[Title 42 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2024 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 42
Public Health
________________________
Parts 400 to 413
Revised as of October 1, 2024
Containing a codification of documents of general
applicability and future effect
As of October 1, 2024
Published by the Office of the Federal Register
National Archives and Records Administration as a
Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 42:
Chapter IV--Centers for Medicare & Medicaid
Services, Department of Health and Human Services 3
Finding Aids:
Table of CFR Titles and Chapters........................ 1049
Alphabetical List of Agencies Appearing in the CFR...... 1069
List of CFR Sections Affected........................... 1079
[[Page iv]]
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 42 CFR 400.200
refers to title 42, part
400, section 200.
----------------------------
[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
volume.
LEGAL STATUS
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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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To determine whether a Code volume has been amended since its
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collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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that volume.
[[Page vii]]
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Oliver A. Potts,
Director,
Office of the Federal Register
October 1, 2024
[[Page ix]]
THIS TITLE
Title 42--Public Health is composed of five volumes. The parts in
these volumes are arranged in the following order: Parts 1-399, parts
400-413, parts 414-429, parts 430-481, and part 482 to end. The first
volume (parts 1-399) contains current regulations issued under chapter
I--Public Health Service (HHS). The second, third, and fourth volumes
(parts 400-413, parts 414-429, and parts 430-481) include regulations
issued under chapter IV--Centers for Medicare & Medicaid Services (HHS)
and the fifth volume (part 482 to end) contains the remaining
regulations in chapter IV and the regulations issued under chapter V by
the Office of Inspector General-Health Care (HHS). The contents of these
volumes represent all current regulations codified under this title of
the CFR as of October 1, 2024.
For this volume, Christine Colaninno was Chief Editor. The Code of
Federal Regulations publication program is under the direction of John
Hyrum Martinez, assisted by Stephen J. Frattini.
[[Page 1]]
TITLE 42--PUBLIC HEALTH
(This book contains parts 400 to 413)
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Part
chapter iv--Centers for Medicare & Medicaid Services,
Department of Health and Human Services................... 400
[[Page 3]]
CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF
HEALTH AND HUMAN SERVICES
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Editorial Note: Nomenclature changes to chapter IV appear at 62 FR
46037, Aug. 29, 1997; 66 FR 39452, July 31, 2001; 67 FR 36540, May 24,
2002; and 77 FR 29028, May 16, 2012
SUBCHAPTER A--GENERAL PROVISIONS
Part Page
400 Introduction; definitions................... 5
401 General administrative requirements......... 8
402 Civil money penalties, assessments, and
exclusions.............................. 38
403 Special programs and projects............... 59
SUBCHAPTER B--MEDICARE PROGRAM
405 Federal health insurance for the aged and
disabled................................ 122
406 Hospital insurance eligibility and
entitlement............................. 318
407 Supplementary medical insurance (SMI)
enrollment and entitlement.............. 337
408 Premiums for supplementary medical insurance 351
409 Hospital insurance benefits................. 369
410 Supplementary medical insurance (SMI)
benefits................................ 400
411 Exclusions from Medicare and limitations on
Medicare payment........................ 498
412 Prospective payment systems for inpatient
hospital services....................... 603
413 Principles of reasonable cost reimbursement;
payment for end-stage renal disease
services; prospectively determined
payment rates for skilled nursing
facilities; payment for acute kidney
injury dialysis......................... 836
[[Page 5]]
SUBCHAPTER A_GENERAL PROVISIONS
PART 400_INTRODUCTION; DEFINITIONS--Table of Contents
Subpart A [Reserved]
Subpart B_Definitions
Sec.
400.200 General definitions.
400.202 Definitions specific to Medicare.
400.203 Definitions specific to Medicaid.
Subpart C [Reserved]
Authority: 42 U.S.C. 1302 and 1395hh and 44 U.S.C. Chapter 35.
Subpart A [Reserved]
Subpart B_Definitions
Sec. 400.200 General definitions.
In this chapter, unless the context indicates otherwise--
Act means the Social Security Act, and titles referred to are titles
of that Act.
Administrator means the Administrator, Centers for Medicare &
Medicaid Services (CMS), formerly the Health Care Financing
Administration (HCFA).
ALJ stands for administrative law judge.
Area means the geographical area within the boundaries of a State,
or a State or other jurisdiction, designated as constituting an area
with respect to which a Professional Standards Review Organization or a
Utilization and Quality Control Peer Review Organization has been or may
be designated.
Beneficiary means a person who is entitled to Medicare benefits and/
or has been determined to be eligible for Medicaid.
CMP stands for competitive medical plan.
Conditions of participation includes requirements for participation
as the latter term is used in part 483 of this chapter.
Condition level deficiencies includes deficiencies with respect to
``level A requirements'' as the latter term is used in parts 442 and 483
of this chapter.
CORF stands for comprehensive outpatient rehabilitation facility.
CFR stands for Code of Federal Regulations.
CMS stands for Centers for Medicare & Medicaid Services, formerly
the Health Care Financing Administration (HCFA).
CY stands for calendar year.
DAB stands for Departmental Appeals Board.
Department means the Department of Health and Human Services (HHS),
formerly the Department of Health, Education, and Welfare.
ESRD stands for end-stage renal disease.
FDA stands for the Food and Drug Administration.
FQHC means Federally qualified health center.
FR stands for Federal Register.
FY stands for fiscal year.
HCPP stands for health care prepayment plan.
HHS stands for the Department of Health and Human Services.
HHA stands for home health agency.
HMO stands for health maintenance organization.
ICF stands for intermediate care facility.
ICF/IID stands for intermediate care facility for individuals with
intellectual disabilities.
Medicaid means medical assistance provided under a State plan
approved under title XIX of the Act.
Medicare means the health insurance program for the aged and
disabled under title XVIII of the Act.
Medicare Savings Programs (MSPs) has the same meaning described in
Sec. 435.4 of this chapter.
NCD stands for national coverage determination.
OASDI stands for the Old Age, Survivors, and Disability Insurance
program under title II of the Act.
OIG stands for the Department's Office of the Inspector General.
Public Health Emergency (PHE) means the Public Health Emergency
determined to exist nationwide as of January 27, 2020, by the Secretary
pursuant to section 319 of the Public Health
[[Page 6]]
Service Act on January 31, 2020, as a result of confirmed cases of
COVID-19, including any subsequent renewals.
QDWI stands for Qualified Disabled and Working Individual.
QIO stands for quality improvement organization.
QMB stands for Qualified Medicare Beneficiary.
Qualified Disabled and Working Individual means an individual who--
(1) Is eligible to enroll for Medicare Part A under section 1818A of
the Act.
(2) Has income, as determined in accordance with SSI methodologies,
that does not exceed 200 percent of the Federal poverty guidelines (as
defined and revised annually by the Office of Management and Budget) for
a family of the size of the individual's family;
(3) Has resources, as determined in accordance with SSI
methodologies, that do not exceed twice the relevant maximum amount
established, for SSI eligibility, for an individual or for an individual
and his or her spouse; and
(4) Is not otherwise eligible for Medicaid.
Qualified Medicare Beneficiary (QMB) means an individual described
in Sec. 435.123 of this chapter.
Qualifying Individual (QI) means an individual described in Sec.
435.125 of this chapter.
Quality improvement organization means an organization that has a
contract with CMS, under part B of title XI of the Act, to perform
utilization and quality control review of the health care furnished, or
to be furnished, to Medicare beneficiaries.
Regional Administrator means a Regional Administrator of CMS.
Regional Office means one of the regional offices of CMS.
RHC stands for rural health clinic.
RRB stands for Railroad Retirement Board.
Secretary means the Secretary of Health and Human Services.
SNF stands for skilled nursing facility.
Social security benefits means monthly cash benefits payable under
section 202 or 223 of the Act.
Specified Low-Income Medicare Beneficiary (SLMB) means an individual
described in Sec. 435.124 of this chapter.
SSA stands for Social Security Administration.
United States means the fifty States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa,
and the Northern Mariana Islands.
U.S.C. stands for United States Code.
[48 FR 12534, Mar. 25, 1983]
Editorial Note: For Federal Register citations affecting Sec.
400.200, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and at www.govinfo.gov.
Sec. 400.202 Definitions specific to Medicare.
As used in connection with the Medicare program, unless the context
indicates otherwise--
Carrier means an entity that has a contract with CMS to determine
and make Medicare payments for Part B benefits payable on a charge basis
and to perform other related functions.
Critical access hospital (CAH) means a facility designated by HFCA
as meeting the applicable requirements of section 1820 of the Act and of
subpart F of part 485 of this chapter.
Departmental Appeals Board means: (1) Except as provided in
paragraphs (2) and (3) of this definition, a Board established in the
office of the Secretary, whose members act in panels to provide
impartial review of disputed decisions made by operating components of
the Department or by ALJs.
(2) For purposes of review of ALJ decisions under part 405, subparts
G and H; part 417, subpart Q; part 422, subpart M; and part 478, subpart
B of this chapter, the Medicare Appeals Council designated by the Board
Chair.
(3) For purposes of part 426 of this chapter, a Member of the Board
and, at the discretion of the Board Chair, any other Board staff
appointed by the Board Chair to perform a review under that part.
Entitled means that an individual meets all the requirements for
Medicare benefits.
Essential access community hospital (EACH) means a hospital
designated by CMS as meeting the applicable requirements of section 1820
of the Act and of subpart G of part 412 of this chapter, as in effect on
September 30, 1997.
[[Page 7]]
GME stands for graduate medical education.
Hospital insurance benefits means payments on behalf of, and in rare
circumstances directly to, an entitled individual for services that are
covered under Part A of title XVIII of the Act.
Intermediary means an entity that has a contract with CMS to
determine and make Medicare payments for Part A or Part B benefits
payable on a cost basis and to perform other related functions.
Local coverage determination (LCD) means a decision by a fiscal
intermediary or a carrier under Medicare Part A or Part B, as
applicable, whether to cover a particular service on an intermediary-
wide or carrier-wide basis in accordance with section 1862(a)(1)(A) of
the Act. An LCD may provide that a service is not reasonable and
necessary for certain diagnoses and/or for certain diagnosis codes. An
LCD does not include a determination of which procedure code, if any, is
assigned to a service or a determination with respect to the amount of
payment to be made for the service.
Medicare integrity program contractor means an entity that has a
contract with CMS under section 1893 of the Act to perform exclusively
one or more of the program integrity activities specified in that
section.
Medicare Part A means the hospital insurance program authorized
under Part A of title XVIII of the Act.
Medicare Part B means the supplementary medical insurance program
authorized under Part B of title XVIII of the Act.
Medicare Part C means the choice of Medicare benefits through
Medicare Advantage plans authorized under Part C of the title XVIII of
the Act.
Medicare Part D means the voluntary prescription drug benefit
program authorized under Part D of title XVIII of the Act.
National coverage determination (NCD) means a decision that CMS
makes regarding whether to cover a particular service nationally under
title XVIII of the Act. An NCD does not include a determination of what
code, if any, is assigned to a service or a determination with respect
to the amount of payment to be made for the service.
Nonparticipating supplier means a supplier that does not have an
agreement with CMS to participate in Part B of Medicare in effect on the
date of the service.
Participating supplier means a supplier that has an agreement with
CMS to participate in Part B of Medicare in effect on the date of the
service.
Payment on an assignment-related basis means payment for Part B
services--
(1) To a physician or other supplier that accepts assignment from
the beneficiary, in accordance with Sec. 424.55 or Sec. 424.56 of this
chapter;
(2) To a physician or other supplier after the beneficiary's death,
in accordance with Sec. 424.64(c)(1) of this chapter; or
(3) To an entity that pays the physician or other supplier under a
health benefit plan, in accordance with Sec. 424.66 of this chapter.
Provider means a hospital, a CAH, a skilled nursing facility, a
comprehensive outpatient rehabilitation facility, a home health agency,
or a hospice that has in effect an agreement to participate in Medicare,
or a clinic, a rehabilitation agency, or a public health agency that has
in effect a similar agreement but only to furnish outpatient physical
therapy or speech pathology services, or a community mental health
center that has in effect a similar agreement but only to furnish
partial hospitalization services.
Railroad retirement benefits means monthly benefits payable to
individuals under the Railroad Retirement Act of 1974 (45 U.S.C.
beginning at section 231).
Services means medical care or services and items, such as medical
diagnosis and treatment, drugs and biologicals, supplies, appliances,
and equipment, medical social services, and use of hospital, CAH, or SNF
facilities.
Supplementary medical insurance benefits means payment to or on
behalf of an entitled individual for services covered under Part B of
title XVIII of the Act.
Supplier means a physician or other practitioner, or an entity other
than a provider, that furnishes health care services under Medicare.
[48 FR 12534, Mar. 25, 1983]
[[Page 8]]
Editorial Note: For Federal Register citations affecting Sec.
400.202, see the List of CFR Sections Affected, which appears in the
Finding Aids section of the printed volume and at www.govinfo.gov.
Sec. 400.203 Definitions specific to Medicaid.
As used in connection with the Medicaid program, unless the context
indicates otherwise--
Applicant means an individual whose written application for Medicaid
has been submitted to the agency determining Medicaid eligibility, but
has not received final action. This includes an individual (who need not
be alive at the time of application) whose application is submitted
through a representative or a person acting responsibly for the
individual.
Federal financial participation (FFP) means the Federal Government's
share of a State's expenditures under the Medicaid program.
FMAP stands for the Federal medical assistance percentage, which is
used to calculate the amount of Federal share of State expenditures for
services.
Intellectual disability means the condition that was previously
referred to as mental retardation.
Medicaid agency or agency means the single State agency
administering or supervising the administration of a State Medicaid
plan.
Nursing facility (NF), effective October 1, 1990, means an SNF or an
ICF participating in the Medicaid program.
PCCM stands for primary care case manager.
PCP stands for primary care physician.
Provider means either of the following:
(1) For the fee-for-service program, any individual or entity
furnishing Medicaid services under an agreement with the Medicaid
agency.
(2) For the managed care program, any individual or entity that is
engaged in the delivery of health care services and is legally
authorized to do so by the State in which it delivers the services.
Services means the types of medical assistance specified in section
1905(a) of the Act and defined in subpart A of part 440 of this chapter.
State means the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa
and the Northern Mariana Islands.
State plan or the plan means a comprehensive written commitment by a
Medicaid agency, submitted under section 1902(a) of the Act, to
administer or supervise the administration of a Medicaid program in
accordance with Federal requirements.
[48 FR 12534, Mar. 25, 1983, as amended at 50 FR 33029, Aug. 16, 1985;
56 FR 8852, Mar. 1, 1991; 57 FR 29155, June 30, 1992; 67 FR 41094, June
14, 2002; 77 FR 29028, May 16, 2012]
Subpart C [Reserved]
PART 401_GENERAL ADMINISTRATIVE REQUIREMENTS--Table of Contents
Subpart A [Reserved]
Subpart B_Confidentiality and Disclosure
Sec.
401.101 Purpose and scope.
401.102 Definitions.
401.105 Rules for disclosure.
401.106 Publication.
401.108 CMS rulings.
401.109 Precedential Final Decisions of the Secretary.
401.110 Publications for sale.
401.112 Availability of administrative staff manuals.
401.116 Availability of records upon request.
401.118 Deletion of identifying details.
401.120 Creation of records.
401.126 Information or records that are not available.
401.128 Where requests for records may be made.
401.130 Materials available at social security district offices and
branch offices.
401.132 Materials in field offices of the Office of Hearings and
Appeals, SSA.
401.133 Availability of official reports on providers and suppliers of
services, State agencies, intermediaries, and carriers under
Medicare.
401.134 Release of Medicare information to State and Federal agencies.
401.135 Release of Medicare information to the public.
401.136 Requests for information or records.
401.140 Fees and charges.
401.144 Denial of requests.
401.148 Administrative review.
401.152 Court review.
Subpart C [Reserved]
[[Page 9]]
Subpart D_Reporting and Returning of Overpayments
401.301 Basis and scope.
401.303 Definitions.
401.305 Requirements for reporting and returning of overpayments.
Subpart E [Reserved]
Subpart F_Claims Collection and Compromise
401.601 Basis and scope.
401.603 Definitions.
401.605 Omissions not a defense.
401.607 Claims collection.
401.613 Compromise of claims.
401.615 Payment of compromise amount.
401.617 Suspension of collection action.
401.621 Termination of collection action.
401.623 Joint and several liability.
401.625 Effect of CMS claims collection decisions on appeals.
Subpart G_Availability of Medicare Data for Performance Measurement
401.701 Purpose and scope.
401.703 Definitions.
401.705 Eligibility criteria for qualified entities.
401.707 Operating and governance requirements for qualified entities.
401.709 The application process and requirements.
401.711 Updates to plans submitted as part of the application process.
401.713 Ensuring the privacy and security of data.
401.715 Selection and use of performance measures.
401.716 Non-public analyses.
401.717 Provider and supplier requests for error correction.
401.718 Dissemination of data.
401.719 Monitoring and sanctioning of qualified entities.
401.721 Terminating an agreement with a qualified entity.
401.722 Qualified clinical data registries.
Authority: Secs. 1102, 1871, and 1874(e) of the Social Security Act
(42 U.S.C. 1302, 1395hh, and 1395w-5) and sec. 105, Pub. L. 114-10, 129
Stat. 87.
Subpart A [Reserved]
Subpart B_Confidentiality and Disclosure
Source: 46 FR 55696, Nov. 12, 1981, unless otherwise noted.
Sec. 401.101 Purpose and scope.
(a) The regulations in this subpart:
(1) Implement section 1106(a) of the Social Security Act as it
applies to the Centers for Medicare & Medicaid Services (CMS). The rules
apply to information obtained by officers or employees of CMS in the
course of administering title XVIII of the Social Security Act
(Medicare), information obtained by Medicare intermediaries or carriers
in the course of carrying out agreements under sections 1816 and 1842 of
the Social Security Act, and any other information subject to section
1106(a) of the Social Security Act;
(2) Relate to the availability to the public, under 5 U.S.C. 552, of
records of CMS and its components. They set out what records are
available and how they may be obtained; and
(3) Supplement the regulations of the Department of Health and Human
Services relating to availability of information under 5 U.S.C. 552,
codified in 45 CFR part 5, and do not replace or restrict them.
(b) Except as authorized by the rules in this subpart, no
information described in paragraph (a)(1) of this section shall be
disclosed. The procedural rules in this subpart (Sec. Sec. 401.106
through 401.152) shall be applied to requests for information which is
subject to the rules for disclosure in this subpart.
(c) Requests for information which may not be disclosed according to
the provisions of this subpart shall be denied under authority of
section 1106(a) of the Social Security Act and this subpart, and
furthermore, such requests which have been made pursuant to the Freedom
of Information Act shall be denied under authority of an appropriate
Freedom of Information Act exemption, 5 U.S.C. 552(b).
Sec. 401.102 Definitions.
For purposes of this subpart:
Act means the Social Security Act.
Freedom of Information Act rules means the substantive mandatory
disclosure provisions of the Freedom of Information Act, 5 U.S.C. 552
(including the exemptions from mandatory disclosure, 5 U.S.C. 552(b), as
implemented by the Department's public information regulation, 45 CFR
part 5, subpart F
[[Page 10]]
and by Sec. Sec. 401.106 to 401.152 of this subpart.
Person means a person as defined in the Administrative Procedure
Act, 5 U.S.C. 551(2). This includes State or local agencies, but does
not include Federal agencies or State or Federal courts.
Record has the same meaning as that provided in 45 CFR 5.5.
Subject individual means an individual whose record is maintained by
the Department in a system of records, as the terms ``individual,''
``record'', and ``system of records'' are defined in the Privacy Act of
1974, 5 U.S.C. 552a(a).
Sec. 401.105 Rules for disclosure.
(a) General rule. The Freedom of Information Act rules shall be
applied to every proposed disclosure of information. If, considering the
circumstances of the disclosure, the information would be made available
in accordance with the Freedom of Information Act rules, then the
information may be disclosed regardless of whether the requester or
beneficiary of the information has a statutory right to request the
information under the Freedom of Information Act, 5 U.S.C. 552, or
whether a request has been made.
(b) Application of the general rule. Pursuant to the general rule in
paragraph (a) of this section,
(1) Information shall be disclosed--
(i) To a subject individual when required by the access provision of
the Privacy Act, 5 U.S.C. 552a(d), as implemented by the Department
Privacy Act regulation, 45 CFR part 5b; and
(ii) To a person upon request when required by the Freedom of
Information Act, 5 U.S.C. 552;
(2) Unless prohibited by any other statute (e.g., the Privacy Act of
1974, 5 U.S.C. 552a(b), the Tax Reform Act of 1976, 26 U.S.C. 6103, or
section 1106(d) and (e) of the Social Security Act), information may be
disclosed to any requester or beneficiary of the information, including
another Federal agency or a State or Federal court, when the information
would not be exempt from mandatory disclosure under Freedom of
Information Act rules or when the information nevertheless would be made
available under the Department's public information regulation's
criteria for disclosures which are in the public interest and consistent
with obligations of confidentiality and administrative necessity, 45 CFR
part 5, subpart F, as supplemented by Sec. Sec. 401.106 to 401.152 of
this subpart.
[42 FR 14704, Mar. 16, 1977. Redesignated at 45 FR 74913, 74914, Nov.
13, 1980, and correctly redesignated at 46 FR 24551, May 1, 1981, as
amended at 46 FR 55697, Nov. 12, 1981]
Sec. 401.106 Publication.
(a) Methods of publication. Materials required to be published under
the provisions of The Freedom of Information Act, 5 U.S.C. 552 (a)(1)
and (2) are published in one of the following ways:
(1) By publication in the Federal Register of CMS regulations, and
by their subsequent inclusion in the Code of Federal Regulations;
(2) By publication in the Federal Register of appropriate general
notices;
(3) By other forms of publication, when incorporated by reference in
the Federal Register with the approval of the Director of the Federal
Register; and
(4) By publication of indexes of precedential orders and opinions
issued in the adjudication of claims, statements of policy and
interpretations which have been adopted but have not been published in
the Federal Register, and of administrative staff manuals and
instructions to staff that affect a member of the public.
(b) Availability for inspection. Those materials which are published
in the Federal Register pursuant to 5 U.S.C. 552(a)(1) shall, to the
extent practicable and to further assist the public, be made available
for inspection at the places specified in Sec. 401.128.
[46 FR 55696, Nov. 12, 1981, as amended at 48 FR 22924, May 23, 1983]
Sec. 401.108 CMS rulings.
(a) After September 1981, a precedent final opinion or order or a
statement of policy or interpretation that has not been published in the
Federal Register as a part of a regulation or of a notice implementing
regulations, but which has been adopted by CMS as having precedent, may
be published in the Federal Register as a CMS Ruling
[[Page 11]]
and will be made available in the publication entitled CMS Rulings.
(b) Precedent final opinions and orders and statements of policy and
interpretation that were adopted by CMS before October, 1981, and that
have not been published in the Federal Register are available in CMS
Rulings.
(c) CMS Rulings are published under the authority of the
Administrator, CMS. They are binding on all CMS components, on all HHS
components that adjudicate matters under the jurisdiction of CMS, and on
the Social Security Administration to the extent that components of the
Social Security Administration adjudicate matters under the jurisdiction
of CMS.
[48 FR 22924, May 23, 1983, as amended at 70 FR 11472, Mar. 8, 2005; 70
FR 37702, June 30, 2005]
Sec. 401.109 Precedential Final Decisions of the Secretary.
(a) The Chair of the Department of Health and Human Services
Departmental Appeals Board (DAB Chair) may designate a final decision of
the Secretary issued by the Medicare Appeals Council in accordance with
part 405, subpart I; part 422, subpart M; part 423, subpart U; or part
478, subpart B, of this chapter as precedential. In determining which
decisions should be designated as precedential, the DAB Chair may take
into consideration decisions that address, resolve, or clarify recurring
legal issues, rules or policies, or that may have broad application or
impact, or involve issues of public interest.
(b) Precedential decisions are made available to the public, with
personally identifiable information of the beneficiary removed, and have
precedential effect from the date they are made available to the public.
Notice of precedential decisions is published in the Federal Register.
(c) Medicare Appeals Council decisions designated in accordance with
paragraph (a) of this section have precedential effect and are binding
on all CMS components, on all HHS components that adjudicate matters
under the jurisdiction of CMS, and on the Social Security Administration
to the extent that components of the Social Security Administration
adjudicate matters under the jurisdiction of CMS.
(d) Precedential effect, as used in this section, means that the
Medicare Appeals Council's--
(1) Legal analysis and interpretation of a Medicare authority or
provision is binding and must be followed in future determinations and
appeals in which the same authority or provision applies and is still in
effect; and
(2) Factual findings are binding and must be applied to future
determinations and appeals involving the same parties if the relevant
facts are the same and evidence is presented that the underlying factual
circumstances have not changed since the issuance of the precedential
final decision.
[82 FR 5105, Jan. 17, 2017]
Sec. 401.110 Publications for sale.
The following publications containing information pertaining to the
program, organization, functions, and procedures of CMS may be purchased
from the Superintendent of Documents, Government Printing Office,
Washington, DC 20402.
(a) Titles 20, 42, and 45 of the Code of Federal Regulations.
(b) Federal Register issues.
(c) Compilation of the Social Security Laws.
(d) CMS Rulings.
(e) Social Security Handbook. The information in the Handbook is not
of precedent or interpretative force.
(f) Medicare/Medicaid Directory of Medical Facilities.
Sec. 401.112 Availability of administrative staff manuals.
All CMS administrative staff manuals and instructions to staff
personnel which contain policies, procedures, or interpretations that
affect the public are available for inspection and copying. A complete
listing of such materials is published in CMS Rulings. These manuals are
generally not printed in a sufficient quantity to permit sale or other
general distribution to the public. Selected material is maintained at
Social Security Administration district offices and field offices and
may be inspected there. See Sec. Sec. 401.130 and 401.132 for a listing
of this material.
[[Page 12]]
Sec. 401.116 Availability of records upon request.
(a) General. In addition to the records made available pursuant to
Sec. Sec. 401.106, 401.108, 401.110 and 401.112, CMS will, upon request
made in accordance with this subpart, make identified records available
to any person, unless they are exempt from disclosure under the
provisions of section 552(b) of title 5, United States Code (see Sec.
401.126), or any other provision of law.
(b) Misappropriation, alteration, or destruction of records. No
person may remove any record made available to him for inspection or
copying under this part, from the place where it is made available. In
addition, no person may steal, alter, mutilate, obliterate, or destroy
in whole or in part, such a record. See sections 641 and 2071 of title
18 of the United States Code.
Sec. 401.118 Deletion of identifying details.
When CMS publishes or otherwise makes available an opinion or order,
statement of policy, or other record which relates to a private party or
parties, the name or names or other identifying details will be deleted.
Sec. 401.120 Creation of records.
Records will not be created by compiling selected items from the
files, and records will not be created to provide the requester with
such data as ratios, proportions, percentages, per capitas, frequency
distributions, trends, correlations, and comparisons. If such data have
been compiled and are available in the form of a record, the record
shall be made available as provided in this subpart.
Sec. 401.126 Information or records that are not available.
(a) Specific exemptions from disclosure. Pursuant to paragraph (b)
of 5 U.S.C. 552, certain classes of records are exempt from disclosure.
For some examples of the kinds of materials which are exempt, see
subpart F of the public information regulation of the Department of
Health and Human Services (45 CFR part 5) and the appendix to that
regulation.
(b) Materials exempt from disclosure by statute. Pursuant to
paragraph (b)(3) of 5 U.S.C. 552, as amended, which exempts from the
requirement for disclosure matters that are exempted from disclosure by
statute, provided that such statute requires that the matters be
withheld from the public in such a manner as to leave no discretion on
the issue, or establishes particular criteria for withholding or refers
to particular types of matter to be withheld:
(1) Reports described in sections 1106 (d) and (e) of the Social
Security Act shall not be disclosed, except in accordance with the
provisions of sections 1106 (d) and (e). Sections 1106 (d) and (e)
provide for public inspection of certain official reports dealing with
the operation of the health programs established by titles XVIII and XIX
of the Social Security Act (Medicare and Medicaid), but require that
program validation survey reports and other formal evaluations of
providers of services shall not identify individual patients, individual
health care practitioners, or other individuals. Section 1106(e) further
requires that none of the reports shall be made public until the
contractor or provider whose performance is being evaluated has had a
reasonable opportunity to review that report and to offer comments. See
Sec. 401.133 (b) and (c);
(2)(i) Except as specified in paragraph (b)(2)(ii) of this section,
CMS may not disclose any accreditation survey or any information
directly related to the survey (including corrective action plans) made
by and released to it by the Joint Commission on Accreditation of
Healthcare Organizations, the American Osteopathic Association or any
other national accreditation organization that meets the requirements of
Sec. 488.5 or Sec. 493.506 of this chapter. Materials that are
confidential include accreditation letters and accompanying
recommendations and comments prepared by an accreditation organization
concerning the entities it surveys.
(ii) Exceptions. (A) CMS may release the accreditation survey of any
home health agency; and
(B) CMS may release the accreditation survey and other information
directly related to the survey (including corrective action plans) to
the extent the survey and information relate to an enforcement action
(for example,
[[Page 13]]
denial of payment for new admissions, civil money penalties, temporary
management and termination) taken by CMS; and
(3) Tax returns and return information defined in section 6103 of
the Internal Revenue Code, as amended by the Tax Reform Act of 1976,
shall not be disclosed except as authorized by the Internal Revenue
Code.
(c) Effect of exemption. Neither 5 U.S.C. 552 nor this regulation
directs the withholding of any record or information, except to the
extent of the prohibitions in paragraph (b) of this section. Except for
material required to be withheld under the statutory provisions
incorporated in paragraph (b) of this section or under another statute
which meets the standards in 5 U.S.C. 552(b)(3), materials exempt from
mandatory disclosure will nevertheless be made available when this can
be done consistently with obligations of confidentiality and
administrative necessity. The disclosure of materials or records under
these circumstances in response to a specific request, however, is of no
precedent force with respect to any other request.
[46 FR 55696, Nov. 12, 1981, as amended at 58 FR 61837, Nov. 23, 1993;
80 FR 29834, May 22, 2015]
Sec. 401.128 Where requests for records may be made.
(a) General. Any request for any record may be made to--
(1) Any CMS component;
(2) Director, Office of Public Affairs, CMS 313-H, Hubert H.
Humphrey Building, 200 Independence Avenue, Washington, DC 20201; or
(3) Director of Public Affairs in any Regional Office of the
Department of Health and Human Services.
The locations and service areas of these offices are as follows:
Region I--John F. Kennedy Federal Building, Boston, MA 02203.
Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont.
Region II--26 Federal Plaza, New York, NY 10007. New York, New Jersey,
Puerto Rico, Virgin Islands.
Region III--Gateway Building, 3535 Market Street, Philadelphia, PA
19101. Delaware, Maryland, Pennsylvania, Virginia, West Virginia,
District of Columbia.
Region IV--101 Marietta Street, Altanta, GA 30323. Alabama, Florida,
Georgia, Kentucky, Mississippi, North Carolina, South Carolina,
Tennessee.
Region V--300 South Wacker Drive, Chicago, IL 60606. Illinois, Indiana,
Michigan, Minnesota, Ohio, Wisconsin.
Region VI--1200 Main Tower Building, Dallas, TX 75202. Arkansas,
Louisiana, New Mexico, Oklahoma, Texas.
Region VII--601 East 12th Street, Kansas City, MO 64106. Iowa, Kansas,
Missouri, Nebraska.
Region VIII--Federal Office Building, 19th and Stout Streets, Denver, CO
80294. Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming.
Region IX--Federal Office Building, 50 United Nations Plaza, San
Francisco, CA 94102. Arizona, California, Hawaii, Nevada, Guam, Trust
Territory of Pacific Islands, American Samoa.
Region X--Arcade Plaza Building, 1321 Second Avenue, Seattle, WA 98101.
Alaska, Idaho, Oregon, Washington.
(b) Records pertaining to individuals. CMS maintains some records
pertaining to individuals. Disclosure of such records is generally
prohibited by section 1106 of the Social Security Act (42 U.S.C. 1306),
except as prescribed in Sec. 401.105 (See also Sec. 401.126(b)).
Requests for records pertaining to individuals may be addressed to:
Director, Office of Research, Demonstrations and Statistics, CMS,
Baltimore, Maryland 21235, when information is sought from the record of
a person who has participated in a research survey conducted by or for
CMS, Office of Research, Demonstrations and Statistics; or whose records
have been included by statistical sampling techniques in research and
statistical studies authorized by the Social Security Act in the field
of health care financing.
(c) Requests for materials listed in Sec. 401.130 or Sec. 401.132
or indexed in the CMS Rulings. A request to inspect and copy materials
listed in Sec. 401.130 or Sec. 401.132 or indexed in CMS Rulings may
be made to any district or branch office of the Social Security
Administration. If the specific material requested is not available in
the office receiving the request, the material will be obtained and made
available promptly.
[[Page 14]]
Sec. 401.130 Materials available at social security district
offices and branch offices.
(a) Materials available for inspection. The following are available
or will be made available for inspection at the social security district
offices and branch offices:
(1) Compilation of the Social Security Laws.
(2) The Public Information Regulation of the Department of Health
and Human Services (45 CFR part 5).
(3) Medicare Program regulations issued by the Centers for Medicare
& Medicaid Services. 42 CFR chapter IV .
(4) CMS Rulings.
(5) Social Security Handbook.
(b) Materials available for inspection and copying. The following
materials are available or will be made available for inspection and
copying at the social security district offices and branch offices:
(1) Claims Manual of the Social Security Administration.
(2) Department Staff Manual on Organization, Department of Health
and Human Services, Part F, CMS.
(3) Parts 2 and 3 of the Part A
Intermediary Manual (Provider Services under Medicare CMS Pub. 13-2 and
13-3).
(4) Parts 2 and 3 of the Part B Intermediary Manual (Physician and
Supplier Services).
(5) Intermediary Letters Related to Parts 2 and 3 of the Part A and
Part B Intermediary Manuals.
(6) State Buy-In Handbook (State Enrollment of Eligible Individuals
under the Supplementary Medical Insurance Program) and Letters.
(7) Group Practice Prepayment Plan Manual (HIM-8) and Letters.
(8) State Operations Manual (HIM-7).
(9) CMS Letters to State Agencies on Medicare.
(10) Skilled Nursing Facility Manual (CMS Pub. 12).
(11) Hearing Officers Handbook (Supplementary Medical Insurance
Program--HIM-21).
(12) Hospital Manual (HIM-10).
(13) Home Health Agency Manual (HIM-11).
(14) Outpatient Physical Therapy Provider Manual (HIM-9).
(15) Provider Reimbursement Manual (HIM-15).
(16) Audit Program Manuals for Hospital (HIM-16), Home Health Agency
(HIM-17), and Extended Care Facilities (HIM-18).
(17) Statements of deficiencies based upon survey reports of health
care institutions or facilities prepared after January 31, 1973, by a
State agency, and such reports (including pertinent written statements
furnished by such institution or facility on such statements of
deficiencies), as set forth in Sec. 401.133(a). Except as otherwise
provided for at Sec. Sec. 401.133 and 488.325 of this chapter for SNFs,
such statements of deficiencies, reports, and pertinent written
statements shall be available or made available only at the social
security district office and regional office servicing the area in which
the institution or facility is located, except that such statements of
deficiencies and pertinent written statements shall also be available at
the local public assistance offices servicing such area.
(18) Indexes to the materials listed in paragraph (a) of this
section and in this paragraph (b) and an index to the Bureau of Hearings
and Appeals Handbook.
[46 FR 55696, Nov. 12, 1981, as amended at 59 FR 56232, Nov. 10, 1994]
Sec. 401.132 Materials in field offices of the Office
of Hearings and Appeals, SSA.
(a) Materials available for inspection. The following materials are
available for inspection in the field offices of the Office of Hearings
and Appeals, SSA.
(1) Title 45 of the Code of Federal Regulations (including the
public information regulation of the Department of Health and Human
Services).
(2) Regulations of the Social Security Administration and CMS.
(3) Title 5, United States Code.
(4) Compilation of the Social Security Laws.
(5) CMS Rulings.
(6) Social Security Handbook.
(b) Handbook available for inspection and copying. The Office of
Hearings and Appeals Handbook is available for inspection and copying in
the field offices of the Office of Hearings and Appeals.
[[Page 15]]
Sec. 401.133 Availability of official reports on providers and
suppliers of services, State agencies, intermediaries, and carriers
under Medicare.
Except as otherwise provided for in Sec. 488.325 of this chapter
for SNFs, the following must be made available to the public under the
conditions specified:
(a) Statements of deficiencies and survey reports on providers of
services prepared by State agencies. (1) Statements of deficiencies
based upon official survey reports prepared after January 31, 1973, by a
State agency pursuant to its agreement entered into under section 1864
of the Social Security Act and furnished to CMS, which relate to a State
agency's findings on the compliance of a health care institution or
facility with the applicable provisions in section 1861 of the Act and
with the regulations, promulgated pursuant to those provisions, dealing
with health and safety of patients in those institutions and facilities;
and (2) State agency survey reports. The statement of deficiencies or
report and any pertinent written statements furnished by the institution
or facility on the statement of deficiencies shall be disclosed within
90 days following the completion of the survey by the State agency, but
not to exceed 30 days following the receipt of the report by CMS. (See
Sec. 401.130(b)(17)) for places where statements of deficiencies,
reports, and pertinent written statements will be available.)
(b) CMS reports on providers of services. Upon request in writing,
official reports and other formal evaluations (including followup
reviews), excluding references to internal tolerance rules and practices
contained therein, internal working papers or other informal memoranda,
prepared and completed after January 31, 1973, which relate to the
performance of providers of services under Medicare: Provided, That no
information identifying individual patients, physicians, or other
practitioners, or other individuals shall be disclosed under this
paragraph. Those reports and other evaluations shall be disclosed within
30 days following the final preparation thereof by CMS during which time
the providers of services shall be afforded a reasonable opportunity to
offer comments, and there shall be disclosed with those reports and
evaluations any pertinent written statements furnished CMS by those
providers on those reports and evaluations.
(c) Contractor performance review reports. Upon request in writing,
official contractor performance review reports and other formal
evaluations (including followup reviews), excluding references to
internal tolerance rules and practices contained therein, internal
working papers or other informal memoranda, prepared and completed after
January 31, 1973, which relate to the evaluation of the performance of
(1) intermediaries and carriers under their agreements entered into
pursuant to sections 1816 and 1842 of the Social Security Act and (2)
State agencies under their agreements entered into pursuant to section
1864 of the Act (including comparative evaluations of the performance of
those intermediaries, carriers, and State agencies). The latest Contract
Performance Review Report pertaining to a particular intermediary or
carrier, prepared prior to February 1, 1973, may also be disclosed to
any person upon request in writing. Those reports and evaluations shall
be disclosed within 30 days following their final preparation by CMS (or
30 days following the request therefor, in the case of the contract
performance review report prepared prior to February 1, 1973), during
which time those intermediaries, carriers, and State agencies, as the
case may be, shall be afforded a reasonable opportunity to offer
comments, and there shall be disclosed with those reports and
evaluations any pertinent written statements furnished CMS by those
intermediaries, carriers, on State agencies or those reports and
evaluations.
(d) Accreditation surveys. Upon written request, CMS will release
the accreditation survey and related information from an accreditation
organization meeting the requirements of Sec. 488.5 or Sec. 493.506 of
this chapter to the extent the survey and information relate to an
enforcement action taken (for example, denial of payment for new
admission, civil money penalties, temporary management and termination)
by CMS;
[[Page 16]]
(e) Upon written request, CMS will release the accreditation survey
of any home health agency.
[46 FR 55696, Nov. 12, 1981; 46 FR 59249, Dec. 4, 1981, as amended at 58
FR 61838, Nov. 23, 1993; 59 FR 56232, Nov. 10, 1994; 80 FR 29834, May
22, 2015]
Sec. 401.134 Release of Medicare information to State and
Federal agencies.
(a) Except as provided in paragraph (b) of this section, the
following information may be released to an officer or employee of an
agency of the Federal or a State government lawfully charged with the
administration of a program receiving grants-in-aid under title V and
XIX of the Social Security Act for the purpose of administration of
those titles, or to any officer or employee of the Department of Army,
Department of Defense, solely for the administration of its Civilian
Health and Medical Program of the Uniformed Services (CHAMPUS):
(1) Information, including the identification number, concerning
charges made by physicians, other practitioners, or suppliers, and
amounts paid under Medicare for services furnished to beneficiaries by
such physicians, other practioners, or suppliers, to enable the agency
to determine the proper amount of benefits payable for medical services
performed in accordance with those programs; or
(2) Information as to physicians or other practioners that has been
disclosed under Sec. 401.105.
(3) Information relating to the qualifications and certification
status of hospitals and other health care facilities obtained in the
process of determining whether, and certifying as to whether,
institutions or agencies meet or continue to meet the conditions of
participation of providers of services or whether other entities meet or
continue to meet the conditions for coverage of services they furnish.
(b) The release of such information shall not be authorized by a
fiscal intermediary or carrier.
(c) The following information may be released to any officer or
employee of an agency of the Federal or a State government lawfully
charged with the duty of conducting an investigation or prosecution with
respect to possible fraud or abuse against a program receiving grants-
in-aid under Medicaid, but only for the purpose of conducting such an
investigation or prosecution, or to any officer or employee of the
Department of the Army, Department of Defense, solely for the
administration of its Civilian Health and Medical Program of the
Uniformed Services (CHAMPUS), provided that the agency has filed an
agreement with CMS that the information will be released only to the
agency's enforcement branch and that the agency will preserve the
confidentiality of the information received and will not disclose that
information for other than program purposes:
(1) The name and address of any provider of medical services,
organization, or other person being actively investigated for possible
fraud in connection with Medicare, and the nature of such suspected
fraud. An active investigation exists when there is significant evidence
supporting an initial complaint but there is need for further
investigation.
(2) The name and address of any provider of medical services,
organization, or other person found, after consultation with an
appropriate professional association or a program review team, to have
provided unnecessary services, or of any physician or other individual
found to have violated the assignment agreement on at least three
occasions.
(3) The name and address of any provider of medical services,
organization or other person released under paragraph (c)(1) or (2) of
this section concerning which an active investigation is concluded with
a finding that there is no fraud or other prosecutable offense.
Sec. 401.135 Release of Medicare information to the public.
The following shall be made available to the public under the
conditions specified:
(a) Information as to amounts paid to providers and other
organizations and facilities for services to beneficiaries under title
XVIII of the Act: Provided, That no information identifying any
particular beneficiaries shall be disclosed under this paragraph.
[[Page 17]]
(b) The name of any provider of services or other person furnishing
services to Medicare beneficiaries who--
(1) Has been found by a Federal court to have been guilty of
submitting false claims in connection with Medicare; or
(2) Has been found by a carrier or intermediary, after consultation
with a professional medical association functioning external to program
administration or, if appropriate, the State medical authority, to have
been engaged in a pattern of furnishing services to beneficiaries which
are substantially in excess of their medical needs; except that the name
of any provider or other person shall not be disclosed pursuant to a
finding under this paragraph (b)(2) of this section, unless that
provider or other person has first been afforded a reasonable
opportunity to offer evidence on his behalf.
(c) Upon request in writing, cost reports submitted by providers of
services pursuant to section 1815 of the Act to enable the Secretary to
determine amounts due the providers.
Sec. 401.136 Requests for information or records.
(a) A request should reasonably identify the requested record by
brief description. Requesters who have detailed information which would
assist in identifying the records requested are urged to provide such
information in order to expedite the handling of the request. Envelopes
in which written requests are submitted should be clearly identified as
Freedom of Information requests. The request should include the fee or
request determination of the fee. When necessary, a written request will
be promptly forwarded to the proper office, and the requester will be
advised of the date of the receipt and identification and address of the
proper office.
(b) Determinations of whether records will be released or withheld
will be made within 10 working days from date of receipt of the request
in the office listed in Sec. 401.128 except where CMS extends this time
and sends notice of such extension to the requester. Such extension may
not exceed 10 additional working days and shall apply only where the
following unusual circumstances exist:
(1) The need to search for and collect the requested records from
field facilities or other establishments that are separate from the
office processing the requests;
(2) The need to search for, collect, and appropriately examine a
voluminous amount of separate and distinct records which are requested
in a single request; or
(3) The need for consultation, which shall be conducted with all
practicable speed, with another agency having a substantial interest in
the request or among two or more components of CMS having a substantial
interest in the subject matter of the request.
(c) If an extension is made, the requester will be notified in
writing before the expiration of 10 working days from receipt of the
request and will be given an explanation of why the extension was
necessary and the date on which a determination will be made.
(d) Authority to extend the time limit with respect to any request
for information or records is granted to the Director, Office of Public
Affairs, CMS and to the Director of Public Affairs in any HHS Regional
Office. Those officers and employees of CMS who are listed in Sec.
401.144(a) as having authority to deny requests for information from
records maintained on individuals are granted authority to extend the
time limit for responding to requests for information from such records.
Sec. 401.140 Fees and charges.
(a) Statement of policy. It is CMS's policy to comply with certain
requests for information services without charge. Except as otherwise
determined pursuant to paragraph (c) of this section, fees will be
charged for the following services with respect to all other requests
for information from records which are reasonably identified by the
requesters:
(1) Reproduction, duplication, or copying of records;
(2) Searches for records; and
(3) Certification or authentication of records.
(b) Fee schedules. The fee schedule is as follows:
(1) Search for records. Three dollars per hour: Provided, however,
That no
[[Page 18]]
charge will be made for the first half hour.
(2) Reproduction, duplication, or copying of records. Ten cents per
page where such reproduction can be made by commonly available
photocopying machines. The cost of reproducing records which cannot be
so photocopied will be determined on an individual basis at actual cost.
(3) Certification or authentication of records. Three dollars per
certification or authentication.
(4) Forwarding materials to destination. Any special arrangements
for forwarding which are requested shall be charged at actual cost;
however, no charge will be made for postage.
(5) No charge will be made when the total amount does not exceed
five dollars.
(c) Waiver or reduction of fees. Waiver or reduction of the fees in
paragraph (b) of this section may be made upon a determination that such
waiver or reduction is in the public interest because furnishing the
information can be considered as primarily benefiting the general
public. Such determination may be made by the appropriate officer or
employee identified in Sec. 401.144.
(d) Sale of documents. On occasion, a previously printed document
may be available for sale to the public; the cost of supplying the
document is one cent per page unless the document is available for sale
from the Superintendent of Documents, in which case the price shall be
that determined by the Superintendent.
Sec. 401.144 Denial of requests.
(a) General authority. Only the Director, Office of Public Affairs,
CMS, and the Regional Directors of Public Affairs, HHS, are authorized
to deny written requests to obtain, inspect or copy any CMS information
or record.
(b) Forms of denials. (1) Oral requests may be dealt with orally,
but the requester should be advised that the oral response is not an
official determination and that an official determination may be
obtained only by submitting the request in writing. Appropriate
available assistance will be offered.
(2) Written Requests--Denials of written requests will be in writing
and will contain the reasons for the denial including, as appropriate, a
statement that a document requested is nonexistent or not reasonably
described or is subject to one or more clearly described exemption(s).
Denials will also provide the requester with appropriate information on
how to exercise the right of appeal.
Sec. 401.148 Administrative review.
(a) Review by the Administrator. A person whose request has been
denied may initiate a review by filing a request for review with the
Administrator of CMS, 700 East High Rise Building, 6401 Security
Boulevard, Baltimore, Maryland 21235, within 30 days of receipt of the
determination to deny or within 30 days of receipt of records which are
in partial response to his request if a portion of a request is granted
and a portion denied, whichever is later. Upon receipt of a timely
request for review, the Administrator will review the decision in
question and the findings upon which it was based. Upon the basis of the
data considered in connection with the decision and whatever other
evidence and written argument is submitted by the person requesting the
review or which is otherwise obtained, the Administrator or his designee
will affirm or revise in whole or in part the findings and decision in
question. A decision to affirm the denial will be made only upon
concurrence of the Assistant Secretary for Public Affairs, or his
designee, after consultation with the General Counsel or his or her
designee, and the appropriate program policy official. Written notice of
the decision of the Administrator will be mailed to the person who
requested the review. A written decision will be made within 20 working
days from receipt of the request for review. Extension of the time limit
may be granted under the circumstances listed in Sec. 401.136(b) to the
extent that the maximum 10 days limit on extensions has not been
exhausted on the initial determination. The decision will include the
basis for it and will advise the requester of his right to judicial
review.
(b) Failure of the Administrator to comply with the time limits.
Failure of the Administrator to comply with the time
[[Page 19]]
limits set forth in Sec. 401.136 and this section constitutes an
exhaustion of the requester's administrative remedies.
Sec. 401.152 Court review.
Where the Administrator upon review affirms the denial of a request
for records, in whole or in part, the requester may seek court review in
the district court of the United States pursuant to 5 U.S.C.
552(a)(4)(B).
Subpart C [Reserved]
Subpart D_Reporting and Returning of Overpayments
Source: 81 FR 7683, Feb. 12, 2016, unless otherwise noted.
Sec. 401.301 Basis and scope.
This subpart sets forth the policies and procedures for reporting
and returning overpayments to the Medicare program for providers and
suppliers of services under Parts A and B of title XVIII of the Act as
required by section 1128J(d) of the Act.
Sec. 401.303 Definitions.
For purposes of this subpart--
Medicare contractor means a Part A/Part B Medicare Administrative
Contractor (A/B MAC) or a Durable Medical Equipment Medicare
Administrative Contractor (DME MAC).
Overpayment means any funds that a person has received or retained
under title XVIII of the Act to which the person, after applicable
reconciliation, is not entitled under such title.
Person means a provider (as defined in Sec. 400.202 of this
chapter) or a supplier (as defined in Sec. 400.202 of this chapter).
Sec. 401.305 Requirements for reporting and returning of overpayments.
(a) General. (1) A person that has received an overpayment must
report and return the overpayment in the form and manner set forth in
this section.
(2) A person has identified an overpayment when the person has, or
should have through the exercise of reasonable diligence, determined
that the person has received an overpayment and quantified the amount of
the overpayment. A person should have determined that the person
received an overpayment and quantified the amount of the overpayment if
the person fails to exercise reasonable diligence and the person in fact
received an overpayment.
(b) Deadline for reporting and returning overpayments. (1) A person
who has received an overpayment must report and return the overpayment
by the later of either of the following:
(i) The date which is 60 days after the date on which the
overpayment was identified.
(ii) The date any corresponding cost report is due, if applicable.
(2) The deadline for returning overpayments will be suspended when
the following occurs:
(i) OIG acknowledges receipt of a submission to the OIG Self-
Disclosure Protocol and will remain suspended until such time as a
settlement agreement is entered, the person withdraws from the OIG Self-
Disclosure Protocol, or the person is removed from the OIG Self-
Disclosure Protocol.
(ii) CMS acknowledges receipt of a submission to the CMS Voluntary
Self-Referral Disclosure Protocol and will remain suspended until such
time as a settlement agreement is entered, the person withdraws from the
CMS Voluntary Self-Referral Disclosure Protocol, or the person is
removed from the CMS Voluntary Self-Referral Disclosure Protocol.
(iii) A person requests an extended repayment schedule as defined in
Sec. 401.603 and will remain suspended until such time as CMS or one of
its contractors rejects the extended repayment schedule request or the
provider or supplier fails to comply with the terms of the extended
repayment schedule.
(c) Applicable reconciliation. (1) The applicable reconciliation
occurs when a cost report is filed; and
(2) In instances when the provider--
(i) Receives more recent CMS information on the SSI ratio, the
provider is not required to return any overpayment resulting from the
updated information until the final reconciliation of the provider's
cost report occurs; or
(ii) Knows that an outlier reconciliation will be performed, the
provider is
[[Page 20]]
not required to estimate the change in reimbursement and return the
estimated overpayment until the final reconciliation of that cost
report.
(d) Reporting. (1) A person must use an applicable claims
adjustment, credit balance, self-reported refund, or other reporting
process set forth by the applicable Medicare contractor to report an
overpayment, except as provided in paragraph (d)(2) of this section. If
the person calculates the overpayment amount using a statistical
sampling methodology, the person must describe the statistically valid
sampling and extrapolation methodology in the report.
(2) A person satisfies the reporting obligations of this section by
making a disclosure under the OIG's Self-Disclosure Protocol or the CMS
Voluntary Self-Referral Disclosure Protocol resulting in a settlement
agreement using the process described in the respective protocol.
(e) Enforcement. Any overpayment retained by a person after the
deadline for reporting and returning the overpayment specified in
paragraph (b) of this section is an obligation for purposes of 31 U.S.C.
3729.
(f) Lookback period. An overpayment must be reported and returned in
accordance with this section if a person identifies the overpayment, as
defined in paragraph (a)(2) of this section, within 6 years of the date
the overpayment was received.
Subpart E [Reserved]
Subpart F_Claims Collection and Compromise
Source: 48 FR 39064, Aug. 29, 1983, unless otherwise noted.
Sec. 401.601 Basis and scope.
(a) Basis. This subpart implements the following statutory
provisions:
(1) For CMS the Debt Collection Improvement Act of 1996 (Pub. L.
104-134) (DCIA), 110 Stat. 1321, 1358 (April 26, 1996) (codified at 31
U.S.C. 3711), and conforms to the regulations (31 CFR parts 900-904)
issued jointly by the Department of the Treasury and the Department of
Justice that generally prescribe claims collection standards and
procedures under the DCIA for the Federal government.
(2) Section 1893(f)(1) of the Act regarding the use of repayment
plans.
(b) Scope. Except as provided in paragraphs (c) through (f) of this
section, the regulations in this subpart describe CMS's procedures and
standards for the collection of claims in any amount, and the compromise
of, or the suspension or termination of collection action on, all claims
for money or property that do not exceed $100,000 or such higher amount
as the Attorney General may from time to time prescribe, exclusive of
interest, arising under any functions delegated to CMS by the Secretary.
(c) Amount of claim. CMS refers all claims that exceed $100,000 or
such higher amount as the Attorney General may from time to time
prescribe, exclusive of interest, to the Department of Justice or the
General Accounting Office for the compromise of claims, or the
suspension or termination of collection action.
(d) Related regulations--(1) Department regulations. DHHS
regulations applicable to CMS that generally implement the FCCA for the
Department are located at 45 CFR part 30. These regulations apply only
to the extent CMS regulations do not address a situation.
(2) CMS regulations. The following regulations govern specific debt
management situations encountered by CMS and supplement this subpart:
(i) Claims against Medicare beneficiaries for the recovery of
overpayments are covered in 20 CFR 404.515.
(ii) Adjustments in Railroad Retirement or Social Security benefits
to recover Medicare overpayments to individuals are covered in
Sec. Sec. 405.350-405.358 of this chapter.
(iii) Claims against providers, physicians, or other suppliers of
services for overpayments under Medicare and for assessment of interest
are covered in Sec. Sec. 405.377 and 405.378 of this chapter,
respectively.
(iv) Claims against beneficiaries for unpaid hospital insurance or
supplementary medical insurance premiums under Medicare are covered in
Sec. 408.110 of this chapter.
[[Page 21]]
(v) State repayment of Medicaid funds by installments is covered in
Sec. 430.48 of this chapter.
(e) Collection and compromise under other statutes and at common
law. The regulations in this subpart do not--
(1) Preclude disposition by CMS of claims under statutes, other than
the FCCA, that provide for the collection or compromise of a claim, or
suspension or termination of collection action.
(2) Affect any rights that CMS may have under common law as a
creditor.
(f) Fraud. The regulations in this subpart do not apply to claims in
which there is an indication of fraud, the presentation of a false
claim, or misrepresentation on the part of a debtor or any other party
having an interest in the claim. CMS forwards these claims to the
Department of Justice for disposition under 4 CFR 105.1.
(g) Enforced collection. CMS refers claims to the Department of
Justice for enforced collection through litigation in those cases which
cannot be compromised or on which collection action cannot be suspended
or terminated in accordance with this subpart or the regulations issued
jointly by the Attorney General and the Comptroller General.
[48 FR 39064, Aug. 29, 1983, as amended at 52 FR 48123, Dec. 18, 1987;
57 FR 56998, Dec. 2, 1992; 61 FR 49271, Sept. 19, 1996; 61 FR 63748,
Dec. 2, 1996; 73 FR 36447, June 27, 2008]
Sec. 401.603 Definitions.
For purposes of this subpart--
Claim means any debt owed to CMS.
Debtor means any individual, partnership, corporation, estate, trust
or other legal entity against which CMS has a claim.
Extended repayment schedule means installment payments to pay back a
debt.
[48 FR 39064, Aug. 29, 1983, as amended at 73 FR 36447, June 27, 2008]
Sec. 401.605 Omissions not a defense.
The failure of CMS to comply with the regulations in this subpart,
or with the related regulations listed in Sec. 401.601(d), is not
available as a defense to a debtor against whom CMS has a claim for
money or property.
Sec. 401.607 Claims collection.
(a) General policy. CMS recovers amounts of claims due from debtors,
including interest where appropriate, by--
(1) Direct collections in lump sums or in installments; or
(2) Offsets against monies owed to the debtor by the Federal
government where possible.
(b) Collection in lump sums. Whenever possible, CMS attempts to
collect claims in full in one lump sum. However, if CMS determines that
a debtor is unable to pay the claim in one lump sum, CMS may instead
enter into an agreement to accept regular installment payments.
(c) Collection in installments. Generally, CMS requires that all
claims to be satisfied by installment payments must be liquidated in
three years or less. If unusual circumstances exist, such as the
possibility of debtor insolvency, an installment agreement that extends
beyond three years may be approved.
(1) Debtor request. If a debtor desires to repay a claim in
installments, the debtor must submit--
(i) A request to CMS; and
(ii) Any information required by CMS to make a decision regarding
the request.
(2) Extended repayment schedule. (i) For purposes of this paragraph
(c)(2), the following definitions apply:
Extreme hardship exists when a provider or supplier qualifies as
being in ``hardship'' as defined in this paragraph and the provider's or
supplier's request for an extended repayment schedule (ERS) is approved
under paragraph (c)(3) of this section.
Hardship exists when the total amount of all outstanding outstanding
overpayments (principal and interest and including overpayments reported
in accordance with Sec. Sec. 401.301 through 401.305) not included in
an approved, existing repayment schedule is 10 percent or greater than
the total Medicare payments made for the cost reporting period covered
by the most recently submitted cost report for a provider filing a cost
report, or for the previous calendar year for a supplier or non cost-
report provider.
[[Page 22]]
(ii) CMS or its contractor reviews a provider's or supplier's
request for an ERS. For a provider or a supplier not paid by Medicare
during the previous year or paid only during a portion of that year, the
contractor or CMS will use the last 12 months of Medicare payments. If
less than a 12-month payment history exists, the number of months
available is annualized to equal an approximate yearly Medicare payment
level for the provider or supplier.
(iii) For a provider or supplier requesting an ERS, CMS or its
contractor evaluates the request based on the definitions and
information submitted under this paragraph (c)(2). For a provider or
supplier whose situation does not meet the definitions in paragraph
(c)(2)(i) of this section, CMS or its contractor evaluates the ERS
request using the information in paragraph (c)(3) of this section in
deciding to grant an ERS.
(iv) CMS or its contractor is prohibited from granting an ERS to a
provider or supplier if there is reason to suspect the provider or
supplier may file for bankruptcy, cease to do business, discontinue
participation in the Medicare program, or there is an indication of
fraud or abuse committed against the Medicare program.
(v) CMS or its contractor may grant a provider or a supplier an ERS
of at least 6 months if repaying an overpayment within 30 days will
constitute a ``hardship'' as defined in paragraph (c)(2)(i) of this
section. If a provider or supplier is granted an ERS under this
paragraph, missing one installment payment constitutes a default and the
total balance of the overpayment will be recovered immediately.
(vi) CMS or its contractor may grant a provider or a supplier an ERS
of 36 months and up to 60 months if repaying an overpayment will
constitute an ``extreme hardship'' as defined in paragraph (c)(2)(i) of
this section.
(3) CMS decision. CMS will determine the number, amount and
frequency of installment payments based on the information submitted by
the debtor and on other factors such as--
(i) Total amount of the claim;
(ii) Debtor's ability to pay; and
(iii) Cost to CMS of administering an installment agreement.
(d) Collection by offset. (1) CMS may offset, where possible, the
amount of a claim against the amount of pay, compensation, benefits or
other monies that a debtor is receiving or is due from the Federal
government.
(2) Under regulations at Sec. 405.350-405.358 of this chapter, CMS
may initiate adjustments in program payments to which an individual is
entitled under title II of the Act (Federal Old Age, Survivors, and
Disability Insurance Benefits) or under the Railroad Retirement Act of
1974 (45 U.S.C. 231) to recover Medicare overpayments.
[48 FR 39064, Aug. 29, 1983, as amended at 61 FR 49271, Sept. 19, 1996;
61 FR 63748, Dec. 2, 1996; 73 FR 36447, June 27, 2008; 81 FR 7684, Feb.
12, 2016]
Sec. 401.613 Compromise of claims.
(a) Amount of compromise. HFCA requires that the amount to be
recovered through a compromise of a claim must--
(1) Bear a reasonable relation to the amount of the claim; and
(2) Be recoverable through enforced collection procedures.
(b) General factors. After considering the bases for a decision to
compromise a claim under paragraph (c) of this section, CMS may further
consider factors such as--
(1) The age and health of the debtor if the debtor is an individual;
(2) Present and potential income of the debtor; and
(3) Whether assets have been concealed or improperly transferred by
the debtor.
(c) Basis for compromise. Bases on which CMS may compromise a claim
include the following--
(1) Inability to pay. CMS may compromise a claim if it determines
that the debtor, or the estate of a deceased debtor, does not have the
present or prospective ability to pay the full amount of the claim
within a reasonable time.
(2) Litigative probabilities. CMS may compromise a claim if it
determines that it would be difficult to prevail in a case before a
court of law as a result of the legal issues involved or inability of
the parties to agree to the facts of
[[Page 23]]
the case. The amount that CMS accepts in compromise under this provision
will reflect--
(i) The likelihood that CMS would have prevailed on the legal
question(s) involved;
(ii) Whether and to what extent CMS would have obtained a full or
partial recovery of a judgment, depending on the availability of
witnesses, or other evidentiary support for CMS's claim; and
(iii) The amount of court costs that would be assessed to CMS.
(3) Cost of collecting the claim. CMS may compromise a claim if it
determines that the cost of collecting the claim does not justify the
enforced collection of the full amount. In this case, CMS may adjust the
amount it accepts as a compromise to allow an appropriate discount for
the costs of collection it would have incurred but for the compromise.
(d) Enforcement policy. CMS may compromise statutory penalties,
forfeitures, or debts established as an aid to enforcement or to compel
compliance, if it determines that its enforcement policy, in terms of
deterrence and securing compliance both present and future, is
adequately served by acceptance of the compromise amount.
Sec. 401.615 Payment of compromise amount.
(a) Time and manner of compromise. Payment by the debtor of the
amount that CMS has agreed to accept as a compromise in full settlement
of a claim must be made within the time and in the manner prescribed by
CMS. Accordingly, CMS will not settle a claim until the full payment of
the compromise amount has been made.
(b) Effect of failure to pay compromise amount. Failure of the
debtor to make payment, as provided by the compromise agreement,
reinstates the full amount of the claim, less any amounts paid prior to
the default.
(c) Prohibition against grace periods. CMS will not agree to
inclusion of a provision in an installment agreement that would permit
grace periods for payments that are late under the terms of the
agreement.
Sec. 401.617 Suspension of collection action.
(a) General conditions. CMS may temporarily suspend collection
action on a claim if the following general conditions are met--
(1) Amount of future recovery. CMS determines that future collection
action may result in a recovery of an amount sufficient to justify
periodic review and action on the claim by CMS during the period of
suspension.
(2) Statute of limitations. CMS determines that--
(i) The applicable statute of limitations has been tolled, waived or
has started running anew; or
(ii) Future collections may be made by CMS through offset despite an
applicable statute of limitations.
(b) Basis for suspension. Bases on which CMS may suspend collection
action on a particular claim include the following--
(1) A debtor cannot be located; or
(2) A debtor--
(i) Owns no substantial equity in property;
(ii) Is unable to make payment on CMS's claim or is unable to effect
a compromise; and
(iii) Has future prospects that justify retention of the claim.
(c) Locating debtors. CMS will make every reasonable effort to
locate missing debtors sufficiently in advance of the bar of an
applicable statute of limitations to permit timely filing of a lawsuit
to recover the amount of the claim.
(d) Effect of suspension on liquidation of security. CMS will
liquidate security, obtained in partial recovery of a claim, despite a
decision under this section to suspend collection action against the
debtor for the remainder of the claim.
Sec. 401.621 Termination of collection action.
(a) General factors. After considering the bases for a decision to
terminate collection action under paragraph (b) of this section, CMS may
further consider factors such as--
(1) The age and health of the debtor if the debtor is an individual;
(2) Present and potential income of the debtor; and
[[Page 24]]
(3) Whether assets have been concealed or improperly transferred by
the debtor.
(b) Basis for termination of collection action. Bases on which CMS
may terminate collection action on a claim include the following--
(1) Inability to collect a substantial amount of the claim. CMS may
terminate collection action if it determines that it is unable to
collect, or to enforce collection, of a significant amount of the claim.
In making this determination, CMS will consider factors such as--
(i) Judicial remedies available;
(ii) The debtor's future financial prospects; and
(iii) Exemptions available to the debtor under State or Federal law.
(2) Inability to locate debtor. In cases involving missing debtors,
CMS may terminate collection action if--
(i) There is no security remaining to be liquidated;
(ii) The applicable statute of limitations has run; or
(iii) The prospects of collecting by offset, whether or not an
applicable statute of limitations has run, are considered by CMS to be
too remote to justify retention of the claim.
(3) Cost of collection exceeds recovery. CMS may terminate
collection action if it determines that the cost of further collection
action will exceed the amount recoverable.
(4) Legal insufficiency. CMS may terminate collection action if it
determines that the claim is legally without merit.
(5) Evidence unavailable. CMS may terminate collection action if--
(i) Efforts to obtain voluntary payment are unsuccessful; and
(ii) Evidence or witnesses necessary to prove the claim are
unavailable.
Sec. 401.623 Joint and several liability.
(a) Collection action. CMS will liquidate claims as quickly as
possible. In cases of joint and several liability among two or more
debtors, CMS will not allocate the burden of claims payment among the
debtors. CMS will proceed with collection action against one debtor even
if other liable debtors have not paid their proportionate shares.
(b) Compromise. Compromise with one debtor does not release a claim
against remaining debtors. Furthermore, CMS will not consider the amount
of a compromise with one debtor to be a binding precedent concerning the
amounts due from other debtors who are jointly and severally liable on
the claim.
Sec. 401.625 Effect of CMS claims collection decisions on appeals.
Any action taken under this subpart regarding the compromise of a
claim, or suspension or termination of collection action on a claim, is
not an initial determination for purposes of CMS appeal procedures.
Subpart G_Availability of Medicare Data for Performance Measurement
Source: 76 FR 76567, Dec. 7, 2011, unless otherwise noted.
Sec. 401.701 Purpose and scope.
The regulations in this subpart implement section 1874(e) of the
Social Security Act as it applies to Medicare data made available to
qualified entities for the evaluation of the performance of providers
and suppliers.
Sec. 401.703 Definitions.
For purposes of this subpart:
(a) Qualified entity means either a single public or private entity,
or a lead entity and its contractors, that meets the following
requirements:
(1) Is qualified, as determined by the Secretary, to use claims data
to evaluate the performance of providers and suppliers on measures of
quality, efficiency, effectiveness, and resource use.
(2) Agrees to meet the requirements described in this subpart at
Sec. Sec. 401.705 through 401.721.
(b) Provider of services (referred to as a provider) has the same
meaning as the term ``provider'' in Sec. 400.202 of this chapter.
(c) Supplier has the same meaning as the term ``supplier'' at Sec.
400.202 of this chapter.
(d) Claim means an itemized billing statement from a provider or
supplier that, except in the context of Part D prescription drug event
data, requests
[[Page 25]]
payment for a list of services and supplies that were furnished to a
Medicare beneficiary in the Medicare fee-for-service context, or to a
participant in other insurance or entitlement program contexts. In the
Medicare program, claims files are available for each institutional
(inpatient, outpatient, skilled nursing facility, hospice, or home
health agency) and non-institutional (physician and durable medical
equipment providers and suppliers) claim type as well as Medicare Part D
Prescription Drug Event (PDE) data.
(e) Standardized data extract is a subset of Medicare claims data
that the Secretary would make available to qualified entities under this
subpart.
(f) Beneficiary identifiable data is any data that contains the
beneficiary's name, Medicare Health Insurance Claim Number (HICN), or
any other direct identifying factors, including, but not limited to
postal address or telephone number.
(g) Encrypted data is any data that does not contain the
beneficiary's name or any other direct identifying factors, but does
include a unique CMS-assigned beneficiary identifier that allows for the
linking of claims without divulging any direct identifier of the
beneficiary.
(h) Claims data from other sources means provider- or supplier-
identifiable claims data that an applicant or qualified entity has full
data usage right to due to its own operations or disclosures from
providers, suppliers, private payers, multi-payer databases, or other
sources.
(i) Clinical data is registry data, chart-abstracted data,
laboratory results, electronic health record information, or other
information relating to the care or services furnished to patients that
is not included in administrative claims data, but is available in
electronic form.
(j) Authorized user is a third party and its contractors (including,
where applicable, business associates as that term is defined at 45 CFR
160.103) that need analyses or data covered by this section to carry out
work on behalf of that third party (meaning not the qualified entity or
the qualified entity's contractors) to whom/which the qualified entity
provides or sells data as permitted under this subpart. Authorized user
third parties are limited to the following entities:
(1) A provider.
(2) A supplier.
(3) A medical society.
(4) A hospital association.
(5) An employer.
(6) A health insurance issuer.
(7) A healthcare provider and/or supplier association.
(8) A state entity.
(9) A federal agency.
(k) Employer has the same meaning as the term ``employer'' as
defined in section 3(5) of the Employee Retirement Insurance Security
Act of 1974.
(l) Health insurance issuer has the same meaning as the term
``health insurance issuer'' as defined in section 2791 of the Public
Health Service Act.
(m) Medical society means a nonprofit organization or association
that provides unified representation and advocacy for physicians at the
national or state level and whose membership is comprised of a majority
of physicians.
(n) Hospital association means a nonprofit organization or
association that provides unified representation and advocacy for
hospitals or health systems at a national, state, or local level and
whose membership is comprised of a majority of hospitals and health
systems.
(o) Healthcare Provider and/or Supplier Association means a
nonprofit organization or association that provides unified
representation and advocacy for providers and suppliers at the national
or state level and whose membership is comprised of a majority of
suppliers or providers.
(p) State Entity means any office, department, division, bureau,
board, commission, agency, institution, or committee within the
executive branch of a state government.
(q) Combined data means, at a minimum, a set of CMS claims data
provided under this subpart combined with claims data, or a subset of
claims data from at least one of the other claims data sources described
in Sec. 401.707(d).
(r) Patient means an individual who has visited the provider or
supplier for
[[Page 26]]
a face-to-face or telehealth appointment at least once in the past 24
months.
(s) Marketing means the same as the term ``marketing'' at 45 CFR
164.501 without the exception to the bar for ``consent'' based
marketing.
(t) Violation means a failure to comply with a requirement of a CMS
DUA (CMS data use agreement) or QE DUA (qualified entity data use
agreement).
(u) Required by law means the same as the phrase ``required by law''
at 45 CFR 164.103.
[76 FR 76567, Dec. 7, 2011, as amended at 81 FR 44479, July 7, 2016]
Sec. 401.705 Eligibility criteria for qualified entities.
(a) Eligibility criteria: To be eligible to apply to receive data as
a qualified entity under this subpart, an applicant generally must
demonstrate expertise and sustained experience, defined as 3 or more
years, in the following three areas, as applicable and appropriate to
the proposed use:
(1) Organizational and governance criteria, including:
(i) Expertise in the areas of measurement that they propose to use
in accurately calculating quality, and efficiency, effectiveness, or
resource use measures from claims data, including the following:
(A) Identifying an appropriate method to attribute a particular
patient's services to specific providers and suppliers.
(B) Ensuring the use of approaches to ensure statistical validity
such as a minimum number of observations or minimum denominator for each
measure.
(C) Using methods for risk-adjustment to account for variations in
both case-mix and severity among providers and suppliers.
(D) Identifying methods for handling outliers.
(E) Correcting measurement errors and assessing measure reliability.
(F) Identifying appropriate peer groups of providers and suppliers
for meaningful comparisons.
(ii) A plan for a business model that is projected to cover the
costs of performing the required functions, including the fee for the
data.
(iii) Successfully combining claims data from different payers to
calculate performance reports.
(iv) Designing, and continuously improving the format of performance
reports on providers and suppliers.
(v) Preparing an understandable description of the measures used to
evaluate the performance of providers and suppliers so that consumers,
providers and suppliers, health plans, researchers, and other
stakeholders can assess performance reports.
(vi) Implementing and maintaining a process for providers and
suppliers identified in a report to review the report prior to
publication and providing a timely response to provider and supplier
inquiries regarding requests for data, error correction, and appeals.
(vii) Establishing, maintaining, and monitoring a rigorous data
privacy and security program, including disclosing to CMS any
inappropriate disclosures of beneficiary identifiable information,
violations of applicable federal and State privacy and security laws and
regulations for the preceding 10-year period (or, if the applicant has
not been in existence for 10 years, the length of time the applicant has
been an organization), and any corrective actions taken to address the
issues.
(viii) Accurately preparing performance reports on providers and
suppliers and making performance report information available to the
public in aggregate form, that is, at the provider or supplier level.
(2) Expertise in combining Medicare claims data with claims data
from other sources, including demonstrating to the Secretary's
satisfaction that the claims data from other sources that it intends to
combine with the Medicare data received under this subpart address the
methodological concerns regarding sample size and reliability that have
been expressed by stakeholders regarding the calculation of performance
measures from a single payer source.
(3) Expertise in establishing, documenting and implementing rigorous
data privacy and security policies including enforcement mechanisms.
(b) Source of expertise and experience: An applicant may demonstrate
expertise and experience in any or all of the
[[Page 27]]
areas described in paragraph (a) of this section through one of the
following:
(1) Activities it has conducted directly through its own staff.
(2) Contracts with other entities if the applicant is the lead
entity and includes documentation in its application of the contractual
arrangements that exist between it and any other entity whose expertise
and experience is relied upon in submitting the application.
Sec. 401.707 Operating and governance requirements for
qualified entities.
A qualified entity must meet the following operating and governance
requirements:
(a) Submit to CMS a list of all measures it intends to calculate and
report, the geographic areas it intends to serve, and the methods of
creating and disseminating reports. This list must include the following
information, as applicable and appropriate to the proposed use:
(1) Name of the measure, and whether it is a standard or alternative
measure.
(2) Name of the measure developer/owner.
(3) If it is an alternative measure, measure specifications,
including numerator and denominator.
(4) The rationale for selecting each measure, including the
relationship to existing measurement efforts and the relevancy to the
population in the geographic area(s) the entity would serve, including
the following:
(i) A specific description of the geographic area or areas it
intends to serve.
(ii) A specific description of how each measure evaluates providers
and suppliers on quality, efficiency, effectiveness, and/or resource
use.
(5) A description of the methodologies it intends to use in creating
reports with respect to all of the following topics:
(i) Attribution of beneficiaries to providers and/or suppliers.
(ii) Benchmarking performance data, including the following:
(A) Methods for creating peer groups.
(B) Justification of any minimum sample size determinations made.
(C) Methods for handling statistical outliers.
(iii) Risk adjustment, where appropriate.
(iv) Payment standardization, where appropriate.
(b) Submit to CMS a description of the process it would establish to
allow providers and suppliers to view reports confidentially, request
data, and ask for the correction of errors before the reports are made
public.
(c) Submit to CMS a prototype report and a description of its plans
for making the reports available to the public.
(d) Submit to CMS information about the claims data it possesses
from other sources, as defined at Sec. 401.703(h), and documentation of
adequate rights to use the other claims data for the purposes of this
subpart.
(e) If requesting a 5 percent national sample to calculate
benchmarks for the specific measures it is using, submit to CMS a
justification for needing the file to calculate benchmarks.
Sec. 401.709 The application process and requirements.
(a) Application deadline. CMS accepts qualified entity applications
on a rolling basis after an application is made available on the CMS Web
site. CMS reviews applications in the order in which they are received.
(b) Selection criteria. To be approved as a qualified entity under
this subpart, the applicant must meet one of the following:
(1) Standard approval process: Meet the eligibility and operational
and governance requirements, fulfill all of the application requirements
to CMS' satisfaction, and agree to pay a fee equal to the cost of CMS
making the data available. The applicant and each of its contractors
that are anticipated to have access to the Medicare data must also
execute a Data Use Agreement with CMS, that among other things,
reaffirms the statutory ban on the use of Medicare data provided to the
qualified entity by CMS under this subpart for purposes other than those
referenced in this subpart.
(2) Conditional approval process: Meet the eligibility and
operational and governance requirements, and fulfill all of the
application requirements to CMS' satisfaction, with the exception of
possession of sufficient claims data from
[[Page 28]]
other sources. Meeting these requirements will result in a conditional
approval as a qualified entity. Entities gaining a conditional approval
as a qualified entity must meet the eligibility requirements related to
claims data from other sources the entity intends to combine with the
Medicare data, agree to pay a fee equal to the cost of CMS making the
data available, and execute a Data Use Agreement with CMS, that among
other things, reaffirms the statutory ban on the use of Medicare data
provided to the qualified entity by CMS under this subpart for purposes
other than those referenced in this subpart before receiving any
Medicare data. If the qualified entity is composed of lead entity with
contractors, any contractors that are anticipated to have access to the
Medicare data must also execute a Data Use Agreement with CMS.
(c) Duration of approval. CMS permits an entity to participate as a
qualified entity for a period of 3 years from the date of notification
of the application approval by CMS. The qualified entity must abide by
all CMS regulations and instructions. If the qualified entity wishes to
continue performing the tasks after the 3-year approval period, the
entity may re-apply for qualified entity status following the procedures
in paragraph (f) of this section.
(d) Reporting period. A qualified entity must produce reports on the
performance of providers and suppliers at least annually, beginning in
the calendar year after they are approved by CMS.
(e) The distribution of data--(1) Initial data release. Once CMS
fully approves a qualified entity under this subpart, the qualified
entity must pay a fee equal to the cost of CMS making data available.
After the qualified entity pays the fee, CMS will release the applicable
encrypted claims data, as well as a file that crosswalks the encrypted
beneficiary ID to the beneficiary name and the Medicare HICN. The data
will be the most recent data available, and will be limited to the
geographic spread of the qualified entity's other claims data, as
determined by CMS.
(2) Subsequent data releases. After the first quarter of
participation, CMS will provide a qualified entity with the most recent
additional quarter of currently available data, as well as a table that
crosswalks the encrypted beneficiary ID to the beneficiary's name and
the Medicare HICN. Qualified entities are required to pay CMS a fee
equal to the cost of making data available before CMS will release the
most recent quarter of additional data to the qualified entity.
(f) Re-application. A qualified entity that is in good standing may
re-apply for qualified entity status. A qualified entity is considered
to be in good standing if it has had no violations of the requirements
in this subpart or if the qualified entity is addressing any past
deficiencies either on its own or through the implementation of a
corrective action plan. To re-apply a qualified entity must submit to
CMS documentation of any changes to what was included in its previously-
approved application. A re-applicant must submit this documentation at
least 6 months before the end of its 3-year approval period and will be
able to continue to serve as a qualified entity until the re-application
is either approved or denied by CMS. If the re-application is denied,
CMS will terminate its relationship with the qualified entity and the
qualified entity will be subject to the requirements for return or
destruction of data at Sec. 401.721(b).
Sec. 401.711 Updates to plans submitted as part of the application
process.
(a) If a qualified entity wishes to make changes to the following
parts of its previously-approved application:
(1) Its list of proposed measures--the qualified entity must send
all the information referenced in Sec. 401.707(a) for the new measures
to CMS at least 30 days before its intended confidential release to
providers and suppliers.
(2) Its proposed prototype report--the qualified entity must send
the new prototype report to CMS at least 30 days before its intended
confidential release to providers and suppliers.
(3) Its plans for sharing the reports with the public--the qualified
entity must send the new plans to CMS at least 30 days before its
intended confidential release to providers and suppliers.
[[Page 29]]
(b) CMS will notify the qualified entity when the entity's proposed
changes are approved or denied for use, generally within 30 days of the
qualified entity submitting the changes to CMS. If a CMS decision on
approval or disapproval for a change is not forthcoming within 30 days
and CMS does not request an additional 30 days for review, the change or
modification shall be deemed to be approved.
(c) If the amount of claims data from other sources available to a
qualified entity decreases, the qualified entity must immediately inform
CMS and submit documentation that the remaining claims data from other
sources is sufficient to address the methodological concerns regarding
sample size and reliability. Under no circumstances may a qualified
entity use Medicare data to create a report, use a measure, or share a
report after the amount of claims data from other sources available to a
qualified entity decreases until CMS determines either that the
remaining claims data is sufficient or that the qualified entity has
collected adequate additional data to address any deficiencies.
(1) If the qualified entity cannot submit the documentation required
in paragraph (c) of this section, or if CMS determines that the
remaining claims data is not sufficient, CMS will afford the qualified
entity up to 120 days to obtain additional claims to address any
deficiencies. If the qualified entity does not have access to sufficient
new data after that time, CMS will terminate its relationship with the
qualified entity.
(2) If CMS determines that the remaining claims data is sufficient,
the qualified entity may continue issuing reports, using measures, and
sharing reports.
Sec. 401.713 Ensuring the privacy and security of data.
(a) Data use agreement between CMS and a qualified entity. A
qualified entity must comply with the data requirements in its data use
agreement with CMS (hereinafter the CMS DUA). Contractors (including,
where applicable, business associates) of qualified entities that are
anticipated to have access to the Medicare claims data or beneficiary
identifiable data in the context of this program are also required to
execute and comply with the CMS DUA. The CMS DUA will require the
qualified entity to maintain privacy and security protocols throughout
the duration of the agreement with CMS, and will ban the use or
disclosure of Medicare data or any derivative data for purposes other
than those set out in this subpart. The CMS DUA will also prohibit the
use of unsecured telecommunications to transmit such data, and will
specify the circumstances under which such data must be stored and may
be transmitted.
(b) A qualified entity must inform each beneficiary whose
beneficiary identifiable data has been (or is reasonably believed to
have been) inappropriately accessed, acquired, or disclosed in
accordance with the DUA.
(c) Contractor(s) must report to the qualified entity whenever there
is an incident where beneficiary identifiable data has been (or is
reasonably believed to have been) inappropriately accessed, acquired, or
disclosed.
(d) Data use agreement between a qualified entity and an authorized
user. In addition to meeting the other requirements of this subpart, and
as a pre-condition of selling or disclosing any combined data or any
Medicare claims data (or any beneficiary-identifiable derivative data of
either kind) and as a pre-condition of selling or disclosing non-public
analyses that include individually identifiable beneficiary data, the
qualified entity must enter a DUA (hereinafter the QE DUA) with the
authorized user. Among other things laid out in this subpart, such QE
DUA must contractually bind the authorized user (including any
contractors or business associates described in the definition of
authorized user) to the following:
(1)(i) The authorized user may be permitted to use such data and
non-public analyses in a manner that a HIPAA Covered Entity could do
under the following provisions:
(A) Activities falling under paragraph (1) of the definition of
``health care operations'' under 45 CFR 164.501: Quality improvement
activities, including care coordination activities and efforts to track
and manage medical costs; patient-safety activities; population-based
activities such as
[[Page 30]]
those aimed at improving patient safety, quality of care, or population
health, including the development of new models of care, the development
of means to expand coverage and improve access to healthcare, the
development of means of reducing healthcare disparities, and the
development or improvement of methods of payment or coverage policies.
(B) Activities falling under paragraph (2) of the definition of
``health care operations'' under 45 CFR 164.501: Reviewing the
competence or qualifications of health care professionals, evaluating
practitioner and provider performance, health plan performance,
conducting training programs in which students, trainees, or
practitioners in areas of health care learn under supervision to
practice or improve their skills as health care providers, training of
non-health care professionals, accreditation, certification, licensing,
or credentialing activities.
(C) Activities that qualify as ``fraud and abuse detection or
compliance activities'' under 45 CFR 164.506(c)(4)(ii).
(D) Activities that qualify as ``treatment'' under 45 CFR 164.501.
(ii) All other uses and disclosures of such data and/or such non-
public analyses must be forbidden except to the extent a disclosure
qualifies as a ``required by law'' disclosure as defined at 45 CFR
164.103.
(2) The authorized user is prohibited from using or disclosing the
data or non-public analyses for marketing purposes as defined at Sec.
401.703(s).
(3) The authorized user is required to ensure adequate privacy and
security protection for such data and non-public analyses. At a minimum,
regardless of whether the authorized user is a HIPAA covered entity,
such protections of beneficiary identifiable data must be at least as
protective as what is required of covered entities and their business
associates regarding protected health information (PHI) under the HIPAA
Privacy and Security Rules. In all cases, these requirements must be
imposed for the life of such beneficiary identifiable data or non-public
analyses and/or any derivative data, that is until all copies of such
data or non-public analyses are returned or destroyed. Such duties must
be written in such a manner as to survive termination of the QE DUA,
whether for cause or not.
(4) Except as provided for in paragraph (d)(5) of this section, the
authorized user must be prohibited from re-disclosing or making public
any such data or non-public analyses.
(5)(i) At the qualified entity's discretion, it may permit an
authorized user that is a provider as defined in Sec. 401.703(b) or a
supplier as defined in Sec. 401.703(c), to re-disclose such data and
non-public analyses as a covered entity will be permitted to disclose
PHI under 45 CFR 164.506(c)(4)(i), under 45 CFR 164.506(c)(2), or under
45 CFR 164.502(e)(1).
(ii) All other uses and disclosures of such data and/or such non-
public analyses is forbidden except to the extent a disclosure qualifies
as a ``required by law'' disclosure.
(6) Authorized users who/that receive the beneficiary de-identified
combined data or Medicare data as contemplated under Sec. 401.718 are
contractually prohibited from linking the beneficiary de-identified data
to any other identifiable source of information, and must be
contractually barred from attempting any other means of re-identifying
any individual whose data is included in such data.
(7) The QE DUA must bind authorized user(s) to notifying the
qualified entity of any violations of the QE DUA, and it must require
the full cooperation of the authorized user in the qualified entity's
efforts to mitigate any harm that may result from such violations, or to
comply with the breach provisions governing qualified entities under
this subpart.
[76 FR 76567, Dec. 7, 2011, as amended at 81 FR 44479, July 7, 2016]
Sec. 401.715 Selection and use of performance measures.
(a) Standard measures. A standard measure is a measure that can be
calculated in full or in part from claims data from other sources and
the standardized extracts of Medicare Parts A and B claims, and Part D
prescription drug event data and meets the following requirements:
(1) Meets one of the following criteria:
[[Page 31]]
(i) Is endorsed by the entity with a contract under section 1890(a)
of the Social Security Act.
(ii) Is time-limited endorsed by the entity with a contract under
section 1890(a) of the Social Security Act until such time as the full
endorsement status is determined.
(iii) Is developed under section 931 of the Public Health Service
Act.
(iv) Can be calculated from standardized extracts of Medicare Parts
A or B claims or Part D prescription drug event data, was adopted
through notice-and-comment rulemaking, and is currently being used in
CMS programs that include quality measurement.
(v) Is endorsed by a CMS-approved consensus-based entity. CMS will
approve organizations as consensus-based entities based on review of
documentation of the consensus-based entity's measure approval process.
To receive approval as a consensus-based entity, an organization must
submit information to CMS documenting its processes for stakeholder
consultation and measures approval; an organization will only receive
approval as a consensus-based entity if all measure specifications are
publically available. An organization will retain CMS acceptance as a
consensus-based entity for 3 years after the approval date, at which
time CMS will review new documentation of the consensus-based entity's
measure approval process for a new 3-year approval.
(2) Is used in a manner that follows the measure specifications as
written (or as adopted through notice-and-comment rulemaking), including
all numerator and denominator inclusions and exclusions, measured time
periods, and specified data sources.
(b) Alternative measure. (1) An alternative measure is a measure
that is not a standard measure, but that can be calculated in full, or
in part, from claims data from other sources and the standardized
extracts of Medicare Parts A and B claims, and Part D prescription drug
event data, and that meets one of the following criteria:
(i) Rulemaking process: Has been found by the Secretary, through a
notice-and comment-rulemaking process, to be more valid, reliable,
responsive to consumer preferences, cost-effective, or relevant to
dimensions of quality and resource use not addressed by standard
measures, and is used by a qualified entity in a manner that follows the
measure specifications as adopted through notice-and-comment rulemaking,
including all numerator and denominator inclusions and exclusions,
measured time periods, and specified data sources.
(ii) Stakeholder consultation approval process: Has been found by
the Secretary, using documentation submitted by a qualified entity that
outlines its consultation and agreement with stakeholders in its
community, to be more valid, responsive to consumer preferences, cost-
effective, or relevant to dimensions of quality and resource use not
addressed by standard measures, and is used by a qualified entity in a
manner that follows the measure specifications as submitted, including
all numerator and denominator inclusions and exclusions, measured time
periods, and specified data sources. If a CMS decision on approval or
disapproval of alternative measures submitted using the stakeholder
consultation approval process is not forthcoming within 60 days of
submission of the measure by the qualified entity, the measure will be
deemed approved. However, CMS retains the right to disapprove a measure
if, even after 60 days, we find it to not be ``more valid, reliable,
responsive to consumer preferences, cost-effective, or relevant to
dimensions of quality and resource'' than a standard measure.
(2) An alternative measure approved under the process at paragraph
(b)(1)(i) of this section may be used by any qualified entity. An
alternative measure approved under the process at paragraph (b)(1)(ii)
of this section may only be used by the qualified entity that submitted
the measure for consideration by the Secretary. A qualified entity may
use an alternative measure up until the point that an equivalent
standard measure for the particular clinical area or condition becomes
available at which point the qualified entity must switch to the
standard measure within 6 months or submit additional scientific
justification and receive approval, via either paragraphs (b)(1)(i) or
(b)(1)(ii) of this section, from
[[Page 32]]
the Secretary to continue using the alternative measure.
(3) To submit an alternative measure for consideration under the
notice-and-comment-rulemaking process, for use in the calendar year
following the submission, an entity must submit the following
information by May 31st:
(i) The name of the alternative measure.
(ii) The name of the developer or owner of the alternative measure.
(iii) Detailed specifications for the alternative measure.
(iv) Evidence that use of the alternative measure would be more
valid, reliable, responsive to consumer preferences, cost-effective, or
relevant to dimensions of quality and resource use not addressed by
standard measures.
(4) To submit an alternative measure for consideration under the
documentation of stakeholder consultation approval process described in
paragraph (b)(1)(ii) of this section, for use once the measure is
approved by the Secretary, an entity must submit the following
information to CMS:
(i) The name of the alternative measure.
(ii) The name of the developer or owner of the alternative measure.
(iii) Detailed specifications for the alternative measure.
(iv) A description of the process by which the qualified entity
notified stakeholders in the geographic region it serves of its intent
to seek approval of an alternative measure. Stakeholders must include a
valid cross representation of providers, suppliers, payers, employers,
and consumers.
(v) A list of stakeholders from whom feedback was solicited,
including the stakeholders' names and roles in the community.
(vi) A description of the discussion about the proposed alternative
measure, including a summary of all pertinent arguments supporting and
opposing the measure.
(vii) Unless CMS has already approved the same measure for use by
another qualified entity, no new scientific evidence on the measure is
available, and the subsequent qualified entity wishes to rely upon the
scientific evidence submitted by the previously approved applicant, an
explanation backed by scientific evidence that demonstrates why the
measure is more valid, reliable, responsive to consumer preferences,
cost-effective, or relevant to dimensions of quality and resource use
not addressed by a standard measure.
Sec. 401.716 Non-public analyses.
(a) General. So long as it meets the other requirements of this
subpart, and subject to the limits in paragraphs (b) and (c) of this
section, the qualified entity may use the combined data to create non-
public analyses in addition to performance measures and provide or sell
these non-public analyses to authorized users (including any contractors
or business associates described in the definition of authorized user).
(b) Limitations on a qualified entity. In addition to meeting the
other requirements of this subpart, a qualified entity must comply with
the following limitations as a pre-condition of dissemination or selling
non-public analyses to an authorized user:
(1) A qualified entity may only provide or sell a non-public
analysis to a health insurance issuer as defined in Sec. 401.703(l),
after the health insurance issuer or a business associate of that health
insurance issuer has provided the qualified entity with claims data that
represents a majority of the health insurance issuer's covered lives,
using one of the four methods of calculating covered lives established
at 26 CFR 46.4375-1(c)(2), for the time period and geographic region
covered by the issuer-requested non-public analyses. A qualified entity
may not provide or sell a non-public analysis to a health insurance
issuer if the issuer does not have any covered lives in the geographic
region covered by the issuer-requested non-public analysis.
(2) Analyses that contain information that individually identifies
one or more beneficiaries may only be disclosed to a provider or
supplier (as defined at Sec. 401.703(b) and (c)) when both of the
following conditions are met:
(i) The analyses only contain identifiable information on
beneficiaries with whom the provider or supplier have a patient
relationship as defined at Sec. 401.703(r).
[[Page 33]]
(ii) A QE DUA as defined at Sec. 401.713(d) is executed between the
qualified entity and the provider or supplier prior to making any
individually identifiable beneficiary information available to the
provider or supplier.
(3) Except as specified under paragraph (b)(2) of this section, all
analyses must be limited to beneficiary de-identified data. Regardless
of the HIPAA covered entity or business associate status of the
qualified entity and/or the authorized user, de-identification must be
determined based on the standards for HIPAA covered entities found at 45
CFR 164.514(b).
(4) Analyses that contain information that individually identifies a
provider or supplier (regardless of the level of the provider or
supplier, that is, individual clinician, group of clinicians, or
integrated delivery system) may not be disclosed unless one of the
following three conditions apply:
(i) The analysis only individually identifies the provider or
supplier that is being supplied the analysis.
(ii) Every provider or supplier individually identified in the
analysis has been afforded the opportunity to appeal or correct errors
using the process at Sec. 401.717(f).
(iii) Every provider or supplier individually identified in the
analysis has notified the qualified entity, in writing, that analyses
can be disclosed to the authorized user without first going through the
appeal and error correction process at Sec. 401.717(f).
(c) Non-public analyses agreement between a qualified entity and an
authorized user for beneficiary de-identified non-public analyses
disclosures. In addition to the other requirements of this subpart, a
qualified entity must enter a contractually binding non-public analyses
agreement with the authorized user (including any contractors or
business associates described in the definition of authorized user) as a
pre-condition to providing or selling de-identified analyses. Such non-
public analyses agreement must contain the following provisions:
(1) The authorized user may not use the analyses or derivative data
for the following purposes:
(i) Marketing, as defined at Sec. 401.703(s).
(ii) Harming or seeking to harm patients or other individuals both
within and outside the healthcare system regardless of whether their
data are included in the analyses.
(iii) Effectuating or seeking opportunities to effectuate fraud and/
or abuse in the healthcare system.
(2) If the authorized user is an employer as defined in Sec.
401.703(k), the authorized user may only use the analyses or derivative
data for purposes of providing health insurance to employees, retirees,
or dependents of employees or retirees of that employer.
(3)(i) At the qualified entity's discretion, it may permit an
authorized user that is a provider as defined in Sec. 401.703(b) or a
supplier as defined in Sec. 401.703(c), to re-disclose the de-
identified analyses or derivative data, as a covered entity will be
permitted under 45 CFR 164.506(c)(4)(i), or under 45 CFR 164.502(e)(1).
(ii) All other uses and disclosures of such data and/or such non-
public analyses is forbidden except to the extent a disclosure qualifies
as a ``required by law'' disclosure.
(4) If the authorized user is not a provider or supplier, the
authorized user may not re-disclose or make public any non-public
analyses or derivative data except as required by law.
(5) The authorized user may not link the de-identified analyses to
any other identifiable source of information and may not in any other
way attempt to identify any individual whose de-identified data is
included in the analyses.
(6) The authorized user must notify the qualified entity of any DUA
violations, and it must fully cooperate with the qualified entity's
efforts to mitigate any harm that may result from such violations.
[81 FR 44480, July 7, 2016]
Sec. 401.717 Provider and supplier requests for error correction.
(a) A qualified entity must confidentially share measures,
measurement methodologies, and measure results with providers and
suppliers at least 60 calendar days before making reports public. The 60
calendar days begin on the date on which qualified entities
[[Page 34]]
send the confidential reports to providers and suppliers. A qualified
entity must inform providers and suppliers of the date the reports will
be made public at least 60 calendar days before making the reports
public.
(b) Before making the reports public, a qualified entity must allow
providers and suppliers the opportunity to make a request for the data,
or to make a request for error correction, within 60 calendar days after
sending the confidential reports to providers or suppliers.
(c) During the 60 calendar days between sending a confidential
report on measure results and releasing the report to the public, the
qualified entity must, at the request of a provider or supplier and with
appropriate privacy and security protections, release the Medicare
claims data and beneficiary names to the provider or supplier. Qualified
entities may only provide the Medicare claims and/or beneficiary names
relevant to the particular measure or measure result the provider or
supplier is appealing.
(d) A qualified entity must inform providers and suppliers that
reports will be made public, including information related to the status
of any data or error correction requests, after the date specified to
the provider or supplier when the report is sent for review and, if
necessary, error correction requests (at least 60 calendar days after
the report was originally sent to the providers and suppliers),
regardless of the status of any requests for error correction.
(e) If a provider or supplier has a data or error correction request
outstanding at the time the reports become public, the qualified entity
must, if feasible, post publicly the name of the appealing provider or
supplier and the category of the appeal request.
(f) A qualified entity must comply with the following requirements
before disclosing non-public analyses, as defined at Sec. 401.716,
which contain information that individually identifies a provider or
supplier:
(1) A qualified entity must confidentially notify a provider or
supplier that non-public analyses that individually identify the
provider or supplier are going to be released to an authorized user at
least 65 calendar days before disclosing the analyses. This confidential
notification must include a short summary of the analyses (including the
measures calculated), the process for the provider or supplier to
request the analyses, the authorized users receiving the analyses, and
the date on which the qualified entity will release the analyses to the
authorized user.
(2) A qualified entity must allow providers and suppliers the
opportunity to opt-in to the review and correction process as defined in
paragraphs (a) through (e) of this section, anytime during the 65
calendar days. If a provider or supplier chooses to opt-in to the review
and correction process more than 5 days into the notification period,
the time for the review and correction process is shortened from 60 days
to the number of days between the provider or supplier opt-in date and
the release date specified in the confidential notification.
[76 FR 76567, Dec. 7, 2011, as amended at 81 FR 44481, July 7, 2016]
Sec. 401.718 Dissemination of data.
(a) General. Subject to the other requirements in this subpart, the
requirements in paragraphs (b) and (c) of this section and any other
applicable laws or contractual agreements, a qualified entity may
provide or sell combined data or provide Medicare data at no cost to
authorized users defined at Sec. 401.703(b), (c), (m), and (n).
(b) Data--(1) De-identification. Except as specified in paragraph
(b)(2) of this section, any data provided or sold by a qualified entity
to an authorized user must be limited to beneficiary de-identified data.
De-identification must be determined based on the de-identification
standards for HIPAA covered entities found at 45 CFR 164.514(b).
(2) Exception. If such disclosure will be consistent with all
applicable laws, data that individually identifies a beneficiary may
only be disclosed to a provider or supplier (as defined at Sec.
401.703(b) and (c)) with whom the identifiable individuals in such data
have a current patient relationship as defined at Sec. 401.703(r).
(c) Data use agreement between a qualified entity and an authorized
user. A
[[Page 35]]
qualified entity must contractually require an authorized user to comply
with the requirements in Sec. 401.713(d) prior to providing or selling
data to an authorized user under Sec. 401.718.
[81 FR 44481, July 7, 2016]
Sec. 401.719 Monitoring and sanctioning of qualified entities.
(a) CMS will monitor and assess the performance of qualified
entities and their contractors using the following methods:
(1) Audits.
(2) Submission of documentation of data sources and quantities of
data upon the request of CMS and/or site visits.
(3) Analysis of specific data reported to CMS by qualified entities
through annual reports (as described in paragraph (b) of this section)
and reports on inappropriate disclosures or uses of beneficiary
identifiable data (as described in paragraph (c) of this section).
(4) Analysis of complaints from beneficiaries and/or providers or
suppliers.
(b) A qualified entity must provide annual reports to CMS containing
information related to the following:
(1) General program adherence, including the following information:
(i) The number of Medicare and private claims combined.
(ii) The percent of the overall market share the number of claims
represent in the qualified entity's geographic area.
(iii) The number of measures calculated.
(iv) The number of providers and suppliers profiled by type of
provider and supplier.
(v) A measure of public use of the reports.
(2) The provider and supplier data sharing, error correction, and
appeals process, including the following information:
(i) The number of providers and suppliers requesting claims data.
(ii) The number of requests for claims data fulfilled.
(iii) The number of error corrections.
(iv) The type(s) of problem(s) leading to the request for error
correction.
(v) The amount of time to acknowledge the request for data or error
correction.
(vi) The amount of time to respond to the request for error
correction.
(vii) The number of requests for error correction resolved.
(3) Non-public analyses provided or sold to authorized users under
this subpart, including the following information:
(i) A summary of the analyses provided or sold, including--
(A) The number of analyses.
(B) The number of purchasers of such analyses.
(C) The types of authorized users that purchased analyses.
(D) The total amount of fees received for such analyses.
(E) QE DUA or non-public analyses agreement violations.
(ii) A description of the topics and purposes of such analyses.
(iii) The number of analyses disclosed with unresolved requests for
error correction.
(4) Data provided or sold to authorized users under this subpart,
including the following information:
(i) The entities who received data.
(ii) The basis under which each entity received such data.
(iii) The total amount of fees received for providing, selling, or
sharing the data.
(iv) QE DUA violations.
(c) A qualified entity must inform CMS of inappropriate disclosures
or uses of beneficiary identifiable data under the DUA.
(d) CMS may take the following actions against a qualified entity if
CMS determines that the qualified entity violated any of the
requirements of this subpart, regardless of how CMS learns of a
violation:
(1) Provide a warning notice to the qualified entity of the specific
concern, which indicates that future deficiencies could lead to
termination.
(2) Request a corrective action plan (CAP) from the qualified
entity.
(3) Place the qualified entity on a special monitoring plan.
(4) Terminate the qualified entity.
(5) In the case of a violation, as defined at Sec. 401.703(t), of
the CMS DUA or
[[Page 36]]
the QE DUA, CMS will impose an assessment on a qualified entity in
accordance with the following:
(i) Amount of assessment. CMS will calculate the amount of the
assessment of up to $100 per individual entitled to, or enrolled for,
benefits under part A of title XVIII of the Social Security Act or
enrolled for benefits under Part B of such title whose data was
implicated in the violation based on the following:
(A) Basic factors. In determining the amount per impacted
individual, CMS takes into account the following:
(1) The nature and the extent of the violation.
(2) The nature and the extent of the harm or potential harm
resulting from the violation.
(3) The degree of culpability and the history of prior violations.
(B) Criteria to be considered. In establishing the basic factors,
CMS considers the following circumstances:
(1) Aggravating circumstances. Aggravating circumstances include the
following:
(i) There were several types of violations occurring over a lengthy
period of time.
(ii) There were many of these violations or the nature and
circumstances indicate a pattern of violations.
(iii) The nature of the violation had the potential or actually
resulted in harm to beneficiaries.
(2) Mitigating circumstances. Mitigating circumstances include the
following:
(i) All of the violations subject to the imposition of an assessment
were few in number, of the same type, and occurring within a short
period of time.
(ii) The violation was the result of an unintentional and
unrecognized error and the qualified entity took corrective steps
immediately after discovering the error.
(C) Effects of aggravating or mitigating circumstances. In
determining the amount of the assessment to be imposed under paragraph
(d)(5)(i)(A) of this section:
(1) If there are substantial or several mitigating circumstance, the
aggregate amount of the assessment is set at an amount sufficiently
below the maximum permitted by paragraph (d)(5)(i)(A) of this section to
reflect the mitigating circumstances.
(2) If there are substantial or several aggravating circumstances,
the aggregate amount of the assessment is set at an amount at or
sufficiently close to the maximum permitted by paragraph (d)(5)(i)(A) of
this section to reflect the aggravating circumstances.
(D) The standards set for the qualified entity in this paragraph are
binding, except to the extent that--
(1) The amount imposed is not less than the approximate amount
required to fully compensate the United States, or any State, for its
damages and costs, tangible and intangible, including but not limited to
the costs attributable to the investigation, prosecution, and
administrative review of the case.
(2) Nothing in this section limits the authority of CMS to settle
any issue or case as provided by part 1005 of this title or to
compromise any assessment as provided by paragraph (d)(5)(ii)(E) of this
section.
(ii) Notice of determination. CMS must propose an assessment in
accordance with this paragraph (d)(5), by notifying the qualified entity
by certified mail, return receipt requested. Such notice must include
the following information:
(A) The assessment amount.
(B) The statutory and regulatory bases for the assessment.
(C) A description of the violations upon which the assessment was
proposed.
(D) Any mitigating or aggravating circumstances that CMS considered
when it calculated the amount of the proposed assessment.
(E) Information concerning response to the notice, including:
(1) A specific statement of the respondent's right to a hearing in
accordance with procedures established at Section 1128A of the Act and
implemented in 42 CFR part 1005.
(2) A statement that failure to respond within 60 days renders the
proposed determination final and permits the imposition of the proposed
assessment.
(3) A statement that the debt may be collected through an
administrative offset.
[[Page 37]]
(4) In the case of a respondent that has an agreement under section
1866 of the Act, notice that imposition of an exclusion may result in
termination of the provider's agreement in accordance with section
1866(b)(2)(C) of the Act.
(F) The means by which the qualified entity may pay the amount if
they do not intend to request a hearing.
(iii) Failure to request a hearing. If the qualified entity does not
request a hearing within 60 days of receipt of the notice of proposed
determination, any assessment becomes final and CMS may impose the
proposed assessment.
(A) CMS notifies the qualified entity, by certified mail with return
receipt requested, of any assessment that has been imposed and of the
means by which the qualified entity may satisfy the judgment.
(B) The qualified entity has no right to appeal an assessment for
which the qualified entity has not requested a hearing.
(iv) When an assessment is collectible. An assessment becomes
collectible after the earliest of the following:
(A) Sixty (60) days after the qualified entity receives CMS's notice
of proposed determination under paragraph (d)(5)(ii) of this section, if
the qualified entity has not requested a hearing.
(B) Immediately after the qualified entity abandons or waives its
appeal right at any administrative level.
(C) Thirty (30) days after the qualified entity receives the ALJ's
decision imposing an assessment under Sec. 1005.20(d) of this title, if
the qualified entity has not requested a review before the DAB.
(D) Sixty (60) days after the qualified entity receives the DAB's
decision imposing an assessment if the qualified entity has not
requested a stay of the decision under Sec. 1005.22(b) of this title.
(v) Collection of an assessment. Once a determination by HHS has
become final, CMS is responsible for the collection of any assessment.
(A) The General Counsel may compromise an assessment imposed under
this part, after consulting with CMS or OIG, and the Federal government
may recover the assessment in a civil action brought in the United
States district court for the district where the claim was presented or
where the qualified entity resides.
(B) The United States or a state agency may deduct the amount of an
assessment when finally determined, or the amount agreed upon in
compromise, from any sum then or later owing the qualified entity.
(C) Matters that were raised or that could have been raised in a
hearing before an ALJ or in an appeal under section 1128A(e) of the Act
may not be raised as a defense in a civil action by the United States to
collect an assessment.
[76 FR 76567, Dec. 7, 2011, as amended at 81 FR 44481, July 7, 2016]
Sec. 401.721 Terminating an agreement with a qualified entity.
(a) Grounds for terminating a qualified entity agreement. CMS may
terminate an agreement with a qualified entity if CMS determines the
qualified entity or its contractor meets any of the following:
(1) Engages in one or more serious violations of the requirements of
this subpart.
(2) Fails to completely and accurately report information to CMS or
fails to make appropriate corrections in response to confidential
reviews by providers and suppliers in a timely manner.
(3) Fails to submit an approvable corrective action plan (CAP) as
prescribed by CMS, fails to implement an approved CAP, or fails to
demonstrate improved performance after the implementation of a CAP.
(4) Improperly uses or discloses claims information received from
CMS in violation of the requirements in this subpart.
(5) Based on its re-application, no longer meets the requirements in
this subpart.
(6) Fails to maintain adequate data from other sources in accordance
with Sec. 401.711(c).
(7) Fails to ensure authorized users comply with their QE DUAs or
analysis use agreements.
(b) Return or destruction of CMS data upon voluntary or involuntary
termination from the qualified entity program:
(1) If CMS terminates a qualified entity's agreement, the qualified
entity
[[Page 38]]
and its contractors must immediately upon receipt of notification of the
termination commence returning or destroying any and all CMS data (and
any derivative files). In no instance can this process exceed 30 days.
(2) If a qualified entity voluntarily terminates participation under
this subpart, it and its contractors must return to CMS, or destroy, any
and all CMS data in its possession within 30 days of notifying CMS of
its intent to end its participation.
[76 FR 76567, Dec. 7, 2011, as amended at 81 FR 44482, July 7, 2016]
Sec. 401.722 Qualified clinical data registries.
(a) A qualified clinical data registry that agrees to meet all the
requirements in this subpart, with the exception of Sec. 401.707(d),
may request access to Medicare data as a quasi qualified entity in
accordance with such qualified entity program requirements.
(b) Notwithstanding Sec. 401.703(q) (generally defining combined
data), for purposes of qualified clinical data registries acting as
quasi qualified entities under the qualified entity program
requirements, combined data means, at a minimum, a set of CMS claims
data provided under this subpart combined with clinical data or a subset
of clinical data.
[81 FR 44482, July 7, 2016]
PART 402_CIVIL MONEY PENALTIES, ASSESSMENTS, AND EXCLUSIONS
--Table of Contents
Subpart A_General Provisions
Sec.
402.1 Basis and scope.
402.3 Definitions.
402.5 Right to a hearing before the final determination.
402.7 Notice of proposed determination.
402.9 Failure to request a hearing.
402.11 Notice to other agencies and other entities.
402.13 Penalty, assessment, and exclusion not exclusive.
402.15 Collateral estoppel.
402.17 Settlement.
402.19 Hearings and appeals.
402.21 Judicial review.
Subpart B_Civil Money Penalties and Assessments
402.105 Amount of penalty.
402.107 Amount of assessment.
402.109 Statistical sampling.
402.111 Factors considered determinations regarding the amount of
penalties and assessments.
402.113 When a penalty and assessment are collectible.
402.115 Collection of penalty or assessment.
Subpart C_Exclusions
402.200 Basis and purpose.
402.205 Length of exclusion.
402.208 Factors considered in determining whether to exclude, and the
length of exclusion.
402.209 Scope and effect of exclusion.
402.210 Notices.
402.212 Response to notice of proposed determination to exclude.
402.214 Appeal of exclusion.
402.300 Request for reinstatement.
402.302 Basis for reinstatement.
402.304 Approval of request for reinstatement.
402.306 Denial of request for reinstatement.
402.308 Waivers of exclusions.
Authority: 42 U.S.C. 1302 and 1395hh.
Source: 63 FR 68690, Dec. 14, 1998, unless otherwise noted.
Subpart A_General Provisions
Sec. 402.1 Basis and scope.
(a) Basis. This part is based on the sections of the Act that are
specified in paragraph (c) of this section.
(b) Scope. This part--
(1) Provides for the imposition of civil money penalties,
assessments, and exclusions against persons that violate the provisions
of the Act specified in paragraph (c), (d), or (e) of this section; and
(2) Sets forth the appeal rights of persons subject to penalties,
assessments, or exclusion and the procedures for reinstatement following
exclusion.
(c) Civil money penalties. CMS or OIG may impose civil money
penalties against any person or other entity specified in paragraphs
(c)(1) through (c)(35) of this section under the identified section of
the Act. (The authorities that also permit imposition of an assessment
or exclusion are noted in the applicable paragraphs.)
[[Page 39]]
(1) Sections 1833(h)(5)(D) and 1842(j)(2)--Any person that knowingly
and willfully, and on a repeated basis, bills for a clinical diagnostic
laboratory test, other than on an assignment-related basis. This
provision includes tests performed in a physician's office but excludes
tests performed in a rural health clinic. (This violation may also
include an assessment and cause exclusion.)
(2) Section 1833(i)(6)--Any person that knowingly and willfully
presents, or causes to be presented, a bill or request for payment for
an intraocular lens inserted during or after cataract surgery for which
the Medicare payment rate includes the cost of acquiring the class of
lens involved.
(3) Section 1833(q)(2)(B)--Any entity that knowingly and willfully
fails to provide information about a referring physician, including the
physician's name and unique physician identification number for the
referring physician, when seeking payment on an unassigned basis. (This
violation, if it occurs in repeated cases, may also cause an exclusion.)
(4) Sections 1834(a)(11)(A) and 1842(j)(2)--Any durable medical
equipment supplier that knowingly and willfully charges for a covered
service that is furnished on a rental basis after the rental payments
may no longer be made (except for maintenance and servicing) as provided
in section 1834(a)(7)(A). (This violation may also include an assessment
and cause exclusion.)
(5) Sections 1834(a)(18)(B) and 1842(j)(2)--Any nonparticipating
durable medical equipment supplier that knowingly and willfully, in
violation of section 1834(a)(18)(A), fails to make a refund to Medicare
beneficiaries for a covered service for which payment is precluded due
to an unsolicited telephone contact from the supplier. (This violation
may also include an assessment and cause exclusion.)
(6) Sections 1834(b)(5)(C) and 1842(j)(2)--Any nonparticipating
physician or supplier that knowingly and willfully charges a Medicare
beneficiary more than the limiting charge, as specified in section
1834(b)(5)(B), for radiologist services. (This violation may also
include an assessment and cause exclusion.)
(7) Sections 1834(c)(4)(C) and 1842(j)(2)--Any nonparticipating
physician or supplier that knowingly and willfully charges a Medicare
beneficiary more than the limiting charge, as specified in section
1834(c)(4)(B), for mammography screening. (This violation may also
include an assessment and cause exclusion.)
(8) Sections 1834(h)(3) and 1842(j)(2)--Any supplier of prosthetic
devices, orthotics, and prosthetics that knowingly and willfully charges
for a covered prosthetic device, orthotic, or prosthetic that is
furnished on a rental basis after the rental payment may no longer be
made (except for maintenance and servicing). (This violation may also
include an assessment and cause exclusion.)
(9) Section 1834(j)(2)(A)(iii)--Any supplier of durable medical
equipment, including a supplier of prosthetic devices, prosthetics,
orthotics, or supplies, that knowingly and willfully distributes a
certificate of medical necessity in violation of section
1834(j)(2)(A)(i) or fails to provide the information required under
section 1834(j)(2)(A)(ii).
(10) Sections 1834(j)(4) and 1842(j)(2)--
(i) Any supplier of durable medical equipment, including a supplier
of prosthetic devices, prosthetics, orthotics, or supplies, that
knowingly and willfully fails to make refunds in a timely manner to
Medicare beneficiaries for services billed other than on an assignment-
related basis if--
(A) The supplier does not possess a Medicare supplier number;
(B) The service is denied in advance under section 1834(a)(15); or
(C) The service is determined not to be medically necessary or
reasonable.
(ii) These violations may also include an assessment and cause
exclusion.
(11) Sections 1842(b)(18)(B) and 1842(j)(2)--Any practitioner
specified in section 1842(b)(18)(C) (physician assistants, nurse
practitioners, clinical nurse specialists, certified registered nurse
anesthetists, certified nurse-midwives, clinical social workers, and
clinical psychologists) or other person that
[[Page 40]]
knowingly and willfully bills or collects for any services by the
practitioners on other than an assignment-related basis. (This violation
may also include an assessment and cause exclusion.)
(12) Sections 1842(k) and 1842(j)(2)--Any physician who knowingly
and willfully presents, or causes to be presented, a claim or bill for
an assistant at cataract surgery performed on or after March 1, 1987 for
which payment may not be made because of section 1862(a)(15). (This
violation may also include an assessment and cause exclusion.)
(13) Sections 1842(l)(3) and 1842(j)(2)--Any nonparticipating
physician who does not accept payment on an assignment-related basis and
who knowingly and willfully fails to refund on a timely basis any
amounts collected for services that are not reasonable or medically
necessary or are of poor quality, in accordance with section
1842(l)(1)(A). (This violation may also include an assessment and cause
exclusion.)
(14) Sections 1842(m)(3) and 1842(j)(2)--(i) Any nonparticipating
physician, who does not accept payment for an elective surgical
procedure on an assignment-related basis and whose charge is at least
$500, who knowingly and willfully fails to--
(A) Disclose the information required by section 1842(m)(1)
concerning charges and coinsurance amounts; and
(B) Refund on a timely basis any amount collected for the procedure
in excess of the charges recognized and approved by the Medicare
program.
(ii) This violation may also include an assessment and cause
exclusion.
(15) Sections 1842(n)(3) and 1842(j)(2)--Any physician who knowingly
and willfully, in repeated cases, bills one or more beneficiaries, for
purchased diagnostic tests, any amount other than the payment amount
specified in section 1842(n)(1)(A) or section 1842(n)(1)(B). (This
violation may also include an assessment and cause exclusion.)
(16) Section 1842(p)(3)(A)--Any physician or practitioner who
knowingly and willfully fails promptly to provide the appropriate
diagnosis code or codes upon request by CMS or a carrier on any request
for payment or bill not submitted on an assignment-related basis for any
service furnished by the physician. (This violation, if it occurs in
repeated cases, may also cause exclusion.)
(17) Sections 1848(g)(1)(B) and 1842(j)(2)--
(i) Any nonparticipating physician, supplier, or other person that
furnishes physicians' services and does not accept payment on an
assignment-related basis, that--
(A) Knowingly and willfully bills or collects in excess of the
limiting charge (as defined in section 1848(g)(2)) on a repeated basis;
or
(B) Fails to make an adjustment or refund on a timely basis as
required by section 1848(g)(1)(A)(iii) or (iv).
(ii) These violations may also include an assessment and cause
exclusion.
(18) Section 1848(g)(3)(B) and 1842(j)(2)--Any person that knowingly
and willfully bills for State plan approved physicians' services, as
defined in section 1848(j)(3), on other than an assignment-related basis
for a Medicare beneficiary who is also eligible for Medicaid (these
individuals include qualified Medicare beneficiaries). This provision
applies to services furnished on or after April 1, 1990. (This violation
may also include an assessment and cause exclusion.)
(19) Section 1848(g)(4)(B)(ii), 1842(p)(3), and 1842(j)(2)(A)--
(i) Any physician, supplier, or other person (except any person that
has been excluded from the Medicare program) that, for services
furnished after September 1, 1990, knowingly and willfully--
(A) Fails to submit a claim on a standard claim form for services
provided for which payment is made under Part B on a reasonable charge
or fee schedule basis; or
(B) Imposes a charge for completing and submitting the standard
claims form.
(ii) These violations, if they occur in repeated cases, may also
cause exclusion.
(20) Section 1862(b)(6)(B)--Any entity that knowingly, willfully,
and repeatedly--
(i) Fails to complete a claim form relating to the availability of
other
[[Page 41]]
health benefit plans in accordance with section 1862(b)(6)(A); or
(ii) Provides inaccurate information relating to the availability of
other health benefit plans on the claim form.
(21) Section 1862(b)(7)(B)--Except for the situation described in
paragraphs (c)(21)(ii)(A) and (B) of this section, any entity that has a
reporting obligation under section 1862(b)(7) of the Act (``reporting
entity'') that--
(i) Fails to report any beneficiary record within 1 year of the last
acceptable reporting date, defined as 365 days from the GHP coverage
effective date or the Medicare beneficiary's entitlement date, whichever
is later.
(ii) A civil money penalty (CMP) is not imposed if--
(A) The incident of noncompliance is associated with a specific
reporting policy or procedural change on the part of CMS that has been
effective for less than 6 months following the implementation of that
policy or procedural change (or for 1 year, should CMS be unable to
provide a minimum of 6 months' notice prior to implementing such
changes).
(B) The entity complies with any reporting thresholds or any other
reporting exclusions.
(22) Section 1862(b)(8)(E)--Except for the situations described in
paragraph (c)(22)(ii)(A), (B) and (C) of this section, any applicable
plan that has a reporting obligation under section 1862(b)(8) of the Act
(``applicable plan''), that--
(i) Fails to report any beneficiary record within 1 year from the
date of the settlement, judgment, award, or other payment, or the
effective date where ongoing payment responsibility for medical care has
been assumed by the entity.
(ii) A CMP is not imposed in the following situations:
(A) An NGHP applicable plan fails to report required information as
a result of the applicable plan's inability to obtain an individual's
last name, first name, date of birth, gender, Medicare Beneficiary
Identifier (MBI), Social Security Number (SSN), or the last 5 digits of
the SSN, and the applicable plan has made a good faith effort to obtain
this information by meeting the following:
(1) Has communicated the need for this information to the individual
and his or her attorney, or other representative, if applicable, or
both.
(2) Has requested the information from the individual and his or her
attorney, or other representative (if applicable), at least three
times--
(i) Once in writing (including electronic mail);
(ii) Then at least once more by mail; and
(iii) At least once more by phone or other means of contact in the
absence of a response to the mailings.
(3) Has not received a response or has received a written response
clearly indicating that the individual refuses to provide the needed
information. Should the applicable plan receive a written response from
the individual or their attorney or representative that clearly and
unambiguously declines or refuses to provide any portion of the
information specified herein, no additional communications with the
individual or their attorney or other representative are required.
(4) Has documented its efforts to obtain the MBI or SSN (or the last
5 digits of the SSN). This documentation, including any written
rejection correspondence, must be retained for a minimum of 5 years.
(B) An NGHP applicable plan complies with any reporting thresholds
or any other reporting exclusions.
(C) The incident of noncompliance is associated with a specific
reporting policy or procedural change on the part of CMS that has been
effective for less than 6 months following the implementation of that
policy or procedural change (or for 12 months, should CMS be unable to
provide a minimum of 6 months' notice prior to implementing such
changes).
(23) Section 1877(g)(5)--Any person that fails to report information
required by HHS under section 1877(f) concerning ownership, investment,
and compensation arrangements. (This violation may also include an
assessment and cause exclusion.)
(24) Sections 1879(h), 1834(a)(18), and 1842(j)(2)--
(i) Any durable medical equipment supplier, including a supplier of
prosthetic devices, prosthetics, orthotics,
[[Page 42]]
or supplies, that knowingly and willfully fails to make refunds in a
timely manner to Medicare beneficiaries for services billed on an
assignment-related basis if--
(A) The supplier did not possess a Medicare supplier number;
(B) The service is denied in advance under section 1834(a)(15) of
the Act; or
(C) The service is determined not to be payable under section
1834(a)(17)(b) because of unsolicited telephone contacts.
(ii) These violations may also include an assessment and cause
exclusion.
(25) Section 1882(a)(2)--Any person that issues a Medicare
supplemental policy that has not been approved by the State regulatory
program or does not meet Federal standards on and after the effective
date in section 1882(p)(1)(C). (This violation may also include an
assessment and cause exclusion.)
(26) Section 1882(p)(8)--Any person that sells or issues Medicare
supplemental policies, on or after July 30, 1992, that fail to conform
to the NAIC or Federal standards established under section 1882(p).
(This violation may also include an assessment and cause exclusion.)
(27) Section 1882(p)(9)(C)--
(i) Any person that sells a Medicare supplemental policy and--
(A) Fails to make available for sale the core group of basic
benefits when selling other Medicare supplemental policies with
additional benefits; or
(B) Fails to provide the individual, before the sale of the policy,
an outline of coverage describing the benefits provided by the policy.
(ii) These violations may also include an assessment and cause
exclusion.
(28) Section 1882(q)(5)(C)--
(i) Any person that fails to--
(A) Suspend a Medicare supplemental policy at the policyholder's
request, if the policyholder applies for and is determined eligible for
medical assistance, and the policyholder provides notice within 90 days
of the eligibility determination; or
(B) Automatically reinstate the policy as of the date of termination
of medical assistance if the policyholder loses eligibility for medical
assistance and the policyholder provides notice within 90 days of loss
of eligibility.
(ii) These violations may also include an assessment and cause
exclusion.
(29) Section 1882(r)(6)(A)--Any person that fails to provide refunds
or credits as required by section 1882(r)(1)(B). (This violation may
also include an assessment and cause exclusion.)
(30) Section 1882(s)(4)--
(i) Any issuer of a Medicare supplemental policy that--
(A) Does not waive any time periods applicable to preexisting
conditions, waiting periods, elimination periods, or probationary
periods if the time periods were already satisfied under a preceding
Medicare supplemental policy; or
(B) Denies a policy, conditions the issuance or effectiveness of the
policy, or discriminates in the pricing of the policy based on health
status or other criteria as specified in section 1882(s)(2)(A).
(ii) These violations may also include an assessment and cause
exclusion.
(31) Section 1882(t)(2)--
(i) Any issuer of a Medicare supplemental policy that--
(A) Fails substantially to provide medically necessary services to
enrollees seeking the services through the issuer's network of entities;
(B) Imposes premiums on enrollees in excess of the premiums approved
by the State;
(C) Acts to expel an enrollee for reasons other than nonpayment of
premiums; or
(D) Does not provide each enrollee at the time of enrollment with
the specific information provided in section 1882(t)(1)(E)(i) or fails
to obtain a written acknowledgment from the enrollee of receipt of the
information (as required by section 1882(t)(1)(E)(ii)).
(ii) These violations may also include an assessment and cause
exclusion.
(32) Sections 1834(k)(6) and 1842(j)(2)--Any person or entity who
knowingly and willfully bills or collects for any outpatient therapy
services or comprehensive outpatient rehabilitation services on other
than an assignment-related basis. (This violation may also include an
assessment and cause exclusion.)
[[Page 43]]
(33) Sections 1834(l)(6) and 1842(j)(2)--Any supplier of ambulance
services who knowingly and willfully bills or collects for any services
on other than an assignment-related basis. (This violation may also
include an assessment and cause exclusion.)
(34) Section 1806(b)(2)(B)--Any person who knowingly and willfully
fails to furnish a beneficiary with an itemized statement of items or
services within 30 days of the beneficiary's request.
(35) Section 1128G (b) (1) and (2)--Any applicable manufacturer or
applicable group purchasing organization that fails to timely,
accurately, or completely report a payment or other transfer of value or
an ownership or investment interest to CMS, as required under part 403,
subpart I, of this chapter.
(d) Assessments. CMS or OIG may impose assessments in addition to
civil money penalties for violations of the following statutory
sections:
(1) Section 1833: Paragraph (h)(5)(D).
(2) Section 1834: Paragraphs (a)(11)(A), (a)(18)(B), (b)(5)(C),
(c)(4)(C), (h)(3), (j)(4), (k)(6), and (l)(6).
(3) Section 1842: Paragraphs (k), (l)(3), (m)(3), and (n)(3).
(4) Section 1848: Paragraph (g)(1)(B).
(5) Section 1877: Paragraph (g)(5).
(6) Section 1879: Paragraph (h).
(7) Section 1882: Paragraphs (a)(2), (p)(8), (p)(9)(C), (q)(5)(C),
(r)(6)(A), (s)(3), and (t)(2).
(e) Exclusions. (1) CMS or OIG may exclude any person from
participation in the Medicare program on the basis of any of the
following violations of the statute:
(i) Section 1833: Paragraphs (h)(5)(D) and, in repeated cases,
(q)(2)(B).
(ii) Section 1834: Paragraphs (a)(11)(A), (a)(18)(B), (b)(5)(C),
(c)(4)(C), (h)(3), (j)(4), (k)(6), and (l)(6).
(iii) Section 1842: Paragraphs (b)(18)(B), (k), (l)(3), (m)(3),
(n)(3), and, in repeated cases, (p)(3)(B).
(iv) Section 1848: Paragraphs (g)(1)(B), (g)(3)(B), and, in repeated
cases, (g)(4)(B)(ii).
(v) Section 1877: Paragraph (g)(5).
(vi) Section 1879: Paragraph (h).
(vii) Section 1882: Paragraphs (a)(2), (p)(8), (p)(9)(C), (q)(5)(C),
(r)(6)(A), (s)(4), and (t)(2).
(2) CMS or OIG must exclude from participation in the Medicare
program any of the following, under the identified section of the Act:
(i) Section 1834(a)(17)(C)--Any supplier of durable medical
equipment and supplies that are covered under section 1834(a)(13) that
knowingly contacts Medicare beneficiaries by telephone regarding the
furnishing of covered services in violation of section 1834(a)(17)(A)
and whose conduct establishes a pattern of prohibited contacts as
described under section 1834(a)(17)(A).
(ii) Section 1834(h)(3)--Any supplier of prosthetic devices,
orthotics, and prosthetics that knowingly contacts Medicare
beneficiaries by telephone regarding the furnishing of prosthetic
devices, orthotics, or prosthetics in the same manner as in the
violation under section 1834(a)(17)(A) and whose conduct establishes a
pattern of prohibited contacts in the same manner as described in
section 1834(a)(17)(C).
(f) Responsible persons. (1) If CMS or OIG determines that more than
one person is responsible for any of the violations described in
paragraph (c) or paragraph (d) of this section, it may impose a civil
money penalty or a civil money penalty and assessment against any one of
those persons or jointly and severally against two or more of those
persons. However, the aggregate amount of the assessments collected may
not exceed the amount that could be assessed if only one person were
responsible.
(2) A principal is liable for penalties and assessments for the
actions of his or her agent acting within the scope of the agency.
(g) Time limits. Neither CMS nor OIG initiates an action to impose a
civil money penalty, assessment, or proceeding to exclude a person from
participation in the Medicare program unless it begins the action within
6 years from the date on which the claim was presented, the request for
payment was made, or the incident occurred.
[63 FR 68690, Dec. 14, 1998, as amended at 66 FR 49546, Sept. 28, 2001;
78 FR 9520, Feb. 8, 2013; 88 FR 70372, Oct. 11, 2023]
Sec. 402.3 Definitions.
For purposes of this part:
[[Page 44]]
Assessment means the amount described in Sec. 402.107 and includes
the plural of that term.
Assignment-related basis means that the claim submitted by a
physician, supplier or other person is paid on the basis of an
assignment, whereby the physician, supplier or other person agrees to
accept the Medicare payment as payment in full for the services
furnished to the beneficiary and is precluded from charging the
beneficiary more than the deductible and coinsurance based upon the
approved Medicare fee amount. Additional obligations, including
obligations to make refunds in certain circumstances, are established at
section 1842(b)(3) of the Act.
Claim means an application for payment for a service for which the
Medicare or Medicaid program may pay.
Covered means that a service is described as reasonable and
necessary for the diagnosis or treatment of illness or injury or to
improve the functioning of a malformed body member. A service is not
covered if it is specifically identified as excluded from Medicare Part
B coverage or is not a defined Medicare Part B benefit.
Exclusion means the temporary or permanent barring of a person or
other entity from participation in the Medicare or State health care
program and that services furnished or ordered by that person are not
paid for under either program.
General Counsel means the General Counsel of HHS or his or her
designees.
Initiating agency means whichever agency (CMS or the OIG) initiates
the interaction with the person.
Knowingly or knowingly and willfully means that a person, with
respect to information--
(1) Has actual knowledge of the information;
(2) Acts in deliberate ignorance of the truth or falsity of the
information; or
(3) Acts in reckless disregard of the truth or falsity of the
information; and
(4) No proof of specific intent is required.
Medicare supplemental policy means a policy guaranteeing that a
health plan will pay a policyholder's coinsurance and deductible and
will cover other limitations on payment imposed under title XVIII of the
Act and will provide additional health plan or non-Medicare coverage for
services up to a predefined benefit limit.
NAIC stands for the National Association of Insurance Commissioners.
Nonparticipating describes a physician, supplier, or other person
(excluding any provider of services) that, at the time of furnishing the
services to Medicare Part B beneficiaries, is not a participating
physician or supplier.
Participating describes a physician or supplier (excluding any
provider of services) that, before the beginning of any given year,
enters into an agreement with HHS that provides that the physician or
supplier will accept payment under the Medicare program on an
assignment-related basis for all services furnished to Medicare Part B
beneficiaries.
Penalty means the amount described in Sec. 402.105 and includes the
plural of that term.
Person means an individual, trust or estate, partnership,
corporation, professional association or corporation, or other entity,
public or private.
Physicians' services means the following Medicare covered
professional services:
(1) Surgery, consultation, home, office and institutional calls, and
other professional services performed by physicians.
(2) Services and supplies furnished ``incident to'' a physician's
professional services.
(3) Outpatient physical and occupational therapy services.
(4) Diagnostic x-ray tests and other diagnostic tests (excluding
clinical diagnostic laboratory tests).
(5) X-ray, radium, and radioactive isotope therapy, including
materials and services of technicians.
(6) Antigens prepared by a physician.
Radiologist service means radiology services performed only by, or
under the direction of, a physician who is certified, or eligible to be
certified, by the American Board of Radiology or for whom radiology
services account for at least 50 percent of the total amount of charges
made under part B of title XVIII of the Act.
Request for payment means an application submitted by a person to
any person for payment for a service.
[[Page 45]]
Respondent means the person upon which CMS or OIG has imposed, or
proposes to impose, a civil money penalty, assessment, or exclusion.
Service includes--
(1) Any item, device, medical supply, or service claimed to have
been furnished to a patient and listed in an itemized claim for program
payment; or
(2) In the case of a claim based on costs, any entry or omission in
a cost report, books of account or other documents supporting the claim.
State includes the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, the Northern Mariana Islands, and the
Trust Territory of the Pacific Islands.
Timely basis means that the adjustment to a bill or a refund is
considered ``on a timely basis'' if the physician, supplier, or other
person makes the adjustment or refund to the appropriate party no later
than 30 days after the date the physician, supplier, or other person is
notified by the Medicare Part B contractor of the violation and the
requirement to refund any excess collections.
[63 FR 68690, Dec. 14, 1998, as amended at 72 FR 39752, July 20, 2007]
Sec. 402.5 Right to a hearing before the final determination.
CMS or OIG does not make a determination adverse to any person under
this part until the person has been given a written notice and
opportunity for the determination to be made on the record after a
hearing at which the person is entitled to be represented by counsel, to
present witnesses, and to cross-examine witnesses against the person.
Sec. 402.7 Notice of proposed determination.
(a) If CMS or OIG proposes a penalty and, as applicable, an
assessment, or proposes to exclude a respondent from participation in
Medicare in accordance with this part, it sends the respondent written
notice of its intent by certified mail, return receipt requested. The
notice includes the following information:
(1) Reference to the statutory basis or bases for the penalty,
assessment, exclusion, or any combination, as applicable.
(2)(i) A description of the claims, requests for payment, or
incidents with respect to which the penalty, assessment, and exclusion
are proposed; or
(ii) If CMS or OIG is relying upon statistical sampling to project
the number and types of claims or requests for payment and the dollar
amount, a description of the claims and requests for payment comprising
the sample and a brief description of the statistical sampling technique
CMS or OIG used.
(3) The reason why the claims, requests for payment, or incidents
are subject to a penalty and assessment.
(4) The amount of the proposed penalty and of any proposed
assessment.
(5) Any mitigating or aggravating circumstances that CMS or OIG
considered when it determined the amount of the proposed penalty and any
applicable assessment.
(6) Information concerning response to the notice, including--
(i) A specific statement of the respondent's right to a hearing; and
(ii) A statement that failure to request a hearing within 60 days
renders the proposed determination final and permits the imposition of
the proposed penalty and any assessment.
(iii) A statement that the debt may be collected through an
administrative offset.
(7) In the case of a respondent that has an agreement under section
1866 of the Act, notice that imposition of an exclusion may result in
termination of the provider's agreement in accordance with section
1866(b)(2)(C) of the Act.
Sec. 402.9 Failure to request a hearing.
(a) If the respondent does not request a hearing within 60 days of
receipt of the notice of proposed determination specified in Sec.
402.7, any civil money penalty, assessment, or exclusion becomes final
and CMS or OIG may impose the proposed penalty, assessment, or
exclusion, or any less severe penalty, assessment, or suspension.
(b) CMS or OIG notifies the respondent by certified mail, return
receipt requested, of any penalty, assessment, or exclusion that has
been imposed and of the means by which the respondent may satisfy the
judgment.
[[Page 46]]
(c) The respondent has no right to appeal a penalty, assessment, or
exclusion for which he or she has not requested a hearing.
Sec. 402.11 Notice to other agencies and other entities.
(a) Whenever a penalty, assessment, or exclusion becomes final, CMS
or OIG notifies the following organizations and entities about the
action and the reasons for it:
(1) The appropriate State or local medical or professional
association.
(2) The appropriate quality improvement organization.
(3) As appropriate, the State agency responsible for the
administration of each State health care program (Medicaid, the Maternal
and Child Health Services Block Grant Program, and the Social Services
Block Grant Program).
(4) The appropriate Medicare carrier or fiscal intermediary.
(5) The appropriate State or local licensing agency or organization
(including the Medicare and Medicaid State survey agencies).
(6) The long-term care ombudsman.
(b) For exclusions, CMS or OIG also notifies the public and
specifies the effective date.
Sec. 402.13 Penalty, assessment, and exclusion not exclusive.
Penalties, assessments, and exclusions imposed under this part are
in addition to any other penalties prescribed by law.
Sec. 402.15 Collateral estoppel.
(a) When a final determination that the respondent presented or
caused to be presented a claim or request for payment falling within the
scope of Sec. 402.1 has been rendered in any proceeding in which the
respondent was a party and had an opportunity to be heard, the
respondent is bound by that determination in any proceeding under this
part.
(b) A person who has been convicted (whether upon a verdict after
trial or upon a plea of guilty or nolo contendere) of a Federal crime
charging fraud or false statements is barred from denying the essential
elements of the criminal offense if the proceedings under this part
involve the same transactions.
Sec. 402.17 Settlement.
CMS or OIG has exclusive authority to settle any issues or case,
without the consent of the ALJ or the Secretary, at any time before a
final decision by the Secretary. Thereafter, the General Counsel has the
exclusive authority.
Sec. 402.19 Hearings and appeals.
The hearings and appeals procedures set forth in part 1005 of
chapter V of this title are available to any person that receives an
adverse determination under this part. For an appeal of a civil money
penalty, assessment, or exclusion imposed under this part, either CMS or
OIG may represent the government in the hearing and appeals process.
Sec. 402.21 Judicial review.
After exhausting all available administrative remedies, a respondent
may seek judicial review of a penalty, assessment, or exclusion that has
become final. The respondent may seek review only with respect to a
penalty, assessment, or exclusion with respect to which the respondent
filed an exception under Sec. 1005.21(c) of this title unless the court
excuses the failure or neglect to urge the exception in accordance with
section 1128A(e) of the Act because of extraordinary circumstances.
Subpart B_Civil Money Penalties and Assessments
Sec. 402.105 Amount of penalty.
(a) $2,000. Except as provided in paragraphs (b) through (h) of this
section, CMS or OIG may impose a penalty of not more than $2,000 as
adjusted annually under 45 CFR part 102 for each service, bill, or
refusal to issue a timely refund that is subject to a determination
under this part and for each incident involving the knowing, willful,
and repeated failure of an entity furnishing a service to submit a
properly completed claim form or to include on the claim form accurate
information regarding the availability of other health insurance benefit
plans (Sec. 402.1(c)(21)).
[[Page 47]]
(b) $1,000. CMS or OIG may impose a penalty of not more than $1,000
as adjusted annually under 45 CFR part 102 for the following:
(1) Per certificate of medical necessity knowingly and willfully
distributed to physicians on or after December 31, 1994 that--
(i) Contains information concerning the medical condition of the
patient; or
(ii) Fails to include cost information.
(2) For entities with reporting obligations under section 1862(b)(7)
of the Act (``reporting entity''), if a reporting entity fails to report
any beneficiary record within the specified period from the latter of
the GHP coverage effective date or the Medicare beneficiary's
entitlement date. The penalty is--
(i) Calculated on a daily basis, based on the number of recently
added beneficiary records reviewed where CMS identifies that the entity
submitted the required information more than 1 year after the GHP
coverage effective date for the individual; and
(ii) $1,000 as adjusted annually under 45 CFR part 102 for each
calendar day starting the day after 1 year (365 days) from the first
instance of noncompliance, as defined in paragraph (b)(2)(i) of this
section.
(3) For entities with reporting obligations under section 1862(b)(8)
of the Act (``applicable plan'') as follows:
(i) If an applicable plan fails to report any NGHP beneficiary
record within the specified period from the date of the settlement,
judgment, award, or other payment (including the effective date of the
assumption of ongoing payment responsibility for medical care). The
penalty is--
(A) Calculated on a daily basis, based on the number of recently
added beneficiary records reviewed where CMS identifies that the entity
submitted the required information more than 1 year after the date of
settlement, judgment, award, or other payment (including the effective
date of the assumption of ongoing payment responsibility for medical
care);
(B) $250 (as adjusted annually under 45 CFR part 102) for each
calendar day of noncompliance as defined in paragraph (b)(3)(i)(A) of
this section for each individual for which the required information
should have been submitted, but was reported more than 1 year but less
than 2 years after the required reporting date;
(C) $500 (as adjusted annually under 45 CFR part 102) for each
calendar day of noncompliance as defined in paragraph (b)(3)(i)(A) of
this section for each individual for which the required information
should have been submitted, but was reported 2 years or more, but less
than 3 years, after the required reporting date; and
(D) $1,000 (as adjusted annually under 45 CFR part 102), for each
calendar day of noncompliance as defined in paragraph (b)(3)(i)(A) of
this section for each individual for which the required information
should have been submitted, but was reported 3 years or more after the
required reporting date.
(ii) The maximum penalty that may be imposed for noncompliance
associated with any one individual for which the required information
should have been submitted is $365,000 (as adjusted annually under 45
CFR part 102).
(c) $5,000. CMS or OIG may impose a penalty of not more than $5,000
as adjusted annually under 45 CFR part 102 for each violation resulting
from the following:
(1) The failure of a Medicare supplemental policy issuer, on a
replacement policy, to waive any time periods applicable to pre-existing
conditions, waiting periods, elimination periods, or probationary
periods that were satisfied under a preceding policy (Sec.
402.1(c)(29)); and
(2) Any issuer of any Medicare supplemental policy denying a policy,
conditioning the issuance or effectiveness of the policy, or
discriminating in the pricing of the policy based on health status or
other criteria as specified in section 1882(s)(2)(A). (Sec.
402.1(c)(29)).
(d) $10,000. (1) CMS or OIG may impose a penalty of not more than
$10,000 as adjusted annually under 45 CFR part 102 for each day that
reporting entity ownership arrangements is late (Sec. 402.1(c)(22)).
(2) CMS or OIG may impose a penalty of not more than $10,000 as
adjusted annually under 45 CFR part 102 for the following violations
that occur on or after January 1, 1997:
[[Page 48]]
(i) Knowingly and willfully, and on a repeated basis, billing for a
clinical diagnostic laboratory test, other than on an assignment-related
basis (Sec. 402.1(c)(1)).
(ii) By any durable medical equipment supplier, knowingly and
willfully charging for a covered service that is furnished on a rental
basis after the rental payments may no longer be made (except for
maintenance and servicing) as provided in section 1834(a)(7)(A) (Sec.
402.1(c)(4)).
(iii) By any durable medical equipment supplier, knowingly and
willfully, in violation of section 1834(a)(18)(A), failing to make a
refund to Medicare beneficiaries for a covered service for which payment
is precluded due to an unsolicited telephone contact from the supplier
(Sec. 402.1(c)(5)).
(iv) By any nonparticipating physician or supplier, knowingly and
willfully charging a Medicare beneficiary more than the limiting charge,
as specified in section 1834(b)(5)(B), for radiologist services (Sec.
402.1(c)(6)).
(v) By any nonparticipating physician or supplier, knowingly and
willfully charging a Medicare beneficiary more than the limiting charge,
as specified in section 1834(c)(3), for mammography screening (Sec.
402.1(c)(7)).
(vi) By any supplier of prosthetic devices, orthotics, and
prosthetics, knowingly and willfully charging for a covered prosthetic
device, orthotic, or prosthetic that is furnished on a rental basis
after the rental payment may no longer be made (except for maintenance
and servicing) (Sec. 401.2(c)(8)).
(vii) By any supplier of durable medical equipment, including a
supplier of prosthetic devices, prosthetics, orthotics, or supplies,
knowingly and willfully failing to make refunds in a timely manner to
Medicare beneficiaries for services billed other than on an assigned-
related basis if--
(A) The supplier does not possess a Medicare supplier number;
(B) The service is denied in advance; or
(C) The service is determined not to be medically necessary or
reasonable (Sec. 402.1(c)(10)).
(viii) Knowingly and willfully billing or collecting for any
services on other than an assignment-related basis for practitioners
specified in section 1842(b)(18)(B) (Sec. 402.1(c)(11)).
(ix) By any physician, knowingly and willfully presenting, or
causing to be presented, a claim or bill for an assistant at cataract
surgery performed on or after March 1, 1987 for which payment may not be
made because of section 1862(a)(15) (Sec. 402.1(c)(12)).
(x) By any nonparticipating physician who does not accept payment on
an assignment-related basis, knowingly and willfully failing to refund
on a timely basis any amounts collected for services that are not
reasonable or medically necessary or are of poor quality, in accordance
with section 1842(l)(1)(A) (Sec. 402.1(c)(13)).
(xi) By any nonparticipating physician, who does not accept payment
for an elective surgical procedure on an assignment-related basis and
whose charge is at least $500, knowingly and willfully failing to--
(A) Disclose the information required by section 1842(m)(1)
concerning charges and coinsurance amounts; and
(B) Refund on a timely basis any amount collected for the procedure
in excess of the charges recognized and approved by the Medicare program
(Sec. 402.1(c)(14)).
(xii) By any physician, in repeated cases, knowingly and willfully
billing one or more beneficiaries, for purchased diagnostic tests, any
amount other than the payment amount specified in section 1842(n)(1)(A)
or section 1842(n)(1)(B) (Sec. 402.1(c)(15)).
(xiii) By any nonparticipating physician, supplier, or other person
that furnishes physicians' services and does not accept payment on an
assignment-related basis--
(A) Knowingly and willfully billing or collecting in excess of the
limiting charge (as defined in section 1843(g)(2)) on a repeated basis;
or
(B) Failing to make an adjustment or refund on a timely basis as
required by section 1848(g)(1)(A)(iii) or (iv) (Sec. 402.1(c)(17)).
(xiv) Knowingly and willfully billing for State plan approved
physicians' services on other than an assignment-related basis for a
Medicare beneficiary who is also eligible for Medicaid (Sec.
402.1(c)(18)).
[[Page 49]]
(xv) By any supplier of durable medical equipment, including a
supplier of prosthetic devices, prosthetics, orthotics, or supplies,
knowingly and willfully failing to make refunds in a timely manner to
Medicare beneficiaries for services billed on an assignment-related
basis if--
(A) The supplier did not possess a Medicare supplier number;
(B) The service is denied in advance; or
(C) The service is determined not to be medically necessary or
reasonable (Sec. 402.1(c)(23)).
(3) CMS or OIG may impose a penalty of not more than $10,000 as
adjusted annually under 45 CFR part 102 for each violation, if a person
or entity knowingly and willfully bills or collects for outpatient
therapy or comprehensive rehabilitation services other than on an
assignment-related basis.
(4) CMS or OIG may impose a penalty of not more than $10,000 as
adjusted annually under 45 CFR part 102 for each violation, if a person
or entity knowingly and willfully bills or collects for outpatient
ambulance services other than on an assignment-related basis.
(5) CMS or OIG may impose a penalty of not more than $10,000 as
adjusted annually under 45 CFR part 102 for each failure of an
applicable manufacturer or an applicable group purchasing organization
to report timely, accurately, or completely a payment or other transfer
of value or an ownership or investment interest (Sec. 402.1(c)(34)).
The total penalty imposed with respect to failures to report in an
annual submission of information will not exceed $150,000 as annually
adjusted under 45 CFR part 102.
(e) $15,000. CMS or OIG may impose a penalty of not more than
$15,000 as adjusted annually under 45 CFR part 102 for if the seller of
a Medicare supplemental policy is not the issuer, for each violation
described in paragraphs (f)(2) and (f)(3) of this section (Sec. 402.1
(c)(25) and (c)(26)).
(f) $25,000. CMS or OIG may impose a penalty of not more than
$25,000 as adjusted annually under 45 CFR part 102 for each of the
following violations:
(1) Issuance of a Medicare supplemental policy that has not been
approved by an approved State regulatory program or does not meet
Federal standards on and after the effective date in section
1882(p)(1)(C) of the Act (Sec. 402.1(c)(23)).
(2) Sale or issuance after July 30, 1992, of a Medicare supplemental
policy that fails to conform with the NAIC or Federal standards
established under section 1882(p) of the Act (Sec. 402.1(c)(25)).
(3) Failure to make the core group of basic benefits available for
sale when selling other Medicare supplemental plans with additional
benefits (Sec. 402.1(c)(26)).
(4) Failure to provide, before sale of a Medicare supplemental
policy, an outline of coverage describing the benefits provided by the
policy (Sec. 402.1(c)(26)).
(5) Failure of an issuer of a policy to suspend or reinstate a
policy, based on the policy holder's request, during entitlement to or
upon loss of eligibility for medical assistance (Sec. 402.1(c)(27)).
(6) Failure to provide refunds or credits for Medicare supplemental
policies as required by section 1882(r)(1)(B) (Sec. 402.1(c)(28)).
(7) By an issuer of a Medicare supplemental policy--
(i) Substantial failure to provide medically necessary services to
enrollees seeking the services through the issuer's network of entities;
(ii) Imposition of premiums on enrollees in excess of the premiums
approved by the State;
(iii) Action to expel an enrollee for reasons other than nonpayment
of premiums; or
(iv) Failure to provide each enrollee, at the time of enrollment,
with the specific information provided in section 1882(t)(1)(E)(i) or
failure to obtain a written acknowledgment from the enrollee of receipt
of the information (as required by section 1882(t)(1)(E)(ii)) (section
1882(t)(2)).
(g) $100. CMS or OIG may impose a penalty of not more than $100 as
adjusted annually under 45 CFR part 102 for each violation if the person
or entity does not furnish an itemized statement to a Medicare
beneficiary within 30 days of the beneficiary's request.
(h) $100,000. CMS or OIG may impose a penalty of not more than
$10,000 as adjusted annually under 45 CFR part 102 for each knowing
failure of an applicable manufacturer or an applicable
[[Page 50]]
group purchasing organization to report timely, accurately or completely
a payment or other transfer of value or an ownership or investment
interest (Sec. 402.1(c)(34)). The total penalty imposed with respect to
knowing failures to report in an annual submission of information will
not exceed $1,000,000 as annually adjusted under 45 CFR part 102.
[63 FR 68690, Dec. 14, 1998, as amended at 66 FR 49546, Sept. 28, 2001;
72 FR 39752, July 20, 2007; 72 FR 46175, Aug. 17, 2007; 78 FR 9520, Feb.
8, 2013; 81 FR 61561, Sept. 6, 2016; 88 FR 70372, Oct. 11, 2023]
Sec. 402.107 Amount of assessment.
A person subject to civil money penalties specified in Sec.
402.1(c) may be subject, in addition, to an assessment. An assessment is
a monetary payment in lieu of damages sustained by HHS or a State
agency.
(a) The assessment may not be more than twice the amount claimed for
each service that was a basis for the civil money penalty, except for
the violations specified in paragraph (b) of this section that occur
before January 1, 1997.
(b) For the violations specified in this paragraph occurring after
January 1, 1997, the assessment may not be more than three times the
amount claimed for each service that was the basis for a civil money
penalty. The violations are the following:
(1) Knowingly and willfully billing, and on a repeated basis, for a
clinical diagnostic laboratory test, other than on an assignment-related
basis (Sec. 402.1(c)(1)).
(2) By any durable medical equipment supplier, knowingly and
willfully charging for a covered service that is furnished on a rental
basis after the rental payments may no longer be made (except for
maintenance and servicing) as provided in section 1834(a)(7)(A) (Sec.
402.1(c)(4)).
(3) By any durable medical equipment supplier, knowingly and
willfully failing, in violation of section 1834(a)(18)(A), to make a
refund to Medicare beneficiaries for a covered service for which payment
is precluded due to an unsolicited telephone contact from the supplier
(Sec. 402.1(c)(5)).
(4) By any nonparticipating physician or supplier, knowingly and
willfully charging a Medicare beneficiary more than the limiting charge,
as specified in section 1834(b)(5)(B), for radiologist services (Sec.
402.1(c)(6)).
(5) By any nonparticipating physician or supplier, knowingly and
willfully charging a Medicare beneficiary more than the limiting charge
as specified in section 1834(c)(3), for mammography screening (Sec.
402.1(c)(7)).
(6) By any supplier of prosthetic devices, orthotics, and
prosthetics, knowingly and willfully charging for a covered prosthetic
device, orthotic, or prosthetic that is furnished on a rental basis
after the rental payment may no longer be made (except for maintenance
and servicing) (Sec. 401.2(c)(8)).
(7) By any supplier of durable medical equipment, including a
supplier of prosthetic devices, prosthetics, orthotics, or supplies,
knowingly and willfully failing to make refunds in a timely manner to
Medicare beneficiaries for services billed other than on an assignment-
related basis if--
(i) The supplier does not possess a Medicare supplier number;
(ii) The service is denied in advance; or
(iii) The service is determined not to be medically necessary or
reasonable (Sec. 402.1(c)(10)).
(8) Knowingly and willfully billing or collecting for any services
on other than an assignment-related basis for a person or entity
specified in sections 1834(k)(6), 1834(l)(6), or 1842(b)(18)(B) (Sec.
402.1(c)(11), (c)(31), or (c)(32)).
(9) By any physician, knowingly and willfully presenting, or causing
to be presented, a claim or bill for an assistant at cataract surgery
performed on or after March 1, 1987 for which payment may not be made
because of section 1862(a)(15) (Sec. 402.1(c)(12)).
(10) By any nonparticipating physician who does not accept payment
on an assignment-related basis, knowingly and willfully failing to
refund on a timely basis any amounts collected for services that are not
reasonable or medically necessary or are of poor quality, in accordance
with section 1842(l)(1)(A) (Sec. 402.1(c)(13)).
(11) By any nonparticipating physician, who does not accept payment
for
[[Page 51]]
an elective surgical procedure on an assignment-related basis and whose
charge is at least $500, knowingly and willfully failing to--
(i) Disclose the information required by section 1842(m)(1)
concerning charges and coinsurance amounts; and
(ii) Refund on a timely basis any amount collected for the procedure
in excess of the charges recognized and approved by the Medicare program
(Sec. 402.1(c)(14)).
(12) By any physician, in repeated cases, knowingly and willfully
billing one or more beneficiaries, for purchased diagnostic tests, any
amount other than the payment amount specified in section 1842(n)(1)(A)
or section 1842(n)(1)(B) (Sec. 402.1(c)(15)).
(13) By any nonparticipating physician, supplier, or other person
that furnishes physicians' services and does not accept payment on an
assignment-related basis--
(i) Knowingly and willfully billing or collecting in excess of the
limiting charge (as defined in section 1843(g)(2)) on a repeated basis;
or
(ii) Failing to make an adjustment or refund on a timely basis as
required by section 1848(g)(1)(A) (iii) or (iv) (Sec. 402.1(c)(17)).
(14) Knowingly and willfully billing for State plan approved
physicians' services on other than an assignment-related basis for a
Medicare beneficiary who is also eligible for Medicaid (Sec.
402.1(c)(18)).
(15) By any supplier of durable medical equipment, including
suppliers of prosthetic devices, prosthetics, orthotics, or supplies,
knowingly and willfully failing to make refunds in a timely manner to
Medicare beneficiaries for services billed on an assignment-related
basis if--
(i) The supplier did not possess a Medicare supplier number;
(ii) The service is denied in advance; or
(iii) The service is determined not to be medically necessary or
reasonable (Sec. 402.1(c)(23)).
[63 FR 68690, Dec. 14, 1998, as amended at 66 FR 49546, Sept. 28, 2001]
Sec. 402.109 Statistical sampling.
(a) Purpose. CMS or OIG may introduce the results of a statistical
sampling study to show the number and amount of claims subject to
sanction under this part that the respondent presented or caused to be
presented.
(b) Prima facie evidence. The results of the statistical sampling
study, if based upon an appropriate sampling and computed by valid
statistical methods, constitute prima facie evidence of the number and
amount of claims or requests for payment subject to sanction under Sec.
402.1.
(c) Burden of proof. Once CMS or OIG has made a prima facie case,
the burden is on the respondent to produce evidence reasonably
calculated to rebut the findings of the statistical sampling study. CMS
or OIG then has the opportunity to rebut this evidence.
Sec. 402.111 Factors considered in determinations regarding
the amount of penalties and assessments.
(a) Basic factors. In determining the amount of any penalty or
assessment, CMS or OIG takes into account the following:
(1) The nature of the claim, request for payment, or information
given and the circumstances under which it was presented or given.
(2) The degree of culpability, history of prior offenses, and
financial condition of the person submitting the claim or request for
payment or giving the information.
(3) The resources available to the person submitting the claim or
request for payment or giving the information.
(4) Such other matters as justice may require.
(b) Criteria to be considered. As guidelines for taking into account
the factors listed in paragraph (a) of this section, CMS or OIG
considers the following circumstances:
(1) Aggravating circumstances of the incident. An aggravating
circumstance is any of the following:
(i) The services or incidents were of several types, occurring over
a lengthy period of time.
(ii) There were many of these services or incidents or the nature
and circumstances indicate a pattern of claims or requests for payment
for these services or a pattern of incidents.
[[Page 52]]
(iii) The amount claimed or requested for these services was
substantial.
(iv) Before the incident or presentation of any claim or request for
payment subject to imposition of a civil money penalty, the respondent
was held liable for criminal, civil, or administrative sanctions in
connection with a program covered by this part or any other public or
private program of payment for medical services.
(v) There is proof that a respondent engaged in wrongful conduct,
other than the specific conduct upon which liability is based, relating
to government programs or in connection with the delivery of a health
care service. (The statute of limitations governing civil money penalty
proceedings does not apply to proof of other wrongful conduct as an
aggravating circumstance.)
(2) Mitigating circumstances. The following circumstances are
mitigating circumstances:
(i) All the services or incidents subject to a civil money penalty
were few in number and of the same type, occurred within a short period
of time, and the total amount claimed or requested for the services was
less than $1,000.
(ii) The claim or request for payment for the service was the result
of an unintentional and unrecognized error in the process of presenting
claims or requesting payment and the respondent took corrective steps
promptly after discovering the error.
(iii) Imposition of the penalty or assessment without reduction
would jeopardize the ability of the respondent to continue as a health
care provider.
(3) Other matters as justice may require. Other circumstances of an
aggravating or mitigating nature are taken into account if, in the
interests of justice, they require either a reduction of the penalty or
assessment or an increase in order to ensure the achievement of the
purposes of this part.
(c) Effect of aggravating or mitigating circumstances. In
determining the amount of the penalty and assessment to be imposed for
every service or incident subject to a determination under Sec.
402.1(c)--
(1) If there are substantial or several mitigating circumstances,
the aggregate amount of the penalty and assessment is set at an amount
sufficiently below the maximum permitted by Sec. Sec. 402.105(a) and
402.107 to reflect that fact.
(2) If there are substantial or several aggravating circumstances,
the aggregate amount of the penalty and assessment is set at an amount
at or sufficiently close to the maximum permitted by Sec. Sec.
402.105(a) and 402.107 to reflect that fact.
(d)(1) The standards set forth in this section are binding, except
to the extent that their application would result in imposition of an
amount that would exceed limits imposed by the United States
Constitution.
(2) The amount imposed is not less than the approximate amount
required to fully compensate the United States, or any State, for its
damages and costs, tangible and intangible, including but not limited to
the costs attributable to the investigation, prosecution, and
administrative review of the case.
(3) Nothing in this section limits the authority of CMS or OIG to
settle any issue or case as provided by Sec. 402.19 or to compromise
any penalty and assessment as provided by Sec. 402.115.
Sec. 402.113 When a penalty and assessment are collectible.
A civil money penalty and assessment become collectible after the
earliest of the following:
(a) Sixty days after the respondent receives CMS's or OIG's notice
of proposed determination under Sec. 402.7, if the respondent has not
requested a hearing before an ALJ.
(b) Immediately after the respondent abandons or waives his or her
appeal right at any administrative level.
(c) Thirty days after the respondent receives the ALJ's decision
imposing a civil money penalty or assessment under Sec. 1005.20(d) of
this title, if the respondent has not requested a review before the DAB.
(d) If the DAB grants an extension of the period for requesting the
DAB's review, the day after the extension expires if the respondent has
not requested the review.
[[Page 53]]
(e) Immediately after the ALJ's decision denying a request for a
stay of the effective date under Sec. 1005.22(b) of this title.
(f) If the ALJ grants a stay under Sec. 1005.22(b) of this title,
immediately after the judicial ruling is completed.
(g) Sixty days after the respondent receives the DAB's decision
imposing a civil money penalty if the respondent has not requested a
stay of the decision under Sec. 1005.22(b) of this title.
Sec. 402.115 Collection of penalty or assessment.
(a) Once a determination by HHS has become final, CMS is responsible
for the collection of any penalty or assessment.
(b) The General Counsel may compromise a penalty or assessment
imposed under this part, after consultation with CMS or OIG, and the
Federal government may recover the penalty or assessment in a civil
action brought in the United States district court for the district
where the claim was presented or where the respondent resides.
(c) The United States or a State agency may deduct the amount of a
penalty and assessment when finally determined, or the amount agreed
upon in compromise, from any sum then or later owing to the respondent.
(d) Matters that were raised or that could have been raised in a
hearing before an ALJ or in an appeal under section 1128A(e) of the Act
may not be raised as a defense in a civil action by the United States to
collect a penalty under this part.
Subpart C_Exclusions
Source: 72 FR 39752, July 20, 2007, unless otherwise noted.
Sec. 402.200 Basis and purpose.
(a) Basis. This subpart is based on the sections of the Act that are
specified in Sec. 402.1(e).
(b) Purpose. This subpart--
(1) Provides for the imposition of an exclusion from the Medicare
and Medicaid programs (and, where applicable, other Federal health care
programs) against persons that violate the provisions of the Act
provided in Sec. 402.1(e) (and further described in Sec. 402.1(c));
and
(2) Sets forth the appeal rights of persons subject to exclusion and
the procedures for reinstatement following exclusion.
Sec. 402.205 Length of exclusion.
The length of exclusion from participation in Medicare, Medicaid,
and, where applicable, other Federal health care programs, is contingent
upon the specific violation of the Medicare statute. A full description
of the specific violations identified in the sections of the Act are
cross-referenced in the regulatory sections listed in the table in
paragraph (a) of this section.
(a) In no event will the period of exclusion exceed 5 years for
violation of the following sections of the Act:
------------------------------------------------------------------------
Code of Federal Regulations
Social Security Act paragraph section
------------------------------------------------------------------------
1833(h)(5)(D) in repeated cases........ Sec. 402.1(c)(1)
1833(q)(2)(B) in repeated cases........ Sec. 402.1(c)(3)
1834(a)(11)(A)......................... Sec. 402.1(c)(4)
1834(a)(18)(B)......................... Sec. 402.1(c)(5)
1834(b)(5)(C).......................... Sec. 402.1(c)(6)
1834(c)(4)(C).......................... Sec. 402.1(c)(7)
1834(h)(3)............................. Sec. 402.1(c)(8)
1834(j)(4)............................. Sec. 402.1(c)(10)
1834(k)(6)............................. Sec. 402.1(c)(31)
1834(l)(6)............................. Sec. 402.1(c)(32)
1842(b)(18)(B)......................... Sec. 402.1(c)(11)
1842(k)................................ Sec. 402.1(c)(12)
1842(l)(3)............................. Sec. 402.1(c)(13)
1842(m)(3)............................. Sec. 402.1(c)(14)
1842(n)(3)............................. Sec. 402.1(c)(15)
1842(p)(3)(B) in repeated cases........ Sec. 402.1(c)(16)
1848(g)(1)(B) in repeated cases........ Sec. 402.1(c)(17)
1848(g)(3)(B).......................... Sec. 402.1(c)(18)
1848(g)(4)(B)(ii) in repeated cases.... Sec. 402.1(c)(19)
1879(h)................................ Sec. 402.1(c)(23)
------------------------------------------------------------------------
(b) For violation of the following sections, there is no maximum
time limit for the period of exclusion.
------------------------------------------------------------------------
Code of Federal Regulations
Social Security Act paragraph section
------------------------------------------------------------------------
1834(a)(17)(c) for a pattern of Sec. 402.1(e)(2)(i)
contacts.
1834(h)(3) for a pattern of contacts... Sec. 402.1(e)(2)(ii)
1877(g)(5)............................. Sec. 402.1(c)(22)
1882(a)(2)............................. Sec. 402.1(c)(24)
1882(p)(8)............................. Sec. 402.1(c)(25)
1882(p)(9)(C).......................... Sec. 402.1(c)(26)
1882(q)(5)(C).......................... Sec. 402.1(c)(27)
1882(r)(6)(A).......................... Sec. 402.1(c)(28)
1882(s)(4)............................. Sec. 402.1(c)(29)
1882(t)(2)............................. Sec. 402.1(c)(30)
------------------------------------------------------------------------
(c) For a person excluded under any of the grounds specified in
paragraph (a) of this section, notwithstanding any
[[Page 54]]
other requirements in this section, reinstatement occurs--
(1) At the expiration of the period of exclusion, if the exclusion
was imposed for a period of 5 years; or
(2) At the expiration of 5 years from the effective date of the
exclusion, if the exclusion was imposed for a period of less than 5
years and the initiating agency did not receive the appropriate written
request for reinstatement as specified in Sec. 402.300.
Sec. 402.208 Factors considered in determining whether to exclude,
and the length of exclusion.
(a) General factors. In determining whether to exclude a person and
the length of exclusion, the initiating agency considers the following:
(1) The nature of the claims and the circumstances under which they
were presented.
(2) The degree of culpability, the history of prior offenses, and
the financial condition of the person presenting the claims.
(3) The total number of acts in which the violation occurred.
(4) The dollar amount at issue (Medicare Trust Fund dollars or
beneficiary out-of-pocket expenses).
(5) The prior history of the person insofar as its willingness or
refusal to comply with requests to correct said violations.
(6) Any other facts bearing on the nature and seriousness of the
person's misconduct.
(7) Any other matters that justice may require.
(b) Criteria to be considered. As a guideline for taking into
account the general factors listed in paragraph (a) of this section, the
initiating agency may consider any one or more of the circumstances
listed in paragraphs (b)(1) and (b)(2) of this section, as applicable.
The respondent, in his or her written response to the notice of intent
to exclude (that is, the proposed exclusion), may provide information
concerning potential mitigating circumstances.
(1) Aggravating circumstances. An aggravating circumstance may be
any of the following:
(i) The services or incidents were of several types and occurred
over an extended period of time.
(ii) There were numerous services or incidents, or the nature and
circumstances indicate a pattern of claims or requests for payment or a
pattern of incidents, or whether a specific segment of the population
was targeted.
(iii) Whether the person was held liable for criminal, civil, or
administrative sanctions in connection with a program covered by this
part or any other public or private program of payment for health care
items or services at any time before the incident or whether the person
presented any claim or made any request for payment that included an
item or service subject to a determination under Sec. 402.1.
(iv) There is proof that the person engaged in wrongful conduct,
other than the specific conduct upon which liability is based, relating
to government programs and in connection with the delivery of a health
care item or service. The statute of limitations governing civil money
penalty proceedings at section 1128A(c)(1) of the Act does not apply to
proof of other wrongful conducts as an aggravating circumstance.
(v) The wrongful conduct had an adverse impact on the financial
integrity of the Medicare program or its beneficiaries.
(vi) The person was the subject of an adverse action by any other
Federal, State, or local government agency or board, and the adverse
action is based on the same set of circumstances that serves as a basis
for the imposition of the exclusion.
(vii) The noncompliance resulted in a financial loss to the Medicare
program of at least $5,000.
(viii) The number of instances for which full, accurate, and
complete disclosure was not made as required, or provided as requested,
and the significance of the undisclosed information.
(2) Mitigating circumstances. A mitigating circumstance may be any
of the following:
(i) All incidents of noncompliance were few in nature and of the
same type, occurred within a short period of time, and the total amount
claimed or
[[Page 55]]
requested for the items or services provided was less than $1,500.
(ii) The claim(s) or request(s) for payment for the item(s) or
service(s) provided by the person were the result of an unintentional
and unrecognized error in the person's process for presenting claims or
requesting payment, and the person took corrective steps promptly after
the error was discovered.
(iii) Previous cooperation with a law enforcement or regulatory
entity resulted in convictions, exclusions, investigations, reports for
weaknesses, or civil money penalties against other persons.
(iv) Alternative sources of the type of health care items or
services furnished by the person are not available to the Medicare
population in the person's immediate area.
(v) The person took corrective action promptly upon learning of the
noncompliance from the person's employee or contractor, or by the
Medicare contractor.
(vi) The person had a documented mental, emotional, or physical
condition before or during the commission of the noncompliant act(s) and
that condition reduces the person's culpability for the acts in
question.
(vii) The completeness and timeliness of refunding to the Medicare
Trust Fund or Medicare beneficiaries any inappropriate payments.
(viii) The degree of culpability of the person in failing to provide
timely and complete refunds.
(3) Other matters as justice may require. Other circumstances of an
aggravating or mitigating nature are taken into account if, in the
interest of justice, those circumstances require either a reduction or
increase in the sanction to ensure achievement for the purposes of this
subpart.
(4) Initiating agency authority. Nothing in this section limits the
authority of the initiating agency to settle any issue or case as
provided by Sec. 402.17, or to compromise any penalty and assessment as
provided by Sec. 402.115.
Sec. 402.209 Scope and effect of exclusion.
(a) Scope of exclusion. Under this title, persons may be excluded
from the Medicare, Medicaid, and, where applicable, any other Federal
health care programs.
(b) Effect of exclusion on a person(s). (1) Unless and until an
excluded person is reinstated into the Medicare program, no payment is
made by Medicare, Medicaid, and, where applicable, any other Federal
health care programs for any item or service furnished by the excluded
person or at the direction or request of the excluded person when the
person furnishing the item or service knew or had reason to know of the
exclusion, on or after the effective date of the exclusion as specified
in the notice of exclusion.
(2) An excluded person may not take assignment of a Medicare
beneficiary's claim on or after the effective date of the exclusion.
(3) An excluded person that submits, or causes to be submitted,
claims for items or services furnished during the exclusion period is
subject to civil money penalty liability under section 1128A(a)(1)(D) of
the Act, and criminal liability under section 1128B(a)(3) of the Act. In
addition, submission of claims, or the causing of claims to be submitted
for items or services furnished, ordered, or prescribed, by an excluded
person may serve as the basis for denying reinstatement to the Medicare
program.
(c) Exceptions. (1) If a Medicare beneficiary or other person
(including a supplier) submits an otherwise payable claim for items or
services furnished by an excluded person, or under the medical direction
or on the request of an excluded person after the effective date of the
exclusion, CMS pays the first claim submitted by the beneficiary or
other person and immediately notifies the claimant of the exclusion. CMS
does not pay a beneficiary or other person (including a supplier) for
items or services furnished by, or under, the medical direction of an
excluded person more than 15 days after the date on the notice to the
beneficiary or other person (including a supplier), or after the
effective date of the exclusion, whichever is later.
(2) Notwithstanding the other provisions of this section, payment
may be made for certain emergency items or services furnished by an
excluded person, or under the medical direction or
[[Page 56]]
on the request of an excluded person during the period of exclusion. To
be payable, a claim for the emergency items or services must be
accompanied by a sworn statement of the person furnishing the items or
services, specifying the nature of the emergency and the reason that the
items or services were not furnished by a person eligible to furnish or
order the items or services. No claim for emergency items or services is
payable if those items or services were provided by an excluded person
that, through employment, contractual, or under any other arrangement,
routinely provides emergency health care items or services.
Sec. 402.210 Notices.
(a) Notice of proposed determination to exclude. When the initiating
agency proposes to exclude a person from participation in a Federal
health care program in accordance with this part, notice of the proposed
determination to exclude must be given in writing, and delivered or sent
by certified mail, return receipt requested. The written notice must
include, at a minimum--
(1) Reference to the statutory basis for the exclusion.
(2) A description of the claims, requests for payment, or incidents
for which the exclusion is proposed.
(3) The reason why those claims, requests for payments, or incidents
subject the person to an exclusion.
(4) The length of the proposed exclusion.
(5) A description of the circumstances that were considered when
determining the period of exclusion.
(6) Instructions for responding to the notice, including a specific
statement of the person's right to submit documentary evidence and a
written response concerning whether the exclusion is warranted, and any
related issues such as potential mitigating circumstances. The notice
must specify that--
(i) The person has the right to request an opportunity to meet with
an official of the initiating agency to make an oral presentation; and
(ii) The request to make an oral presentation must be submitted
within 30 days of the receipt of the notice of intent to exclude.
(7) If a person fails, within the time permitted under Sec.
402.212, to exercise the right to respond to the notice of proposed
determination to exclude, the initiating agency may initiate actions for
the imposition of the exclusion.
(b) Notice of exclusion. Once the initiating agency determines that
the exclusion is warranted, a written notice of exclusion is sent to the
person in the same manner as described in paragraph (a) of this section.
The exclusion is effective 20 days from the date of the notice. The
written notice must include, at a minimum, the following:
(1) The basis for the exclusion.
(2) The length of the exclusion and, when applicable, the factors
considered in setting the length.
(3) The effect of exclusion.
(4) The earliest date on which the initiating agency considers a
request for reinstatement.
(5) The requirements and procedures for reinstatement.
(6) The appeal rights available to the excluded person under part
1005 of this title.
(c) Amendment to the notice of exclusion. No later than 15 days
before the final exhibit exchanges required under Sec. 1005.8 of this
title, the initiating agency may amend the notice of exclusion if
information becomes available that justifies the imposition of a period
of exclusion other than the one proposed in the original written notice.
Sec. 402.212 Response to notice of proposed determination to exclude.
(a) A person that receives a notice of intent to exclude (that is,
the proposed determination) as described in Sec. 402.210, may present
to the initiating agency a written response stating whether the proposed
exclusion is warranted, and may present additional supportive
documentation. The person must submit this response within 60 days of
the receipt of notice. The initiating agency reviews the materials
presented and initiates a response to the person regarding the argument
presented, and any changes to the determination, if appropriate.
(b) The person is also afforded an opportunity to make an oral
presentation to the initiating agency concerning
[[Page 57]]
whether the proposed exclusion is warranted and any related matters. The
person must submit this request within 30 days of the receipt of notice.
Within 15 days of receipt of the person's request, the initiating agency
initiates communication with the person to establish a mutually agreed
upon time and place for the oral presentation and discussion.
Sec. 402.214 Appeal of exclusion.
(a) The procedures in part 1005 of this title apply to all appeals
of exclusions. References to the Inspector General in that part apply to
the initiating agency.
(b) A person excluded under this subpart may file a request for a
hearing before an administrative law judge (ALJ) only on the issues of
whether--
(1) The basis for the imposition of the exclusion exists; and
(2) The duration of the exclusion is unreasonable.
(c) When the initiating agency imposes an exclusion for a period of
1 year or less, paragraph (b)(2) of this section does not apply.
(d) The excluded person must file a request for a hearing within 60
days from the receipt of notice of exclusion. The effective date of an
exclusion is not delayed beyond the date stated in the notice of
exclusion simply because a request for a hearing is timely filed (see
paragraph (g) of this section).
(e) A timely filed written request for a hearing must include--
(1) A statement as to the specific issues or findings of fact and
conclusions of law in the notice of exclusion with which the person
disagrees.
(2) Basis for the disagreement.
(3) The general basis for the defenses that the person intends to
assert.
(4) Reasons why the proposed length of exclusion should be modified.
(5) Reasons, if applicable, why the health or safety of Medicare
beneficiaries receiving items or services does not warrant the exclusion
going into or remaining in effect before the completion of an ALJ
proceeding in accordance with part 1005 of this title.
(f) If the excluded person does not file a written request for a
hearing as provided in paragraph (d) of this section, the initiating
agency notifies the excluded person, by certified mail, return receipt
requested, that the exclusion goes into effect or continues in
accordance with the notice of exclusion. The excluded person has no
right to appeal the exclusion other than as described in this section.
(g) If the excluded person files a written request for a hearing,
and asserts in the request that the health or safety of Medicare
beneficiaries does not warrant the exclusion going into or remaining in
effect before completion of an ALJ hearing, then the initiating agency
may make a determination as to whether the exclusion goes into effect or
continues pending the outcome of the ALJ hearing.
Sec. 402.300 Request for reinstatement.
(a) An excluded person may submit a written request for
reinstatement to the initiating agency no sooner than 120 days prior to
the terminal date of exclusion as specified in the notice of exclusion.
The written request for reinstatement must include documentation
demonstrating that the person has met the standards set forth in Sec.
402.302. Obtaining or reactivating a Medicare provider number (or
equivalent) does not constitute reinstatement.
(b) Upon receipt of a written request for reinstatement, the
initiating agency may require the person to furnish additional, specific
information, and authorization to obtain information from private health
insurers, peer review organizations, and others as necessary to
determine whether reinstatement is granted.
(c) Failure to submit a written request for reinstatement or to
furnish the required information or authorization results in the
continuation of the exclusion, unless the exclusion has been in effect
for 5 years. In this case, reinstatement is automatic.
(d) If a period of exclusion is reduced on appeal (regardless of
whether further appeal is pending), the excluded person may request and
apply for reinstatement within 120 days of the expiration of the reduced
exclusion period. A written request for the reinstatement includes the
same standards as noted in paragraph (b) of this section.
[[Page 58]]
Sec. 402.302 Basis for reinstatement.
(a) The initiating agency authorizes reinstatement if it determines
that--
(1) The period of exclusion has expired;
(2) There are reasonable assurances that the types of actions that
formed the basis for the original exclusion did not recur and will not
recur; and
(3) There is no additional basis under title XVIII of the Act that
justifies the continuation of the exclusion.
(b) The initiating agency does not authorize reinstatement if it
determines that submitting claims or causing claims to be submitted or
payments to be made by the Medicare program for items or services
furnished, ordered, or prescribed, may serve as a basis for denying
reinstatement. This section applies regardless of whether the excluded
person has obtained a Medicare provider number (or equivalent), either
as an individual or as a member of a group, before being reinstated.
(c) In making a determination regarding reinstatement, the
initiating agency considers the following:
(1) Conduct of the excluded person occurring before the date of the
notice of the exclusion, if that conduct was not known to the initiating
agency at the time of the exclusion;
(2) Conduct of the excluded person after the date of the exclusion;
(3) Whether all fines and all debts due and owing (including
overpayments) to any Federal, State, or local government that relate to
Medicare, Medicaid, or, where applicable, any Federal, State, or local
health care program are paid in full, or satisfactory arrangements are
made to fulfill these obligations;
(4) Whether the excluded person complies with, or has made
satisfactory arrangements to fulfill, all of the applicable conditions
of participation or conditions of coverage under the Medicare statutes
and regulations; and
(5) Whether the excluded person has, during the period of exclusion,
submitted claims, or caused claims to be submitted or payment to be made
by Medicare, Medicaid, and, where applicable, any other Federal health
care program, for items or services furnished, ordered, or prescribed,
and the conditions under which these actions occurred.
(d) Reinstatement is not effective until the initiating agency
grants the request and provides notices under Sec. 402.304.
Reinstatement is effective as provided in the notice.
(e) A determination for a denial of reinstatement is not appealable
or reviewable except as provided in Sec. 402.306.
(f) An ALJ may not require reinstatement of an excluded person in
accordance with this chapter.
Sec. 402.304 Approval of request for reinstatement.
(a) If the initiating agency grants a request for reinstatement, the
initiating agency--
(1) Gives written notice to the excluded person specifying the date
of reinstatement; and
(2) Notifies appropriate Federal and State agencies, and, to the
extent possible, all others that were originally notified of the
exclusion, that the person is reinstated into the Medicare program.
(b) A determination by the initiating agency to reinstate an
excluded person has no effect if Medicare, Medicaid, or, where
applicable, any other Federal health care program has imposed a longer
period of exclusion under its own authorities.
Sec. 402.306 Denial of request for reinstatement.
(a) If a request for reinstatement is denied, the initiating agency
provides written notice to the excluded person. Within 30 days of the
date of this notice, the excluded person may submit to the initiating
agency:
(1) Documentary evidence and a written argument challenging the
reinstatement denial; or
(2) A written request to present written evidence or oral argument
to an official of the initiating agency.
(b) If a written request as described in paragraph (a)(2) of this
section is received timely by the initiating agency, the initiating
agency, within 15 days of receipt of the excluded person's request,
initiates communication with the excluded person to establish a time and
place for the requested meeting.
[[Page 59]]
(c) After evaluating any additional evidence submitted by the
excluded person (or at the end of the 30-day period described in
paragraph (a) of this section, if no documentary evidence or written
request is submitted), the initiating agency sends written notice to the
excluded person either confirming the denial, or approving the
reinstatement in the manner set forth in Sec. 402.304. If the
initiating agency elects to uphold its denial decision, the written
notice also indicates that a subsequent request for reinstatement will
not be considered until at least 1 year after the date of the written
denial notice.
(d) The decision to deny reinstatement is not subject to
administrative review.
Sec. 402.308 Waivers of exclusions.
(a) Basis. Section 1128(c)(3)(B) of the Act specifies that in the
case of an exclusion from participation in the Medicare program based
upon section 1128(a)(1), (a)(3), or (a)(4) of the Act, the individual
may request that CMS present, on his or her behalf, a request to the OIG
for a waiver of the exclusion.
(b) Definitions. For purposes of this section:
Excluded person has the same meaning as a ``person'' as defined in
Sec. 402.3 who meets for the purposes of this subpart, the definition
of the term ``exclusion'' in Sec. 402.3.
Hardship for purposes of this section means something that
negatively affects Medicare beneficiaries and results from the
imposition of an exclusion because the excluded person is the sole
community physician or sole source of essential specialized services in
the Medicare community.
Sole community physician has the same meaning as that term is
defined Sec. 1001.2 of this title.
Sole source of essential specialized services in the community has
the same meaning as that term defined by the Sec. 1001.2 of this title.
(c) General rule. If CMS determines that a hardship as defined in
paragraph (b)(2) of this section results from exclusion of an affected
person from the Medicare program, CMS may consider and may make a
request to the Inspector General for waiver of the Medicare exclusion.
(d) Submission and content of a waiver of exclusion request. An
excluded person must submit a request for waiver of exclusion in writing
to CMS that includes the following:
(1) A copy of the exclusion notice from the OIG.
(2) A statement requesting that CMS present a waiver of exclusion
request to the OIG on his or her behalf.
(3) A statement that he or she is the sole community physician or
sole source of essential specialized services in the community.
(4) Documentation to support the statement in paragraph (d)(3) of
this section.
(e) Processing of waiver of exclusion requests. CMS processes a
request for a waiver of exclusion as follows:
(1) Notifies the submitter that the waiver of exclusion request has
been received.
(2) Reviews and validates all submitted documents.
(3) During its analysis, CMS may require additional, specific
information, and authorization to obtain information from private health
insurers, peer review organizations (including, but not limited to,
Quality Improvement Organizations), and others as necessary to determine
validity.
(4) Makes a determination regarding whether or not to submit the
waiver of exclusion request to the OIG based on review and validation of
the submitted documents.
(5) If CMS elects to submit the waiver of exclusion request to the
OIG, CMS copies the excluded person on the request.
(6) If CMS denies the request, then CMS notifies the excluded person
of the decision and specifies the reason(s) for the decision.
(f) Administrative or judicial review. A determination rendered
under paragraph (e)(4) of this section is not subject to administrative
or judicial review.
PART 403_SPECIAL PROGRAMS AND PROJECTS--Table of Contents
Subpart A [Reserved]
[[Page 60]]
Subpart B_Medicare Supplemental Policies
Sec.
403.200 Basis and scope.
General Provisions
403.201 State regulation of insurance policies.
403.205 Medicare supplemental policy.
403.206 General standards for Medicare supplemental policies.
403.210 NAIC model standards.
403.215 Loss ratio standards.
State Regulatory Programs
403.220 Supplemental Health Insurance Panel.
403.222 State with an approved regulatory program.
Voluntary Certification Program: General Provisions
403.231 Emblem.
403.232 Requirements and procedures for obtaining certification.
403.235 Review and certification of policies.
403.239 Submittal of material to retain certification.
403.245 Loss of certification.
403.248 Administrative review of CMS determinations.
Voluntary Certification Program: Loss Ratio Provisions
403.250 Loss ratio calculations: General provisions.
403.251 Loss ratio date and time frame provisions.
403.253 Calculation of benefits.
403.254 Calculation of premiums.
403.256 Loss ratio supporting data.
403.258 Statement of actuarial opinion.
Subpart C_Recognition of State Reimbursement Control Systems
403.300 Basis and purpose.
403.302 Definitions.
403.304 Minimum requirements for State systems--discretionary approval.
403.306 Additional requirements for State systems--mandatory approval.
403.308 State systems under demonstration projects--mandatory approval.
403.310 Reduction in payments.
403.312 Submittal of application.
403.314 Evaluation of State systems.
403.316 Reconsideration of certain denied applications.
403.318 Approval of State systems.
403.320 CMS review and monitoring of State systems.
403.321 State systems for hospital outpatient services.
403.322 Termination of agreements for Medicare recognition of State
systems.
Subparts D--F [Reserved]
Subpart G_Religious Nonmedical Health Care Institutions_Benefits,
Conditions of Participation, and Payment
403.700 Basis and purpose.
403.702 Definitions and terms.
403.720 Conditions for coverage.
403.724 Valid election requirements.
403.730 Condition of participation: Patient rights.
403.732 Condition of participation: Quality assessment and performance
improvement.
403.734 Condition of participation: Food services.
403.736 Condition of participation: Discharge planning.
403.738 Condition of participation: Administration.
403.740 Condition of participation: Staffing.
403.742 Condition of participation: Physical environment.
403.744 Condition of participation: Life safety from fire.
403.745 Condition of participation: Building Safety.
403.746 Condition of participation: Utilization review.
403.748 Condition of participation: Emergency preparedness.
403.750 Estimate of expenditures and adjustments.
403.752 Payment provisions.
403.754 Monitoring expenditure level.
403.756 Sunset provision.
403.764 Basis and purpose of religious nonmedical health care
institutions providing home service.
403.766 Requirements for coverage and payment of RNHCI home services.
403.768 Excluded services.
403.770 Payments for home services.
Subpart H_Medicare Prescription Drug Discount Card and Transitional
Assistance Program
403.800 Basis and scope.
403.802 Definitions.
403.804 General rules for solicitation, application and Medicare
endorsement period.
403.806 Sponsor requirements for eligibility for endorsement.
403.808 Use of transitional assistance funds.
403.810 Eligibility and reconsiderations.
403.811 Enrollment, disenrollment, and associated endorsed sponsor
requirements.
403.812 HIPAA privacy, security, administrative data standards, and
national identifiers.
403.813 Marketing limitations and record retention requirements.
[[Page 61]]
403.814 Special rules concerning Part C organizations and Medicare cost
plans and their enrollees.
403.815 Special rules concerning States.
403.816 Special rules concerning long-term care and I/T/U pharmacies.
403.817 Special rules concerning the territories.
403.820 Sanctions, penalties, and termination.
403.822 Reimbursement of transitional assistance and associated sponsor
requirements.
Subpart I_Transparency Reports and Reporting of Physician Ownership or
Investment Interests
403.900 Purpose and scope.
403.902 Definitions.
403.904 Reports of payments or other transfers of value.
403.906 Reports of physician ownership and investment interests.
403.908 Procedures for electronic submission of reports.
403.910 Delayed publication for payments made under product research or
development agreements and clinical investigations.
403.912 Penalties for failure to report.
403.914 Preemption of State laws.
Subpart K_Access to Identifiable Data for the Center for Medicare and
Medicaid Models
403.1100 Purpose and scope.
403.1105 Definitions.
403.1110 Evaluation of models.
Subpart L_Requirements for Direct-to-Consumer Television Advertisements
of Drugs and Biological Products To Include the List Price of That
Advertised Product
403.1200 Scope.
403.1201 Definitions.
403.1202 Pricing information.
403.1203 Specific presentation requirements.
403.1204 Compliance.
Authority: 42 U.S.C. 1302 and 1395hh.
Subpart A [Reserved]
Subpart B_Medicare Supplemental Policies
Source: 47 FR 32400, July 26, 1982, unless otherwise noted.
Sec. 403.200 Basis and scope.
(a) Provisions of the legislation. This subpart implements, in part,
section 1882 of the Social Security Act. The intent of that section is
to enable Medicare beneficiaries to identify Medicare supplemental
policies that do not duplicate Medicare, and that provide adequate,
fairly priced protection against expenses not covered by Medicare. The
legislation establishes certain standards for Medicare supplemental
policies and provides two methods for informing Medicare beneficiaries
which policies meet those standards:
(1) Through a State approved program, that is, a program that a
Supplemental Health Insurance Panel determines to meet certain minimum
requirements for the regulation of Medicare supplemental policies; and
(2) In a State without an approved program, through certification by
the Secretary of policies voluntarily submitted by insuring
organizations for review against the standards.
(b) Scope of subpart. This subpart sets forth the standards and
procedures CMS will use to implement the voluntary certification
program.
General Provisions
Sec. 403.201 State regulation of insurance policies.
(a) The provisions of this subpart do not affect the right of a
State to regulate policies marketed in that State.
(b) Approval of a policy under the voluntary certification program,
as provided for in Sec. 403.235(b), does not authorize the insuring
organization to market a policy that does not conform to applicable
State laws and regulations.
Sec. 403.205 Medicare supplemental policy.
(a) Except as specified in paragraph (e) of this section, Medicare
supplemental (or Medigap) policy means a health insurance policy or
other health benefit plan that--
(1) A private entity offers to a Medicare beneficiary; and
(2) Is primarily designed, or is advertised, marketed, or otherwise
purported to provide payment for expenses incurred for services and
items that are not reimbursed under the Medicare
[[Page 62]]
program because of deductibles, coinsurance, or other limitations under
Medicare.
(b) The term policy includes both policy form and policy as
specified in paragraphs (b)(1) and (b)(2) of this section.
(1) Policy form. Policy form is the form of health insurance
contract that is approved by and on file with the State agency for the
regulation of insurance.
(2) Policy. Policy is the contract--
(i) Issued under the policy form; and
(ii) Held by the policy holder.
(c) If the policy otherwise meets the definition in this section, a
Medicare supplemental policy includes-
(1) An individual policy;
(2) A group policy;
(3) A rider attached to an individual or group policy; or
(4) As of January 1, 2006, a stand-alone limited health benefit plan
or policy that supplements Medicare benefits and is sold primarily to
Medicare beneficiaries.
(d) Any rider attached to a Medicare supplemental policy becomes an
integral part of the basic policy.
(e) Medicare supplemental policy does not include a Medicare
Advantage plan, a Prescription Drug Plan under Part D, or any of the
other types of health insurance policies or health benefit plans that
are excluded from the definition of a Medicare supplemental policy in
section 1882(g)(1) of the Act.
[70 FR 4525, Jan. 28, 2005]
Sec. 403.206 General standards for Medicare supplemental policies.
(a) For purposes of the voluntary certification program described in
this subpart, a policy must meet--
(1) The National Association of Insurance Commissioners (NAIC) model
standards as defined in Sec. 405.210; and
(2) The loss ratio standards specified in Sec. 403.215.
(b) Except as specified in paragraph (c) of this section, the
standards specified in paragraph (a) of this section must be met in a
single policy.
(c) In the case of a nonprofit hospital or a medical association
where State law prohibits the inclusion of all benefits in a single
policy, the standards specified in paragraph (a) of the section must be
met in two or more policies issued in conjunction with one another.
Sec. 403.210 NAIC model standards.
(a) NAIC model standards means the National Association of Insurance
Commissioners (NAIC) ``Model Regulation to Implement the Individual
Accident and Insurance Minimum Standards Act'' (as amended and adopted
by the NAIC on June 6, 1979, as it applies to Medicare supplemental
policies). Copies of the NAIC model standards can be purchased from the
National Association of Insurance Commissioners at 350 Bishops Way,
Brookfield, Wisconsin 53004, and from the NIARS Corporation, 318
Franklin Avenue, Minneapolis, Minnesota 55404.
(b) The policy must comply with the provisions of the NAIC model
standards, except as follows--
(1) Policy, for purposes of this paragraph, means individual and
group policy, as specified in Sec. 403.205. The NAIC model standards
limit ``policy'' to individual policy.
(2) The policy must meet the loss ratio standards specified in Sec.
403.215.
[47 FR 32400, July 26, 1982; 49 FR 44472, Nov. 7, 1984]
Sec. 403.215 Loss ratio standards.
(a) The policy must be expected to return to the policyholders, in
the form of aggregate benefits provided under the policy--
(1) At least 75 percent of the aggregate amount of premiums in the
case of group policies; and
(2) At least 60 percent of the aggregate amount of premiums in the
case of individual policies.
(b) For purposes of loss ratio requirements, policies issued as a
result of solicitation of individuals through the mail or by mass media
advertising are considered individual policies.
State Regulatory Programs
Sec. 403.220 Supplemental Health Insurance Panel.
(a) Membership. The Supplemental Health Insurance Panel (Panel)
consists of--
(1) The Secretary or a designee, who serves as chairperson, and
[[Page 63]]
(2) Four State Commissioners or Superintendents of Insurance
appointed by the President. (The terms Commissioner or Superintendent of
Insurance include persons of similar rank.)
(b) Functions. (1) The Panel determines whether or not a State
regulatory program for Medicare supplemental health insurance policies
meets and continues to meet minimum requirements specified in section
1882 of the Social Security Act.
(2) The chairperson of the Panel informs the State Commissioners and
Superintendents of Insurance of all determinations made under paragraph
(b)(1) of this section.
Sec. 403.222 State with an approved regulatory program.
(a) A State has an approved regulatory program if the Panel
determines that the State has in effect under State law a regulatory
program that provides for the application of standards, with respect to
each Medicare supplemental policy issued in that State, that are equal
to or more stringent than those specified in section 1882 of the Social
Security Act.
(b) Policy issued in that State means--
(1) A group policy, if the holder of the master policy resides in
that State; and
(2) An individual policy, if the policy is--
(i) Issued in that State; or
(ii) Issued for delivery in that State.
(c) A policy issued in a State with an approved regulatory program
is considered to meet the NAIC model standards in Sec. 403.210 and loss
ratio standards in Sec. 403.215.
Voluntary Certification Program: General Provisions
Sec. 403.231 Emblem.
(a) The emblem is a graphic symbol, approved by HHS, that indicates
that CMS has certified a policy as meeting the requirements of the
voluntary certification program, specified in Sec. 403.232.
(b) Unless prohibited by the State in which the policy is marketed,
the insuring organization may display the emblem on policies certified
under the voluntary certification program.
(c) The manner in which the emblem may be displayed and the
conditions and restrictions relating to its use will be stated in the
letter with which CMS notifies the insuring organization that a policy
has been certified. The insuring organization must comply with these
conditions and restrictions.
(d) If a certified policy is issued in a State that later has an
approved regulatory program, as provided for in Sec. 403.222, the
insuring organization may display the emblem on the policy until the
earliest of the following--
(1) When prohibited by State law or regulation.
(2) When the policy no longer meets the requirements for Medicare
supplemental policies specified in Sec. 403.206.
(3) The date the insuring organization would be required to submit
material to CMS for annual review in order to retain certification, if
the State did not have an approved program (see Sec. 403.239).
Sec. 403.232 Requirements and procedures for obtaining certification.
(a) To be certified by CMS, a policy must meet--
(1) The NAIC model standards specified in Sec. 403.210;
(2) The loss ratio standards specified in Sec. 403.215; and
(3) Any State requirements applicable to a policy--
(i) Issued in that State; or
(ii) Marketed in that State.
(b) An insuring organization requesting certification of a policy
must submit the following to CMS for review--
(1) A copy of the policy form (including all the documents that
would constitute the contract of insurance that is proposed to be
marketed as a certified policy).
(2) A copy of the application form including all attachments.
(3) A copy of the uniform certificate issued under a group policy.
(4) A copy of the outline of coverage, in the form prescribed by the
NAIC model standards.
(5) A copy of the Medicare supplement buyers' guide to be provided
to all applicants if the buyers' guide is not the CMS/NAIC buyers'
guide.
(6) A statement of when and how the outline of coverage and the
buyers'
[[Page 64]]
guide will be delivered and copies of applicable receipt forms.
(7) A copy of the notice of replacement and statement as to when and
how that notice will be delivered.
(8) A list of States in which the policy is authorized for sale. If
the policy was approved under a deemer provision in any State, the
conditions involved must be specified.
(9) A copy of the loss ratio calculations, as specified in Sec.
403.250.
(10) Loss ratio supporting data, as specified in Sec. 403.256.
(11) A statement of actuarial opinion, as specified in Sec.
403.258.
(12) A statement that the insuring organization will notify the
policyholders in writing, within the period of time specified in Sec.
403.245(c), if the policy is identified as a certified policy at the
time of sale and later loses certification.
(13) A signed statement in which the president of the insuring
organization, or a designee, attests that--
(i) The policy meets the requirements specified in paragraph (a) of
this section; and
(ii) The information submitted to CMS for review is accurate and
complete and does not misrepresent any material fact.
Sec. 403.235 Review and certification of policies.
(a) CMS will review policies that the insuring organization
voluntarily submits, except that CMS will not review a policy issued in
a State with an approved regulatory program under Sec. 403.222.
(b) If the requirements specified in Sec. 403.232 are met, CMS
will--
(1) Certify the policy; and
(2) Authorize the insuring organization to display the emblem on the
policy, as provided for in Sec. 403.231.
(c) If CMS certifies a policy, it will inform all State
Commissioners and Superintendents of Insurance of that fact.
Sec. 403.239 Submittal of material to retain certification.
(a) CMS certification of a policy that continues to meet the
standards will remain in effect, if the insuring organization files the
following material with CMS no later than the date specified in
paragraph (b) or (c) of this section--
(1) Any changes in the material, specified in Sec. 403.232(b), that
was submitted for previous certification.
(2) The loss ratio supporting data specified in Sec. 403.256(b).
(3) A signed statement in which the president of the insuring
organization, or a designee, attests that--
(i) The policy continues to meet the requirements specified in Sec.
403.232(a); and
(ii) The information submitted to CMS for review is accurate and
complete and does not misrepresent any material fact.
(b) Except as specified in paragraph (c) of this section, the
insuring organization must file the material with CMS no later than June
30 of each year. The first time the insuring organization must file the
material is no later than June 30 of the calendar year that follows the
year in which CMS--
(1) Certifies a new policy; or
(2) Certifies a policy that lost certification as provided in Sec.
403.245.
(c) If the loss ratio calculation period, used to calculate the
expected loss ratio for the last actuarial certification submitted to
CMS, ends before the June 30 date of paragraph (b) of this section, the
insuring organization must file the material with CMS no later then the
last day of that rate calculation period.
Sec. 403.245 Loss of certification.
(a) A policy loses certification if--
(1) The insuring organization withdraws the policy from the
voluntary certification program; or
(2) CMS determines that--
(i) The policy fails to meet the requirements specified in Sec.
403.232(a); or
(ii) The insuring organization has failed to meet the requirements
for submittal of material specified in Sec. 403.239.
(b) If a policy loses its certification, CMS will inform all State
Commissioners and Superintendents of Insurance of that fact.
(c) If a policy that displays the emblem, or that has been marketed
as a certified policy without the emblem, loses certification, the
insuring organization must notify each holder of the
[[Page 65]]
policy, or of a certificate issued under the policy, of that fact. The
notice must be in writing and sent by the earlier of--
(1) The date of the first regular premium notice after the date the
policy loses its certification; or
(2) 60 days after the date the policy loses its certification.
Sec. 403.248 Administrative review of CMS determinations.
(a) This section provides for administrative review if CMS
determines--
(1) Not to certify a policy; or
(2) That a policy no longer meets the standards for certification.
(b) If CMS makes a determination specified in paragraph (a) of this
section, it will send a notice to the insuring organization containing
the following information:
(1) That CMS has made such a determination.
(2) The reasons for the determination.
(3) That the insuring organization has 30 days from the date of the
notice to--
(i) Request, in writing, an administrative review of the CMS
determination; and
(ii) Submit additional information to CMS for review.
(4) That, if the insuring organization requests an administrative
review, CMS will conduct the review, as provided for in paragraph (c) of
this section.
(5) That, in a case involving loss of certification, the CMS
determination will go into effect 30 days from the date of the notice,
unless the insuring organization requests an administrative review. If
the insuring organization requests an administrative review, the policy
retains its certification until CMS makes a final determination.
(c) If the insuring organization requests an administrative review,
CMS will conduct the review as follows--
(1) A CMS official, not involved in the initial CMS determination,
will initiate and complete an administrative review within 90 days of
the date of the notice provided for in paragraph (b) of this section.
(2) The official will consider--
(i) The original material submitted to CMS for review, as specified
in Sec. 403.232(b) or Sec. 403.239(a); and
(ii) Any additional information, that the insuring organization
submits to CMS.
(3) Within 15 days after the administrative review is completed, CMS
will inform the insuring organization in writing of the final decision,
with an explanation of the final decision.
(4) If the final decision is that a policy lose its certification,
the loss of certification will go into effect 15 days after the date of
CMS's notice informing the insuring organization of the final decision.
Voluntary Certification Program: Loss Ratio Provisions
Sec. 403.250 Loss ratio calculations: General provisions.
(a) Basic formula. The expected loss ratio is calculated by
determining the ratio of benefits to premiums.
(b) Calculations. The insuring organization must calculate loss
ratios according to the provisions of Sec. Sec. 403.251, 403.253, and
403.254.
Sec. 403.251 Loss ratio date and time frame provisions.
(a) Initial calculation date means the first date of the period that
the insuring organization uses to calculate the policy's expected loss
ratio.
(1) The initial calculation date may be before, the same as, or
after the date the insuring organization sends the policy to CMS for
review, except--
(2) The initial calculation date must not be earlier than January 1
of the calendar year in which the policy is sent to CMS.
(b) Loss ratio calculation period means the period beginning with
the initial calculation date and ending with the last day of the period
for which the insuring organization calculates the policy's scale of
premiums.
(c) To calculate ``present values'', the insuring organization may
ignore discounting (an actuarial procedure that provides for the impact
of a variety of factors, such as lapse of policies) for loss ratio
calculation periods not exceeding 12 months.
[[Page 66]]
Sec. 403.253 Calculation of benefits.
(a) General provisions. (1) Except as provided for in paragraph
(a)(2) of this section, calculate the amount of ``benefits'' by--
(i) Adding the present values on the initial calculation date of--
(A) Expected incurred benefits in the loss ratio calculation period,
to--
(B) The total policy reserve at the last day of the loss ratio
calculation period: and
(ii) Subtracting the total policy reserve on the initial calculation
date from the sum of these values.
(2) To calculate the amount of ``benefits'' in the case of community
or pool rated individual or group policies rerated on an annual basis,
calculate the expected incurred benefits in the loss ratio calculation
period.
(b) Calculation of total policy reserve--(1) Option for calculation.
The insuring organization must calculate ``total policy reserve''
according to the provisions of paragraph (b) (2) or (3) of this section.
(2) Total policy reserve: Federal provisions. (i) ``Total policy
reserve'' means the sum of--
(A) Additional reserve; and
(B) The reserve for future contingent benefits.
(ii) Additional reserve means the amount calculated on a net level
reserve basis, using appropriate values to account for lapse, mortality,
morbidity, and interest, that on the valuation date represents--
(A) The present value of expected incurred benefits over the loss
ratio calculation period; less--
(B) The present value of expected net premiums over the loss ratio
calculation period.
(iii) Net premium means the level portion of the gross premium used
in calculating the additional reserve. On the day the policy is issued,
the present value of the series of those portions equals the present
value of the expected incurred claims over the period that the gross
premiums are computed to provide coverage.
(iv) Reserve for future contingent benefits means the amounts, not
elsewhere included, that provide for the extension of benefits after
insurance coverage terminates. These benefits--
(A) Are predicated on a health condition existing on the date
coverage ends;
(B) Accrue after the date coverage ends; and
(C) Are payable after the valuation date.
(3) Total policy reserve: State provisions. ``Total policy reserve''
means the total policy reserve calculated according to appropriate State
law or regulation.
Sec. 403.254 Calculation of premiums.
(a) General provisions. To calculate the amount of ``premiums'',
calculate the present value on the initial calculation date of expected
earned premiums for the loss ratio calculation period.
(b) Specific provisions. (1) Earned premium for a given period
means--
(i) Written premiums for the period; plus--
(ii) The total premium reserve at the beginning of the period;
less--
(iii) The total premium reserve at the end of the period.
(2) Written premiums in a period means--
(i) Premiums collected in that period; plus--
(ii) Premiums due and uncollected at the end of that period; less--
(iii) Premiums due and uncollected at the beginning of that period.
(3) Total premium reserve means the sum of--
(i) The unearned premium reserve;
(ii) The advance premium reserve; and
(iii) The reserve for rate credits.
(4) Unearned premium reserve means the portion of gross premiums due
that provide for days of insurance coverage after the valuation date.
(5) Advance premium reserve means premiums received by the insuring
organization that are due after the valuation date.
(6) Reserve for rate credits means rate credits on a group policy
that--
(i) Accrue by the valuation date of the policy; and
(ii) Are paid or credited after the valuation date.
[[Page 67]]
Sec. 403.256 Loss ratio supporting data.
(a) For purposes of requesting CMS certification under Sec.
403.232, the insuring organization must submit the following loss ratio
data to CMS for review--
(1) A statement of why the policy is to be considered, for purposes
of the loss ratio standards, an individual or a group policy.
(2) The earliest age at which policyholders can purchase the policy.
(3) The general marketing method and the underwriting criteria used
for the selection of applicants to whom coverage is offered.
(4) What policies are to be included under the one policy form, by
the dates the policies are issued.
(5) The loss ratio calculation period.
(6) The scale of premiums for the loss ratio calculation period.
(7) The expected level of earned premiums in the loss ratio
calculation period.
(8) The expected level of incurred claims in the loss ratio
calculation period.
(9) A description of how the following assumptions were used in
calculating the loss ratio.
(i) Morbidity.
(ii) Mortality.
(iii) Lapse.
(iv) Assumed increases in the Medicare deductible.
(v) Impact of inflation on reimbursement per service.
(vi) Interest.
(vii) Expected distribution, by age and sex, of persons who will
purchase the policy in the coming year.
(viii) Expected impact on morbidity by policy duration of--
(A) The process used to select insureds from among those that apply
for a policy; and
(B) Pre-existing condition clauses in the policy.
(b) For purposes of requesting continued CMS certification under
Sec. 403.239(a), the insuring organization must submit the following to
CMS--
(1) A description of all changes in the loss ratio data, specified
in paragraph (a) of this section, that occurred since CMS last reviewed
the policy.
(2) The past loss ratio experience for the policy, including the
experience of all riders and endorsements issued under the policy. The
loss ratio experience data must include earned premiums, incurred
claims, and total policy reserves that the insuring organization
calculates--
(i) For all years of issue combined; and
(ii) Separately for each calendar year since CMS first certified the
policy.
Sec. 403.258 Statement of actuarial opinion.
(a) For purposes of certification requests submitted under Sec.
403.232(b) and subsequent review as specified in Sec. 403.239(a),
statement of actuarial opinion means a signed declaration in which a
qualified actuary states that the assumptions used in calculating the
expected loss ratio are appropriate and reasonable, taking into account
actual policy experience, if any, and reasonable expectations.
(b) Qualified actuary means--
(1) A member in good standing of the American Academy of Actuaries;
or
(2) A person who has otherwise demonstrated his or her actuarial
competence to the satisfaction of the Commissioner or Superintendent of
Insurance of the domiciliary State of the insuring organization.
Subpart C_Recognition of State Reimbursement Control Systems
Source: 51 FR 15492, Apr. 24, 1986, unless otherwise noted.
Sec. 403.300 Basis and purpose.
(a) Basis. This subpart implements section 1886(c) of the Act, which
authorizes payment for Medicare inpatient hospital services in
accordance with a State's reimbursement control system rather than under
the Medicare reimbursement principles as described in CMS's regulations
and instructions.
(b) Purpose. Contained in this subpart are--
(1) The basic requirements that a State reimbursement control system
must meet in order to be approved by CMS;
(2) A description of CMS's review and evaluation procedures; and
(3) The conditions that apply if the system is approved.
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Sec. 403.302 Definitions.
For purposes of this subpart--
Chief executive officer of a State means the Governor of the State
or the Governor's designee.
Existing demonstration project refers to demonstration projects
approved by CMS under the authority of section 402(a) of the Social
Security Amendments of 1967 (42 U.S.C. 1395b-1) or section 222(a) of the
Social Security Amendments of 1972 (42 U.S.C. 1395b-1 (note)) and in
effect on April 20, 1983 (the date of the enactment of Pub. L. 98-21
(Social Security Amendments of 1983)).
Federal hospital means a hospital that is administered by, or that
is under exclusive contract with, the Department of Defense, the
Veterans Administration, or the Indian Health Service.
State system or system refers to a State reimbursement control
system that is approved by CMS under the authority of section 1886(c) of
the Act and that satisfies the requirements described in this subpart.
Sec. 403.304 Minimum requirements for State systems--discretionary approval.
(a) Discretionary approval by CMS. CMS may approve Medicare payments
under a State system, if CMS determines that the system meets the
requirements in paragraphs (b) and (c) of this section and, if
applicable paragraph (d) of this section.
(b) Requirements for State system. (1) An application for approval
of the system must be submitted to CMS by the Chief Executive Officer of
the State.
(2) The State system must apply to substantially all non-Federal
acute care hospitals in the State.
(3) All hospitals covered by the system must have and maintain a
utilization and quality control review agreement with a Quality
Improvement Organization, as required under section 1866(a)(1)(F) of the
Act and Sec. 466.78(a) of this chapter.
(4) Federal hospitals must be excluded from the State system.
(5) Nonacute care or specialty hospital (such as rehabilitation,
psychiatric, or children's hospitals) may, at the option of the State,
be excluded from the State system.
(6) The State system must apply to at least 75 percent of all
revenues or expenses--
(i) For inpatient hospital services in the State; and
(ii) For inpatient hospital services under the State's Medicaid
plan.
(7) Under the system, HMOs and competitive medical plans (CMPs), as
defined by section 1876(b) of the Act and part 417 of this chapter, must
be allowed to negotiate payment rates with hospitals.
(8) The system must limit hospital charges for Medicare
beneficiaries to deductibles, coinsurance or non-covered services.
(9) Unless a waiver is granted by CMS under Sec. 489.23 of this
chapter, the system must prohibit payment, as required under section
1862(a)(14) of the Act and Sec. 405.310(m) of this chapter, for
nonphysician services provided to hospital inpatients under Part B of
Medicare.
(10) The system must require hospitals to submit Medicare cost
reports or approved reports in lieu of Medicare cost reports as
required.
(11) The system must require--
(i) Preparation, collection, or retention by the State of reports
(such as financial, administrative, or statistical reports) that may be
necessary, as determined by CMS, to review and monitor the State's
assurances; and
(ii) Submission of the reports to CMS upon request.
(12) The system must provide hospitals an opportunity to appeal
errors that they believe have been made in the determination of their
payment rates. The system, if it is prospective may not permit providers
to file administrative appeals that would result in a retroactive
revision of prospectively determined payment rates.
(c) Satisfactory assurances. The State must provide to CMS
satisfactory assurance as to the following:
(1) The system provides for equitable treatment of hospital patients
and hospital employees.
(2) The system provides for equitable treatment of all entities that
pay hospitals for inpatient hospital services, including Federal and
State programs. Under the requirement, the following conditions must be
met:
[[Page 69]]
(i) Both the Medicare and Medicaid programs must participate under
the system.
(ii) The State must assure equitable and uniform treatment under the
system of third-party payors of inpatient hospital services in terms of
opportunity. Equitable opportunity must include, but need not be limited
to, participation in the system and availability of discounts. Criteria
under which discounts are made available must be equitably and uniformly
applied to all payors, except for discounts negotiated by HMOs and CMPs.
Discounts available to HMOs and CMPs as result of their statutory right
to negotiate payment rates independently of a State system, as described
in paragraph (b)(7) of this section, need not be available to other
payors.
(iii) The State must assure that all third-party payors that
participate under the system share in the system's risks and benefits.
(3) The amount of Medicare payments made under the system over 36-
month periods may not exceed the amount of Medicare payment that would
otherwise have been made under the Medicare principles of reimbursement
for Medicare items and services had the State system not been in effect.
States must submit the assurance and supporting data as required by
Sec. 403.320 to document that the payment limit is not exceeded. States
that have an existing Medicare demonstration project in effect on April
20, 1983, and that have requested approval of a State system under
section 1886(c)(4) of the Act, may elect to have the effectiveness of
the State system under this paragraph judged on the basis of the State
system's rate of increase or inflation in Medicare inpatient hospital
payments as compared to the national rate of increase or inflation for
such payments during the three cost reporting periods of the hospitals
in the State beginning on or after October 1, 1983.
(d) Additional cost-effectiveness assurance. If the assurances and
supporting data required under paragraph (c)(3) of this section are
insufficient to provide assurance satisfactory to CMS regarding the
cost-effectiveness of a State system, the State may additionally submit
one of the following assurances in order to meet the cost-effectiveness
test:
(1) State responsibility for excess payments. The State must agree
that each month Medicare intermediaries will disburse to the State's
hospital Federal funds that in the aggregate equal no more than would
have been disbursed in the absence of the State system. Any additional
funds necessary to pay hospitals for Medicare services required by the
State system will be paid to the intermediaries by the State. These
additional amounts will be refunded to the State by the intermediaries
to the extent that, in subsequent months, the State system requires a
smaller aggregate payment for Medicare services than would have been
paid in the absence of the State system.
(2) Limitations on payments. (i) The State must agree that if its
projections exceed what Medicare would pay in any particular period, the
State and CMS will establish and agreed upon payment schedule that will
limit payments under the State system based on a predetermined
percentage relationship between projected State payments and what
payments would have been under Medicare.
(ii) If deviation from the predetermined relationship described in
paragraph (d)(2)(i) of this section occurs, the State must further agree
that--
(A) Medicare payments would be capped automatically at payment
levels based on the rates used for the Medicare prospective payment
system and the State would be required to pay the difference to
individual hospitals in its system; or
(B) The State may provide by legislation or legally binding
regulations that any reduced payments to hospitals under the system that
result from this cost-effectiveness assurance will constitute full and
final payment for hospital services furnished to Medicare beneficiaries
for the period covered by these reduced payments.
Sec. 403.306 Additional requirements for State systems--mandatory
approval.
(a) General policy--(1) Mandatory approval. HFCA will approve an
application for Medicare reimbursement under
[[Page 70]]
a State system if the system meets all of the requirements of Sec.
403.304 and of paragraph (b) of this section.
(2) Exception. CMS may approve an application if the State system
meets all of the requirements of Sec. 403.304 but only some of the
requirements of paragraph (b) of this section.
(b) Additional requirements--(1) Operation of system. The system
must--
(i) Be operated directly by the State or by entity designated under
State law;
(ii) Provide for payments to hospitals using a methodology under
which--
(A) Prospectively determined payment rates are established; and
(B) Exceptions, adjustments, and methods for changes in methodology
are set forth;
(iii) Provide that a change by the State in the system that has the
effect of materially changing payments to hospitals can take effect only
upon 60 days notice to CMS and to the hospitals likely to be materially
affected by the change and upon CMS's approval of the change.
(2) Satisfactory assurances--(i) Admissions practice. The State must
assure that the operation of the system will not result in any change in
hospital admission practices that result in--
(A) A significant reduction in the proportion of patients receiving
hospital services covered under the system who have no third-party
coverage and who are unable to pay for hospital services;
(B) A significant reduction in the proportion of individuals
admitted to hospitals for inpatient hospital services for which payment
is less, or is likely to be less, than the anticipated charges for or
cost of the services;
(C) A refusal to admit patients who would be expected to require
unusually costly or prolonged treatment for reasons other than those
related to the appropriateness of the care available at the hospital; or
(D) A refusal to provide emergency services to any person who is in
need of emergency services, if the hospital provides the services.
(ii) Consultation with local government officials. The State must
provide documentation that it has consulted with local government
officials concerning the impact of the system on publicly owned or
operated hospitals.
Sec. 403.308 State systems under demonstration projects--mandatory
approval.
CMS will approve an application from a State for a State system if--
(a) The system was in effect prior to April 20, 1983 under an
existing demonstration project; and
(b) The minimum requirements and assurances for approval of a State
system are met under Sec. 403.304 (b)(1)-(10) and Sec. 403.304(c),
and, if appropriate Sec. 403.304(d).
Sec. 403.310 Reduction in payments.
(a) General rule. If CMS determines that the satisfactory assurances
required of a State under Sec. 403.304(c) and, if applicable, Sec.
403.304(d) have not been met, or will not be met, with respect to any
36-month period, CMS will reduce Medicare payments to individual
hospitals being reimbursed under the State's system or, if applicable,
under the Medicare payment system, in an amount equal to the amount by
which the Medicare payments under the system exceed the amount of
Medicare payments to such hospitals that otherwise would have been made
not using the State system. The amount of the recoupment will include,
when appropriate, interest charges computed in accordance with Sec.
405.378 of this chapter.
(b) Recoupment procedures. The amount of the overpayment will be
recouped on a proportionate basis from each of those hospitals that
received payments under the State system that exceeded the payments they
would have received under the Medicare payment system. Each hospital's
share of the aggregate excess payment will be determined on the basis of
a comparison of the hospital's proportionate share of the aggregate
payment received under the State system that is in excess of what the
aggregate payment would have been under the Medicare payment system.
Recoupments may be accomplished by a hospital's direct payment to the
Medicare program or by offsets to future payments made to the hospital.
[[Page 71]]
(c) Alternative recoupment procedures. As an alternative to the
recoupment procedures described in paragraph (b) of this section and
subject to CMS's acceptance, the State may provide, by legislation or
legally binding regulations, procedures for the recoupment of the amount
of payments that exceed the amount of payments that otherwise would have
been paid by Medicare if the State system had not been in effect.
(d) Rule for existing Medicare demonstration projects. In cases of
existing Medicare demonstration projects where the expenditure test is
to be applied by a rate of increase factor, the amount of the excess
payment will be determined, for the three hospital cost reporting
periods beginning before October 1, 1986, by a comparison of the State
system's rate of increase to the national rate of increase. Recoupment
of excessive payments will be assessed and recouped as described in this
section.
[51 FR 15492, Apr. 24, 1986, as amended at 61 FR 63748, Dec. 2, 1996]
Sec. 403.312 Submittal of application.
The Chief Executive Officer of the State is responsible for--
(a) Submittal of the application to CMS for approval; and
(b) Supplying the assurances and necessary documentation as required
under Sec. Sec. 403.304 through 403.308.
Sec. 403.314 Evaluation of State systems.
CMS will evaluate all State applications for approval of State
systems and notify the State of its determination within 60 days.
Sec. 403.316 Reconsideration of certain denied applications.
(a) Request for reconsideration. If CMS denies an application for a
State system, the State may request that CMS reconsider the denial if
the State believes that its system meets all of the requirements for
mandatory approval under Sec. Sec. 403.304 and 403.306 or, in the case
of a State with a system operating under an existing demonstration
project, the applicable requirements of Sec. Sec. 403.304 and 403.308.
(b) Time limit. (1) The State must submit its request for
reconsideration within 60 days after the date of CMS's notice that the
application was denied.
(2) CMS will notify the State of the results of its reconsideration
within 60 days after it receives the request for reconsideration.
Sec. 403.318 Approval of State systems.
(a) Approval agreement. If CMS approves a State system, a written
agreement will be executed between CMS and the Chief Executive Officer
of the State. The agreement must incorporate any terms of the State's
application for approval of the system as agreed to by the parties and,
as a minimum, must contain provisions that require the following:
(1) The system is operated directly by the State or an entity
designated by State law.
(2) For purposes of the Medicare program, the State's system applies
only to Medicare payments for inpatient, and if applicable, outpatient
hospital services.
(3) The system conforms to applicable Medicare law and regulations
other than those relating to the amount of reimbursement for inpatient
hospital services, or for inpatient and outpatient services, whichever
the State system covers. Applicable regulations include, for example,
those describing Medicare benefits and entitlement requirements for
program beneficiaries, as explained in parts 406 and 409 of this
chapter; the requirements at part 405, subpart J of this chapter
specifying conditions of participation for hospitals; the requirements
at part 405, subparts A, G, and S of this chapter on Medicare program
administration; and all applicable fraud and abuse regulations contained
in titles 42 and 45 of the CFR.
(4) The State must obtain CMS's approval of the State's reporting
forms and of provider cost reporting forms or other forms that have not
been approved by CMS but that are necessary for the collection of
required information.
(b) Effective date. An approved State system may not be effective
earlier than the date of the approval agreement, which may not be
retroactive.
[[Page 72]]
Sec. 403.320 CMS review and monitoring of State systems.
(a) General rule. The State must submit an assurance and detailed
and quantitative studies of provider cost and financial data and
projections to support the effectiveness of its system, as required by
paragraphs (b) and (c) of this section.
(b) Required information. (1) Under Sec. 403.304(c)(3) an assurance
is required that the system will not result in greater payments over a
36-month period than would have otherwise been made under Medicare not
using such system. If a State that has an existing demonstration project
in effect on April 20, 1983 elects under Sec. 403.304(c)(3) to have the
effectiveness of its system judged on the basis of a rate of increase
factor, the State must submit an assurance that its rate of increase or
inflation in inpatient hospital payments does not exceed, for that
portion of the 36-month period that is subject to this test, the
national rate of increase or inflation in Medicare inpatient hospital
payments. The election of the rate of increase test applies only to the
three cost reporting periods beginning on or after October 1, 1983. At
the end of these cost reporting periods, the State must assure,
beginning with the first month after the expiration of the third cost
reporting period beginning after October 1, 1983, that payments under
its system will not exceed over the remainder of the 36-month period
what Medicare payments would have been.
(2) Estimates and data are required to support the State's
assurance, required under Sec. 403.304(c)(3), that expenditures under
the State system will not exceed what Medicare would have paid over a
36-month period. The estimates and projections of what Medicare would
have otherwise paid must take into account all the Medicare
reimbursement principles in effect at the time and, for any period in
which payments either exceed or are less than Medicare levels, the
values of interest the Medicare Trust Fund earned, or would have earned,
on these amounts. Upon application for approval, the State must submit
projections for each hospital for the first 12-month period covered by
the assurance, in both the aggregate and on a per discharge basis, of
Medicare inpatient expenditures under Medicare principles of
reimbursement and parallel projections of Medicare inpatient
expenditures under the State's system and the resulting cost or savings
to Medicare. The State must also submit separate statewide projections
for each year of the 36-month period, in both the aggregate and on a
weighted average discharge basis, of inpatient expenditures under the
State system and under the Medicare principles of reimbursement.
(3) The projection submitted under paragraph (b)(2) of this section
must include a detailed description of the methodology and assumptions
used to derive the expenditure amounts under both systems. In instances
where the assumptions are different under the projections cited in
paragraph (b)(2) of this section, the State must provide a detailed
explanation of the reasons for the differences. At a minimum, the
following separate data and assumptions are to be included in the
projections for the Medicare principles and for the State's system.
(i) The State system base year and the Medicare allowable and
reimbursable cost of each hospital that the State used to develop the
projections, including the amount of estimated pass through costs.
(ii) The categories of costs that are included in the State system
and are reimbursed differently under the State system than under the
Medicare system.
(iii) The number of Medicare and total base year discharges and
admissions for each hospital.
(iv) The rate of change factor (and the method of application of
this factor) used to project the base year costs over the 36-month
period to which the assurance would apply.
(v) Any allowance for anticipated growth in the amount of services
from the base year (if applicable, the allowance must be presented in
separate estimates for population increases or for increases in rates of
admissions or both).
(vi) Any adjustment in which the State is permitted by CMS to take
into account previous reductions in the Medicare payment amounts that
were
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the result of the effectiveness of the State's system even though
Medicare was not a part of that system.
(vii) Appropriate recognition and projection of the time value of
trust fund expenditures for the period the State system expenditures
were either less than or exceeded the Medicare system payments.
(viii) States applying under a rate of increase effectiveness test
under Sec. 403.304(c)(3) must also submit data projecting the parallel
rates of increase during the requisite period.
(4) The projections must include both the aggregate payments and the
payments per discharge for the individual hospitals and for the State as
a whole.
(5) On a case-by-case basis. CMS may require additional data and
documentation as needed to complete its review and monitoring.
(6) For existing Medicare demonstration projects in effect on April
20, 1983, the assurance and data as required by paragraphs (a) and (b)
of this section, if appropriate, may be based on aggregate payments or
payments per inpatient admission or discharge. CMS will judge the
effectiveness of these systems on the basis of the rate of increase or
inflation in Medicare inpatient hospital payments compared to the
national rate of increase or inflation for such payments during the
State's hospitals' three cost reporting periods beginning on or after
October 1, 1983. The data submitted by the State for the period subject
to the rate of increase test must include the rate of increase
projection for that particular period of time. For the subsequent period
of time, the State must assure that payments under its system will not
exceed what Medicare payments would have been, as described in Sec.
403.304(c)(3).
(7) If the amount of Medicare payments under the State system
exceeds what would have been paid under the Medicare reimbursement
principles in any given year, the State must also submit quantitative
evidence that the system will result in expenditures that do not exceed
what Medicare expenditures would have been over the 36 month period
beginning with the first month that the State system is operating. For a
State that has an existing demonstration project in effect on April 20,
1983, and that elects under Sec. 403.304(c)(3) to have a rate of
increase test apply, if the State's rate of increase or inflation
exceeds the national rate of increase or inflation in a given year, the
State must submit quantitative evidence that, over 36 months, its
payments will not exceed the national rate of increase or inflation.
Furthermore, if payments under the State's system must be compared to
actual Medicare expenditures, at the end of the third cost reporting
period, as described in paragraph (b)(1) of this section, and payments
under the State's system exceed what Medicare would have paid in a given
year, the State must submit quantitative evidence that, over 36 months,
payments under its system will not exceed what Medicare would have paid.
(c) Review of assurances regarding expenditures. CMS will review the
State's assurances and data submitted under this section, as a
prerequisite to the approval of the State's system. CMS will compare the
State's projections of payment amounts to CMS data in order to determine
if the State's assurance is reasonable and fully supportable. If the CMS
data indicate that the State's system would result in payment amounts
that would be more then that which would have been paid under the
Medicare principles, the State's assurances would not be acceptable. For
States applying in accordance with Sec. 403.308, if CMS data indicate
that the State's system would result in a rate of increase or inflation
that would be more than the national rate of increase or inflation, the
State's assurances would not be acceptable.
(d) Medicaid upper limit. In accordance with Sec. 447.253 of this
chapter, the State system may not result in aggregate payments for
Medicaid inpatient hospital services that would exceed the amount that
would have otherwise have been paid under the Medicare principles as
applied through the State system.
(e) Monitoring of Medicare expenditures. CMS will monitor on a
quarterly basis expenditures under the State's system as compared to
what Medicare expenditures would have been if the system had not been in
effect. If CMS
[[Page 74]]
determines at any time that the payments made under the State's system
exceed the States' projections, as established by the satisfactory
assurances required under Sec. 403.304(c) and, if appropriate, the
predetermined percentage relationship of the payments as required under
Sec. 403.304(d). CMS will--
(1) Conclude that payments under the State system over a 36-month
period will exceed what Medicare would have paid:
(2) Terminate the waiver; and
(3) Recoup overpayments to the affected hospitals in accordance with
the procedures described in Sec. 403.310.
Sec. 403.321 State systems for hospital outpatient services.
CMS may approve a State's application for approval of an outpatient
system if the following conditions are met:
(a) The State's inpatient system is approved.
(b) The State's outpatient application meets the requirements and
assurances for an inpatient system described in Sec. Sec. 403.304 (b)
and (c), and 403.306 (b)(1) and (b)(2)(ii).
(c) The State submits a separate application that provides separate
assurances and estimates and data in further support of its assurance
submitted under paragraph (b)(1) of Sec. 403.320, as follows:
(1) Upon application for approval, the State must submit estimates
and data that include, but are not limited to, projections for the first
12-month period covered by the assurance for each hospital, in both the
aggregate and on an average cost per service and payment basis, of
Medicare outpatient expenditures under Medicare principles of
reimbursement; parallel projections of Medicare outpatient expenditures
under the State system; and the resulting cost or savings to Medicare
independent of the State system for hospital inpatient services.
(2) The State must submit separate statewide projections for each
year of the 36-month period of the aggregate outpatient expenditures for
each system. The projections submitted under this paragraph must--
(i) Comply with the requirements of paragraphs (b) (3) and (5) of
Sec. 403.320 regarding a detailed description of the methodology used
to derive the expenditure amounts:
(ii) Include the data and assumptions set forth in paragraphs (b)(3)
(i), (ii), (iii), (iv), and (v) of Sec. 403.320; and
(iii) Include any assumption the State has adopted for establishing
the number of Medicare and total base year outpatient services for each
hospital.
(3) The State must provide a detailed explanation of the reasons for
any difference between the data or assumptions used for the separate
projections.
Sec. 403.322 Termination of agreements for Medicare recognition
of State systems.
(a) Termination of agreements. (1) CMS may terminate any approved
agreement if it finds, after the procedures described in this paragraph
are followed that the State system does not satisfactorily meet the
requirements of section 1886(c) of the Act or the regulations in this
subpart. A termination must be effective on the last day of a calendar
quarter.
(2) CMS will give the State reasonable notice of the proposed
termination of an agreement and of the reasons for the termination at
least 90 days before the effective date of the termination.
(3) CMS will give the State the opportunity to present evidence to
refute the finding.
(4) CMS will issue a final notice of termination upon a final review
and determination on the State's evidence.
(b) Termination by State. A State may voluntarily terminate a State
system by giving CMS notice of its intent to terminate. A termination
must be effective on the last day of a calendar quarter. The State must
notify CMS of its intent to terminate at least 90 days before the
effective date of the termination.
Subparts D--F [Reserved]
[[Page 75]]
Subpart G_Religious Nonmedical Health Care Institutions_Benefits,
Conditions of Participation, and Payment
Source: 64 FR 67047, Nov. 30, 1999, unless otherwise noted.
Sec. 403.700 Basis and purpose.
This subpart implements sections 1821; 1861(e), (y), and (ss); 1869;
and 1878 of the Act regarding Medicare payment for inpatient hospital or
posthospital extended care services furnished to eligible beneficiaries
in religious nonmedical health care institutions.
Sec. 403.702 Definitions and terms.
For purposes of this subpart, the following definitions and terms
apply:
Election means a written statement signed by the beneficiary or the
beneficiary's legal representative indicating the beneficiary's choice
to receive nonmedical care or treatment for religious reasons.
Excepted medical care means medical care that is received
involuntarily or required under Federal, State, or local laws.
FFY stands for Federal fiscal year.
Medical care or treatment means health care furnished by or under
the direction of a licensed physician that can involve diagnosing,
treating, or preventing disease and other damage to the mind and body.
It may involve the use of pharmaceuticals, diet, exercise, surgical
intervention, and technical procedures.
Nonexcepted medical care means medical care (other than excepted
medical care) that is sought by or for a beneficiary who has elected
religious nonmedical health care institution services.
Religious nonmedical care or religious method of healing means
health care furnished under established religious tenets that prohibit
conventional or unconventional medical care for the treatment of a
beneficiary, and the sole reliance on these religious tenets to fulfill
a beneficiary's total health care needs.
RNHCI stands for ``religious nonmedical health care institution,''
as defined in section 1861(ss)(1) of the Act.
Religious nonmedical nursing personnel means individuals who are
grounded in the religious beliefs of the RNHCI, trained and experienced
in the principles of nonmedical care, and formally recognized as
competent in the administration of care within their religious
nonmedical health care group.
Sec. 403.720 Conditions for coverage.
Medicare covers services furnished in an RNHCI if the following
conditions are met:
(a) The provider meets the definition of an RNHCI as defined in
section 1861(ss)(1) of the Act. That is, it is an institution that:
(1) Is described in section 501(c)(3) of the Internal Revenue Code
of 1986 and is exempt from taxes under section 501(a).
(2) Is lawfully operated under all applicable Federal, State, and
local laws and regulations.
(3) Furnishes only nonmedical nursing items and services to
beneficiaries who choose to rely solely upon a religious method of
healing and for whom the acceptance of medical services would be
inconsistent with their religious beliefs.
(4) Furnishes nonmedical items and services exclusively through
nonmedical nursing personnel who are experienced in caring for the
physical needs of nonmedical patients.
(5) Furnishes nonmedical items and services to inpatients on a 24-
hour basis.
(6) Does not furnish, on the basis of religious beliefs, through its
personnel or otherwise medical items and services (including any medical
screening, examination, diagnosis, prognosis, treatment, or the
administration of drugs) for its patients.
(7) Is not owned by, is not under common ownership with, or does not
have an ownership interest of 5 percent or more in, a provider of
medical treatment or services and is not affiliated with a provider of
medical treatment or services or with an individual who has an ownership
interest of 5 percent or more in, a provider of medical treatment or
services. (Permissible affiliations are described at Sec. 403.738(c).)
(8) Has in effect a utilization review plan that sets forth the
following:
[[Page 76]]
(i) Provides for review of the admissions to the institution, the
duration of stays, and the need for continuous extended duration of
stays in the institution, and the items and services furnished by the
institution.
(ii) Requires that reviews be made by an appropriate committee of
the institution that included the individuals responsible for overall
administration and for supervision of nursing personnel at the
institution.
(iii) Provides that records be maintained of the meetings,
decisions, and actions of the review committee.
(iv) Meets other requirements as the Secretary finds necessary to
establish an effective utilization review plan.
(9) Provides information CMS may require to implement section 1821
of the Act, including information relating to quality of care and
coverage decisions.
(10) Meets other requirements CMS finds necessary in the interest of
the health and safety of the patients who receive services in the
institution. These requirements are the conditions of participation in
this subpart.
(b) The provider meets the conditions of participation cited in
Sec. Sec. 403.730 through 403.746. (A provider may be deemed to meet
conditions of participation in accordance with part 488 of this
chapter.)
(c) The provider has a valid provider agreement as a hospital with
CMS in accordance with part 489 of this chapter and for payment purposes
is classified as an extended care hospital.
(d) The beneficiary has a condition that would make him or her
eligible to receive services covered under Medicare Part A as an
inpatient in a hospital or SNF.
(e) The beneficiary has a valid election as described in Sec.
403.724 in effect for Medicare covered services furnished in an RNHCI.
Sec. 403.724 Valid election requirements.
(a) General requirements. An election statement must be made by the
Medicare beneficiary or his or her legal representative.
(1) The election must be a written statement that must include the
following statements:
(i) The beneficiary is conscientiously opposed to acceptance of
nonexcepted medical treatment.
(ii) The beneficiary acknowledges that the acceptance of nonexcepted
medical treatment is inconsistent with his or her sincere religious
beliefs.
(iii) The beneficiary acknowledges that the receipt of nonexcepted
medical treatment constitutes a revocation of the election and may limit
further receipt of services in an RNHCI.
(iv) The beneficiary acknowledges that the election may be revoked
by submitting a written statement to CMS.
(v) The beneficiary acknowledges that revocation of the election
will not prevent or delay access to medical services available under
Medicare Part A in facilities other than RNHCIs.
(2) The election must be signed and dated by the beneficiary or his
or her legal representative.
(3) The election must be notarized.
(4) The RNHCI must keep a copy of the election statement on file and
submit the original to CMS with any information obtained regarding prior
elections or revocations.
(5) The election becomes effective on the date it is signed.
(6) The election remains in effect until revoked.
(b) Revocation of election. (1) A beneficiary's election is revoked
by one of the following:
(i) The beneficiary receives nonexcepted medical treatment for which
Medicare payment is requested.
(ii) The beneficiary voluntarily revokes the election and notifies
CMS in writing.
(2) The receipt of excepted medical treatment as defined in Sec.
403.702 does not revoke the election made by a beneficiary.
(c) Limitation on subsequent elections. (1) If a beneficiary's
election has been made and revoked twice, the following limitations on
subsequent elections apply:
(i) The third election is not effective until 1 year after the date
of the most recent revocation.
(ii) Any succeeding elections are not effective until 5 years after
the date of the most recent revocation.
[[Page 77]]
(2) CMS will not accept as the basis for payment of any claim any
elections executed on or after January 1 of the calendar year in which
the sunset provision described in Sec. 403.756 becomes effective.
Sec. 403.730 Condition of participation: Patient rights.
An RNHCI must protect and promote each patient's rights.
(a) Standard: Notice of rights. The RNHCI must do the following:
(1) Inform each patient of his or her rights in advance of
furnishing patient care.
(2) Have a process for prompt resolution of grievances, including a
specific person within the facility whom a patient may contact to file a
grievance. In addition, the facility must provide patients with
information about the facility's process as well as with contact
information for appropriate State and Federal resources.
(b) Standard: Exercise of rights. The patient has the right to:
(1) Be informed of his or her rights and to participate in the
development and implementation of his or her plan of care.
(2) Make decisions regarding his or her care, including transfer and
discharge from the RNHCI. (See Sec. 403.736 for discharge and transfer
requirements.)
(3) Formulate advance directives and expect staff who furnish care
in the RNHCI to comply with those directives, in accordance with part
489, subpart I of this chapter. For purposes of conforming with the
requirement in Sec. 489.102 that there be documentation in the
patient's medical records concerning advanced directives, the patient
care records of a beneficiary in an RNHCI are equivalent to medical
records held by other providers.
(c) Standard: Privacy and safety. The patient has the right to the
following:
(1) Personal privacy.
(2) Care in a safe setting.
(3) Freedom from verbal, psychological, and physical abuse, and
misappropriation of property.
(4) Freedom from the use of restraints.
(5) Freedom from involuntary seclusion.
(d) Standard: Confidentiality of patient records. For any patient
care records or election information it maintains on patients, the RNHCI
must establish procedures to do the following:
(1) Safeguard the privacy of any information that identifies a
particular patient. Information from, or copies of, records may be
released only to authorized individuals, and the RNHCI must ensure that
unauthorized individuals cannot gain access to or alter patient records.
Original patient care records must be released only in accordance with
Federal or State laws, court orders, or subpoenas.
(2) Maintain the records and information in an accurate and timely
manner.
(3) Ensure timely access by patients to the records and other
information that pertains to that patient.
(4) Abide by all Federal and State laws regarding confidentiality
and disclosure for patient care records and election information.
Sec. 403.732 Condition of participation: Quality assessment
and performance improvement.
The RNHCI must develop, implement, and maintain a quality assessment
and performance improvement program.
(a) Standard: Program scope. (1) The quality assessment and
performance improvement program must include, but is not limited to,
measures to evaluate:
(i) Access to care.
(ii) Patient satisfaction.
(iii) Staff performance.
(iv) Complaints and grievances.
(v) Discharge planning activities.
(vi) Safety issues, including physical environment.
(2) In each of the areas listed in paragraph (a)(1) of this section,
and any other areas the RNHCI includes, the RNHCI must do the following:
(i) Define quality assessment and performance improvement measures.
(ii) Describe and outline quality assessment and performance
improvement activities appropriate for the services furnished by or in
the RNHCI.
(iii) Measure, analyze, and track performance that reflect care and
RNHCI processes.
[[Page 78]]
(iv) Inform all patients, in writing, of the scope and
responsibilities of the quality assessment and performance improvement
program.
(3) The RNHCI must set priorities for performance improvement,
considering the prevalence of and severity of identified problems.
(4) The RNHCI must act to make performance improvements and must
track performance to assure that improvements are sustained.
(b) Standard: Program responsibilities. (1) The governing body,
administration, and staff are responsible for ensuring that the quality
assessment and performance improvement program addresses identified
priorities in the RNHCI and are responsible for the development,
implementation, maintenance, and performance improvement of assessment
actions.
(2) The RNHCI must include all programs, departments, functions, and
contracted services when developing, implementing, maintaining, and
evaluating the program of quality assessment and performance
improvement.
Sec. 403.734 Condition of participation: Food services.
The RNHCI must have an organized food service that is directed and
adequately staffed by qualified personnel.
(a) Standard: Sanitary conditions. The RNHCI must furnish food to
the patient that is obtained, stored, prepared, distributed, and served
under sanitary conditions.
(b) Standard: Meals. The RNHCI must serve meals that furnish each
patient with adequate nourishment in accordance with the recommended
dietary allowances of the Food and Nutrition Board of the National
Research Council, National Academy of Sciences. The RNHCI must do the
following:
(1) Furnish food that is palatable, attractive, and at the proper
temperature and consistency.
(2) Offer substitutes of similar nourishment to patients who refuse
food served or desire alternative choices.
(3) Furnish meals at regular times comparable to normal mealtimes in
the community. There must be no more than 14 hours between a substantial
evening meal and breakfast the following day.
(4) The RNHCI must offer snacks at bedtime.
Sec. 403.736 Condition of participation: Discharge planning.
(a) Discharge planning and instructions. The RNHCI must have in
effect a discharge planning process that applies to all patients. The
process must assure that appropriate post-institution services are
obtained for each patient, as necessary. The RNHCI must assess the need
for a discharge plan for any patient likely to suffer adverse
consequences if there is no planning.
(1) Discharge instructions must be provided at the time of discharge
to the patient or the patient's caregiver as necessary.
(2) If the patient assessment indicates a need for a discharge plan,
the discharge plan must include instructions on post-RNHCI care to be
used by the patient or the caregiver in the patient's home, as
identified in the discharge plan.
(3) If the RNHCI's patient assessment does not indicate a need for a
discharge plan, the beneficiary or his or her legal representative may
request a discharge plan. In this case, the RNHCI must develop a
discharge plan for the beneficiary.
(b) Standard: Transfer or referral. The RNHCI must transfer or refer
patients in a timely manner to another facility (including a medical
facility if requested by the beneficiary, or his or her legal
representative) in accordance with Sec. 403.730(b)(2).
(c) Standard: Reassessment. The RNHCI must reassess its discharge
planning process on an ongoing basis. The reassessment must include a
review of discharge plans to ensure that they are responsive to
discharge needs.
[64 FR 67047, Nov. 30, 1999, as amended at 68 FR 66720, Nov. 28, 2003;
84 FR 51813, Sept. 30, 2019]
Sec. 403.738 Condition of participation: Administration.
An RNHCI must have written policies regarding its organization,
services, and administration.
(a) Standard: Compliance with Federal, State, and local laws. The
RNHCI must
[[Page 79]]
operate in compliance with all applicable Federal, State, and local
laws, regulations, and codes including, but not limited to, those
pertaining to the following:
(1) Protection against discrimination on the basis of race, color,
national origin, age, or handicap (45 CFR parts 80, 84, and 91).
(2) Protection of human research subjects (45 CFR part 46).
(3) Application of all safeguards to protect against the possibility
of fraud and abuse (42 CFR part 455).
(4) Privacy of individually identifiable health information (45 CFR
part 164).
(b) Standard: Governing body. (1) The RNHCI must have a governing
body, or a person designated to function as a governing body, that is
legally responsible for establishing and implementing all policies
regarding the RNHCI's management and operation.
(2) The governing body must appoint the administrator responsible
for the management of the RNHCI.
(c) Standard: Affiliations and disclosure. (1) An affiliation is
permissible if it is between one of the following:
(i) An individual serving as an uncompensated director, trustee,
officer, or other member of the governing body of an RNHCI and a
provider of medical treatment or services.
(ii) An individual who is a director, trustee, officer, employee, or
staff member of an RNHCI and another individual, with whom he or she has
a family relationship, who is affiliated with (or has an ownership
interest in) a provider of medical treatment or services.
(iii) The RNHCI and an individual or entity furnishing goods or
services as a vendor to both providers of medical treatment or services
and RNHCIs.
(2) The RNHCI complies with the disclosure requirements of
Sec. Sec. 420.206 and 455.104 of this chapter.
(3) The RNHCI furnishes written notice, including the identity of
each new individual or company, to CMS at the time of a change, if a
change occurs in any of the following:
(i) Persons with an ownership or control interest, as defined in
Sec. Sec. 420.201 and 455.101 of this chapter.
(ii) The officers, directors, agents, or managing employees.
(iii) The religious entity, corporation, association, or other
company responsible for the management of the RNHCI.
(iv) The RNHCI's administrator or director of nonmedical nursing
services.
[64 FR 67047, Nov. 30, 1999, as amended at 68 FR 66720, Nov. 28, 2003]
Sec. 403.740 Condition of participation: Staffing.
The RNHCI must be staffed with qualified experienced personnel who
are present in sufficient numbers to meet the needs of the patients.
(a) Standard: Personnel qualifications. The RNHCI must ensure that
staff who supervise or furnish services to patients are qualified to do
so and that staff allowed to practice without direct supervision have
specific training to furnish these services.
(b) Standard: Education, training, and performance evaluation. (1)
The RNHCI must ensure that staff (including contractors and other
individuals working under arrangement) have the necessary education and
training concerning their duties so that they can furnish services
competently. This education includes, but is not limited to, training
related to the individual job description, performance expectations,
applicable organizational policies and procedures, and safety
responsibilities.
(2) Staff must demonstrate, in practice, the skills and techniques
necessary to perform their duties and responsibilities.
(3) The RNHCI must evaluate the performance of staff and implement
measures for improvement.
Sec. 403.742 Condition of participation: Physical environment.
A RNHCI must be designed, constructed, and maintained to ensure the
safety of the patients, staff, and the public.
(a) Standard: Buildings. The physical plant and the overall
environment must be maintained in a manner that ensures the safety and
well-being of the patients. The RNHCI must have the following:
(1) Procedures for the proper storage and disposal of trash.
(2) Proper ventilation and temperature control and appropriate
lighting
[[Page 80]]
levels to ensure a safe and secure environment.
(3) An effective pest control program.
(4) A preventive maintenance program to maintain essential
mechanical, electrical, and fire protection equipment operating in an
efficient and safe manner.
(5) A working call system for patients to summon aid or assistance.
(b) Standard: Patient rooms. Patient rooms must be designed and
equipped for adequate care, comfort, and privacy of the patient.
(1) Patient rooms must meet the following conditions:
(i) Accommodate no more than four patients.
(ii) Measure at least 80 square feet per patient in multiple patient
rooms and at least 100 square feet in single patient rooms.
(iii) Have direct access to an exit corridor.
(iv) Be designed or equipped to assure full visual privacy for each
patient.
(v) Have at least one window to the outside.
(vi) Have a floor at or above grade level.
(2) The RNHCI must furnish each patient with the following:
(i) A separate bed of proper size and height for the convenience of
the patient.
(ii) A clean, comfortable mattress.
(iii) Bedding appropriate to the weather and climate.
(iv) Functional furniture appropriate to the patient's needs and
individual closet space with clothes racks and shelves accessible to the
patient.
(3) CMS may permit variances in requirements specified in paragraphs
(b)(1)(i) and (ii) of this section relating to rooms on an individual
basis when the RNHCI adequately demonstrates in writing that the
variances meet the following:
(i) Are in accordance with the special needs of the patients.
(ii) Will not adversely affect patients' health and safety.
[64 FR 67047, Nov. 30, 1999, as amended at 81 FR 64021, Sept. 16, 2016]
Sec. 403.744 Condition of participation: Life safety from fire.
(a) General. An RNHCI must meet the following conditions:
(1) Except as otherwise provided in this section--
(i) The RNHCI must meet the applicable provisions and must proceed
in accordance with the Life Safety Code (NFPA 101 and Tentative Interim
Amendments TIA 12-1, TIA 12-2, TIA 12-3, and TIA 12-4).
(ii) Notwithstanding paragraph (a)(1)(i) of this section, corridor
doors and doors to rooms containing flammable or combustible materials
must be provided with positive latching hardware. Roller latches are
prohibited on such doors.
(2) The RNHCI must have written fire control plans that contain
provisions for prompt reporting of fires; extinguishing fires;
protection of patients, staff, and the public; evacuation; and
cooperation with fire fighting authorities.
(3) The RNHCI must maintain written evidence of regular inspection
and approval by State or local fire control agencies.
(4) The RNHCI may place alcohol-based hand rub dispensers in its
facility if the dispensers are installed in a manner that adequately
protects against inappropriate access.
(5) When a sprinkler system is shut down for more than 10 hours the
RHNCI must:
(i) Evacuate the building or portion of the building affected by the
system outage until the system is back in service, or
(ii) Establish a fire watch until the system is back in service.
(6) Building must have an outside window or outside door in every
sleeping room, and for any building constructed after July 5, 2016 the
sill height must not exceed 36 inches above the floor. Windows in atrium
walls are considered outside windows for the purposes of this
requirement.
(b) Exceptions. (1) In consideration of a recommendation by the
State survey agency or Accrediting Organization, or at the discretion of
the Secretary, may waive, for periods deemed appropriate, specific
provisions of the Life Safety
[[Page 81]]
Code, which would result in unreasonable hardship upon a RNHCI facility,
but only if the waiver will not adversely affect the health and safety
of the patients.
(2) If CMS finds that the fire and safety code imposed by State law
adequately protects patients in the institution, the provisions of the
Life Safety Code required in paragraph (a)(1) of this section do not
apply in that State.
(c) The standards incorporated by reference in this section are
approved for incorporation by reference by the Director of the Office of
the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part
51. You may inspect a copy at the CMS Information Resource Center, 7500
Security Boulevard, Baltimore, MD or at the National Archives and
Records Administration (NARA). For information on the availability of
this material at NARA, call 202-741-6030, or go to: http://
www.archives.gov/ federal_register/ code_of_ federal_regulations/
ibr_locations.html. If any changes in this edition of the Code are
incorporated by reference, CMS will publish a document in the Federal
Register to announce the changes.
(1) National Fire Protection Association, 1 Batterymarch Park,
Quincy, MA 02169, www.nfpa.org, 1.617.770.3000.
(i) NFPA 101, Life Safety Code, 2012 edition, issued August 11,
2011;
(ii) TIA 12-1 to NFPA 101, issued August 11, 2011.
(iii) TIA 12-2 to NFPA 101, issued October 30, 2012.
(iv) TIA 12-3 to NFPA 101, issued October 22, 2013.
(v) TIA 12-4 to NFPA 101, issued October 22, 2013.
(2) [Reserved]
[64 FR 67047, Nov. 30, 1999, as amended at 68 FR 1385, Jan. 10, 2003; 69
FR 18803, Apr. 9, 2004; 69 FR 49240, Aug. 11, 2004; 70 FR 15237, Mar.
25, 2005; 70 FR 71007, Nov. 25, 2005; 71 FR 55339, Sept. 22, 2006; 81 FR
26896, May 4, 2016]
Sec. 403.745 Condition of participation: Building safety.
(a) Standard: Building Safety. Except as otherwise provided in this
section the RNHCI must meet the applicable provisions and must proceed
in accordance with the Health Care Facilities Code (NFPA 99 and
Tentative Interim Amendments TIA 12-2, TIA 12-3, TIA 12-4, TIA 12-5 and
TIA 12-6).
(b) Standard: Exceptions. Chapters 7, 8, 12, and 13 of the adopted
Health Care Facilities Code do not apply to a RNHCI.
(c) Waiver. If application of the Health Care Facilities Code
required under paragraph (a) of this section would result in
unreasonable hardship for the RNHCI, CMS may waive specific provisions
of the Health Care Facilities Code, but only if the waiver does not
adversely affect the health and safety of individuals.
(d) Incorporation by reference. The standards incorporated by
reference in this section are approved for incorporation by reference by
the Director of the Office of the Federal Register in accordance with 5
U.S.C. 552(a) and 1 CFR part 51. You may inspect a copy at the CMS
Information Resource Center, 7500 Security Boulevard, Baltimore, MD or
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, call 202-741-
6030, or go to: http://www.archives.gov/ federal_register/ code_of_
federal_regulations/ ibr_locations.html. If any changes in this edition
of the Code are incorporated by reference, CMS will publish a document
in the Federal Register to announce the changes.
(1) National Fire Protection Association, 1 Batterymarch Park,
Quincy, MA 02169, www.nfpa.org, 1.617.770.3000.
(i) NFPA 99, Standards for Health Care Facilities Code of the
National Fire Protection Association 99, 2012 edition, issued August 11,
2011.
(ii) TIA 12-2 to NFPA 99, issued August 11, 2011.
(iii) TIA 12-3 to NFPA 99, issued August 9, 2012.
(iv) TIA 12-4 to NFPA 99, issued March 7, 2013.
(v) TIA 12-5 to NFPA 99, issued August 1, 2013.
(vi) TIA 12-6 to NFPA 99, issued March 3, 2014.
(2) [Reserved]
[81 FR 26896, May 4, 2016]
[[Page 82]]
Sec. 403.746 Condition of participation: Utilization review.
The RNHCI must have in effect a written utilization review plan to
assess the necessity of services furnished. The plan must provide that
records be maintained of all meetings, decisions, and actions by the
utilization review committee.
(a) Standard: Utilization review plan. The utilization review plan
must contain written procedures for evaluating the following:
(1) Admissions.
(2) Duration of care.
(3) Continuing care of an extended duration.
(4) Items and services furnished.
(b) Standard: Utilization review committee. The committee is
responsible for evaluating each admission and ensuring that the
admission is necessary and appropriate. The utilization review plan must
be carried out by the utilization review committee, consisting of the
governing body, administrator or other individual responsible for the
overall administration of the RNHCI, the supervisor of nursing staff,
and other staff as appropriate.
(c) Standard: Utilization review committee role in RNHCI home
services. In addition to the requirements in paragraphs (a) and (b) of
this section, the utilization review committee is responsible for:
(1) The admission, and at least every 30 days, the continued care
review of each patient in the RHNCI home services program.
(2) Oversight and monitoring of the home services program, including
the purchase and utilization of designated durable medical equipment
items for beneficiaries in the program.
[64 FR 67047, Nov. 30, 1999, as amended at 69 FR 66419, Nov. 15, 2004]
Sec. 403.748 Condition of participation: Emergency preparedness.
The Religious Nonmedical Health Care Institution (RNHCI) must comply
with all applicable Federal, State, and local emergency preparedness
requirements. The RNHCI must establish and maintain an emergency
preparedness program that meets the requirements of this section. The
emergency preparedness program must include, but not be limited to, the
following elements:
(a) Emergency plan. The RNHCI must develop and maintain an emergency
preparedness plan that must be reviewed, and updated at least every 2
years. The plan must do all of the following:
(1) Be based on and include a documented, facility-based and
community-based risk assessment, utilizing an all-hazards approach.
(2) Include strategies for addressing emergency events identified by
the risk assessment.
(3) Address patient population, including, but not limited to,
persons at-risk; the type of services the RNHCI has the ability to
provide in an emergency; and, continuity of operations, including
delegations of authority and succession plans.
(4) Include a process for cooperation and collaboration with local,
tribal, regional, State, and Federal emergency preparedness officials'
efforts to maintain an integrated response during a disaster or
emergency situation.
(b) Policies and procedures. The RNHCI must develop and implement
emergency preparedness policies and procedures, based on the emergency
plan set forth in paragraph (a) of this section, risk assessment at
paragraph (a)(1) of this section, and the communication plan at
paragraph (c) of this section. The policies and procedures must be
reviewed and updated at least every 2 years. At a minimum, the policies
and procedures must address the following:
(1) The provision of subsistence needs for staff and patients,
whether they evacuate or shelter in place, include, but are not limited
to the following:
(i) Food, water, and supplies.
(ii) Alternate sources of energy to maintain the following:
(A) Temperatures to protect patient health and safety and for the
safe and sanitary storage of provisions.
(B) Emergency lighting.
(C) Fire detection, extinguishing, and alarm systems.
(D) Sewage and waste disposal.
(2) A system to track the location of on-duty staff and sheltered
patients in the RNHCI's care during an emergency. If on-duty staff and
sheltered patients
[[Page 83]]
are relocated during the emergency, the RNCHI must document the specific
name and location of the receiving facility or other location.
(3) Safe evacuation from the RNHCI, which includes the following:
(i) Consideration of care needs of evacuees.
(ii) Staff responsibilities.
(iii) Transportation.
(iv) Identification of evacuation location(s).
(v) Primary and alternate means of communication with external
sources of assistance.
(4) A means to shelter in place for patients, staff, and volunteers
who remain in the facility.
(5) A system of care documentation that does the following:
(i) Preserves patient information.
(ii) Protects confidentiality of patient information.
(iii) Secures and maintains the availability of records.
(6) The use of volunteers in an emergency and other emergency
staffing strategies to address surge needs during an emergency.
(7) The development of arrangements with other RNHCIs and other
providers to receive patients in the event of limitations or cessation
of operations to maintain the continuity of nonmedical services to RNHCI
patients.
(8) The role of the RNHCI under a waiver declared by the Secretary,
in accordance with section 1135 of Act, in the provision of care at an
alternate care site identified by emergency management officials.
(c) Communication plan. The RNHCI must develop and maintain an
emergency preparedness communication plan that complies with Federal,
State, and local laws and must be reviewed and updated at least every 2
years. The communication plan must include all of the following:
(1) Names and contact information for the following:
(i) Staff.
(ii) Entities providing services under arrangement.
(iii) Next of kin, guardian or custodian.
(iv) Other RNHCIs.
(v) Volunteers.
(2) Contact information for the following:
(i) Federal, State, tribal, regional, and local emergency
preparedness staff.
(ii) Other sources of assistance.
(3) Primary and alternate means for communicating with the
following:
(i) RNHCI's staff.
(ii) Federal, State, tribal, regional, and local emergency
management agencies.
(4) A method for sharing information and care documentation for
patients under the RNHCI's care, as necessary, with care providers to
maintain the continuity of care, based on the written election statement
made by the patient or his or her legal representative.
(5) A means, in the event of an evacuation, to release patient
information as permitted under 45 CFR 164.510(b)(1)(ii).
(6) A means of providing information about the general condition and
location of patients under the facility's care as permitted under 45 CFR
164.510(b)(4).
(7) A means of providing information about the RNHCI's occupancy,
needs, and its ability to provide assistance, to the authority having
jurisdiction, the Incident Command Center, or designee.
(d) Training and testing. The RNHCI must develop and maintain an
emergency preparedness training and testing program that is based on the
emergency plan set forth in paragraph (a) of this section, risk
assessment at paragraph (a)(1) of this section, policies and procedures
at paragraph (b) of this section, and the communication plan at
paragraph (c) of this section. The training and testing program must be
reviewed and updated at least every 2 years.
(1) Training program. The RNHCI must do all of the following:
(i) Initial training in emergency preparedness policies and
procedures to all new and existing staff, individuals providing services
under arrangement, and volunteers, consistent with their expected roles.
(ii) Provide emergency preparedness training at least every 2 years.
(iii) Maintain documentation of all emergency preparedness training.
(iv) Demonstrate staff knowledge of emergency procedures.
[[Page 84]]
(v) If the emergency preparedness policies and procedures are
significantly updated, the RNHCI must conduct training on the updated
policies and procedures.
(2) Testing. The RNHCI must conduct exercises to test the emergency
plan. The RNHCI must do the following:
(i) Conduct a paper-based, tabletop exercise at least annually. A
tabletop exercise is a group discussion led by a facilitator, using a
narrated, clinically-relevant emergency scenario, and a set of problem
statements, directed messages, or prepared questions designed to
challenge an emergency plan.
(ii) Analyze the RNHCI's response to and maintain documentation of
all tabletop exercises, and emergency events, and revise the RNHCI's
emergency plan, as needed.
[81 FR 64021, Sept. 16, 2016, as amended at 84 FR 51813, Sept. 30, 2019]
Sec. 403.750 Estimate of expenditures and adjustments.
(a) Estimates. CMS estimates the level of expenditures for services
provided under this subpart before the start of each FFY beginning with
FFY 2000.
(b) Adjustments to payments. When the level of estimated
expenditures is projected to exceed the FFY trigger level as described
in paragraph (d) of this section, for the year of the projection,
payments to RNHCIs will be reduced by a proportional percentage to
prevent estimated expenditures from exceeding the trigger level. In
addition to reducing payments proportionally, CMS may impose alternative
adjustments.
(c) Notification of adjustments. CMS notifies participating RNHCIs
before the start of the FFY of the type and level of expenditure
reductions to be made and when these adjustments will apply.
(d) Calculation of trigger level. The trigger level for FFY 1998 is
$20,000,000. For subsequent FFYs, the trigger level is the unadjusted
trigger level increased or decreased by the carry forward as described
in Sec. 403.754(b). The unadjusted trigger level is the base year
amount (the unadjusted trigger level dollar amount for the prior FFY)
increased by the average consumer price index (the single numerical
value published monthly by the Bureau of Labor Statistics that presents
the relationship in United States urban areas for the current cost of
goods and services compared to a base year, to represent the change in
spending power) for the 12-month period ending on July 31 preceding the
beginning of the FFY.
Sec. 403.752 Payment provisions.
(a) Payment to RNHCIs. Payment for services may be made to an RNHCI
that meets the conditions for coverage described in Sec. 403.720 and
the conditions of participation described in Sec. Sec. 403.730 through
403.746. Payment is made in accordance with Sec. 413.40 of this chapter
to an RNHCI meeting these conditions.
(b) Review of estimates and adjustments. There is no administrative
or judicial review of the level of estimated expenditures or the
adjustments in payments described in Sec. 403.750(a) and (b).
(c) Effect on beneficiary liability. When payments are reduced in
accordance with Sec. 403.750(b), the RNHCI may bill the beneficiary the
amount of the Medicare reduction attributable to his or her covered
services.
(d) Notification of beneficiary liability. (1) The RNHCI must notify
the beneficiary in writing at the time of admission of any proposed or
current proportional Medicare adjustment. A beneficiary currently
receiving care in the RNHCI must be notified in writing at least 30 days
before the Medicare reduction is to take effect. The notification must
inform the beneficiary that the RNHCI can bill him or her for the
proportional Medicare adjustment.
(2) The RNHCI must, at time of billing, provide the beneficiary with
his or her liability for payment, based on a calculation of the Medicare
reduction pertaining to the beneficiary's covered services permitted by
Sec. 403.750(b).
Sec. 403.754 Monitoring expenditure level.
(a) Tracking expenditures. Starting in FFY 1999 CMS begins
monitoring Medicare payments to RNHCIs.
(b) Carry forward. The difference between the trigger level and
Medicare expenditures for a FFY results in a carry forward that either
increases or decreases the unadjusted trigger level described in Sec.
403.750(d). In no case may
[[Page 85]]
the carry forward exceed $50,000,000 for an FFY.
Sec. 403.756 Sunset provision.
(a) Effective date. Beginning with FFY 2002, if the level of
estimated expenditures for all RNHCIs exceeds the trigger level for 3
consecutive FFYs, CMS will not accept as the basis for payment of any
claim any election executed on or after January 1 of the following
calendar year.
(b) Notice of activation. A notice in the Federal Register will be
published at least 60 days before January 1 of the calendar year that
the sunset provision becomes effective.
(c) Effects of sunset provision. Only those beneficiaries who have a
valid election in effect before January 1 of the year in which the
sunset provision becomes effective will be able to claim Medicare
payment for care in an RNHCI, and only for RNCHI services furnished
during that election.
Sec. 403.764 Basis and purpose of religious
nonmedical health care institutions providing home service.
(a) Basis. This subpart implements sections 1821, 1861, 1861(e),
1861(m), 1861(y), 1861(ss) and 1861(aaa), 1869 and 1878 of the Act
regarding Medicare payment for items and services provided in the home
setting furnished to eligible beneficiaries by religious nonmedical
health care institutions (RNHCIs).
(b) Purpose. The home benefit provides for limited durable medical
equipment (DME) items and RNHCI services in the home setting that are
fiscally limited to $700,000 per calendar year, with an expiration date
of December 31, 2006, or the date on which the 2006 spending limit is
reached.
[69 FR 66419, Nov. 15, 2004]
Sec. 403.766 Requirements for coverage and payment of RNHCI
home services.
(a) Medicare Part A pays for RNHCI home services if the RNHCI
provider does the following:
(1) Submit a notice of intent to CMS to exercise the option of
providing home service.
(2) Provide RNHCI services to eligible beneficiaries,
(3) Arrange with suppliers to furnish appropriate DME items as
required to meet documented eligible beneficiary needs.
(4) Arrange for RNHCI nurse home visits to eligible beneficiaries.
(5) Have a utilization committee that assumes the additional
responsibility for the oversight and monitoring of the items and RNHCI
nursing services provided under the home benefit.
(6) Meet all applicable requirements set forth in subpart G of this
part.
(b) To be an eligible beneficiary to RNHCI home services the
beneficiary must:
(1) Have an effective election in place.
(2) Be confined to the home, as specified in Sec. 409.42(a) of this
chapter.
(3) Have a condition that makes him or her eligible to receive
services covered under Medicare home health.
(4) Receive home services and DME items from a RNHCI.
(5) Be responsible for deductible and coinsurance for DME, as
specified in Sec. 409.50 of this chapter.
[69 FR 66419, Nov. 15, 2004, as amended at 70 FR 16721, Apr. 1, 2005]
Sec. 403.768 Excluded services.
In addition to items and services excluded in Sec. 409.49 of this
chapter, items and services are also excluded if they are provided by:
(a) A HHA that is not a RNHCI.
(b) A supplier who is not providing RNHCI designated items under
arrangement with a RNHCI.
(c) A nurse who is not providing RNHCI home nursing services under
arrangement with a RNHCI.
[69 FR 66419, Nov. 15, 2004]
Sec. 403.770 Payments for home services.
(a) The RNHCI nursing visits are paid at the modified low
utilization payment adjusted (LUPA) rate used under the home health
prospective payment system at Sec. 484.230 of this chapter.
(b) Appropriate DME items are paid as priced by Medicare, minus the
deductible and coinsurance liability of the beneficiary.
[69 FR 66419, Nov. 15, 2004]
[[Page 86]]
Subpart H_Medicare Prescription Drug Discount Card and Transitional
Assistance Program
Source: 68 FR 69915, Dec. 15, 2003, unless otherwise noted.
Sec. 403.800 Basis and scope.
(a) Basis. This subpart is based on section 1860D-31 of the Social
Security Act (the Act).
(b) Scope. This subpart sets forth the standards and procedures CMS
uses to implement the Medicare Prescription Drug Discount Card and
Transitional Assistance Program.
Sec. 403.802 Definitions.
For purposes of this subpart, the following definitions apply:
Affiliated organization means an organization that is a legally
separate entity from the endorsed drug card sponsor and meets one of the
following conditions:
(1) The organization and the endorsed drug card sponsor are under
common control. Common control exists if another entity has the power,
directly or indirectly, to significantly influence or direct the actions
or policies of the organization and the endorsed drug card sponsor.
(2) The organization is under the control of the endorsed drug card
sponsor or the organization controls the endorsed drug card sponsor.
Control exists if an entity has the power, directly or indirectly, to
significantly influence or direct the actions or policies of another
entity.
(3) The organization possesses an ownership or equity interest of 5
percent or more in the endorsed drug card sponsor on both the date on
which the endorsed drug card sponsor markets the organization's Part D
plan, and the date on which the endorsed drug card sponsor signed its
endorsement contract with CMS.
Annual coordinated election period means the period beginning on
November 15, 2004 and ending on December 31, 2004, during which a
discount card enrollee may elect to disenroll from their current
endorsed discount card program and elect enrollment in another endorsed
discount card program effective January 1, 2005.
Applicant means the non-governmental, single legal organization or
entity doing business in the United States that is applying for Medicare
endorsement of its prescription drug discount card program, as described
in its application, to be operated by itself or in coordination with
subcontractors.
Application means the document submitted to CMS by an applicant that
seeks to demonstrate the applicant's compliance with the requirements
specified in this subpart in order to obtain Medicare endorsement of the
applicant's prescription drug discount card program.
Authorized representative means a person with legal authority to act
on behalf of an individual in making decisions related to the
individual's health care or the individual's enrollment in,
disenrollment from, and access to negotiated prices and transitional
assistance under the Medicare Prescription Drug Discount Card and
Transitional Assistance Program.
Covered discount card drug means any of the following: a drug that
may be dispensed only upon a prescription and that is described in
sections 1927(k)(2)(A)(i) through (iii) of the Act; a biological product
described in sections 1927(k)(2)(B)(i) through (iii) of the Act; insulin
described in section 1927(k)(2)(C) of the Act; the following medical
supplies associated with the injection of insulin: syringes, needles,
alcohol swabs, and gauze; a vaccine licensed under section 351 of the
Public Health Service Act; or any use of a covered discount card drug
for a medically accepted indication (as defined in section 1927(k)(6) of
the Act). The definition of covered discount card drug excludes the
following: agents when used for anorexia, weight loss, or weight gain;
agents when used to promote fertility; agents when used for cosmetic
purposes or hair growth; agents when used for the symptomatic relief of
cough and colds; prescription vitamins and mineral products, except
prenatal vitamins and fluoride preparations; nonprescription drugs;
outpatient drugs for which the manufacturer seeks to require that
associated tests
[[Page 87]]
or monitoring services be purchased exclusively from the manufacturer or
its designee as a condition of sale; barbiturates; and benzodiazepines.
Discount card enrollee or enrollee or card enrollee means an
individual described in Sec. 403.810(a) who elects to enroll in a
Medicare-endorsed prescription drug discount card program.
Effective date means the date on which an enrollment or
disenrollment transaction becomes effective.
Enrollment period means the period beginning on the initial
enrollment date and ending on December 31, 2005.
Exclusive card program means an endorsed discount card program that
is offered by an exclusive card sponsor.
Exclusive card sponsor means an endorsed sponsor that also operates
one or more Medicare managed care plans and limits enrollment in its
endorsed discount card program to individuals described in Sec.
403.810(a) who are enrollees in one of the Medicare managed care plans
it offers.
Family size means one for individuals who are single, and two for
individuals who are married.
Federal Employee's Health Benefits Program plan means a plan under
chapter 89 of title 5 of the United States Code including the Retired
Federal Employee's Health Benefits Program.
Formulary means the list of specific drugs from among covered
discount card drugs for which an endorsed sponsor offers negotiated
prices to Medicare beneficiaries enrolled in its Medicare-endorsed
prescription drug discount card program.
Group enrollment means simultaneous enrollment of all or some of the
individuals described in section 403.810(a) who are members of a
Medicare managed care plan into the exclusive card program offered by
the Medicare managed care organization.
HIPAA means the Health Insurance Portability and Accountability Act
of 1996, 42 U.S.C. 1320d and section 264 of Public Law 104-191.
Income means the components of an individual's adjusted gross income
(AGI), as defined under 26 U.S.C. section 62, and, to the extent not
included in the components of AGI, retirement and disability benefits,
or, if he or she is married, the sum of such income for the individual
and his or her spouse.
Initial enrollment date means the date established by the Secretary
on which endorsed sponsors may begin accepting beneficiaries' standard
enrollment forms.
Initial enrollment year means the period beginning on the initial
enrollment date and ending on December 31, 2004.
I/T/U pharmacy means a pharmacy operated by the Indian Health
Service, an Indian tribe or tribal organization, or an urban Indian
organization, all of which are defined in section 4 of the Indian Health
Care Improvement Act, 25 U.S.C. 1603.
Long-term care facility means a skilled nursing facility, as defined
in section 1819(a) of the Act, or nursing facility, as defined in
section 1919(a) of the Act.
Long-term care pharmacy means a pharmacy owned by or under contract
with a long-term care facility to provide prescription drugs to the
facility's residents.
Medicare cost plan means an organization that offers enrollment
under a reasonable cost reimbursement contract under section 1876(h) of
the Act.
Medicare managed care organization means a Part C organization
offering a Part C plan described in section 1851(a)(2)(A) of the Act or
a Medicare cost plan.
Medicare managed care plan means a plan described in section
1851(a)(2)(A) of the Act offered by a Part C organization or a Medicare
cost plan.
Medicare Prescription Drug Discount Card and Transitional Assistance
Program or Medicare Drug Discount Card Program means the program
established under section 1860D-31 of the Act.
Medicare-endorsed prescription drug discount card program, or
endorsed program, or endorsed discount card program means any
prescription drug discount card program that has received Medicare
endorsement and whose endorsed sponsor has entered into a contract with
CMS.
Medicare-endorsed prescription drug discount card sponsor, or
endorsed sponsor, or endorsed discount card sponsor means any applicant
that has received
[[Page 88]]
endorsement from Medicare and entered into a contract with CMS to
operate an approved Medicare-endorsed discount card program.
Negotiated price means the discounted price for a covered discount
card drug offered by an endorsed sponsor, including any dispensing fee,
which takes into account negotiated price concessions, such as
discounts, direct or indirect subsidies, rebates, and direct or indirect
remunerations.
Network pharmacy means a licensed pharmacy that is not a mail order
pharmacy and that is under contract with an endorsed sponsor to provide
negotiated prices to its card enrollees and accept transitional
assistance as payment for covered discount card drugs provided to its
transitional assistance enrollees.
New Medicare managed care organization means an entity applying for
approval to enter into a new contract with CMS to offer a new,
coordinated care plan or plans as described in section 1851(a)(2)(A) of
the Act under Medicare Part C and an exclusive card program under the
Medicare Drug Discount Card Program.
Over-the-counter drug means a non-prescription drug.
Part C organization means an organization offering a Part C plan.
Part C plan means a plan described in section 1859(b)(1) of the Act.
Part D plan has the meaning given the term at Sec. 423.4.
Pharmacy network means the group of network pharmacies under
contract with an endorsed sponsor.
Poverty line means the income level defined in section 673(2) of the
Community Services Block Grant Act, 42 U.S.C. 9902(2), including any
revision required by such section, applicable to the family size
involved.
Rural means a five-digit zip code in which the population density is
less than 1000 persons per square mile.
Second enrollment year means the period beginning on January 1, 2005
and ending on December 31, 2005.
Solicitation means the application materials identified in the
notice CMS publishes in the Federal Register announcing its intention to
accept and consider applications from applicants seeking Medicare
endorsement for their prescription drug discount card programs.
Special election period means the period beginning the day after the
effective date of an individual's disenrollment from an endorsed
discount card program for one of the reasons listed in Sec.
403.811(b)(2). The length of any given election period will be specified
by CMS in a form and manner that supports the goals of the Medicare Drug
Discount Card Program.
Special endorsed sponsor means an endorsed sponsor who has received
special endorsement by CMS.
Special endorsement means an endorsement granted under Sec. 403.816
or Sec. 403.817.
Standard enrollment form means an enrollment form or other approved
process for enrolling individuals into an endorsed program that
incorporates the standard elements provided by CMS.
Subcontractor means an organization or entity doing business in the
United States with which an applicant or endorsed sponsor enters into a
contract or other legal arrangement in connection with the operation of
a prescription drug discount card program.
Suburban means a five-digit zip code in which the population density
is between 1000 and 3000 persons per square mile.
Transition period means the period beginning on January 1, 2006 and
ending, for individuals enrolled for coverage under Part D, on the
effective date of the individual's coverage, and for individuals not so
enrolled, on the last day of the initial Part D open enrollment period.
Transitional assistance means a subsidy that transitional assistance
enrollees may apply toward the cost of covered discount card drugs in
the manner described in Sec. 403.808(d).
Transitional assistance effective date means the date on which a
transitional assistance enrollee can access transitional assistance.
Transitional assistance enrollee means an individual described in
Sec. 403.810(b) who has applied for and been determined eligible for
transitional assistance and has enrolled in a discount card program.
[[Page 89]]
Urban means a five-digit zip code in which the population density is
greater than 3000 persons per square mile.
[68 FR 69915, Dec. 15, 2003, as amended at 70 FR 52022, Sept. 1, 2005]
Sec. 403.804 General rules for solicitation, application
and Medicare endorsement period.
(a) Application. (1) Except as provided in paragraph (a)(2) of this
section, an applicant must submit an application to CMS by the deadline
announced in the solicitation to be eligible for Medicare endorsement of
its prescription drug discount card program. The applicant must certify
that based on best knowledge, information, and belief, the reported
information is accurate, complete, truthful, and supportable.
(2) A new Medicare managed care organization may simultaneously
apply to offer a new Part C plan or plans and an exclusive card program
after the deadline announced in the solicitation. New Medicare managed
care organizations seeking endorsement of their prescription drug
discount card programs must submit an application to CMS at the time
that they submit their Part C applications. New Medicare managed care
organizations will be eligible for endorsement provided CMS approves
their Part C application, the new Medicare managed care organizations
demonstrate to CMS that they meet the criteria under paragraph (b) of
this section, and the new Medicare managed care organizations
demonstrate that they will meet the requirements of paragraph (e)(2) of
this section.
(b) Eligibility to receive endorsement. Except as specified in
Sec. Sec. 403.814, 403.816 and 403.817, an applicant will be eligible
for endorsement if its application demonstrates to CMS's satisfaction
that the applicant meets the requirements of Sec. 403.806(a) and Sec.
403.806(b)(1) and that it would operate its endorsed program in a manner
consistent with the requirements of Sec. 403.806(b)(2) and (b)(3)
through Sec. 403.806(m). An applicant that submits a complete
application that meets all of the requirements of this subpart will be
eligible to enter into a contract with CMS to operate a Medicare-
endorsed prescription drug discount card program. Following the receipt
of its Medicare endorsement, an endorsed sponsor must comply with the
requirements of Sec. 403.806(b)(2) and (b)(3) through Sec. 403.806(m)
through the end of the transition period.
(c) Ability to subcontract with other organizations and entities.
(1) An applicant for endorsement may demonstrate that it meets the
requirements of this subpart by combining with subcontractors.
(2) Any subcontracts must be in final form satisfactory to CMS,
signed by all applicable parties, and filed with CMS before an endorsed
sponsor will be permitted to engage in any enrollment or information and
outreach.
(3) Once endorsed, an endorsed sponsor must ensure that its
subcontractors comply with all applicable requirements of this subpart.
(d) Period of endorsement. An applicant eligible to receive
endorsement will be required to sign a contract with CMS agreeing to
operate its approved Medicare-endorsed prescription drug discount card
program(s) until the end of the transition period.
(e)(1) Except as provided in paragraph (e)(2) of this section, we
expect an endorsed sponsor to be ready by June 8, 2004, to initiate
enrollment and fully operate its endorsed program in compliance with the
requirements of Sec. 403.806(b)(2) and (b)(3) through Sec. 403.806(m).
(2) A new Medicare managed care organization must be ready to
initiate enrollment and fully operate its exclusive card program in
compliance with the requirements of Sec. Sec. 403.806(b)(2) and (b)(3)
through Sec. 403.806(m) upon approval of its Part C application and
application for Medicare endorsement of its prescription drug discount
card program.
Sec. 403.806 Sponsor requirements for eligibility for endorsement.
Except as specified in Sec. Sec. 403.814, 403.816, and 403.817, an
endorsed sponsor must meet the following requirements:
(a) Applicant experience. (1) An applicant must be a non-
governmental, single legal entity doing business in the United States.
(2) An applicant must have 3 years of private sector experience in
the United States in pharmacy benefit management, which is defined to
mean--
[[Page 90]]
(i) Adjudicating and processing claims for drugs at the point of
sale;
(ii) Negotiating with prescription drug manufacturers and others for
discounts, rebates, and/or other price concessions on prescription
drugs; and
(iii) Administering and tracking individuals' subsidies or benefits
in real time.
(3) A single legal entity which is either the applicant or a
subcontractor must, at the time of application for Medicare endorsement,
operate a pharmacy benefit program, a prescription drug discount card
program, a low-income drug assistance program, or a similar program that
serves at least 1 million covered lives.
(b) Financial stability and business integrity. (1) An applicant
must demonstrate a satisfactory record of the financial stability and
business integrity of itself, any subcontractors on whom the applicant
relies to satisfy the 3 years experience requirement in paragraph (a)(2)
of this section and the 1 million covered lives requirement in paragraph
(a)(3) of this section, and any subcontractors engaged by the applicant
to perform the following activities: develop the pharmacy network;
negotiate with manufacturers or pharmacies for rebates, discounts, or
other price concessions; handle eligibility for or enrollment in the
endorsed sponsor's endorsed discount card program and/or transitional
assistance; and administer transitional assistance.
(2) An endorsed sponsor and any subcontractors described in
paragraph (b)(1) of this section must maintain a satisfactory record of
financial stability and business integrity during the term of the
endorsed program.
(3) Medicare endorsement of a discount card program shall not be
construed to express or imply any opinion that an endorsed sponsor or
any subcontractor of an endorsed sponsor is in compliance with or not
liable under the False Claims Act, anti-kickback statute (section
1128B(b) of the Act), or other legal authorities for any improper
billing, claims submission, or related conduct.
(c) Compliance with applicable law. An endorsed sponsor must comply
with all applicable Federal and State laws, including the Federal anti-
kickback statute (section 1128B(b) of the Act).
(d) Prescription drug offering. An endorsed sponsor must comply with
the following discount, rebate, and formulary requirements:
(1) Offer all of its discount card enrollees negotiated prices on
covered discount card drugs, which may be limited to those covered
discount card drugs included on the endorsed sponsor's formulary.
(2) If the endorsed sponsor uses a formulary, offer a negotiated
price on at least one covered discount card drug in each of the lowest
level categories for each of the therapeutic groups representing the
drugs most commonly needed by Medicare beneficiaries as determined by
CMS. A specific covered discount card drug may not be used to fulfill
this requirement for more than one category.
(3) Offer a negotiated price on a generic drug in at least 55
percent of the lowest level categories in each of the therapeutic groups
representing the drugs most commonly needed by Medicare beneficiaries as
determined by CMS.
(4) In setting negotiated prices under this section, an endorsed
sponsor may vary its prices and the drugs included on the formulary by
pharmacy contract and enrollee characteristics, such as transitional
assistance eligibility status.
(5) Synchronize changes in the list of, and negotiated prices for,
covered discount card drugs included in the endorsed sponsor's formulary
with formulary and negotiated prices published on a price comparison Web
site, as described in paragraph (i)(4)(v) of this section.
(6) Obtain rebates, discounts, or other price concessions from
manufacturers on covered discount card drugs and pass a share of such
concessions to enrollees through negotiated prices.
(7) Guarantee that network and mail order pharmacies provide the
lower of the negotiated price or usual and customary price when a
covered discount card drug for a negotiated price is available at the
point of sale.
(8) Guarantee that a network pharmacy, at the point of sale, inform
a discount card enrollee of any differential
[[Page 91]]
between the price of a prescribed drug (if it is a covered discount card
drug) and the price of the lowest priced generic covered discount card
drug that is therapeutically equivalent and bioequivalent and available
at such pharmacy. Mail order pharmacies are to provide this information
at the time of delivery of the drug.
(9) Except during the week of November 15, 2004 (which coincides
with the beginning of the annual coordinated election period), ensure
that any increase in the negotiated price for a covered discount card
drug does not exceed an amount proportionate to the change in the drug's
average wholesale price (AWP), and/or an amount proportionate to the
changes in the endorsed sponsor's cost structure, including material
changes to any discounts, rebates, or other price concessions the
endorsed sponsor receives from a pharmaceutical manufacturer or
pharmacy.
(e) Transitional assistance administration. An endorsed sponsor must
administer transitional assistance funds, including any roll-over funds
as described in Sec. 403.808(f), for transitional assistance enrollees,
through the following procedures:
(1) Establish accounting procedures to manage the transitional
assistance funds for each transitional assistance enrollee.
(2) Ensure that transitional assistance funds are applicable to, and
only to, all covered discount card drugs available at the endorsed
sponsors' network and mail order pharmacies, regardless of formulary.
(3) Ensure that, at network and mail order pharmacies, transitional
assistance funds are applied at the lower of negotiated price (if any)
and the pharmacy's usual and customary price.
(4) Ensure that network pharmacies make available to the
transitional assistance enrollee, electronically or by telephone, at the
point-of-sale of covered discount card drugs, the amount of transitional
assistance remaining available to the transitional assistance enrollee.
Mail order pharmacies are to make this information available by
telephone.
(5) Maintain a toll-free telephone number that discount card
enrollees may use to determine their transitional assistance balances.
(6) Enforce coinsurance requirements described in Sec. 403.808(e)
and ensure that the portion of the price paid through coinsurance is not
deducted from the total transitional assistance funds available to the
discount card enrollee.
(f) Service area and pharmacy access. An endorsed sponsor must meet
the following requirements for its service area and its pharmacy
network:
(1) The service area must cover one or more States.
(2) The endorsed sponsor's discount card program must be available
to all eligible individuals residing in each State in the endorsed
sponsor's service area and may not be offered to individuals residing
outside of the United States.
(3) The endorsed sponsor must have a contracted pharmacy network,
consisting of pharmacies other than mail-order pharmacies, sufficient to
ensure that for beneficiaries residing in the endorsed sponsor's service
area the following requirements are satisfied:
(i) At least 90 percent of Medicare beneficiaries, on average, in
urban areas served by the endorsed program, live within 2 miles of a
network pharmacy;
(ii) At least 90 percent of Medicare beneficiaries, on average, in
suburban areas served by the endorsed program, live within 5 miles of a
network pharmacy; and
(iii) At least 70 percent of Medicare beneficiaries, on average, in
rural areas served by the endorsed program, live within 15 miles of a
network pharmacy.
(4) The endorsed sponsor's pharmacy network may be supplemented by
pharmacies offering home delivery via mail-order, provided the
requirements of paragraph (f)(3) of this section are met.
(g) Information and outreach and customer service. (1) An endorsed
sponsor must provide through the Internet and some other tangible medium
(such as a mailing) to Medicare beneficiaries information and outreach
materials describing its endorsed drug card program, including the
following information--
(i) The enrollment fee;
[[Page 92]]
(ii) Negotiated prices offered for covered discount card drugs;
(iii) If offered, discounts on over-the-counter drugs;
(iv) Any other products or services offered under the endorsement;
and
(v) Any other information that CMS determines is necessary for a
full description of the endorsed discount drug card program.
(2) An endorsed sponsor must include on a Web site the following:
(i) Information regarding when the Web site was last updated; and
(ii) A disclaimer that the information on the Web site may not be
current.
(3) An endorsed sponsor must use the following forms which
incorporate standard elements provided by CMS:
(i) An enrollment form (except as may be modified for an exclusive
card sponsor as discussed in Sec. 403.814(b)(5)(iii); and
(ii) An eligibility determination notice.
(4) An endorsed sponsor must provide to each enrollee a card that
complies with National Council for Prescription Drug Programs standards.
(5) An endorsed sponsor must meet the following requirements for the
review and approval of information and outreach materials:
(i) Comply with the Information and Outreach Guidelines published by
CMS except as provided in paragraph (g)(5)(vi) of this section.
(ii) Except as provided in paragraph (g)(5)(iii) of this section,
not distribute any information and outreach materials until or unless
they are approved by CMS.
(iii) If CMS does not disapprove the initial submission of
information and outreach materials within 30 days of receipt of these
materials, the materials are deemed approved under paragraph (g)(5)(ii)
of this section.
(iv) Information and outreach materials may discuss only products or
services inside the scope of endorsement, as described in paragraph (h)
of this section.
(v) Information and outreach materials include the same kinds of
materials described in 42 CFR 422.80(b), as well as the enrollment form,
eligibility determination form, and membership card described in
paragraphs (g)(3) and (g)(4) of this section, Web site content, and
information regarding discounts for over-the-counter drugs.
(vi) All materials related to products and services that are Part D
plans must comply with the requirements specified in Sec. 423.50 of
this chapter.
(6) An endorsed sponsor must maintain a toll-free customer call
center that is open during usual business hours and that provides
customer telephone service, including to pharmacists, in accordance with
standard business practices. The endorsed sponsor must inform enrollees
that the toll-free telephone number provides information on the amount
of remaining transitional assistance, in accordance with paragraph
(e)(5) of this section.
(7) An endorsed sponsor must provide a system to reduce the
likelihood of medical errors and adverse drug interactions and to
improve medication use.
(h) Products and services inside and outside the scope of the
endorsement. (1) An endorsed sponsor may provide, under the endorsement,
only those products and services inside the scope of the endorsement,
including conducting enrollment. An endorsed sponsor must ensure that
discount card enrollees are not charged any additional fee (other than
the enrollment fee allowed under Sec. 403.811(c)) for products or
services inside the scope of the endorsement.
(2) Products and services inside the scope of the endorsement are
limited to--
(i) Products or services offered for no additional fee, other than
the enrollment fee allowed under Sec. 403.811(c), that are directly
related to a covered discount card drug; or
(ii) A discounted price for an over-the-counter drug.
(i) Reporting. (1) An endorsed sponsor must report to CMS on a
periodic basis information on the major features of the endorsed
sponsor's programs that correspond to the qualifications for
endorsement, including, but not limited to, information concerning--
(i) Savings from pharmacies and manufacturers obtained through
rebates, discounts, and other price concessions;
[[Page 93]]
(ii) Savings shared with discount card enrollees by manufacturer, by
all retail pharmacies, by all mail order pharmacies, and by all brand
name and all generic covered discount card drugs;
(iii) Dispensing fees;
(iv) Certified (by the chief financial officer) financial accounting
records on transitional assistance used by the transitional assistance
enrollees in each month;
(v) Participant utilization and spending statements;
(vi) Utilization and spending for selected drugs;
(vii) Performance on customer service metrics such as call center
performance;
(viii) Grievance logs; and
(ix) Endorsed sponsor's compliance with the pharmacy network access
standards.
(2) An endorsed sponsor must provide notice of, and the rationale
for, negotiated price increases, except for increases during the week of
November 15, 2004, due to reasons other than changes in average
wholesale price (AWP).
(3) An endorsed sponsor must certify that based on best knowledge,
information, and belief, the reported information is accurate, complete,
truthful, and supportable.
(4) Through a price comparison Web site, an endorsed sponsor must
report the following information:
(i) Customer service hours;
(ii) Customer service contact information;
(iii) Endorsed program Web site address;
(iv) Annual enrollment fee; and
(v) Negotiated prices (including any applicable dispensing fee), for
every covered discount card drug included in the discount card program's
offering.
(5) CMS may require endorsed sponsors to submit, in standard
terminology, descriptions of other discount card related services they
provide, such as pharmacist services.
(j) Grievance process. An endorsed sponsor must establish and
maintain a grievance process. This process must be designed to track and
appropriately address in a timely manner enrollees' complaints about any
aspect of their endorsed program for which the endorsed sponsor is
responsible.
(k) Eligibility, enrollment, and disenrollment. (1) An endorsed
sponsor must make preliminary eligibility determinations in accordance
with Sec. 403.810 and conduct enrollment and disenrollment in
accordance with Sec. 403.811.
(l) Authorized representative. An endorsed sponsor must treat an
individual's authorized representative as the individual, if under
applicable law, the authorized representative has the legal authority to
act on behalf of the individual with respect to the action at issue.
(m) Other. An endorsed sponsor must meet the requirements of
Sec. Sec. 403.812, 403.813, and 403.822 of this subpart.
[68 FR 69915, Dec. 15, 2003, as amended at 70 FR 52023, Sept. 1, 2005]
Sec. 403.808 Use of transitional assistance funds.
(a) Individuals determined eligible for transitional assistance in
2004. Subject to paragraph (d) of this section, an individual who, in
calendar year 2004, is determined eligible for transitional assistance
under Sec. 403.810(b) is entitled to the following:
(1) $600 in calendar year 2004; and
(2) $600 in calendar year 2005.
(b) Individuals determined eligible for transitional assistance in
2005. Subject to paragraph (d) of this section, an individual who, in
calendar year 2005, is determined eligible for transitional assistance
under Sec. 403.810(b) is entitled to one of the following amounts for
calendar year 2005:
(1) If the complete application for the individual's transitional
assistance eligibility is received on or after January 1, 2005 and
before April 1, 2005, $600.
(2) If the complete application for the individual's transitional
assistance eligibility is received on or after April 1, 2005 and before
July 1, 2005, $450.
(3) If the complete application for the individual's transitional
assistance eligibility is received on or after July 1, 2005 and before
October 1, 2005, $300.
(4) If the complete application for the individual's transitional
assistance eligibility is received on or after October 1, 2005 and on or
before December 31, 2005, $150.
[[Page 94]]
(c) Payment of enrollment fee. An individual found eligible for
transitional assistance is entitled to have CMS pay the annual
enrollment fee to the endorsed sponsor on his or her behalf.
(d) Conditions on use of transitional assistance. A transitional
assistance enrollee may access the transitional assistance described in
paragraphs (a) and (b) of this section only if the following conditions
are met:
(1) Except as provided in Sec. 403.814(b)(3)(v), the transitional
assistance funds are applied toward the cost of a covered discount card
drug obtained under the Medicare Prescription Drug Discount Card and
Transitional Assistance Program;
(2) The individual pays a coinsurance amount in accordance with
Sec. 403.808(e);
(3) The individual purchases the covered discount card drug on or
after the individual's transitional assistance effective date; and
(4) The individual is enrolled in the Medicare Prescription Drug
Discount Card and Transitional Assistance Program on the date the
individual's claim for the covered discount card drug is adjudicated.
(e) Coinsurance. If sufficient transitional assistance funds are
available, transitional assistance funds must be expended in accordance
with the following:
(1) For beneficiaries with incomes at or below 100 percent of the
poverty line, 95 percent of the price of a covered discount card drug
must be paid from the available transitional assistance funds.
(2) For beneficiaries with incomes greater than 100 percent but at
or below 135 percent of the poverty line, 90 percent of the price of a
covered discount card drug must be paid from the available transitional
assistance funds.
(f) Rollover. An individual with transitional assistance retains
access to any balance of transitional assistance not expended in a
calendar year during the next calendar year, up to and including the
transition period, if the individual--
(1) Remains in his or her current endorsed discount card program;
(2) Elects a new endorsed program in an Annual Coordinated Election
Period; or
(3) Is eligible for a Special Election Period under Sec.
403.811(b)(2) and elects a new endorsed discount card program during
such Special Election Period.
Sec. 403.810 Eligibility and reconsiderations.
(a) Eligibility for an endorsed discount card program. An individual
is eligible to enroll in an endorsed discount card program only if such
individual meets the following conditions:
(1) The individual is entitled to benefits, or enrolled, under
Medicare Part A or enrolled under Medicare Part B; and
(2) The individual, at the time of applying to enroll in an endorsed
discount card program, is not enrolled in a State medical assistance
program under Title XIX of the Act or under a waiver pursuant to section
1115 of the Act, under which the individual is entitled to any medical
assistance for outpatient prescribed drugs as described in section
1905(a)(12) of the Act, except as allowed in Sec. 403.817(d).
(b) Eligibility for transitional assistance. An individual is
eligible to receive transitional assistance if, at the time of applying
for transitional assistance, the individual meets the following
conditions:
(1) The individual meets the conditions in paragraph (a) of this
section;
(2) The individual resides in one of the 50 States or the District
of Columbia;
(3) The individual's income is not more than 135 percent of the
poverty line applicable to the individual's family size;
(4) The individual does not have coverage for covered discount card
drugs under one or more of the following sources:
(i) A group health plan or health insurance coverage, as these terms
are defined under section 2791 of the Public Health Service Act, other
than a Part C plan or a group health plan consisting solely of excepted
benefits (such as a Medigap plan) as the term is defined under section
2791 of the Public Health Service Act;
(ii) Coverage provided under Chapter 55 of Title 10, United States
Code, including TRICARE; or
(iii) A Federal Employee's Health Benefits Program plan; and
[[Page 95]]
(5) The individual (or the individual's authorized representative)
completes a standard enrollment form and signs and dates the form in
accordance with Sec. 403.811(a)(4). By signing the form, the individual
(or the individual's authorized representative) certifies, under penalty
of perjury, that, to the best of the individual's knowledge, the
information he or she provides on the form is accurate.
(c) Special rule for QMBs, SLMBs and QIs. An individual is deemed to
meet the income requirements in paragraph (b)(3) of this section if the
individual is enrolled under Title XIX of the Act as a--
(1) Qualified Medicare Beneficiary (QMB);
(2) Specified Low-Income Medicare Beneficiary (SLMB); or
(3) Qualified Individual (QI).
(d) Duration of eligibility determinations. An individual determined
eligible for the Medicare Prescription Drug Discount Card and
Transitional Assistance Program and, in the case of transitional
assistance enrollees, for transitional assistance, shall remain eligible
for the Medicare Prescription Drug Discount Card and Transitional
Assistance Program and, in the case of transitional assistance
enrollees, for transitional assistance for the duration of the
individual's enrollment in the Medicare Prescription Drug Discount Card
and Transitional Assistance Program.
(e) Drug card and transitional assistance benefits not treated as
benefits under other Federal programs. Any benefits received under the
Medicare Prescription Drug Discount Card and Transitional Assistance
Program must not be taken into account in determining an individual's
eligibility for, or the amount of benefits under, any other Federal
program.
(f) Verification of eligibility. (1) CMS will verify eligibility to
enroll in an endorsed discount card program or to receive transitional
assistance.
(2) If CMS is unable to verify an individual's eligibility or
ineligibility for transitional assistance, CMS can require the
individual to provide additional income information in a form and manner
specified by CMS as one condition of eligibility for transitional
assistance.
(g) Reconsideration. (1) If an individual is determined ineligible
to enroll in an endorsed discount card program under paragraph (a) of
this section or determined ineligible to receive transitional assistance
under paragraph (b) of this section, the individual (or the individual's
authorized representative) has a right to request that an independent
review entity under contract with CMS reconsider the determination.
(2) Reconsideration requests must be filed within 60 days from date
of notice of an ineligibility determination, unless the individual (or
the individual's authorized representative) can demonstrate good cause
for why the 60-day time frame should be extended.
(3) An individual (or the individual's authorized representative)
may submit additional documentary evidence or an explanation about his
or her eligibility in writing to the independent review entity, as part
of the reconsideration process.
(4) Reconsideration decisions shall be issued by the independent
review entity in writing and contain an explanation of the reasoning of
the decision.
Sec. 403.811 Enrollment and disenrollment and associated endorsed
sponsor requirements.
(a) Enrollment process. (1) An individual (or an individual's
authorized representative) applying to enroll in an endorsed discount
card program must complete a standard enrollment form or other method
allowed by CMS and provide such information to the endorsed discount
card program in which the individual wishes to enroll.
(2) An individual electing to join an endorsed discount card program
that charges an annual enrollment fee, and who is not applying for
transitional assistance, must agree to pay the annual enrollment fee, if
any, in a form and manner determined by the endorsed card sponsor.
(3) An individual applying for transitional assistance at the time
that they apply for enrollment in an endorsed discount card program may
only enroll in the endorsed discount card program at that time if CMS
determines that
[[Page 96]]
the individual is eligible for transitional assistance. Individuals not
found eligible for transitional assistance may enroll in an endorsed
discount card program without applying for transitional assistance after
being notified of their ineligibility for transitional assistance.
(4) An individual applying for transitional assistance must complete
a standard enrollment form and sign and date the form, certifying, under
penalty of perjury or similar sanction for false statements, as to the
accuracy of the information provided on the standard enrollment form.
(5) Except as provided in Sec. 403.811(b)(4), an individual who is
not currently enrolled in an endorsed card program seeking to enroll in
the Medicare Prescription Drug Discount Card and Transitional Assistance
Program may do so at any time during the enrollment period.
(6) An individual may not be enrolled in more than one endorsed
discount card program at a time.
(7) An individual may enroll in only one endorsed discount card
program per year during the enrollment period. An individual enrolling
during the initial enrollment year, with the exception of the
circumstances under paragraph (b)(2) of this section, may change
election for the second enrollment year during the annual coordinated
election period. During the second enrollment year, an individual may
enroll in only one endorsed discount card program, unless the individual
meets the circumstances described in paragraph (b)(2) of this section.
(8) An individual remains enrolled in an endorsed discount card
program elected unless--
(i) The individual is disenrolled under paragraph (b) of this
section;
(ii) The individual elects a new program during the Annual
Coordinated Election Period; or
(iii) The endorsed sponsor terminates its endorsed discount card
program, or is terminated.
(9) No new enrollment in an endorsed discount card program or
changing election of an endorsed discount card program is allowed during
the transition period.
(10) Except as specified in Sec. 403.814(b)(6)(i), an individual
may enroll in any endorsed discount card program, and only those
endorsed discount card programs, offered in the individual's State of
residence.
(11) In order to access negotiated prices or transitional
assistance, if applicable, an individual must be enrolled in an endorsed
discount card program. Access to negotiated prices begins with the
effective date of enrollment and ends with disenrollment. Access to
transitional assistance begins with the transitional assistance
effective date and ends for claims finalized on the date of
disenrollment.
(12) Except as provided in paragraph (b)(5) of this section, an
individual may apply for transitional assistance at any time during the
enrollment period.
(b) Disenrollment process. (1) An enrollee may voluntarily disenroll
at any time by notifying (or by having his authorized representative
notify) the endorsed sponsor.
(2) An enrolled individual who disenrolls during the enrollment
period under the following circumstances is granted a Special Election
Period in which the individual may enroll in another endorsed discount
card program during the enrollment period:
(i) A move of residence outside the service area of the current
program;
(ii) A change in residence to or from a long-term care facility;
(iii) Enrollment in or disenrollment from a Part C plan or Medicare
cost plan;
(iv) An individual's current endorsed discount card program is
terminated or terminates; or
(v) Other exceptional circumstances, as defined by the Secretary.
(3) Notification in order to effect a disenrollment is not required
for an individual disenrolling from a terminating endorsed discount card
program or enrolling in or disenrolling from a Medicare managed care
plan offering an exclusive card program, or for individuals changing
endorsed discount card programs during the Annual Coordinated Election
Period.
(4) A drug discount card enrollee who disenrolls from an endorsed
discount card program other than for one of the reasons listed in
paragraph (b)(2) of
[[Page 97]]
this section will no longer be determined eligible for the Medicare
Prescription Drug Discount Card and Transitional Assistance Program and,
if he or she disenrolls in 2004, must re-apply for the Medicare
Prescription Drug Discount Card and Transitional Assistance Program
should he or she wish to enroll in another endorsed discount card
program for the second enrollment year.
(5) An individual receiving transitional assistance who voluntarily
disenrolls from an endorsed discount card program other than for one of
the reasons listed in paragraph (b)(2) of this section will forfeit any
transitional assistance remaining available to the individual on the
date of disenrollment, and, if he or she disenrolls in 2004, must re-
apply for transitional assistance for 2005 in order to receive
transitional assistance in 2005.
(6) A discount card enrollee other than a transitional assistance
enrollee may be involuntarily disenrolled from his or her endorsed
discount card program for failure to pay the annual enrollment fee on a
timely basis.
(7) A discount drug card enrollee other than a transitional
assistance enrollee may be charged another annual enrollment fee each
time the individual disenrolls from one endorsed discount card program
and enrolls in another endorsed discount card program during the
calendar year.
(c) Enrollment fees. (1) An endorsed sponsor may charge an annual
enrollment fee of no more than $30 to each individual enrolled in its
endorsed discount card program.
(2) An endorsed sponsor may not collect an enrollment fee from any
individual applying for or receiving transitional assistance.
(3) The annual enrollment fee must not be prorated for portions of
the year.
(4) An endorsed sponsor must charge a uniform enrollment fee to
every discount card eligible individual, or to the Secretary in the case
of individuals receiving transitional assistance, residing in a State.
(5) An endorsed sponsor must refund any enrollment fee collected
from a discount card enrollee, or any State that has paid the enrollment
fee on behalf of the discount card enrollee, during the calendar year
during which the individual is determined eligible to receive
transitional assistance.
(6) An endorsed sponsor may not charge an annual enrollment fee
during the transition period.
Sec. 403.812 HIPAA privacy, security, administrative data standards,
and national identifiers.
(a) HIPAA covered entities. An endorsed sponsor is a HIPAA covered
entity and must comply with the standards, implementation
specifications, and requirements in 45 CFR parts 160, 162, and 164 as
set forth in this section. Those functions of an endorsed sponsor the
performance of which are necessary or directly related to the operations
of the endorsed discount card program are covered functions for purposes
of applying to endorsed sponsors the standards, implementation
specifications, and requirements in 45 CFR parts 160, 162, and 164.
(b) HIPAA privacy requirements. An endorsed sponsor must comply with
the standards, implementation specifications, and requirements in the
Standards for Privacy of Individually Identifiable Health Information,
45 CFR parts 160 and 164, subparts A and E, in the same manner as a
health plan, except to the extent such requirements are temporarily
waived by the Secretary.
(c) Security requirements--(1) Standard. An endorsed sponsor must
comply with the applicable standards, implementation specifications, and
requirements in the HIPAA Security Rule, 45 CFR parts 160 and 164,
subparts A and C, in the same manner as other covered entities as of the
compliance date of such Rule.
(2) Attestation. An applicant in its application shall--
(i) Attest that, as of the initial enrollment date, it will have in
place appropriate administrative, technical, and physical safeguards to
protect the privacy of protected health information in accordance with
45 CFR 164.530(c); and
(ii) Attest that its information security measures will meet the
standards,
[[Page 98]]
implementation specifications, and requirements of 45 CFR part 164
subparts A and C as of the initial enrollment date, or, if unable to
make this attestation, provide a plan for coming into compliance with
these requirements by the compliance date of the Security Rule set forth
in 45 CFR part 164, subpart C.
(d) Administrative data standards. An endorsed sponsor must comply
with any applicable standards, implementation specifications, and
requirements in the Standards for Electronic Transactions under 45 CFR
parts 160 and 162 subparts I through R.
(e) Unique identifiers. An endorsed sponsor must comply with any
applicable standards, implementation specifications, and requirements
regarding standard unique identifiers under 45 CFR parts 160 and 162 as
of the compliance date of any final rule for standard unique
identifiers.
(f) Applicability of other regulations. Nothing in this paragraph or
in Sec. 403.813 shall be deemed a modification of parts 160, 162 and
164 of title 45, Code of Federal Regulations or otherwise modify the
applicability of such regulations to other organizations or covered
entities independently subject to the mandates of HIPAA. If an endorsed
sponsor is also a health plan, health care provider, or health care
clearinghouse, nothing is this paragraph shall impair or otherwise
affect the application of HIPAA or parts 160, 162 and 164 of title 45,
Code of Federal Regulations to such entity and its performance of those
functions which make such entity a health plan, health care provider, or
health care clearinghouse.
Sec. 403.813 Marketing limitations and record retention requirements.
(a) Marketing limitations. (1) An endorsed sponsor may only market
the following:
(i) Those products and services offered under the endorsed program
that are inside the scope of endorsement defined in Sec. 403.806(h) and
permitted under Sec. 403.812(b).
(ii) A Part D plan offered by the endorsed sponsor or an affiliated
organization of the endorsed sponsor.
(2) An endorsed sponsor may not request that a drug card enrollee or
an individual seeking to enroll in its endorsed discount card program
authorize the endorsed sponsor to use or disclose individually
identifiable health information for purposes of marketing any product or
service not allowed under paragraph (a)(1) of this section.
(3) An endorsed sponsor may not co-mingle any materials related to
the marketing of products and services allowed under paragraph (a)(1) of
this section with other marketing materials.
(4) Following termination of an endorsed sponsor's endorsement under
Sec. Sec. 403.820(c), (d) or (e) or termination of the Medicare Drug
Discount Card and Transitional Assistance Program, a drug card
enrollee's individually identifiable health information collected or
maintained by an endorsed sponsor may not be used or disclosed for
purposes of marketing any product or service.
(b) Record retention standard. (1) An endorsed sponsor must retain
records that it creates, collects, or maintains while participating in
the Medicare Drug Discount Card and Transitional Assistance Program as
part of its operations of an endorsed program for at least 6 years
following termination of such program, or, in the event the endorsed
sponsor's endorsement is terminated under Sec. 420.820(c), (d), or (e)
of this chapter at least 6 years following termination of such
endorsement. The Secretary may extend the six-year retention period if
an endorsed sponsor's records relate to an ongoing investigation,
litigation, or negotiation by the Secretary, the Department of Health
and Human Services Office of Inspector General, the Department of
Justice, or a State, or such documents otherwise relate to suspicions of
fraud and abuse or violations of Federal or State law.
(2) For the period during which an endorsed sponsor retains records
as specified in paragraph (b)(1) of this section, an endorsed sponsor
must continue to apply security and privacy protections to such records
and the information contained therein to the same extent endorsed
sponsors are required to do so under Sec. Sec. 403.812(b) and
403.812(c)(1) prior to termination.
[68 FR 69915, Dec. 15, 2003, as amended at 70 FR 52023, Sept. 1, 2005]
[[Page 99]]
Sec. 403.814 Special rules concerning Part C organizations and
Medicare cost plans and their enrollees.
(a) General requirements. (1) A Part C organization and Medicare
cost plan may not require enrollment in an endorsed discount card
program as a condition for enrollment in its Part C plan or Medicare
cost plan.
(2) A Part C organization may subsidize the enrollment fee for an
endorsed discount card program, whether operated by the Part C
organization or another endorsed sponsor, for individuals described in
Sec. 403.810(a), provided that any such benefit is reflected in the
Part C organization's Adjusted Community Rate filing.
(b) Exclusive card sponsors. (1) A Medicare managed care
organization may elect to become an exclusive card sponsor by limiting
enrollment in its endorsed discount card program to individuals
described in Sec. 403.810(a) who are enrolled in any of its Medicare
managed care plans. The Medicare managed care organization must be the
applicant for endorsement in order to offer an exclusive card program.
Such an election must be made at the time of application for
endorsement.
(2) Except as noted in paragraphs (b)(3) and (b)(4) of this section,
an exclusive card sponsor must comply with all requirements for endorsed
sponsors noted in Sec. Sec. 403.804 and 403.806.
(3) An exclusive card sponsor is deemed to meet or is exempt from
certain specific requirements listed in Sec. 403.806 as follows:
(i) An exclusive card sponsor is deemed to meet the pharmacy network
requirement in Sec. 403.806(f)(3) if its pharmacy network is not
limited to mail-order pharmacies and is equivalent to the pharmacy
network used in its Medicare managed care plan and such pharmacy network
has been approved by the Secretary, or, if its Medicare managed care
plan does not use a pharmacy network, the Secretary determines that the
pharmacy network provides sufficient access to covered discount card
drugs at negotiated prices for discount card enrollees under the
standard set forth under 42 CFR 422.112 for a Part C organization
described in section 1851(a)(2)(A) of the Act, or under 42 CFR
417.416(e) for a Medicare cost plan.
(ii) An exclusive card sponsor is deemed to meet the service area
requirements in Sec. 403.806(f)(1) and (f)(2) if it operates in a
service area equivalent to its Medicare managed care plan's service
area.
(iii) An exclusive card sponsor is deemed to meet the requirement
for financial stability and business integrity in Sec. 403.806(b)
through compliance with Sec. 422.400 of this chapter (if a Part C
organization described in section 1851(a)(2)(A) of the Act) or
compliance with Sec. Sec. 417.120 and 417.122 of this chapter (if a
Medicare cost plan).
(iv) An exclusive card sponsor is deemed to meet the covered lives
requirement in Sec. 403.806(a)(3).
(v) An exclusive card sponsor is deemed to meet the requirements of
Sec. 403.806(e)(2) if it ensures that transitional assistance funds are
applied to, and only to, the cost to transitional assistance enrollees
of any covered discount card drugs obtained from a network or mail order
pharmacy included in the exclusive card sponsor's pharmacy network, and
at the option of the exclusive card sponsor, any covered discount card
drug obtained under an outpatient prescription drug benefit offered
under the affiliated Medicare managed care plan, including any
deductibles, co-payments, coinsurance, and other cost-sharing amounts
for which transitional assistance enrollees are responsible under the
Medicare managed care plan's outpatient prescription drug benefit.
(4) As the Secretary determines appropriate on a case-by-case basis,
any additional requirements discussed in Sec. Sec. 403.804 and 403.806,
except for the requirements in Sec. Sec. 403.812 and 403.813, may be
waived or modified on behalf of an exclusive card sponsor if:
(i) The requirements are duplicative of or conflict with the
requirements that a Medicare managed care organization must meet either
under Part C or under section 1876 of Title XVIII of the Act; or
(ii) The waiver or modification is necessary to improve coordination
between benefits under the Medicare Prescription Drug Discount Card and
Transitional Assistance Program and
[[Page 100]]
the benefits either under Part C or under section 1876 of Title XVIII of
the Act.
(iii) The applicant seeking to become an exclusive card sponsor
requests such waivers or modifications in writing in a manner required
by the Secretary.
(5) An exclusive card sponsor may conduct group enrollment according
to the following rules:
(i) The exclusive card sponsor must seek CMS verification that its
Medicare managed care members are individuals described in Sec.
403.810(a) and enroll such individuals as a group into its exclusive
card program.
(ii) The exclusive card sponsor must give all individuals it is
enrolling as a group the opportunity to decline enrollment, and the
opportunity to apply for transitional assistance.
(iii) The exclusive card sponsor may use a modified version of the
standard enrollment form described in Sec. 403.806(g)(3) or other CMS-
approved process for group enrollment in its endorsed discount card
program.
(6) An individual enrolled in a Medicare managed care plan offered
by a Medicare managed care organization offering an exclusive card
program to individuals enrolled in such Medicare managed care plan is
subject to the following requirements:
(i) The individual may enroll only in the endorsed discount card
program offered by his or her Medicare managed care organization.
(ii) If the exclusive card sponsor group elects to group enroll into
an exclusive card program members of the Medicare managed plan, the
individual must actively decline enrollment to avoid enrollment in the
exclusive card program.
(c) Non-uniformity of Benefits. Implementation of the Medicare
Prescription Drug Discount Card and Transitional Assistance Program,
including the provision of transitional assistance and the payment or
waiver of any enrollment fee by a Part C organization, will not be taken
into account in applying the uniform premium and uniform benefits
requirement in sections 1854(c) and 1854(f)(1)(D) of the Act and 42 CFR
422.100(d)(2) and 42 CFR 422.312(b)(2).
Sec. 403.815 Special rules concerning States.
(a) Optional State payment of enrollment fee. (1) A State may enter
into payment arrangements with endorsed sponsors to provide payment of
some or all of endorsed discount card programs' enrollment fees for some
or all of the State's individuals described in Sec. 403.810(a) who are
not transitional assistance enrollees, provided the enrollment fees are
paid directly by the State to the endorsed sponsor.
(2) Expenditures made by a State for enrollment fees described in
paragraph (a)(1) of this section must not be treated as State
expenditures for which Federal matching payments are available under
titles XIX or XXI of the Act.
(b) Optional State payment of coinsurance. (1) A State may enter
into payment arrangements with pharmacies to provide payment of some or
all of coinsurance amounts described in Sec. 403.808(e) for some or all
of the State's transitional assistance enrollees, provided the
coinsurance amounts are paid directly by the State to the pharmacy.
(2) Expenditures made by a State for coinsurance described in
paragraph (b)(1) of this section must not be treated as State
expenditures for which Federal matching payments are available under
titles XIX or XXI of the Act.
(c) Coinsurance for Qualified Medicare Beneficiaries. For
transitional assistance enrollees who are qualified Medicare
beneficiaries, any coinsurance liability under Sec. 403.808(e) must not
be treated as Medicare cost-sharing coinsurance, under section
1905(p)(3)(B) of the Act, for which a State would otherwise be required
to pay.
(d) State data. (1) A State must provide data on a monthly basis in
an electronic format as determined necessary by the Secretary to
effectuate the verification of beneficiary eligibility for the Medicare
Prescription Drug Discount Card and Transitional Assistance Program.
(2) Expenditures made by a State in complying with the requirements
of paragraph (d)(1) of this section will be treated as State
expenditures for which Federal matching payments are available under
section 1903(a)(7) of the Act.
[[Page 101]]
Sec. 403.816 Special rules concerning long-term care and I/T/U pharmacies.
(a) In general. (1) An applicant for endorsement may submit an
application to become a special endorsed sponsor for long-term care and/
or for I/T/U pharmacies.
(2) Of qualified applicants, the Secretary will select at least two
of the best-qualified applicants for special endorsement for long-term
care and at least two of the best-qualified applicants for special
endorsement for I/T/U pharmacies.
(3) Applicants for special endorsement for long-term care must
demonstrate in their applications that they meet the requirements in
paragraph (b) of this section.
(4) Applicants for special endorsement for I/T/U pharmacies must
demonstrate in their applications that they meet the requirements in
paragraph (d) of this section.
(b) Long-term care. A special endorsed sponsor for long-term care
must--
(1) Apply transitional assistance toward the cost of covered
discount card drugs obtained by transitional assistance enrollees who
reside in long-term care facilities and who receive such prescription
drugs through long-term care pharmacies;
(2) Offer contractual arrangements to any long-term care pharmacy
seeking reimbursement from transitional assistance for covered discount
card drugs provided by such pharmacy to transitional assistance
enrollees who reside in long-term care facilities;
(3) Process any submitted claims from network pharmacies and out-of-
network long-term care pharmacies that supply covered discount card
drugs to transitional assistance enrollees who reside in long-term care
facilities, when such enrollees have unspent transitional assistance
remaining;
(4) Include special terms and conditions in its contracts with
network pharmacies that are long-term care pharmacies to facilitate
access to and the administration of transitional assistance to
transitional assistance enrollees residing in long-term care facilities,
including, but not limited to the following--
(i) Waiving penalties against long-term care pharmacies for
submitting late claims to the special endorsed sponsor due to the
pharmacy's coordination of benefits activities; and
(ii) Permitting a long-term care pharmacy to limit its services to
only transitional assistance enrollees who reside in a long-term care
facility served by the long-term care pharmacy.
(5) Except as noted in paragraph (c) of this section, comply with
all requirements for endorsed sponsors noted in Sec. Sec. 403.804 and
403.806.
(c) Waiver of requirements. (1) The following requirements will not
apply to or will be waived for special endorsed sponsors providing
transitional assistance to long-term care residents:
(i) Section 403.806(d) (relating to the prescription drug offering)
shall not apply to long-term care pharmacies in the special endorsed
sponsor's network; and
(ii) Section 403.806(e)(4) (requiring information about the amount
of transitional assistance remaining) shall not apply to long-term care
pharmacies in the special endorsed sponsor's network.
(2)(i) As the Secretary determines appropriate on a case-by-case
basis, any additional requirements discussed in Sec. Sec. 403.804 and
403.806, except for the requirements in Sec. Sec. 403.812 and 403.813,
may be waived or modified on behalf of a special endorsed sponsor for
long-term care if the waiver or modification is--
(A) Necessary to enable the applicant to either initiate enrollment
activities under the special endorsement within 6 months of enactment of
section 1860D-31 of the Act, or accommodate the unique needs of long-
term care pharmacies; or
(B) Compliance with the requirement(s) in question would be
impracticable or inefficient.
(ii) Applicants to become special endorsed sponsors for long-term
care must request such waivers or modifications in writing in a manner
required by the Secretary.
(d) I/T/U pharmacies. A special endorsed sponsor for I/T/U
pharmacies must--
(1) Apply transitional assistance toward the cost of covered
discount card
[[Page 102]]
drugs obtained by transitional assistance enrollees who are American
Indians and Alaska Natives and who receive prescription drugs through I/
T/U pharmacies as allowed under paragraph (d)(2) of this section;
(2) Offer contractual arrangements to any I/T/U pharmacy that is in
the special endorsed sponsor's service area and seeking reimbursement
from transitional assistance for covered discount card drugs provided by
such pharmacy to transitional assistance enrollees who are also American
Indians/Alaska Natives;
(3) Include special terms and conditions in its contracts with
network I/T/U pharmacies to facilitate access to and the administration
of transitional assistance for transitional assistance enrollees who are
American Indians/Alaska Natives, including, but not limited to the
following:
(i) Permitting an I/T/U pharmacy to limit its services to only those
transitional assistance enrollees who are American Indians/Alaska
Natives, and
(ii) Allowing an I/T/U pharmacy to select which drugs to stock,
which may be a more limited set than other retail pharmacies.
(4) Except as noted in paragraph (e) of this section, comply with
all requirements for endorsed sponsors noted in Sec. Sec. 403.804 and
403.806.
(e) Waiver of requirements. (1) The following requirements will not
apply to or will be waived for special endorsed sponsors providing
transitional assistance through I/T/U pharmacies:
(i) Section 403.806(d) (relating to the prescription drug offering)
shall not apply to I/T/U pharmacies in the special endorsed sponsor's
network; and
(ii) Section 403.806(e)(4) (requiring information about the amount
of transitional assistance remaining) shall not apply to I/T/U
pharmacies in the special endorsed sponsor's network.
(2)(i) As the Secretary determines appropriate on a case-by-case
basis, any additional requirements discussed in Sec. Sec. 403.804 and
403.806, except for the requirements in Sec. Sec. 403.812 and 403.813,
may be waived or modified on behalf of a special endorsed sponsor for I/
T/U pharmacies if the waiver or modification is--
(A) Necessary to enable the applicant to either initiate enrollment
activities under the special endorsement within 6 months of enactment of
section 1860D-31 of the Act, or accommodate the unique needs of I/T/U
pharmacies; or
(B) Compliance with the requirement(s) in question would be
impracticable or inefficient.
(ii) Applicants to become special endorsed sponsors for I/T/U
pharmacies must request such waivers or modifications in writing in a
manner required by the Secretary.
Sec. 403.817 Special rules concerning the territories.
(a) In general. (1) An applicant for endorsement may submit an
application to become a special endorsed sponsor for all of the
territories.
(2) Of qualified applicants, the Secretary will select at least one
of the best-qualified applicants to receive a special endorsement for
the territories.
(3) Applicants for special endorsement for the territories must
demonstrate in their applications that they meet the requirements in
paragraph (b) of this section.
(b) Requirements--(1) Negotiated prices. A special endorsed sponsor
for residents of the territories must provide access to negotiated
prices in the territories.
(2) Transitional assistance. Any transitional assistance in the
territories must be in accordance with paragraph (e) of this section.
(3) Requirements, exception. Except as specified in paragraph (c) of
this section, a special endorsed sponsor for the territories must meet
the requirements of Sec. Sec. 403.804 and 403.806.
(c) Waiver of requirements and alternative requirements. (1) Section
403.806(d)(8) (requiring information about price differentials) shall
not apply to pharmacies located in the territories and which are in the
special endorsed sponsor's pharmacy network.
(2) Sections 403.806(f)(2) and (f)(3) will be deemed met if the
special endorsed sponsor makes a good faith effort to secure the
participation of retail and mail order pharmacies throughout a
territory.
(3)(i) As the Secretary determines appropriate on a case-by-case
basis, any
[[Page 103]]
additional requirements discussed in Sec. Sec. 403.804 and 403.806,
except for the requirements in Sec. Sec. 403.812 and 403.813, may be
waived or modified on behalf of a special endorsed sponsor for the
territories if--
(A) Such waiver is necessary to enable the applicant to either
initiate enrollment activities under the special endorsement within 6
months of enactment of section 1860D-31 of the Act, or accommodate the
unique needs of pharmacies in the territories; or
(B) Compliance with the requirement(s) in question would be
impracticable or inefficient.
(ii) Applicants to become special endorsed sponsors for the
territories must request such waivers or modifications in writing in a
manner required by the Secretary.
(d) Other exceptions. A special endorsed sponsor for the territories
may enroll in its endorsed discount card program Medicaid enrollees with
coverage for outpatient prescription drugs, as described in Sec.
403.810(a)(2).
(e) Transitional assistance provided by Territories. (1)
Transitional assistance in the territories may be administered only
according to a plan submitted by a territory and approved by CMS.
(2) Territories choosing to provide transitional assistance must
submit a plan to CMS within 90 days of the publication of this
regulation. The plan must--
(i) Describe how funds allocated to the territory are to be used to
cover the cost of covered discount card drugs obtained by individuals
who reside in the territory, who are entitled to benefits under Medicare
Part A or enrolled under Medicare Part B, and who have income at or
below 135 percent of the poverty line for the contiguous United States;
and
(ii) Describe how the territory will ensure that amounts received
under the allotment are to be used only to provide covered discount card
drugs to those individuals determined eligible for transitional
assistance, as described in paragraph (e)(2)(i) of this section, and
(iii) Provide such written assurance for the requirements in
paragraph (e)(2)(ii) of this section.
(3) CMS will review and approve plans submitted and make allotments
to territories with approved plans.
(4) CMS may request reports or information to substantiate that the
territories have administered the program consistent with the
territory's approved transitional assistance plan.
Sec. 403.820 Sanctions, penalties, and termination.
(a) Intermediate sanctions. (1) For the violations listed in
paragraph (a)(3) of this section, the following intermediate sanctions
may be imposed on any endorsed sponsor:
(i) Suspension of enrollment of Medicare beneficiaries.
(ii) Suspension of information and outreach activities to Medicare
beneficiaries.
(2) Duration of sanctions. The intermediate sanctions continue in
effect until CMS is satisfied that the deficiency on which the
determination was based has been corrected and is not likely to recur.
(3) Sanctionable violations. The violations for which intermediate
sanctions may be imposed are as follows:
(i) Substantial failure to maintain a contracted retail pharmacy
network meeting the requirements of Sec. 403.806(f);
(ii) Substantial failure to comply with CMS Information and Outreach
Guidelines;
(iii) Substantial failure to provide discount card enrollees with
negotiated prices consistent with information reported to CMS for the
price comparison Web site and/or reported by the endorsed sponsor;
(iv) Except during the week of November 15, 2004 (which coincides
with the beginning of the annual coordinated election period),
substantial failure to ensure that the negotiated price for a covered
discount card drug does not exceed an amount proportionate to the change
in the drug's average wholesale price (AWP), and/or an amount
proportionate to changes in the card sponsor's cost structure (including
material changes to any discounts, rebates, or other price concessions
the sponsor receives from a pharmaceutical manufacturer or pharmacy);
(v) Charging drug card enrollees additional fees beyond a $30
enrollment fee;
[[Page 104]]
(vi) Charging transitional assistance enrollees any enrollment fee;
(vii) Charging a coinsurance more than 5 percent for those at or
below 100 percent of the poverty line, or 10 percent for those above 100
percent but at or below 135 percent of the poverty line;
(viii) Substantial failure to administer properly the transitional
assistance funding for transitional assistance enrollees;
(ix) Substantial failure to provide CMS or its designees with
requested information related to the endorsed sponsor's endorsed
discount card operations; or
(x) Failure to otherwise substantially comply with the requirements
of this subpart, including failing to perform the operational
requirements of this program or the failure to submit an acceptable plan
of correction within the timeframe specified by CMS.
(4) Written notice of proposed sanctions. (i) Prior to imposing
sanctions, CMS will send a written notice to the endorsed sponsor
stating the nature and basis of the proposed sanction.
(ii) CMS will send a copy of the notice in paragraph (a)(4)(i) of
this section to the Office of the Inspector General.
(iii) CMS will allow the endorsed sponsor 15 days from the receipt
of notice to provide evidence that it has not committed an act or
omission that may fairly be characterized as a basis for sanction.
(iv) Should an endorsed sponsor present evidence described in
paragraph (a)(4)(iii) of this section and by the time limit described in
that paragraph, a CMS official not involved in the original sanction
determination shall review the evidence and provide the endorsed sponsor
a concise written decision setting forth the factual and legal basis for
the decision that affirms or rescinds the original determination.
(5) Effective date of sanction. (i) A sanction is effective 15 days
after the date that the endorsed sponsor is notified of the sanction or,
if the endorsed sponsor timely seeks reconsideration of that sanction
decision, on the date specified in the notice of CMS's reconsideration
determination.
(ii) The sanction remains in effect until CMS notifies the endorsed
sponsor that CMS is satisfied that the basis for imposing the sanction
has been corrected and is not likely to recur.
(b) Civil monetary penalties--(1) OIG penalties. The Office of the
Inspector General (OIG) may impose civil monetary penalties in
accordance with 42 CFR parts 1003 and 1005 in addition to, or in place
of, sanctions that CMS may impose, as described in paragraph (a) of this
section, against an endorsed sponsor whom it determines has knowingly--
(i) Misrepresented or falsified information in information and
outreach or comparable material provided to program enrollee or other
persons;
(ii) Charged a program enrollee in violation of the terms of the
endorsement contract; or
(iii) Used transitional assistance funds in any manner that is
inconsistent with the purpose of the transitional assistance program.
(2) CMS penalties. If CMS determines that an endorsed sponsor has
engaged in conduct that it knows or should know constitutes a violation
as described in paragraph (a)(3) of this section, where the failure to
perform involves the operational requirements of the program, CMS may
impose civil monetary penalties in accordance with 42 CFR parts 1003 and
1005 in addition to, or in place of, the sanctions that CMS may impose,
as described in paragraph (a) of this section.
(3) CMS or the OIG may impose civil monetary penalties of no more
than $10,000 for each violation.
(c) Termination of endorsement by CMS. (1) CMS may terminate the
endorsement contract at any time with notice on the following bases:
(i) Any of the bases for the imposition of intermediate sanctions as
stated in paragraph (a)(3) of this section; or
(ii) The endorsed sponsor engaged in false or misleading information
and outreach practices; or
(iii) The endorsed sponsor fails to comply with the requirement of
Sec. 403.804(e).
(2) CMS shall provide the endorsed sponsor written notice of
termination 30 days prior to the CMS-determined effective date of the
termination at
[[Page 105]]
which time the endorsed sponsor must do the following:
(i) Provide its discount card enrollees notice of the termination
within 10 days of receiving notice from CMS;
(ii) Continue to provide services to its discount card enrollees for
90 days after the discount card enrollees were sent the notice of
termination from the endorsed sponsor; and
(iii) Suspend all information and outreach and enrollment activities
once enrollees have received the notice of termination.
(3) Corrective action plan. Before terminating a contract, CMS shall
provide the endorsed sponsor with reasonable opportunity to develop and
receive CMS approval of a corrective action plan to correct the
deficiencies that are the basis of the proposed termination.
(d) Termination by endorsed sponsor--(1) Cause for termination. The
endorsed sponsor may terminate its endorsement contract if CMS fails
substantially to carry out the terms of the contract.
(2) Card sponsor notice. The endorsed sponsor must give advance
notice as follows:
(i) To CMS, at least 90 days prior to the intended date of
termination. This notice must specify the reasons why the endorsed
sponsor is requesting contract termination; and
(ii) To its discount card enrollees, by mail, at least 60 days prior
to the termination effective date. This notice must include a written
description of alternative endorsed discount card programs that serve
the discount card enrollee's address.
(3) Effective date of termination. The effective date of the
termination is determined by CMS and is at least 90 days after the date
CMS receives the endorsed sponsor's notice of intent to terminate.
(e) Termination by mutual consent. (1) A contract may be modified or
terminated at any time by written mutual consent.
(2) If the contract is terminated by mutual consent, the endorsed
sponsor must provide notice to its discount card enrollees as provided
in paragraph (d)(2) of this section.
(3) If the contract is modified by mutual consent, the endorsed
sponsor must provide notice to its discount card enrollees of any
changes that CMS determines are appropriate for notification within
timeframes specified by CMS.
(f) Appeal of contract determinations--(1) Scope. This section
establishes the procedures for reviewing the following contract
determinations:
(i) A determination that an applicant is not qualified to enter into
a contract with CMS under section 1860D-31 of the Act; and
(i) A determination to terminate a contract with an endorsed sponsor
in accordance with paragraph (c) of this section.
(2) Notice of determination. When CMS makes an initial contract
determination, it gives the endorsed sponsor or applicant written notice
specifying--
(i) The reasons for the determination; and
(ii) The endorsed sponsor's or applicant's right to request
reconsideration.
(3) Effect of contract determination. The contract determination is
final and binding unless a timely request for a reconsideration hearing
is filed under this section.
(4) Right to reconsideration. An endorsed sponsor whose contract is
terminated or an applicant denied endorsement may request a hearing for
reconsideration of the CMS contract determination.
(5) Method and place for filing a request. A request for a
reconsideration hearing must be made in writing and filed with the CMS
Central Office.
(6) Time for filing a request. The request for a reconsideration
hearing must be filed within 15 days from the date of the notice of the
initial determination.
(7) Appointment of hearing officer. CMS shall appoint a hearing
officer to conduct the reconsideration. The hearing officer shall be a
representative of the Administrator and not otherwise a party to the
contract determination.
(8) Conduct of hearing. The endorsed sponsor or applicant may be
represented by counsel and may present evidence and examine witnesses. A
complete recording of the proceedings will be made and transcribed.
[[Page 106]]
(9) Reconsideration determination. A reconsideration determination
is a new determination that--
(i) Is based on a review of the contract determination, the evidence
and findings upon which it was based, and any other written evidence
submitted before notice of the reconsidered determination is mailed,
including facts relating to the status of the endorsed sponsor
subsequent to the contract determination; and
(ii) Affirms, reverses, or modifies the initial contract
determination.
(10) Notice of reconsidered determination. As soon as practicable
after the close of the hearing, the hearing officer issues a written
reconsideration determination that contains the following:
(i) Findings with respect to the applicant's qualifications to enter
into or an endorsed sponsor's qualifications to remain under a contract
with CMS under section 1860D-31 of the Act;
(ii) A statement of the specific reasons for the reconsidered
determination.
(11) Effect of reconsidered determination. A reconsidered
determination is final and binding on the parties and is not subject to
judicial review.
(g) Compliance with HIPAA. Failure of an endorsed sponsor to comply
with HIPAA and/or the standards, implementation specifications, and
requirements in 45 CFR parts 160, 162, and 164, as established in Sec.
403.812, shall be a violation of HIPAA and may be enforced under
sections 1176 and 1177 of the Act.
Sec. 403.822 Reimbursement of transitional assistance and associated
sponsor requirements.
(a) A Transitional Assistance Account is created within the Federal
Supplementary Medical Insurance Trust Fund and kept separate from all
other funds within that fund.
(b) The Managing Trustee of the Transitional Assistance Account
shall pay on a monthly basis from the Account the amounts certified by
CMS as necessary to make payments for transitional assistance as allowed
in Sec. 403.808.
(c) Endorsed sponsors must routinely account to CMS for the
transitional assistance provided to the transitional assistance
enrollees for finalized (not pending, or denied) claims up to the
allowed balance provided by CMS to the sponsor.
(d) Payment transactions will be audited by the Secretary or his
agent.
(e) Federal funding in excess of the amount of the balance included
in CMS's system is not permitted.
Subpart I_Transparency Reports and Reporting of Physician Ownership or
Investment Interests
Source: 78 FR 9521, Feb. 8, 2013, unless otherwise noted.
Sec. 403.900 Purpose and scope.
The regulations in this subpart implement section 1128G of the Act.
These regulations apply to applicable manufacturers and applicable group
purchasing organizations and describe the requirements and procedures
for applicable manufacturers to report payments or other transfers of
value provided to covered recipients, as well as for applicable
manufacturers and applicable group purchasing organizations to report
ownership or investment interests held by physicians or immediate family
members of physicians in such entities.
Sec. 403.902 Definitions.
For purposes of this subpart, the following definitions apply:
Applicable group purchasing organization means an entity that:
(1) Operates in the United States; and
(2) Purchases, arranges for or negotiates the purchase of a covered
drug, device, biological, or medical supply for a group of individuals
or entities, but not solely for use by the entity itself.
Applicable manufacturer means an entity that is operating in the
United States and that falls within one of the following categories:
(1) An entity that is engaged in the production, preparation,
propagation, compounding, or conversion of a covered drug, device,
biological, or medical supply, but not if such covered drug, device,
biological or medical supply is solely for use by or within the
[[Page 107]]
entity itself or by the entity's own patients. This definition does not
include distributors or wholesalers (including, but not limited to,
repackagers, relabelers, and kit assemblers) that do not hold title to
any covered drug, device, biological or medical supply.
(2) An entity under common ownership with an entity in paragraph (1)
of this definition, which provides assistance or support to such entity
with respect to the production, preparation, propagation, compounding,
conversion, marketing, promotion, sale, or distribution of a covered
drug, device, biological or medical supply.
Assistance and support means providing a service or services that
are necessary or integral to the production, preparation, propagation,
compounding, conversion, marketing, promotion, sale, or distribution of
a covered drug, device, biological or medical supply.
Certified nurse midwife means a registered nurse who has
successfully completed a program of study and clinical experience
meeting guidelines prescribed by the Secretary, or has been certified by
an organization recognized by the Secretary.
Certified registered nurse anesthetist means a certified registered
nurse anesthetist licensed by the State who meets such education,
training, and other requirements relating to anesthesia services and
related care as the Secretary may prescribe. In prescribing such
requirements the Secretary may use the same requirements as those
established by a national organization for the certification of nurse
anesthetists. Such term also includes, as prescribed by the Secretary,
an anesthesiologist assistant.
Charitable contribution includes, but is not limited to, any payment
or transfer of value made to an organization with tax-exempt status
under the Internal Revenue Code of 1986, which is not provided in
exchange for any goods, items or services.
Charity care means services provided by a covered recipient
specifically for a patient who is unable to pay for such services or for
whom payment would be a significant hardship, where the covered
recipient neither receives, nor expects to receive, payment because of
the patient's inability to pay.
Clinical investigation means any experiment involving one or more
human subjects, or materials derived from human subjects, in which a
drug, device, biological or medical supply is administered, dispensed or
used.
Clinical nurse specialist means, an individual who--
(1) Is a registered nurse and is licensed to practice nursing in the
State in which the clinical nurse specialist services are performed; and
(2) Holds a master's degree in a defined clinical area of nursing
from an accredited educational institution.
Common ownership refers to circumstances where the same individual,
individuals, entity, or entities directly or indirectly own 5 percent or
more total ownership of two entities. This includes, but is not limited
to, parent corporations, direct and indirect subsidiaries, and brother
or sister corporations.
Covered drug, device, biological, or medical supply means any drug,
device, biological, or medical supply for which payment is available
under Title XVIII of the Act or under a State plan under Title XIX or
XXI of the Act (or a waiver of such plan), either separately (such as
through a fee schedule or formulary) or as part of a bundled payment
(for example, under the hospital inpatient prospective payment system or
the hospital outpatient prospective payment system) and which is of the
type that in the case of a--
(1) Drug or biological, by law, requires a prescription to be
dispensed; or
(2) Device (including a medical supply that is a device), by law,
requires premarket approval by or premarket notification to the FDA.
Covered recipient means-- (1) Any physician, physician assistant,
nurse practitioner, clinical nurse specialist, certified registered
nurse anesthetist, or certified nurse-midwife who is not a bona fide
employee of the applicable manufacturer that is reporting the payment;
or
(2) A teaching hospital, which is any institution that received a
payment under 1886(d)(5)(B), 1886(h), or 1886(s) of the Act during the
last calendar year
[[Page 108]]
for which such information is available.
Device identifier is the mandatory, fixed portion of a unique device
identifier (UDI) that identifies the specific version or model of a
device and the labeler of that device (as described at 21 CFR 801.3 in
paragraph (1) of the definition of ``Unique device identifier'').
Employee means an individual who is considered to be ``employed by''
or an ``employee'' of an entity if the individual would be considered to
be an employee of the entity under the usual common law rules applicable
in determining the employer-employee relationship (as applied for
purposes of section 3121(d)(2) of the Internal Revenue Code of 1986).
Immediate family member means any of the following:
(1) Spouse.
(2) Natural or adoptive parent, child, or sibling.
(3) Stepparent, stepchild, stepbrother, or stepsister.
(4) Father-, mother-, daughter-, son-, brother-, or sister-in-law.
(5) Grandparent or grandchild.
(6) Spouse of a grandparent or grandchild.
Indirect payments or other transfers of value refer to payments or
other transfers of value made by an applicable manufacturer (or an
applicable group purchasing organization) to a covered recipient (or a
physician owner or investor) through a third party, where the applicable
manufacturer (or applicable group purchasing organization) requires,
instructs, directs, or otherwise causes the third party to provide the
payment or transfer of value, in whole or in part, to a covered
recipient(s) (or a physician owner or investor).
Know, knowing, or knowingly--(1) Means that a person, with respect
to information--
(i) Has actual knowledge of the information;
(ii) Acts in deliberate ignorance of the truth or falsity of the
information; or
(iii) Acts in reckless disregard of the truth or falsity of the
information; and
(2) Requires no proof of a specific intent to defraud.
Long term medical supply or device loan means the loan of supplies
or a device for 91 days or longer.
Non-teaching hospital covered recipient means a person who is one or
more of the following: Physician; physician assistant; nurse
practitioner; clinical nurse specialist; certified registered nurse
anesthetist; or certified nurse-midwife.
NPPES stands for the National Plan & Provider Enumeration System.
Nurse practitioner means a nurse practitioner who performs such
services as such individual is legally authorized to perform (in the
State in which the individual performs such services) in accordance with
State law (or the State regulatory mechanism provided by State law), and
who meets such training, education, and experience requirements (or any
combination thereof) as the Secretary may prescribe in regulations.
Operating in the United States means that an entity--
(1) Has a physical location within the United States or in a
territory, possession, or commonwealth of the United States; or
(2) Otherwise conducts activities within the United States or in a
territory, possession, or commonwealth of the United States, either
directly or through a legally-authorized agent.
Ownership or investment interest--(1) Includes, but is not limited
to the following:
(i) Stock, stock option(s) (other than those received as
compensation, until they are exercised).
(ii) Partnership share(s);
(iii) Limited liability company membership(s).
(iv) Loans, bonds, or other financial instruments that are secured
with an entity's property or revenue or a portion of that property or
revenue.
(2) May be direct or indirect and through debt, equity or other
means.
(3) Exceptions. The following are not ownership or investment
interests for the purposes of this section:
(i) An ownership or investment interest in a publicly traded
security or mutual fund, as described in section 1877(c) of the Act.
[[Page 109]]
(ii) An interest in an applicable manufacturer or applicable group
purchasing organization that arises from a retirement plan offered by
the applicable manufacturer or applicable group purchasing organization
to the physician (or a member of his or her immediate family) through
the physician's (or immediate family member's) employment with that
applicable manufacturer or applicable group purchasing organization.
(iii) Stock options and convertible securities received as
compensation, until the stock options are exercised or the convertible
securities are converted to equity.
(iv) An unsecured loan subordinated to a credit facility.
(v) An ownership or investment interest if an applicable
manufacturer or applicable group purchasing organization did not know,
as defined in this section, about such ownership or investment interest.
(vi) A titular ownership or investment interest that excludes the
ability or right to receive the financial benefits of ownership or
investment, including, but not limited to, the distribution of profits,
dividends, proceeds of sale, or similar returns on investment; or
(vii) An interest in an entity that arises from an employee stock
ownership plan (ESOP) that is qualified under section 401(a) of the
Internal Revenue Code of 1986.
Payment or other transfer of value means a transfer of anything of
value.
Physician has the same meaning given that term in section 1861(r) of
the Act.
Physician assistant means a physician assistant who performs such
services as such individual is legally authorized to perform (in the
State in which the individual performs such services) in accordance with
State law (or the State regulatory mechanism provided by State law), and
who meets such training, education, and experience requirements (or any
combination thereof) as the Secretary may prescribe in regulations.
Physician-owned distributorship, for the purposes of determining the
existence of a reportable ownership or investment interest under this
subpart, means an entity that:
(1) Meets the definition of an applicable manufacturer or applicable
group purchasing organization as defined in this section, and
(2) Meets at least one of the following two conditions:
(i) Has a minimum of 5 percent direct or indirect ownership or
investment interest in the applicable manufacturer or applicable group
purchasing organization held by a physician or a physician's immediate
family member, or
(ii) A physician or a physician's immediate family member receives
compensation from the applicable manufacturer or group purchasing
organization in the form of a commission, return on investment, profit
sharing, profit distribution, or other remuneration directly or
indirectly derived from the sale or distribution of devices by the
applicable manufacturer or group purchasing organization in which the
physician or physician's immediate family member has ownership.
(3) This physician owned distributor definition does not apply for
purposes of any other laws or regulations, including, but not limited
to, section 1877 of the Act, the regulations at 42 CFR part 411, subpart
J, section 1128B of the Act, or the regulations at 42 CFR 1001.952.
Related to a covered drug, device, biological, or medical supply
means that a payment or other transfer of value is made in reference to
or in connection with one or more covered drugs, devices, biologicals,
or medical supplies.
Research includes a systematic investigation designed to develop or
contribute to generalizable knowledge relating broadly to public health,
including behavioral and social-sciences research. This term encompasses
basic and applied research and product development.
Short term medical supply or device loan means the loan of a covered
device or a device under development, or the provision of a limited
quantity of medical supplies for a short-term trial period, not to
exceed a loan period of 90 cumulative days per calendar year or a
quantity of 90 cumulative days of average daily use per calendar year,
to permit evaluation of the device or medical supply by the covered
recipient.
[[Page 110]]
Third party means another individual or entity, regardless of
whether such individual or entity is operating in the United States.
Unique device identifier means an identifier that adequately
identifies a device through its distribution and use by meeting the
requirements of 21 CFR 801.40 and 830.3.
[78 FR 9521, Feb. 8, 2013, as amended at 79 FR 68000, Nov. 13, 2014; 84
FR 63185, Nov. 15, 2019; 85 FR 10, Jan 2, 2020; 86 FR 65659, Nov. 19,
2021]
Sec. 403.904 Reports of payments or other transfers of value
to covered recipients.
(a) General rule. (1) Direct and indirect payments or other
transfers of value provided by an applicable manufacturer to a covered
recipient during the preceding calendar year, and direct and indirect
payments or other transfers of value provided to a third party at the
request of or designated by the applicable manufacturer on behalf of a
covered recipient during the preceding calendar year, must be reported
by the applicable manufacturer to CMS on an annual basis.
(2) For CY 2013, only payments or other transfers of value made on
or after August 1, 2013 must be reported to CMS.
(3) An applicable manufacturer or applicable group purchasing
organization that has reported payments or transfers of value under the
scope of this section may not remove, delete, or alter any record/(s)
unless an error is discovered in the information that had been
furnished, or the record is otherwise believed to meet exceptions for
reporting.
(b) Limitations. Certain limitations on reporting apply in the
following circumstances:
(1) Applicable manufacturers for whom total (gross) revenues from
covered drugs, devices, biologicals, or medical supplies constituted
less than 10 percent of total (gross) revenue during the fiscal year
preceding the reporting year are only required to report payments or
other transfers of value that are related to one or more covered drugs,
devices, biologicals or medical supplies.
(2) Applicable manufacturers under paragraph (2) of the definition
in Sec. 403.902 are only required to report payments or other transfers
of value that are related to a covered drug, device, biological, or
medical supply for which they provided assistance or support to an
applicable manufacturer under paragraph (1) of the definition.
(3) Applicable manufacturers under either paragraph (1) or (2) of
the definition in Sec. 403.902 that have separate operating divisions
that do not manufacture any covered drugs, devices, biologicals, or
medical supplies (for example, animal health divisions) are only
required to report payments to covered recipients related to the
activities of these separate divisions if those payments or other
transfers of value are related to a covered drug, device, biological, or
medical supply. This includes reporting of payments or other transfers
of value that are related to covered drugs, devices, biologicals, or
medical supplies made by applicable manufacturers to covered recipients
through these operating divisions.
(4) Applicable manufacturers that do not manufacture a covered drug,
device, biological, or medical supply except when under a written
agreement to manufacture the covered drug, device, biological, or
medical supply for another entity, do not hold the FDA approval,
licensure, or clearance for the covered drug, device, biological, or
medical supply, and are not involved in the sale, marketing, or
distribution of the product, are only required to report payments or
other transfers of value that are related to one or more covered drugs,
devices, biologicals, or medical supplies.
(c) Required information to report. A report must contain all of the
following information for each payment or other transfer of value:
(1) Name of the covered recipient. For non-teaching hospital covered
recipients, the name must be as listed in the National Plan & Provider
Enumeration System (NPPES) (if applicable) and include first and last
name, middle initial, and suffix (for all that apply).
[[Page 111]]
(2) Address of the covered recipient. Primary business address of
the covered recipient, including all the following:
(i) Street address.
(ii) Suite or office number (if applicable).
(iii) City.
(iv) State.
(v) ZIP code.
(3) Identifiers for non-teaching hospital covered recipients. In the
case of a covered recipient the following identifiers:
(i) The specialty.
(ii) National Provider Identifier (if applicable and as listed in
the NPPES). If a National Provider Identifier cannot be identified for a
non-teaching hospital covered recipient, the field may be left blank,
indicating that the applicable manufacturer could not find one.
(iii) State professional license number(s) (for at least one State
where the non-teaching hospital covered recipient maintains a license),
and the State(s) in which the license is held.
(4) Amount of payment or other transfer of value. A payment or other
transfer of value made to a group of covered recipients should be
distributed appropriately among the individual covered recipients who
requested the payment, on whose behalf the payment was made, or who are
intended to benefit from the payment or other transfer of value.
(5) Date of payment or transfer of value. The date of each payment
or other transfer of value.
(i) For payments or other transfers of value made over multiple
dates (rather than as a lump sum), applicable manufacturers may choose
whether to report each payment or other transfer of value as separate
line item using the dates the payments or other transfers of value were
each made, or as a single line item for the total payment or other
transfer of value using the first payment date as the reported date.
(ii) For small payments or other transfers of value reported as a
single line item, applicable manufacturers must report the date that the
first bundled small payment or other transfer of value was provided to
the covered recipient.
(6) Form of payment or transfer of value. The form of each payment
or other transfer of value, as described in paragraph (d) of this
section.
(7) Nature of payment or transfer of value. The nature of each
payment or other transfer of value, as described in paragraph (e) of
this section.
(8) Related covered drug, device, biological or medical supply.
Report the marketed or brand name of the related covered drugs, devices,
biologicals, or medical supplies, and therapeutic area or product
category unless the payment or other transfer of value is not related to
a particular covered drug, device, biological or medical supply.
(i) For drugs and biologicals--
(A) If the marketed name has not yet been selected, applicable
manufacturers must indicate the name registered on clinicaltrials.gov.
(B) Any regularly used identifiers must be reported, including, but
not limited to, national drug codes.
(ii) For devices, if the device has a unique device identifier
(UDI), then the device identifier (DI) portions of it must be reported,
as applicable.
(iii) Applicable manufacturers may report the marketed name and
therapeutic area or product category for payments or other transfers of
value related to a non-covered drug, device, biological, or medical
supply.
(iv) Applicable manufacturers must indicate if the related drug,
device, biological, or medical supply is covered or non-covered.
(v) Applicable manufacturers must indicate if the payment or other
transfer of value is not related to any covered or non-covered drug,
device, biological or medical supply.
(9) Eligibility for delayed publication. Applicable manufacturers
must indicate whether a payment or other transfer of value is eligible
for delayed publication, as described in Sec. 403.910.
(10) Payments to third parties. (i) If the payment or other transfer
of value was provided to a third party at the request of or designated
on behalf of a covered recipient, the payment or transfer of value must
be reported in the name of that covered recipient.
(ii) If the payment or other transfer of value was provided to a
third party at the request of or designated on behalf of a covered
recipient, the name of the entity that received the payment
[[Page 112]]
or other transfer of value (if made to an entity) or indicate
``individual'' (if made to an individual). If a covered recipient
performed a service, but neither accepted the offered payment or other
transfer of value nor requested that it be made to a third party, the
applicable manufacturer is not required to report the offered payment or
other transfer of value unless the applicable manufacturer nonetheless
provided it to a third party and designated such payment or other
transfer of value as having been provided on behalf of the covered
recipient.
(11) Payments or transfers of value to physician owners or
investors. Must indicate whether the payment or other transfer of value
was provided to a physician or the immediate family of the physician who
holds an ownership or investment interest (as defined Sec. 403.902) in
the applicable manufacturer.
(12) Additional information or context for payment or transfer of
value. May provide a statement with additional context for the payment
or other transfer of value.
(d) Reporting the form of payment or other transfer of value. An
applicable manufacturer must report each payment or transfer of value,
or separable part of that payment or transfer of value, as taking one of
the following forms of payment that best describes the form of the
payment or other transfer of value, or separable part of that payment or
other transfer of value.
(1) Cash or cash equivalent.
(2) In-kind items or services.
(3) Stock.
(4) Stock option.
(5) Any other ownership interest.
(6) Dividend, profit or other return on investment.
(e) Reporting the nature of the payment or other transfer of value.
(1) General rule. The categories describing the nature of a payment or
other transfer of value are mutually exclusive for the purposes of
reporting under subpart I of this part.
(2) Rules for categorizing natures of payment. An applicable
manufacturer must categorize each payment or other transfer of value, or
separable part of that payment or transfer of value, with one of the
categories listed in paragraphs (e)(2)(i) through (xviii) of this
section, using the designation that best describes the nature of the
payment or other transfer of value, or separable part of that payment or
other transfer of value. If a payment or other transfer of value could
reasonably be considered as falling within more than one category, the
applicable manufacturer should select one category that it deems to most
accurately describe the nature of the payment or transfer of value.
(i) Consulting fee.
(ii) Compensation for services other than consulting, including
serving as faculty or as a speaker at an event other than a continuing
education program.
(iii) Honoraria.
(iv) Gift.
(v) Entertainment.
(vi) Food and beverage.
(vii) Travel and lodging (including the specified destinations).
(viii) Education.
(ix) Research.
(x) Charitable contribution.
(xi) Debt forgiveness.
(xii) Royalty or license.
(xiii) Current or prospective ownership or investment interest.
(xiv) Compensation for serving as faculty or as a speaker for a
medical education program.
(xv) Long term medical supply or device loan.
(xvi) Grant.
(xvii) Space rental or facility fees (teaching hospital only).
(xviii) Acquisitions.
(f) Special rules for research payments. All payments or other
transfers of value made in connection with an activity that meets the
definition of research in this section and that are subject to a written
agreement, a research protocol, or both, must be reported under these
special rules.
(1) Research-related payments or other transfers of value to covered
recipients, including research-related payments or other transfers of
value made indirectly to a covered recipient through a third party, must
be reported to CMS separately from other payments or transfers of value,
and must include the following information
[[Page 113]]
(in lieu of the information required by Sec. 403.904(c)):
(i) Name of the research institution, individual or entity receiving
the payment or other transfer of value.
(A) If paid to a non-teaching hospital covered recipient, all of the
following must be provided:
(1) The non-teaching hospital covered recipient's name as listed in
the NPPES (if applicable).
(2) National Provider Identifier.
(3) State professional license number(s) (for at least one State
where the non-teaching hospital covered recipient maintains a license)
and State(s) in which the license is held.
(4) Specialty.
(5) Primary business address of the non-teaching hospital covered
recipient(s).
(B) If paid to a teaching hospital covered recipient, list the name
and primary business address of teaching hospital.
(C) If paid to a non-covered recipient (such as a non-teaching
hospital or clinic), list the name and primary business address of the
entity.
(ii) Total amount of the research payment, including all research-
related costs for activities outlined in a written agreement, research
protocol, or both.
(iii) Name of the research study.
(iv) Name(s) of any related covered drugs, devices, biologicals, or
medical supplies (subject to the requirements specified in paragraph
(c)(8) of this section); for drugs and biologicals, the relevant
National Drug Code(s), if any; and for devices and medical supplies, the
relevant device identifier, if any, and the therapeutic area or product
category if a marketed name is not available.
(v) Information about each non-teaching hospital covered recipient
principal investigator (if applicable) set forth in paragraph
(f)(1)(i)(A) of this section.
(vi) Contextual information for research (optional).
(vii) ClinicalTrials.gov identifier (optional).
(2) For pre-clinical studies (before any human studies have begun),
only report the following information:
(i) Research entity name (as required in paragraph (f)(1)(i) of this
section).
(ii) Total amount of payment (as required in paragraph (f)(1)(ii) of
this section).
(ii) Principal investigator(s) (as required in paragraph (f)(1)(v)
of this section).
(g) Special rules for reporting food and beverage. (1) When
allocating the cost of food and beverage among covered recipients in a
group setting where the cost of each individual covered recipient's meal
is not separately identifiable, such as a platter provided to physicians
in a group practice setting, applicable manufacturers must calculate the
value per person by dividing the entire cost of the food or beverage by
the total number of individuals who partook in the meal (including both
covered recipients and non-covered recipients, such as office staff).
The per person value of the meal must be reported as a payment or other
transfer of value only for covered recipients who actually partook in
the food or beverage.
(2) Applicable manufacturers are not required to report or track
buffet meals, snacks, soft drinks, or coffee made generally available to
all participants of a large-scale conference or similar large-scale
event.
(h) Exclusions from reporting. The following are excluded from the
reporting requirements specified in this section:
(1) Indirect payments or other transfers of value (as defined in
Sec. 403.902), where the applicable manufacturer is unaware of the
identity of the covered recipient. An applicable manufacturer is unaware
of the identity of a covered recipient if the applicable manufacturer
does not know (as defined in Sec. 403.902) the identity of the covered
recipient during the reporting year or by the end of the second quarter
of the following reporting year.
(2)(i) For CY 2013, payments or other transfers of value less than
$10, unless the aggregate amount transferred to, requested by, or
designated on behalf of the covered recipient exceeds $100 in a calendar
year.
(ii) For CY 2014 and subsequent calendar years, to determine if
transfers of value are excluded under this section, the dollar amounts
specified in paragraph (h)(2)(i) of this section must
[[Page 114]]
be increased by the same percentage as the percentage increase in the
consumer price index for all urban consumers (all items; U.S. city
average) for the 12-month period ending with June of the previous year.
CMS will publish the values for the next reporting year 90 days before
the beginning of the reporting year.
(iii) Payments or other transfers of value of less than $10 in CY
2013 (or less than the amount described in paragraph (h)(2)(i) of this
section for CY 2014 and subsequent calendar years) provided at large-
scale conferences and similar large-scale events, as well as events open
to the public, do not need to be reported nor included for purposes of
the $100 aggregate threshold in CY 2013 (or the aggregate threshold
calculated in accordance paragraph (h)(2)(i) of this section for CY 2014
and subsequent calendar years), even if the aggregate total for a
covered recipient exceeds the aggregate threshold for the calendar year.
(iv) When reporting payments or other transfers of value under the
$10 threshold for CY 2013 (or under the amount described in paragraph
(i)(2)(ii) of this section for CY 2014 and subsequent calendar years)
for covered recipients that exceed the aggregate threshold for the
reporting year, applicable manufacturers may (but are not required to)
report all small payments to a particular covered recipient that fall
within the same nature of payment category as a single payment or other
transfer of value.
(3) Product samples, including coupons and vouchers that can be used
by a patient to obtain samples, which are not intended to be sold and
are intended for patient use.
(4) Educational materials and items that directly benefit patients
or are intended to be used by or with patients, including the value of
an applicable manufacturer's services to educate patients regarding a
covered drug, device, biological, or medical supply.
(5) Short term medical supply or device loan.
(6) Items or services provided under a contractual warranty
(including service or maintenance agreements), whether or not the
warranty period has expired, including the replacement of a covered
device, where the terms of the warranty are set forth in the purchase or
lease agreement for the covered device.
(7) A transfer of anything of value to a non-teaching hospital
covered recipient when the covered recipient is a patient, research
subject or participant in data collection for research, and not acting
in the professional capacity of a covered recipient.
(8) Discounts, including rebates.
(9) In-kind items used for the provision of charity care.
(10) A dividend or other profit distribution from, or ownership or
investment interest in, a publicly traded security or mutual fund.
(11) In the case of an applicable manufacturer who offers a self-
insured plan or directly reimburses for healthcare expenses, payments
for the provision of health care to employees and their families.
(12) In the case of a covered recipient who is a licensed non-
medical professional, a transfer of anything of value to the covered
recipient if the transfer is payment solely for the non-medical
professional services of the licensed non-medical professional.
(13) In the case of a non-teaching hospital covered recipient, a
transfer of anything of value to the covered recipient if the transfer
is payment solely for the services of the covered recipient with respect
to an administrative proceeding, legal defense, prosecution, or
settlement or judgment of a civil or criminal action and arbitration.
(14) A payment or transfer of value to a covered recipient if the
payment or transfer of value is made solely in the context of a
personal, non-business-related relationship.
[78 FR 9521, Feb. 8, 2013, as amended at 79 FR 68000, Nov. 13, 2014; 84
FR 63186, Nov. 15, 2019; 86 FR 65659, Nov. 19, 2021]
Sec. 403.906 Reports of physician ownership and investment interests.
(a) General rule. (1) Each applicable manufacturer and applicable
group purchasing organization must report to CMS on an annual basis all
ownership and investment interests in the applicable manufacturer or
applicable group purchasing organization that were held by a physician
or an immediate family
[[Page 115]]
member of a physician during the preceding calendar year.
(2) For CY 2013, only ownership or investment interests held on or
after August 1, 2013 must be reported to CMS.
(b) Identifying information. Reports on physician ownership and
investment interests must include the following identifying information:
(1) Name of the physician (as listed in the National Plan & Provider
Enumeration System (if applicable), including first and last name,
middle initial, and suffix (for all that apply), and an indication of
whether the ownership or investment interest was held by the physician
or an immediate family member of the physician.
(2) Primary business address of the physician, including the
following:
(i) Street address.
(ii) Suite or office number (if applicable).
(iii) City.
(iv) State.
(v) ZIP code.
(3) The following information for the physician (regardless of
whether the ownership or investment interest is held by an immediate
family member of the physician):
(i) The specialty.
(ii) National Provider Identifier (if applicable and as listed in
NPPES).
(iii) State professional license number(s) (for at least one State
where the physician maintains a license), and the State(s) in which the
license is held.
(4) Dollar amount invested by each physician or immediate family
member of the physician.
(5) Value and terms of each ownership or investment interest.
(6) Direct and indirect payments or other transfers of value
provided to a physician holding an ownership or investment interest, and
direct and indirect payments or other transfers of value provided to a
third party at the request of or designated by the applicable
manufacturer or applicable group purchasing organization on behalf of a
physician owner or investor, must be reported by the applicable
manufacturer or applicable group purchasing organization in accordance
with the requirements for reporting payments or other transfers of value
in Sec. 403.904(c) through (h). The terms ``applicable manufacturer and
applicable group purchasing organization'' must be substituted for
``applicable manufacturer,'' and ``physician owner or investor'' must be
substituted for ``covered recipient'' in each place they appear.
[78 FR 9521, Feb. 8, 2013, as amended at 79 FR 68001, Nov. 13, 2014]
Sec. 403.908 Procedures for electronic submission of reports.
(a) File format. Reports required under this subpart must be
electronically submitted to CMS by March 31, 2014, and by the 90th day
of each subsequent calendar year.
(b) General rules. (1) If an applicable manufacturer made no
reportable payments or transfers of value in the previous calendar year,
nor had any reportable ownership or investment interests held by a
physician or a physician's immediate family member (as defined in Sec.
403.902) during the previous calendar year, the applicable manufacturer
is not required to file a report.
(2) If an applicable group purchasing organization had no reportable
ownership or investment interests held by a physician or physician's
immediate family member during the previous calendar year, the
applicable group purchasing organization is not required to file a
report.
(c) Registration. (1) Applicable manufacturers that have reportable
payments or other transfers of value, ownership or investment interests,
or both, are required to report under this subpart and must register
with CMS within 90 days of the end of the calendar year for which a
report is required.
(2) Applicable group purchasing organizations that have reportable
ownership or investment interests are required to report under this
subpart and must register with CMS within 90 days of the end of the
calendar year for which a report is required.
(3) During registration, applicable manufacturers and applicable
group purchasing organizations must name two points of contact with
appropriate contact information. These points of contact must be updated
for 2 years following record submission.
(4) An applicable manufacturer or applicable group purchasing
organization that meets the definition of physician-
[[Page 116]]
owned distributorship as defined in Sec. 403.902 must identify its
status as a physician-owned distributorship when registering or
recertifying.
(d) Other rules. (1) Consolidated reports. (i) An applicable
manufacturer under paragraph (1) of the definition that is under common
ownership with separate entities that are also applicable manufacturers
under paragraph (1) of the definition may, but is not required to, file
a consolidated report of all the payments or other transfers of value to
covered recipients, and physician ownership or investment interests, for
all of the entities.
(ii) An applicable manufacturer under paragraph (1) of the
definition of applicable manufacturer and an entity (or entities) under
common ownership with the applicable manufacturer under paragraph (2) of
the definition of applicable manufacturer may, but are not required to,
file a consolidated report of all the payments or other transfers of
value to covered recipients, and physician ownership or investment
interests.
(iii) If multiple applicable manufacturers (under paragraph (1) or
(2) of the definition or both paragraphs of the definition) submit a
consolidated report, the report must provide the names of each
applicable manufacturer and entity (or entities) under common ownership
that the report covers, and the report must identify the specific entity
that provided each payment.
(iv) A single payment or other transfer of value reported in a
consolidated report must only be reported once by one applicable
manufacturer.
(v) The applicable manufacturer submitting a consolidated report on
behalf of itself and other applicable manufacturers under common
ownership, as permitted under this paragraph, is liable for civil
monetary penalties imposed on each of the applicable manufacturers whose
reportable payments or other transfers of value were included in the
consolidated report, up to the annual maximum amount specified in Sec.
403.912(c) for each individual applicable manufacturer included in the
report.
(2) Joint ventures. If a payment or other transfer of value is
provided in accordance with a joint venture or other cooperative
agreement between two or more applicable manufacturers, the payment or
other transfer of value must be reported--
(i) In the name of the applicable manufacturer that actually
furnished the payment or other transfer of value to the covered
recipient, unless the terms of a written agreement between the
applicable manufacturers specifically require otherwise, so long as the
agreement requires that all payments or other transfers of value in
accordance with the arrangement are reported by one of the applicable
manufacturers; and
(ii) Only once by one applicable manufacturer.
(e) Attestation. Each report, including any subsequent corrections
to a filed report, must include an attestation by the Chief Executive
Officer, Chief Financial Officer, Chief Compliance Officer, or other
Officer of the applicable manufacturer or applicable group purchasing
organization that the information reported is timely, accurate, and
complete to the best of his or her knowledge and belief. For applicable
manufacturers choosing to submit a consolidated report in accordance
with paragraph (d)(1) of this section, the applicable manufacturer
submitting the consolidated report must attest on behalf of itself, in
addition to each of the other applicable manufacturers included in the
consolidated report.
(f) Assumptions document. Applicable manufacturers and applicable
group purchasing organizations may submit an assumptions document,
explaining the reasonable assumptions made and methodologies used when
reporting payments or other transfers of value, or ownership or
investment interests. The assumptions documents will not be made
available to covered recipients, physician owners or investors, or the
public.
(g) 45-day review period for review and error correction. (1)
General rule. Applicable manufacturers, applicable group purchasing
organizations, covered recipients, and physician owners or investors
must have an opportunity to review and submit corrections to the
information submitted for a period of not less than 45-days before CMS
makes the information available to the
[[Page 117]]
public. In no case may this 45-day period for review and submission of
corrections prevent the information from being made available to the
public.
(2) Notification. CMS notifies the applicable manufacturers,
applicable group purchasing organizations, covered recipients, and
physician owners or investors when the reported information is ready for
review.
(i) Applicable manufacturers and applicable group purchasing
organizations are notified through the points of contact they identified
during registration.
(ii) Covered recipients--
(A) Are notified using an online posting and notifications on CMS's
listserves.
(B) May also register with CMS to receive notification about the
review processes.
(iii) The 45-day review period begins on the date specified in the
online notification.
(3) Process. (i) An applicable manufacturer, applicable group
purchasing organization, covered recipient or a physician owner or
investor may log into a secure Web site to view only the information
reported specifically about itself.
(ii) Covered recipients and physician owners or investors are able
to review data submitted about them for the previous reporting year.
(iii) If the applicable manufacturer, applicable group purchasing
organization, covered recipient, or physician owner or investor agrees
with the information reported, the applicable manufacturer, applicable
group purchasing organization, covered recipient, or physician owner or
investor may electronically certify that the information reported is
accurate.
(iv) If a covered recipient or physician owner or investor disagrees
with the information reported, the covered recipient or physician owner
or investor can initiate a dispute, which is sent to the appropriate
applicable manufacturer or applicable group purchasing organization to
be resolved between the parties.
(v) Covered recipients and physician owners or investors may
initiate disputes at any time after the 45-day period begins, but before
the end of the calendar year, but any changes resulting from disputes
initiated outside the 45-day period, may not be made until the next time
the data is refreshed.
(4) Data disputes. (i) In order to be corrected prior to the
publication of the data, applicable manufacturers and applicable group
purchasing organizations must notify CMS of resolved disputes and
changes to the information submitted by no later than 15 days after the
end of the 45-day period (that is, 60 days after the 45-day review
period begins).
(ii) Disputes which are not resolved by 15 days after the end of the
review and correction period, may still be resolved, but any changes
resulting from the disputes may be made until the next time the data is
refreshed.
(iii) If the dispute is not resolved by 15 days after the end of the
45-day review and correction period, CMS publicly reports and aggregates
the applicable manufacturer's or applicable group purchasing
organization's version of the payment or other transfer of value, or
ownership or investment interest data, but marks the payment or other
transfer of value or ownership or investment interest as disputed.
(h) Errors or omissions. (1) If an applicable manufacturer or
applicable group purchasing organization discovers an error or omission
in its annual report, it must submit corrected information to CMS
immediately upon confirmation of the error or omission.
(2) Upon receipt, CMS notifies the affected covered recipient or
physician owner or investor that the additional information has been
submitted and is available for review. CMS updates the Web site at least
once annually with corrected information.
[78 FR 9521, Feb. 8, 2013, as amended at 84 FR 63187, Nov. 15, 2019; 86
FR 65659, Nov. 19, 2021]
Sec. 403.910 Delayed publication for payments made under product
research or development agreements and clinical investigations.
(a) General rule. Certain research payments or other transfers of
value made to a covered recipient by an applicable manufacturer under a
product research or development agreement may be delayed from
publication on the Web site.
[[Page 118]]
Publication of a payment or other transfer of value is delayed when made
in connection with the following instances:
(1) Research on or development of a new drug, device, biological, or
medical supply, or a new application of an existing drug, device,
biological, or medical supply.
(2) Clinical investigations regarding a new drug, device,
biological, or medical supply.
(b) Research or development agreement. The research or development
agreement must include a written agreement, a research protocol, or both
between the applicable manufacturer and covered recipient.
(c) Date of publication. Payments or other transfers of value
eligible for delayed publication must be reported to CMS (in the manner
required in Sec. 403.904(f)) on the first reporting date following the
year in which they occur, but CMS does not publicly post the payment
until the first annual publication date after the earlier of the
following:
(1) The date of the approval, licensure or clearance of the covered
drug, device, biological, or medical supply by FDA.
(2) Four calendar years after the date the payment or other transfer
of value was made.
(d) Notification of delayed publication. (1) An applicable
manufacturer must indicate on its research report to CMS whether a
payment or other transfer of value is eligible for a delay in
publication. The absence of this indication in the report will result in
CMS posting all payments publicly in the first year of public reporting.
(2) An applicable manufacturer must continue to indicate annually in
its report that FDA approval, licensure, or clearance of the new drug,
device, biological or medical supply to which the payment or other
transfer of value is related, is pending.
(3) An applicable manufacturer must notify CMS during subsequent
annual submissions, if the new drug, device, biological or medical
supply, to which the payment is related (or the new application of the
existing drug, device, biological, or medical supply), is approved by
the FDA.
(4) Failure to notify CMS when FDA approval occurs may be considered
failure to report, and the applicable manufacturer may be subject to
civil monetary penalties.
(5) If, after 4 years from the date of a payment first appearing in
a report to CMS, there is an indication in a report that the payment is
subject to delayed reporting, it is reported regardless of the
indication.
(e) Confidentiality. Information submitted and eligible for delayed
publication is considered confidential and will not be subject to
disclosure under 5 U.S.C. 552, or any similar Federal, State, or local
law, until on or after the date on which the information made available
to the public as required in this section.
Sec. 403.912 Penalties for failure to report.
(a) Failure to report. (1) Any applicable manufacturer or applicable
group purchasing organization that fails to timely, accurately or
completely report the information required in accordance with the rules
established under this subpart is subject to a civil monetary penalty of
not less than $1,000, but not more than $10,000, as adjusted annually
under 45 CFR part 102 for each payment or other transfer of value or
ownership or investment interest not reported timely, accurately, or
completely.
(2) The total amount of civil monetary penalties imposed on each
applicable manufacturer or applicable group purchasing organization
(regardless of whether the applicable manufacturer was a part of a
consolidated report) with respect to failures to report in an annual
submission of information will not exceed $150,000 as adjusted annually
under 45 CFR part 102.
(b) Knowing failure to report. (1) Any applicable manufacturer or
applicable group purchasing organization that knowingly fails to timely,
accurately or completely report the information required in accordance
with the rules established under this subpart is subject to a civil
monetary penalty of not less than $10,000, but not more than $100,000,
as adjusted annually under 45 CFR part 102 for each payment or other
[[Page 119]]
transfer of value or ownership or investment interest not reported
timely, accurately, or completely.
(2) The total amount of civil monetary penalties imposed on each
applicable manufacturer or group purchasing organization (regardless of
whether the applicable manufacturer was a part of a consolidated report)
with respect to knowing failures to report in an annual submission of
information will not exceed $1,000,000 as adjusted annually under 45 CFR
part 102.
(c) Total annual civil monetary penalties. The amount of civil
monetary penalties imposed on each applicable manufacturer or applicable
group purchasing organization under paragraphs (a)(1) and (b)(1) of this
section are--
(1) Aggregated separately;
(2) Subject to separate aggregate totals under paragraphs (a)(2) and
(b)(2) of this section, with a maximum combined annual total of
$1,150,000 as adjusted annually under 45 CFR part 102.
(d) Determinations regarding the amount of civil monetary penalties.
In determining the amount of the civil monetary penalty, factors to be
considered include, but are not limited to, the following:
(1) The length of time the applicable manufacturer or applicable
group purchasing organization failed to report, including the length of
time the applicable manufacturer or applicable group purchasing
organization knew of the payment or other transfer of value, or
ownership or investment interest.
(2) Amount of the payment the applicable manufacturer or applicable
group purchasing organization failed to report.
(3) Level of culpability.
(4) Nature and amount of information reported in error.
(5) Degree of diligence exercised in correcting information reported
in error.
(e) Record retention and audits. (1) Maintenance of records. (i)
Applicable manufacturers and applicable group purchasing organizations
must maintain all books, contracts, records, documents, and other
evidence sufficient to enable the audit, evaluation, and inspection of
the applicable manufacturer's or applicable group purchasing
organization's compliance with the requirement to timely, accurately or
completely submit information in accordance with the rules established
under this subpart.
(ii) The items described in paragraph (e)(1)(i) of this section must
be maintained for a period of at least 5 years from the date the payment
or other transfer of value, or ownership or investment interest is
published publicly on the Web site.
(2) Audit. HHS, CMS, OIG or their designees may audit, inspect,
investigate and evaluate any books, contracts, records, documents, and
other evidence of applicable manufacturers and applicable group
purchasing organizations that pertain to their compliance with the
requirement to timely, accurately or completely submit information in
accordance with the rules established under this subpart.
(3) The requirements in this subpart are in addition to, and do not
limit, any other applicable requirements that may obligate applicable
manufacturers or applicable group purchasing organizations to retain and
allow access to records.
(f) Use of funds. Funds collected by the Secretary as a result of
the imposition of a civil monetary penalty under this section must be
used to carry out the operation of this subpart.
(g) Notice, hearings, appeals, and collection. Civil monetary
penalties imposed under this section are subject to the provisions set
forth in subparts A and B of part 402 of this chapter, including those
pertaining to notice, opportunity for a hearing, appeals procedures, and
collection of penalties.
[78 FR 9521, Feb. 8, 2013, as amended at 81 FR 61561, Sept. 6, 2016; 82
FR 42749, Sept. 12, 2017]
Sec. 403.914 Preemption of State laws.
(a) General rule. In the case of a payment or other transfer of
value provided by an applicable manufacturer to a covered recipient,
this subpart preempts any statute or regulation of a State or political
subdivision of a State that requires an applicable manufacturer to
disclose or report, in any format, the type of information regarding the
payment or other transfer of value required to be reported under this
subpart.
[[Page 120]]
(b) Information collected for public health purposes. (1)
Information required to be reported to a Federal, State, or local
governmental agency for public health surveillance, investigation, or
other public health purposes or health oversight purposes must still be
reported to appropriate Federal, State, or local governmental agencies,
regardless of whether the same information is required to be reported
under this subpart.
(2) Governmental agencies include, but are not limited to, the
following:
(i) Agencies that are charged with preventing or controlling
disease, injury, disability.
(ii) Agencies that conduct oversight activities authorized by law,
including audits, investigations, inspections, licensure or disciplinary
actions, or other activities necessary for oversight of the health care
system.
Subpart K_Access to Identifiable Data for the Center for Medicare and
Medicaid Models
Source: 79 FR 68001, Nov. 13, 2014, unless otherwise noted.
Sec. 403.1100 Purpose and scope.
The regulations in this subpart implement section 1115A of the Act.
The intent of that section is to enable CMS to test innovative payment
and service delivery models to reduce program expenditures while
preserving and/or enhancing the quality of care furnished to individuals
under titles XVIII, XIX, and XXI of the Act. The Secretary is also
required to conduct an evaluation of each model tested.
Sec. 403.1105 Definitions.
For purposes of this subpart--
Applicable titles means Titles XVIII, XIX, or XXI of the Act.
Sec. 403.1110 Evaluation of models.
(a) Evaluation. The Secretary conducts an evaluation of each model
tested under section 1115A of the Act. Such evaluation must include an
analysis of the following:
(1) The quality of care furnished under the model, including the
measurement of patient-level outcomes and patient-centeredness criteria
determined appropriate by the Secretary.
(2) The changes in spending under the applicable titles by reason of
the model.
(b) Information. Any State or other entity participating in the
testing of a model under section 1115A of the Act must collect and
report such information, including ``protected health information'' as
that term is defined at 45 CFR 160.103, as the Secretary determines is
necessary to monitor and evaluate such model. Such data must be produced
to the Secretary at the time and in the form and manner specified by the
Secretary.
Subpart L_Requirements for Direct-to-Consumer Television Advertisements
of Drugs and Biological Products To Include the List Price of That
Advertised Product
Source: 84 FR 20757, May 10, 2019, unless otherwise noted.
Sec. 403.1200 Scope.
(a) Covered pharmaceuticals. Except as specified in paragraph (b) of
this section, this subpart applies to advertisements for a prescription
drug or biological product distributed in the United States for which
payment is available, directly or indirectly, under titles XVIII or XIX
of the Social Security Act.
(b) Excepted pharmaceuticals. An advertisement for any prescription
drug or biological product that has a list price, as defined in Sec.
403.1201, less than $35 per month for a 30-day supply or typical course
of treatment shall be exempt from the requirements of this subpart.
Sec. 403.1201 Definitions.
For the purposes of this subpart, the following definitions apply:
(a) Biological product. Biological product means any biological
product, as that term is defined in Public Health Service Act (``PHS
Act'') section 351(i), that is licensed by the Food and Drug
Administration pursuant to section 351 and is subject to the
requirements of
[[Page 121]]
Federal Food, Drug, and Cosmetic Act (FDCA) section 503(b)(1).
(b) Prescription drug. Prescription drug means any drug, as defined
in the FDCA section 201(g), that has been approved by the Food and Drug
Administration pursuant to FDCA section 505 and is subject to the
requirements of FDCA section 503(b)(1).
(c) List price. List price means the wholesale acquisition cost, as
defined in paragraph (d) of this section.
(d) Wholesale acquisition cost. Wholesale acquisition cost means,
with respect to a prescription drug or biological product, the
manufacturer's list price for the prescription drug or biological
product to wholesalers or direct purchasers in the United States, not
including prompt pay or other discounts, rebates or reductions in price,
for the most recent month for which the information is available, as
reported in wholesale price guides or other publications of drug or
biological product pricing data.
Sec. 403.1202 Pricing information.
Any advertisement for any prescription drug or biological product on
television (including broadcast, cable, streaming, or satellite) must
contain a textual statement indicating the current list price for a
typical 30-day regimen or for a typical course of treatment, whichever
is most appropriate, as determined on the first day of the quarter
during which the advertisement is being aired or otherwise broadcast, as
follows: ``The list price for a [30-day supply of ] [typical course of
treatment with] [name of prescription drug or biological product] is
[insert list price]. If you have health insurance that covers drugs,
your cost may be different.'' Where the price is related to the typical
course of treatment and that typical course of treatment varies
depending on the indication for which a prescription drug or biological
product is prescribed, the list price to be used is the one for the
typical course of treatment associated with the primary indication
addressed in the advertisement.
Sec. 403.1203 Specific presentation requirements.
The textual statement described in Sec. 403.1202 shall be presented
at the end of an advertisement in a legible manner, meaning that it is
placed appropriately and is presented against a contrasting background
for sufficient duration and in a size and style of font that allows the
information to be read easily.
Sec. 403.1204 Compliance.
(a) Identification of non-compliant products. The Secretary will
maintain a public list that will include the prescription drugs and
biological products identified by the Secretary to be advertised in
violation of this subpart.
(b) State or local requirements. No State or political subdivision
of any State may establish or continue in effect any requirement
concerning the disclosure in a television advertisement of the pricing
of a prescription drug or biological product which is different from, or
in addition to, any requirement imposed by this subpart.
[[Page 122]]
SUBCHAPTER B_MEDICARE PROGRAM
PART 405_FEDERAL HEALTH INSURANCE FOR THE
AGED AND DISABLED--Table of Contents
Subpart A [Reserved]
Subpart B_Medical Services Coverage Decisions That
Relate to Health Care
Technology
Sec.
405.201 Scope of subpart and definitions.
405.203 FDA categorization of investigational devices.
405.205 Coverage of a non-experimental/investigational (Category B)
device.
405.207 Services related to a noncovered device.
405.209 Payment for a Category B (Nonexperimental/investigational)
device.
405.211 Coverage of items and services in FDA-approved IDE studies.
405.212 Medicare Coverage IDE study criteria.
405.213 Re-evaluation of a device categorization.
405.215 Confidential commercial and trade secret information.
Subpart C_Suspension of Payment, Recovery of Overpayments, and Repayment
of Scholarships and Loans
General Provisions
405.301 Scope of subpart.
Liability for Payments to Providers and Suppliers, and Handling of
Incorrect Payments
405.350 Individual's liability for payments made to providers and other
persons for items and services furnished the individual.
405.351 Incorrect payments for which the individual is not liable.
405.352 Adjustment of title XVIII incorrect payments.
405.353 Certification of amount that will be adjusted against individual
title II or railroad retirement benefits.
405.354 Procedures for adjustment or recovery--title II beneficiary.
405.355 Waiver of adjustment or recovery.
405.356 Principles applied in waiver of adjustment or recovery.
405.357 Notice of right to waiver consideration.
405.358 When waiver of adjustment or recovery may be applied.
405.359 Liability of certifying or disbursing officer.
Suspension and Recoupment of Payment to Providers and Suppliers and
Collection and Compromise of Overpayments
405.370 Definitions.
405.371 Suspension, offset, and recoupment of Medicare payments to
providers and suppliers of services.
405.372 Proceeding for suspension of payment.
405.373 Proceeding for offset or recoupment.
405.374 Opportunity for rebuttal.
405.375 Time limits for, and notification of, administrative
determination after receipt of rebuttal statement.
405.376 Suspension and termination of collection action and compromise
of claims for overpayment.
405.377 Withholding Medicare payments to recover Medicaid overpayments.
405.378 Interest charges on overpayment and underpayments to providers,
suppliers, and other entities.
405.379 Limitation on recoupment of provider and supplier overpayments.
Repayment of Scholarships and Loans
405.380 Collection of past-due amounts on scholarship and loan programs.
Subpart D_Private Contracts
405.400 Definitions.
405.405 General rules.
405.410 Conditions for properly opting-out of Medicare.
405.415 Requirements of the private contract.
405.420 Requirements of the opt-out affidavit.
405.425 Effects of opting-out of Medicare.
405.430 Failure to properly opt-out.
405.435 Failure to maintain opt-out.
405.440 Emergency and urgent care services.
405.445 Cancellation of opt-out and early termination of opt-out.
405.450 Appeals.
405.455 Application to Medicare Advantage contracts
Subpart E_Criteria for Determining Reasonable Charges
405.500 Basis.
405.501 Determination of reasonable charges.
405.502 Criteria for determining reasonable charges.
405.503 Determining customary charges.
405.504 Determining prevailing charges.
405.505 Determination of locality
405.506 Charges higher than customary or prevailing charges or lowest
charge levels.
[[Page 123]]
405.507 Illustrations of the application of the criteria for determining
reasonable charges.
405.508 Determination of comparable circumstances; limitation.
405.509 Determining the inflation-indexed charge.
405.511 Reasonable charges for medical services, supplies, and
equipment.
405.512 Carriers' procedural terminology and coding systems.
405.515 Reimbursement for clinical laboratory services billed by
physicians.
405.517 Payment for drugs and biologicals that are not paid on a cost or
prospective payment basis.
405.520 Payment for a physician assistant's, nurse practitioner's, and
clinical nurse specialists' services and services furnished
incident to their professional services.
405.534 Limitation on payment for screening mammography services.
405.535 Special rule for nonparticipating physicians and suppliers
furnishing screening mammography services before January 1,
2002.
Subparts F-G [Reserved]
Subpart H_Appeals Under the Medicare Part B Program
405.800 Appeals of CMS or a CMS contractor.
405.803 Appeals rights.
405.806 Impact of reversal of contractor determinations on claims
processing.
405.809 Reinstatement of provider or supplier billing privileges
following corrective action.
405.812 Effective date for DMEPOS supplier's billing privileges.
405.815 Submission of claims.
405.818 Deadline for processing provider enrollment initial
determinations.
Subpart I_Determinations, Redeterminations, Reconsiderations, and
Appeals Under Original Medicare (Parts A and B)
405.900 Basis and scope.
405.902 Definitions.
405.903 Prepayment review.
405.904 Medicare initial determinations, redeterminations and appeals:
General description.
405.906 Parties to the initial determinations, redeterminations,
reconsiderations, hearings, and reviews.
405.908 Medicaid State agencies.
405.910 Appointed representatives.
405.912 Assignment of appeal rights.
Initial Determinations
405.920 Initial determinations.
405.921 Notice of initial determination.
405.922 Time frame for processing initial determinations.
405.924 Actions that are initial determinations.
405.925 Decisions of utilization review committees.
405.926 Actions that are not initial determinations.
405.927 Initial determinations subject to the reopenings process.
405.928 Effect of the initial determination.
405.929 Post-payment review.
405.930 Failure to respond to additional documentation request.
Redeterminations
405.940 Right to a redetermination.
405.942 Time frame for filing a request for a redetermination.
405.944 Place and method of filing a request for a redetermination.
405.946 Evidence to be submitted with the redetermination request.
405.947 Notice to the beneficiary of applicable plan's request for a
redetermination.
405.948 Conduct of a redetermination.
405.950 Time frame for making a redetermination.
405.952 Withdrawal or dismissal of a request for a redetermination.
405.954 Redetermination.
405.956 Notice of a redetermination.
405.958 Effect of a redetermination.
Reconsideration
405.960 Right to a reconsideration.
405.962 Time frame for filing a request for a reconsideration.
405.964 Place and method of filing a request for a reconsideration.
405.966 Evidence to be submitted with the reconsideration request.
405.968 Conduct of a reconsideration.
405.970 Timeframe for making a reconsideration following a contractor
redetermination.
405.972 Withdrawal or dismissal of a request for reconsideration or
review of a contractor's dismissal of a request for
redetermination.
405.974 Reconsideration and review of a contractor's dismissal of a
request for redetermination.
405.976 Notice of a reconsideration.
405.978 Effect of a reconsideration.
Reopenings
405.980 Reopening of initial determinations, redeterminations,
reconsiderations, decisions, and reviews.
405.982 Notice of a revised determination or decision.
405.984 Effect of a revised determination or decision.
405.986 Good cause for reopening.
[[Page 124]]
Expedited Access to Judicial Review
405.990 Expedited access to judicial review.
ALJ Hearings
405.1000 Hearing before an ALJ and decision by an ALJ or attorney
adjudicator: General rule.
405.1002 Right to an ALJ hearing.
405.1004 Right to a review of QIC notice of dismissal.
405.1006 Amount in controversy required for an ALJ hearing and judicial
review.
405.1008 Parties to the proceedings on a request for an ALJ hearing.
405.1010 When CMS or its contractors may participate in the proceedings
on a request for an ALJ hearing.
405.1012 When CMS or its contractors may be a party to a hearing.
405.1014 Request for an ALJ hearing or a review of a QIC dismissal.
405.1016 Time frames for deciding an appeal of a QIC reconsideration or
escalated request for a QIC reconsideration.
405.1018 Submitting evidence.
405.1020 Time and place for a hearing before an ALJ.
405.1022 Notice of a hearing before an ALJ.
405.1024 Objections to the issues.
405.1026 Disqualification of the ALJ or attorney adjudicator.
405.1028 Review of evidence submitted by parties.
405.1030 ALJ hearing procedures.
405.1032 Issues before an ALJ or attorney adjudicator.
405.1034 Requesting information from the QIC.
405.1036 Description of an ALJ hearing process.
405.1037 Discovery.
405.1038 Deciding a case without a hearing before an ALJ.
405.1040 Prehearing and posthearing conferences.
405.1042 The administrative record.
405.1044 Consolidated proceedings.
405.1046 Notice of an ALJ or attorney adjudicator decision.
405.1048 The effect of an ALJ's or attorney adjudicator's decision.
405.1050 Removal of a hearing request from OMHA to the Council.
405.1052 Dismissal of a request for a hearing before an ALJ or request
for review of a QIC dismissal.
405.1054 Effect of dismissal of a request for a hearing or request for
review of QIC dismissal.
405.1056 Remands of requests for hearing and requests for review.
405.1058 Effect of a remand.
Applicability of Medicare Coverage Policies
405.1060 Applicability of nation coverage determinations (NCDs).
405.1062 Applicability of local coverage determinations and other
policies not binding on the ALJ or attorney adjudicator and
Council.
405.1063 Applicability of laws, regulations, CMS Rulings, and
precedential decisions.
Medicare Appeals Council Review
405.1100 Medicare Appeals Council review: General.
405.1102 Request for Council review when ALJ or attorney adjudicator
issues decision or dismissal.
405.1106 Where a request for review or escalation may be filed.
405.1108 Council actions when request for review or escalation is filed.
405.1110 Council reviews on its own motion.
405.1112 Content of request for review.
405.1114 Dismissal of request for review.
405.1116 Effect of dismissal of request for Council review or request
for hearing.
405.1118 Obtaining evidence from the Council.
405.1120 Filling briefs with the Council.
405.1122 What evidence may be submitted to the Council.
405.1124 Oral argument.
405.1126 Case remanded by the Council.
405.1128 Action of the Council.
405.1130 Effect of the Council's decision.
405.1132 Request for escalation to Federal court.
405.1134 Extension of time to file action in Federal district court.
405.1136 Judicial review.
405.1138 Case remanded by a Federal district court.
405.1140 Council review of ALJ decision in a case remanded by a Federal
district court.
Subpart J_Expedited Determinations and Reconsiderations of Provider
Service Terminations, and Procedures for Inpatient Hospital Discharges
405.1200 Notifying beneficiaries of provider service terminations.
405.1202 Expedited determination procedures.
405.1204 Expedited reconsiderations.
405.1205 Notifying beneficiaries of hospital discharge appeal rights.
405.1206 Expedited determination procedures for inpatient hospital care.
405.1208 Hospital requests expedited QIO review.
Subparts K-Q [Reserved]
[[Page 125]]
Subpart R_Provider Reimbursement Determinations and Appeals
405.1801 Introduction.
405.1803 Contractor determination and notice of amount of program
reimbursement.
405.1804 Matters not subject to administrative or judicial review under
prospective payment.
405.1805 Parties to contractor determination.
405.1807 Effect of contractor determination.
405.1809 Contractor hearing procedures.
405.1811 Right to contractor hearing; contents of, and adding issues to,
hearing request.
405.1813 Good cause extension of time limit for requesting a contractor
hearing.
405.1814 Contractor hearing officer jurisdiction.
405.1815 Parties to proceedings before the contractor hearing
officer(s).
405.1817 Hearing officer or panel of hearing officers authorized to
conduct contractor hearing; disqualification of officers.
405.1819 Conduct of contractor hearing.
405.1821 Prehearing discovery and other proceedings prior to the
contractor hearing.
405.1823 Evidence at contractor hearing.
405.1825 Witnesses at contractor hearing.
405.1827 Record of proceedings before the contractor hearing officer(s).
405.1829 Scope of authority of contractor hearing officer(s).
405.1831 Contractor hearing decision.
405.1832 Contractor hearing officer review of compliance with the
substantive reimbursement requirement of an appropriate cost
report claim.
405.1833 Effect of contractor hearing decision.
405.1834 CMS reviewing official procedure.
405.1835 Right to Board hearing; contents of, and adding issues to,
hearing request.
405.1836 Good cause extension of time limit for requesting a Board
hearing.
405.1837 Group appeals.
405.1839 Amount in controversy.
405.1840 Board jurisdiction.
405.1842 Expedited judicial review.
405.1843 Parties to proceedings in a Board appeal.
405.1845 Composition of Board; hearings, decisions, and remands.
405.1847 Disqualification of Board members.
405.1849 Establishment of time and place of hearing by the Board.
405.1851 Conduct of Board hearing.
405.1853 Board proceedings prior to any hearing; discovery.
405.1855 Evidence at Board hearing.
405.1857 Subpoenas.
405.1859 Witnesses.
405.1861 Oral argument and written allegations.
405.1863 Administrative policy at issue.
405.1865 Record of administrative proceedings.
405.1867 Scope of Board's legal authority.
405.1868 Board actions in response to failure to follow Board rules.
405.1869 Scope of Board's authority in a hearing decision.
405.1871 Board hearing decision.
405.1873 Board review of compliance with the reimbursement requirement
of an appropriate cost report claim.
405.1875 Administrator review.
405.1877 Judicial review.
405.1881 Appointment of representative.
405.1883 Authority of representative.
405.1885 Reopening an intermediary determination or reviewing entity
decision.
405.1887 Notice of reopening; effect of reopening.
405.1889 Effect of a revision; issue-specific nature of appeals of
revised determinations and decisions.
Subparts S-T [Reserved]
Subpart U_Conditions for Coverage of Suppliers of End-Stage Renal
Disease (ESRD) Services
405.2100-405.2101 [Reserved]
405.2102 Definitions.
405.2110 Designation of ESRD networks.
405.2111 [Reserved]
405.2112 ESRD network organizations.
405.2113 Medical review board.
405.2114 [Reserved]
405.2131-405.2184 [Reserved]
Subparts V-W [Reserved]
Subpart X_Rural Health Clinic and Federally Qualified Health Center
Services
405.2400 Basis.
405.2401 Scope and definitions.
405.2402 Rural health clinic basic requirements.
405.2403 Rural health clinic content and terms of the agreement with the
Secretary.
405.2404 Termination of rural health clinic agreements.
405.2410 Application of Part B deductible and coinsurance.
405.2411 Scope of benefits.
405.2412 Physicians' services.
405.2413 Services and supplies incident to a physician's services.
405.2414 Nurse practitioner, physician assistant, and certified nurse
midwife services.
405.2415 Incident to services and direct supervision.
405.2416 Visiting nurse services.
405.2417 Visiting nurse services: Determination of shortage of agencies.
[[Page 126]]
Federally Qualified Health Center Services
405.2430 Basic requirements.
405.2434 Content and terms of the agreement.
405.2436 Termination of agreement.
405.2440 Conditions for reinstatement after termination by CMS.
405.2442 Notice to the public.
405.2444 Change of ownership.
405.2446 Scope of services.
405.2448 Preventive primary services.
405.2449 Preventive services.
405.2450 Clinical psychologist, clinical social worker, marriage and
family therapist, and mental health counselor services.
405.2452 Services and supplies incident to clinical psychologist,
clinical social worker, marriage and family therapist, and
mental health counselor services.
Payment for Rural Health Clinic and Federally Qualified Health Center
Services
405.2460 Applicability of general payment exclusions.
405.2462 Payment for RHC and FQHC services.
405.2463 What constitutes a visit.
405.2464 Payment rate.
405.2466 Annual reconciliation.
405.2467 Requirements of the FQHC PPS.
405.2468 Allowable costs.
405.2469 FQHC supplemental payments.
405.2470 Reports and maintenance of records.
405.2472 Beneficiary appeals.
Authority: 42 U.S.C. 263a, 405(a), 1302, 1320b-12, 1395x, 1395y(a),
1395ff, 1395hh, 1395kk, 1395rr, and 1395ww(k).
Subpart A [Reserved]
Subpart B_Medical Services Coverage Decisions That Relate to Health Care
Technology
Authority: Secs. 1102, 1862 and 1871 of the Social Security Act as
amended (42 U.S.C.1302, 1395y, and 1395hh).
Source: 60 FR 48423, Sept. 19, 1995, unless otherwise noted.
Sec. 405.201 Scope of subpart and definitions.
(a) Scope. This subpart establishes that--
(1) CMS uses the FDA categorization of a device as a factor in
making Medicare coverage decisions; and
(2) CMS may consider for Medicare coverage certain devices with an
FDA-approved investigational device exemption (IDE) that have been
categorized as Category B (Nonexperimental/investigational) device.
(3) CMS identifies criteria for coverage of items and services
furnished in IDE studies.
(b) Definitions. As used in this subpart--
Category A (Experimental) device refers to a device for which
``absolute risk'' of the device type has not been established (that is,
initial questions of safety and effectiveness have not been resolved)
and the FDA is unsure whether the device type can be safe and effective.
Category B (Nonexperimental/investigational) device refers to a
device for which the incremental risk is the primary risk in question
(that is, initial questions of safety and effectiveness of that device
type have been resolved), or it is known that the device type can be
safe and effective because, for example, other manufacturers have
obtained FDA premarket approval or clearance for that device type.
ClinicalTrials.gov refers to the National Institutes of Health's
National Library of Medicine's online registry and results database of
publicly and privately supported clinical studies of human participants
conducted around the world.
Contractors refers to Medicare Administrative Contractors and other
entities that contract with CMS to review and adjudicate claims for
Medicare payment of items and services.
Investigational device exemption (IDE) refers to an FDA-approved IDE
application that permits a device, which would otherwise be subject to
marketing approval or clearance, to be shipped lawfully for the purpose
of conducting a clinical study in accordance with 21 U.S.C. 360j(g) and
21 CFR part 812.
Routine care items and services refers to items and services that
are otherwise generally available to Medicare beneficiaries (that is, a
benefit category exists, it is not statutorily excluded, and there is no
national noncoverage decision) that are furnished during a clinical
study and that would
[[Page 127]]
be otherwise furnished even if the beneficiary were not enrolled in a
clinical study.
[60 FR 48423, Sept. 19, 1995, as amended at 78 FR 74809, Dec. 10, 2013;
86 FR 3009, Jan. 14, 2021; 86 FR 62958, Nov. 15, 2021]
Sec. 405.203 FDA categorization of investigational devices.
(a) The FDA assigns a device with an FDA-approved IDE to one of two
categories:
(1) Category A (Experimental) devices.
(2) Category B (Nonexperimental/investigational) devices.
(b) The FDA notifies CMS, when it notifies the sponsor, that the
device is categorized by FDA as Category A (Experimental) or Category B
(Nonexperimental).
(c) CMS uses the categorization of the device as a factor in making
Medicare coverage decisions.
[60 FR 48423, Sept. 19, 1995, as amended at 78 FR 74809, Dec. 10, 2013
Sec. 405.205 Coverage of a Category B (Nonexperimental/
investigational) device.
(a) For any device that meets the requirements of the exception at
Sec. 411.15(o) of this chapter, the following procedures apply:
(1) The FDA notifies CMS, when it notifies the sponsor, that the
device is categorized by FDA as Category B (Nonexperimental/
investigational).
(2) CMS uses the categorization of the device as a factor in making
Medicare coverage decisions.
(b) If the FDA becomes aware that a categorized device no longer
meets the requirements of the exception at Sec. 411.15(o) of this
chapter, the FDA notifies the sponsor and CMS and the procedures
described in paragraph (a)(2) of this section apply.
[60 FR 48423, Sept. 19, 1995, as amended at 78 FR 74809, Dec. 10, 2013
Sec. 405.207 Services related to a noncovered device.
(a) When payment is not made. Medicare payment is not made for
medical and hospital services that are related to the use of a device
that is not covered because CMS determines the device is not
``reasonable'' and ``necessary'' under section 1862(a)(1)(A) of the Act
or because it is excluded from coverage for other reasons. These
services include all services furnished in preparation for the use of a
noncovered device, services furnished contemporaneously with and
necessary to the use of a noncovered device, and services furnished as
necessary after-care that are incident to recovery from the use of the
device or from receiving related noncovered services.
(b) When payment is made. Medicare payment may be made for--
(1) Covered services to treat a condition or complication that
arises due to the use of a noncovered device or a noncovered device-
related service; or
(2) Routine care items and services related to Category A
(Experimental) devices as defined in Sec. 405.201(b), and furnished in
conjunction with FDA-approved clinical studies that meet the coverage
requirements in Sec. 405.211.
(3) Routine care items and services related to Category B
(Nonexperimental/investigational) devices as defined in Sec.
405.201(b), and furnished in conjunction with FDA-approved clinical
studies that meet the coverage requirements in Sec. 405.211.
[60 FR 48423, Sept. 19, 1995, as amended at 69 FR 66420, Nov. 15, 2004;
78 FR 74809, Dec. 10, 2013]
Sec. 405.209 Payment for a Category B (Nonexperimental
/investigational) device.
Payment under Medicare for a Category B (Nonexperimental/
investigational) device is based on, and may not exceed, the amount that
would have been paid for a currently used device serving the same
medical purpose that has been approved or cleared for marketing by the
FDA.
[78 FR 74809, Dec. 10, 2013]
Sec. 405.211 Coverage of items and services in FDA-approved
IDE studies.
(a) Coverage of routine care items and services for Category A
(Experimental) devices. Medicare covers routine care items and services
furnished in an FDA-approved Category A (Experimental) IDE study if CMS
(or its designated entity) determines that the Medicare coverage IDE
study criteria in Sec. 405.212 are met.
[[Page 128]]
(b) Coverage of Category B (Nonexperimental/investigational) IDE
devices and routine care items and services. Medicare may make payment
for a Category B (Nonexperimental/investigational) IDE device and
routine care items and services furnished in an FDA-approved Category B
(Nonexperimental/investigational) IDE study if CMS (or its designated
entity) determines prior to the submission of the first related claim
that the Medicare coverage IDE study criteria in Sec. 405.212 are met.
(c) CMS (or its designated entity) must review the following to
determine if the Medicare coverage IDE study criteria in Sec. 405.212
are met for purposes of coverage of items and services described in
paragraphs (a) and (b) of this section:
(1) FDA approval letter of the IDE.
(2) IDE study protocol.
(3) IRB approval letter.
(4) NCT number.
(5) Supporting materials, as needed.
(d) Notification. A listing of all CMS-approved Category A
(Experimental) IDE studies and Category B (Nonexperimental/
investigational) IDE studies shall be posted on the CMS Web site and
published in the Federal Register.
[78 FR 74809, Dec. 10, 2013]
Sec. 405.212 Medicare Coverage IDE study criteria.
(a) For Medicare coverage of items and services described in Sec.
405.211, a Category A (Experimental) or Category B (Nonexperimental/
investigational) IDE study must meet all of the following criteria:
(1) The principal purpose of the study is to test whether the device
improves health outcomes of appropriately selected patients.
(2) The rationale for the study is well supported by available
scientific and medical information, or it is intended to clarify or
establish the health outcomes of interventions already in common
clinical use.
(3) The study results are not anticipated to unjustifiably duplicate
existing knowledge.
(4) The study design is methodologically appropriate and the
anticipated number of enrolled subjects is adequate to confidently
answer the research question(s) being asked in the study.
(5) The study is sponsored by an organization or individual capable
of successfully completing the study.
(6) The study is in compliance with all applicable Federal
regulations concerning the protection of human subjects found at 21 CFR
parts 50, 56, and 812 and 45 CFR part 46.
(7) Where appropriate, the study is not designed to exclusively test
toxicity or disease pathophysiology in healthy individuals. Studies of
all medical technologies measuring therapeutic outcomes as one of the
objectives may be exempt from this criterion only if the disease or
condition being studied is life threatening and the patient has no other
viable treatment options.
(8) The study is registered with the National Institutes of Health's
National Library of Medicine's ClinicalTrials.gov.
(9) The study protocol describes the method and timing of release of
results on all pre-specified outcomes, including release of negative
outcomes and that the release should be hastened if the study is
terminated early.
(10) The study protocol must describe how Medicare beneficiaries may
be affected by the device under investigation, and how the study results
are or are not expected to be generalizable to the Medicare beneficiary
population. Generalizability to populations eligible for Medicare due to
age, disability, or other eligibility status must be explicitly
described.
(b) [Reserved]
[78 FR 74809, Dec. 10, 2013]
Sec. 405.213 Re-evaluation of a device categorization.
(a) General rules. (1) Any sponsor that does not agree with an FDA
decision that categorizes its device as Category A (experimental) may
request re-evaluation of the categorization decision.
(2) A sponsor may request review by CMS only after the requirements
of paragraph (b) of this section are met.
(3) No reviews other than those described in paragraphs (b) and (c)
of this section are available to the sponsor.
(4) Neither the FDA original categorization or re-evaluation
(described
[[Page 129]]
in paragraph (b) of this section) nor CMS's review (described in
paragraph (c) of this section) constitute an initial determination for
purposes of the Medicare appeals processes under part 405, subpart G or
subpart H, or parts 417, 473, or 498 of this chapter.
(b) Request to FDA. A sponsor that does not agree with the FDA's
categorization of its device may submit a written request to the FDA at
any time requesting re-evaluation of its original categorization
decision, together with any information and rationale that it believes
support recategorization. The FDA notifies both CMS and the sponsor of
its decision.
(c) Request to CMS. If the FDA does not agree to recategorize the
device, the sponsor may seek review from CMS. A device sponsor must
submit its request in writing to CMS. CMS obtains copies of relevant
portions of the application, the original categorization decision, and
supplementary materials. CMS reviews all material submitted by the
sponsor and the FDA's recommendation. CMS reviews only information in
the FDA record to determine whether to change the categorization of the
device. CMS issues a written decision and notifies the sponsor of the
IDE and the FDA.
[60 FR 48423, Sept. 19, 1995, as amended at 78 FR 74810, Dec. 10, 2013
Sec. 405.215 Confidential commercial and trade secret information.
To the extent that CMS relies on confidential commercial or trade
secret information in any judicial proceeding, CMS will maintain
confidentiality of the information in accordance with Federal law.
Subpart C_Suspension of Payment, Recovery of Overpayments, and Repayment
of Scholarships and Loans
Authority: Secs. 1102, 1815, 1833, 1842, 1862, 1866, 1870, 1871,
1879 and 1892 of the Social Security Act (42 U.S.C. 1302, 1395g, 1395l,
1395u, 1395y, 1395cc, 1395gg, 1395hh, 1395pp and 1395ccc) and 31 U.S.C.
3711.
Source: 31 FR 13534, Oct. 20, 1966, unless otherwise noted.
Redesignated at 42 FR 52826, Sept. 30, 1977.
Editorial Note: Nomenclature changes to subpart C of part 405 appear
at 76 FR 5961, Feb. 2, 2011.
General Provisions
Sec. 405.301 Scope of subpart.
This subpart sets forth the policies and procedures for handling of
incorrect payments and recovery of overpayments.
[54 FR 41733, Oct. 11, 1989]
Liability for Payments To Providers or Suppliers and Handling of
Incorrect Payments
Sec. 405.350 Individual's liability for payments made to
providers and other persons for items and services furnished the individual.
Any payment made under title XVIII of the Act to any provider of
services or other person with respect to any item or service furnished
an individual shall be regarded as a payment to the individual, and
adjustment shall be made pursuant to Sec. Sec. 405.352 through 405.358
where:
(a) More than the correct amount is paid to a provider of services
or other person and the Secretary determines that:
(1) Within a reasonable period of time, the excess over the correct
amount cannot be recouped from the provider of services or other person,
or
(2) The provider of services or other person was without fault with
respect to the payment of such excess over the correct amount, or
(b) A payment has been made under the provisions described in
section 1814(e) of the Act, to a provider of services for items and
services furnished the individual.
(c) For purposes of paragraph (a)(2) of this section, a provider of
services or other person must, in the absence of evidence to the
contrary, be deemed to be without fault if the determination of the
carrier, the intermediary, or the Centers for Medicare & Medicaid
Services that more than the correct amount was paid was made subsequent
to the fifth year following the year in
[[Page 130]]
which notice was sent to such individual that such amount had been paid.
[41 FR 1492, Jan. 8, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977,
as amended at 61 FR 49271, Sept. 19, 1996; 78 FR 74810, Dec. 10, 2013]
Sec. 405.351 Incorrect payments for which the individual is not liable.
Where an incorrect payment has been made to a provider of services
or other person, the individual is liable only to the extent that he has
benefited from such payment.
Sec. 405.352 Adjustment of title XVIII incorrect payments.
Where an individual is liable for an incorrect payment (i.e., a
payment made under Sec. 405.350(a) or Sec. 405.350(b)) adjustment is
made (to the extent of such liability) by:
(a) Decreasing any payment under title II of the Act, or under the
Railroad Retirement Act of 1937, to which the individual is entitled; or
(b) In the event of the individual's death before adjustment is
completed, by decreasing any payment under title II of the Act, or under
the Railroad Retirement Act of 1937 payable to the estate of the
individual or to any other person, that are based on the individual's
earnings record (or compensation).
[31 FR 13534, Oct. 20, 1966, as amended at 41 FR 1492, Jan. 8, 1976.
Redesignated at 42 FR 52826, Sept. 30, 1977]
Sec. 405.353 Certification of amount that will be adjusted against
individual title II or railroad retirement benefits.
As soon as practicable after any adjustment is determined to be
necessary, the Secretary, for purposes of this subpart, shall certify
the amount of the overpayment or payment (see Sec. 405.350) with
respect to which the adjustment is to be made. If the adjustment is to
be made by decreasing subsequent payments under the Railroad Retirement
Act of 1937, such certification shall be made to the Railroad Retirement
Board.
Sec. 405.354 Procedures for adjustment or recovery--title II beneficiary.
The procedures applied in making an adjustment or recovery in the
case of a title II beneficiary are the applicable procedures of 20 CFR
404.502.
[31 FR 13534, Oct. 20, 1966, as amended at 32 FR 18027, Dec. 16, 1967.
Redesignated at 42 FR 52826, Sept. 30, 1977]
Sec. 405.355 Waiver of adjustment or recovery.
(a) The provisions of Sec. 405.352 may not be applied and there may
be no adjustment or recovery of an incorrect payment (i.e., a payment
made under Sec. 405.350(a) or Sec. 405.350(b)) in any case where such
incorrect payment has been made with respect to an individual who is
without fault, or where such adjustment or recovery would be made by
decreasing payments to which another person who is without fault is
entitled as provided in section 1870(b) of the Act where such adjustment
or recovery would defeat the purpose of title II or title XVIII of the
Act or would be against equity and good conscience. (See 20 CFR 404.509
and 404.512.)
(b) Adjustment or recovery of an incorrect payment (or only such
part of an incorrect payment as may be determined to be inconsistent
with the purposes of Title XVIII of the Act) against an individual who
is without fault will be deemed to be against equity and good conscience
if the incorrect payment was made for items and services that are not
payable under section 1862(a)(1) or (a)(9) of the Act and if the
determination that such payment was incorrect was made subsequent to the
fifth year following the year in which notice of such payment was sent
to such individual.
[41 FR 1493, Jan. 8, 1976. Redesignated at 42 FR 52826, Sept. 30, 1977;
78 FR 74810, Dec. 10, 2013]
Sec. 405.356 Principles applied in waiver of adjustment or recovery.
The principles applied in determining waiver of adjustment or
recovery (Sec. 405.355) are the applicable principles of Sec. 405.358
and 20 CFR 404.507-404.509, 404.510a, and 404.512.
[61 FR 49271, Sept. 19, 1996]
Sec. 405.357 Notice of right to waiver consideration.
Whenever an initial determination is made that more than the correct
[[Page 131]]
amount of payment has been made, notice of the provisions of section
1870(c) of the Act regarding waiver of adjustment or recovery shall be
sent to the overpaid individual and to any other individual against whom
adjustment or recovery of the overpayment is to be effected (see Sec.
405.358).
[61 FR 49271, Sept. 19, 1996]
Sec. 405.358 When waiver of adjustment or recovery may be applied.
Section 1870(c) of the Act provides that there shall be no
adjustment or recovery in any case where an incorrect payment under
title XVIII (hospital and supplementary medical insurance benefits) has
been made (including a payment under section 1814(e) of the Act with
respect to an individual:
(a) Who is without fault, and
(b) Adjustment or recovery would either:
(1) Defeat the purposes of title II or title XVIII of the Act, or
(2) Be against equity and good conscience.
[61 FR 49271, Sept. 19, 1996]
Sec. 405.359 Liability of certifying or disbursing officer.
No certifying or disbursing officer shall be held liable for any
amount certified or paid by him to any provider of services or other
person:
(a) Where the adjustment or recovery of such amount is waived (see
Sec. 405.355), or
(b) Where adjustment (see Sec. 405.352) or recovery is not
completed prior to the death of all persons against whose benefits such
adjustment is authorized.
Suspension and Recoupment of Payment to Providers and Suppliers and
Collection and Compromise of Overpayments
Sec. 405.370 Definitions.
(a) For purposes of this subpart, the following definitions apply:
Credible allegation of fraud. A credible allegation of fraud is an
allegation from any source, including but not limited to the following:
(1) Fraud hotline tips verified by further evidence
(2) Claims data mining.
(3) Patterns identified through provider audits, civil false claims
cases, and law enforcement investigations. Allegations are considered to
be credible when they have indicia of reliability.
Fraud hotline tip. A complaint or other communications that are
submitted through a fraud reporting phone number or a website intended
for the same purpose, such as the Federal Government's HHS OIG Hotline
or a health plan's fraud hotline.
Medicare contractor. Unless the context otherwise requires,
includes, but is not limited to the any of following:
(1) A fiscal intermediary.
(2) A carrier.
(3) Program safeguard contractor.
(4) Zone program integrity contractor.
(5) Part A/Part B Medicare administrative contractor.
Offset. The recovery by Medicare of a non-Medicare debt by reducing
present or future Medicare payments and applying the amount withheld to
the indebtedness. (Examples are Public Health Service debts or Medicaid
debts recovered by CMS).
Recoupment. The recovery by Medicare of any outstanding Medicare
debt by reducing present or future Medicare payments and applying the
amount withheld to the indebtedness.
Resolution of an investigation. An investigation of credible
allegations of fraud will be considered resolved when legal action is
terminated by settlement, judgment, or dismissal, or when the case is
closed or dropped because of insufficient evidence to support the
allegations of fraud.
Suspension of payment. The withholding of payment by a Medicare
contractor from a provider or supplier of an approved Medicare payment
amount before a determination of the amount of the overpayment exists,
or until the resolution of an investigation of a credible allegation of
fraud.
(b) For purposes of Sec. Sec. 405.378 and 405.379, the following
terms apply:
Appellant means the beneficiary, assignee or other person or entity
that has filed and pursued an appeal concerning a particular initial
determination. Designation as an appellant does
[[Page 132]]
not in itself convey standing to appeal the determination in question.
Fiscal intermediary means an organization that has entered into a
contract with CMS in accordance with section 1816 of the Act and is
authorized to make determinations and payments for Part A of title XVIII
of the Act, and Part B provider services as specified in Sec. 421.5(c)
of this chapter.
Medicare Appeals Council means the council within the Departmental
Appeals Board of the U.S. Department of Health and Human Services.
Medicare contractor, unless the context otherwise requires,
includes, but is not limited to, a fiscal intermediary, carrier,
recovery audit contractor, and Medicare administrative contractor.
Party means an individual or entity listed in Sec. 405.906 that has
standing to appeal an initial determination and/or a subsequent
administrative appeal determination.
Qualified Independent Contractor (QIC) Qualified Independent
Contractor (QIC) means an entity which contracts with the Secretary in
accordance with section 1869 of the Act to perform reconsiderations
under Sec. 405.960 through Sec. 405.978.
Remand means to vacate a lower level appeal decision, or a portion
of the decision, and return the case, or a portion of the case, to that
level for a new decision.
Vacate means to set aside a previous action.
[61 FR 63745, Dec. 2, 1996, as amended at 74 FR 47468, Sept. 16, 2009;
76 FR 5961, Feb. 2, 2011; 86 FR 6093, Jan. 19, 2021]
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:
(1) Suspended, in whole or in part, by CMS or a Medicare contractor
if CMS or the Medicare contractor possesses reliable information that an
overpayment exists or that the payments to be made may not be correct,
although additional information may be needed for a determination.
(2) In cases of suspected fraud, suspended, in whole or in part, by
CMS or a Medicare contractor if CMS or the Medicare contractor has
consulted with the OIG, and, as appropriate, the Department of Justice,
and determined that a credible allegation of fraud exists against a
provider or supplier, unless there is good cause not to suspend
payments.
(3) Offset or recouped, in whole or in part, by a Medicare
contractor if the Medicare contractor or CMS has determined that the
provider or supplier to whom payments are to be made has been overpaid.
(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.
(b) Good cause exceptions applicable to payment suspensions. (1) CMS
may find that good cause exists not to suspend payments or not to
continue to suspend payments to an individual or entity against which
there are credible allegations of fraud if--
(i) OIG or other law enforcement agency has specifically requested
that a payment suspension not be imposed because such a payment
suspension may compromise or jeopardize an investigation;
(ii) It is determined that beneficiary access to items or services
would be so jeopardized by a payment suspension in whole or part as to
cause a danger to life or health;
(iii) It is determined that other available remedies implemented by
CMS or a Medicare contractor more effectively or quickly protect
Medicare funds than would implementing a payment suspension; or
(iv) CMS determines that a payment suspension or a continuation of a
payment suspension is not in the best interests of the Medicare program.
(2) Every 180 days after the initiation of a suspension of payments
based on credible allegations of fraud, CMS will--
(i) Evaluate whether there is good cause to not continue such
suspension under this section; and
(ii) Request a certification from the OIG or other law enforcement
agency that the matter continues to be under
[[Page 133]]
investigation warranting continuation of the suspension.
(3) Good cause not to continue to suspend payments to an individual
or entity against which there are credible allegations of fraud must be
deemed to exist if a payment suspension has been in effect for 18 months
and there has not been a resolution of the investigation, except CMS may
extend a payment suspension beyond that point if--
(i) The case has been referred to, and is being considered by, the
OIG for administrative action (for example, civil money penalties); or
such administrative action is pending or
(ii) The Department of Justice submits a written request to CMS that
the suspension of payments be continued based on the ongoing
investigation and anticipated filing of criminal or civil action or both
or based on a pending criminal or civil action or both. At a minimum,
the request must include the following:
(A) Identification of the entity under suspension.
(B) The amount of time needed for continued suspension in order to
conclude the criminal or civil proceeding or both.
(C) A statement of why or how criminal or civil action or both may
be affected if the requested extension is not granted.
(c) Steps necessary for suspension of payment, offset, and
recoupment. (1) Except as provided in paragraphs (d) and (e) of this
section, CMS or the Medicare contractor suspends payments only after it
has complied with the procedural requirements set forth at Sec.
405.372.
(2) The Medicare contractor offsets or recoups payments only after
it has complied with the procedural requirements set forth at Sec.
405.373.
(d) Suspension of payment in the case of unfiled cost reports. (1)
If a provider has failed to timely file an acceptable cost report,
payment to the provider is immediately suspended in whole or in part
until a cost report is filed and determined by the Medicare contractor
to be acceptable.
(2) In the case of an unfiled cost report, the provisions of Sec.
405.372 do not apply. (See Sec. 405.372(a)(2) concerning failure to
furnish other information.)
(e) Suspension of payment in the case of unfiled hospice cap
determination reports. (1) If a provider has failed to timely file an
acceptable hospice cap determination report, payment to the provider is
immediately suspended in whole or in part until a cap determination
report is filed and determined by the Medicare contractor to be
acceptable.
(2) In the case of an unfiled hospice cap determination report, the
provisions of Sec. 405.372 do not apply. (See Sec. 405.372(a)(2)
concerning failure to furnish other information.)
[76 FR 5961, Feb. 2, 2011, as amended at 79 FR 50509, Aug. 22, 2014; 84
FR 47852, Sept. 10, 2019]i
Sec. 405.372 Proceeding for suspension of payment.
(a) Notice of intention to suspend--(1) General rule. Except as
provided in paragraphs (a)(2) through (a)(4) of this section, if the
Medicare contractor, or CMS has determined that a suspension of payments
under Sec. 405.371(a)(1) should be put into effect, the Medicare
contractor must notify the provider or supplier of the intention to
suspend payments, in whole or in part, and the reasons for making the
suspension.
(2) Failure to furnish information. The notice requirement of
paragraph (a)(1) of this section does not apply if the Medicare
contractor suspends payments to a provider or supplier in accordance
with section 1815(a) or section 1833(e) of the Act, respectively,
because the provider or supplier has failed to submit information
requested by the Medicare contractor that is needed to determine the
amounts due the provider or supplier. (See Sec. 405.371(c) concerning
failure to file timely acceptable cost reports.)
(3) Harm to trust funds. A suspension of payment may be imposed
without prior notice if CMS, the intermediary, or carrier determines
that the Medicare Trust Funds would be harmed by giving prior notice.
CMS may base its determination on an intermediary's or carrier's belief
that giving prior notice would hinder the possibility of recovering the
money.
(4) Fraud. If the intended suspension of payment involves credible
allegations of fraud under Sec. 405.371(a)(2), CMS--
[[Page 134]]
(i) In consultation with OIG and, as appropriate, the Department of
Justice, determines whether to impose the suspension and if prior notice
is appropriate;
(ii) Directs the Medicare contractor as to the timing and content of
the notification to the provider or supplier; and
(iii) Is the real party in interest and is responsible for the
decision.
(b) Rebuttal--(1) If prior notice is required. If prior notice is
required under paragraph (a) of this section, the Medicare contractor
must give the provider or supplier an opportunity for rebuttal in
accordance with Sec. 405.374. If a rebuttal statement is received
within the specified time period, the suspension of payment goes into
effect on the date stated in the notice, and the procedures and
provisions set forth in Sec. 405.375 apply. If by the end of the period
specified in the notice no statement has been received, the suspension
goes into effect automatically, and the procedures set forth in
paragraph (c) of this section are followed.
(2) If prior notice is not required. If, under the provisions of
paragraphs (a)(2) through (a)(4) of this section, a suspension of
payment is put into effect without prior notice to the provider or
supplier, the Medicare contractor must, once the suspension is in
effect, give the provider or supplier an opportunity to submit a
rebuttal statement as to why the suspension should be removed.
(c) Subsequent action. (1) If a suspension of payment is put into
effect under Sec. 405.371(a)(1), CMS or the Medicare contractor takes
timely action after the suspension to obtain the additional information
it may need to make a determination as to whether an overpayment exists
or the payments may be made.
(i) CMS or the Medicare contractor makes all reasonable efforts to
expedite the determination.
(ii) As soon as the determination is made, CMS or the Medicare
contractor informs the provider or supplier and, if appropriate, the
suspension is rescinded or any existing recoupment or offset is adjusted
to take into account the determination.
(2)(i) If a suspension of payment is based upon credible allegations
of fraud in accordance with Sec. 405.371(a)(2), subsequent action must
be taken by CMS or the Medicare contractor to make a determination as to
whether an overpayment exists.
(ii) The rescission of the suspension and the issuance of a final
overpayment determination to the provider or supplier may be delayed
until resolution of the investigation.
(d) Duration of suspension of payment--(1) General rule. Except as
provided in paragraphs (d)(2) and (d)(3) of this section, a suspension
of payment is limited to 180 days, starting with the date the suspension
begins.
(2) 180-day extension. (i) An intermediary, a carrier, or, in cases
of fraud and misrepresentation, OIG or a law enforcement agency, may
request a one-time only extension of the suspension period for up to 180
additional days if it is unable to complete its examination of the
information or investigation, as appropriate, within the 180-day time
limit. The request must be submitted in writing to CMS.
(ii) Upon receipt of a request for an extension, CMS notifies the
provider or supplier of the requested extension. CMS then either extends
the suspension of payment for up to an additional 180 days or determines
that the suspended payments are to be released to the provider or
supplier.
(3) Exceptions to the time limits. (i) The time limits specified in
paragraphs (d)(1) and (d)(2) of this section do not apply if the
suspension of payments is based upon credible allegations of fraud under
Sec. 405.371(a)(2).
(ii) Although the time limits specified in paragraphs (d)(1) and
(d)(2) of this section do not apply to suspensions based on credible
allegations of fraud, all suspensions of payment in accordance with
Sec. 405.371(a)(2) will be temporary and will not continue after the
resolution of an investigation, unless a suspension is warranted because
of reliable evidence of an overpayment or that the payments to be made
may not be correct, as specified in Sec. 405.371(a)(1).
[[Page 135]]
(e) Disposition of suspended payments. Payments suspended under the
authority of Sec. 405.371(a) are first applied to reduce or eliminate
any overpayments determined by the Medicare contractor, or CMS,
including any interest assessed under the provisions of Sec. 405.378,
and then applied to reduce any other obligation to CMS or to HHS. In the
absence of a legal requirement that the excess be paid to another
entity, the excess is released to the provider or supplier.
[61 FR 63746, Dec. 2, 1996, as amended at 76 FR 5962, Feb. 2, 2011]
Sec. 405.373 Proceeding for offset or recoupment.
(a) General rule. Except as specified in paragraphs (b) and (f) of
this section, if the Medicare Administrative Contractor or CMS has
determined that an offset or recoupment of payments under Sec.
405.371(a)(3) should be put into effect, the Medicare Administrative
Contractor must--
(1) Notify the provider or supplier of its intention to offset or
recoup payment, in whole or in part, and the reasons for making the
offset or recoupment; and
(2) Give the provider or supplier an opportunity for rebuttal in
accordance with Sec. 405.374.
(b) Exception to recouping payment. Paragraph (a) of this section
does not apply if the Medicare Administrative Contractor, after
furnishing a provider a written notice of the amount of program
reimbursement in accordance with Sec. 405.1803, recoups payment under
paragraph (c) of Sec. 405.1803. (For provider rights in this
circumstance, see Sec. Sec. 405.1809, 405.1811, 405.1815, 405.1835, and
405.1843.)
(c) Actions following receipt of rebuttal statement. If a provider
or supplier submits, in accordance with Sec. 405.374, a statement as to
why an offset or recoupment should not be put into effect on the date
specified in the notice, the Medicare contractor must comply with the
time limits and notification requirements of Sec. 405.375.
(d) No rebuttal statement received. If, by the end of the time
period specified in the notice, no statement has been received, the
recoupment or offset goes into effect automatically.
(e) Duration of recoupment or offset. Except as provided in Sec.
405.379, if a recoupment or offset is put into effect, it remains in
effect until the earliest of the following:
(1) The overpayment and any assessed interest are liquidated.
(2) The Medicare contractor obtains a satisfactory agreement from
the provider or supplier for liquidation of the overpayment.
(3) The Medicare contractor, on the basis of subsequently acquired
evidence or otherwise, determines that there is no overpayment.
(f) Exception to offset or recoupment of payments for shared
Taxpayer Identification Number. Paragraph (a) of this section does not
apply in instances where the Medicare Administrative Contractor intends
to offset or recoup payments to the applicable provider of services or
supplier to satisfy an amount due from an obligated provider of services
or supplier when the applicable and obligated provider of services or
supplier share the same Taxpayer Identification Number.
[61 FR 63747, Dec. 2, 1996, as amended at 74 FR 47468, Sept. 16, 2009;
81 FR 80551, Nov. 15, 2016]
Sec. 405.374 Opportunity for rebuttal.
(a) General rule. If prior notice of the suspension of payment,
offset, or recoupment is given under Sec. 405.372 or Sec. 405.373, the
Medicare contractor must give the provider or supplier an opportunity,
before the suspension, offset, or recoupment takes effect, to submit any
statement (to include any pertinent information) as to why it should not
be put into effect on the date specified in the notice. Except as
provided in paragraph (b) of this section, the provider or supplier has
at least 15 days following the date of notification to submit the
statement.
(b) Exception. The Medicare contractor may for cause--
(1) Impose a shorter period for rebuttal; or
(2) Extend the time within which the statement must be submitted.
[61 FR 63747, Dec. 2, 1996]
[[Page 136]]
Sec. 405.375 Time limits for, and notification of, administrative
determination after receipt of rebuttal statement.
(a) Submission and disposition of evidence. If the provider or
supplier submits a statement, under Sec. 405.374, as to why a
suspension of payment, offset, or recoupment should not be put into
effect, or, under Sec. 405.372(b)(2), why a suspension should be
terminated, CMS, the intermediary, or carrier must within 15 days, from
the date the statement is received, consider the statement (including
any pertinent evidence submitted), together with any other material
bearing upon the case, and determine whether the facts justify the
suspension, offset, or recoupment or, if already initiated, justify the
termination of the suspension, offset, or recoupment. Suspension,
offset, or recoupment is not delayed beyond the date stated in the
notice in order to review the statement.
(b) Notification of determination. The Medicare contractor must send
written notice of the determination made under paragraph (a) of this
section to the provider or supplier. The notice must--
(1) In the case of offset or recoupment, contain rationale for the
determination; and
(2) In the case of suspension of payment, contain specific findings
on the conditions upon which the suspension is initiated, continued, or
removed and an explanatory statement of the determination.
(c) Determination is not appealable. A determination made under
paragraph (a) of this section is not an initial determination and is not
appealable.
[61 FR 63747, Dec. 2, 1996]
Sec. 405.376 Suspension and termination of collection action and
compromise of claims for overpayment.
(a) Basis and purpose. This section contains requirements and
procedures for the compromise of, or suspension or termination of
collection action on, claims for overpayments against a provider or a
supplier under the Medicare program. It is adopted under the authority
of the Federal Claims Collection Act (31 U.S.C. 3711). Collection and
compromise of claims against Medicare beneficiaries are explained at 20
CFR 404.515.
(b) Definitions. As used in this section, debtor means a provider of
services or a physician or other supplier of services that has been
overpaid under title XVIII of the Social Security Act. It includes an
individual, partnership, corporation, estate, trust, or other legal
entity.
(c) Basic conditions. A claim for recovery of Medicare overpayments
against a debtor may be compromised, or collection action on it may be
suspended or terminated, by the Centers for Medicare & Medicaid Services
(CMS) if;
(1) The claim does not exceed $100,000, or such higher amount as the
Attorney General may from time to time prescribe, exclusive of interest;
and
(2) There is no indication of fraud, the filing of a false claim, or
misrepresentation on the part of the debtor or any director, partner,
manager, or other party having an interest in the claim.
(d) Basis for compromise. A claim may be compromised for one or more
of the following reasons:
(1) The debtor, or the estate of a deceased debtor, does not have
the present or prospective ability to pay the full amount within a
reasonable time;
(2) The debtor refuses to pay the claim in full and the United
States is unable to collect the full amount within a reasonable time by
legal proceedings;
(3) There is real doubt the United States can prove its case in
court; or
(4) The cost of collecting the claim does not justify enforced
collection of the full amount.
(e) Basis for termination of collection action. Collection action
may be terminated for one or more of the following reasons:
(1) The United States cannot enforce collection of any significant
sum;
(2) The debtor cannot be located, there is no security to be
liquidated, the statute of limitations has run, and the prospects of
collecting by offset are too remote to justify retention of the claim;
(3) The cost of further collection action is likely to exceed any
recovery;
[[Page 137]]
(4) It is determined the claim is without merit; or
(5) Evidence to substantiate the claim is no longer available.
(f) Basis for suspension of collection action. Collection action may
be suspended for either of the following reasons if future collection
action is justified based on potential productivity, including
foreseeable ability to pay, and size of claim:
(1) The debtor cannot be located; or
(2) The debtor is unable to make payments on the claim or to fulfill
an acceptable compromise.
(g) Factors considered. In determining whether a claim will be
compromised, or collection action terminated or suspended, CMS will
consider the following factors:
(1) Age and health of the debtor, present and potential income,
inheritance prospects, possible concealment or fraudulent transfer of
assets, and the availability of assets which may be reached by enforced
collection proceedings, for compromise under paragraph (d)(1) of this
section, termination under paragraph (e)(1) of this section, and
suspension under paragraph (f)(2) of this section;
(2) Applicable exemptions available to a debtor and uncertainty
concerning the price of the property in a forced sale, for compromise
under paragraph (d)(2) of this section and termination under paragraph
(e)(1) of this section; and
(3) The probability of proving the claim in court, the probability
of full or partial recovery, the availability of necessary evidence, and
related pragmatic considerations, for compromise under paragraph (d)(3)
of this section.
(h) Amount of compromise. The amount accepted in compromise will be
reasonable in relation to the amount that can be recovered by enforced
collection proceedings.
Consideration shall be given to the following:
(1) The exemptions available to the debtor under State or Federal
law;
(2) The time necessary to collect the overpayment;
(3) The litigative probabilities involved; and
(4) The administrative and litigative costs of collection where the
cost of collecting the claim is a basis for compromise.
(i) Payment of compromise--(1) Time and manner. Payment of the
amount that CMS has agreed to accept as a compromise in full settlement
of a Medicare overpayment claim must be made within the time and in the
manner prescribed by CMS. An overpayment claim is not compromised or
settled until the full payment of the compromised amount has been made
within the time and in the manner prescribed by CMS.
(2) Failure to pay compromised amount. Failure of the debtor or the
estate to make payment as provided by the comprise reinstates the full
amount of the overpayment claim, less any amounts paid prior to the
default.
(j) Effect of compromise, or suspension, or termination of
collection action. Any action taken by CMS under this section regarding
the compromise of an overpayment claim, or termination or suspension of
collection action on an overpayment claim, is not an initial
determination for purposes of the appeal procedures under subparts G, H,
and R of this part.
[43 FR 59381, Dec. 20, 1978, as amended at 57 FR 56998, Dec. 2, 1992.
Redesignated and amended at 61 FR 63745, 63747, Dec. 2, 1996]
Sec. 405.377 Withholding Medicare payments to recover Medicaid
overpayments.
(a) Basis and purpose. This section implements section 1885 of the
Act, which provides for withholding Medicare payments to certain
Medicaid providers that have not arranged to repay Medicaid overpayments
as determined by the Medicaid State agency or have failed to provide
information necessary to determine the amount (if any) of overpayments.
(b) When withholding may be used. CMS may withhold Medicare payment
to offset Medicaid overpayments that a Medicaid agency has been unable
to collect if--
(1) The Medicaid agency has followed the procedure specified in
Sec. 447.31 of this chapter; and
(2) The institution or person is one described in paragraph (c) of
this section and either--
[[Page 138]]
(i) Has not made arrangements satisfactory to the Medicaid agency to
repay the overpayment; or
(ii) Has not provided information to the Medicaid agency necessary
to enable the agency to determine the existence or amount of Medicaid
overpayment.
(c) Institutions or persons affected. Withholding under paragraph
(b) of this section may be made with respect to any of the following
entities that has or had in effect an agreement with a Medicaid agency
to furnish services under an approved Medicaid State plan:
(1) An institutional provider that has in effect an agreement under
section 1866 of the Act. (Part 489 (Provider and Supplier Agreements)
implements section 1866 of the Act.)
(2) A physician or supplier that has accepted payment on the basis
of an assignment under section 1842(b)(3)(B)(ii) of the Act. (Section
424.55 sets forth the conditions a supplier agrees to in accepting
assignment.)
(d) Amount to be withheld. (1) CMS contacts the appropriate Medicare
contractor to determine the amount of Medicare payment to which the
institution or person is entitled.
(2) CMS may require the Medicare contractor to withhold Medicare
payments to the institution or person by the lesser of the following
amounts:
(i) The amount of the Medicare payments to which the institution or
person would otherwise be entitled.
(ii) The total Medicaid overpayment to the institution or person.
(e) Notice of withholding. If CMS intends to withhold payments under
this section, it notifies by certified mail, return receipt requested,
the institution or person and the appropriate Medicare contractor of the
intention to withhold Medicare payments and follows the procedure in
Sec. 405.374. The notice includes--
(1) Identification of the institution or person; and
(2) The amount of Medicaid overpayment to be withheld from payments
to which the institution or person would otherwise be entitled under
Medicare.
(f) Termination of withholding. CMS terminates the withholding if--
(1) The Medicaid overpayment is completely recovered;
(2) The institution or person enters into an agreement satisfactory
to the Medicaid agency to repay the overpayment; or
(3) The Medicaid agency determines that there is no overpayment
based on newly acquired evidence or a subsequent audit.
(g) Disposition of funds withheld. CMS releases amounts withheld
under this section to the Medicaid agency to be applied against the
Medicaid overpayment made by the State agency.
[61 FR 63747, Dec. 2, 1996]
Sec. 405.378 Interest charges on overpayment and underpayments
to providers, suppliers, and other entities.
(a) Basis and purpose. This section, which implements sections
1815(d), 1833(j) and 1893(f)(2)(B) of the Act and common law, and
authority granted under the Federal Claims Collection Act, provides for
the charging and payment of interest on overpayments and underpayments
to Medicare providers, suppliers, HMOs, competitive medical plans
(CMPs), and health care prepayment plans (HCPPs).
(b) Basic rules. (1) CMS will charge interest on overpayments, and
pay interest on underpayments, to providers and suppliers of services
(including physicians and other practitioners), except as specified in
paragraphs (f) and (h) of this section.
(2) Except as provided in paragraph (j) of this section, interest
accrues from the date of the final determination as defined in paragraph
(c) of this section, and either is charged on the overpayment balance or
paid on the underpayment balance for each full 30-day period that
payment is delayed.
(c) Definition of final determination. (1) For purposes of this
section, any of the following constitutes a final determination:
(i) A Notice of Amount of Program Reimbursement (NPR) is issued, as
discussed in Sec. Sec. 405.1803, 417.576, and 417.810, and either--
(A) A written demand for payment is made; or
(B) A written determination of an underpayment is made by the
intermediary after a cost report is filed.
(ii) In cases in which an NPR is not used as a notice of
determination (that
[[Page 139]]
is, primarily under part B), one of the following constitutes a final
determination--
(A) A written determination that an overpayment exists and a written
demand for payment; or
(B) A written determination of an underpayment.
(iii) Other examples of cases in which an NPR is not used are
carrier reasonable charge determinations under subpart E of this part,
interim cost settlements made for HMOs, CMPs, and HCPPs under Sec. Sec.
417.574 and 417.810(e) of this chapter, and initial retroactive
adjustment determinations under Sec. 413.64(f)(2) of this chapter. In
the case of interim cost settlements and initial retroactive adjustment
determinations, if the debtor does not dispute the adjustment
determination within the timeframe designated in the notice of the
determination (generally at least 15 days), a final determination is
deemed to have been made. If the provider or supplier does dispute
portions of the determination, a final determination is deemed to have
been made on those portions when the intermediary issues a new
determination in response to the dispute.
(iv) The due date of a timely-filed cost report that indicates an
amount is due CMS, and is not accompanied by payment in full. (If an
additional overpayment or underpayment is determined by the carrier or
intermediary, a final determination on the additional amount is made in
accordance with paragraphs (c)(1)(i), (c)(1)(ii), or (c)(1)(iii), of
this section.)
(v) With respect to a cost report that is not filed on time, the day
following the date the cost report was due (plus a single extension of
time not to exceed 30 days if granted for good cause), until the time as
a cost report is filed. (When the cost report is subsequently filed,
there is an additional determination as specified in paragraphs (c)(1)
(i), (ii), (iii), or (iv) of this section.)
(2) Except as required by any subsequent administrative or judicial
reversal and specifically as provided in paragraphs (i) and (j) of this
section, interest accrues from the date of final determination as
specified in this section.
(d) Rate of interest. (1) The interest rate on overpayments and
underpayments is the higher of--
(i) The rate as fixed by the Secretary of the Treasury after taking
into consideration private consumer rates of interest prevailing on the
date of final determination as defined in paragraph (c) of this section
(this rate is published quarterly in the Federal Register by the
Department under 45 CFR 30.13(a)); or
(ii) The current value of funds rate (this rate is published
annually in the Federal Register by the Secretary of the Treasury,
subject to quarterly revisions).
(2) [Reserved]
(e) Accrual of interest. (1) If a cost report is filed that does not
indicate an amount is due CMS but the intermediary makes a final
determination that an overpayment exists, or if a carrier makes a final
determination that an overpayment to a physician or supplier exists,
interest will accrue beginning with the date of such final
determination. Interest will continue to accrue during periods of
administrative and judicial appeal and until final disposition of the
claim.
(2)(i) If a cost report is filed and indicates that an amount is due
CMS, interest on the amount due will accrue from the due date of the
cost report unless--
(A) Full payment on the amount due accompanies the cost report; or
(B) The provider and the intermediary agree in advance to liquidate
the overpayment through a reduction in interim payments over the next
30-day period.
(ii) If the intermediary determines an additional overpayment during
the cost settlement process, interest will accrue from the date of each
determination.
(iii) The interest rate on each of the final determinations of an
overpayment will be the rate of interest in effect on the date the
determination is made.
(3) In the case of a cost report that is not filed on time, interest
also will accrue on a determined overpayment from the day following the
due date of the report (plus a single extension of time not to exceed 30
days if granted
[[Page 140]]
for good cause, as specified in Sec. 413.24(f)) of this chapter, to the
time the cost report is filed.
(4) If an intermediary or a carrier makes a final determination that
an underpayment exists, interest to the provider or the supplier will
accrue from the date of notification of the underpayment.
(f) Waiver of interest charges. (1) When an intermediary or a
carrier makes a final determination that an overpayment or underpayment
exists, as specified in paragraphs (e)(1), (e)(2)(ii), and (e)(4)--
(i) Interest charges will be waived if the overpayment or
underpayment is completely liquidated within 30 days from the date of
the final determination.
(ii) CMS may waive interest charges if it determines that the
administrative cost of collecting them exceeds the interest charges.
(2) Interest will not be waived for that period of time during which
the cost report was due but remained unfiled for more than 30 days, as
specified in paragraph (e)(3) of this section.
(g) Rules applicable to partial payments. If an overpayment is
repaid in installments or recouped by withholding from several payments
due the provider or supplier of services--
(1) Each payment or recoupment will be applied first to accrued
interest and then to the principal; and
(2) After each payment or recoupment, interest will accrue on the
remaining unpaid balance.
(h) Nonallowable cost. As specified in Sec. Sec. 412.113 and
413.153 of this chapter, interest accrued on overpayments and interest
on funds borrowed specifically to repay overpayments are not considered
allowable costs, up to the amount of the overpayment, unless the
provider had made a prior commitment to borrow funds for other purposes
(for example, capital improvements).
(See Sec. 413.153(a)(2) of this chapter for exceptions based on
administrative or judicial reversal.)
(i) Exceptions to applicability. (1) The provisions of this section
do not apply to the time period for which interest is payable under
Sec. 413.64(j) of this chapter because the provider seeks judicial
review of a decision of the Provider Reimbursement Review Board, or a
subsequent reversal, affirmance, or modification of that decision by the
Administrator. Prior to that time, until the provider seeks judicial
review, interest accrues at the rate specified in this section on
outstanding unpaid balances resulting from final determinations as
defined in paragraph (c) of this section.
(2) If an overpayment or an underpayment determination is reversed
administratively or judicially, and the reversal is no longer subject to
appeal, appropriate adjustments will be made with respect to the
overpayment or underpayment and the amount of interest charged.
(j) Special rule for provider or supplier overpayments subject to
Sec. 405.379. If an overpayment determination subject to the limitation
on recoupment under Sec. 405.379 is reversed in whole or in part by an
Administrative Law Judge (ALJ) or at subsequent administrative or
judicial levels of appeal and if funds have been recouped and retained
by the Medicare contractor, interest will be paid to the provider or
supplier as follows:
(1) The applicable rate of interest is that provided in paragraph
(d) of this section.
(2) The interest rate in effect on the date the ALJ, the Medicare
Appeals Council, the Federal district court or subsequent appellate
court issues a decision reversing the overpayment determination in whole
or in part is the rate used to calculate the interest due the provider
or supplier.
(3) Interest will be calculated as follows:
(i) Interest will be paid on the principal amount recouped only.
(ii) Interest will be calculated on a simple rather than a compound
basis.
(iii) Interest will be calculated in full 30-day periods and will
not be payable on amounts recouped for any periods of less than 30 days
in which the Medicare contractor had possession of the funds.
(iv) In calculating the period in which the amount was recouped,
days in which the ALJ's adjudication period to conduct a hearing are
tolled under 42 CFR 405.1014 shall not be counted.
(v) In calculating the period in which the amount was recouped, days
in which the Medicare Appeals Council's
[[Page 141]]
adjudication period to conduct a review are tolled under 42 CFR 405.1106
shall not be counted.
(4) If the decision by the ALJ, Medicare Appeals Council, Federal
district court or a subsequent Federal reviewing court, reverses the
overpayment determination, as modified by prior levels of administrative
or judicial review, in part, the Medicare contractor in effectuating the
decision may allocate recouped monies to that part of the overpayment
determination affirmed by the decision. Interest will be paid to the
provider or supplier on recouped amounts that remain after this
allocation in accordance with this paragraph (j) of this section.
[47 FR 54814, Dec. 6, 1982, as amended at 49 FR 36102, Sept. 14, 1984;
49 FR 44472, Nov. 7, 1984; 51 FR 34792, Sept. 30, 1986; 56 FR 31336,
July 10, 1991. Redesignated at 61 FR 63745, Dec. 2, 1996; 69 FR 45607,
July 30, 2004; 74 FR 47468, Sept. 16, 2009]
Sec. 405.379 Limitation on recoupment of provider and supplier
overpayments.
(a) Basis and purpose. This section implements section 1893(f)(2)(A)
of the Act which limits recoupment of Medicare overpayments if a
provider of services or supplier seeks a reconsideration until a
decision is rendered by a Qualified Independent Contractor (QIC). This
section also limits recoupment of Medicare overpayments when a provider
or supplier seeks a redetermination until a redetermination decision is
rendered.
(b) Overpayments subject to limitation. (1) This section applies to
overpayments that meet the following criteria:
(i) Is one of the following types of overpayments:
(A) Post-pay denial of claims for benefits under Medicare Part A
which is determined and for which a written demand for payment has been
made on or after November 24, 2003; or
(B) Post-pay denial of claims for benefits under Medicare Part B
which is determined and for which a written demand for payment has been
made on or after October 29, 2003; or
(C) Medicare Secondary Payer (MSP) recovery where the provider or
supplier received a duplicate primary payment and for which a written
demand for payment was issued on or after October 10, 2003; or
(D) Medicare Secondary Payer (MSP) recovery based on the provider's
or supplier's failure to file a proper claim with the third party payer
plan, program, or insurer for payment and, if Part A, demanded on or
after November 24, 2003, or, if Part B, demanded on or after October 29,
2003; and
(ii) The provider or supplier can appeal the overpayment as a
revised initial determination under the Medicare claims appeal process
at 42 CFR parts 401 and 405 or as an initial determination for provider/
supplier MSP duplicate primary payment recoveries.
(2) This section does not apply to all other overpayments including,
but not limited to, the following:
(i) All Medicare Secondary Payer recoveries except those expressly
identified in paragraphs (b)(1)(i)(C) and (D) of this section;
(ii) Beneficiary overpayments; and
(iii) Overpayments that arise from a cost report determination and
are appealed under the provider reimbursement process of 42 CFR part 405
Subpart R--Provider Reimbursement Determinations and Appeals.
(c) Rules of construction. (1) For purposes of this section, what
constitutes a valid and timely request for a redetermination is to be
determined in accordance with Sec. 405.940 through Sec. 405.958.
(2) For purposes of this section, what constitutes a valid and
timely request for a reconsideration is to be determined in accordance
with Sec. 405.960 through Sec. 405.978.
(d) General rules. (1) Medicare contractors can begin recoupment no
earlier than 41 days from the date of the initial overpayment demand but
shall cease recoupment of the overpayment in question, upon receipt of a
timely and valid request for a redetermination of an overpayment. If the
recoupment has not yet gone into effect, the contractor shall not
initiate recoupment.
(2) If the redetermination decision is an affirmation in whole or in
part of the overpayment determination, recoupment may be initiated or
resumed in accordance with paragraph (e) of this section.
(3) Upon receipt of a timely and valid request for a reconsideration
of an
[[Page 142]]
overpayment, the Medicare contractor shall cease recoupment of the
overpayment in question. If the recoupment has not yet gone into effect,
the contractor must not initiate recoupment.
(4) The contractor may initiate or resume recoupment following
action by the QIC in accordance with paragraph (f) of this section.
(5) If the provider or supplier subsequently appeals the overpayment
to the ALJ, the Medicare Appeals Council, or Federal court, recoupment
remains in effect as provided in Sec. 405.373(e).
(6) If an overpayment determination is appealed and recoupment
stopped, the contractor may continue to recoup other overpayments owed
by the provider or supplier in accordance with this section.
(7) Amounts recouped prior to a reconsideration decision may be
retained by the Medicare contractor in accordance with paragraph (g) of
this section.
(8) If either the redetermination or reconsideration decision is a
full reversal of the overpayment determination or if the overpayment
determination is reversed in whole or in part at subsequent levels of
administrative or judicial appeal, adjustments shall be made with
respect to the overpayment and the amount of interest charged.
(9) Interest accrues and is payable in accordance with the
provisions of Sec. 405.378.
(e) Initiating or resuming recoupment after redetermination
decision. (1) Recoupment that has been deferred or stopped may be
initiated or resumed if the debt (remaining unpaid principal balance and
interest) has not been satisfied in full and the provider or supplier
has been afforded the opportunity for rebuttal in accordance with the
requirements of Sec. 405.373 through Sec. 405.375. Recoupment may be
resumed under any of the following circumstances:
(i) Immediately upon receipt by the Medicare contractor of the
provider's or supplier's request for a withdrawal of a request for a
redetermination in accordance with Sec. 405.952(a).
(ii) On the 60th calendar day after the date of the notice of
redetermination issued under Sec. 405.956 if the redetermination
decision is an affirmation in whole of the overpayment determination in
question.
(iii) On the 60th calendar day after the date of the written notice
to the provider or supplier of the revised overpayment amount, if the
redetermination decision is an affirmation in part, which has the effect
of reducing the amount of the overpayment.
(2) Notwithstanding paragraphs (e)(i), (ii) and (iii) of this
section, recoupment must not be resumed, or if resumed, must cease upon
receipt of a timely and valid request for a reconsideration by the QIC.
(f) Initiating or resuming recoupment following action by the QIC on
the reconsideration request. (1) Recoupment may be initiated or resumed
upon action by the QIC subject to the following limitations:
(i) The provider or supplier has been afforded the opportunity for
rebuttal in accordance with the requirements of Sec. 405.373 through
Sec. 405.375; and
(ii) The debt (remaining unpaid principal balance and interest) has
not been satisfied in full; and
(iii) If the action by the QIC is the notice of the reconsideration,
the reconsideration decision either affirms in whole or in part the
overpayment determination, including the redetermination, in question.
(2) For purposes of this paragraph (f), the action by the QIC on the
reconsideration request is the earliest to occur of the following:
(i) The QIC mails or otherwise transmits written notice of the
dismissal of the reconsideration request in its entirety in accordance
with Sec. 405.972; or
(ii) The QIC receives a timely and valid request to withdraw the
request for the reconsideration in accordance with Sec. 405.972; or
(iii) The QIC transmits written notice of the reconsideration in
accordance with Sec. 405.976; or
(iv) The QIC notifies the parties in writing that the
reconsideration is being escalated to an ALJ in accordance with Sec.
405.970.
(g) Disposition of funds recouped. (1) If the Medicare contractor
recouped funds before a timely and valid request for a redetermination
was received, the amount recouped may be retained and applied first to
accrued interest and
[[Page 143]]
then to reduce or eliminate the principal balance of the overpayment
subject to the following:
(i) If the redetermination results in a reversal, the amount
recouped may be applied to any other debt, including interest, owed by
the provider or supplier before any excess is released to the provider.
(ii) If the redetermination results in a partial reversal and the
decision reduces the overpayment plus assessed interest below the amount
already recouped, the excess may be applied to any other debt, including
interest, owed by the provider or supplier before any excess is released
to the provider or supplier.
(iii) If the redetermination results in an affirmation and the
provider or supplier subsequently requests a reconsideration, the
Medicare contractor may retain the amount recouped and apply the funds
first to accrued interest and then to outstanding principal pending
action by the QIC on the reconsideration request.
(2) If the Medicare contractor also recouped funds in accordance
with paragraph (e) of this section, the amount recouped may be retained
by the Medicare contractor and applied first to accrued interest and
then to reduce or eliminate the outstanding principal balance pending
action by the QIC on the reconsideration request.
(3) If the action by the QIC is a dismissal, receipt of a
withdrawal, a notice that the reconsideration is being escalated to an
ALJ, or a reconsideration which affirms in whole the overpayment
determination, including the redetermination, in question, the amount
recouped is applied to interest first, then to reduce the outstanding
principal balance and recoupment may be resumed as provided under
paragraph (f) of this section.
(4) If the action by the QIC is a reconsideration, which reverses in
whole the overpayment determination, including the redetermination, in
question, the amount recouped may be applied to any other debt,
including interest, owed by the provider or supplier to CMS or to HHS
before any excess is released to the provider or supplier.
(5) If the action by the QIC is a reconsideration which results in a
partial reversal and the decision reduces the overpayment plus assessed
interest below the amount already recouped, the excess may be applied to
any other debt, including interest, owed by the provider or supplier to
CMS or to HHS before any excess is released to the provider or supplier.
(h) Relationship to extended repayment schedules. Notwithstanding
Sec. 401.607 (c)(2)(v) of this chapter regarding an extended repayment
schedule (ERS), a provider or supplier will not be deemed in default if
recoupment of an overpayment is not effectuated or stopped in accordance
with this section, and the following conditions are met:
(1) The provider or supplier has been granted an ERS under Sec.
401.607(c) of this chapter.
(2) The ERS has been granted for an overpayment that is listed in
paragraph (b) of this section.
(3) The provider or supplier has submitted a valid and timely
request to the Medicare contractor for a redetermination of the
overpayment in accordance with Sec. Sec. 405.940 through 405.958 or
reconsideration of the overpayment in accordance with Sec. Sec. 405.960
through 405.978.
[74 FR 47469, Sept. 16, 2009]
Repayment of Scholarships and Loans
Sec. 405.380 Collection of past-due amounts on scholarship
and loan programs.
(a) Basis and purpose. This section implements section 1892 of the
Act, which authorizes the Secretary to deduct from Medicare payments for
services amounts considered as past-due obligations under the National
Health Service Corps Scholarship program, the Physician Shortage Area
Scholarship program, and the Health Education Assistance Loan program.
(b) Offsetting against Medicare payment. (1) Medicare carriers and
intermediaries offset against Medicare payments in accordance with the
signed repayment agreement between the Public Health Service and
individuals who have breached their scholarship or loan obligations and
who--
(i) Accept Medicare assignment for services;
[[Page 144]]
(ii) Are employed by or affiliated with a provider, HMO, or
Competitive Medical Plan (CMP) that receives Medicare payment for
services; or
(iii) Are members of a group practice that receives Medicare payment
for services.
(2) For purposes of this section, ``provider'' includes all entities
eligible to receive Medicare payment in accordance with an agreement
under section 1866 of the Act.
(c) Beginning of offset. (1) The Medicare carrier offsets Medicare
payments beginning six months after it notifies the individual or the
group practice of the amount to be deducted and the particular
individual to whom the deductions are attributable.
(2) The Medicare intermediary offsets payments beginning six months
after it notifies the provider, HMO, CMP or group practice of the amount
to be deducted and the particular individuals to whom the deductions are
attributable. Offset of payments is made in accordance with the terms of
the repayment agreement. If the individual ceases to be employed by the
provider, HMO, or CMP, or leaves the group practice, no deduction is
made.
(d) Refusal to offset against Medicare payment. If the individual
refuses to enter into a repayment agreement, or breaches any provision
of the agreement, or if Medicare payment is insufficient to maintain the
offset collection according to the agreed upon formula, then--
(1) The Department, within 30 days if feasible, informs the Attorney
General; and
(2) The Department excludes the individual from Medicare until the
entire past due obligation has been repaid, unless the individual is a
sole community practitioner or the sole source of essential specialized
services in a community and the State requests that the individual not
be excluded.
[57 FR 19092, May 4, 1992]
Subpart D_Private Contracts
Authority: Secs. 1102, 1802, and 1871 of the Social Security Act (42
U.S.C. 1302, 1395a, and 1395hh).
Source: 63 FR 58901, Nov. 2, 1998, unless otherwise noted.
Sec. 405.400 Definitions.
For purposes of this subpart, the following definitions apply:
Beneficiary means an individual who is enrolled in Part B of
Medicare.
Emergency care services means inpatient or outpatient hospital
services that are necessary to prevent death or serious impairment of
health and, because of the danger to life or health, require use of the
most accessible hospital available and equipped to furnish those
services.
Legal representative means one or more individuals who, as
determined by applicable State law, has the legal authority to enter
into the contract with the physician or practitioner on behalf of the
beneficiary.
Opt-out means the status of meeting the conditions specified in
Sec. 405.410.
Opt-out period means, with respect to an affidavit that meets the
requirements of Sec. 405.420, a 2-year period beginning on the date the
affidavit is signed, as specified by Sec. 405.410(c)(1) or (2) as
applicable, and each successive 2-year period unless the physician or
practitioner properly cancels opt-out in accordance with Sec. 405.445.
Participating physician means a ``physician'' as defined in this
section who has signed an agreement to participate in Part B of
Medicare.
Physician means a doctor of medicine; doctor of osteopathy; doctor
of dental surgery or of dental medicine; doctor of podiatric medicine;
or doctor of optometry who is legally authorized to practice medicine,
osteopathy, dental surgery, dental medicine, podiatric medicine, or
optometry by the State in which he performs such function and who is
acting within the scope of his license when he performs such functions.
Practitioner means a physician assistant, nurse practitioner,
clinical nurse specialist, certified registered nurse anesthetist,
certified nurse midwife, clinical psychologist, clinical social worker,
marriage and family therapist, mental health counselor, registered
dietitian or nutrition professional, who is currently legally authorized
to practice in that capacity by each State in
[[Page 145]]
which he or she furnishes services to patients or clients.
Private contract means a document that meets the criteria specified
in Sec. 405.415.
Properly opt-out means to complete, without defect, the requirements
for opt-out as specified in Sec. 405.410.
Properly terminate opt-out means to complete, without defect, the
requirements for terminating opt-out as specified in Sec. 405.445.
Urgent care services means services furnished to an individual who
requires services to be furnished within 12 hours in order to avoid the
likely onset of an emergency medical condition.
[63 FR 58901, Nov. 2, 1998, as amended at 69 FR 1116, Jan. 7, 2004; 71
FR 69782, Dec. 1, 2006; 79 FR 68001, Nov. 13, 2014; 80 FR 71370, Nov.
16, 2015; 88 FR 79523, Nov. 16, 2023]
Sec. 405.405 General rules.
(a) A physician or practitioner may enter into one or more private
contracts with Medicare beneficiaries for the purpose of furnishing
items or services that would otherwise be covered by Medicare, provided
the conditions of this subpart are met.
(b) A physician or practitioner who enters into at least one private
contract with a Medicare beneficiary under the conditions of this
subpart, and who submits one or more affidavits in accordance with this
subpart, opts out of Medicare for the opt-out period described in Sec.
405.400 unless the opt-out is terminated early according to Sec.
405.445.
(c) Both the private contracts described in paragraph (a) of this
section and the physician's or practitioner's opt-out described in
paragraph (b) of this section are null and void if the physician or
practitioner fails to properly opt-out in accordance with the conditions
of this subpart.
(d) Both the private contracts described in paragraph (a) of this
section and the physician's or practitioner's opt-out described in
paragraph (b) of this section are null and void for the remainder of the
opt-out period if the physician or practitioner fails to remain in
compliance with the conditions of this subpart during the opt-out
period.
(e) Services furnished under private contracts meeting the
requirements of this subpart are not covered services under Medicare,
and no Medicare payment will be made for such services either directly
or indirectly, except as permitted in accordance with Sec. 405.435(c).
[63 FR 58901, Nov. 2, 1998, as amended at 80 FR 71370, Nov. 16, 2015]
Sec. 405.410 Conditions for properly opting-out of Medicare.
The following conditions must be met for a physician or practitioner
to properly opt-out of Medicare:
(a) Each private contract between a physician or a practitioner and
a Medicare beneficiary that is entered into prior to the submission of
the affidavit described in paragraph (b) of this section must meet the
specifications of Sec. 405.415.
(b) The physician or practitioner must submit an affidavit that
meets the specifications of Sec. 405.420 to each Medicare
Administrative Contractor with which he or she would file claims absent
the opt-out.
(c) A nonparticipating physician or a practitioner may opt-out of
Medicare at any time in accordance with the following:
(1) The initial 2-year opt-out period begins the date the affidavit
meeting the requirements of Sec. 405.420 is signed, provided the
affidavit is filed within 10 days after he or she signs his or her first
private contract with a Medicare beneficiary.
(2) If the physician or practitioner does not timely file the opt-
out affidavit(s) as specified in the previous paragraph, the initial 2-
year opt-out period begins when the last such affidavit is filed. Any
private contract entered into before the last required affidavit is
filed becomes effective upon the filing of the last required affidavit,
and the furnishing of any items or services to a Medicare beneficiary
under such contract before the last required affidavit is filed is
subject to standard Medicare rules.
(d) A participating physician may properly opt-out of Medicare at
the beginning of any calendar quarter, provided that the affidavit
described in
[[Page 146]]
Sec. 405.420 is submitted to the participating physician's Medicare
Administrative Contractors at least 30 days before the beginning of the
selected calendar quarter. A private contract entered into before the
beginning of the selected calendar quarter becomes effective at the
beginning of the selected calendar quarter, and the furnishing of any
items or services to a Medicare beneficiary under such contract before
the beginning of the selected calendar quarter is subject to standard
Medicare rules.
[63 FR 58901, Nov. 2, 1998, as amended at 80 FR 71370, Nov. 16, 2015]
Sec. 405.415 Requirements of the private contract.
A private contract under this subpart must:
(a) Be in writing and in print sufficiently large to ensure that the
beneficiary is able to read the contract.
(b) Clearly state whether the physician or practitioner is excluded
from Medicare under sections 1128, 1156, or 1892 or any other section of
the Social Security Act.
(c) State that the beneficiary or his or her legal representative
accepts full responsibility for payment of the physician's or
practitioner's charge for all services furnished by the physician or
practitioner.
(d) State that the beneficiary or his or her legal representative
understands that Medicare limits do not apply to what the physician or
practitioner may charge for items or services furnished by the physician
or practitioner.
(e) State that the beneficiary or his or her legal representative
agrees not to submit a claim to Medicare or to ask the physician or
practitioner to submit a claim to Medicare.
(f) State that the beneficiary or his or her legal representative
understands that Medicare payment will not be made for any items or
services furnished by the physician or practitioner that would have
otherwise been covered by Medicare if there was no private contract and
a proper Medicare claim had been submitted.
(g) State that the beneficiary or his or her legal representative
enters into this contract with the knowledge that he or she has the
right to obtain Medicare-covered items and services from physicians and
practitioners who have not opted-out of Medicare, and that the
beneficiary is not compelled to enter into private contracts that apply
to other Medicare-covered services furnished by other physicians or
practitioners who have not opted-out.
(h) State the expected or known effective date and the expected or
known expiration date of the current 2-year opt-out period.
(i) State that the beneficiary or his or her legal representative
understands that Medigap plans do not, and that other supplemental plans
may elect not to, make payments for items and services not paid for by
Medicare.
(j) Be signed by the beneficiary or his or her legal representative
and by the physician or practitioner.
(k) Not be entered into by the beneficiary or by the beneficiary's
legal representative during a time when the beneficiary requires
emergency care services or urgent care services. (However, a physician
or practitioner may furnish emergency or urgent care services to a
Medicare beneficiary in accordance with Sec. 405.440.)
(l) Be provided (a photocopy is permissible) to the beneficiary or
to his or her legal representative before items or services are
furnished to the beneficiary under the terms of the contract.
(m) Be retained (original signatures of both parties required) by
the physician or practitioner for the duration of the current 2-year
opt-out period.
(n) Be made available to CMS upon request.
(o) Be entered into for each 2-year opt-out period.
[63 FR 58901, Nov. 2, 1998, as amended at 80 FR 71370, Nov. 16, 2015]
Sec. 405.420 Requirements of the opt-out affidavit.
An affidavit under this subpart must:
(a) Be in writing and be signed by the physician or practitioner.
(b) Contain the physician's or practitioner's full name, address,
telephone number, national provider identifier (NPI) or billing number,
if one has been assigned, uniform provider identification number (UPIN)
if one has been assigned, or, if neither an NPI nor a
[[Page 147]]
UPIN has been assigned, the physician's or practitioner's tax
identification number (TIN).
(c) State that, except for emergency or urgent care services (as
specified in Sec. 405.440), during the opt-out period the physician or
practitioner will provide services to Medicare beneficiaries only
through private contracts that meet the criteria of paragraph Sec.
405.415 for services that, but for their provision under a private
contract, would have been Medicare-covered services.
(d) State that the physician or practitioner will not submit a claim
to Medicare for any service furnished to a Medicare beneficiary during
the opt-out period, nor will the physician or practitioner permit any
entity acting on his or her behalf to submit a claim to Medicare for
services furnished to a Medicare beneficiary, except as specified in
Sec. 405.440.
(e) State that, during the opt-out period, the physician or
practitioner understands that he or she may receive no direct or
indirect Medicare payment for services that he or she furnishes to
Medicare beneficiaries with whom he or she has privately contracted,
whether as an individual, an employee of an organization, a partner in a
partnership, under a reassignment of benefits, or as payment for a
service furnished to a Medicare beneficiary under a Medicare Advantage
plan.
(f) State that a physician or practitioner who opts-out of Medicare
acknowledges that, during the opt-out period, his or her services are
not covered under Medicare and that no Medicare payment may be made to
any entity for his or her services, directly or on a capitated basis.
(g) State a promise by the physician or practitioner to the effect
that, during the opt-out period, the physician or practitioner agrees to
be bound by the terms of both the affidavit and the private contracts
that he or she has entered into.
(h) Acknowledge that the physician or practitioner recognizes that
the terms of the affidavit apply to all Medicare-covered items and
services furnished to Medicare beneficiaries by the physician or
practitioner during the opt-out period (except for emergency or urgent
care services furnished to the beneficiaries with whom he or she has not
previously privately contracted) without regard to any payment
arrangements the physician or practitioner may make.
(i) With respect to a physician who has signed a Part B
participation agreement, acknowledge that such agreement terminates on
the effective date of the affidavit.
(j) Acknowledge that the physician or practitioner understands that
a beneficiary who has not entered into a private contract and who
requires emergency or urgent care services may not be asked to enter
into a private contract with respect to receiving such services and that
the rules of Sec. 405.440 apply if the physician furnishes such
services.
[63 FR 58901, Nov. 2, 1998, as amended at 79 FR 68001, Nov. 13, 2014]
Sec. 405.425 Effects of opting-out of Medicare.
If a physician or practitioner opts-out of Medicare in accordance
with this subpart, the following results obtain during the opt-out
period:
(a) Except as provided in Sec. 405.440, no payment may be made
directly by Medicare or by any Medicare Advantage plan to the physician
or practitioner or to any entity to which the physician or practitioner
reassigns his right to receive payment for services.
(b) The physician or practitioner may not furnish any item or
service that would otherwise be covered by Medicare (except for
emergency or urgent care services) to any Medicare beneficiary except
through a private contract that meets the requirements of this subpart.
(c) The physician or practitioner is not subject to the requirement
to submit a claim for items or services furnished to a Medicare
beneficiary, as specified in Sec. 424.5(a)(6) of this chapter, except
as provided in Sec. 405.440.
(d) The physician or practitioner is prohibited from submitting a
claim to Medicare for items or services furnished to a Medicare
beneficiary except as provided in Sec. 405.440.
(e) In the case of a physician, he or she is not subject to the
limiting charge provisions of Sec. 414.48 of this
[[Page 148]]
chapter, except for services provided under Sec. 405.440.
(f) The physician or practitioner is not subject to the prohibition-
on-reassignment provisions of Sec. 414.80 of this chapter, except for
services provided under Sec. 405.440.
(g) In the case of a practitioner, he or she is not prohibited from
billing or collecting amounts from beneficiaries (as provided in 42
U.S.C. 1395u(b)(18)(B)).
(h) The death of a beneficiary who has entered into a private
contract (or whose legal representative has done so) does not invoke
Sec. 424.62 or Sec. 424.64 of this chapter with respect to the
physician or practitioner with whom the beneficiary (or legal
representative) has privately contracted.
(i) The physician or practitioner who has not been excluded under
sections 1128, 1156 or 1892 of the Act and whose Medicare enrollment is
not revoked under Sec. 424.535 of this chapter may order, certify the
need for, prescribe, or refer a beneficiary for Medicare-covered items,
services, and drugs, 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 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, services, and drugs except, with
respect to exclusions, as provided in Sec. 1001.1901 of this title, and
must otherwise comply with the terms of any exclusion in accordance with
Sec. 1001.1901 of this title effective with the date of the exclusion.
[63 FR 58901, Nov. 2, 1998, as amended at 79 FR 68001, Nov. 13, 2014; 80
FR 71370, Nov. 16, 2015; 84 FR 47852, Sept. 10, 2019]
Sec. 405.430 Failure to properly opt-out.
(a) A physician or practitioner fails to properly opt-out if--
(1) Any private contract between the physician or practitioner and a
Medicare beneficiary, that was entered into before the affidavit
described in Sec. 405.420 was filed, does not meet the specifications
of Sec. 405.415; or
(2) He or she fails to submit the affidavit(s) in accordance with
Sec. 405.420.
(b) If a physician or practitioner fails to properly opt-out in
accordance with paragraph (a) of this section, the following results
obtain:
(1) The physician's or practitioner's attempt to opt-out of Medicare
is nullified, and all of the private contracts between the physician or
practitioner and Medicare beneficiaries for the two-year period covered
by the attempted opt-out are deemed null and void.
(2) The physician or practitioner must submit claims to Medicare for
all Medicare-covered items and services furnished to Medicare
beneficiaries, including the items and services furnished under the
nullified contracts. A nonparticipating physician is subject to the
limiting charge provisions of Sec. 414.48 of this chapter. A
participating physician is subject to the limitations on charges of the
participation agreement he or she signed.
(3) The practitioner may not reassign any claim except as provided
in Sec. 424.80 of this chapter.
(4) The practitioner may neither bill nor collect an amount from the
beneficiary except for applicable deductible and coinsurance amounts.
(5) The physician or practitioner may make another attempt to
properly opt-out at any time.
Sec. 405.435 Failure to maintain opt-out.
(a) A physician or practitioner fails to maintain opt-out under this
subpart if, during the opt-out period--
(1) He or she knowingly and willfully--
(i) Submits a claim for Medicare payment (except as provided in
Sec. 405.440); or
(ii) Receives Medicare payment directly or indirectly for Medicare-
covered services furnished to a Medicare beneficiary (except as provided
in Sec. 405.440).
(2) He or she fails to enter into private contracts with Medicare
beneficiaries for the purpose of furnishing items and services that
would otherwise be covered by Medicare, or enters into contracts that
fail to meet the specifications of Sec. 405.415; or
(3) He or she fails to comply with the provisions of Sec. 405.440
regarding billing
[[Page 149]]
for emergency care services or urgent care services; or
(4) He or she fails to retain a copy of each private contract that
he or she has entered into for the duration of the current 2-year period
for which the contracts are applicable or fails to permit CMS to inspect
them upon request.
(b) If a physician or practitioner fails to maintain opt-out in
accordance with paragraph (a) of this section, then, for the remainder
of the opt-out period, except as provided by paragraph (d) of this
section--
(1) All of the private contracts between the physician or
practitioner and Medicare beneficiaries are deemed null and void.
(2) The physician's or practitioner's opt-out of Medicare is
nullified.
(3) The physician or practitioner must submit claims to Medicare for
all Medicare-covered items and services furnished to Medicare
beneficiaries.
(4) The physician or practitioner or beneficiary will not receive
Medicare payment on Medicare claims for the remainder of the opt-out
period, except as provided in paragraph (c) of this section.
(5) The physician is subject to the limiting charge provisions of
Sec. 414.48 of this chapter.
(6) The practitioner may not reassign any claim except as provided
in Sec. 424.80 of this chapter.
(7) The practitioner may neither bill nor collect any amount from
the beneficiary except for applicable deductible and coinsurance
amounts.
(8) The physician or practitioner may not attempt to once more meet
the criteria for properly opting-out until the current 2-year period
expires.
(c) Medicare payment may be made for the claims submitted by a
beneficiary for the services of an opt-out physician or practitioner
when the physician or practitioner did not privately contract with the
beneficiary for services that were not emergency care services or urgent
care services and that were furnished no later than 15 days after the
date of a notice by the carrier that the physician or practitioner has
opted-out of Medicare.
(d) If a physician or practitioner demonstrates that he or she has
taken good faith efforts to maintain opt-out (including by refunding
amounts in excess of the charge limits to beneficiaries with whom he or
she did not sign a private contract) within 45 days of a notice from the
Medicare Administrative Contractor of a violation of paragraph (a) of
this section, then the requirements of paragraphs (b)(1) through (8) of
this section are not applicable. In situations where a violation of
paragraph (a) of this section is not discovered by the Medicare
Administrative Contractor during the current 2-year period when the
violation actually occurred, then the requirements of paragraphs (b)(1)
through (8) of this section are applicable from the date that the first
violation of paragraph (a) of this section occurred until the end of the
2-year period during which the violation occurred unless the physician
or practitioner takes good faith efforts, within 45 days of any notice
from the Medicare Administrative Contractor that the physician or
practitioner failed to maintain opt-out, or within 45 days of the
physician's or practitioner's discovery of the failure to maintain opt-
out, whichever is earlier, to correct his or her violations of paragraph
(a) of this section. Good faith efforts include, but are not limited to,
refunding any amounts collected in excess of the charge limits to
beneficiaries with whom he or she did not sign a private contract.
[63 FR 58901, Nov. 2, 1998, as amended at 70 FR 70329, Nov. 21, 2005; 80
FR 71370, Nov. 16, 2015]
Sec. 405.440 Emergency and urgent care services.
(a) A physician or practitioner who has opted-out of Medicare under
this subpart need not enter into a private contract to furnish emergency
care services or urgent care services to a Medicare beneficiary.
Accordingly, a physician or practitioner will not be determined to have
failed to maintain opt-out if he or she furnishes emergency care
services or urgent care services to a Medicare beneficiary with whom the
physician or practitioner has not previously entered into a private
contract, provided the physician or practitioner complies with the
billing requirements specified in paragraph (b) of this section.
[[Page 150]]
(b) When a physician or practitioner who has not been excluded under
sections 1128, 1156, or 1892 of the Social Security Act furnishes
emergency care services or urgent care services to a Medicare
beneficiary with whom the physician or practitioner has not previously
entered into a private contract, he or she:
(1) Must submit a claim to Medicare in accordance with both 42 CFR
part 424 and Medicare instructions (including but not limited to
complying with proper coding of emergency or urgent care services
furnished by physicians and practitioners who have opted-out of
Medicare).
(2) May collect no more than--
(i) The Medicare limiting charge, in the case of a physician; or
(ii) The deductible and coinsurance, in the case of a practitioner.
(c) Emergency care services or urgent care services furnished to a
Medicare beneficiary with whom the physician or practitioner has
previously entered into a private contract (that is, entered into before
the onset of the emergency medical condition or urgent medical
condition), are furnished under the terms of the private contract.
(d) Medicare may make payment for emergency care services or urgent
care services furnished by a physician or practitioner who has properly
opted-out when the services are furnished and the claim for services is
made in accordance with this section. A physician or practitioner who
has been excluded must comply with the regulations at Sec. 1001.1901
(Scope and effect of exclusion) of this title when he or she furnishes
emergency services to beneficiaries and may not bill and be paid for
urgent care services.
Sec. 405.445 Cancellation of opt-out and early termination of opt-out.
(a) A physician or practitioner may cancel opt-out by submitting a
written notice to each Medicare Administrative Contractor to which he or
she would file claims absent the opt-out, not later than 30 days before
the end of the current 2-year opt-out period, indicating that the
physician or practitioner does not want to extend the application of the
opt-out affidavit for a subsequent 2-year period.
(b) To properly terminate opt-out a physician or practitioner must:
(1) Not have previously opted out of Medicare.
(2) Notify all Medicare Administrative Contractors, with which he or
she filed an affidavit, of the termination of the opt-out no later than
90 days after the effective date of the initial 2-year period.
(3) Refund to each beneficiary with whom he or she has privately
contracted all payment collected in excess of:
(i) The Medicare limiting charge (in the case of physicians); or
(ii) The deductible and coinsurance (in the case of practitioners).
(4) Notify all beneficiaries with whom the physician or practitioner
entered into private contracts of the physician's or practitioner's
decision to terminate opt-out and of the beneficiaries' right to have
claims filed on their behalf with Medicare for the services furnished
during the period between the effective date of the opt-out and the
effective date of the termination of the opt-out period.
(c) When the physician or practitioner properly terminates opt-out
in accordance with paragraph (b), he or she will be reinstated in
Medicare as if there had been no opt-out, and the provision of Sec.
405.425 shall not apply unless the physician or practitioner
subsequently properly opts out.
(d) A physician or practitioner who has completed opt-out on or
before January 1, 1999 may terminate opt-out during the 90 days
following January 1, 1999 if he or she notifies all carriers to whom he
or she would otherwise submit claims of the intent to terminate opt-out
and complies with paragraphs (b)(3) and (4) of this section. Paragraph
(c) of this section applies in these cases.
[63 FR 58901, Nov. 2, 1998, as amended at 80 FR 71371, Nov. 16, 2015]
Sec. 405.450 Appeals.
(a) A determination by CMS that a physician or practitioner has
failed to properly opt out, failed to maintain opt-out, failed to timely
renew opt-out, failed to privately contract, failed to properly
terminate opt-out, or failed to
[[Page 151]]
properly cancel opt-out is an initial determination for purposes of
Sec. 498.3(b) of this chapter.
(b) A determination by CMS that no payment can be made to a
beneficiary for the services of a physician who has opted-out is an
initial determination for purposes of Sec. 405.924.
[63 FR 58901, Nov. 2, 1998, as amended at 79 FR 68001, Nov. 13, 2014; 80
FR 71371, Nov. 16, 2015]
Sec. 405.455 Application to Medicare Advantage contracts.
An organization that has a contract with CMS to provide one or more
Medicare Advantage (M + C) plans to beneficiaries (part 422 of this
chapter):
(a) Must acquire and maintain information from Medicare carriers on
physicians and practitioners who have opted-out of Medicare.
(b) Must make no payment directly or indirectly for Medicare covered
services furnished to a Medicare beneficiary by a physician or
practitioner who has opted-out of Medicare.
(c) May make payment to a physician or practitioner who furnishes
emergency or urgent care services to a beneficiary who has not
previously entered into a private contract with the physician or
practitioner in accordance with Sec. 405.440.
[63 FR 58901, Nov. 2, 1998, as amended at 79 FR 68001, Nov. 13, 2014]
Subpart E_Criteria for Determining Reasonable Charges
Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C.
1302 and 1395hh).
Source: 32 FR 12599, Aug. 31, 1967, unless otherwise noted.
Redesignated at 42 FR 52826, Sept. 30, 1977.
Sec. 405.500 Basis.
Subpart E is based on the provisions of the following sections of
the Act: Section 1814(b) provides for Part A payment on the basis of the
lesser of a provider's reasonable costs or customary charges. Section
1832 establishes the scope of benefits provided under the Part B
supplementary medical insurance program. Section 1833(a) sets forth the
amounts of payment for supplementary medical insurance services on the
basis of the lesser of a provider's reasonable costs or customary
charges. Section 1834(a) specifies how payments are made for the
purchase or rental of new and used durable medical equipment for
Medicare beneficiaries. Section 1834(b) provides for payment for
radiologist services on a fee schedule basis. Section 1834(c) provides
for payments and standards for screening mammography. Section 1842(b)
sets forth the provisions for a carrier to enter into a contract with
the Secretary and to make determinations with respect to Part B claims.
Section 1842(h) sets forth the requirements for a physician or supplier
to voluntarily enter into an agreement with the Secretary to become a
participating physician or supplier. Section 1842(i) sets forth the
provisions for the payment of Part B claims. Section 1848 establishes a
fee schedule for payment of physician services. Section 1861(b) sets
forth the inpatient hospital services covered by the Medicare program.
Section 1861(s) sets forth medical and other health services covered by
the Medicare program. Section 1861(v) sets forth the general authority
under which CMS may establish limits on provider costs recognized as
reasonable in determining Medicare program payments. Section 1861(aa)
sets forth the rural health clinic services and Federally qualified
health center services covered by the Medicare program. Section 1861(jj)
defines the term ``covered osteoporosis drug.'' Section 1862(a)(14)
lists services that are excluded from coverage. Section 1866(a)
specifies the terms for provider agreements. Section 1881 authorizes
special rules for the coverage of and payment for services furnished to
patients with end-stage renal disease. Section 1886 sets forth the
requirements for payment to hospitals for inpatient hospital services.
Section 1887 sets forth requirements for payment of provider-based
physicians and payment under certain percentage arrangements. Section
1889 provides for Medicare and Medigap information by telephone.
[60 FR 63175, Dec. 8, 1995]
[[Page 152]]
Sec. 405.501 Determination of reasonable charges.
(a) Except as specified in paragraphs (b), (c), and (d) of this
section, Medicare pays no more for Part B medical and other health
services than the ``reasonable charge'' for such service. The reasonable
charge is determined by the carriers (subject to any deductible and
coinsurance amounts as specified in Sec. Sec. 410.152 and 410.160 of
this chapter).
(b) Part B of Medicare pays on the basis of ``reasonable cost'' (see
part 413 of this chapter) for certain institutional services, certain
services furnished under arrangements with institutions, and services
furnished by entities that elect to be paid on a cost basis (including
health maintenance organizations, rural health clinics, FQHCs that are
authorized to bill under a reasonable cost system, and end-stage renal
disease facilities).
(c) Carriers will determine the reasonable charge on the basis of
the criteria specified in Sec. 405.502, and the customary and
prevailing charge screens in effect when the service was furnished.
(Also see Sec. Sec. 415.55 through 415.70 and Sec. Sec. 415.100
through 415.130 of this chapter, which pertain to the determination of
reimbursement for services performed by hospital-based physicians.)
However, when services are furnished more than 12 months before the
beginning of the fee screen year (January 1 through December 30) in
which a request for payment is made, payment is based on the customary
and prevailing charge screens in effect for the fee screen year that
ends immediately preceding the fee screen year in which the claim or
request for payment is made.
(d) Payment under Medicare Part B for durable medical equipment and
prosthetic and orthotic devices is determined in accordance with the
provisions of subpart D of part 414 of this chapter.
[47 FR 63274, Dec. 31, 1981, as amended at 51 FR 34978, Oct. 1, 1986; 51
FR 37911, Oct. 27, 1986; 54 FR 9003, Mar. 2, 1989; 57 FR 24975, June 12,
1992; 57 FR 33896, July 31, 1992; 57 FR 57688, Dec. 7, 1992; 60 FR
63176, Dec. 8, 1995; 79 FR 25473, May 2, 2014]