[Federal Register: July 23, 2004 (Volume 69, Number 141)]
[Proposed Rules]
[Page 43956-43964]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23jy04-28]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 402
[CMS-6146-P]
RIN 0938-AL53
Medicare Program; Revised Civil Money Penalties, Assessments,
Exclusions, and Related Appeals Procedures
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would establish the procedures for imposing
exclusions for certain violations of the Medicare program. These
procedures are based on the procedures that the Office of Inspector
General has published for civil money penalties, assessments, and
exclusions under their delegated authority. These regulations would
protect beneficiaries from health care providers and entities found in
noncompliance with Medicare rules and regulations and would otherwise
improve the safeguard provisions under the Medicare statute.
DATES: To be assured consideration, comments must be received at the
appropriate address, as provided below, no later than 5 p.m. on
September 21, 2004.
ADDRESSES: In commenting, please refer to file code CMS-6146-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission or e-mail. Mail written comments (one
original and three copies) to the following address only: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-6146-P, P.O. Box 8013, Baltimore, MD 21244-8013.
Please allow sufficient time for mailed comments to be timely
received in the event of delivery delays.
If you prefer, you may deliver (by hand or courier) your written
comments (one original and three copies) to one of the following
addresses: Room 443-G, Hubert H. Humphrey Building, 200 Independence
Avenue, SW., Washington, DC 20201, or Room C5-14-03, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and could be considered late.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Joel Cohen, (410) 786-3349.
SUPPLEMENTARY INFORMATION:
Submitting Comments: We welcome comments from the public on all
issues set forth in this rule to assist us in fully considering issues
and developing policies. You can assist us by referencing the file code
CMS-6146-P and the specific ``issue identifier'' that precedes the
section on which you choose to comment.
Inspection of Public Comments: Comments received timely will be
available for public inspection as they are processed, generally
beginning approximately 3 weeks after publication of a document, at the
headquarters of the Centers for Medicare & Medicaid Services, 7500
Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of
each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view
public comments, phone (410) 786-7197.
Copies: To order copies of the Federal Register containing this
document, send your request to: New Orders, Superintendent of
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date
of the issue requested and enclose a check or money order
[[Page 43957]]
payable to the Superintendent of Documents, or enclose your Visa or
Master Card number and expiration date. Credit card orders can also be
placed by calling the order desk at (202) 512-1800 or by faxing to
(202) 512-2250. The cost for each copy is $10. As an alternative, you
can view and photocopy the Federal Register document at most libraries
designated as Federal Depository Libraries and at many other public and
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This Federal Register document is also available from the Federal
Register online database through GPO Access, a service of the U.S.
Government Printing Office. The Web site address is: http://www.access.gpo.gov/nara/index.html
.
I. Background
[If you choose to comment on issues in this section, please include
the caption ``Background'' at the beginning of your comments.]
Section 2105 of the Omnibus Budget Reconciliation Act of 1981 (Pub.
L. 97-35) added section 1128A to the Social Security Act (the Act) to
authorize the Secretary of Health and Human Services to impose civil
money penalties, assessments, and/or exclusion from the Medicare
program for certain health care facilities, practitioners, suppliers or
other entities under prescribed circumstances. Exclusion provides the
ultimate enforcement tool for agencies attempting to establish
compliance with legal and program standards, and is used in addition to
potential civil, criminal, and/or administrative proceedings.
Since 1981, the Congress has significantly increased both the
number and types of circumstances under which the Secretary may impose
an exclusion of a provider or an entity from the Medicare and State
health care programs. The Secretary has delegated the authority for
these provisions to either the Office of Inspector General (OIG) or the
Centers for Medicare & Medicaid Services (CMS) (59 FR 52967, October
20, 1994). The exclusion authorities delegated to the OIG address
fraud, misrepresentation, or falsification, while those that address
noncompliance with programmatic or regulatory requirements are
delegated to CMS. However, the OIG has the authority to impose an
exclusion and to prosecute cases involving exclusions that were
delegated to CMS if CMS and the OIG jointly determine it to be in the
interest of economy, efficiency, or effective coordination of
activities. The determination may be made either on a case-by-case
basis, or for all cases brought under a particular listed authority.
On December 14, 1998, we published a final rule in the Federal
Register (63 FR 68687), delineating the procedures for pursuing civil
money penalties (CMPs) and assessments. That final rule added a new
part 402 to title 42, chapter IV of the Code of Federal Regulations
(CFR) to incorporate our CMP and assessment authorities. We did not
address exclusions in that final rule, but did reserve subpart C to
incorporate this information at a future date.
In the December 14, 1998 rule, we indicated that our procedures for
imposing the CMPs and assessment authorities delegated to CMS were
based on the procedures that the OIG has delineated in 42 CFR part
1003. We also made the OIG's hearing and appeal procedures set forth in
42 CFR part 1005 effective for the CMP, assessment, and exclusion
authorities delegated to CMS.
II. Provisions of the Proposed Rule
This proposed rule would amend part 402, subpart C, Exclusions, to
incorporate the rules concerning exclusions associated with the CMP
violations identified in part 402. Subpart C contains the general
requirements and procedures that are common to the imposition of an
exclusion from Medicare, Medicaid, and, where applicable, other Federal
health care programs. These regulations would not materially impact the
hearing and appeal procedures currently available to any person on whom
we could impose an exclusion.
Specifically, we are proposing to add the following provisions to
subpart C:
Section 402.200, Basis and purpose.
[If you choose to comment on issues in this section, please include
the caption ``Basis and purpose'' at the beginning of your comments.]
This section provides the basis and purpose for the imposition of
an exclusion from Medicare, Medicaid, and, where applicable, other
Federal health care programs for noncompliance with the respective
provisions of the Act specified in Sec. 402.1(e). This subpart also
sets forth the appeal rights of persons subject to exclusion, and the
procedures for reinstatement following exclusion. This subpart is based
on Sec. 1003.102, Sec. 1003.105, Sec. 1003.107, and Sec. 1003.109
of the OIG's regulations.
Section 402.205, Length of exclusion.
[If you choose to comment on issues in this section, please include
the caption ``Length of exclusion'' at the beginning of your comments.]
This section describes the duration of exclusion from Medicare,
Medicaid, and, where applicable, other Federal health care programs for
the applicable violation. Currently, there are four general categories
for which violations may cause exclusions. These categories involve
non-compliance with assignment billings, non-compliance with charge or
service limits, failure to provide information or improperly providing
information, or non-compliance with Medigap or Medicare Select. Some
exclusion provisions provide that the exclusion is imposed in
accordance with section 1842(j)(2) of the Act. Section 1842(j)(2)
provides for exclusion from participation in the programs under the
Act. These exclusions may not exceed 5 years. For these exclusion
provisions, CMS proposes to use its discretion to set a duration for
the exclusion, up to 5 years, after considering aggravating and
mitigating circumstances as described in this proposed rule. By
contrast, many other exclusion provisions extend to all Federal health
care programs, and do not address the minimum or maximum duration of
the exclusion, but instead simply refer to applying the provisions of
section 1128A of the Act, or section 1128(c) of the Act for imposition
of the exclusion. However, neither section 1128A, nor section 1128(c)
addresses the specific duration of an exclusion for any of the title
XVIII exclusion provisions described in this proposed rule. Therefore,
where the duration of an exclusion is not specifically addressed by
statute for a specific exclusion provision, CMS proposes to use its
discretion to apply a time period it believes is justified, taking into
account appropriate aggravating and mitigating factors as described in
this proposed rule.
While several provisions of title 18 of the Act refer on their face
only to CMPs, they also make cross-references to section 1128A of the
Act, from which we assert that our exclusion authority derives. For
example, several provisions within section 1882 of the Act refer to
CMPs. Each of these provisions incorporates by reference portions of
section 1128A, articulating with precise specificity which provisions
of section 1128A are applicable. In each case, this includes section
1128A's exclusion authority found in section 1877, though there the
exclusion authority is made even more clear with the term ``exclusion''
being found in the section heading. The applicable provision of section
1128A is that provision's last sentence, explicitly made applicable to
all the foregoing, which provides that the Secretary ``may make a
determination in the same [CMP]
[[Page 43958]]
proceeding to exclude the person from participation in * * * Federal
health care programs * * *''
Section 402.208, Factors considered in determining whether
to exclude, and the length of exclusion.
[If you choose to comment on issues in this section, please include
the caption ``Factors considered'' at the beginning of your comments.]
The statute specifies the grounds for imposition of the various
exclusions, but offers little detail regarding the adjudicatory
processes inherent in administering them. Instead, the statute vests
CMS with broad administrative discretion. We are sensitive to the fact
that the nature of the grounds for imposition of exclusions vary
widely.
This section describes the specific details of the aggravating or
mitigating circumstances that may be considered. This section is based
on corresponding sections of 42 CFR parts 1001 and 1003. We note that
our application of aggravating and mitigating factors flows both as a
natural result of a statutory scheme that contemplates exclusions of
varying lengths, as well as the Secretary's rulemaking authority
specified in section 1871 of the Act.
Section 402.209, Scope and effect of exclusion.
[If you choose to comment on issues in this section, please include
the caption ``Scope and effect'' at the beginning of your comments.]
This section describes the general scope and effect of an
exclusion. Generally, an excluded provider or supplier may not directly
or indirectly submit claims, or cause claims to be submitted, to the
Medicare program. Providers who submit, or cause to be submitted,
claims during the course of an exclusion risk other possible sanctions,
including criminal and civil liability. Medicare will not pay claims
for beneficiaries who elect to see excluded providers, except, perhaps,
for the first claim, which will be accompanied by a notification to the
beneficiary that the provider/supplier has been excluded from
participation in Medicare and that no further Medicare payments will be
made on the beneficiary's behalf. This section is based on Sec.
1001.1901. We note that in Sec. 402.209(b)(3), whereas in some cases
the maximum exclusion time limit may preclude us from applying the
specified prohibited conduct as the basis for denying reinstatement to
the Medicare program, the fact that an excluded provider has engaged in
such prohibited conduct may give rise to a new exclusion action by the
initiating agency (CMS or OIG), the practical effect of which would be
to deny reinstatement into the Medicare program.
Section 402.210, Notice of exclusion.
[If you choose to comment on issues in this section, please include
the caption ``Notice of exclusion'' at the beginning of your comments.]
This section describes the contents of the respective notices, and,
specifically the timing for release of (a) the written notice of intent
to exclude (that is, the proposed determination), and (b) the written
notice of exclusion. At a minimum, the written notice of intent to
exclude provides the person with such information as to the reason why
the person is noncompliant with the statute, the length of the proposed
exclusion, and instructions for responding to this notice, including
providing argument to the exclusion for the agency to consider. The
written notice to exclude is sent to the person in the same manner as
the written notice of intent to exclude if the agency determines the
exclusion is warranted. This notice will also provide the person with
information on their appeal rights to the exclusion. This section is
based on the notices provided by the OIG in Sec. 1001.2001, Sec.
1001.2002, Sec. 1001.2003, and Sec. 1003.109.
Section 402.212, Response to notice of proposed exclusion.
[If you choose to comment on issues in this section, please include
the caption ``Response to notice'' at the beginning of your comments.]
This section describes the general process and procedure for the
respondent to follow when presenting an oral or written response to the
notice of intent to exclude (that is, the proposed determination). The
agency will accept for consideration any supportive information the
respondent provides. The agency does not limit nor suggest what type of
information should be presented. The burden to present convincing
information is left to the discretion of the respondent. This section
is based on the process and procedures delineated by the OIG in Sec.
1003.109. However, to encourage timely communication between the
respondent and the initiating agency, we have added an additional
element whereby the initiating agency will contact the respondent
within 15 days of receipt of the respondent's request to establish a
mutually agreed upon time and place for the hearing of oral arguments.
Section 402.214, Appeal of exclusion.
[If you choose to comment on issues in this section, please include
the caption ``Appeal of exclusion'' at the beginning of your comments.]
This section describes the general appeal process (as referenced in
Sec. 1005) for requesting a hearing before an administrative law judge
and details the required elements of the written request for appeal.
Generally, the elements of the written request must include the basis
for the disagreement with the exclusion, the general basis for the
defense of the respondent, reasons why the proposed length of exclusion
should be modified. This section is based on Sec. 1001.2003 and Sec.
1001.2007.
Section 402.300, Request for reinstatement.
[If you choose to comment on issues in this section, please include
the caption ``Request for reinstatement'' at the beginning of your
comments.]
In proposed Sec. 402.300, we discuss the request for
reinstatement. In Sec. 402.300(a), we describe the written request for
reinstatement. We discuss that 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 would be required
to include documentation demonstrating that the person has met the
standards set forth in Sec. 402.302. We also state that obtaining or
reactivating a Medicare provider number (or equivalent) would not
constitute reinstatement.
Section 402.300(b) discusses that, 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.
In Sec. 402.300(c), we discuss that failure to submit a written
request for reinstatement and/or to furnish the required information or
authorization would result in the continuation of the exclusion, unless
the exclusion had been in effect for 5 years. In that case,
reinstatement would be automatic.
Section 402.300(d) discusses that, if a period of exclusion is
reduced on appeal (regardless of whether further appeal is pending),
the excluded person would be permitted to request and apply for
reinstatement within 120 days of the expiration of the reduced
exclusion period. A written request for the reinstatement would include
the same standards as noted in paragraph (b) of this section. This
section is based on Sec. 1001.3001.
Section 402.302, Basis for reinstatement.
[[Page 43959]]
[If you choose to comment on issues in this section, please include
the caption ``Basis for reinstatement'' at the beginning of your
comments.]
In Sec. 402.302, we discuss that the initiating agency would
authorize reinstatement if the agency determined that-
(1) The period of exclusion had expired;
(2) There were reasonable assurances that the types of actions that
formed the basis for the original exclusion did not recur and would not
recur; and
(3) There is no additional basis under title XVIII of the Act that
would justify the continuation of the exclusion.
We are also discussing that the initiating agency would not
authorize reinstatement if it determined 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, would
serve as a basis for denying reinstatement. This section would apply
regardless of whether the excluded person had obtained a Medicare
provider number (or equivalent), either as an individual or as a member
of a group, before being reinstated.
In making a determination regarding reinstatement, the initiating
agency would consider--(1) The 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) the
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 were paid in full, or satisfactory arrangements were made
to fulfill these obligations; (4) whether the excluded person complied
with, or had 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 had, 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.
CMS proposes that reinstatement would not be effective until the
initiating agency granted the request and provided notice under Sec.
402.304. Reinstatement would be effective as provided in the notice.
A determination for a denial of reinstatement would not be
appealable or reviewable except as provided in Sec. 402.306.
We also discuss that an ALJ cannot require reinstatement of an
excluded person according to this chapter. The content of this section
is based on the criteria provided by the OIG in Sec. 1001.3002.
Section 402.304, Approval of request for reinstatement.
[If you choose to comment on issues in this section, please include
the caption ``Approval of request'' at the beginning of your comments.]
In regard to approval of a request for reinstatement (Sec.
402.304), we discuss that, if the initiating agency would grant a
request for reinstatement, the initiating agency would--
(1) Give written notice to the excluded person specifying the date
of reinstatement; and
(2) Notify appropriate Federal and State agencies, and, to the
extent possible, all others that were originally notified of the
exclusion, that the person had been reinstated into the Medicare
program.
A determination by the initiating agency to reinstate an excluded
person would have no effect if Medicare, Medicaid, or, where
applicable, any other Federal health care program had imposed a longer
period of exclusion under its own authorities. The content of this
section is based on the procedures provided by the OIG in Sec.
1001.3003.
Section 402.306, Denial of request for reinstatement.
[If you choose to comment on issues in this section, please include
the caption ``Denial of request'' at the beginning of your comments.]
In Sec. 402.306, Denial of request for reinstatement, we discuss
that, if a request for reinstatement is denied, the initiating agency
would provide written notice to the excluded person. Within 30 days of
the date of this notice, the excluded person could 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 and/or oral
argument to an official of the initiating agency.
If this written request were received timely by the initiating
agency, the initiating agency, within 15 days of receipt of the
excluded person's request, would initiate communication with the
excluded person to establish a time and place for the requested
meeting.
In addition, we discuss that, after evaluating any additional
evidence submitted by the excluded person (or at the end of the 30-day
period described above, if no documentary evidence or written request
were submitted), the initiating agency would send written notice to the
excluded person either confirming the denial, or approving the
reinstatement as set forth in Sec. 402.304. If the initiating agency
would elect to uphold its denial decision, the written notice would
also indicate that a subsequent request for reinstatement would not be
considered until at least 1 year after the date of the written denial
notice.
The decision to deny reinstatement would not be subject to
administrative review. The content of this section is based on the
procedures provided by the OIG in Sec. 1001.3004.
III. Collection of Information Requirements
While this regulation contains information collection requirements,
these requirements are exempt from the Paperwork Reduction Act as
stipulated in 5 CFR 1320.4(a)(2) (collection of information to conduct
a civil or administrative action, investigation, or audit involving an
agency against specific individuals or entities).
IV. Response to Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are not
able to acknowledge or respond to them individually. We will consider
all comments we receive by the date and time specified in the DATES
section of this preamble, and, if we proceed with a subsequent
document, we will respond to the major comments in the preamble to that
document.
V. Regulatory Impact Statement
Overall Impact
[If you choose to comment on issues in this section, please include
the caption ``Regulatory Impact Statement'' at the beginning of your
comments.]
We have examined the impacts of this proposed rule as required by
Executive Order 12866 (September 1993, Regulatory Planning and Review),
the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-
354), Executive Order 13132 (August 4, 1999, Federalism), and the
Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532).
Executive Order 12866 directs agencies taking ``significant
regulatory action'' to reflect consideration of all
[[Page 43960]]
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more annually). This
proposed rule is not a significant regulatory action as defined by
section 3(f) of Executive Order 12866. We believe that there are no
significant costs associated with this proposed rule that would impose
any mandates on State, local or tribal governments, or the private
sector that would result in an expenditure of $100 million in any given
year. We expect that all program participants would comply with the
statutory and regulatory requirements making unnecessary the imposition
of an exclusion from Medicare, Medicaid and, where applicable, other
Federal health care programs. Therefore, we do not anticipate more than
a de minimis economic impact as a result of this proposed rule.
Further, any impact that may occur would only affect those limited few
individuals or entities that engage in prohibited behavior. We do not
anticipate any savings or costs as a result of this proposed rule.
The RFA (15 U.S.C. 603(a)), as modified by the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), requires agencies
to determine whether the proposed rule would have a significant
economic impact on a substantial number of small entities and, if so,
to identify in the notice of proposed rulemaking any regulatory options
that could mitigate the impact of the proposed regulation on small
businesses. For purposes of the RFA, small entities include small
businesses, nonprofit organizations and small government jurisdictions.
Most hospitals and most other providers and suppliers are small
entities, either by nonprofit status or by having revenues of $26
million or less annually. Individuals and States are not included in
the definition of a small entity. We believe that any impact as a
result of the proposed rule would be minimal, since, as mentioned
above, the only individuals or entities affected would be those limited
few who engage in prohibited conduct. Since the vast majority of
program participants comply with statutory and regulatory requirements,
any aggregate economic impact would not be significant.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. We do not believe a
regulatory impact analysis is required here because, for the reasons
stated above concerning our obligations under the RFA and the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L.
104-121), this proposed rule would not have a significant impact on the
operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that may result in expenditure in any 1 year by State,
local, or tribal governments, in the aggregate, or by the private
sector, of $110 million. We believe that there are no significant costs
associated with this technical rule that would impose any mandates on
State, local, or tribal governments, or the private sector that would
result in an expenditure of $110 million in any given year. As was
previously mentioned, since the majority of program participants comply
with statutory and regulatory requirements, any aggregate economic
impact would not be significant.
Executive Order 13132 establishes certain requirements that an
agency must meet when it publishes a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. We have determined that this proposed rule would not
significantly affect the rights, roles, or responsibilities of the
States. This rule would not impose substantial direct requirement costs
on State or local governments, preempt State law, or otherwise
implicate Federalism.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 402
Administrative practice and procedure, Health facilities, Health
professions, Medicaid, Medicare, Penalties.
For the reasons stated in the preamble, the Centers for Medicare &
Medicaid Services proposes to amend 42 CFR chapter IV, part 402 as set
forth below:
PART 402--CIVIL MONEY PENALTIES, ASSESSMENTS, AND EXCLUSIONS
1. The authority citation for part 402 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Subpart A--General Provisions
2. In Sec. 402.3, the introductory text is republished and a new
definition for ``initiating agency'' is added in alphabetical order to
read as follows:
Sec. 402.3 Definitions.
For purposes of this part:
* * * * *
Initiating agency means whichever agency (CMS or the OIG) initiates
the interaction with the person.
* * * * *
3. In part 402, a new subpart C is added to read as follows:
Subpart C--Exclusions
Sec.
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 Notice of exclusion.
402.212 Response to notice of proposed exclusion.
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.
Subpart C--Exclusions
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
on the specific violation of the Medicare statute. A full description
of the specific violations identified in the sections of
[[Page 43961]]
the Act are cross-referenced in the regulatory sections listed in the
table below.
(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 contacts.. Sec. 402.1(e)(2)(i)
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 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 and/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 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.
[[Page 43962]]
(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 in order to ensure achievement for the
purposes of this subpart.
(c) Limitations. (1) The standards set forth in this section are
binding on the person, except to the extent that their application
results in an imposition of an amount that exceeds the limits imposed
by the United States Constitution.
(2) 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 to paragraph (b)(1) of this section. (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
notify 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 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 Notice of exclusion.
(a) Notice of proposed determination. 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 intent 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, the following:
(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 present
oral argument to an official of the initiating agency.
(ii) The request for oral argument 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 intent to
exclude, the initiating agency may initiate actions for the imposition
of the exclusion.
(b) Notice of exclusion. Once the initiating agency determines that
an 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. 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 exclusion.
(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 arguing 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 initiate 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 be heard by the
initiating agency in order to present oral argument
[[Page 43963]]
concerning whether the proposed exclusion is warranted and any related
matters. The person must submit this request within 60 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 requested
hearing.
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 and/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.
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 provide 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,
[[Page 43964]]
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 and/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.
(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.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: September 5, 2003.
Thomas A. Scully,
Administrator, Centers for Medicare and Medicaid Services.
Dated: March 15, 2004.
Tommy G. Thompson,
Secretary.
[FR Doc. 04-16791 Filed 7-22-04; 8:45 am]
BILLING CODE 4120-01-U