
following factors:
(i) The reasons for the revocations.
(ii) The length of time between the revocations.
(iii) Whether the provider or supplier has any history of final
adverse actions (other than Medicare revocations) or Medicare or
Medicaid payment suspensions.
(iv) Any other information that CMS deems relevant to its
determination.
(4) A reenrollment bar applies to a provider or supplier under any
of its current, former or future names, numerical identifiers or
business identities.
* * * * *
(i) Extension of revocation. (1) If a provider's or supplier's
Medicare enrollment is revoked under paragraph (a) of this section, CMS
may revoke any and all of the provider's or supplier's Medicare
enrollments, including those under different names, numerical
identifiers or business identities and those under different types.
(2) In determining whether to revoke a provider's or supplier's
other enrollments under this paragraph (i), CMS considers the following
factors:
(i) The reason for the revocation and the facts of the case.
(ii) Whether any final adverse actions have been imposed against
the provider or supplier regarding its other enrollments.
(iii) The number and type(s) of other enrollments.
(iv) Any other information that CMS deems relevant to its
determination.
(j) Voluntary termination. (1) CMS may revoke a provider's or
supplier's Medicare enrollment if CMS determines that the provider or
supplier voluntarily terminated its Medicare enrollment in order to
avoid a revocation under paragraph (a) of this section that CMS would
have imposed had the provider or supplier remained enrolled in
Medicare. In making its determination, CMS considers the following
factors:
(i) Whether there is evidence to suggest that the provider knew or
should have known that it was or would be out of compliance with
Medicare requirements.
(ii) Whether there is evidence to suggest that the provider knew or
should have known that its Medicare enrollment would be revoked.
(iii) Whether there is evidence to suggest that the provider
voluntarily terminated its Medicare enrollment in order to circumvent
such revocation.
(iv) Any other evidence or information that CMS deems relevant to
its determination.
(2) A revocation under paragraph (j)(1) of this section is
effective the day before the Medicare contractor receives the
provider's or supplier's Form CMS-855 voluntary termination
application.
[[Page 10752]]
0
14. Amend Sec. 424.540 by revising paragraphs (b)(1) and (2) to read
as follows:
Sec. 424.540 Deactivation of Medicare billing privileges.
* * * * *
(b) * * *
(1) In order for a deactivated provider or supplier to reactivate
its Medicare billing privileges, the provider or supplier must
recertify that its enrollment information currently on file with
Medicare is correct and furnish any missing information as appropriate.
(2) Notwithstanding paragraph (b)(1) of this section, CMS may, for
any reason, require a deactivated provider or supplier to, as a
prerequisite for reactivating its billing privileges, submit a complete
Form CMS-855 application.
* * * * *
0
15. Amend Sec. 424.570 by revising paragraphs (a)(1)(iii) and (iv) to
read as follows:
Sec. 424.570 Moratoria on newly enrolling Medicare providers and
suppliers.
(a) * * *
(1) * * *
(iii) The temporary moratorium does not apply to any of the
following:
(A) Changes in practice location (except if the location is
changing from a location outside the moratorium area to a location
inside the moratorium area).
(B) Changes in provider or supplier information, such as phone
numbers.
(C) Changes in ownership (except changes in ownership of home
health agencies that would require an initial enrollment).
(iv) A temporary moratorium does not apply to any enrollment
application that has been received by the Medicare contractor prior to
the date the moratorium is imposed.
* * * * *
PART 455--PROGRAM INTEGRITY: MEDICAID
0
16. The authority citation for part 455 continues to read as follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
0
17. Amend Sec. 455.101 by adding the definition of ``Affiliation'' in
alphabetical order to read as follows:
Sec. 455.101 Definitions.
Affiliation means, for purposes of applying Sec. 455.107, any of
the following:
(1) A 5 percent or greater direct or indirect ownership interest
that an individual or entity has in another organization.
(2) A general or limited partnership interest (regardless of the
percentage) that an individual or entity has in another organization.
(3) An interest in which an individual or entity exercises
operational or managerial control over or directly or indirectly
conducts the day-to-day operations of another organization (including,
for purposes of this provision, sole proprietorships), either under
contract or through some other arrangement, regardless of whether or
not the managing individual or entity is a W-2 employee of the
organization.
(4) An interest in which an individual is acting as an officer or
director of a corporation.
(5) Any payment assignment relationship under Sec. 447.10(g) of
this chapter.
* * * * *
0
18. Revise Sec. 455.103 to read as follows:
Sec. 455.103 State plan requirement.
A State plan must provide that the requirements of Sec. Sec.
455.104 through 455.107 are met.
0
19. Add Sec. 455.107 to subpart B to read as follows:
Sec. 455.107 Disclosure of affiliations.
(a) Definitions. For purposes of this section only, the following
terms apply:
(1) ``Uncollected debt'' only applies to the following:
(i) Medicare, Medicaid or CHIP overpayments for which CMS or the
State has sent notice of the debt to the affiliated provider or
supplier.
(ii) Civil money penalties (as defined in Sec. 424.57(a) of this
chapter).
(iii) Assessments (as defined in Sec. 424.57(a) of this chapter).
(2) ``Revoked,'' ``Revocation,'' ``Terminated,'' and
``Termination'' include situations where the affiliated provider or
supplier voluntarily terminated its Medicare, Medicaid or CHIP
enrollment to avoid a potential revocation or termination.
(b) General. A provider that is initially enrolling in the Medicaid
program or is revalidating its Medicaid enrollment information must
disclose whether it or any of its owning or managing employees or
organizations (consistent with the terms ``person with an ownership or
control interest'' and ``managing employee'' as defined in Sec.
455.101) has or, within the previous 5 years, has had an affiliation
with a currently or formerly enrolled Medicare, Medicaid or CHIP
provider or supplier that--
(1) Currently has an uncollected debt to Medicare, Medicaid or
CHIP, regardless of--
(i) The amount of the debt;
(ii) Whether the debt is currently being repaid; or
(iii) Whether the debt is currently being appealed.
(2) Has been or is subject to a payment suspension under a federal
health care program (as that latter term is defined in section 1128B(f)
of the Act), regardless of when the payment suspension occurred or was
imposed;
(3) Has been or is excluded from participation in Medicare,
Medicaid or CHIP, regardless of whether the exclusion is currently
being appealed or when the exclusion occurred or was imposed; or
(4) Has had its Medicare, Medicaid or CHIP enrollment denied,
revoked or terminated, regardless of any of the following:
(i) The reason for the denial, revocation or termination.
(ii) Whether the denial, revocation or termination is currently
being appealed.
(iii) When the denial, revocation or termination occurred or was
imposed.
(c) Information. The initially enrolling or revalidating provider
must disclose the following information about each affiliation:
(1) General identifying information about the affiliated provider
or supplier, which includes the following:
(i) Legal name as reported to the Internal Revenue Service or the
Social Security Administration (if the affiliated provider or supplier
is an individual).
(ii) ``Doing business as'' name (if applicable).
(iii) Tax identification number.
(iv) National Provider Identifier (NPI).
(2) Reason for disclosing the affiliated provider or supplier.
(3) Specific data regarding the affiliation relationship, including
the following:
(i) Length of the relationship.
(ii) Type of relationship.
(iii) Degree of affiliation.
(4) If the affiliation has ended, the reason for the termination.
(d) Mechanism. The information described in paragraphs (b) and (c)
of this section must be furnished to the State in a manner prescribed
by the State.
(e) Denial or revocation. The failure of the provider to fully and
completely report the information required in this section when the
provider knew or should reasonably have known of this information may
result in, as applicable, the denial of the provider's initial
enrollment application or the termination of the provider's enrollment
in Medicaid or CHIP.
(f) Undue risk. Upon receipt of the information described in
paragraphs (b)
[[Page 10753]]
and (c) of this section, the State, in consultation with CMS,
determines whether any of the disclosed affiliations poses an undue
risk of fraud, waste or abuse by considering the following factors:
(1) The duration of the affiliation.
(2) Whether the affiliation still exists and, if not, how long ago
the affiliation ended.
(3) The degree and extent of the affiliation.
(4) If applicable, the reason for the termination of the
affiliation.
(5) Regarding the affiliated provider's or supplier's action under
paragraph (b) of this section, all of the following:
(i) The type of action.
(ii) When the action occurred or was imposed.
(iii) Whether the affiliation existed when the action occurred or
was imposed.
(iv) If the action is an uncollected debt--
(A) The amount of the debt;
(B) Whether the affiliated provider or supplier is repaying the
debt; and
(C) To whom the debt is owed.
(v) If a denial, revocation, termination, exclusion or payment
suspension is involved, the reason for the action.
(6) Any other evidence that the state, in consultation with CMS,
deems relevant to its determination.
(g) Determination of undue risk. A determination by the state, in
consultation with CMS, that a particular affiliation poses an undue
risk of fraud, waste or abuse will result in, as applicable, the denial
of the provider's initial enrollment in Medicaid or CHIP or the
termination of the provider's enrollment in Medicaid or CHIP.
(h) New or changed information. (1) A provider must report the
following:
(i) New or changed information regarding existing affiliations.
(ii) Information regarding new affiliations.
(2) A provider is not required to report new or changed information
regarding past affiliations (except as part of a revalidation
application).
(i) Undisclosed affiliations. The State, in consultation with CMS,
may apply paragraph (g) of this section to situations where a
reportable affiliation (as described in paragraphs (b) and (c) of this
section) poses an undue risk of fraud, waste or abuse, but the provider
has not yet disclosed or is not required at that time to disclose the
affiliation to the State.
PART 457--ALLOTMENTS AND GRANTS TO STATES
0
20. The authority citation for part 457 continues to read as follows:
Authority: Section 1102 of the Social Security Act (42 U.S.C.
1302).
0
21. Amend Sec. 457.990 by:
0
a. Redesignating paragraphs (a) and (b) as paragraphs (b) and (c),
respectively.
0
b. Adding a new paragraph (a).
The addition reads as follows:
Sec. 457.990 Provider and supplier screening, oversight, and
reporting requirements.
* * * * *
(a) Section 455.107.
* * * * *
Dated: November 25, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: December 8, 2015.
Sylvia Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2016-04312 Filed 2-25-16; 11:15 am]
BILLING CODE 4120-01-P