[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR405.372]

[Page 89-90]
 
                         TITLE 42--PUBLIC HEALTH
 
                    CHAPTER IV--CENTERS FOR MEDICARE
                          & MEDICAID SERVICES,
                        DEPARTMENT OF HEALTH AND
                             HUMAN SERVICES
 
PART 405_FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
--Table of Contents
 
Subpart C_Suspension of Payment, Recovery of Overpayments, and Repayment 
                        of Scholarships and Loans
 
Sec. 405.372   Proceeding for suspension of payment.

    (a) Notice of intention to suspend--(1) General rule. Except as 
provided in paragraphs (a)(2) through (a)(4) of this section, if the 
intermediary, carrier, or CMS has determined that a suspension of 
payments under Sec. 405.371(a)(1) should be put into effect, the 
intermediary or carrier must notify the provider or supplier of the 
intention to suspend payments, in whole or in part, and the reasons for 
making the suspension.
    (2) Failure to furnish information. The notice requirement of 
paragraph (a)(1) of this section does not apply if the intermediary or 
carrier suspends payments to a provider or supplier in accordance with 
section 1815(a) or section 1833(e) of the Act, respectively, because the 
provider or supplier has failed to submit information requested by the 
intermediary or carrier that is needed to determine the amounts due the 
provider or supplier. (See Sec. 405.371(c) concerning failure to file 
timely acceptable cost reports.)
    (3) Harm to Trust Funds. A suspension of payment may be imposed 
without prior notice if CMS, the intermediary, or carrier determines 
that the Medicare Trust Funds would be harmed by giving prior notice. 
CMS may base its determination on an intermediary's or carrier's belief 
that giving prior notice would hinder the possibility of recovering the 
money.
    (4) Fraud or misrepresentation. If the intended suspension of 
payment involves suspected fraud or misrepresentation, CMS determines 
whether to impose the suspension and if prior notice is appropriate. CMS 
directs the intermediary or carrier as to the timing and content of the 
notification to the provider or supplier. CMS is the real party in 
interest and is responsible for the decision. CMS may base its decision 
on information from the intermediary, carrier, law enforcement agencies, 
or other sources. CMS determines whether the information is reliable.
    (b) Rebuttal--(1) If prior notice is required. If prior notice is 
required under paragraph (a) of this section, the intermediary or 
carrier must give the provider or supplier an opportunity for rebuttal 
in accordance with Sec. 405.374. If a rebuttal statement is received 
within the specified time period, the suspension of payment goes into 
effect on the date stated in the notice, and the procedures and 
provisions set forth in

[[Page 90]]

Sec. 405.375 apply. If by the end of the period specified in the notice 
no statement has been received, the suspension goes into effect 
automatically, and the procedures set forth in paragraph (c) of this 
section are followed.
    (2) If prior notice is not required. If, under the provisions of 
paragraphs (a)(2) through (a)(4) of this section, a suspension of 
payment is put into effect without prior notice to the provider or 
supplier, the intermediary or carrier must, once the suspension is in 
effect, give the provider or supplier an opportunity to submit a 
rebuttal statement as to why the suspension should be removed.
    (c) Subsequent action. If a suspension of payment is put into 
effect, the intermediary, carrier, or CMS takes timely action after the 
suspension to obtain the additional evidence it may need to make a 
determination as to whether an overpayment exists or the payments may be 
made. The intermediary, carrier, or CMS makes all reasonable efforts to 
expedite the determination. As soon as the determination is made, the 
intermediary or carrier informs the provider or supplier and, if 
appropriate, the suspension is rescinded or any existing recoupment or 
offset is adjusted to take into account the determination.
    (d) Duration of suspension of payment--(1) General rule. Except as 
provided in paragraphs (d)(2) and (d)(3) of this section, a suspension 
of payment is limited to 180 days, starting with the date the suspension 
begins.
    (2) 180-day extension. (i) An intermediary, a carrier, or, in cases 
of fraud and misrepresentation, OIG or a law enforcement agency, may 
request a one-time only extension of the suspension period for up to 180 
additional days if it is unable to complete its examination of the 
information or investigation, as appropriate, within the 180-day time 
limit. The request must be submitted in writing to CMS.
    (ii) Upon receipt of a request for an extension, CMS notifies the 
provider or supplier of the requested extension. CMS then either extends 
the suspension of payment for up to an additional 180 days or determines 
that the suspended payments are to be released to the provider or 
supplier.
    (3) Exceptions to the time limits. (i) The time limits specified in 
paragraphs (d)(1) and (d)(2) of this section do not apply if the case 
has been referred to, and is being considered by, the OIG for 
administrative action (for example, civil money penalties).
    (ii) CMS may grant an extension in addition to the extension 
provided under paragraph (d)(2) of this section if the Department of 
Justice submits a written request to CMS that the suspension of payment 
be continued based on the ongoing investigation and anticipated filing 
of criminal and/or civil actions. At a minimum, the request must include 
the following:
    (A) Identification of the entity under suspension.
    (B) The amount of time needed for continued suspension in order to 
implement the criminal and/or civil proceedings.
    (C) A statement of why and/or how criminal and/or civil actions may 
be affected if the requested extension is not granted.
    (e) Disposition of suspended payments. Payments suspended under the 
authority of Sec. 405.371(b) are first applied to reduce or eliminate 
any overpayments determined by the intermediary, carrier, or CMS, 
including any interest assessed under the provisions of Sec. 405.378, 
and then applied to reduce any other obligation to CMS or to HHS. In the 
absence of a legal requirement that the excess be paid to another 
entity, the excess is released to the provider or supplier.

[61 FR 63746, Dec. 2, 1996]