E.7 Draft PIM Chapter 8.doc

Exhibit E.7

HHSM-500-2015-RFP-0122

UPIC

Medicare Program Integrity Manual

Chapter 8 – Administrative Actions and Statistical Sampling for Overpayment Estimates Table of Contents (Rev.)

Transmittals for Chapter 8

8.1 – Appeal of Denials

8.2 – Overpayment Procedures

8.2.1 – Overpayment Assessment Procedures

8.2.1.1 – Definition of Overpayment Assessment Terms

8.2.2 – Assessing Overpayment When Review Was Based on Statistical Sampling for Overpayment Estimation

8.2.3 – Assessing Overpayment or Potential Overpayment When Review Was Based on Limited Sample or Limited Sub–sample

8.2.3.1 – Contractor Activities to Support Assessing Overpayment

8.2.3.2 – Conduct of Expanded Review Based on Statistical Sampling for Overpayment Estimation and Recoupment of Projected Overpayment by Contractors

8.2.3.3 - Consent Settlement Instructions

8.2.3.3.1 - Background on Consent Settlement

8.2.3.3.2 - Opportunity to Submit Additional Information Before Consent Settlement Offer

8.2.3.3.3 - Consent Settlement Offer

8.2.3.3.4 - Option 1 - Election to Proceed to Statistical Sampling for Overpayment Estimation

8.2.3.3.5 - Option 2 - Acceptance of Consent Settlement Offer

8.2.3.3.6 - Consent Settlement Budget and Performance Requirements for ACs

8.2.4 – Coordination with Audit and Reimbursement Staff

8.3 – Suspension of Payment

8.3.1 – When Suspension of Payment May Be Used

8.3.1.1 – Credible Allegation of Fraud Exists – Fraud Suspensions

8.3.1.2 – Reliable Information that an Overpayment Exists – General Suspensions

8.3.1.3 – Reliable Information that the Payments to be Made May Not Be Correct – General Suspensions

8.3.1.4 – Provider Fails to Furnish Records and Other Requested Information – General Suspensions

8.3.2 – Procedures for Implementing Suspension of Payment

8.3.2.1 – CMS Approval

8.3.2.2 – The Notices Involving Payment Suspensions

8.3.2.2.1 – Issuing a Prior Notice versus Concurrent Notice

8.3.2.2.2 – Content of Notice

8.3.2.2.3 – Shortening the Notice Period for Cause

8.3.2.2.4 – Mailing the Notice to the Provider

8.3.2.2.5 – Opportunity for Rebuttal

8.3.2.3 – Claims Review During the Payment Suspension Period

8.3.2.3.1 – Claims Review

8.3.2.3.2 – Case Development - Program Integrity

8.3.2.4 – Duration of Suspension of Payment

8.3.2.5 – Terminating the Payment Suspension

8.3.2.6 – Disposition of the Withheld Funds

8.3.2.7 – Contractor Suspects Additional Improper Claims

8.3.3 – Suspension Process for Multi–Region Issues (National Payment Suspensions)

8.3.3.1 – DME Payment Suspensions (Medicare Administrative Contractors and Zone Program Integrity Contractors)

8.3.3.2 – Non-DME Payment Suspensions (Medicare Administrative Contractors and Zone Program Integrity Contractors)

8.4 – Use of Statistical Sampling for Overpayment Estimation

8.4.1 – Introduction

8.4.1.1 – General Purpose

8.4.1.2 - The Purpose of Statistical Sampling

8.4.1.3 – Steps for Conducting Statistical Sampling

8.4.1.4 - Determining When Statistical Sampling May be Used

8.4.1.5 – Consultation With a Statistical Expert

8.4.1.6 – Use of Other Sampling Methodologies

8.4.2 – Probability Sampling

8.4.3 – Selection of Period to be Reviewed and Composition of Universe

8.4.3.1 – Selection of Period for Review

8.4.3.2 – Defining the Universe, the Sampling Unit, and the Sampling Frame

8.4.3.2.1 – Composition of the Universe

8.4.3.2.2 – The Sampling Unit

8.4.3.2.3 – The Sampling Frame

8.4.4 – Sample Selection

8.4.4.1 – Sample Design

8.4.4.1.1 – Simple Random Sampling

8.4.4.1.2 – Systematic Sampling

8.4.4.1.3 – Stratified Sampling

8.4.4.1.4 – Cluster Sampling

8.4.4.1.5 – Design Combinations

8.4.4.2 – Random Number Selection

8.4.4.3 – Determining Sample Size

8.4.4.4 – Documentation of Sampling Methodology

8.4.4.4.1 – Documentation of Universe and Frame

8.4.4.4.2 – Arrangement and Control Totals

8.4.4.4.3 – Worksheets

8.4.4.4.4 – Overpayment/Underpayment Worksheets

8.4.4.5 – Informational Copies to Primary GTL, Associate GTL, SME or CMS RO

8.4.5 – Calculating the Estimated Overpayment

8.4.5.1 – The Point Estimate

8.4.5.2 – Calculation of the Estimated Overpayment Amount

8.4.6 – Actions to be Performed Following Selection of Provider or Supplier and Sample

8.4.6.1 – Notification of Provider or Supplier of the Review and Selection of the Review Site

8.4.6.1.1 – Written Notification of Review

8.4.6.1.2 – Determining Review Site

8.4.6.2 – Meetings to Start and End the Review

8.4.6.3 – Conducting the Review 8.4.7- Overpayment Recovery

8.4.7.1 – Recovery from Provider or Supplier

8.4.7.2 – Informational Copy to Primary GTL, Associate GTL, SME or CMS RO

8.4.8 – Corrective Actions

8.4.9 – Changes Resulting from Appeals

8.4.9.1 – Sampling Methodology Overturned

8.4.9.2 – Revised Initial Determination

8.4.10 – Resources

8.4.11 – Additional Discussion of Stratified Sampling and Cluster Sampling

8.4.11.1 – Stratified Sampling

8.4.11.2 – Cluster Sampling

8.3 – Suspension of Payment (Rev.)

This section applies to Medicare Administrative Contractors (MACs) and Zone Program Integrity Contractors (ZPICs). Hereinafter, Program Safeguard Contractors (PSCs) shall be included in the term ZPICs.

Hereinafter, suspension of payment may be referenced as “payment suspension.”

Request for Suspension of Payment (“Payment Suspension”) may be approved when there is reliable information that an overpayment exists, when payments to be made may not be correct, or when there is a credible allegation of fraud existing against a provider. The process by which the ZPIC notifies and coordinates with the MAC to implement a CMS-approved suspension of payment shall be documented in the Joint Operating Agreement between the MAC and the ZPIC. The ZPICs shall advise and coordinate the imposition of a payment suspension with the appropriate MAC when a payment suspension has been approved by CMS. The ZPICs/MACs shall perform the necessary medical review and development of overpayments for payment suspensions that have received CMS approval.

Medicare authority to withhold payment in whole or in part for claims otherwise determined to be payable is found in federal regulations at 42 CFR § 405.370-375, which provide for the suspension of payments.

All payment suspensions shall be referred to the CMS Center for Program Integrity’s Provider Enrollment and Oversight Group (PEOG), Division of Enforcement Actions (DEA) team for approval with a copy to the appropriate CPI CORs/BFLs.

8.3.1 – When Suspension of Payment May Be Used

(Rev.)

A payment suspension may be used when there is:

• Reliable information that an overpayment exists, but the amount of the overpayment is not yet determined;

• Reliable information that the payments to be made may not be correct;

• Reliable information that the provider fails to furnish records and other requested information needed to determine the amounts due the provider; revocation may also be possible under these facts (see Chapter 15 of the PIM); or

• In cases of suspected fraud, a payment suspension may be used when there is a credible allegation of fraud.

The above reasons for implementing a payment suspension are described more fully below.

NOTE: For providers that file cost reports, a payment suspension may have little impact. If the provider is receiving periodic interim payments (PIP), the interim payments may be suspended. If the provider is not receiving PIPs, a payment suspension will affect the settlement of the cost report. When an overpayment is determined, the amount is not included in any settlement amount on the cost report. For example, if the intermediary has withheld (suspended) $100,000 when the cost report is settled, the intermediary would continue to hold the $100,000. This means if the cost report shows the Medicare program owing the provider $150,000, the provider would only receive $50,000 until the payment suspension action has been terminated. If the provider owes the Medicare program money at settlement, the amount of the suspended payment would increase the amount owed by the provider. In most instances, fiscal intermediaries or MACs should adjust interim payments to reflect projected cost reductions. The contractors are to limit the adjustment to the percentage of potential fraud or the total payable amount for any other reasons. For example, if the potential fraud involved five percent of the periodic interim rate, the reduction in payment is not to exceed five percent. Occasionally, suspension of all interim payments may be appropriate.

NOTE: If a payment suspension is approved for a home health agency, all Requests for Anticipated Payments (RAPs) are to be suppressed (disapproved) in accordance with 42 C.F.R. §409.43(c)(2). MACs or ZPICs shall make this request to the DEA team as part of its request for a payment suspension.

NOTE: If a payment suspension is approved, this edit of withholding of Medicare funds takes precedent over any other edits withholding money in the MAC systems. When it is time to terminate the payment suspension, the withheld funds must be first applied to the overpayment(s) associated with the payment suspension and any excess is then applied to any other outstanding overpayments or debts owed to CMS or HHS.

8.3.1.1 – Credible Allegation of Fraud Exists against a Provider - Fraud Suspensions

(Rev.)

A payment suspension may be used when the ZPIC, law enforcement or CMS determine that a credible allegation of fraud exists against a provider or supplier (hereinafter referred to as provider). For the purposes of this section, these types of payment suspensions will be called “fraud suspensions.”

Fraud suspensions may also be imposed for reasons not typically viewed within the context of false claims. For example:

· The Quality Improvement Organization (QIO) has reviewed inpatient claims and determined that the diagnosis related groups (DRGs) have been upcoded.

· The ZPIC or MAC may suspect a violation of the physician self-referral ban. For this reason the violation may be considered the cause for a payment suspension since claims submitted in violation of this statutory provision must be denied and any payments made would constitute an overpayment. (Such a referral may require a request from the OIG to impose a payment suspension in order to be considered.)

· Though services are rendered and may be determined as medically necessary and reasonable by the Medicare contractors, law enforcement’s Health Care Fraud Prevention and Enforcement Action Team (HEAT) has credible allegations of kickbacks. (Such a referral shall require a request from the HEAT OIG agent to impose a payment suspension in order to be considered.)

· Forged signatures on medical record documentation (i.e., Certificates of Medical Necessity (CMN), treatment plans, etc.) and/or other misrepresentations on Medicare claims or associated forms to obtain payment that would result in an overpayment determination.

Whether or not the MAC or ZPIC recommends a payment suspension to CMS, based on a credible allegation of fraud, is determined on a case-by-case basis and requires review and analysis of the allegation and facts. The following information is provided to assist the ZPIC in deciding when to recommend a payment suspension to the DEA team.

A. Complaints

There is considerable latitude with regard to complaints alleging fraud and abuse. The provider’s Medicare history, including the volume and frequency of complaints concerning the provider, and the nature of the complaints all contribute to whether a payment suspension should be referred to the DEA team. If there is a credible allegation(s) that a provider is submitting or may have submitted false claims, the ZPIC shall recommend a fraud suspension to the DEA team. (If the MAC identifies the potential fraud issue from a complaint, the MAC shall refer its information to the respective ZPIC for development. If the complaint does not rise to the level of a fraud referral, the MAC may request a payment suspension to the DEA team. See general suspensions at §8.3.1.2)

B. Provider Identified in CMS Fraud Alert

ZPICs shall recommend a fraud suspension to the DEA team if a provider, in their zone, is the subject of a CMS National Fraud Alert and the provider is billing the identical items/services cited in the alert. If the MAC identifies this issue, the MAC shall refer its information to the respective ZPIC for development.

C. Requests for Suspension of Payment ZPICs shall prepare and submit, if appropriate, a payment suspension referral package to the DEA team for all requests received from (but not limited to):

· CMS

· Office of Inspector General (OIG)

· Federal Bureau of Investigation (FBI)

· Assistant United States Attorney (AUSA)

· Other law enforcement agencies or State Agencies

D. Other Situations

Other situations that may be considered when recommending a fraud suspension to the DEA team include but are not limited to:

· Provider has pled guilty to, or been convicted of, Medicare, Medicaid, TRICARE (formally Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)), or private health care fraud and is still billing Medicare for services. (NOTE: With this knowledge, the MAC or ZPIC shall also consider if a revocation action should be pursued.);

· Federal/State law enforcement has subpoenaed the records of, or executed a search warrant upon a health care provider billing Medicare;

· Provider has been indicted by a Federal Grand Jury for fraud, theft, embezzlement, breach of fiduciary responsibility, or other misconduct related to a health care program;

· Provider presents a pattern of evidence of known false documentation or statements sent to the ZPIC or the MAC; e.g., false treatment plans, false statements on provider application forms.

E. Good Cause Exceptions

Reference is made in 42 C.F.R §405.371(b)(1) that allows for good cause exceptions to not suspend payments or continue a payment suspension when there are credible allegations of fraud. These exceptions may be considered for approval by CMS if any apply:

· Law enforcement has requested that a payment suspension not be imposed because such action may compromise or jeopardize its investigation;

· CMS/CPI has determined that a beneficiary access to care issue may exist and potentially cause a danger to life or health in whole or part;

· It has been determined that other available remedies may be implemented that would more effectively or quickly protect Medicare funds (such as revocation, prepayment review); or

· CMS determines that the imposition or the continuation of a payment suspension is not in the best interest of the Medicare program.

Every 180 calendar days after the initiation of a payment suspension based on credible allegations of fraud, CMS is required to evaluate whether there is good cause to terminate the payment suspension. Good cause to terminate a payment suspension is deemed to exist if the payment suspension has been in effect for 18 months. However, there are two exceptions. The first exception is that the case has been referred to and is being considered by the OIG for an administrative action such as a civil monetary penalty or permissive exclusion, or such administrative action is pending, and the OIG has made its request to not terminate the payment suspension in writing. The second exception is that the Department of Justice has submitted a written request to extend the payment suspension based on the ongoing investigation and its anticipation of filing a criminal or civil action or both, or based on a pending criminal or civil action or both. See 42 C.F.R. §405.371(b)(2) and §405.371(b)(3).

CMS/CPI makes the final decision on whether good cause to terminate exists, based on the totality of the circumstances. For all fraud suspensions, the ZPICs shall submit requests to the DEA team before the 180 calendar day timeframe to consider whether good cause to terminate the payment suspension exists.

8.3.1.2 – Reliable Information that an Overpayment Exists - General Suspensions

(Rev.)

A payment suspension may be implemented when the MAC, ZPIC or CMS possesses reliable information that an overpayment exists. In this situation, the MAC or ZPIC shall refer a payment suspension to the DEA team for consideration. For the purposes of this section, these types of payment suspensions will be called “general suspensions.”

EXAMPLE (including but not limited to): Several claimed services identified from either a prepayment or post-payment review were determined to be non-covered or miscoded. It has been determined that there is a pattern of noncompliant billings (the provider has billed this service many times before) and it is suspected that there may be a substantial number of additional non-covered or miscoded claims paid in the past. (When there is knowledge that the provider has been previously educated on this issue and continued to bill, such information shall be presented to the DEA team in its payment suspension referral. Such noncompliance increases the likelihood of the DEA team approving the payment suspension. Additionally, if the provider’s behavior did not change since education, and the education was extensive, the ZPIC may consider referring this as a fraud suspension.)

8.3.1.3 – Reliable Information that the Payments to be Made May Not be Correct - General Suspensions

(Rev.)

A payment suspension may be implemented when the MAC or ZPIC or CMS possesses reliable information that the payments to be made may not be correct. In this situation, the MAC or ZPIC shall refer a payment suspension to the DEA team for consideration. For the purposes of this section, these types of payment suspensions will be called “general suspensions.”

EXAMPLE (including but not limited to): Several claimed services identified from a post-payment review were determined to be non-covered or miscoded. It has been determined that the provider has not changed its billing behavior and it is suspected that there may be a continuance of non-covered or miscoded claimed services to be billed in the future. (When there is knowledge that the provider has been previously educated on this issue and continues to bill, such noncompliance increases the support of approving the payment suspension. However, consideration should be given to whether educating the provider and placing this provider only on prepayment review will correct this issue as opposed to initiating a payment suspension.)

8.3.1.4 – Provider Fails to Furnish Records and Other Requested Information - General Suspensions

(Rev.)

A payment suspension may be used when the MAC, ZPIC or CMS possesses reliable information that the provider has failed to furnish records and other information requested or that is due, and which is needed to determine the amounts due the provider. In this situation, the MAC or ZPIC shall refer a payment suspension to the DEA team. For the purposes of this section, these types of payment suspensions will be called “general suspensions.” Revocation may also be possible under these facts. (See Chapter 15 of the PIM.)

EXAMPLE (including but not limited to): During a post-payment review, medical records and other supporting documentation are solicited from the provider to support payment. The provider fails to submit the requested records. The MAC or ZPIC may request a payment suspension until the requested documentation is received. However, if a payment suspension is approved, the withheld amount should not exceed the amount to be recovered if the solicited claims documentation was not provided and the claims were to be denied.

In lieu of imposing a payment suspension, the MAC or ZPIC may deny the paid claims because the provider failed to provide the requested documentation. In either case, the MAC or ZPIC should determine if the provider is continuing to submit claims for the services in question and take appropriate action(s) to correct the behavior. The MAC or ZPIC may consider placing the provider on prepayment review and/or request a general suspension as described in §8.3.1.3.

NOTE: In the above example, if the only reason for the payment suspension is the failure by the provider to furnish the requested records, and if the provider does eventually provide the requested information, the MAC or ZPIC must then consider the recommendation to terminate the payment suspension. The MAC or ZPIC shall further discuss this with the DEA team for guidance.

EXAMPLE (including but not limited to): The provider fails to timely file an acceptable cost report. Refer to 42 C.F.R. §405.371(d). (NOTE: Such requests regarding the timely filing of an acceptable cost report shall be submitted only to and approved by the CMS, Office of Financial Management and not the DEA team.)

8.3.2 – Procedures for Implementing a Payment Suspension

(Rev.)

8.3.2.1 – CMS Approval

(Rev.)

The initiation (including whether or not to give advance notice), modification, extension, or removal of any type of suspension requires the explicit prior approval of the DEA team. The MAC or ZPIC will discuss requests for payment suspension and other proposed administrative actions with CMS/CPI during a case review meeting. Where applicable, MACs should consult with the respective ZPIC about any payment suspension it wishes to submit for approval prior to referring the request to the DEA team.

A case review meeting shall be held between the ZPIC or MAC and CMS/CPI prior to the approval of a payment suspension action involving an initial request, rebuttal, extension or termination. For purposes of Chapter 8, a case review meeting represents a discussion between CMS/CPI and the ZPIC or MAC to address the details of potential payment suspension requests, potential subsequent actions, as well as other administrative actions that may be appropriate.

The ZPIC shall request all initial payment suspensions via the Fraud Investigation Database (FID) and provide all required information in the respective fields and upload all required attachments. Information uploaded to the FID shall include:

1. A draft of the proposed payment suspension initial notice following the format noted in section 8.3.2.2 (in a word document format);

2. Any other supporting documentation.

The ZPIC shall request all extensions to payment suspensions via the FID and provide all required information in the respective fields and upload all required attachments. The ZPIC shall make the request for an extension at least five business days before the anticipated expiration of the payment suspension. Information uploaded to the FID shall include:

1. A draft of the proposed payment suspension extension notice following the format noted in section 8.3.2.2 (in a word document format);

2. Any other supporting documentation.

The ZPIC shall request all terminations to payment suspensions via the FID and provide all required information in the respective fields and upload all required attachments. The ZPIC shall make the request for a termination at least five business days before the anticipated expiration of the payment suspension. Information uploaded to the FID shall include:

1. A draft of the proposed payment suspension termination notice following the format noted in section 8.3.2.2 (in a word document format);

2. A draft of the associated overpayment determination notice(s) (in a word document format).

NOTE: All MAC requested payment suspensions shall also be uploaded to the FID by the DEA team.

NOTE: All HEAT-related payment suspensions require a declaration from law enforcement and are usually sent directly to the DEA team by law enforcement for consideration. If a ZPIC receives a HEAT-related payment suspension request and a declaration is not received within three business days of receiving the request for a payment suspension, the ZPIC shall contact the respective DEA team for guidance.

The MAC and ZPIC shall not take steps to implement any of the above suspension actions without the explicit approval of the DEA team. If approved, the DEA team shall make appropriate changes to the draft notice before approving the payment suspension notice and upload the approval and documents via the FID.

When a payment suspension is approved by the DEA team, the ZPIC shall inform the respective MAC of this action and the MAC shall effectuate the suspension of payments to the provider unless prior notice of the payment suspension is necessary. When prior notice is necessary, the MAC shall effectuate the suspension of payment in concert with the established date from the payment suspension notice. The MACs shall ensure that all money on the payment floor is not released to the provider and is withheld in accordance with the payment suspension rules and regulations. MACs shall provide an accounting of the money withheld on day one of the payment suspension to the ZPIC. The ZPIC shall enter this amount in the FID as the first monetary entry. Additionally, for all approved MAC generated payment suspensions, the MAC shall inform the respective ZPIC of the approved action.

Unless otherwise specified, when a payment suspension is imposed, no payments are to be released to the provider as of the effective date of the payment suspension. This includes payments for new claims processed, payments for adjustments to claims previously paid, interim PIPs, and RAPs. If it is discovered that money is released to the provider after the effective date of the payment suspension, the MAC or ZPIC shall contact the DEA team for guidance.

8.3.2.2 – The Notices Involving Payment Suspensions (Rev.)

The ZPICs and MACs shall use the following exhibits as the model notices when preparing the draft notices for CMS approval:

· The Notice to Suspend Payments (Please refer to Exhibits 16A to 16D)

· The Notice to Extend the Payment Suspension (Please refer to Exhibit 16E)

· The Notice to Terminate the Payment Suspension (Please refer to Exhibit 16F)

8.3.2.2.1 – Issuing a Prior Notice versus Issuing a Concurrent Notice

(Rev.)

MACs and ZPICs shall inform the provider of the payment suspension action being taken. When prior notice is appropriate, the MAC or ZPIC shall, in most instances, give at least 15 calendar days’ prior notice before effectuating the payment suspension. Day one begins the calendar day after the notice is mailed.

A. If the Medicare Trust Fund would be harmed by giving prior notice: the MAC or ZPIC shall recommend to the DEA team, not to give prior notice if in the MAC’s or ZPIC’s opinion, any of the following apply:

1. A delay in implementing the payment suspension will cause the overpayment to rise at an accelerated rate (i.e., dumping of claims);

2. There is reason to believe that the provider may flee the MAC’s jurisdiction before the overpayment can be recovered;

3. The MAC or ZPIC has first-hand knowledge of a risk that the provider will cease or severely curtail operations or otherwise seriously jeopardize its ability to repay its debts; or

4. A delay may impact law enforcement’s investigation.

If the DEA team approves waiver of the prior notice requirement, the MAC or ZPIC shall send the provider notice concurrent with implementation of the payment suspension, but no later than five calendar days, after the payment suspension is imposed. If additional time is needed to release the notice, the MAC or ZPIC shall confer with the DEA team for guidance.

B. If the reason for the payment suspension request is because the provider failed to furnish requested information, the MAC or ZPIC shall recommend that the DEA team waive the prior notice. If the DEA team concurs to waive the prior notice requirement, the MAC or ZPIC shall send the provider notice concurrent with implementation of the suspension, but no later than five calendar days after the payment suspension is imposed. If additional time is needed to release the notice, the MAC or ZPIC shall confer with the DEA team for guidance.

C. If the payment suspension request is a fraud suspension, the ZPIC shall recommend to the DEA team that prior notice not be given. If the DEA team concurs to waive the prior notice requirement, the ZPIC shall send the provider notice concurrent with implementation of the payment suspension, but no later than five calendar days, after the payment suspension is imposed. If additional time is needed to release the notice, the ZPIC shall confer with the DEA team for guidance.

8.3.2.2.2 – Content of Payment Suspension Notice

(Rev.)

MACs and ZPICs shall prepare a “draft notice” (in accordance with section 8.3.2.2) and send it, along with the recommendation and any other supportive information, to the DEA team for approval. The draft notice shall include, at a minimum:

· The date the payment suspension action will be or has been imposed;

· How long the suspension is expected to be in effect (NOTE: All payment suspensions shall be established in 180 calendar day increments.);

· The reason for suspending payment. (For fraud suspensions, the ZPIC shall not disclose information that would undermine the potential fraud case. However, the rationale must be specific enough to justify the action being taken.);

· In most notices, the MAC or ZPIC shall identify and describe at least five example claims that are associated with the reason for the payment suspension. The example claims are to be current claims not more than one year old. The notice shall only reference the example claim control number, the amount of payment and the date of service. Information such as beneficiary name or HICN shall not be referenced in the notice. Having this specific information identified in the notice provides the provider an opportunity to review its respective records associated with the example claims and be able to specifically rebut the payment suspension if appropriate;

· The extent of the payment suspension (i.e., 100 percent payment suspension or partial payment suspension, where less than 100 percent of payments are withheld);

· The payment suspension action is not appealable;

· CMS/CPI has approved implementation of the payment suspension;

· Documentation that the provider has been given the opportunity to submit a rebuttal statement within 15 calendar days of notification; and

· An address for the provider to mail the rebuttal.

8.3.2.2.3 – Shortening the Notice Period for Cause

(Rev.)

At any time, the MAC or ZPIC may recommend to the DEA team that the prior notice be shortened during a previously approved notice period. Such a recommendation would be appropriate if the MAC or ZPIC believes that the provider will intentionally submit additional claims prior to the effective date of the payment suspension. If the DEA team approves that the payment suspension is to be imposed earlier than indicated in the issued notice, the MAC or ZPIC shall notify the provider in writing of the change and the reason. The MAC or ZPIC shall draft a notice for the DEA team’s approval before releasing the notice to the provider.

8.3.2.2.4 – Mailing the Notice to the Provider (Rev.)

After consultation with and approval from the DEA team, the MAC or the ZPIC shall send the approved payment suspension notice (initial, responses to rebuttals, extensions, and terminations) to the provider. All such notices shall be sent via certified mail to ensure receipt. Additionally, CMS suggests that when the provider is represented by counsel, a copy of the notice is also sent to the counsel. In the case of fraud suspensions, the ZPIC shall send an informational copy to the OIG, FBI, or the AUSA for its file, if law enforcement has been previously involved and/or has an active investigation/case on the provider. The ZPIC shall also upload the signed copies of all notices released to the provider into the FID.

8.3.2.2.5 – Opportunity for Rebuttal

(Rev.)

If the payment suspension is approved with prior notice, the provider is afforded an opportunity to submit to the MAC or ZPIC a statement (including any pertinent information) within 15 calendar days indicating why the payment suspension action should not be imposed. However, this time may be shortened or lengthened for cause. (See 42 C.F.R. §405.374(b).)

If the payment suspension is approved without prior notice, the provider is also afforded an opportunity to submit to the MAC or ZPIC a statement (including any pertinent information) as to why the payment suspension action should not be imposed. (See 42 C.F.R. §405.372(b)(2).) For the purposes of consistency for both prior notice and no prior notice, CMS/CPI suggests that a 15 calendar day response time be established for the provider.

Regardless of whether a provider does or does not submit a rebuttal timely, a timely determination and written response by the MAC or ZPIC is still required in accordance with 42 C.F.R. §405.375. If a provider does respond but not timely, the MAC or ZPIC shall include the following language in the draft response:

“At the outset, we note that your rebuttal was not submitted within the time allowed under 42 C.F.R. §405.374. Without waiving that objection, however, we respond to your rebuttal as follows…”

MACs and ZPICs shall ensure the following:

· CMS Review –MACs and ZPICs shall forward the provider’s rebuttal statement and any pertinent information to the DEA team via the FID. The MAC or ZPIC shall evaluate the information presented and then draft a response addressing each item mentioned in the rebuttal and submit it to the DEA team for approval via the FID. The draft response should be sent to the DEA team for approval at least five business days before the anticipated release of the response to the provider. The MAC or ZPIC may contact the DEA team for guidance before drafting a response.

· Timing – Upon the DEA team’s approval of a payment suspension, the MAC or ZPIC shall ensure that the implementation of a payment suspension with prior notice is not delayed by the receipt and/or review of the rebuttal statement, unless the DEA team provides guidance otherwise. The payment suspension shall go into effect as indicated in the prior notice.

· Review of Rebuttal – Because payment suspension actions are not appealable, the rebuttal is the provider’s only opportunity to present information as to why suspension action should not be initiated or should be terminated. MACs and ZPICs shall carefully review the provider’s rebuttal statement and pertinent information, and shall consider all facts and issues raised by the provider. If the MAC or ZPIC is convinced that the payment suspension action should not be initiated or should be terminated, they shall consult with the DEA team for guidance.

· Response – CMS is obligated to consider the rebuttal and supportive information received from the provider and to make a determination within 15 calendar days from receipt of the rebuttal. While CMS is required to make its determination within 15 calendar days, it is not obligated to issue its determination within that timeframe. However, CMS expects that all attempts by the MAC or ZPIC to issue the response to the provider’s rebuttal is within the 15 calendar days (from the date the statement is received, and following consultation and approval from the DEA team.) (See 42 C.F.R. §405.375(a).) If a full response cannot be drafted in the required timeframe, the MAC or ZPIC shall draft an interim response for release that is approved by the DEA team.

8.3.2.3 – Claims Review During the Payment Suspension Period

(Rev.)

A payment suspension does not stop submitted claims from processing and resulting in full or partial denials or adjudication for payment. A payment suspension only stops the claim payments from being released to the provider. These claim payments will be withheld in an account (which does not accrue any interest) for the purpose of applying the withheld funds to the overpayment(s) determined or other debts owed to CMS or HHS in accordance with 42 C.F.R §405.372(e). (This withholding of Medicare payments is for everything payable and releasable to the provider. It also includes adjustments to claims that would result in payments being released to the provider, RAPs, etc.) If a claim is submitted for payment and is partially or fully denied, the provider is afforded appeal rights to those denials.

8.3.2.3.1 – Claims Review (Rev.)

While a payment suspension does not stop claims processing, CMS prefers that all claims being processed during the payment suspension period be reviewed on a prepayment basis for reasonableness and necessity. If fraud-related, the review of claims should also address whether services were actually rendered as billed. This will ensure that the withheld payments only include payable claims to be used in the disposition of the funds when the final overpayment(s) are determined.

A. Claims Review Once a payment suspension has been imposed, the MACs and the ZPICs shall follow the claims processing and review procedures in accordance with PIM, Chapter 3. MACs and ZPICs shall ensure that the provider is not substituting a new category of improper billings to counteract the effect of the payment suspension. (If such a situation arises, the MAC or ZPIC shall modify the payment suspension accordingly with the DEA team’s approval.) If the claim is determined to be not payable, it shall be denied and the provider afforded its appeal rights. For claims that are not denied, the MAC shall send a remittance advice to the provider showing that payment was approved but the actual funds not sent.

MACs and ZPICs are not required to perform 100 percent prepayment review of claims processed during the payment suspension period. If prepayment review is not conducted either at 100 percent or on a code(s) specific basis, a post-payment review shall be performed on the universe of claims adjudicated for payment during the payment suspension, prior to the issuance of the overpayment determination. In order to reduce the burden of resources, if only specific claim types (or certain codes) are the subject of noncompliance, the MAC or ZPIC may elect to only place such claims types on prepayment or post-payment review. MACs and ZPICs shall consult with the DEA team for guidance when resources may be better utilized employing statistical sampling for overpayment determination(s). MACs and ZPICs shall use the principles of statistical sampling for overpayment estimation found in the PIM, Chapter 8, section 8.4, to determine what percentage of claims in a given universe of withheld claims payments are payable. In all cases involving a post-payment review, the MAC or ZPIC shall follow the rules of reopening as defined in 42 C.F.R.§405.980 and inform the provider that the claims are reopened in accordance the regulations when requesting records and supportive information.

B. Review of Suspected Fraudulent or Overpaid Claims:

MACs and ZPICs shall follow procedures in the PIM Chapter 3, §3.8 in establishing an overpayment. The overpayment consists of all claims in a specific time period(s) determined to have been paid incorrectly. MACs and ZPICs shall make all reasonable efforts to expedite the determination of the overpayment amount. MACs and ZPICs shall account for binding revised determinations or binding reconsiderations in its overpayment determination in accordance with 42 C.F.R. §405.984.

NOTE: Claims selected for post-payment review may be reopened within one year for any reason or within four years for good cause. (See 42 C.F.R. §405.980.) Cost report determinations may be reopened within three years after the Notice of Program Reimbursement has been issued. Good cause is defined as new and material evidence, error on the face of the record, or clerical error. The regulations have open-ended potential for fraud or similar fault. The exception to the one year rule is for adjustments to DRG claims. A provider has 60 calendar days to request a change in an assignment of a DRG. (See 42 C.F.R. §412.60(d).)

8.3.2.3.2 – Case Development – Program Integrity

(Rev.)

The ZPIC shall enter all payment suspensions into the FID. In the Suspension Narrative field, the ZPIC shall include the items/services affected (i.e., type of item/service and applicable HCPCS/CPT codes). The first monetary entry of money withheld in the FID should reflect the money withheld on Day One of the payment suspension.

8.3.2.4 – Duration of the Payment Suspension

(Rev.)

A. Time Limits for General Suspensions

If the DEA team approves a general payment suspension, it will be for a 180 calendar day period. At the 180-day benchmark, the MAC or ZPIC may request an extension of an additional 180 calendar days if time is needed to complete the overpayment determination. Additionally, the OIG or other law enforcement agency may also request that the payment suspension be extended an additional 180 calendar days if its investigation is not completed. Only the DEA team may approve the request to extend the period of the payment suspension for up to an additional 180 calendar days upon the written request of the MAC, ZPIC, OIG, or other law enforcement agency. The request to the DEA team to extend the payment suspension shall provide the following:

· Name and address of the provider under suspension;

· Amount of additional time needed (not to exceed the 180 calendar days); and

· Rationale explaining why the additional time is necessary.

If approved for an extension, the period of time shall not exceed 180 calendar days. General suspensions shall not continue beyond 360 calendar days. However, there may be an occasion when the information gathered by the MAC or ZPIC during its review supports a change from a general suspension to a fraud suspension. Only with the DEA team approval may the category of the type of payment suspension be transitioned from a general payment suspension to a fraud suspension. Please note that if the transition from a general payment suspension to a fraud payment suspension is approved, the provider must be informed of the new development by the ZPIC, with a DEA team approved notice. Additionally, the provider must be afforded the opportunity for rebuttal. If the general payment suspension was initiated by the MAC, and it is decided to transition a general payment suspension to a fraud payment suspension, a transfer of the payment suspension related documentation must be transferred to the ZPIC for completion. It is therefore necessary that in such situations, the MAC, ZPIC and the DEA team have a discussion as to the appropriate actions to be taken.

B. Exceptions to Time Limits for Fraud Suspensions

If a payment suspension is based on credible allegations of fraud, the payment suspension may continue beyond 360 days with a written request for an extension from law enforcement. An extension may be warranted if there has not been a resolution of law enforcement’s investigation of the potential fraud. After 18 months, good cause not to continue a payment suspension is deemed to exist unless certain criteria are satisfied. (See 42 C.F.R. §405.371(b)(3).) To extend a fraud suspension beyond 18 months:

· The Department of Justice must submit a written request for an extension based on the ongoing investigation and the anticipated filing of criminal or civil action or both or based on a pending criminal or civil action or both. Requests must include: 1) the identity of the person or entity under the payment suspension, 2) the amount of time needed for continuation of the payment suspension in order to conclude the criminal or civil proceeding or both, and 3) a statement of why and/or how criminal and/or civil actions may be affected if the payment suspension is not granted. or;

· The OIG must submit a written request to extend the payment suspension because the case is being considered by the OIG for an administrative action (e.g., permissive exclusions, CMPs) or such action is pending. However, this exception does not apply to pending criminal investigations by OIG.

C. Provider Notice of the Extension

The MAC or ZPIC shall obtain the DEA team approval for the extension request and draft notice, and shall notify the provider if the suspension action has been extended. MACs and ZPICs shall prepare a “draft extension notice” (in accordance with section 8.3.2.2) and submit it via the FID, any other supportive information, to the DEA team for approval at least five business days before the payment suspension is set to expire. The draft notice shall follow the model language provided in the exhibits and shall include, at a minimum:

· The date the payment suspension will be extended (NOTE: the date is to be the same date the payment suspension was to expire);

· The reason for extending the payment suspension; and

· That CMS has approved the extension of the payment suspension.

Upon approval of the notice from the DEA team, the MAC or ZPIC shall provide a copy of the signed notice to the DEA team via the FID.

8.3.2.5 – Terminating the Payment Suspension

(Rev.)

The MAC or ZPIC shall recommend to the DEA team that the payment suspension be terminated prior to the payment suspension expiring. The MAC or ZPIC shall provide this request via the FID at least five business days prior to the anticipated payment suspension expiration date. No action associated with the termination shall be taken without the explicit approval of the DEA team. MACs or ZPICs shall prepare a “draft termination notice” (in accordance with section 8.3.2.2) and send it, along with a draft overpayment notice(s) and any other supportive information, to the DEA team for approval.

The MAC or ZPIC shall recommend to the DEA team that a suspension be terminated when any of the following occur:

· The basis for the payment suspension action was that an overpayment may exist or money to be paid may be incorrect, and the MAC or ZPIC has determined the amount of the overpayment, if any.

· The basis for the payment suspension action was that a credible allegation of fraud exists against the provider, and the amount of the overpayment has been determined.

· The basis for the payment suspension action was that payments to be made may not be correct, and the MAC or ZPIC has determined that current payments to be made are now correct, and any associated overpayments have been determined.

· The basis for the payment suspension action was that the provider failed to furnish records, and the provider has now submitted all appropriate requested records.

When the payment suspension is terminated, the disposition of the withheld funds shall be achieved in accordance with 42 C.F.R. §405.372(e) and the payment suspension edit withholding the provider’s funds is removed in the MAC system accordingly. Upon approval of the termination notice by the DEA team, the MAC or ZPIC shall provide a copy of the signed notice via the FID to the DEA team.

8.3.2.6 – Disposition of the Withheld Funds (Rev.)

Payments for appropriate Medicare claims that are withheld during a payment suspension should not exceed the estimated amount of overpayment. MACs and ZPICs shall maintain an accurate, up-to-date record of the dollar amount withheld and the claims that comprise the withheld amount. MACs and ZPICs shall keep a separate accounting of payment on all claims affected by the payment suspension. They shall keep track of how much money is uncontested and due the provider. The amount needs to be known as it represents assets that may be applied to reduce or eliminate any overpayment. See PIM, Chapter 8, §8.2. MACs and ZPICs shall be able to provide, upon request, copies of the claims affected by the payment suspension. The MAC shall coordinate the issuance of the demand for the overpayment(s) and termination of the payment suspension with respect to approved action by the DEA team. The MAC shall apply the amount withheld first to the Medicare overpayment(s) associated with the payment suspension and then apply any excess money to reduce any other obligation to CMS or to DHHS. MACs shall remit to the provider all monies held in excess of the amount the provider owes. If the provider owes more money than what was withheld as a result of the payment suspension, the MAC shall initiate recoupment action. See 42 C.F.R. §405.372(e).

8.3.2.7 – Contractor Suspects Additional Improper Claims

(Rev.)

A. Present Time If the payment suspension is in the process of being terminated or has been terminated, and the MAC or ZPIC believes that the provider will continue to submit noncovered, misrepresented, or potentially fraudulent claims, the MAC or ZPIC shall consider implementing or recommending other actions as appropriate (e.g., education, prepayment review, revocation, a new suspension of payment.)

B. Past Period of Time

If the payment suspension is in the process of being terminated or has been terminated, and the MAC or ZPIC believes there are past periods of claims submissions that may contain possible overpayments, the MAC or ZPIC shall consider recommending a new payment suspension covering those dates.

C. Additional Services

If during the time that a provider is under a partial payment suspension for a particular service(s), and the MAC or ZPIC determines there is reason to initiate a payment suspension action for a different service, a new payment suspension shall be initiated or the new service(s) shall be incorporated into the existing payment suspension depending on the circumstances. The MAC or ZPIC shall discuss this action with the DEA team for a decision.

Anytime a new suspension action is initiated on a provider who is already under one or more partial payment suspension actions, the MAC or ZPIC shall, if appropriate: 1) obtain separate CMS approval, 2) issue an additional notice to the provider, and 3) offer a new rebuttal period to the provider.

8.3.3 – Suspension Process for Multi-Region Issues (National Payment Suspensions)

(Rev.)

8.3.3.1 – DME Payment Suspensions (MACs and ZPICs) (Rev.)

For national payment suspensions involving durable medical equipment (DME) suppliers that are enrolled in multiple jurisdictions, the following is applicable for DME MACs and ZPICs:

· When CMS suspends payments to a DME supplier, all payments to the supplier are suspended in all DME jurisdictions if the same Tax Identification Number is used.