[Federal Register Volume 75, Number 86 (Wednesday, May 5, 2010)]
[Rules and Regulations]
[Pages 24437-24449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-10505]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 424 and 431

[CMS-6010-IFC]
RIN 0938-AQ01


Medicare and Medicaid Programs; Changes in Provider and Supplier 
Enrollment, Ordering and Referring, and Documentation Requirements; and 
Changes in Provider Agreements

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

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule with comment period implements several 
provisions set forth in the Patient Protection and Affordable Care Act 
(Affordable Care Act). It implements the provision which requires all 
providers of medical or other items or services and suppliers that 
qualify for a National Provider Identifier (NPI) to include their NPI 
on all applications to enroll in the Medicare and Medicaid programs and 
on all claims for payment submitted under the Medicare and Medicaid 
programs. This interim final rule with comment period also requires 
physicians and eligible professionals to order and refer covered items 
and services for Medicare beneficiaries to be enrolled in Medicare. In 
addition, it adds requirements for providers, physicians, and other 
suppliers participating in the Medicare program to provide 
documentation on referrals to programs at high risk of waste and abuse, 
to include durable medical equipment, prosthetics, orthotics and 
supplies (DMEPOS), home health services, and other items or services 
specified by the Secretary.

DATES: Effective date: These regulations are effective on July 6, 2010. 
Comment date: To be assured consideration, comments must be received at 
one of the addresses provided below, no later than 5 p.m. on July 6, 
2010.

ADDRESSES: In commenting, please refer to file code CMS-6010-IFC. 
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).
     Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the instructions for 
submitting comments on the home page.
     By regular mail. You may mail written comments to the 
following address only: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-6010-IFC, 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.
     By express or overnight mail. You may send written 
comments to the following address only: Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Attention: CMS-6010-
IFC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-
1850.
     By hand or courier. If you prefer, you may deliver (by 
hand or courier) your written comments before the close of the comment 
period to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-7195 in advance to schedule your 
arrival with one of our staff members.
    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: Patricia Peyton, (410) 786-1812 for 
Medicare issues. Rick Friedman, (410) 786-4451 for Medicaid issues.

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://regulations.gov. Follow the search instructions on 
that Web site to view public comments.
    Comments received timely will be also available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday

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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

    The Medicare program, title XVIII of the Social Security Act (the 
Act), is the primary payer of health care for 42 million enrolled 
beneficiaries. Under section 1802 of the Act, a beneficiary may obtain 
health services from an individual or an organization qualified to 
participate in the Medicare program. Qualifications to participate are 
specified in statute and in regulations (see, for example, sections 
1814, 1815, 1819, 1833, 1834, 1842, 1861, 1866, and 1891 of the Act); 
and 42 CFR chapter IV, subchapter E, which concerns standards and 
certification requirements).
    Providers and suppliers furnishing services must comply with the 
Medicare requirements stipulated in the Act and in our regulations. 
These requirements are meant to ensure compliance with applicable 
statutes, as well as to promote the furnishing of high quality care. As 
Medicare program expenditures have grown, we have increased our efforts 
to ensure that only qualified individuals and organizations are allowed 
to enroll or maintain their Medicare billing privileges.
    Medicaid is a joint Federal and State health care program for 
eligible low-income individuals. States have considerable flexibility 
in how they administer their Medicaid programs within a broad Federal 
framework and programs vary from State to State.
    The Patient Protection and Affordable Care Act (the Affordable Care 
Act) (Pub. L. 111-148) makes a number of changes to the Medicaid 
program, strengthening tools for quality and integrity, adding new 
benefits, and expanding coverage. To maintain program integrity and 
assure quality, it is consistent with these changes to assure that only 
qualified providers participate in the program and that these providers 
bill accurately for their services. Although our regulations provide 
States with considerable flexibility, the Federal framework includes 
some key requirements to ensure program integrity and quality care. For 
example, Medicaid providers must generally meet all State licensing and 
scope-of-practice requirements, and may be subject to additional 
Federal and State quality standards. Additionally, our regulations 
require timely filing of claims by providers.
    Including the NPI on claims and enrollment applications is an 
important step in controlling fraud and abuse, ensuring a unique 
identifier so that States can assure that only qualified Medicaid 
providers have provider agreements and maintain their Medicaid billing 
privileges. This practice implements the requirement in section 
1128J(e) of the Act, as added by section 6402(a) of the Affordable Care 
Act and will also help in implementing other important protections 
under the Affordable Care Act that ensure quality health care services 
for program beneficiaries.

A. Statutory Authority

    The following is an overview of the sections that grant this 
authority.
     Sections 1102 and 1871 of the Act provide general 
authority for the Secretary of Health and Human Services (the 
Secretary) to prescribe regulations for the efficient administration of 
the Medicare program.
     Section 1128J(e) of the Act, added by section 6402(a) of 
the Affordable Care Act, requires that the Secretary require by 
regulation that all providers of medical or other items or services and 
suppliers under titles XVIII and XIX that are eligible for a national 
provider identifier (NPI) include the NPI on all applications to enroll 
in such programs and on all claims for payment under such programs.
     Sections 1814(a), 1815(a), and 1833(e) of the Act require 
the submission of information necessary to determine the amounts due a 
provider or other person.
     Section 1834(j)(1)(A) of the Act states that no payment 
may be made for items furnished by a supplier of medical equipment and 
supplies unless such supplier obtains (and renews at such intervals as 
the Secretary may require) a supplier number. In order to obtain a 
supplier number, a supplier must comply with certain supplier standards 
as identified by the Secretary.
     Section 1842(r) of the Act requires the Centers for 
Medicare and Medicaid Services (CMS) to establish a system for 
furnishing a unique identifier for each physician who furnishes 
services for which payment may be made.
     Section 1862(e)(1) of the Act states that no payment may 
be made when an item or service was at the medical direction of an 
individual or entity that is excluded in accordance with sections 1128, 
1128A, 1156, or 1842(j)(2) of the Act.
     Section 4313 of the Balanced Budget Act of 1997 (BBA) 
(Pub. L. 105-33) amended sections 1124(a)(1) and 1124A of the Act to 
require disclosure of both the Employer Identification Number (EIN) and 
Social Security Number (SSN) of each provider or supplier, each person 
with ownership or control interest in the provider or supplier, any 
subcontractor in which the provider or supplier directly or indirectly 
has a 5 percent or more ownership interest, and any managing employees 
including Directors and Board Members of corporations and non-profit 
organizations and charities. The ``Report to Congress on Steps Taken to 
Assure Confidentiality of Social Security Account Numbers as Required 
by the Balanced Budget Act'' was signed by the Secretary and sent to 
the Congress on January 26, 1999. This report outlines the provisions 
of a mandatory collection of SSNs and EINs effective on or after April 
26, 1999.
     Section 4312(a) of the Balanced Budget Act of 1997 amended 
section 1834(a)(16) of the Act by requiring certain Medicare suppliers 
of durable medical equipment, prosthetics, orthotics and supplies 
(DMEPOS) to furnish CMS with a surety bond. Section 4312(b) requires 
that a surety bond be in an amount of not less than $50,000.
     Section 31001(i)(1) of the Debt Collection Improvement Act 
of 1996 (DCIA) (Pub. L. 104-134) amended section 7701 of 31 U.S.C. by 
adding paragraph (c) to require that any person or entity doing 
business with the Federal Government must provide their Taxpayer 
Identification Number (TIN).
     Section 936(j)(1)(A) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173) 
amended the Act to require the Secretary to establish a process for the 
enrollment of providers of services and suppliers.
    We are authorized to collect information on the Medicare enrollment 
application (that is, the CMS-855, (Office of Management and Budget 
(OMB) approval number 0938-0685)) to ensure that correct payments are 
made to providers and suppliers under the Medicare program as 
established by title XVIII of the Act.
     Section 1902(a)(27) of the Act provides general authority 
for the Secretary to require provider agreements under the Medicaid 
State Plans with every person or institution providing services under 
the State Plan. Under these agreements, the Secretary may require 
information regarding any payments claimed by such person or 
institution for providing services under the State plan.

B. Historical Enrollment Initiatives

    Historically, Medicare has permitted the enrollment of providers 
and suppliers whose qualifications for meeting all of our enrollment 
standards were sometimes questionable. This has raised concern that 
providers and

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suppliers in our program may be underqualified or even fraudulent and 
has led us to increase our efforts to establish more stringent controls 
on provider and supplier entry into the Medicare program. The following 
is a summary of the regulations that we have published over the past 10 
years to ensure that only qualified providers and suppliers are 
participating in the Medicare program.
    In the October 11, 2000 Federal Register, we published the 
Additional Supplier Standards final rule with comment period where we 
established additional standards with which a DMEPOS supplier must 
comply in order to receive and maintain Medicare billing privileges. 
This final rule with comment period outlined the supplier requirements 
to ensure that suppliers of DMEPOS are qualified to furnish DMEPOS and 
to help safeguard the Medicare program and its beneficiaries from 
fraudulent or abusive billing practices.
    In the April 21, 2006, Federal Register, we published the 
Requirements for Providers and Suppliers to Establish and Maintain 
Medicare Enrollment final rule that implemented section 1866(j)(1)(A) 
of the Act. In this final rule, we required that all providers and 
suppliers (other than those who have elected to ``opt-out'' of the 
Medicare program) complete an enrollment application and submit 
specific information to CMS in order to obtain Medicare billing 
privileges. This final rule also required that all providers and 
suppliers must periodically update and certify the accuracy of their 
enrollment information to receive and maintain billing privileges in 
the Medicare program. These regulatory provisions include requirements 
to protect beneficiaries and the Medicare Trust Fund by preventing 
unqualified, fraudulent, or excluded providers and suppliers from 
providing items or services to Medicare beneficiaries or from billing 
the Medicare program or its beneficiaries.
    In the December 1, 2006, Federal Register (71 FR 69624), we 
published a final rule titled, ``Medicare Program; Revisions to Payment 
Policies, Five-Year Review of Work Relative Value Units, Changes to the 
Practice Expense Methodology Under the Physician Fee Schedule, and 
Other Changes to Payment Under Part B; Revisions to the Payment 
Policies of Ambulance Services Under the Fee Schedule for Ambulance 
Services; and Ambulance Inflation Factor Update for CY 2007.'' In part, 
this final rule with comment established performance standards for 
independent diagnostic testing facilities.
    In the April 10, 2007, Federal Register (72 FR 17992), we published 
a final rule titled, ``Competitive Acquisition for Certain Durable 
Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS).'' 
This final rule implemented section 302 of the MMA requiring that 
DMEPOS suppliers meet certain quality standards and established DME 
competitive bidding.
    In the November 27, 2007 Federal Register (72 FR 66222), we 
published a final rule titled, ``Medicare Program; Revisions to Payment 
Policies Under the Physician Fee Schedule, and Other Part B Payment 
Policies for CY 2008; Revisions to the Payment Policies of Ambulance 
Services Under the Ambulance Fee Schedule for CY 2008; and the 
Amendment of the E-Prescribing Exemption for Computer Generated 
Facsimile Transmissions; Final Rule.'' In this final rule, we clarified 
our interpretation of several of the existing independent diagnostic 
testing facility (IDTF) performance standards found at Sec.  410.33(b) 
and Sec.  410.33(g), proposed a new IDTF performance standard at Sec.  
410.33(g)(15), and a new proposed IDTF provision at Sec.  410.33(i).
    In the June 27, 2008, Federal Register (73 FR 36448), we published 
a final rule titled, ``Appeals of CMS or CMS Contractor Determinations 
When a Provider or Supplier Fails to Meet the Requirements for Medicare 
Billing Privileges.'' This final rule implemented section 936 of the 
MMA and extended appeal rights to all providers and suppliers, 
including DMEPOS suppliers, whose enrollment applications for Medicare 
billing privileges are denied or revoked by CMS or a Medicare 
contractor (that is, carrier, fiscal intermediary, National Supplier 
Clearinghouse Medicare Administrative Contractor (MAC), or Part A/Part 
B MAC). This final rule also allowed providers and suppliers to seek 
judicial review after they have exhausted the administrative appeals 
process. In addition, this final rule also implemented provider 
enrollment provisions that apply to all provider and supplier types.
    In the November 19, 2008, Federal Register (73 FR 69726), we 
published a final rule with comment titled, ``Payment Policies Under 
the Physician Fee Schedule and Other Revisions to Part B for CY 2009; 
E-Prescribing Exemption for Computer Generated Facsimile Transmissions; 
and Payment for Certain Durable Medical Equipment, Prosthetics, 
Orthotics, and Supplies (DMEPOS).'' In part, this final rule with 
comment period established a number of provider enrollment provisions 
affecting physicians, non-physician practitioners, and other providers 
and suppliers, such as the re-enrollment bar of 1 to 3 years on revoked 
providers and suppliers, as well as the limitation on retroactive 
billing by providers and suppliers.
    In the January 2, 2009, Federal Register (74 FR 166), we published 
a final rule titled, ``Medicare Program; Surety Bond Requirement for 
Suppliers of Durable Medical Equipment, Prosthetics, Orthotics, and 
Supplies (DMEPOS); Final Rule.'' Consistent with section 4312(a) of the 
BBA, this final rule implemented section 1834(a)(16) of the Act by 
requiring certain Medicare suppliers of DMEPOS to furnish CMS with a 
surety bond of no less than $50,000.
    Historically, the States in operating the Medicaid program have 
permitted the enrollment of providers and suppliers who meet the State 
requirements for Medicaid enrollment. Due to the increased risk of 
fraud and abuse in public health care programs of all types, the NPI 
requirement will strengthen cross-program integrity efforts.

II. Provisions of the Interim Final Rule With Comment Period

A. Inclusion of the National Provider Identifier (NPI) on all Medicare 
and Medicaid Enrollment Applications and Claims

1. Background
    Section 1128J(e) of the Act builds on the past Congressional 
mandate to require the adoption of a unique identifier for health care 
providers and codifies the NPI requirements that Medicare is already 
requiring for its fee-for-service (FFS) providers and suppliers.
    ``Health care provider'' is defined in the Health Insurance 
Portability and Accountability Act (HIPAA) definitions found at 45 CFR 
160.103. With the exception of organ procurement organizations and Part 
B CAP drug vendors, the term ``health care provider'' includes all of 
the providers and suppliers who are eligible to enroll in the Medicare 
program and most who are eligible to enroll in the Medicaid program. In 
this discussion, we use the term ``health care provider'' when 
referring to HIPAA and HIPAA regulations, and we use ``providers and 
suppliers'' when referring to those health care providers who are 
eligible to enroll in the Medicare program.
    In the January 23, 2004, NPI final rule (69 FR 3434), we adopted 
the NPI as the standard unique health identifier for health care 
providers. This fulfilled the

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requirement of section 1173(b) of the Act, which was added by HIPAA. 
The final rule stated that HIPAA does not prohibit health plans from 
requiring their enrolled health care providers to obtain NPIs. 
Accordingly, the Medicare program required enrolling fee-for-service 
(FFS) providers and suppliers (and their subparts, in accordance with 
the NPI Final Rule) to report their NPIs on their Medicare enrollment 
applications beginning in May 2006. When FFS providers and suppliers 
who had enrolled prior to May 2006 submitted enrollment applications to 
update their enrollment information, they were required to report their 
NPIs on those enrollment applications. These requirements ensured that 
the Medicare provider and supplier enrollment records included the NPIs 
and, in effect, already implemented one of the provisions of section 
1128J(e) of the Act.
    In accordance with the NPI final rule and the subsequent guidance 
from the Secretary, beginning May 23, 2008, Medicare required its 
enrolled FFS providers and suppliers to use NPIs in their electronic 
claims to identify not only themselves as the billing providers, but 
any other providers or suppliers who, according to the Implementation 
Guides for the adopted standard claims transactions, were also required 
to be identified in those claims. These other health care providers 
include rendering providers, supervising providers, and ordering and 
referring providers. The regulations that adopted the HIPAA standard 
transactions are found at (65 FR 50312, 68 FR 8381, and 74 FR 3296). In 
addition, at that same time, Medicare required its enrolled FFS 
providers and suppliers to make this same use of NPIs in their paper 
claims.
    The Provider Enrollment, Chain, and Ownership System (PECOS), 
implemented in 2003, is the national repository of enrolled Medicare 
FFS providers and suppliers (except DMEPOS suppliers, who will be added 
to PECOS later in 2010). PECOS contains the information furnished by 
providers and suppliers in their Medicare FFS enrollment applications 
and additional information added as required to keep the information 
current and to protect the integrity of the Medicare program (for 
example, fact and date of death, Office of Inspector General 
exclusions). In 2007, PECOS began sending the NPIs in the daily 
provider and supplier enrollment data extract going to the Part A and 
Part B FFS claims systems. In 2009, Medicare added the NPIs to the 
enrollment records of the DMEPOS suppliers, which are currently housed 
in the DMEPOS supplier enrollment repository at the National Supplier 
Clearinghouse MAC. After the DMEPOS supplier enrollment records are 
added to PECOS, PECOS will send a daily DMEPOS supplier enrollment data 
extract, which will include the NPIs, to the DMEPOS FFS claims system. 
Medicare FFS claims systems link the NPIs that are reported in claims 
with the appropriate enrollment records in order to properly price and 
pay the claims.
    In summary, Medicare has been requiring its providers and suppliers 
to report their NPIs on their Medicare enrollment applications; its 
enrolled providers and suppliers to report their NPIs, and the NPIs of 
other providers and suppliers (as required and as explained previously) 
in their electronic and paper Medicare claims; and suppliers who order 
or refer covered items or services for Medicare beneficiaries to have 
NPIs so that they can be identified, as required, in the claims for the 
covered items and services that they have ordered and referred. 
Similarly, consistent with NPI final rule and subsequent guidance from 
the Secretary, beginning May 23, 2008, Medicaid providers have also 
been required to report their NPIs on their Medicaid claims. This IFC 
now requires their NPIs be submitted for Medicaid provider agreements.
2. Provisions of the Affordable Care Act
    Section 6402(a) of the Affordable Care Act added a new section 
1128J of the Act, entitled ``Medicare and Medicaid Program Integrity 
Provisions.'' Section 1128J(e), as added by section 6402(a) of the 
Affordable Care Act, requires the Secretary to promulgate a regulation 
that requires, not later than January 1, 2011, all providers of medical 
or other items or services and suppliers under the programs under 
titles XVIII and XIX that qualify for a NPI to include their NPI on all 
applications to enroll in such programs and on all claims for payment 
submitted under such programs. In Medicaid, there is no Federally 
required process for provider enrollment except that all Medicaid 
providers are required to enter into a provider agreement with the 
State as a condition of participating in the program under section 
1902(a)(27) of the Act. Therefore, in the Medicaid context we are 
including the submission of an NPI to the State agency as a requirement 
under the provider agreement. The NPI requirements in this IFC are thus 
applicable to the reporting of NPIs--(1) Pursuant to Medicaid provider 
agreements; (2) on Medicare provider and supplier enrollment 
applications; and (3) on Medicare and Medicaid claims.
3. Requirements Established by This IFC
    For the Medicare program, we are establishing, at Sec.  424.506(b), 
requirements that a provider or supplier who is eligible for an NPI 
must report the NPI on the Medicare enrollment application; and, if the 
provider or supplier enrolled in Medicare prior to obtaining an NPI and 
the NPI is not in the provider's or supplier's enrollment record, the 
provider or supplier must report the NPI to Medicare in an enrollment 
application so that the NPI will be added to the provider's or 
supplier's enrollment record in PECOS. We are also establishing, at 
Sec.  424.506(b)(1), a requirement that a provider or supplier who is 
enrolled in fee-for-service (FFS) Medicare report its NPI, as well as 
the NPI of any other provider or supplier who is required to be 
identified in those claims, on any electronic or paper claims that the 
provider or supplier submits to Medicare. We are also establishing, at 
Sec.  424.506(b)(2), that a claim submitted by a Medicare beneficiary 
contain the legal name and, if the beneficiary knows the NPI, the NPI 
of any provider or supplier who is required to be identified in that 
claim.
    If a Medicare beneficiary does not know the NPI of a provider or 
supplier who is required to be identified in the claim that he or she 
is submitting, the beneficiary may submit the claim without the NPI(s) 
as long as the claim contains the legal name(s) of the health care 
provider(s). If a beneficiary so desires, he or she can obtain a 
provider's or a supplier's NPI by requesting it directly from the 
provider or supplier or from a member of his or her office staff, or by 
looking it up in the NPI Registry at https://nppes.cms.hhs.gov/NPPES/NPIRegistryHome.do.
    Furthermore, we are establishing, at Sec.  424.506(c)(3), that a 
Medicare claim from a provider or a supplier will be rejected if it 
does not contain the required NPI(s).
    For the Medicaid program, we are establishing, at Sec.  
431.107(b)(5), a requirement that the agreement between a State agency 
and each provider furnishing services under the State plan include a 
requirement that any Medicaid provider eligible for an NPI furnish its 
NPI to the State agency under that agreement and on all Medicaid 
claims.

B. Ordering and Referring Covered Items and Services for Medicare 
Beneficiaries

1. Background
    Section 1833(q) of the Act requires that claims for items or 
services for

[[Page 24441]]

which payment may be made under Part B and for which there was a 
referral by a referring physician shall include the name and the unique 
identification number of the referring physician. Physicians are 
doctors of medicine and osteopathy, optometry, podiatry, dental 
medicine, dental surgery, and chiropractic. Referring physicians are 
those who order covered items or services for Medicare beneficiaries 
from Medicare providers and suppliers as well as those who refer 
Medicare beneficiaries to Medicare providers and suppliers for covered 
services. We consider those who ``refer'' to also be authorized to 
``order.'' In this IFC, we refer to physicians who both order and refer 
as ``ordering and referring suppliers'' and the act of ordering items 
or services for Medicare beneficiaries or referring Medicare 
beneficiaries to other providers or suppliers for services as 
``ordering and referring.''
    The Implementation Guides for the adopted HIPAA standard 
transactions do not use the word ``supplier'' in their descriptions of 
the health care providers who must be identified in those transactions. 
For example, and as stated earlier in this preamble, the Implementation 
Guides use the terms ``billing provider, ordering provider, referring 
provider'' and others. Because this section of this IFC relates only to 
the Medicare program, and because the statute and regulations use the 
term ``supplier'' (not ``provider'') when referring to physicians and 
non-physician practitioners, we are using the term ``ordering and 
referring suppliers'' in this IFC. This term corresponds to ``ordering 
provider'' and ``referring provider'' described in the Implementation 
Guides.
    The Medicare providers and suppliers who furnish the covered 
ordered or referred items and services send claims to Medicare for 
reimbursement for those covered items and services.
    With the establishment and implementation of surrogate Unique 
Physician Identification Numbers (UPINs) in 1992, suppliers could be 
identified, but not uniquely identified, in claims as ordering and 
referring suppliers. These suppliers included physicians, physician 
assistants, clinical nurse specialists, nurse practitioners, clinical 
psychologists, certified nurse midwives, and clinical social workers.
    Sections 6405(a) and (c) of the Affordable Care Act indicate that 
orders and referrals for DMEPOS and for other categories of items and 
services may be made by a physician or an ``eligible professional under 
section 1848(k)(3)(B).'' Section 1848(k)(3)(B) of the Act discusses 
covered professional services for which payment may be made under, or 
is based on, the fee schedule, and which are furnished by: (1) A 
physician; (2) a practitioner described in section 1842(b)(18)(C) of 
Act; (3) a physical or occupational therapist or a qualified speech-
language pathologist; and (4) a qualified audiologist. Section 
1842(b)(18)(C) of the Act discusses billing and payment for Medicare 
services furnished by physician assistants, nurse practitioners, 
clinical nurse specialists, certified registered nurse anesthetists, 
certified nurse-midwives, clinical social workers, clinical 
psychologists, and registered dietitians or nutrition professionals. 
Neither section 1848(k)(3)(B) of the Act nor section 1842(b)(18)(C) of 
the Act discuss the issue of ordering or referring covered items or 
services for Medicare beneficiaries. Although section 6405(a) of the 
Affordable Care Act indicates that DMEPOS may be ordered by enrolled 
physicians or enrolled eligible professionals under section 
1848(k)(3)(B) of the Act, our policy has not been to permit all of the 
eligible professionals listed in that section or in section 
1842(b)(18)(C) of the Act to order and refer. Section 6405(c) of the 
Affordable Care Act gives the Secretary the discretion to determine the 
professions that can order and refer for all covered items and services 
under title XVIII that are not mentioned in sections 6405(a) and (b) of 
the Affordable Care Act (DMEPOS and home health, respectively). In 
addition, the claims processing edits that we established in 2009 
require that the ordering and referring suppliers for DMEPOS and for 
laboratory, imaging, and specialist services be those physicians and 
professionals who were eligible for UPINs: Physicians, physician 
assistants, clinical nurse specialists, nurse practitioners, clinical 
psychologists, certified nurse midwives, and clinical social workers. 
In this IFC, the term eligible professional means any of the 
professionals listed in section 1848(k)(3)(B) of the Act. In this 
preamble, we distinguish physicians from eligible professionals (even 
though physicians are included in section 1848(k)(3)(B) as eligible 
professionals) because sections 6405(a) and (b) of the Affordable Care 
Act reference physicians separately from eligible professionals. 
Section 6405(c) of the Affordable Care Act gives the Secretary the 
discretion to determine the health professions that can order and refer 
items and services other than DMEPOS and home health.
    In the past, prior to the Medicare implementation of the NPI on May 
23, 2008, physicians and eligible professionals were identified in 
claims as ordering or referring suppliers by their UPINs. Physicians 
and eligible professionals applied for and were assigned UPINs as part 
of the process of enrolling in the Medicare program; therefore, 
physicians and eligible professionals were expected to be identified in 
claims as ordering or referring suppliers by their UPINs.
    Surrogate UPINs were established to be used in claims to 
temporarily identify certain ordering and referring suppliers who had 
not yet completed the Medicare enrollment process and, therefore, had 
not yet been assigned UPINs. Surrogate UPINs were used to collectively 
identify the following: (1) Physicians who were serving in the military 
or with the Department of Veterans Affairs or the Public Health Service 
(including the Indian Health Service); (2) interns, residents, and 
fellows; and (3) retired physicians. There was also a surrogate UPIN 
(OTH000) that could be used for any other supplier who ordered or 
referred who could not be identified by any of the other surrogate 
UPINs.
    Over time, providers and suppliers began using surrogate UPINs in 
their claims to identify ordering and referring suppliers who had been 
assigned their own UPINs, as well as individuals who had never been 
assigned UPINs. In addition, they also used UPINs that had been 
assigned to physicians other than the physicians who they were 
identifying in their claims as the ordering or referring suppliers. We 
believe that many providers and suppliers became aware that the use of 
any UPIN would get their claims processed and paid. They learned, over 
time, that Medicare claims edits on the ordering and referring 
suppliers were based on the format of the UPIN, and all UPINs had the 
same format. The claims process did not verify the UPINs of ordering or 
referring suppliers. These practices negated the intent of the UPIN, 
which was to uniquely identify the ordering or referring supplier.
    Analysis of Medicare claims data prior to 2008 (UPINs were not 
permitted to be used in Medicare claims after May 23, 2008) revealed 
that these practices were widespread and, as a result, we had reason to 
believe that many physicians and eligible professionals were unaware of 
the requirement that their assigned UPINs were intended to uniquely 
identify them as ordering or referring suppliers and, more importantly, 
that they needed to apply for UPINs. As a result, Medicare may have 
paid claims for covered ordered and referred items and services that 
may

[[Page 24442]]

have been ordered or referred by professionals who were not of a 
profession eligible to order and refer; by physicians or eligible 
professionals who were not enrolled in the Medicare program; or by 
physicians or eligible professionals who were not in an approved 
Medicare enrollment status (for example, they were sanctioned, their 
licenses were suspended or revoked, their billing privileges were 
terminated, or they were deceased).
    With the Medicare implementation of the NPI in May 2008, Medicare 
discontinued the assignment of UPINs and no longer allowed UPINs to be 
used in Medicare claims. Medicare required providers and suppliers who 
were sending claims to Medicare for covered ordered and referred items 
and services to use the NPI, rather than the UPIN, to identify the 
ordering and referring suppliers in their claims. Because the NPI Final 
Rule did not discuss the concept of ``surrogate NPIs'' nor did it 
contain a provision for the establishment of ``surrogate NPIs,'' 
surrogate NPIs do not and cannot exist. Because physicians and non-
physician practitioners are eligible for NPIs, only the NPI may be used 
in Medicare claims to identify ordering and referring suppliers.
    We believe that the new requirements discussed below will address 
concerns expressed by the Department of Health and Human Services' 
(DHHS) Office of Inspector General (OIG) report titled, ``Durable 
Medical Equipment Ordered with Surrogate Physician Identification 
Numbers, OEI-03-01-00270, September 2002,'' which found that the use of 
surrogate UPINs on Medicare claims poses a vulnerability to the 
Medicare program. The HHS OIG found a substantial number of 
documentation problems in the supporting evidence submitted by 
suppliers for claims processed with surrogate UPINs. The DHHS OIG 
estimated that, in 1999, Medicare paid $61 million for services ordered 
with a surrogate UPIN that had missing or incomplete supporting 
documentation. Finally, the DHHS OIG stated that the findings in its 
report also revealed misuse of surrogate UPINs on Medicare claims. The 
HHS OIG found that surrogate UPINs were incorrectly used for many 
services since the ordering physician had already been issued a 
permanent UPIN. The HHS OIG believed this to be a significant problem 
given that the use of a surrogate UPIN on medical equipment claims 
allows them to be processed automatically whether the equipment has 
been ordered by a physician or not. The HHS OIG stated that the 
inappropriate use of surrogate UPINs by suppliers goes unchecked, the 
Medicare program becomes vulnerable to fraudulent billings and 
inappropriate payments.
    To ensure the unique identification of ordering and referring 
suppliers and that they were qualified to order and refer, Medicare 
implemented claims edits in 2009 that require the ordering and 
referring suppliers identified in Part B claims for items of DMEPOS and 
services of laboratories, imaging suppliers, and specialists be 
identified by their legal names and their NPIs and that they have 
enrollment records in PECOS. Claims edits are under development to 
ensure that claims for Part A and Part B home health services identify 
the physicians who ordered the home health services by their legal 
names and their NPIs and that those physicians have enrollment records 
in PECOS.
2. Provisions of the Affordable Care Act
    Section 6405(a) amended section 1834(a)(11)(B) of the Act to 
specify, with respect to suppliers of durable medical equipment, that 
payment may be made under that subsection only if the written order for 
the item has been communicated to the DMEPOS supplier by a physician 
who is enrolled under section 1866(j) of the Act or an eligible 
professional under section 1848(k)(3)(B) who is enrolled under section 
1866(j) before delivery of the item. Section 1128J(e) requires that he 
or she be identified by his or her NPI in claims for those services. 
Medicare requires the ordering supplier (the physician or the eligible 
professional) to be identified by legal name and NPI in the claim 
submitted by the supplier of DMEPOS.
    Section 10604 of the Affordable Care Act, amended section 6405(b) 
of the Affordable Care Act as follows: (1) Section 1814(a)(2) of the 
Act to specify, with respect to home health services under Part A, that 
payment may be made to providers of services if they are eligible and 
only if a physician enrolled under section 1866(j) of the Act certifies 
(and recertifies, as required) that the services are or were required 
in accordance with section 1814(a)(1)(C) of the Act; and (2) section 
1835(a)(2) of the Act to specify, with respect to home health services 
under Part B, that payments may be made to providers of services if 
they are eligible and only if a physician enrolled under section 
1866(j) of the Act certifies (and recertifies, as required) that the 
services are or were medically required in accordance with section 
1835(a)(1)(B) of the Act. Section 1128J(e) requires that the physician 
be identified by his or her NPI in claims for those services. Medicare 
requires the ordering supplier (the physician) to be identified by 
legal name and NPI in the claim submitted by the provider of home 
health services.
    In addition, section 6405(c) of the Affordable Care Act gives the 
Secretary the authority to extend the requirements made by subsections 
(a) and (b) to all other categories of items or services under title 
XVIII of the Social Security Act, including covered Part D drugs as 
defined in section 1860D-2(e) of the Act, that are ordered, prescribed, 
or referred by a physician enrolled under section 1866(j) of the Act or 
an eligible professional under section 1848(k)(3)(B) of the Act. 
Section 1128J(e) requires that he or she be identified by his or her 
NPI in claims for those services. Medicare requires the ordering or 
referring supplier (the physician or the eligible professional) to be 
identified by legal name and NPI in the claims submitted by the 
suppliers of laboratory, imaging, and specialist services. These 
amendments are effective on or after July 1, 2010.
3. Requirements of This IFC
    To ensure that ordering suppliers (physicians and eligible 
professionals) are uniquely identified in Medicare claims for covered 
items of DMEPOS as required by section 6405(a) of the Affordable Care 
Act, and to ensure that those DMEPOS items are ordered by qualified 
physicians or eligible professionals, we are requiring at a new Sec.  
424.507(a), the following:
     In Part B claims for covered items of DMEPOS that require 
the identification of the ordering supplier, and with the exception 
noted below, the ordering supplier be a physician or an eligible 
professional with an approved enrollment record in PECOS (see the 
exception below), and be identified in the claim by his or her legal 
name and by his or her own NPI (that is, by the NPI that was assigned 
to him or her by the National Plan and Provider Enumeration System 
[NPPES] as an Entity type 1 [an individual]).
    To ensure that ordering suppliers are uniquely identified in 
Medicare Part A claims for covered Part A or Part B home health 
services as required by section 6405(b), as amended by section 10604 of 
the Affordable Care Act, and to ensure that those home health services 
are ordered by qualified physicians, we are requiring at a new Sec.  
424.507, the following:
     In Part A claims for covered Part A and Part B home health 
items or services that require the identification of the ordering 
supplier, and with the exception noted below, the ordering supplier be 
a physician with an approved enrollment record in PECOS

[[Page 24443]]

(see the exception below), and be identified in the claim by his or her 
legal name and by his or her own NPI (that is, by the NPI that was 
assigned to him or her by the National Plan and Provider Enumeration 
System [NPPES] as an Entity type 1 [an individual]).
    To ensure that ordering or referring suppliers are uniquely 
identified in Part B claims for covered services of laboratories, 
imaging suppliers, and specialists, under the discretion afforded the 
Secretary in section 6405(c), and to ensure that those items or 
services are ordered or referred by qualified physicians or eligible 
professionals, we are requiring at a new Sec.  424.507(b), the 
following:
     In Part B claims for covered services of laboratories, 
imaging suppliers, and specialists that require the identification of 
the ordering or referring supplier, and with the exception noted below, 
the ordering or referring supplier be a physician or an eligible 
professional with an approved enrollment record in PECOS (see the 
exception below), and be identified in the claim by his or her legal 
name and by his or her own NPI (that is, by the NPI that was assigned 
to him or her by the National Plan and Provider Enumeration System 
(NPPES) as an Entity Type 1 (an individual).
    We are requiring at a new Sec.  424.507(c) that Medicare 
contractors will reject claims from providers and suppliers for the 
above-described covered ordered or referred items or services if the 
legal names and the NPIs are not reported in the claims or, with the 
exception noted below, if the ordering or referring supplier does not 
have an approved enrollment record in PECOS.
    We are requiring at a new Sec.  424.507(d) that Medicare 
contractors may deny a claim submitted by a Medicare beneficiary for 
the above-described ordered or referred covered items and services if 
the ordering or referring supplier is not identified by his or her 
legal name or, with the exception noted below, if the ordering or 
referring supplier does not have an approved enrollment record in 
PECOS.
    Our continuing outreach efforts stress the need for those who order 
and refer to have approved enrollment records in PECOS.
    While we are not including additional categories of ordered or 
referred covered items or services in this IFC (such as Part B drugs), 
we reserve the right to apply these requirements to additional 
categories through future rulemaking once the policies have been 
developed. We are considering proposing the requirements for covered 
prescribed Part B drugs within the next year.
    A physician or eligible professional who orders or refers must be 
enrolled in the Medicare program by having an enrollment record in an 
approved status in PECOS, even if he or she is enrolled only for the 
purposes of ordering and referring. To ensure that orders and referrals 
for Medicare beneficiaries are written by qualified physicians and 
eligible professionals, it is necessary that their credentials be 
verified; such verification can occur only as part of the Medicare 
provider/supplier enrollment process. PECOS, as described earlier in 
this preamble, is the national Medicare FFS provider and supplier 
enrollment repository. All providers and suppliers who enrolled in 
Medicare within the past 6 years, as well as those who enrolled more 
than 6 years ago and who have submitted updates to their enrollment 
information within the past 6 years, have enrollment records in PECOS 
that contain verified credentials. Those who enrolled more than 6 years 
ago and who have not updated their enrollment information in the past 6 
(or more) years will need to submit enrollment applications to Medicare 
to establish enrollment records in PECOS. They may do this by filling 
out the paper Medicare provider enrollment applications (using the 
appropriate form(s) from the CMS-855 series of forms) and mailing the 
completed application(s) to the appropriate Medicare enrollment 
contractor or by using Internet-based PECOS to submit their enrollment 
application to the Medicare enrollment contractor over the Internet. 
With the implementation in 2009 of the claims processing edits to 
ensure the NPI and the name reported in claims to identify the ordering 
or referring suppliers matched information in PECOS for physicians and 
professionals of a profession eligible to order and refer, many 
enrolled physicians and eligible professionals who do not have 
enrollment records in PECOS are submitting enrollment applications in 
order to establish those enrollment records. We expect that most, if 
not all, of them will have submitted enrollment applications before the 
end of 2010, including those who are enrolling solely to continue to 
order and refer. A physician or eligible professional who is deceased, 
retired, or excluded from the Medicare program, or who otherwise would 
not have an approved enrollment record in PECOS, would not be eligible 
to order or refer items or services for Medicare beneficiaries. Please 
note the following exception for physicians and eligible professionals 
who do not have an approved enrollment record in PECOS:
    Under section 1802(b) of the Act and the implementing regulations 
at 42 CFR 405.400 et seq., physicians and non-physician practitioners 
can opt out of the Medicare program and enter into private contracts 
with Medicare beneficiaries. By entering into these types of contracts, 
these suppliers do not bill the Medicare program for services that they 
furnish to Medicare beneficiaries. We require that physicians and 
eligible professionals who have properly filed an appropriate affidavit 
with a Medicare contractor in order to opt out of the Medicare program 
be required to be identified in claims by their names and their NPIs if 
they order or refer covered items or services for Medicare 
beneficiaries. We are creating an exception to the requirement that 
ordering and referring suppliers be required to have an approved 
enrollment record in PECOS for those physicians and non-physician 
practitioners who have validly opted out of the Medicare program. 
Therefore, physicians and non-physician practitioners who have validly 
opted out of Medicare are eligible to order and refer covered items and 
services for Medicare beneficiaries. If they have properly completed 
the appropriate affidavit in order to opt out of Medicare, they will 
have records in PECOS that contain their NPIs and that indicate that 
they have validly opted out of the Medicare program. In January 2009, 
there were approximately 10,000 physicians and eligible professionals 
who had opted out of the Medicare program. Compared to the more than 
800,000 enrolled physicians and eligible professionals, there are 
relatively few physicians and eligible professionals who have opted out 
of Medicare.
    Accordingly, the physicians or eligible professional that opted out 
must meet the following:
     A currently enrolled physician or eligible professional 
who does not have an enrollment record in PECOS is required to 
establish an enrollment record in PECOS so that he or she can order and 
refer covered items or services for Medicare beneficiaries. A physician 
or eligible professional who has validly opted out of the Medicare 
program will have a valid opt-out record in PECOS and is not required 
to submit an enrollment application.
     A physician or eligible professional who is employed by 
the Public Health Service, the Department of Defense, or the Department 
of Veterans Affairs is required to have an approved enrollment record 
in PECOS in order to order and refer covered items and services for 
Medicare beneficiaries, even though he or she would not be

[[Page 24444]]

submitting claims to Medicare for services furnished to Medicare 
beneficiaries. We require, therefore, that these physicians and 
eligible professionals enroll in Medicare solely to order and refer 
(and not to be paid for services furnished to Medicare beneficiaries).
     A dentist furnishes many services that are not covered by 
Medicare and, as a result, most dentists are not enrolled in Medicare. 
However, a dentist may order services for patients who are Medicare 
beneficiaries, such as sending oral specimens to laboratories for 
testing. Doctors of dental medicine or dental surgery are considered 
physicians and we require that they have approved enrollment records in 
PECOS if they order or refer covered items or services for patients who 
are Medicare beneficiaries.
     A pediatrician may treat Medicare beneficiaries (for 
example, those of any age who are enrolled in the Medicare end-stage 
renal disease (ESRD) program or those who are entitled to Medicare 
benefits under other Federal programs), although the volume of such 
patients is generally so low that most pediatricians are not enrolled 
in Medicare. We require that a pediatrician have an approved enrollment 
record in PECOS if he or she orders or refers covered items or services 
for patients who are Medicare beneficiaries.
     Residents and interns order and refer covered items and 
services for Medicare beneficiaries. Prior to the implementation of the 
NPI, residents and interns were identified in claims as the ordering or 
referring providers by surrogate UPINs. Interns are not issued medical 
licenses by States; therefore, they are not eligible to enroll in 
Medicare. Residents have medical licenses if they practice in States 
that issue medical licenses to residents; as a result, some residents 
are eligible to enroll in Medicare. Due to the variances in licensure 
and the necessity for interns and residents to be able to continue to 
order and refer covered items and services for Medicare beneficiaries, 
we require that the teaching physician--not the resident or intern--be 
identified in the claim as the ordering or referring provider whenever 
a resident or intern orders or refers.
    These ordering and referring requirements, when implemented, will 
allow us to uniquely identify the ordering and referring supplier in 
claims (except when the teaching physician is identified as the 
ordering or referring supplier in situations where an intern or a 
resident ordered or referred) and assure, because of the requirement to 
have an approved enrollment or valid opt out record in PECOS, that the 
ordering and referring supplier is qualified to order and refer items 
and services for Medicare beneficiaries. This will enable us to edit 
claims for ordering and referring suppliers who do not have approved 
enrollment records in PECOS (that is, those who are excluded, deceased, 
or retired, and those whose Medicare billing privileges have been 
terminated through exclusion, revocation, or otherwise), and those who 
have voluntarily terminated their relationship with Medicare or who 
have validly opted out of Medicare.
    Further, we are requiring that Part A claims for covered ordered 
Part A and Part B home health services must include the legal name and 
the NPI of the ordering supplier, who must be a physician. We are 
requiring that Part B claims for covered, ordered, and referred Part B 
items and services (excluding Part B drugs) must include the legal name 
and the NPI of the ordering or referring supplier. We place these same 
requirements (except for the NPI) on claims submitted by Medicare 
beneficiaries for these same ordered or referred items and services. 
Although suppliers are required to submit claims on behalf of 
beneficiaries under the mandatory claim submission policy at section 
1848(g)(4)(A) of the Act, we recognize that beneficiaries may submit 
claims to Medicare for payment. In order to fully enforce the ordering 
and referring requirement established by section 6405 of the Affordable 
Care Act, we plan to deny a beneficiary claim for a service when the 
legal name of the ordering or referring supplier is not included on the 
claim.
    We believe that these requirements will promote quality health care 
services for Medicare beneficiaries because orders and referrals would 
be written by qualified physicians and eligible professionals, as their 
credentials would have been verified as part of the Medicare provider/
supplier enrollment process.
    Additionally, we believe these requirements will eliminate the 
abusive practice of reporting identifiers in claims as being assigned 
to specific ordering or referring suppliers when, in fact, those 
identifiers had not been assigned to those specific ordering or 
referring suppliers. As a result, our requirements should eliminate 
these types of problematic claims and ensure the qualifications of the 
ordering and referring suppliers.
    Our requirements will enable us to know the identity of the 
individual who ordered or referred and, if appropriate, we could 
establish edits to check for over-ordering specific items or services, 
over-referring specific services, and/or over-ordering or over-
referring to specific providers of services and suppliers.
    Furthermore, these requirements support our existing authority, at 
Sec.  424.516(f), under which the ordering and referring suppliers, and 
those providers of services and suppliers who furnish covered items or 
services based on orders or referrals, are required to maintain 
documentation (to include the NPI) that supports the orders and 
referrals for 7 years in order to maintain an active enrollment status 
in the Medicare program.
    Lastly, these requirements may lead to a reduction in inappropriate 
Medicare payments.
    We are aware that, in some cases, Medicare beneficiaries may be 
patients of physicians or eligible professionals who do not have 
approved enrollment records in PECOS, or may be patients of 
professionals who are not of a profession that is eligible to order or 
refer, and that these physicians and professionals may be ordering and 
referring covered items and services for these Medicare beneficiaries 
at this time. We expect to conduct outreach activities to educate 
Medicare beneficiaries, as well as Medicare providers of services and 
suppliers who furnish covered items and services based on orders and 
referrals, so that we can eliminate situations where those providers of 
services and suppliers who would be furnishing covered ordered and 
referred items and services would not be paid for those covered items 
or services because their claims failed the edits.
    Finally, we believe that the requirements will address the 
recommendations offered by the DHHS OIG report titled, ``Medicare 
Payments in 2007 for Medical Equipment and Supply Claims with Invalid 
or Inactive Referring Physician Identifiers, OEI-04-08-00470, February 
2009.'' Specifically, the OIG recommended that CMS:
    (1) Determine why Medicare claims with identifiers associated with 
deceased referring physicians continue to be paid;
    (2) Implement claims-processing system changes to ensure that NPIs 
for both referring physicians and suppliers be listed on medical 
equipment and supply claims are valid and active.
    (3) Emphasize to suppliers the importance of using accurate NPIs 
for both referring physicians and suppliers when submitting Medicare 
claims; and
    (4) Determine the earliest date to end the provision that allows 
suppliers to submit claims without referring

[[Page 24445]]

physician NPIs while maintaining beneficiary access to services.
    With respect to recommendation (4), we began requiring Medicare 
claims to identify ordering and referring providers by NPIs beginning 
May 23, 2008. If the provider of services or the supplier submitting 
the claim for the covered ordered or referred items or services could 
not determine the NPI of the ordering or referring supplier, we 
permitted the provider of services or the supplier submitting the claim 
to use its own NPI in place of the NPI of the ordering or referring 
provider. These types of claims for DMEPOS items now fail the claims 
processing edits that were implemented in 2009. Medicare-enrolled 
physicians and professionals are required to have NPIs. The NPI 
Registry (available at https://nppes.cms.hhs.gov/NPPES/NPIRegistryHome.do) enables anyone with a computer with Internet access 
to look up a health care provider's NPI by name or NPI, and the NPPES 
downloadable file (downloadable from http://nppesdata.cms.hhs.gov/CMS_NPI_files.html) contains the NPIs of all health care providers who 
have active NPIs, as well as identifying information about the health 
care providers that is publicly disclosable under the Freedom of 
Information Act. (The National Plan and Provider Enumeration System 
Data Dissemination Notice, published in the May 30, 2007 Federal 
Register, further describes the NPI Registry and the NPPES downloadable 
file.) The existing claims processing edits described earlier in this 
preamble check to ensure that the NPI reported on a Part B claim for 
ordered or referred covered items or services (excluding Part B home 
health services and Part B drug claims) belongs to the ordering or 
referring supplier whose name is also reported in those claims, and not 
to the supplier who submitted the claim. As stated previously, the 
provisions of section 6405 of the Affordable Care Act are effective 
July 1, 2010.

C. Requirement for Physicians, Other Suppliers, and Providers to 
Maintain and Provide Access to Documentation on Referrals to Programs 
at High Risk of Waste and Abuse

1. Background
    On November 19, 2008, we published a final rule with comment 
titled, ``Revisions to Payment Policies Under the Physician Fee 
Schedule and Other Revisions to Part B for CY 2009; Revisions to the 
Amendment of the E-Prescribing Exemption for Computer Generated 
Facsimile Transmissions; and the Competitive Acquisition for Certain 
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies 
(DMEPOS)'' in the Federal Register. In this IFC, we established Sec.  
424.516(f) to require providers and suppliers to maintain ordering and 
referring documentation, including the NPI, received from a physician 
or eligible non-physician practitioner. We also established in Sec.  
424.516(f) that physicians and eligible professionals are required to 
maintain written ordering and referring documentation for 7 years from 
the date of service. Finally, we established in Sec.  424.535(a)(10) 
that failure to comply with the documentation requirements specified in 
Sec.  424.516(f) is a reason for revocation.
2. Provisions of the Affordable Care Act
    Section 6406 of the Affordable Care Act amends section 1866(a)(1) 
of the Act and added a new subparagraph (W) which requires providers to 
agree to ``maintain and, upon request of the Secretary, provide access 
to documentation relating to written orders or requests for payment for 
durable medical equipment, certifications for home health services, or 
referrals for other items or services written or ordered by the 
provider under this title, as specified by the Secretary.''
    In addition, section 6406 of the Affordable Care Act amended 
section 1842(h) of the Act by adding a new paragraph which states, 
``The Secretary may revoke enrollment, for a period of not more than 
one year for each act, for a physician or supplier under section 
1866(j) if such physician or supplier fails to maintain and, upon 
request of the Secretary, provide access to documentation relating to 
written orders or requests for payment for durable medical equipment, 
certifications for home health services, or referrals for other items 
or services written or ordered by such physician or supplier under this 
title, as specified by the Secretary.''
    Section 6406(b)(3) of the Affordable Care Act amends section 
1866(a)(1) of the Act to require that providers and suppliers maintain 
and, upon request, provide to the Secretary, access to written or 
electronic documentation relating to written orders or requests for 
payment for durable medical equipment, certifications for home health 
services, or referrals for other items or services written or ordered 
by the provider as specified by the Secretary. Section 6406(b)(3) does 
not limit the authority of the Office of Inspector General to fulfill 
the Inspector General's responsibilities in accordance with applicable 
Federal law.
3. Requirements of This IFC
    In our requirements, in our revision of Sec.  424.516(f), we are 
replacing the term ``eligible non-physician practitioner'' with 
``eligible professional.'' This change is consistent with our 
definition of ``eligible professional'' and correctly identifies the 
professionals who, in addition to physicians, are eligible to order and 
refer.
    At this time, we are expanding Sec.  424.516(f) to include 
requirements for documentation and access to documentation related to 
orders and referrals for covered home health, laboratory, imaging, and 
specialist services. Section 424.516(f) currently includes requirements 
for documentation and access to documentation for orders for DMEPOS. We 
reserve the right to, at a future date, publish proposed requirements 
for documentation and access to documentation for additional items and 
services that may be ordered or referred under title XVIII and that are 
programs of high risk of waste and abuse.
    We are revising the existing Sec.  424.516(f) to now read 
``Maintaining and providing access to documentation.'' A provider or a 
supplier who furnishes covered ordered DMEPOS or referred home health, 
laboratory, imaging, or specialist services is required to maintain 
documentation for 7 years from the date of service and, upon the 
request of CMS or a Medicare contractor, to provide access to that 
documentation. The documentation includes written and electronic 
documents (including the NPI of the physician who ordered the home 
health services and the NPI of the physician or the eligible 
professional who ordered or referred the DMEPOS, laboratory, imaging, 
or specialist services) relating to written orders and requests for 
payments for items of DMEPOS and home health, laboratory, imaging, and 
specialist services. A physician who ordered home health services and a 
physician and an eligible professional who ordered or referred items of 
DMEPOS or laboratory, imaging, and specialist services is required to 
maintain documentation for 7 years from the date of the order, 
certification, or referral and, upon request of CMS or a Medicare 
contractor, to provide access to that documentation. The documentation 
includes written and electronic documents (including the NPI of the 
physician who ordered the home health services and the NPI of the 
physician or the eligible professional who ordered or referred the 
DMEPOS, laboratory, imaging, or specialist services) relating

[[Page 24446]]

to written orders or requests for payments for items of DMEPOS and home 
health, laboratory, imaging, and specialist services. Note that we are 
clarifying that the documentation includes both written and electronic 
documentation.
    We are revising Sec.  424.535(a)(10) to read, ``The Centers for 
Medicare & Medicaid Services'' (CMS) may revoke enrollment, for a 
period of not more than one year for each act, for a provider or a 
supplier under section 1866(j) of the Act if such provider or supplier 
fails to meet the requirements of Sec.  424.516(f). Providers and 
suppliers will continue to have appeal rights afforded to them in 
accordance with part 498.

III. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

IV. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule. The 
notice of proposed rulemaking includes a reference to the legal 
authority under which the rule is proposed, and the terms and 
substances of the proposed rule or a description of the subjects and 
issues involved. This procedure can be waived, however, if an agency 
finds good cause that a notice-and-comment procedure is impracticable, 
unnecessary, or contrary to the public interest and incorporates a 
statement of the finding and its reasons in the rule issued. The NPI 
requirements set forth in this IFC are necessary to implement the data 
reporting requirements in section 1128J(e) of the Act, as amended by 
section 6402(a) of the Affordable Care Act, which require that the 
Secretary promulgate a regulation to implement this requirement no 
later than January 2011. Moreover these NPI requirements are needed to 
implement the Medicare requirements specified in section 6405 of the 
Affordable Care Act that are effective July 1, 2010. Section 6406 of 
the Affordable Care Act was effective January 1, 2010. It is imperative 
that the regulatory provisions be set forth as soon as possible to 
deliver the guidance necessary to enact the provisions.
    In addition, several of these provisions may be issued as an IFC 
because they fall under the exception in Medicare to the section 
1871(b)(1)(B) of the Act rulemaking requirements. Section 1871 of the 
Act generally requires that we issue a notice of proposed rulemaking 
prior to issuing a final rule under the Medicare program. However, 
section 1871(b)(1)(b) provides that the Secretary is not required to 
issue a notice of proposed rulemaking before issuing a final rule if 
``* * * a statute establishes a specific deadline for the 
implementation of a provision and the deadline is less than 150 days 
after the date of the enactment of the statute in which the deadline is 
contained.'' Section 6405 establishes an effective date of July 1, 
2010, which is less than 150 days from the date of enactment of this 
statute. Moreover, section 6406 establishes an effective date of 
January 1, 2010, which has already passed.
    We do not believe that the portions of this rule not exempted from 
notice and comment rulemaking pursuant to section 1871(b)(1)(B) of the 
Act add any new burdens for Medicare or Medicaid providers and 
suppliers. Both Medicare and Medicaid programs generally require unique 
provider identifiers, and thus delaying this rule is unnecessary. 
Finally, a delay in implementing these provisions would be contrary to 
the public interest and to CMS' efforts to reduce and eliminate fraud 
and abuse in the Medicare and Medicaid programs. For these reasons, we 
find good cause to waive the notice of proposed rulemaking and to issue 
this final rule on an interim basis. We are providing a 60-day comment 
period.

V. Collection of Information Requirements

    In accordance with section 3507(j) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection included 
in this interim final rule with comment period will be submitted for 
emergency approval to the Office of Management and Budget (OMB). The 
revised information collection requirements associated with 0938-0685, 
0938-0931, and 0938-0999 (see sections V.A. and V.D. of this IFC) will 
not be effective until approved by OMB.
    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

A. ICRs Regarding National Provider Identifier (NPI) on All Medicare 
Enrollment Applications and Claims (Sec.  424.506)

    Section 424.506(b)(1) states that providers and suppliers who are 
eligible for NPIs be required to report their NPIs on their enrollment 
applications for Medicare. Similarly, Sec.  424.506 (b)(2) states that 
if providers or suppliers enrolled in Medicare prior to obtaining NPIs 
and their NPIs are not in their enrollment records, they must submit 
enrollment applications containing their NPIs.
    The burden associated with the requirements in Sec.  424.506(b) is 
the time and effort necessary for a provider or a supplier to apply for 
an NPI and the time and effort necessary to report the NPIs on their 
enrollment applications for Medicare.
    Sections Sec.  424.510 and Sec.  424.515 state that providers and 
suppliers must submit enrollment information on the applicable 
enrollment application and update, resubmit, and recertify the accuracy 
of their enrollment information every 5 years. In addition, Sec.  
424.516 lists reporting requirements for providers and suppliers. To 
submit enrollment information for an initial application (even if 
enrolling solely to order and refer), a change of information, or to 
respond to a revalidation request, a provider or supplier must complete 
and submit the applicable CMS-855 enrollment application or complete 
and submit the enrollment application over the Internet using Internet-
based PECOS. Although we are unable to quantify the number, we do not 
believe that a significant number of physicians and eligible 
professionals will enroll in Medicare solely to order and refer. The 
burden associated with the enrollment requirements found in Sec.  
424.510,

[[Page 24447]]

Sec.  424.515, andSec.  424.516 is the time and effort necessary to 
complete and submit applicable Medicare enrollment applications. While 
this burden is subject to the PRA, it is currently approved under 
existing OMB control numbers (OCN). Specifically, the burden associated 
with obtaining an NPI is currently approved under OCN 0938-0931. The 
burden associated with submitting initial Medicare enrollment 
applications and updating Medicare enrollment information to include 
NPI is approved under OCN 0938-0685 (Applications CMS-855 A, B, I, and 
R) 0938-1056 (Application CMS-855 S).
    Section 424.506(b)(1) states that providers and suppliers who are 
enrolled in Medicare must report their National Provider Identifiers 
(NPIs) and the NPIs of any other providers or suppliers who are 
required to be identified in their claims on all paper and electronic 
claims that they send to Medicare. The burden associated with this 
requirement is the time and effort necessary to complete and submit a 
claim form. While this requirement is subject to the PRA, the 
associated burden is currently approved under OCN 0938-0999.

B. ICRs Regarding Ordering and Referring Covered Items and Services for 
Medicare Beneficiaries (Sec.  424.507)

    Section 424.507 states that to receive payment for covered Part A 
or Part B home health services, the claim must contain the legal name 
and the NPI of the ordering physician; and to receive payment for 
covered items of DMEPOS, and certain other covered Part B items or 
services (excluding Part B drugs), the claim must contain the legal 
name and the NPI of the ordering or referring physician or eligible 
professional. The burden associated with these requirements is the time 
and effort necessary to submit a claim with the required information. 
While these requirements are subject to the PRA, the associated burden 
is currently approved under OCN 0938-0999.

C. ICRs Regarding Additional Provider and Supplier Requirements for 
Enrolling and Maintaining Active Enrollment Status in the Medicare 
Program (Sec.  424.516)

    Section 424.516(f)(1) discusses the documentation requirements for 
providers and suppliers. A provider or supplier is required for 7 years 
from the date of service to maintain and upon request of CMS or a 
Medicare contractor, provide access to documentation, including the NPI 
of the physician or the eligible professional who ordered or referred 
the item or service, relating to written orders or requests for 
payments for items of DMEPOS and referrals for home health, laboratory, 
imaging, and specialist.
    Similarly, Sec.  424.516(f) discusses the documentation 
requirements for providers and suppliers. At Sec.  424.516(f)(1), 
providers and suppliers are required for 7 years from the date of 
service to maintain and, upon request of CMS or a Medicare contractor, 
provide access to documentation, including the NPI of the physician or 
the eligible professional who ordered or referred the item or service, 
relating to written orders or requests for payments for items of DMEPOS 
and referrals for home health, laboratory, imaging, and specialist. At 
Sec.  424.516(f)(2), physicians and eligible professionals are required 
for 7 years from the date of service to maintain and, upon request of 
CMS or a Medicare contractor, provide access to written and electronic 
documentation relating to written orders or certifications for items of 
DMEPOS and home health, laboratory, imaging, and specialist services, 
written, ordered, referred by such physician or non-physician 
practitioner.
    The burden associated with the requirements in Sec.  424.516(f) is 
the time and effort necessary to both maintain documentation on file 
and to furnish the information upon request to CMS or a Medicare 
contractor. While the requirement is subject to the PRA, we believe the 
associated burden is exempt. As discussed in the final rule that was 
published November 19, 2008 (73 FR 69726), we believe the burden 
associated with maintaining documentation and furnishing it upon 
request is a usual and customary business practice and thereby exempt 
from the PRA under 5 CFR 1320.3(b)(2).

D. ICRs Regarding the Reporting of National Provider Identifier by 
Medicaid Providers (Sec.  431.507(b)(5))

    Section 431.107(b)(5) states that a Medicaid provider has to 
furnish its NPI (if eligible for an NPI) to its State agency and 
include its NPI on all claims submitted under the Medicaid program. The 
burden associated with the Medicaid requirements in Sec.  431.107(b)(5) 
is the time and effort necessary for a provider to report the NPIs to 
the State agency and on claims submitted to the Medicaid program.
    We are in the process of revising the information collection 
requirements contained in OCNs 0938-0685, 0938-0931, and 0938-0999 in 
accordance with the provisions of this rulemaking. These information 
collection requirements will be sent to OMB for review and approval in 
accordance with the emergency procedures of the PRA and will not go 
into effect until approved by OMB.
    If you comment on these information collection and recordkeeping 
requirements, please do either of the following:
    1. Submit your comments electronically as specified in the 
ADDRESSES section of this proposed rule; or
    2. Submit your comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attention: CMS Desk Officer, 
[CMS-6010-IFC]
    Fax: (202) 395-6974; or E-mail: [email protected]

VI. Regulatory Impact Analysis

    We have examined the impact of this 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), 
section 1102(b) of the Act, the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4), and Executive Order 13132 on Federalism, and the 
Congressional Review Act (5 U.S.C. 804 et seq.). Executive Order 12866 
directs agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts; and equity). A regulatory impact analysis (RIA) must be 
prepared for major rules with economically significant effects ($100 
million or more in any 1 year). Virtually all providers and suppliers 
who wish to enroll in Medicare and Medicaid programs have already 
obtained NPIs. Most enrolled Medicare and Medicaid providers and 
suppliers who will be affected by the statutory and regulatory 
requirements are already meeting those requirements. For example, 
Medicare providers and suppliers have been reporting their NPIs on 
their enrollment applications for 4 years and have been using NPIs in 
their paper and electronic Medicare claims as well as electronic 
Medicaid claims for 2 years. The majority of suppliers who submit 
claims for ordered or referred DMEPOS and laboratory, imaging, and 
specialist services are ensuring that their claims meet the 
requirements of this IFC. In addition, the majority of Medicare 
physicians and eligible professionals who order and refer but who do 
not have approved enrollment records in PECOS are aware of the need to 
establish those records and many have already submitted their 
enrollment

[[Page 24448]]

applications to Medicare in order to do so. Medicare DMEPOS suppliers 
and those physicians and eligible professionals who order DMEPOS are 
already maintaining documentation in accordance with the requirements 
of this IFC. Other Medicare providers and suppliers who will be 
required to do so by this IFC are likely already in full or partial 
compliance as part of their routine business operations. Therefore, we 
do not believe this rule reaches the economic threshold and thus is not 
considered a major rule.
    The RFA requires agencies to analyze options for regulatory relief 
for small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $6.5 to 
$31.5 million in any one year. Individuals and States are not included 
in the definition of a small entity. We are not preparing an analysis 
for the RFA because we have determined that this rule will not have a 
significant economic impact on a substantial number of small entities. 
We maintain that this final rule would not have an adverse impact on 
small entities.
    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 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area and has fewer than 100 beds. We are not preparing an 
analysis for section 1102(b) of the Act because we have determined that 
this final rule will not have a significant impact on the operations of 
a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any 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 $135 million. This rule does not mandate expenditures by 
either the governments mentioned or the private sector; therefore, no 
analysis is required. Executive Order 13132 establishes certain 
requirements that an agency must meet when it promulgates a proposed 
rule (and subsequent final rule) that imposes substantial direct 
requirement costs on State and local governments, preempts State law, 
or otherwise has Federalism implications.
    Since this regulation does not impose significant costs on State or 
local governments, the requirements of E.O. 13132 are not applicable. 
In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

B. Alternatives Considered

    Since this final rule is a codification of statutory provisions 
found in the Affordable Care Act, we did not consider alternatives to 
this process.

List of Subjects

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare, Reporting and recordkeeping requirements.

42 CFR Part 431

    Grant programs-health, Health facilities, Medicaid, Privacy, 
Reporting and recordkeeping requirements.

0
For the reasons set forth in the preamble, the Centers for Medicare & 
Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
1. The authority citation for part 424 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).


0
2. Section 424.506 is added to read as follows:


Sec.  424.506  National Provider Identifier (NPI) on all enrollment 
applications and claims.

    (a) Definition. Eligible professional means any of the 
professionals specified in section 1848(k)(3)(B) of the Act.
    (b) Enrollment requirements. (1) A provider or a supplier who is 
eligible for an NPI must report its National Provider Identifier (NPI) 
on its Medicare enrollment application.
    (2) If a provider or a supplier who is eligible for an NPI enrolled 
in the Medicare program prior to obtaining an NPI and the provider's or 
the supplier's NPI is not in the provider's or the supplier's Medicare 
enrollment record, the provider or the supplier must submit a Medicare 
enrollment application that contains the NPI.
    (3) A physician or an eligible professional who has validly opted 
out of the Medicare program does not need to submit an enrollment 
application.
    (c) Claims reporting requirements. (1) A provider or a supplier who 
is enrolled in Medicare and who submits a paper or an electronic claim 
to Medicare include its National Provider Identifier (NPI) and the 
NPI(s) of any other provider(s) or suppliers(s) who is required to be 
identified.
    (2) A Medicare beneficiary who submits a claim for service to 
Medicare--
    (i) Must include the legal name of any provider or supplier who is 
required to be identified in that claim; and
    (ii) May, if known to the beneficiary, include the National 
Provider Identifier (NPI) of any provider or supplier who is required 
to be identified in that claim.
    (3) A Medicare contractor will reject a claim from a provider or a 
supplier if the required NPI(s) is not reported.

0
3. Section 424.507 is added to read as follows:


Sec.  424.507  Ordering and referring covered items and services for 
Medicare beneficiaries.

    (a) Conditions for payment of claims for ordered or referred 
covered Part B items and services (excluding home health services 
described in Sec.  424.507(b) and Part B drugs). (1) Part B provider 
and supplier claims. To receive payment for ordered or referred covered 
Part B items and services (excluding home health services described in 
Sec.  424.507(b), and Part B drugs), a provider's or supplier's must 
meet all of the following requirements:
    (i) The Part B items and services must have been ordered or 
referred by a physician or, when permitted, an eligible professional 
(as defined in Sec.  424.506(a) of this part).
    (ii) The claim from the Part B provider or supplier must contain 
the legal name and the National Provider Identifier (NPI) of the 
physician or the eligible professional (as defined in Sec.  424.506(a) 
of this part) who ordered or referred.
    (iii) The physician or the eligible professional who ordered or 
referred must have an approved enrollment record or a valid opt-out 
record in the Provider Enrollment, Chain and Ownership System (PECOS).
    (iv) If the items or services were ordered or referred by a 
resident or an intern, the claim must identify the teaching physician 
as the ordering or referring supplier. The claim must identify the 
teaching physician by his or her legal name and NPI and he or she must 
have an approved enrollment record or a valid opt-out record in PECOS.
    (2) Part B beneficiary claims. To receive payment for ordered or 
referred covered Part B items and services (excluding home health 
services described in Sec.  424.507(b), and Part B

[[Page 24449]]

drugs), a beneficiary's claim must meet all of the following 
requirements:

    (i) The Part B items and services must have been ordered or 
referred by a physician or, when permitted, an eligible professional 
(as defined in Sec.  424.506(a) of this part).
    (ii) The claim must contain the legal name of the physician or the 
eligible professional (as defined in Sec.  424.506(a) of this part) who 
ordered or referred.
    (iii) The physician or the eligible professional who ordered or 
referred must have an approved enrollment record or a valid opt-out 
record in the Provider Enrollment, Chain and Ownership System (PECOS).
    (iv) If the items or services were ordered or referred by a 
resident or an intern, the claim must identify the teaching physician 
as the ordering or referring supplier. The claim must identify the 
teaching physician by his or her legal name and he or she must have an 
approved enrollment record or a valid opt-out record in PECOS.
    (b) Conditions for payment of claims for ordered covered home 
health services. (1) Home health provider claims. To receive payment 
for ordered, covered Part A or Part B home health services, a 
provider's home health services claim must meet all of the following 
requirements:
    (i) The Part A or Part B home health services must have been 
ordered by a physician;
    (ii) The claim from the provider of home health services must 
contain the legal name and the National Provider Identifier (NPI) of 
the ordering physician;
    (iii) The ordering physician must have an approved enrollment 
record or a valid opt-out record in the Provider Enrollment, Chain, and 
Ownership System (PECOS); and
    (iv) If the services were ordered by a resident or an intern, the 
claim must identify the teaching physician as the ordering or referring 
physician. The claim must identify the teaching physician by his or her 
legal name and NPI and he or she must have an approved enrollment 
record or a valid opt-out record in PECOS.
    (2) Home health beneficiary claims. To receive payment for ordered 
covered Part A or Part B home health services, a beneficiary's home 
health services claim must meet all of the following requirements:
    (i) The Part A or Part B home health services must have been 
ordered by a physician.
    (ii) The claim from the provider of home health services must 
contain the legal name of the ordering physician.
    (iii) The ordering physician must have an approved enrollment 
record or a valid opt-out record in the Provider Enrollment, Chain, and 
Ownership System (PECOS).
    (iv) If the services were ordered by a resident or an intern, the 
claim must identify the teaching physician as the ordering or referring 
physician. The claim must identify the teaching physician by his or her 
legal name and he or she must have an approved enrollment record or a 
valid opt-out record in PECOS.
    (c) A Medicare contractor will reject a claim from a provider or a 
supplier for covered services described in paragraphs (a) and (b) of 
this section if the claim does not meet the requirements of paragraph 
(a)(1) and (b)(1) of this section, respectively.
    (d) A Medicare contractor may deny a claim from a Medicare 
beneficiary for covered items or services described in paragraphs (a) 
and (b) of this section if the claim does not meet the requirements of 
paragraphs (a)(2) and (b)(2) of this section, respectively.

0
4. Section 424.516 is amended by revising paragraph (f) to read as 
follows:


Sec.  424.516  Additional provider and supplier requirements for 
enrolling and maintaining active enrollment status in the Medicare 
program.

* * * * *
    (f) Maintaining and providing access to documentation. (1) A 
provider or a supplier who furnishes covered ordered DMEPOS or referred 
home health, laboratory, imaging, or specialist services is required to 
maintain documentation for 7 years from the date of service and, upon 
the request of CMS or a Medicare contractor, to provide access to that 
documentation. The documentation includes written and electronic 
documents (including the NPI of the physician who ordered the home 
health services and the NPI of the physician or the eligible 
professional who ordered or referred the DMEPOS, laboratory, imaging, 
or specialist services) relating to written orders and requests for 
payments for items of DMEPOS and home health, laboratory, imaging, and 
specialist services.
    (2) A physician who ordered home health services and a physician 
and an eligible professional who ordered or referred items of DMEPOS or 
laboratory, imaging, and specialist services is required to maintain 
documentation for 7 years from the date of the order, certification, or 
referral and, upon request of CMS or a Medicare contractor, to provide 
access to that documentation. The documentation includes written and 
electronic documents (including the NPI of the physician who ordered 
the home health services and the NPI of the physician or the eligible 
professional who ordered or referred the DMEPOS, laboratory, imaging, 
or specialist services) relating to written orders or requests for 
payments for items of DMEPOS and home health, laboratory, imaging, and 
specialist services.

0
5. Section 424.535 is amended by revising (a)(10) to read as follows:


Sec.  424.535  Revocation of enrollment and billing privileges in the 
Medicare program.

    (a) * * *
    (10) Failure to document or provide CMS access to documentation. 
(i) The provider or supplier (as described in section 1866(j) of the 
Act) did not comply with the documentation or CMS access requirements 
specified in Sec.  424.516(f) of this subpart.
    (ii) A provider or supplier that meets the revocation criteria 
specified in paragraph (a)(10)(i) of this section, is subject to 
revocation for a period of not more than 1 year for each act of 
noncompliance.
* * * * *

PART 431--STATE ORGANIZATION AND GENERAL ADMINISTRATION

0
6. The authority citation for part 431 continues to read as follows:

    Authority:  Sec. 1102 of the Social Security Act, (42 U.S.C. 
1302).


0
7. Section 431.107 is amended by adding a new paragraph (b)(5) to read 
as follows:


Sec.  431.107  Required provider agreement.

* * * * *
    (b) * * *
    (5)(i) Furnish to the State agency its National Provider Identifier 
(NPI) (if eligible for an NPI); and
    (ii) Include its NPI on all claims submitted under the Medicaid 
program.

    Dated: April 28, 2010.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: April 29, 2010.
Kathleen Sebelius,
Secretary.

    Authority:  Catalog of Federal Domestic Assistance Program No. 
93.773, Medicare--Hospital Insurance; and Program No. 93.774, 
Medicare--Supplementary Medical Insurance Program, and Program No. 
93.778, Medical Assistance Program.

[FR Doc. 2010-10505 Filed 4-30-10; 4:15 pm]
BILLING CODE P