[Federal Register Volume 83, Number 20 (Tuesday, January 30, 2018)]
[Rules and Regulations]
[Pages 4147-4151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-01783]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 424

[CMS-6059-N8]


Medicare, Medicaid, and Children's Health Insurance Programs: 
Announcement of the Extension of Temporary Moratoria on Enrollment of 
Part B Non-Emergency Ground Ambulance Suppliers and Home Health 
Agencies in Designated Geographic Locations

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

ACTION: Extension of temporary moratoria.

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SUMMARY: This document announces the extension of statewide temporary 
moratoria on the enrollment of new Medicare Part B non-emergency ground 
ambulance providers and suppliers and Medicare home health agencies, 
subunits, and branch locations in Florida, Illinois, Michigan, Texas, 
Pennsylvania, and New Jersey, as applicable, to prevent and combat 
fraud, waste, and abuse. This extension also applies to the enrollment 
of new non-emergency ground ambulance suppliers and home health 
agencies, subunits, and branch locations in Medicaid and the Children's 
Health Insurance Program in those states. For purposes of these 
moratoria, providers that were participating as network providers in 
one or more Medicaid managed care organizations prior to January 1, 
2018 will not be considered ``newly enrolling'' when they are required 
to enroll with the State Medicaid agency pursuant to a new statutory 
requirement, and thus will not be subject to the moratoria.

DATES: Applicable January 29, 2018.

FOR FURTHER INFORMATION CONTACT: Jung Kim, (410) 786-9370.
    News media representatives must contact CMS' Public Affairs Office 
at (202) 690-6145 or email them at [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

A. CMS' Implementation of Temporary Enrollment Moratoria

    The Social Security Act (the Act) provides the Secretary with tools 
and resources to combat fraud, waste, and abuse in Medicare, Medicaid, 
and the Children's Health Insurance Program (CHIP). In particular, 
section 1866(j)(7) of the Act provides the Secretary with authority to 
impose a temporary moratorium on the enrollment of new Medicare, 
Medicaid, or CHIP providers and suppliers, including categories of 
providers and suppliers, if the Secretary determines a moratorium is 
necessary to prevent or combat fraud, waste, or abuse under these 
programs. Regarding Medicaid, section 1902(kk)(4) of the Act requires 
States to comply with any moratorium imposed by the Secretary unless 
the State determines that the imposition of such moratorium would 
adversely impact Medicaid beneficiaries' access to care. In addition, 
section 2107(e)(1)(F) of the Act provides that the Medicaid provision 
in section 1902(kk) of the Act is also applicable to CHIP.
    In the February 2, 2011 Federal Register (76 FR 5862), CMS 
published a final rule with comment period titled, ``Medicare, 
Medicaid, and Children's Health Insurance Programs; Additional 
Screening Requirements, Application Fees, Temporary Enrollment 
Moratoria, Payment Suspensions and Compliance Plans for Providers and 
Suppliers,'' which implemented section 1866(j)(7) of the Act by 
establishing new regulations at 42 CFR 424.570. Under Sec.  
424.570(a)(2)(i) and (iv), CMS, or CMS in consultation with the 
Department of Health and Human Services' Office of Inspector General 
(HHS OIG) or the Department of Justice (DOJ), or both, may impose a 
temporary moratorium on newly enrolling Medicare providers and 
suppliers if CMS determines that there is a significant potential for 
fraud, waste, or abuse with respect to a particular provider or 
supplier type, or particular geographic locations, or both. At Sec.  
424.570(a)(1)(ii), CMS stated that it would announce any temporary 
moratorium in a Federal Register document that includes the rationale 
for the imposition of such moratorium. This document fulfills that 
requirement.
    In accordance with section 1866(j)(7)(B) of the Act, there is no 
judicial review under sections 1869 and

[[Page 4148]]

1878 of the Act, or otherwise, of the decision to impose a temporary 
enrollment moratorium. A provider or supplier may use the existing 
appeal procedures at 42 CFR part 498 to administratively appeal a 
denial of billing privileges based on the imposition of a temporary 
moratorium; however, the scope of any such appeal is limited solely to 
assessing whether the temporary moratorium applies to the provider or 
supplier appealing the denial. Under Sec.  424.570(c), CMS denies the 
enrollment application of a provider or supplier if the provider or 
supplier is subject to a moratorium. If the provider or supplier was 
required to pay an application fee, the application fee will be 
refunded if the application was denied as a result of the imposition of 
a temporary moratorium (see Sec.  424.514(d)(2)(v)(C)).
    Based on this authority and our regulations at Sec.  424.570, we 
initially imposed moratoria to prevent enrollment of new home health 
agencies, subunits, and branch locations \1\ (hereafter referred to as 
HHAs) in Miami-Dade County, Florida and Cook County, Illinois, as well 
as surrounding counties, and Medicare Part B ground ambulance suppliers 
in Harris County, Texas and surrounding counties, in a notice issued on 
July 31, 2013 (78 FR 46339).\2\ We exercised this authority again in a 
notice published on February 4, 2014 (79 FR 6475) when we extended the 
existing moratoria for an additional 6 months and expanded them to 
include enrollment of HHAs in Broward County, Florida; Dallas County, 
Texas; Harris County, Texas; and Wayne County, Michigan and surrounding 
counties, and enrollment of ground ambulance suppliers in Philadelphia, 
Pennsylvania and surrounding counties. Then, we further extended these 
moratoria in documents issued on August 1, 2014 (79 FR 44702), February 
2, 2015 (80 FR 5551), July 28, 2015 (80 FR 44967), and February 2, 2016 
(81 FR 5444). On August 3, 2016 (81 FR 51120), we extended the current 
moratoria for an additional 6 months and expanded them to statewide for 
the enrollment of new HHAs in Florida, Illinois, Michigan, and Texas, 
and Part B non-emergency ambulance suppliers in New Jersey, 
Pennsylvania, and Texas. Our August 3, 2016 publication also announced 
the lifting of temporary moratoria for all Part B emergency ambulance 
suppliers.\3\ On January 9, 2017 (82 FR 2363) and July 28, 2017 (82 FR 
35122), CMS again issued a document to extend the temporary moratoria 
for a period of 6 months. On September 1, 2017, CMS lifted the 
statewide temporary moratorium on the enrollment of new Medicare Part B 
non-emergency ground ambulance suppliers in Texas under the authority 
of Sec.  424.570(d). This lifting of the moratorium also applied to 
Medicaid and CHIP in Texas. This decision was a result of the 
Presidential Disaster Declaration signed on August 25, 2017 for several 
counties in the State of Texas due to Hurricane Harvey. Upon 
declaration of the disaster, CMS carefully reviewed the potential 
impact of continued moratoria in Texas, and decided to lift the 
temporary enrollment moratorium on non-emergency ground ambulance 
suppliers in Texas in order to aid in the disaster response. CMS 
published a formal announcement of this decision on November 3, 2017 
(82 FR 51274).
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    \1\ As noted in the preamble to the final rule with comment 
period implementing the moratorium authority (February 2, 2011, 76 
FR 5870), home health agency subunits and branch locations are 
subject to the moratoria to the same extent as any other newly 
enrolling home health agency.
    \2\ CMS has identified an error in the provider and beneficiary 
saturation data described in our July 31, 2013 Federal Register 
notice (78 FR 46339). We have subsequently revised the methodology 
by which we determine provider and beneficiary saturation. Following 
these revisions to the methodology, we simulated application of our 
current 2016 methodology to the 2013 data, and determined that the 
2013 decision to impose the moratorium would not have been impacted 
had the revised methodology been applied. Provider saturation 
remains one of the criteria used to determine whether to implement a 
moratorium. CMS has made market saturation data publicly available 
at https://data.cms.gov/market-saturation.
    \3\ CMS also concurrently announced a demonstration under the 
authority provided in section 402(a)(l)(J) of the Social Security 
Amendments of 1967 (42 U.S.C. 1395b-l(a)(l)(J)) that allows for 
access to care-based exceptions to the moratoria in certain limited 
circumstances after a heightened review of that provider has been 
conducted. This exception process also applies to Medicaid and CHIP 
providers in each state. This announcement may be found in the 
Federal Register document issued on August 3, 2016 (81 FR 51116).
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B. Determination of the Need for Moratoria

    In imposing these enrollment moratoria, CMS considered both 
qualitative and quantitative factors suggesting a high risk of fraud, 
waste, or abuse. CMS relied on law enforcement's longstanding 
experience with ongoing and emerging fraud trends and activities 
through civil, criminal, and administrative investigations and 
prosecutions. CMS' determination of a high risk of fraud, waste, or 
abuse in these provider and supplier types within these geographic 
locations was then confirmed by CMS' data analysis, which relied on 
factors the agency identified as strong indicators of risk. (For a more 
detailed explanation of this determination process and of these 
authorities, see the July 31, 2013 notice (78 FR 46339) or February 4, 
2014 moratoria document (79 FR 6475)).
    Because fraud schemes are highly migratory and transitory in 
nature, many of CMS' program integrity authorities and anti-fraud 
activities are designed to allow the agency to adapt to emerging fraud 
in different locations. The laws and regulations governing CMS' 
moratoria authority give us flexibility to use any and all relevant 
criteria for future moratoria, and CMS may rely on additional or 
different criteria as the basis for future moratoria.
1. Application to Medicaid and the Children's Health Insurance Program 
(CHIP)
    The February 2, 2011, final rule also implemented section 
1902(kk)(4) of the Act, establishing new Medicaid regulations at Sec.  
455.470. Under Sec.  455.470(a)(1) through (3), the Secretary may 
impose a temporary moratorium, in accordance with Sec.  424.570, on the 
enrollment of new providers or provider types after consulting with any 
affected State Medicaid agencies. The State Medicaid agency must impose 
a temporary moratorium on the enrollment of new providers or provider 
types identified by the Secretary as posing an increased risk to the 
Medicaid program unless the State determines that the imposition of 
such moratorium would adversely affect Medicaid beneficiaries' access 
to medical assistance and so notifies the Secretary. The final rule 
also implemented section 2107(e)(1)(D) of the Act by providing, at 
Sec.  457.990 of the regulations, that all of the provisions that apply 
to Medicaid under sections 1902(a)(77) and 1902(kk) of the Act, as well 
as the implementing regulations, also apply to CHIP.
    Section 1866(j)(7) of the Act authorizes imposition of a temporary 
enrollment moratorium for Medicare, Medicaid, and/or CHIP, ``if the 
Secretary determines such moratorium is necessary to prevent or combat 
fraud, waste, or abuse under either such program.'' While there may be 
exceptions, CMS believes that generally, a category of providers or 
suppliers that poses a risk to the Medicare program also poses a 
similar risk to Medicaid and CHIP. Many of the anti-fraud provisions in 
the Act reflect this concept of ``reciprocal risk'' in which a provider 
that poses a risk to one program poses a risk to the other programs. 
For example, section 1902(a)(39) of the Act requires State Medicaid 
agencies to terminate the participation of an individual or entity if 
such individual or entity is

[[Page 4149]]

terminated under Medicare or any other State Medicaid plan. Additional 
provisions in the Act also support the determination that categories of 
providers and suppliers pose the same risk to Medicaid as to Medicare. 
Section 1866(j) of the Act requires us to establish levels of screening 
for categories of providers and suppliers based on the risk of fraud, 
waste, and abuse determined by the Secretary. Section 1902(kk) of the 
Act requires State Medicaid agencies to screen providers and suppliers 
based on the same levels established for the Medicare program. This 
reciprocal concept is also reflected in the Medicare moratoria 
regulations at Sec.  424.570(a)(2)(ii) and (iii), which permit CMS to 
impose a Medicare moratorium based solely on a State imposing a 
Medicaid moratorium. Accordingly, CMS has determined that there is a 
reasonable basis for concluding that a category of providers or 
suppliers that poses a risk to Medicare also poses a similar risk to 
Medicaid and CHIP, and that a moratorium in all of these programs is 
necessary to effectively combat this risk.
2. Consultation With Law Enforcement
    In consultation with the HHS Office of Inspector General (OIG) and 
the Department of Justice (DOJ), CMS previously identified two provider 
and supplier types in nine geographic locations that warrant a 
temporary enrollment moratorium. For a more detailed discussion of this 
consultation process, see the July 31, 2013 notice (78 FR 46339) or 
February 4, 2014 moratoria document (79 FR 6475).
3. Data Analysis
    In addition to consulting with law enforcement, CMS also analyzed 
its own data to identify specific provider and supplier types within 
geographic locations with significant potential for fraud, waste or 
abuse, therefore warranting the imposition of enrollment moratoria.
4. Beneficiary Access to Care
    Beneficiary access to care in Medicare, Medicaid, and CHIP is of 
critical importance to CMS and its State partners, and CMS carefully 
evaluated access for the target moratorium locations with every 
imposition and extension of the moratoria. Prior to imposing and 
extending these moratoria, CMS reviewed Medicare data for these areas 
and found no concerns with beneficiary access to HHAs or ground 
ambulance suppliers. CMS also consulted with the appropriate State 
Medicaid Agencies and with the appropriate State Departments of 
Emergency Medical Services to determine if the moratoria would create 
access to care concerns for Medicaid and CHIP beneficiaries. All of 
CMS' State partners were supportive of CMS' analysis and proposals, and 
together with CMS, determined that continuation of these moratoria 
would not create access to care issues for Medicaid or CHIP 
beneficiaries.
5. When a Temporary Moratorium Does Not Apply
    Under Sec.  424.570(a)(1)(iii), a temporary moratorium does not 
apply to any of the following: (1) Changes in practice location (2) 
changes in provider or supplier information, such as phone number or 
address; or (3) changes in ownership (except changes in ownership of 
HHAs that require initial enrollment under Sec.  424.550). Also, in 
accordance with Sec.  424.570(a)(1)(iv), a temporary moratorium does 
not apply to any enrollment application that a Medicare contractor has 
already approved, but has not yet entered into the Provider Enrollment, 
Chain, and Ownership System (PECOS) at the time the moratorium is 
imposed.
6. Lifting a Temporary Moratorium
    In accordance with Sec.  424.570(b), a temporary enrollment 
moratorium imposed by CMS will remain in effect for 6 months. If CMS 
deems it necessary, the moratorium may be extended in 6-month 
increments. CMS will evaluate whether to extend or lift the moratorium 
before the end of the initial 6-month period and, if applicable, any 
subsequent moratorium periods. If one or more of the moratoria 
announced in this document are extended, CMS will publish a document 
regarding such extensions in the Federal Register.
    As provided in Sec.  424.570(d), CMS may lift a moratorium at any 
time if the President declares an area a disaster under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, if circumstances 
warranting the imposition of a moratorium have abated, if the Secretary 
has declared a public health emergency, or if, in the judgment of the 
Secretary, the moratorium is no longer needed.
    Once a moratorium is lifted, the provider or supplier types that 
were unable to enroll because of the moratorium will be designated to 
the ``high'' screening level in accordance with Sec. Sec.  
424.518(c)(3)(iii) and 455.450(e)(2) if such provider or supplier 
applies at any time within 6 months from the date the moratorium was 
lifted.

II. Extension of Home Health and Ambulance Moratoria--Geographic 
Locations

    CMS currently has in place statewide moratoria on newly enrolling 
HHAs in Florida, Illinois, Michigan, and Texas and Part B non-emergency 
ambulance suppliers in New Jersey and Pennsylvania. Under section 
1932(d)(6)(A) of the Act, network providers in a Medicaid managed care 
organization are required to enroll with the State Medicaid agency no 
later than January 1, 2018. For purposes of these moratoria, providers 
that were participating as network providers in one or more managed 
care organizations before January 1, 2018 will not be considered 
``newly enrolling'' when they are required to enroll with the State 
under this statutory requirement; and thus will not be subject to the 
moratoria.
    As provided in Sec.  424.570(b), CMS may deem it necessary to 
extend previously-imposed moratoria in 6-month increments. Under this 
authority, CMS is extending the temporary moratoria on the Medicare 
enrollment of HHAs and Part B non-emergency ground ambulance providers 
and suppliers in the geographic locations discussed herein. Under the 
regulations at Sec.  455.470 and Sec.  457.990, these moratoria also 
apply to the enrollment of HHAs and non-emergency ground ambulance 
providers and suppliers in Medicaid and CHIP in those locations. Under 
Sec.  424.570(b), CMS is required to publish a document in the Federal 
Register announcing any extension of a moratorium, and this extension 
of moratoria document fulfills that requirement.
    CMS consulted with the HHS-OIG regarding the extension of the 
moratoria on new HHAs and Part B non-emergency ground ambulance 
providers and suppliers in all of the moratoria states, and HHS-OIG 
agrees that a significant potential for fraud, waste, and abuse 
continues to exist regarding those provider and supplier types in these 
geographic areas. The circumstances warranting the imposition of the 
moratoria have not yet abated, and CMS has determined that the 
moratoria are still needed as we monitor the indicators and continue 
with administrative actions to combat fraud and abuse, such as payment 
suspensions and revocations of provider/supplier numbers. (For more 
information regarding the monitored indicators, see the February 4, 
2014 moratoria document (79 FR 6475)).
    Based upon CMS' consultation with the relevant State Medicaid 
agencies, CMS has concluded that extending

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these moratoria will not create an access to care issue for Medicaid or 
CHIP beneficiaries in the affected states at this time. CMS also 
reviewed Medicare data for these states and found there are no current 
problems with access to HHAs or ground ambulance providers or 
suppliers. Nevertheless, the agency will continue to monitor these 
locations to make sure that no access to care issues arise in the 
future.
    Based upon our consultation with law enforcement and consideration 
of the factors and activities described previously, CMS has determined 
that the current temporary enrollment moratoria should be extended for 
an additional 6 months.

III. Summary of the Moratoria Locations

    CMS is executing its authority under sections 1866(j)(7), 
1902(kk)(4), and 2107(e)(1)(D) of the Act to extend and implement 
temporary enrollment moratoria on HHAs for all counties in Florida, 
Illinois, Michigan, and Texas, as well as Part B non-emergency ground 
ambulance providers and suppliers for all counties in New Jersey and 
Pennsylvania.

IV. Clarification of Right to Judicial Review

    Section 1866(j)(7)(B) of the Act states that there shall be no 
judicial review under section 1869, section 1878, or otherwise, of a 
temporary moratorium imposed on the enrollment of new providers of 
services and suppliers if the Secretary determines that the moratorium 
is necessary to prevent or combat fraud, waste, or abuse. Accordingly, 
our regulations at 42 CFR 498.5(l)(4) state that for appeals of denials 
based on a temporary moratorium, the scope of review will be limited to 
whether the temporary moratorium applies to the provider or supplier 
appealing the denial. The agency's basis for imposing a temporary 
moratorium is not subject to review. Our regulations do not limit the 
right to seek judicial review of a final agency decision that the 
temporary moratorium applies to a particular provider or supplier. In 
the preamble to the February 2, 2011 (76 FR 5918) final rule with 
comment period establishing this regulation, we explained that ``a 
provider or supplier may administratively appeal an adverse 
determination based on the imposition of a temporary moratorium up to 
and including the Department Appeal Board (DAB) level of review.'' We 
are clarifying that providers and suppliers that have received 
unfavorable decisions in accordance with the limited scope of review 
described in Sec.  498.5(l)(4) may seek judicial review of those 
decisions after they exhaust their administrative appeals. However, we 
reiterate that section 1866(j)(7)(B) of the Act precludes judicial 
review of the agency's basis for imposing a temporary moratorium.

V. Collection of Information Requirements

    This document does not impose information collection requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. Consequently, there is no need for review by the Office 
of Management and Budget under the authority of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).

VI. Regulatory Impact Statement

    CMS has examined the impact of this document as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social 
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 
(March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism 
(August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health, and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major regulatory 
actions with economically significant effects ($100 million or more in 
any 1 year). This document will prevent the enrollment of new home 
health providers and Part B non-emergency ground ambulance suppliers in 
Medicare, Medicaid, and CHIP in certain states. Though savings may 
accrue by denying enrollments, the monetary amount cannot be 
quantified. Since the imposition of the initial moratoria on July 31, 
2013, more than 1187 HHAs and 24 ambulance companies in all geographic 
areas affected by the moratoria had their applications denied. We have 
found the number of applications that are denied after 60 days declines 
dramatically, as most providers and suppliers will not submit 
applications during the moratoria period. Therefore, this document does 
not reach the economic threshold, and thus is not considered a major 
action.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having revenues of 
less than $7.5 million to $38.5 million in any one year. Individuals 
and states are not included in the definition of a small entity. CMS is 
not preparing an analysis for the RFA because it has determined, and 
the Secretary certifies, that this document will not have a significant 
economic impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if an action may have a significant impact 
on the operations of a substantial number of small rural hospitals. 
This analysis must conform to the provisions of section 604 of the RFA. 
For purposes of section 1102(b) of the Act, CMS defines a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area (MSA) for Medicare payment purposes and has fewer than 
100 beds. CMS is not preparing an analysis for section 1102(b) of the 
Act because it has determined, and the Secretary certifies, that this 
document will not have a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any regulatory action whose mandates require spending in any 1 
year of $100 million in 1995 dollars, updated annually for inflation. 
In 2017, that threshold is approximately $148 million. This document 
will have no consequential effect on state, local, or tribal 
governments or on the private sector.
    Executive Order 13771, titled ``Reducing Regulation and Controlling 
Regulatory Costs,'' was issued on January 30, 2017 (82 FR 9339, 
February 3, 2017). It has been determined that this notice is a 
transfer notice that does not impose more than de minimis costs and 
thus is not a regulatory action for the purposes of E.O. 13771.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed regulatory action (and 
subsequent final action) that imposes substantial direct requirement 
costs on state and local governments, preempts

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state law, or otherwise has Federalism implications. Because this 
document does not impose any costs on state or local governments, the 
requirements of Executive Order 13132 are not applicable.
    In accordance with the provisions of Executive Order 12866, this 
document was reviewed by the Office of Management and Budget.

    Dated: January 12, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2018-01783 Filed 1-29-18; 8:45 am]
 BILLING CODE 4120-01-P