Medicare Program; Requirements for Providers and Suppliers To Establish and Maintain Medicare Enrollment, 20754-20781 [06-3722]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 71, Number 77 (Friday, April 21, 2006)]
[Rules and Regulations]
[Pages 20754-20781]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-3722]



[[Page 20753]]

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Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Part 420, 424 et al.



Medicare Program; Requirements for Providers and Suppliers To Establish 
and Maintain Medicare Enrollment; Final Rule

Federal Register / Vol. 71, No. 77 / Friday, April 21, 2006 / Rules 
and Regulations

[[Page 20754]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 420, 424, 489, and 498

[CMS-6002-F]
RIN 0938-AH73


Medicare Program; Requirements for Providers and Suppliers To 
Establish and Maintain Medicare Enrollment

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

ACTION: Final rule.

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SUMMARY: This final rule requires that all providers and suppliers 
(other than physicians or practitioners who have elected to ``opt-out'' 
of the Medicare program) complete an enrollment form and submit 
specific information to us. This final rule also requires that all 
providers and suppliers periodically update and certify the accuracy of 
their enrollment information to receive and maintain billing privileges 
in the Medicare program. In addition, this final rule implements 
provisions in the statute that require us to ensure that all Medicare 
providers and suppliers are qualified to provide the appropriate health 
care services. These statutory provisions include requirements meant to 
protect beneficiaries and the Medicare Trust Funds by preventing 
unqualified, fraudulent, or excluded providers and suppliers from 
providing items or services to Medicare beneficiaries or billing the 
Medicare program or its beneficiaries.

DATES: Effective Date: These regulations are effective on June 20, 
2006.

FOR FURTHER INFORMATION CONTACT: Michael C. Collett, (410) 786-6121.

SUPPLEMENTARY INFORMATION: 
    Copies: To order copies of the Federal Register containing this 
document, send your request to: New Orders, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date 
of the issue requested and enclose a check or money order payable to 
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number and expiration date. Credit card orders can also be placed by 
calling the order desk at (202) 512-1800 (or toll-free at 1-888-293-
6498) or by faxing to (202) 512-2250. The cost for each copy is $10. As 
an alternative, you can view and photocopy the Federal Register 
document at most libraries designated as Federal Depository Libraries 
and at many other public and academic libraries throughout the country 
that receive the Federal Register.
    This Federal Register document is also available from the Federal 
Register online database through GPO Access, a service of the U.S. 
Government Printing Office. The Web site address is: https://
www.gpoaccess.gov/nara/.

I. Background

A. General

    The Medicare program, title XVIII of the Social Security Act (the 
Act), is the primary payer of health care costs for 43 million enrolled 
beneficiaries. Under section 1802 of the Act, a beneficiary may obtain 
health services from any institution, agency, or person 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. 
CMS, State survey and certification agencies, or both inspect 
facilities when required, for compliance with regulatory and 
operational requirements before we allow them to participate in the 
Medicare program. Thereafter, we will review and re-verify the 
continued adherence to our requirements either as part of a scheduled 
recertification survey, or as a result of a complaint or other 
information received that will directly affect the provider's or 
supplier's business relationship with the Medicare program or indicate 
noncompliance with this regulation. The initial certification and 
subsequent recertification ensure that Medicare requirements are met, 
continue to be met, and promote the appropriate spending of the 
Medicare Trust Funds by helping to ensure that unqualified providers 
and suppliers are not granted billing privileges with the Medicare 
program.
    Historically, a provider or supplier wishing to receive payment 
from Medicare or its beneficiaries would contact a Medicare fiscal 
intermediary (FI), the State survey agency, or a Medicare carrier. In 
compliance with sections 1816, 1842 and 1874 of the Act, as stipulated 
in 42 CFR Part 421, we contract with fee-for-service contractors to 
administer payment for services and to manage other administrative 
responsibilities that the law imposes. Our regional offices, State 
survey agencies, carriers and FIs use statutes, regulations, and 
operating instructions as guidance when assigning appropriate 
identification numbers and determining whether to grant billing 
privileges in the Medicare program to providers and suppliers.
    As Medicare program expenditures have grown, increased attention 
was focused on strategies to curb improper Medicare payments by 
implementing business processes and standards that safeguard the 
Medicare program and its beneficiaries, while ensuring that well 
qualified individuals and health care organizations serve beneficiaries 
as promptly as possible.

B. Specific Authority To Collect Enrollment Information

    1. Various sections of the Act and the Code of Federal Regulations 
require providers and suppliers to furnish information concerning the 
amounts due and the identification of individuals or entities who 
furnish medical services to beneficiaries before payment can be made.
     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. Under this authority, this final rule will 
require the collection of information from providers and suppliers for 
the purpose of enrolling in the Medicare program and granting 
privileges to bill the program for health care services furnished to 
Medicare beneficiaries.
     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 1842(r) of the Act requires us to establish a 
system for furnishing a unique identifier for each physician who 
furnishes services for which payment may be made. To complete this, we 
need to collect information unique to that physician.
     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 1834(j)(1)(A) of the Act states that no payment 
may be made for items furnished by a supplier of durable medical 
equipment, prosthetics, orthotics, and supplies (DMEPOS) unless that 
supplier obtains, and renews

[[Page 20755]]

at intervals as we may require, a billing number.
    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 Secretary signed and sent to the 
Congress a ``Report to Congress on Steps Taken to Assure 
Confidentiality of Social Security Account Numbers as Required by the 
Balanced Budget Act'' on January 26, 1999, with mandatory collection of 
SSNs and EINs effective on or after April 26, 1999.
    2. 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 Tax 
Identification Number (TIN).
    3. We are authorized to collect information on the CMS 855-
Provider/Supplier Enrollment Application, (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.

C. Prior Enrollment Initiatives

    For a number of years, concern about easy entry into the Medicare 
program by unqualified or even fraudulent providers or suppliers has 
led us to step up our efforts on a number of fronts to establish more 
stringent controls on provider and supplier entry into the Medicare 
program.
    For example, in 1993 we established the National Supplier 
Clearinghouse (NSC), our contractor for enrolling suppliers of DMEPOS 
in Medicare. We instituted new procedures to use validation software to 
certify the existence of the listed business address for suppliers of 
DMEPOS. The NSC also checked the DMEPOS supplier telephone numbers 
against a national directory. This initial effort resulted in the 
revocation of about 1,500 supplier billing numbers and an estimated 
savings of $7 million per month to the Medicare Trust Funds.
    In fiscal year (FY) 1998, we required site visits for all new 
DMEPOS suppliers. The DMEPOS visits resulted in: 156 denials of new 
applicants out of 159 visits; and 656 revocations of existing suppliers 
out of 2,091 visits.
    In FY 1998 and FY 1999, our carriers and FIs submitted proposals to 
conduct site visits for those provider or supplier types that they 
believed would yield the greatest benefit in their regions. After 
reviewing the submitted proposals, we funded 320 site visits to various 
enrolling and currently enrolled Independent Diagnostic Testing 
Facilities (IDTFs), skilled nursing facilities (SNFs), home health 
agencies (HHAs), rural health clinics, comprehensive outpatient 
rehabilitation facilities, physician groups, clinical psychologists, 
and ambulance companies. The project provided useful information for 
making appropriate determinations for the eligibility to bill Medicare. 
In the course of these reviews--
     219 provider numbers were authorized or maintained;
     30 provider numbers were deactivated;
     37 provider applications were denied; and
     34 providers were referred to contractor fraud units.
    These site visits proved valuable to some providers and suppliers 
by helping them to enroll in the Medicare program properly. The site 
visits were also helpful to us in ensuring that we only conduct 
business with legitimate providers and suppliers. We believe that site 
visits are an important component of successful provider and supplier 
enrollment. We believe that there is ample authority in the statute for 
this approach. The statute confers upon the Secretary the authority to 
seek information he needs to determine the amounts due to providers and 
suppliers of services. Part of that duty is fulfilled by reviewing 
documentation offered by those entities submitting claims, but part of 
that duty may also be performed through the use of on-site reviews that 
enable the Secretary to verify, for example, that he is paying an 
entity that actually exists or that is providing a service that it 
represented it would provide in its enrollment application. Often these 
kinds of determinations cannot be made solely based on the review of 
paper documentation submitted to contractors even though they bear 
heavily on the amounts that may be due to a particular provider or 
supplier. As past experience has demonstrated, in many cases site 
visits are the only method we have to ensure that providers and 
suppliers actually exist and meet the requirements to participate in 
the Medicare program, particularly in the absence of State licensure or 
regulation. Left unchecked, Medicare program resources and the health 
of Medicare beneficiaries may be vulnerable.

II. Provisions of the Proposed Rule

    In the April 25, 2003 Federal Register (68 FR 22064), we published 
a proposed rule that builds on our collective experience and sets forth 
our standard enrollment requirements in new subpart P in part 424 of 
this chapter. We proposed that all providers and suppliers, other than 
the ``opt-out'' physicians and ``opt-out'' practitioners described 
below, must submit an enrollment application with specific information 
to enroll in the Medicare program, obtain a Medicare billing number, 
and receive Medicare billing privileges. The provisions of the proposed 
rule were designed to supplement, but not replace or nullify, existing 
regulations concerning the establishment of provider or supplier 
agreements, the issuance of provider or supplier billing numbers, and 
payment for Medicare covered services or supplies to eligible providers 
or suppliers.
    Specifically, we proposed to require that providers and suppliers 
prove their qualifications and identity and submit specified 
information to us before they are granted billing privileges in the 
Medicare program. If the provider or supplier fails to meet the 
requirements or submit the required information, we would not enroll it 
in the Medicare program or, if it is currently in the program, we would 
revoke its billing privileges. We believe the documentation and 
associated verification methods we use to determine whether to grant a 
provider or supplier billing privileges are necessary to ensure 
compliance with Medicare requirements and to prevent abuse of the 
Medicare program and the inappropriate use of Medicare funds. We also 
believe that the requirements will not hinder qualified individuals and 
organizations from enrolling or maintaining enrollment in the Medicare 
program.

A. Scope and Definitions

    We proposed to establish our standard enrollment requirements in 
part 424, new subpart P. In proposed Sec.  424.500 (Scope), we stated 
that these requirements apply to all providers and suppliers except 
those physicians and other eligible practitioners who have elected to 
``opt-out'' of Medicare as

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described in part 405, subpart D of our regulations.
    In proposed Sec.  400.502 (Definitions), we would establish the 
definitions for several key terms used throughout new subpart P. The 
terms ``provider'' and ``supplier'' are not defined in this subpart 
because their definitions are already established throughout 42 CFR. 
The term ``provider'' is defined in both Sec.  400.202 and Sec.  488.1. 
Together these sections define a provider as including a hospital, a 
critical access hospital, a skilled nursing facility, a nursing 
facility, a comprehensive outpatient rehabilitation facility, a home 
health agency, or a hospice, that has in effect an agreement to 
participate in Medicare; or a provider of outpatient physical therapy 
or speech pathology services; or a community mental health center. The 
term ``supplier,'' as defined in Sec.  400.202, is a physician or other 
practitioner, or an entity other than a provider (as defined in Sec.  
400.202 and Sec.  488.1) that furnishes health care services under 
Medicare. Section 488.1 also defines ``supplier'' to mean independent 
laboratory; portable X-ray services; physical therapist in independent 
practice; ESRD facility; rural health clinic; Federally-qualified 
health center; or chiropractor. The term ``supplier'' also includes 
``indirect suppliers,'' as indicated in 45 CFR 61.3.
    We proposed to define ``managing employee'' to be a general 
manager, business manager, administrator, director, or other individual 
who exercises operational or managerial control over, or who directly 
or indirectly conducts the day-to-day operations of, the institution, 
organization, or agency, either under contract or through some other 
arrangement, regardless of whether the individual is a W-2 employee.
    Section 1124A of the Act and Sec.  420.204 authorize the Secretary 
to collect information about managing employees. Section 1124A of the 
Act incorporates by reference the definition of managing employee, 
contained in section 1126(b) of the Act as an individual, including a 
general manager, business manager, administrator, and director, who 
exercises operational or managerial control over the entity, or who 
directly or indirectly conducts the day-to-day operations of the 
entity. We have found that a number of providers and suppliers are 
managed by individuals that have control over the day-to-day operations 
of the entity and are not employees. Some of these individuals are 
known to bill Medicare fraudulently, and are on the Office of Inspector 
General (OIG) ``List of Excluded Individuals and Entities'' and the 
General Services Administration (GSA) ``List of Parties Excluded from 
Federal Procurement and Non-procurement Programs''. These lists are 
commonly referred to as the ``OIG Sanction List'' for those parties 
excluded by the OIG from participation in any Federal health care 
programs (as defined in section 1128B(f) of the Act), and the ``GSA 
Debarment List'' for those parties debarred, suspended or otherwise 
excluded by other Federal agencies from participation in Federal 
procurement and non-procurement programs and activities, in accordance 
with the Federal Acquisition and Streamlining Act of 1994, and with the 
HHS Common Rule at 45 CFR part 76.
    Extending the term ``managing employee'' to include individuals 
performing managerial duties who are not technically employees would be 
consistent with the legislative intent to require information on those 
individuals that have effective control over a provider's or supplier's 
day-to-day operations.

B. Basic Enrollment Requirement

    Proposed Sec.  424.505 requires a provider or supplier to have a 
valid Medicare billing number for the date a service was rendered in 
order to receive payment for covered Medicare services from either 
Medicare (in the case of assigned claims) or the Medicare beneficiary 
(in the case of unassigned claims).
    Under longstanding policy and operating procedures, any claim 
submitted without an active billing number is incomplete and cannot be 
processed for payment. Providers and suppliers who are not enrolled in 
the Medicare program must adhere to the mandatory claims submission 
rules at Sec.  424.32(a)(1) (Basic requirements for all claims) and 
section 1848(g)(4) of the Act. In addition, a claim submitted without a 
valid Medicare billing number would not be considered a valid claim and 
will be rejected. If the mandatory claims submission requirements are 
not met the provider or supplier could have sanctions imposed as 
outlined in section 1848(g)(4) of the Act for failure to file a claim 
as required.

C. Requirements for Obtaining a Billing Number and Medicare Billing 
Privileges

    To obtain a Medicare billing number and be eligible to receive 
payment for Medicare covered services, providers and suppliers must 
enroll in the Medicare program and meet other applicable Federal 
requirements. The Medicare program, through its contractors, requires 
specific identifying information from a provider or supplier before 
payment is authorized. Our issuance of an identification number to a 
provider or supplier does not automatically convey the privilege to 
bill Medicare. There must be a corresponding approval of the provider 
or supplier as meeting all Federal requirements to bill Medicare for 
the number to be an approved and active Medicare billing number.
    In Sec.  424.510 (CMS 855), we proposed that a provider or supplier 
must submit to us the appropriate completed CMS 855--Provider/Supplier 
Enrollment Application based on the type of provider or supplier 
enrolling. As part of our continuing efforts to improve the enrollment 
process, the series of CMS 855 enrollment forms with proposed revisions 
were submitted with the proposed rule, and were published in the 
Federal Register concurrently for review and public comment. Some of 
the proposed revisions were the removal of certain data collections 
from all forms in the series such as information on clearinghouses used 
in claims submission, practice locations from the CMS 855R, and a 
shortened attachment for ambulance companies in the CMS 855B. We also 
simplified the sections for reporting owners and managers and added 
instructional clarifications. The forms are identified as follows:
     CMS 855A--For providers billing fiscal intermediaries.
     CMS 855B--For supplier organizations billing carriers.
     CMS 855I--For individual health care practitioners billing 
carriers.
     CMS 855R--For individual health care practitioners to 
reassign benefits to an organization.
     CMS 855S--For DMEPOS Suppliers billing the NSC.
    The CMS 855 applications will be used to gather information on 
providers and suppliers for the purpose of authorizing billing numbers 
and establishing eligibility to furnish services to Medicare 
beneficiaries. The information submitted will also uniquely identify 
the providers and suppliers for the purpose of enumeration and payment. 
OMB approved the CMS 855 for these purposes (OMB approval number 0938-
0685).
    In Sec.  424.510(a)(1), we proposed to require that a provider or 
supplier submit the following on its CMS 855:
     Complete and accurate responses to all information 
requested within each section as applicable to the provider or supplier 
type.
     Any documentation currently required by CMS under this or 
other statutory or regulatory authority to

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uniquely identify the provider or supplier (for example, an SSN or a 
TIN).
     Any documentation currently required by CMS under this or 
other statutory or regulatory authority to establish the provider or 
supplier's eligibility to furnish services to beneficiaries in the 
Medicare program (for example, a medical license or business license).
    Under the authorities noted previously in this preamble all 
providers, suppliers, and other health care related individuals and 
entities who would receive Medicare reimbursements, either directly or 
indirectly as a result of enrolling in the Medicare program, must 
furnish their SSN and TIN as a condition of maintaining an active 
enrollment status and billing privileges. We also maintained the right 
to require persons with ownership or control interests (as that term is 
defined in section 1124(a)(3) of the Act) in their providers and 
suppliers, and of all managing employees (as that term is defined in 
section 1126(b) of the Act and in Sec.  420.201 of the regulations) of 
these providers and suppliers to also furnish their SSN and TIN as a 
condition of enrollment.
    We proposed to require that providers and suppliers must certify 
that all the information furnished on the CMS 855 is accurate, 
complete, truthful, and verifiable. Any concealment or 
misrepresentation of material information in these applications would 
constitute violation of this regulation and may result in the 
rejection, denial, or revocation of the provider or supplier's 
enrollment and billing privileges. In addition, the concealment or 
misrepresentation would be referred to the OIG for investigation and 
appropriate criminal, civil or administrative action.
    In Sec.  424.510(a)(2), we proposed to require that the CMS 855 
must be signed by an individual who has the authority to bind the 
provider or supplier both legally and financially to the requirements 
set forth in subpart P. This person must be the individual practitioner 
or have an ownership or control interest in the provider or supplier, 
as that term is defined in section 1124(a)(3) of the Act, such as, be 
the provider's or supplier's general partner, chairman of the board, 
chief financial officer, chief executive officer, president, or hold a 
position of similar status and authority within the provider or 
supplier organization. The signature would attest that the information 
submitted is accurate, complete, and truthful, and the provider or 
supplier is aware of, and will abide by, Medicare rules and 
regulations.
    To ensure that the individual signing the form can bind the 
enrollee from a financial and legal standpoint, we would require the 
following persons to sign the enrollment form:
     In the case of an individual practitioner, the applying 
practitioner.
     In the case of a sole proprietorship, the applying sole 
proprietor.
     In the case of a corporation, partnership, group, limited 
liability company (LLC), or other organization, an authorized official 
as defined in Sec.  424.502.
    When an authorized official signs the application, the signed 
application is considered binding upon the corporation partnership, 
organization, group, or LLC (hereafter referred to in this section as 
an organization), as applicable. This requirement establishes 
accountability for the accuracy of the information on the CMS 855 and 
ensures that the provider or supplier is committed to taking the 
necessary steps to comply with these requirements. In addition to the 
signature requirements, we proposed to establish a delegation of 
authority. As stated in this section, the original and all subsequent 
revalidation CMS 855s submitted by an organization to enroll or 
maintain enrollment in the Medicare program must have certification 
statements signed by the current authorized official(s) on file with 
Medicare. Any subsequent updates or changes made outside the enrollment 
or revalidation process may be signed by a delegated official of the 
enrolled organization.
    The delegated official must be a W-2 managing employee of the 
provider or supplier who is enrolling in, or currently enrolled in, the 
Medicare program, or be an individual with ownership or control 
interest in the provider or supplier.
    The delegation of signature authority would not apply for 
individual practitioners and sole proprietors. All CMS 855s submitted 
by individual practitioners or sole proprietors must be signed by the 
enrolling or enrolled individual.
    As proposed in Sec.  424.510(a)(2)(ii), the delegation of authority 
must be assigned by the authorized official currently on file with us 
or the authorized official who has signed the CMS 855 currently being 
submitted to us. All delegations of authority must be submitted via the 
CMS 855 and must include the title of each person delegated authority 
to update or change the organization's enrollment information. The 
assignment must be signed by both the authorized official currently on 
file with Medicare and the person(s) being delegated as an official of 
the organization. The signature of the delegated official would bind 
the organization both legally and financially, as if the signature was 
that of the authorized official. Once the delegation of authority is 
established, the signatures of the authorized official or the assigned 
delegated official(s) would be the only acceptable signature(s) on 
correspondence to report updates or changes to the enrollment 
information.
    In Sec.  424.510(b), we proposed to verify initial compliance with 
statutes and regulations before providers and suppliers are granted 
billing privileges, as well as on a continuing basis. The verifications 
would be based on information submitted by providers and suppliers on 
the CMS 855.
    We proposed to require in Sec.  424.510(c) that providers and 
suppliers, including those that are deemed to meet Medicare health and 
safety requirements by virtue of their accreditation by a national 
accrediting body, must attest via signature on the CMS 855 that they 
have met all the requirements set forth in this regulation before they 
are granted billing privileges. Those providers for which certification 
is required must meet the provisions of part 488 concerning mandatory 
State survey and certification requirements. Providers also must have 
completed a provider agreement in accordance with part 489, which 
specifies the requirements for provider agreements. In addition, in 
Sec.  424.510(d) and (e), we proposed to require that providers and 
suppliers must be operational as defined in Sec.  424.502 and must meet 
additional requirements that apply to both enrolling and currently 
enrolled providers and suppliers before receiving a Medicare billing 
number and becoming eligible for Medicare payments.
    In recognition of the effectiveness of site visits, we proposed to 
require, at Sec.  424.510(f), a plan for integrating site visits as 
part of our enrollment validation process and general program oversight 
activities. We proposed to reserve the right to perform on-site 
inspections of the provider or supplier when we deem necessary to 
ensure compliance with Medicare enrollment requirements. For certain 
providers and suppliers this practice has always been the case (for 
example, hospitals, SNFs, and HHAs), but we are extending this to all 
providers and suppliers when deemed necessary based on questionable 
enrollment information. Site visits for enrollment purposes will not 
affect those site visits performed for establishing conditions of 
participation.

[[Page 20758]]

    The proposed site visits and on-site inspections to ensure 
compliance with Medicare enrollment requirements are unrelated to the 
compliance-related site visits already being conducted by the OIG. 
After a provider or supplier enters into a corporate integrity 
agreement with the OIG, usually as the result of a Federal False Claims 
Act settlement, the OIG may conduct a site visit as part of its work in 
monitoring the provider or supplier's compliance with the terms of the 
corporate integrity agreement.
    Upon the provider or supplier's successful completion of the 
enrollment process, including State survey and certification, 
accreditation, and approval of the CMS 855, we would grant Medicare 
billing privileges and issue a billing number if one has not already 
been issued. The effective date for reimbursement of Medicare covered 
services would continue to be determined based on current Medicare 
regulations and policy based on the type of provider or supplier 
submitting claims. Currently, the effective dates for reimbursement can 
be found at Sec.  489.13 for providers and suppliers requiring State 
survey or certification or accreditation, Sec.  424.5 and Sec.  424.44 
for nonsurveyed or certified/accredited suppliers, and Sec.  424.57 and 
section 1834(j)(1)(A) of the Act for DMEPOS suppliers. For those 
providers and suppliers seeking accreditation from a CMS-approved 
accreditation organization, the effective date for reimbursement is the 
later of the date accreditation was received or the final approval of 
the CMS 855. Based on the regulations cited previously, we would not 
issue Medicare billing numbers or grant Medicare billing privileges 
retroactive to the date that the provider or supplier received final 
approval of their enrollment application (CMS 855). We proposed to use 
this process because we believe there is a relationship between 
fulfilling the requirements stipulated in the Medicare program statutes 
and related laws, the integrity of the provider and supplier, the 
quality of care furnished to Medicare beneficiaries, and the confidence 
of the public in the Medicare program.
    In the future there will be universal provider and supplier 
numbers, as required by the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA), for uniquely identifying a provider 
or supplier and for purposes of billing all health plans, including 
Medicare and Medicaid. When this universal number is in place, it will 
still be necessary for providers and suppliers to apply for enrollment 
as a Medicare provider or supplier and be granted Medicare billing 
privileges.

D. Requirements for Reporting Changes and Updates to, and the Periodic 
Revalidation of, Medicare Enrollment Information

    In Sec.  424.515, we proposed to require that a provider or 
supplier must update its enrollment information, and recertify as to 
its accuracy when any changes are made. We would also periodically 
require revalidation of the enrollment information by all providers and 
suppliers when enrollment information has aged over 3 years. The 
revalidation process will ensure that we have complete and current 
information on all Medicare providers and suppliers and ensure 
continued compliance with Medicare requirements. In addition, this 
process further ensures that Medicare beneficiaries are receiving 
services furnished only by legitimate providers and suppliers, and 
strengthens our ability to protect the Medicare Trust Funds.
    The accuracy of the data describing the individuals or 
organizations with which we do business is essential to efficient and 
effective operation of the Medicare program. For this reason, we 
proposed to require at Sec.  424.520(b), that individuals and 
organizations are responsible for updating their CMS 855 information to 
reflect any changes in a timely manner. We would define timely as 
meaning within 90 days, with the exception of a change in ownership or 
control of the provider or supplier which must be reported within 30 
days. Failure to do so may result in deactivation or even revocation of 
their billing privileges.
    We would determine, upon receipt of any changes, if continued 
enrollment in the Medicare program is proper. We expect that in the 
vast majority of cases, updates or changes would not affect the status 
of the provider or supplier. Where it does, we would follow the 
revocation procedures outlined later in this rule.
    When no such changes or updates were reported or submitted for a 
period of time, we believe that it is prudent to take steps to confirm 
the continued validity of the information that was previously 
submitted. We believe that this revalidation of enrollment information 
should be accomplished in a way that minimizes the reporting burden to 
the provider or supplier, but also mitigates the risk to the program of 
maintaining incomplete or inaccurate information that materially 
affects the relationship of the program to the provider or supplier. 
For this reason, we proposed to require that we will initiate a 
revalidation process for any individual or organization that has not 
submitted a change or update within the last 3 years. Routine 
revalidations may or may not be accompanied by site visits.
    We will reserve the right to perform non-routine revalidation and 
request the provider or supplier to recertify as to the accuracy of the 
enrollment information when warranted to assess and confirm the 
validity of the enrollment information. Non-routine revalidation may be 
triggered as a result of information indicating local problems, 
national initiatives, fraud investigations, complaints from 
beneficiaries, or other reasons that cause us to question the integrity 
of the provider or supplier in its relationship with the Medicare 
program. Like routine revalidation, non-routine revalidation may or may 
not be accompanied by site visits.
    We proposed to require that the revalidation of enrollment 
information occur no more than once every 3 years. We reserve the right 
to adjust this schedule if we determine that revalidation should occur 
on a more frequent basis due to complaints or evidence we receive 
indicating noncompliance with the statute or regulations by specific 
provider or supplier types. The schedule may also be on a less frequent 
basis if we determine that the integrity of and compliance with the 
statute and regulations by specific provider or supplier types 
indicates that less frequent validation is justified. If such a change 
were to occur, we would notify all affected providers and suppliers in 
writing at least 90 days in advance of implementing the change. We 
would continue to revalidate enrollment information for Ambulance 
Service Suppliers in accordance with regulations set forth at Sec.  
410.41(c)(2) (Requirements for ambulance suppliers), and DMEPOS 
suppliers would continue to renew enrollment in accordance with 
regulations set forth at Sec.  424.57(e) (Special payment rules for 
items furnished by DMEPOS suppliers and issuance of DMEPOS supplier 
billing numbers).
    We proposed to require at new Sec.  424.515(a) that during the 
revalidation or update process all providers and suppliers must attest 
by way of a signed certification statement that the requirements set 
forth in this regulation continue to be met. This requirement would not 
only ensure continued accuracy of the CMS 855 information, but would 
also ensure that the provider or supplier is committed to taking the 
necessary steps to maintain compliance with these requirements. 
However, it should be noted that periodic validation of a provider or 
supplier's Medicare enrollment information is separate from the survey 
requirements for the provider

[[Page 20759]]

or supplier as contained in 42 CFR Chapter IV, subchapter E (Standards 
and certification).
    We proposed to require the information submitted for revalidation 
or update to include any new or changed documentation as required by us 
under this or other statutory or regulatory authority that identifies 
the provider or supplier, and any documentation as required by us under 
this or other statutory or regulatory authority required to verify the 
provider or supplier's continued eligibility to furnish services to 
beneficiaries in the Medicare program. We would also require a 
signature on the completed CMS 855 that meets the requirements proposed 
in Sec.  424.510(a)(3).
    In Sec.  424.515(b), we also proposed to require that a provider or 
supplier must submit a CMS 855 with complete information for 
revalidation within 60 calendar days of our revalidation notification. 
For those providers and suppliers who initially enrolled in the 
Medicare program via the CMS 855, we would furnish a copy of the 
information currently on file for their review, request that they make 
any changes, and certify via their signature that the information is 
accurate, complete, and truthful. We estimate that completion of the 
form would require on average 8 hours. Therefore, we believe 60 days is 
a reasonable timeframe for providers and suppliers to comply.
    As part of the revalidation process, we would verify the accuracy 
of the reported information on the applicable CMS 855. Because survey 
and certification are independent program requirements distinct from 
the revalidation of enrollment information requirements set forth in 
this subpart, we proposed in Sec.  424.515(c) that new surveys or 
certifications are not required for the revalidation process. However, 
providers must continue to meet the provisions of Sec.  488 and Sec.  
489 concerning mandatory State survey and certification requirements. 
When applicable, providers must also have completed a provider 
agreement in accordance with Sec.  489, which specifies the 
requirements for provider agreements. We would also reserve the right, 
at proposed Sec.  424.515(d), to perform on-site inspections, to 
further ensure compliance with Medicare requirements.
    We understand that the resubmission and update of enrollment 
information would place an obligation on providers and suppliers. We 
are considering a variety of ways to minimize the burden of this 
important information collection and verification provision (including 
the use of Internet technology).
    To reduce the burden when reporting updates or changes in the 
future, we would require that all providers and suppliers currently in 
the Medicare program complete, in its entirety, the CMS 855 at least 
once if they have not done so in the past. This would ensure that we 
have the most current and accurate information, and would allow us to 
make full use of electronic data submissions via the Internet. By 
having a complete enrollment record, we would be able to produce and 
transmit or mail the CMS 855, pre-populated with previously reported 
information, to the provider or supplier for their review and signature 
certification as to the continued accuracy of the information and 
require them to update any information that is no longer current.

E. Additional Provider and Supplier Requirements for Enrolling and 
Maintaining Active Enrollment Status in the Medicare Program

    In new Sec.  424.520, we proposed to specify the additional 
requirements that providers and suppliers must meet to enroll or 
maintain enrollment in the Medicare program. The provider or supplier 
must certify that it meets, and continues to meet, the following 
requirements:
     Compliance with title XVIII of the Act (Medicare Statutory 
Provisions) and applicable regulations.
     Compliance with all applicable Federal and State licensure 
and regulatory requirements that apply to the specific provider or 
supplier type that relate to providing health care services.
     Not employing or contracting with individuals or entities 
excluded from participation in Federal Health care programs for the 
provision of items and services reimbursable under these programs in 
violation of section 1128A(a)(6) of the Act.
    The OIG program exclusion regulations were amended effective August 
25, 1995, in accordance with the Federal Acquisition Streamlining Act 
of 1994 (FASA), and with the HHS Common Rule at 45 CFR part 76, to 
explain the scope and effect of an OIG exclusion. In accordance with 
the FASA, government-wide reciprocal effect will be given by all 
Federal agencies to an administrative sanction imposed by any Federal 
agency. Specifically, the statute provides that: ``No agency shall 
allow a party to participate in any procurement and nonprocurement 
activity if any [other] agency has debarred, suspended, or otherwise 
excluded, that party from participation in a procurement or 
nonprocurement activity,'' (FASA, section 2455). Therefore, consistent 
with the FASA, its implementing regulation, and OIG regulations (Sec.  
1001.1901(b)), we would deny or revoke enrollment (revocation effective 
on the date of the exclusion) if the provider or supplier is subject to 
an OIG exclusion, or is debarred, suspended or otherwise excluded by 
any other Federal health care program or agency.

F. Rejection of a Provider's or Supplier's CMS 855 for Medicare 
Enrollment

    In new Sec.  424.525, we proposed that if a provider or supplier 
enrolling in the Medicare program for the first time fails to furnish 
complete information on the CMS 855, or fails to furnish missing 
information or any necessary supporting documentation as required by 
CMS under this or other statutory or regulatory authority within 60 
calendar days of our request to furnish the information, we would 
reject the provider or supplier's CMS 855 application. Rejection would 
not occur if the provider or supplier is actively communicating with us 
to resolve any issues regardless of any timeframes.
    Upon notification of a rejected CMS 855, the provider or supplier 
must again begin the enrollment process by completing and submitting a 
new CMS 855 and all applicable documentation. We proposed to specify in 
Sec.  424.525(b) that the new form must also update any information 
that is different from that originally submitted. This would ensure 
that we have the most recent information about the provider or 
supplier. The enrollment process would culminate in the granting of 
billing privileges or denial or rejection of the application.

G. Denial of Enrollment

    We would deny enrollment in the Medicare program to providers or 
suppliers whom we determine to be ineligible. Providers and suppliers 
who are denied enrollment would not receive Medicare billing 
privileges. In Sec.  424.530(a), we proposed to require that a provider 
or supplier applying for enrollment in the Medicare program may be 
denied enrollment for any of the following reasons:
     Under Sec.  424.530(a)(1), enrollment may be denied if the 
provider or supplier were found not to be in compliance (for example, 
failure to furnish required documentation, lack of qualified practice 
location) with the Medicare enrollment requirements applicable to the 
type of provider or supplier enrolling, unless the reason for 
noncompliance were corrected or the provider or supplier has submitted 
a

[[Page 20760]]

plan of corrective action as outlined in part 488.
     In Sec.  424.530(a)(2), we proposed to require that 
enrollment may also be denied if: a provider, supplier, an owner, 
managing employee, authorized or delegated official an supervising 
physician, medical director, or other health care personnel furnishing 
Medicare reimbursable services who is required to be reported on the 
providers' or suppliers' CMS 855 (for example, an ambulance crew 
member) --
    + Is excluded from the Medicare, Medicaid, or any other Federal 
health care programs, as defined in Sec.  1001.2, in accordance with 
Sec.  1001.1901(a); or
    + Is debarred, suspended, or otherwise excluded from participating 
in any other Federal procurement or nonprocurement activity in 
accordance with FASA, section 2455; (See HHS Common Rule provisions 
that discuss the effect of a program exclusion under title XI of the 
Act, as well as other Federal agency debarments, suspensions, and 
exclusions found at 45 CFR 76.100(c) and (d)).
    We are required to ensure that no payments are made to any 
providers or suppliers who are excluded from participation in the 
Medicare program under authorities found in sections 1128, 1156, 1862, 
1867, and 1892 of the Act, or who are debarred, suspended or otherwise 
excluded as authorized by FASA. This includes any individual, entity, 
or any provider or supplier that arranges or contracts with (by 
employment or otherwise) an individual or entity that the provider or 
supplier knows or should know is excluded from participation in a 
Federal health care program for the provision of items or services for 
which payment may be made under such a program (section 1128A(a)(6) of 
the Act), and any provider or supplier that has been debarred, 
suspended, or otherwise excluded from participation in any other 
Executive Branch procurement or nonprocurement programs or activity 
(FASA, section 2455).
    Therefore, when an individual or entity is excluded by the OIG 
under section 1128 of the Act, the exclusion is applicable to 
participation in all Federal health care programs (including Medicare 
and Medicaid as defined in section 1128B(f) of the Act). In addition, 
section 1862(e) of the Act prohibits the Secretary from paying for 
items and services furnished by excluded individuals. We believe that 
our general authorities, in combination with the prohibition against 
paying for items or services furnished by excluded individuals, 
provides authority for us to deny enrollment unless a provider or 
supplier terminates its relationship with the relevant individual. The 
denial will remain effective until that provider, supplier, managing 
employee, authorized or delegated official, medical director, 
supervising physician, or other health care personnel furnishing 
Medicare reimbursable services, is no longer excluded or sanctioned. 
Section 424.530(b)(3) also would provide that the denial will be 
effective within 30 days of the denial notification.
    In Sec.  424.530(a)(3), we also proposed to require that we may 
deny enrollment in the Medicare program if the provider or supplier, or 
any owner of the provider or supplier, has been convicted of a Federal 
or State felony offense that we determine to be detrimental to the best 
interests of the Medicare program or its beneficiaries. This authority 
is afforded to us in many of the HIPAA fraud and abuse provisions and 
section 4302 of the BBA. In making assessments, we proposed to require 
including any felony convictions from the last 10 years or more. In 
addition, we would consider the severity of the underlying offense.
    Felonies that we determine to be detrimental to the best interests 
of the Medicare program or its beneficiaries include the following:
     Within the last 10 years or more preceding enrollment or 
revalidation of enrollment, crimes against persons, such as rape, 
murder, kidnapping, assault and battery, robbery, and other similar 
crimes for which the individual was convicted, including guilty pleas 
and adjudicated pretrial diversions. We believe it is reasonable for 
the Medicare program to question the ability of the individual or 
entity with such a history to respect the life and property of program 
beneficiaries.
     Within the last 10 years or more preceding enrollment or 
revalidation of enrollment, financial crimes, such as extortion, 
embezzlement, income tax evasion, making false statements, insurance 
fraud, and other similar crimes for which the individual was convicted, 
including guilty pleas and adjudicated pretrial diversions. We believe 
it is reasonable for the Medicare program to question the honesty and 
integrity of the individual or entity with such a history in providing 
services and claiming payment under the Medicare program.
     Within the last 10 years or more preceding enrollment or 
revalidation of enrollment, any felony that placed the Medicare program 
or its beneficiaries at immediate risk, such as a malpractice suit that 
resulted in a conviction of criminal neglect or misconduct.
     Any felonies referred to in section 1128 of the Act.
    Under section 1128(a) of the Act, the Secretary must exclude 
individuals or entities convicted of certain crimes, such as program-
related crimes, crimes related to patient abuse or neglect, and 
conviction of a felony related to health care fraud or controlled 
substances. In addition, the Secretary has authority to exclude 
individuals and entities for other adverse actions including when an 
individual or entity is owned or controlled by a sanctioned or 
convicted individual, in accordance with section 1128(b)(8) of the Act.
    In cases where the provider or supplier is not a convicted 
individual but, rather, has an ownership or management relationship 
with a convicted or excluded individual, that provider or supplier may 
also be subject to civil monetary penalties as stated in section 
1128A(a)(6) of the Act. In addition, we may deny or revoke billing 
privileges if such a relationship exists. However, the denial may be 
reversed if, within 30 days of the denial notification, the provider or 
supplier terminates its ownership or management relationship with the 
convicted or excluded individual or organization.
    In Sec.  424.530(a)(4), we proposed to require that we may deny 
enrollment if the provider or supplier has deliberately submitted false 
or misleading information on their CMS 855 to gain enrollment in the 
Medicare program. Offenders may be subject to fines or imprisonment, or 
both, in accordance with current statute and regulation.
    In Sec.  424.530(a)(5), we proposed possible denial of enrollment 
where there are repeated instances in which, upon on-site review or 
other reliable evidence, we do not find present those licensed medical 
professionals required under the statute or regulations to supervise 
treatment or provide Medicare covered services for Medicare patients; 
or we determine that the provider or supplier is not operational to 
furnish Medicare covered services or supplies.
    As outlined in Sec.  424.530(b), if the denied provider or supplier 
appeals the decision, and the denial is upheld, that provider or 
supplier may submit a new CMS 855 after we notify it that the original 
determination was upheld. If the provider or supplier did not appeal 
the determination, it may submit a new CMS 855 when the timeframe for 
appeal rights has lapsed. We proposed this latter requirement to 
prevent administrative difficulties that might result in processing two 
enrollment forms if a new one is submitted during the time period when 
the provider or supplier may appeal an initial denial.

[[Page 20761]]

    Medicare enrollment denials would impact the provider or supplier 
on a national scale. In proposed Sec.  424.530(c), we stated that when 
a provider or supplier is denied enrollment in Medicare, we would 
review all other related Medicare enrollment files that the denied 
provider or supplier has an association with (for example, as an owner 
or managing employee) to determine if the denial warrants an adverse 
action of the associated Medicare provider or supplier.

H. Revocation of Enrollment and Billing Privileges From the Medicare 
Program

    Revocation occurs when an enrolled provider or supplier's billing 
privileges are terminated. In proposed Sec.  424.535, we outlined the 
causes for revocation and what a provider or supplier would need to do 
to re-enroll in the Medicare program after revocation. In considering 
whether to revoke enrollment and billing privileges in the Medicare 
program, we would consider the severity of the offenses, mitigating 
circumstances, program and beneficiary risk if enrollment was to 
continue, possibility of corrective action plans, beneficiary access to 
care, and any other pertinent factors.
    In general, we proposed to require revocation criteria that are 
similar to our reasons for denial of initial Medicare program 
enrollment. In Sec.  424.535(a)(1), we proposed to require that a 
provider or supplier's enrollment and billing privileges may be revoked 
if, at any time, it is determined to be out of compliance with the 
Medicare enrollment requirements outlined in subpart P including 
failure to report changes to enrollment information timely or failure 
to adhere to corrective action plans, and has not corrected the problem 
within 30 days of notice of noncompliance or submitted a plan of 
corrective action as cited earlier. We may request additional 
documentation from the provider or supplier to determine compliance if 
adverse information is received or otherwise found concerning the 
provider or supplier. If requested documentation we required under this 
or other statutory or regulatory authority is not submitted within 30 
calendar days of our request, we would immediately begin revocation 
proceedings. If the documentation is received timely, we would review 
and verify the information to determine if we should proceed with the 
revocation. Providers requiring State survey and certification would 
continue to receive payment during the data verification review under 
current regulations found at part 488 and under section 1819(h)(2)(c) 
of the Act. Providers and suppliers not subject to State survey and 
certification may have their payments suspended during the data review.
    We also proposed to require that we may revoke a provider or 
supplier's billing privileges if the provider or supplier establishes 
the following:
     Repeated instances in which, upon on-site review or other 
reliable evidence, we do not find present those licensed medical 
professionals required under the statute or regulation to supervise 
treatment of, or to provide Medicare covered service for, Medicare 
patients.
    Additional proposed reasons that may result in the revocation of 
billing privileges in Sec.  424.535(a) includes the following:
     The provider or supplier, any owner, managing employee, 
authorized or delegated official, supervising physician or other health 
care personnel who must be reported on the CMS 855 (for example, 
ambulance crew member) of the provider or supplier, in accordance with 
section 1862(e)(1) and (2) of the Act, becomes excluded from the 
Medicare, Medicaid or any other Federal health care programs, as 
defined in Sec.  1001.2, in accordance with section 1128 or 1156 of the 
Act, or is debarred, suspended or otherwise by any Federal health care 
program or agency.
     The provider or supplier, or any owner of the provider or 
supplier, is convicted of a Federal or State felony offense that we 
determine to be detrimental to the best interests of the program as 
outlined in ``Denial of Enrollment'' above.
     The provider or supplier certified as ``true'' 
deliberately submitted false or misleading information on the CMS 855 
in order to enroll or maintain enrollment in the Medicare program. 
(Offenders may be subject to criminal or civil prosecution, in 
accordance with current laws and regulations).
     Upon on-site review, we determine that the provider or 
supplier is no longer operational to furnish Medicare covered services 
or supplies.
     The provider or supplier fails to furnish complete and 
accurate information on the CMS 855 and any applicable documentation 
within 60 calendar days of our notice to recertify its enrollment 
information.
     The provider or supplier knowingly sells to or allows 
another individual or entity to use its billing number.
    In addition to the revocation of the provider's or supplier's 
billing privileges, we proposed to require at Sec.  424.535(b) that any 
provider agreement in effect at the time of revocation would also be 
terminated effective with the date of revocation. We do not believe it 
would be prudent for us to maintain an active provider agreement for a 
provider or supplier whose business relationship with Medicare was 
adverse enough as to cause the revocation of its billing privileges. 
Section 1866(b)(2)(A) of the Act specifies that the Secretary may 
terminate a provider agreement after the Secretary has determined that 
the provider fails to comply substantially with the provisions of title 
XVIII. We proposed to amend Sec.  489.53 and Sec.  498.3 to reflect 
this proposal.
    In new Sec.  424.535(c), we proposed to require that upon 
notification of the revocation of its billing number, if the provider 
or supplier seeks to re-establish enrollment and billing privileges in 
the Medicare program (either after the appeals process is exhausted or 
in place of the appeals process), then the provider or supplier must 
complete and submit a new CMS 855 as a new provider or supplier and 
applicable documentation. Providers must be resurveyed or recertified 
by the State survey agency as a new provider and must establish a new 
provider agreement with our Regional Office.
    If the billing privileges are revoked due to the adverse activity 
of an individual or organization other than the provider or supplier, 
the revocation may be reversed if the provider or supplier terminates 
its business relationship with the individual or organization that was 
responsible for the revocation within 30 days.
    As with a denial of Medicare enrollment, revocations would impact 
the provider or supplier on a national scale. As proposed in Sec.  
424.535(d), if a provider or supplier's billing privileges are revoked, 
we would review all other related Medicare enrollment files that the 
revoked provider or supplier has an association with (for example, as 
an owner or managing employee) to determine if the revocation warrants 
an adverse action of the associated Medicare provider or supplier.

I. Deactivation of Medicare Billing Privileges

    When a provider or supplier's billing number is deactivated, 
billing privileges are suspended, but can be restored upon the 
submission of updated or recertified information. In new Sec.  424.540, 
we proposed to continue to deactivate a provider or supplier's Medicare 
billing number if no Medicare claims are submitted for 2 consecutive 
calendar quarters (6 months) unless current policy or regulations 
specify otherwise for specific provider or supplier types. Our current 
policy requires deactivation of billing numbers after 4 consecutive

[[Page 20762]]

calendar quarters (12 months) of no claim submissions. We included this 
reduction to the current requirement because we are aware of a number 
of program integrity issues related to inactive Medicare billing 
numbers. We wish to prevent, for example, questionable businesses from 
deliberately obtaining multiple numbers so that they could keep one 
``in reserve'' in the event their practices result in suspension of 
claims payment under their active number. We also wish to prevent 
fraudulent entities from obtaining information about discontinued 
providers or suppliers, for example, using the Medicare billing number 
of a deceased physician.
    We also proposed to require deactivation of a billing number if we 
discover changes to the information provided on the provider or 
supplier's CMS 855 that were not reported within 90 days of the change. 
This includes, but is not limited to, changes to billing services, a 
change in the practice location, or a change of any managing employee. 
A change in ownership or control must be reported within 30 calendar 
days.
    Deactivation of Medicare billing privileges is considered a 
temporary action to protect the provider or supplier from misuse of 
their billing number and to also protect the Medicare Trust Funds from 
unnecessary overpayments. The temporary deactivation of a billing 
number would not have any effect on a provider or supplier's 
participation agreement or conditions of participation.
    In Sec.  424.540(b), we proposed that a provider or supplier whose 
billing number has been deactivated for any reason other than 
nonsubmission of a claim for 6 months and who wants to reactivate its 
Medicare billing number must complete and submit a new CMS 855. Those 
providers and suppliers whose billing number are deactivated after 
nonsubmission of a claim must recertify that the enrollment information 
currently on file with Medicare is correct before the claim would be 
paid. In addition, the provider or supplier must meet all current 
Medicare requirements in place at the time of the reactivation. The 
provider or supplier must also be prepared to submit a valid claim or 
risk subsequent deactivation of their billing number. Once notified, we 
would give all reactivations of Medicare billing numbers priority 
handling to ensure expedient payment of claims. Reactivation of a 
Medicare billing number would not require resurvey or certification by 
State agency, or the establishment of a new provider agreement.

J. Provider and Supplier Appeals

    In new Sec.  424.545, we proposed that a provider or supplier that 
has been denied enrollment in the Medicare program, or whose enrollment 
has been revoked, may appeal our decision in accordance with our 
regulations at part 405, subpart H, for suppliers or part 498, subpart 
A, for providers. We are currently drafting a single regulatory appeals 
process for all providers and suppliers denied or revoked from 
participation in the Medicare program. In keeping with current policy, 
we also proposed that no payments would be made during the appeals 
process. If the provider or supplier is successful in overturning a 
denial or revocation, unpaid claims for services furnished during the 
overturned period may be resubmitted.
    In addition, we proposed in Sec.  424.545(b) that a provider or 
supplier whose billing privilege was deactivated may file a rebuttal 
using procedures found at Sec.  405.74.

K. Prohibitions on the Sale or Transfer of Billing Privileges

    We proposed in new Sec.  424.550 that a provider or supplier would 
be prohibited from selling its Medicare billing number to any 
individual or entity, or allowing another individual or entity to use 
its Medicare billing number. Similarly, we would prohibit a provider or 
supplier from transferring its Medicare billing privileges to any 
indiv