[Federal Register: June 27, 2008 (Volume 73, Number 125)]
[Notices]
[Page 36522-36528]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jn08-57]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-1400-GNC]
RIN 0938-AP34
Medicare Program; Criteria and Standards for Evaluating
Intermediary and Carrier Performance During Fiscal Year 2009
AGENCY: Centers for Medicare and Medicaid Services (CMS), HHS.
ACTION: General notice with comment period.
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SUMMARY: This general notice with comment period describes the criteria
and standards to be used for evaluating the performance of fiscal
intermediaries (FIs) and carriers in the administration of the Medicare
program. The results of these evaluations are considered whenever we
enter into, renew, or terminate a FI agreement, carrier contract, or
take other contract actions, for example, assigning or reassigning
providers or services to a FI or designating regional or national
intermediaries. We are requesting public comment on these criteria and
standards.
DATES: Effective Date: The criteria and standards are effective on
October 1, 2008.
Comment Date: To be assured consideration, comments must be
received no later than 5 p.m. on August 26, 2008.
ADDRESSES: In commenting, please refer to file code CMS-1400-GNC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the instructions for
``Comment or Submission'' and enter the filecode to find the document
accepting comments.
2. By regular mail. You may mail written comments (one original and
two copies) to the following address ONLY: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Attention:
CMS-1400-GNC, P.O. Box 8013, Baltimore, MD 21244-8013.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments (one
original and two copies) to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-1400-GNC, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to either of the following addresses:
a. Room 445-G, Hubert H. Humphrey Building, 200 Independence
Avenue, SW., Washington, DC 20201. (Because access to the interior of
the HHH Building is not readily available to persons without Federal
Government identification, commenters are encouraged to leave their
comments in the CMS drop slots located in the main lobby of the
building. A stamp-in clock is available for persons wishing to retain a
proof of filing by stamping in and retaining an extra copy of the
comments being filed.)
b. 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call telephone number (410) 786-7195 in advance to schedule your
arrival with one of our staff members.
[[Page 36523]]
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
Submission of comments on paperwork requirements. You may submit
comments on this document's paperwork requirements by following the
instructions at the end of the ``Collection of Information
Requirements'' section in this document.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Lee Ann Crochunis, (410) 786-3362.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following Web site as soon as possible after they have been
received: http://www.regulations.gov. Follow the search instructions on
that Web site to view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, MD 21244, Monday through Friday of each week from 8:30 a.m.
to 4 p.m. To schedule an appointment to view public comments, phone 1-
800-743-3951.
I. Background
A. Medicare Part A--Hospital Insurance
Under section 1816 of the Social Security Act (the Act), public or
private organizations and agencies participate in the administration of
Part A (Hospital Insurance) of the Medicare program under agreements
with CMS. These agencies or organizations, known as fiscal
intermediaries (FIs), determine whether medical services are covered
under Medicare, determine correct payment amounts and then make
payments to the health care providers (for example, hospitals, skilled
nursing facilities (SNFs), and community mental health centers) on
behalf of the beneficiaries. Section 1816(f) of the Act requires us to
develop criteria, standards, and procedures to evaluate an FI's
performance of its functions under its agreement.
Section 1816(e)(4) of the Act requires us to designate regional
agencies or organizations, which are already Medicare FIs under section
1816 of the Act, to perform claim processing functions for freestanding
home health agency (HHA) claims. We refer to these organizations as
Regional Home Health Intermediaries (RHHIs) under 42 CFR 421.117.
The evaluation of FI performance is part of our contract management
process. These evaluations need not be limited to the current fiscal
year (FY), other fixed term basis, or agreement term.
B. Medicare Part B--Supplementary Medical Insurance
Under section 1842 of the Act, we are authorized to enter into
contracts with carriers to fulfill various functions in the
administration of Part B, Supplementary Medical Insurance of the
Medicare program. Beneficiaries, physicians, and suppliers of services
submit claims to these carriers. The carriers determine whether the
services are covered under Medicare and the amount payable for the
services or supplies, and then make payment to the appropriate party.
Under section 1842(b)(2) of the Act, we are required to develop
criteria, standards, and procedures to evaluate a carrier's performance
of its functions under its contract. Evaluations of Medicare fee-for-
service (FFS) contractor performance need not be limited to the current
Fiscal Year (FY), other fixed term basis, or contract term. The
evaluation of carrier performance is part of our contract management
process.
C. Development and Publication of Criteria and Standards
In addition to the statutory requirements, Sec. 421.120, Sec.
421.122, and Sec. 421.201, provide for publication of a Federal
Register notice to announce the criteria and standards for FIs and
carriers before the beginning of each evaluation period. In the October
1, 2007 Federal Register (72 FR 55775), we published a general notice
with comment period the current criteria and standards for FIs and
carriers.
To the extent possible, we make every effort to publish the
criteria and standards before the beginning of the FY, which is October
1. If we do not publish a Federal Register notice before the new FY
begins, readers may presume that until and unless notified otherwise,
the criteria and standards that were in effect for the previous FY
remain in effect.
In those instances in which we are unable to meet our goal of
publishing the subject Federal Register notice before the beginning of
the FY, we may publish the criteria and standards notice at any
subsequent time during the year. If we publish a notice in this manner,
the evaluation period for the criteria and standards that are the
subject of the notice will be effective beginning on the first day of
the first month following publication of this notice in the Federal
Register. Any revised criteria and standards will measure performance
prospectively; that is, any new criteria and standards in the notice
will be applied only to performance after the effective date listed on
the notice.
It is not our intention to revise the criteria and standards that
will be used during the evaluation period once this information is
published in a Federal Register notice. However, on occasion, either
because of administrative action or statutory mandate, there may be a
need for changes that have a direct impact on the criteria and
standards previously published, or that require the addition of new
criteria or standards, or that cause the deletion of previously
published criteria and standards. If we make these changes, we will
publish a Federal Register notice before implementation of the changes.
In all instances, necessary manual issuances will be published to
ensure that the criteria and standards are applied uniformly and
accurately. Also, as in previous years, this Federal Register notice
will be republished and the effective date revised if changes are
warranted as a result of the public comments received on the criteria
and standards.
The Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA) (Pub. L. 108-173) was enacted on December 8, 2003.
Section 911 of the MMA establishes the Medicare FFS Contracting Reform
(MCR) initiative that is being implemented over the next several years.
This provision requires that we use competitive procedures to replace
our current FIs and carriers with Medicare Administrative Contractors
(MACs). The MMA requires that we compete and transition all work to
MACs by October 1, 2011.
FIs and carriers will continue administering Medicare FFS work as
may be required until the final competitively selected MAC is up and
operating. We will continue to develop and publish standards and
criteria for use in evaluating the performance of FIs and carriers as
long as these types of contractors exist.
[[Page 36524]]
II. Analysis of and Response to Public Comments Received on FY 2008
Criteria and Standards
We received three comments in response to the October 1, 2007
Federal Register general notice with comment. All comments were
reviewed, but none necessitated reissuance of the FY 2008 Criteria and
Standards. Comments submitted did not pertain specifically to the FY
2007 Criteria and Standards.
III. Criteria and Standards--General
Basic principles of the Medicare program are to pay claims promptly
and accurately, and to foster good beneficiary and provider relations.
Contractors must administer the Medicare program efficiently and
economically. The goal of performance evaluation is to ensure that
contractors meet their contractual obligations. We measure contractor
performance to ensure that contractors do what is required of them by
statute, regulation, contract, and our directives.
We have developed a contractor oversight program for FY 2009 that
outlines what is expected of the contractor; measures the performance
of the contractor; evaluates the contractor's performance against those
expectations; and provides for appropriate contract action based upon
the evaluation of the contractor's performance.
As a means to monitor the accuracy of Medicare FFS payments, we
have established the Comprehensive Error Rate Testing (CERT) program
that measures and reports error rates for claims payment decisions made
by carriers and FIs. Since November 2003, the CERT program has been
measuring and reporting claims payment error rates for each individual
carrier. FI-specific rates became available November 2004. These rates
measure not only how well contractors are doing at implementing
automated review edits and identifying which claims to subject to
manual medical review, but they also measure the impact of the
contractor's provider outreach/education, as well as the effectiveness
of the contractor's provider call center(s). We will use these
contractor-specific error rates as a means to evaluate a contractor's
performance.
Several times throughout this notice, we refer to the appropriate
reading level of letters, decisions, or correspondence that are mailed
or otherwise transmitted to Medicare beneficiaries from intermediaries
or carriers. In those instances, appropriate reading level is defined
as whether the communication is below the eighth grade reading level
unless it is obvious that an incoming request from the beneficiary
contains language written at a higher level. In these cases, the
appropriate reading level is tailored to the capacities and
circumstances of the intended recipient.
In addition to evaluating performance based upon our expectations
for FY 2009, we may also conduct follow-up evaluations throughout FY
2009 of areas in which contractor performance was out of compliance
with statute, regulations, and our performance expectations during
prior review years where contractors were required to submit a
Performance Improvement Plan (PIP).
We may also utilize Statement of Auditing Standards-70 (SAS-70)
reviews as a means to evaluate contractors in some or all business
functions.
In FY 2001, we established the Contractor Rebuttal Process as a
commitment to continual improvement of contractor performance
evaluation (CPE). We will continue the use of this process in FY 2009.
The Contractor Rebuttal Process provides the contractors an opportunity
to submit a written rebuttal of CPE findings of fact. Whenever we
conduct an evaluation of contractor operations, contractors have 7
calendar days from the date of the CPE review exit conference to submit
a written rebuttal. The CPE review team or, if appropriate, the
individual reviewer considers the contents of the rebuttal before the
issuance of the final CPE report to the contractor.
The FY 2009 CPE for FIs and carriers is structured into five
criteria designed to meet the stated objectives. The first criterion,
claims processing, measures contractual performance against claims
processing accuracy and timeliness requirements, as well as activities
in handling appeals. Within the claims processing criterion, we have
identified those performance standards that are mandated by
legislation, regulation, or judicial decision. These standards include
claims processing timeliness, the accuracy of Medicare Summary Notices
(MSNs), the timeliness of FI and carrier redeterminations, and the
appropriateness of the reading level and content of FI and carrier
redetermination letters. Further evaluation in the claims processing
criterion may include, but is not limited to, the accuracy of claims
processing, the percent of claims paid with interest, the accuracy of
redeterminations, timeliness of forwarding case files to and
effectuation of Qualified Independent Contractor (QIC) decisions, and
effectuation of administrative law judge (ALJ) decisions.
The second criterion, customer service, assesses the adequacy of
the service provided to customers by the contractor in its
administration of the Medicare program. Functions that may be evaluated
under this criterion include, but will not be limited to, the
following: (1) Timeliness and accuracy of all correspondence to
providers; (2) monitoring the quality of replies provided by the
contractor's provider telephone customer service representatives
(quality call monitoring); and (3) provider outreach and education
activities.
The third criterion, payment safeguards, evaluates whether the
Medicare Trust Fund is safeguarded against inappropriate program
expenditures. Intermediary and carrier performance may be evaluated in
the areas of Medical Review (MR), Medicare Secondary Payer (MSP),
Overpayments (OP), and Provider Enrollment (PE). In addition, FIs
performance may be evaluated in the area of Audit and Reimbursement
(A&R).
In FY 1996, the Congress enacted the Health Insurance Portability
and Accountability Act (HIPAA), Medicare Integrity Program, giving us
the authority to contract with entities other than, but not excluding,
Medicare carriers and intermediaries to perform certain program
safeguard functions. In situations where one or more program safeguard
functions are contracted to another entity, we may evaluate the flow of
communication and information between a Medicare FFS contractor and the
payment safeguard contractor. All benefit integrity functions have been
transitioned from the intermediaries and carriers to the program
safeguard contractors.
Mandated performance standards for FIs in the payment safeguards
criterion include the accuracy of decisions on SNF demand bills and the
timeliness of processing Tax Equity and Fiscal Responsibility Act
(TEFRA) target rate adjustments, exceptions, and exemptions. There are
no mandated performance standards for carriers in the payment
safeguards criterion. FIs and carriers may also be evaluated on any
Medicare Integrity Program (MIP) activities if performed under their
agreement or contract.
The fourth criterion, fiscal responsibility, evaluates the
contractor's efforts to protect the Medicare program and the public
interest. Contractors must effectively manage Federal funds for both
the payment of benefits and the costs of administration under the
Medicare program. Proper financial and budgetary controls, including
internal controls, must be in place to ensure
[[Page 36525]]
contractor compliance with its agreement with HHS and CMS.
Additional functions reviewed under this criterion may include, but
are not limited to, adherence to approved budget, compliance with the
Budget and Performance Requirements (BPRs), and compliance with
financial reporting requirements.
The fifth and final criterion, administrative activities, measures
a contractor's administrative management of the Medicare program. A
contractor must efficiently and effectively manage its operations.
Proper systems security (general and application controls), Automated
Data Processing (ADP) maintenance, and disaster recovery plans must be
in place. A contractor's evaluation under the administrative activities
criterion may include, but is not limited to, establishment,
application, documentation, and effectiveness of internal controls that
are essential in all aspects of a contractor's operation, as well as
the degree to which the contractor cooperates with us in complying with
the Federal Managers' Financial Integrity Act of 1982 (FMFIA).
Administrative activities evaluations may also include reviews related
to contractor implementation of our general instructions and data and
reporting requirements.
We have developed separate measures for RHHIs in order to evaluate
the distinct RHHI functions. These functions include the processing of
claims from freestanding HHAs, hospital-affiliated HHAs, and hospices.
Through an evaluation using these criteria and standards, we may
determine whether the RHHI is effectively and efficiently administering
the program benefit or whether the functions should be moved from one
FIs to another in order to gain that assurance.
In sections IV. through VI. of this notice, we list the criteria
and standards to be used for evaluating the performance of FIs, RHHIs,
and carriers.
IV. Criteria and Standards for Fiscal Intermediaries
A. Claims Processing Criterion
The claims processing criterion contains the following three
mandated standards:
Standard 1. Not less than 95.0 percent of clean electronically
submitted nonperiodic interim payment claims are paid within
statutorily specified timeframes. Clean claims are defined as claims
that do not require Medicare FIs to investigate or develop outside of
their Medicare operations on a prepayment basis. Specifically, the Act
specifies that clean nonperiodic interim payment electronic claims be
paid no earlier than the 14th day after the date of receipt, and that
interest is payable for any clean claims if payment is not issued by
the 31st day after the date of receipt.
Standard 2. Redetermination letters prepared in response to
beneficiary initiated appeal requests are written in a manner
calculated to be understood by the beneficiary. Letters must contain
the required elements as specified in Sec. 405.956.
Standard 3. All redeterminations must be concluded and mailed
within 60 days of receipt of the request, unless the party submits
documentation after the request, in which case the decision-making
timeframe is extended for up to 14 calendar days for each submission.
Because FIs process many claims for benefits under the Part B
portion of the Medicare Program, we also may evaluate how well a FI
follows the procedures for processing appeals of any claims for Part B
benefits.
Additional functions that may be evaluated under this criterion
include, but are not limited to, the following:
Accuracy of claims processing.
Remittance advice transactions.
Establishment and maintenance of a relationship with
Common Working File (CWF) Host.
Accuracy of redetermination decisions.
QIC case file requirements.
Timely and accurate effectuation of appeal decisions.
Accuracy and timeliness of processing appeals and clerical
error reopenings as set forth in part 405, subpart I (Sec. 405.900 et
seq.).
B. Customer Service Criterion
Functions that may be evaluated under this criterion include, but
are not limited to, the following:
Maintaining a properly programmed interactive voice
response system to assist with inquiries.
Performing quality call monitoring.
Training customer service representatives.
Entering valid call center performance data in the
customer service assessment and management system or its successor, the
provider inquiry evaluation system.
Providing timely and accurate written replies to providers
that address the concerns raised and that are written with an
appropriate customer-friendly tone and clarity.
Ensuring written correspondence is evaluated for quality.
Conducting provider outreach and education-activities.
Effectively maintaining an Internet Web site dedicated to
furnishing providers and physicians timely, accurate, and useful
Medicare program information.
C. Payment Safeguards Criterion
The Payment Safeguard criterion contains the following two mandated
standards:
Standard 1. Decisions on SNF demand bills are accurate.
Standard 2. TEFRA target rate adjustments, exceptions, and
exemptions are processed within mandated timeframes. Specifically,
applications must be processed to completion within 75 days after
receipt by the contractor or returned to the hospitals as incomplete
within 60 days of receipt.
FIs may also be evaluated on any MIP activities if performed under
their Part A contractual agreement. These functions and activities
include, but are not limited to, the following:
Audit and Reimbursement
++ Performing the activities specified in our general instructions
for conducting audit and settlement of Medicare cost reports.
++ Establishing accurate interim payments.
Medical Review
++ Increasing the effectiveness of medical review activities.
++ Exercising accurate and defensible decision-making on medical
reviews.
++ Collaborating with other internal components and external
entities to ensure the effectiveness of medical review activities.
Medicare Secondary Payer
++ Accurately following MSP claim development and edit procedures.
++ Auditing hospital files and claims to determine that claims are
being filed to Medicare appropriately.
++ Supporting the Coordination of Benefits Contractor's efforts to
identify responsible payers primary to Medicare.
++ Supporting the MSP Recovery functions for provider, physician or
other supplier debts and duplicate provider, physician or other
supplier payments.
++ Accurately reporting MSP savings.
Overpayments
++ Collecting and referring Medicare debts in a timely manner.
++ Accurately reporting and collecting overpayments.
++ Adhering to our instructions for management of Medicare Trust
Fund debts.
Provider Enrollment
++ Complying with assignment of staff to the provider enrollment
function and training the staff in procedures and verification
techniques.
[[Page 36526]]
++ Complying with the operational standards relevant to the process
for enrolling providers.
D. Fiscal Responsibility Criterion
We may review the FI's efforts to establish and maintain
appropriate financial and budgetary internal controls over benefit
payments and administrative costs. Proper internal controls must be in
place to ensure that contractors comply with their agreements with us.
Additional functions that may be reviewed under the fiscal
responsibility criterion include, but are not limited to, the
following:
Adherence to approved program management and MIP budgets.
Compliance with the BPRs.
Compliance with financial reporting requirements.
Control of administrative cost and benefit payments.
E. Administrative Activities Criterion
We may measure an FI's administrative ability to manage the
Medicare program. We may evaluate the efficiency and effectiveness of
its operations, its system of internal controls, and its compliance
with our directives and initiatives.
We may measure an FI's efficiency and effectiveness in managing its
operations. Proper systems security (general and application controls),
ADP maintenance, and disaster recovery plans must be in place. A FI
must also test system changes to ensure the accurate implementation of
our instructions.
Our evaluation of FI under the administrative activities criterion
may include, but is not limited to, reviews of the following:
Systems security.
ADP maintenance (configuration management, testing, change
management, and security).
Implementation of the Electronic Data Interchange (EDI)
standards adopted for use under HIPAA.
Disaster recovery plan and systems contingency plan.
Data and reporting requirements implementation.
Internal controls establishment and use, including the
degree to which the contractor cooperates with the Secretary in
complying with the FMFIA.
Implementation of our general instructions.
V. Criteria and Standards for Regional Home Health Intermediaries
(RHHIs)
The following three standards are mandated for the RHHI criterion:
Standard 1. Not less than 95.0 percent of clean electronically
submitted nonperiodic interim payment home health and hospice claims
are paid within statutorily specified timeframes. Clean claims are
defined as claims that do not require Medicare FIs to investigate or
develop them outside of their Medicare operations on a prepayment
basis. Specifically, the statute specifies that clean non-periodic
interim payment electronic claims be paid no earlier than the 14th day
after the date of receipt, and that interest is payable for any clean
claims if payment is not issued by the 31st day after the date of
receipt.
Standard 2. Redetermination letters prepared in response to
beneficiary initiated appeal requests are written in a manner
calculated to be understood by the beneficiary. Letters must contain
the required elements as specified in Sec. 405.956.
Standard 3. All redeterminations must be concluded and mailed
within 60 days of receipt of the request, unless the party submits
documentation after the request, in which case the decision-making
timeframe is extended for up to 14 calendar days for each submission.
We may use this criterion to review an RHHI's performance for
handling the HHA and hospice workload. This includes processing HHA and
hospice claims timely and accurately, properly paying and settling HHA
cost reports, and accurately processing redeterminations of initial
determinations from beneficiaries, HHAs, and hospices.
VI. Criteria and Standards for Carriers
A. Claims Processing Criterion
The claims processing criterion contains the following four
mandated standards:
Standard 1. Not less than 95.0 percent of clean electronically
submitted claims are processed within statutorily specified timeframes.
Clean claims are defined as claims that do not require Medicare
carriers to investigate or develop outside of their Medicare operations
on a prepayment basis. Specifically, the Act specifies that clean non-
periodic interim payment electronic claims be paid no earlier than the
14th day after the date of receipt, and that interest is payable for
any clean claims if payment is not issued by the 31st day after the
date of receipt.
Standard 2. Ninety-eight percent of MSNs are properly generated.
Our expectation is that MSN messages are accurately reflecting the
services provided.
Standard 3. Redetermination letters prepared in response to
beneficiary initiated appeal requests are written in a manner
calculated to be understood by the beneficiary. Letters must contain
the required elements as specified in Sec. 405.956.
Standard 4. All redeterminations must be concluded and mailed
within 60 days of receipt of the request, unless the party submits
documentation after the request, in which case the decision-making
timeframe is extended for up to 14 calendar days for each submission.
Additional functions that may be evaluated under this criterion
include, but are not limited to, the following:
Accuracy of claims processing.
Remittance advice transactions.
Establishment and maintenance of relationship with Common
Working File (CWF) Host.
Accuracy of redetermination decisions.
QIC case file requirements.
Timely and accurate effectuation of appeal decisions.
Accuracy and timeliness of processing appeals and clerical
error reopenings as set forth in part 405, subpart I (Sec. 405.900 et
seq.).
B. Customer Service Criterion
Contractors must meet our performance expectations that providers
are served by prompt and accurate administration of the program in
accordance with all applicable laws, regulations, and our general
instructions.
Functions that may be evaluated under this criterion include, but
are not limited to, the following:
Maintaining a properly programmed interactive voice
response system to assist with inquiries.
Performing quality call monitoring.
Training customer service representatives.
Entering valid call center performance data in the
customer service assessment and management system or its successor the
provider inquiry evaluation system.
Providing timely and accurate written replies to providers
that address the concerns raised and that are written with an
appropriate customer-friendly tone and clarity.
Ensuring written correspondence is evaluated for quality.
Conducting provider outreach and education, activities.
Effectively maintaining an Internet Web site dedicated to
furnishing providers timely, accurate, and useful Medicare program
information.
C. Payment Safeguards Criterion
Carriers may be evaluated on any MIP activities if performed under
their contracts. In addition, other carrier
[[Page 36527]]
functions and activities that may be reviewed under this criterion
include, but are not limited to the following:
Medical Review
++ Increasing the effectiveness of medical review activities.
++ Exercising accurate and defensible decision-making on medical
reviews.
++ Collaborating with other internal components and external
entities to ensure the effectiveness of medical review activities.
Medicare Secondary Payer
++ Accurately following MSP claim development/edit procedures.
++ Supporting the Coordination of Benefits Contractor's efforts to
identify responsible payers primary to Medicare.
++ Supporting the Medicare Secondary Payer Recovery functions for
provider, physician or other supplier debts and duplicate provider,
physician or other supplier payments.
++ Accurately reporting MSP savings.
Overpayments
++ Collecting and referring Medicare debts in a timely manner.
++ Accurately reporting and collecting overpayments.
++ Compliance with our instructions for management of Medicare
Trust Fund debts.
Provider Enrollment
++ Complying with assignment of staff to the provider enrollment
function and training staff in procedures and verification techniques.
++ Complying with the operational standards relevant to the process
for enrolling suppliers.
D. Fiscal Responsibility Criterion
We may review the carrier's efforts to establish and maintain
appropriate financial and budgetary internal controls over benefit
payments and administrative costs. Proper internal controls must be in
place to ensure that contractors comply with their contracts.
Additional functions that may be reviewed under the Fiscal
Responsibility criterion include, but are not limited to, the
following:
Adherence to approved program management and MIP budgets.
Compliance with the BPRs.
Compliance with financial reporting requirements.
Control of administrative cost and benefit payments.
E. Administrative Activities Criterion
We may measure a carrier's administrative ability to manage the
Medicare program. We may evaluate the efficiency and effectiveness of
its operations, its system of internal controls, and its compliance
with our directives and initiatives.
We may measure a carrier's efficiency and effectiveness in managing
its operations. Proper systems security (general and application
controls), ADP maintenance, and disaster recovery plans must be in
place. Also, a carrier must test system changes to ensure accurate
implementation of our instructions.
Our evaluation of a carrier under this criterion may include, but
is not limited to, reviews of the following:
Systems security.
ADP maintenance (configuration management, testing, change
management, and security).
Disaster recovery plan/systems contingency plan.
Data and reporting requirements implementation.
Internal controls establishment and use, including the
degree to which the contractor cooperates with the Secretary in
complying with the FMFIA.
Implementation of the Electronic Data Interchange (EDI)
standards adopted for use under the HIPAA.
Implementation of our general instructions.
VII. Action Based on Performance Evaluations
We evaluate a contractor's performance against applicable program
requirements for each criterion. Each contractor must certify that all
information submitted to us relating to the contract management
process, including, without limitation, all files, records, documents
and data, whether in written, electronic, or other form, is accurate
and complete to the best of the contractor's knowledge and belief. A
contractor is required to certify that its files, records, documents,
and data are not manipulated or falsified in an effort to receive a
more favorable performance evaluation. A contractor must further
certify that, to the best of its knowledge and belief, the contractor
has submitted, without withholding any relevant information, all
information required to be submitted for the contract management
process under the authority of applicable law(s), regulation(s),
contract(s), or our manual provision(s). Any contractor that makes a
false, fictitious or fraudulent certification may be subject to
criminal or civil prosecution, as well as appropriate administrative
action. This administrative action may include debarment or suspension
of the contractor, as well as the termination or nonrenewal of a
contract.
If a contractor meets the level of performance required by
operational instructions, it meets the requirements of that criterion.
When we determine a contractor is not meeting performance requirements,
we will use the terms ``major nonconformance'' or ``minor
nonconformance'' to classify our findings. A major nonconformance is a
nonconformance that is likely to result in failure of the supplies or
services, or to materially reduce the usability of the supplies or
services for their intended purpose. A minor nonconformance is a
nonconformance that is not likely to materially reduce the usability of
the supplies or services for their intended purpose, or is a departure
from established standards having little bearing on the effective use
or operation of the supplies or services. The contractor will be
required to develop and implement PIPs for findings determined to be
either a major or minor nonconformance. The contractor will be
monitored to ensure effective and efficient compliance with the PIP,
and to ensure improved performance when requirements are not met.
The results of performance evaluations and assessments under all
criteria applying to FIs, carriers, and RHHIs will be used for contract
management activities and will be published in the contractor's annual
Report of Contractor Performance (RCP). We may initiate administrative
actions as a result of the evaluation of contractor performance based
on these performance criteria. Under sections 1816 and 1842 of the Act,
we consider the results of the evaluation in our determinations when--
Entering into, renewing, or terminating agreements or
contracts with contractors; and
Deciding other contract actions for intermediaries and
carriers (such as deletion of an automatic renewal clause). These
decisions are made on a case-by-case basis and depend primarily on the
nature and degree of performance. More specifically, these decisions
depend on the following:
++ Relative overall performance compared to other contractors.
++ Number of criteria in which nonconformance occurs.
++ Extent of each nonconformance.
++ Relative significance of the requirement for which
nonconformance occurs within the overall evaluation program.
++ Efforts to improve program quality, service, and efficiency.
++ Deciding the assignment or reassignment of providers and
designation of regional or national intermediaries for classes of
providers.
We make individual contract action decisions after considering
these factors in terms of their relative significance
[[Page 36528]]
and impact on the effective and efficient administration of the
Medicare program.
In addition, if the cost incurred by the FI, RHHI, or carrier to
meet its contractual requirements exceeds the amount that we find to be
reasonable and adequate to meet the cost that must be incurred by an
efficiently and economically operated FIs or carrier, these high costs
may also be grounds for adverse action.
VIII. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently the Office of Management and
Budget need not review it under the authority of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
IX. Response to Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are
unable 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 notice, and, if we proceed with a subsequent document,
we will respond to the comments in the section entitled as ``Analysis
of and Response to Public Comments Received on FY 2009 Criteria and
Standards'' of that document.
Authority: Sections 1816(f), 1834(a)(12), and 1842(b) of the
Social Security Act (42 U.S.C. 1395h(f), 1395m(a)(12), and
1395u(b)).
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance, and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: May 16, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. E8-14641 Filed 6-26-08; 8:45 am]
BILLING CODE 4120-01-P