Medicaid Integrity Program; Limitation on Contractor Liability, 67653-67656 [E7-23217]
Download as PDF
<![CDATA[
Federal Register / Vol. 72, No. 230 / Friday, November 30, 2007 / Rules and Regulations
III. Waiver of Proposed Rulemaking
We ordinarily publish a notice of
proposed rulemaking in the Federal
Register to provide a period for public
comment before the provisions of a
notice take effect in accordance with
section 553(b) of the Administrative
Procedure Act (APA) (5 U.S.C. 553(b)).
However, we can waive the notice and
comment procedure if the Secretary
finds, for good cause, that a notice and
comment process is impracticable,
unnecessary or contrary to the public
interest, and incorporates a statement of
the finding and the reasons therefore in
the notice.
We find for good cause that it is
unnecessary to undertake notice and
comment rulemaking because this
notice merely provides technical
corrections to the regulations. We are
not making substantive changes to our
payment methodologies or policies, but
rather, are simply implementing
correctly the payment methodologies
and policies that we previously
proposed, received comment on, and
subsequently finalized. The public has
already had the opportunity to comment
on these payment methodologies and
policies, and this correction notice is
intended solely to ensure that the FY
2008 SNF PPS final rule accurately
reflects them. Therefore, we believe that
undertaking further notice and comment
procedures to incorporate these
corrections into the update notice is
unnecessary and contrary to the public
interest.
(Catalog of Federal Domestic Assistance
Program No. 93.773, Medicare—Hospital
Insurance; and Program No. 93.774,
Medicare—Supplementary Medical
Insurance Program)
Dated: November 19, 2007.
Ann C. Agnew,
Executive Secretary to the Department.
[FR Doc. E7–23219 Filed 11–29–07; 8:45 am]
BILLING CODE 4120–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 455
[CMS–2264–F]
rwilkins on PROD1PC63 with RULES
RIN 0938–AO88
Medicaid Integrity Program; Limitation
on Contractor Liability
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule.
AGENCY:
VerDate Aug<31>2005
16:09 Nov 29, 2007
Jkt 214001
SUMMARY: The Medicaid Integrity
Program (the Program) provides that the
Secretary promote the integrity of the
Medicaid program by entering into
contracts with contractors that will
review the actions of individuals or
entities furnishing items or services
(whether fee-for-service, risk, or other
basis) for which payment may be made
under an approved State plan and/or
any waiver of the plan approved under
section 1115 of the Social Security Act;
audit claims for payment of items or
services furnished, or administrative
services furnished, under a State plan;
identify overpayments of individuals or
entities receiving Federal funds; and
educate providers of services, managed
care entities, beneficiaries, and other
individuals with respect to payment
integrity and quality of care. This final
rule will provide for limitations on a
contractor’s liability while performing
these services under the Program.
The final rule will, to the extent
possible, employ the same or
comparable standards and other
substantive and procedural provisions
as are contained in section 1157
(Limitation on Liability) of the Social
Security Act.
DATES: Effective Date: These regulations
are effective on December 31, 2007.
FOR FURTHER INFORMATION CONTACT:
Barbara Rufo, 410–786–5589 or Crystal
High, 410–786–8366.
SUPPLEMENTARY INFORMATION:
I. Background
A. Current Law
States and the Federal Government
share in the responsibility for
safeguarding Medicaid program
integrity. States must comply with
Federal requirements designed to ensure
that Medicaid funds are properly spent
(or recovered, when necessary). The
Centers for Medicare & Medicaid
Services (CMS) is the primary Federal
agency responsible for providing
oversight of States’ activities and
facilitating their program integrity
efforts.
B. Medicaid Integrity Program
Section 6034 of the Deficit Reduction
Act (DRA) of 2005 (Pub. L. 109–171,
enacted on February 8, 2006) amended
title XIX of the Social Security Act (the
Act), (42 U.S.C. 1396 et seq.) by
redesignating the old section 1936 as
section 1937; and inserting the new
section 1936 to combat Medicaid fraud
and abuse. For the first time, the
Program authorizes the Federal
Government to directly identify,
recover, and prevent inappropriate
Medicaid payments. It will also support
PO 00000
Frm 00019
Fmt 4700
Sfmt 4700
67653
the efforts of the State Medicaid
agencies through a combination of
oversight and technical assistance.
Although individual States work to
ensure the integrity of their respective
Medicaid programs, the Program
represents CMS’ first comprehensive
national strategy to detect and prevent
Medicaid fraud and abuse. The Program
will provide CMS with the ability to
more directly ensure the accuracy of
Medicaid payments and to deter those
who would exploit the program.
The new section 1936 of the Act states
that the Secretary shall promote the
integrity of the Medicaid program by
entering into contracts with eligible
entities to carry out the following
activities:
1. Review of the actions of individuals
or entities furnishing items or services
(whether on a fee-for-service, risk or
other basis) for which payment may be
made under a State plan approved
under title XIX (or under any waiver of
this plan approved under section 1115
of the Act) to determine whether fraud,
waste, and/or abuse has occurred, or is
likely to occur, or whether these actions
have any potential for resulting in an
expenditure of funds under title XIX in
a manner that is not intended under the
provisions of title XIX.
2. Audit of claims for payment for
items or services furnished, or
administrative services rendered, under
a State plan under title XIX, including
cost reports, consulting contracts; and
risk contracts under section 1903(m) of
the Act.
3. Identification of overpayments to
individuals or entities receiving Federal
funds under title XIX.
4. Education of providers of services,
managed care entities, beneficiaries, and
other individuals with respect to
payment integrity and quality of care.
Section 1936 of the Act also provides
that the Secretary will, by regulation,
provide for the limitation of a
contractor’s liability for actions taken to
carry out a contract under the Medicaid
Integrity Program.
II. Provisions of the Proposed
Regulation and Response to Comments
Limitations on Contractor Liability
Section 6034 of the Deficit Reduction
Act of 2005 amended title XIX of the
Act by establishing, under the new
section 1936, the Medicaid Integrity
Program to promote the integrity of the
Medicaid program by authorizing the
Centers for Medicare & Medicaid
Services (CMS) (on behalf of the
Secretary) to enter into contracts with
contractors that will (1) review the
actions of individuals or entities
E:\FR\FM\30NOR1.SGM
30NOR1
rwilkins on PROD1PC63 with RULES
67654
Federal Register / Vol. 72, No. 230 / Friday, November 30, 2007 / Rules and Regulations
furnishing items or services (whether
fee-for-service, risk, or other basis) for
which payment may be made under an
approved State plan and/or any waiver
of the plan approved under section 1115
of the Social Security Act; (2) audit
claims for payment of items or services
furnished, or administrative services
rendered, under a State plan; (3)
identify overpayments to individuals or
entities receiving Federal funds under
title XIX; and (4) educate providers of
services, managed care entities,
beneficiaries, and other individuals
with respect to payment integrity and
quality of care. This final rule will set
forth limitations on a contractor’s
liability while performing these services
under the Program.
Contractors that perform activities
under the Program will be reviewing
activities of providers and others
seeking Medicaid payment for providing
services to Medicaid beneficiaries. In an
effort to reduce or eliminate the Program
contractors’ exposure to possible legal
action from entities they review, section
1936 of the Act requires that we, by
regulation, limit the Program
contractor’s liability for actions taken in
carrying out its contract. We must
establish, to the extent we find
appropriate, standards and other
substantive and procedural provisions
that are the same as, or comparable to,
those contained in section 1157 of the
Act.
Section 1157 of the Act provides that
any organization having a contract
(under Title XI, Part B of the Act) with
the Secretary, as well as its employees,
fiduciaries, and anyone who furnishes
professional services to such an
organization, is/are protected from civil
and criminal liability in performing its
duties under the Act or its contract,
provided these duties are performed
with due care.
In the July 20, 2007 Federal Register
(72 FR 39766), we published the
proposed rule entitled, ‘‘Medicaid
Integrity Program; Limitation on
Contractor Liability,’’ and provided for
a 30-day public comment period. We
received a total of 1 timely comment
from a health care association. The
comment questioned the proposed
provisions and we responded with
further clarification in our response.
Brief summaries for each proposed
provision, a summary of the public
comments we received, and our
responses to comments, are set forth
below.
General Comments
Comment: A commenter expressed
concern that CMS has not provided the
health care community or the public
VerDate Aug<31>2005
16:09 Nov 29, 2007
Jkt 214001
any information about the federal
government’s discussions on the
Program’s contractors, termed Medicaid
Integrity Contractor’s, (MIC) roles,
responsibilities, and qualifications. The
commenter also stated the MICs may not
understand state-specific payment
methodologies, resulting in a significant
learning curve. The commenter also
expressed concern that a lack of public
information about the capabilities of the
contractors prevents the transparency
which all federal government programs
should strive to achieve.
Response: We appreciate the
commenter’s concerns regarding
information sharing and transparency,
as well as the concern that the MICs
may face a significant learning curve in
developing a knowledge base and
experience regarding state-specific
practices. To address these concerns, we
have been working aggressively with
our state and federal partners and
stakeholders (State Medicaid Directors,
State Program Integrity Directors,
Medicaid Fraud Control Unit Directors,
the Federal Bureau of Investigation, and
HHS’ Office of Inspector General) to
share information and to obtain their
input on our planning efforts. We have
also presented information regarding
both the Program and MICs at
conferences of national and regional
associations, including the National
Association of State Medicaid Directors
and the National Association for
Medicaid Program Integrity. To address
the MICs’ potential learning curve, we
have engaged strategic development
contractors to help us build upon the
tools and expertise we already have.
These strategic contractors are assisting
by developing state program integrity
profiles, and developing audit protocols,
methodologies, and standards for the
MICs to use. These tools will establish
a solid knowledge baseline for the MICs,
enabling them to get off to an aggressive,
well-informed start. Moreover, we strive
to inform the public about our mission
and accomplishments, and encourage
interested parties to utilize CMS’
internet site to learn more about
Medicaid program integrity generally at:
https://www.cms.hhs.gov/
MCAIDFraudAbuseGenInfo/, and more
specific information about the CMS’
Medicaid integrity implementation plan
and efforts at: https://www.cms.hhs.gov/
DeficitReductionAct/Downloads/
CMIPupdateaugust2007final.pdf.
Section 455.1 Basis and Scope
The proposed rule, in § 455.1, Basis
and scope, added a new paragraph (c)
stating that subpart C implements
section 1936 of the Act. Section 1936 of
the Act establishes the Medicaid
PO 00000
Frm 00020
Fmt 4700
Sfmt 4700
Integrity Program under which the
Secretary will promote the integrity of
the program by entering into contracts
with eligible entities to carry out the
activities under subpart C. We did not
receive public comments on this
provision, therefore we adopt the
provision as final.
Subpart C—Medicaid Integrity Program
Section 455.200
Basis and Scope
In § 455.200(a), we set forth the
proposed statutory basis which would
implement section 1936 of the Act,
which states that the Secretary will
promote the integrity of the Medicaid
program by entering into contracts with
eligible entities to carry out the
activities under subpart C. In
§ 455.200(b) we proposed the scope for
the limitation on a contractor’s liability
to carry out a contract under the
Medicaid Integrity Program as proposed
under new § 455.202. We did not
receive public comments on this
provision; therefore we adopt the
provision as final.
Section 455.202 Limitation on
Contractor Liability
We proposed in § 455.202 to protect
Program contractors from liability in the
performance of their contracts provided
they carry out their contractual duties
with due care.
Comment: A commenter questioned
the proposed standard for the MICs
which states they will be protected from
civil and criminal liability in
performing their duties so long as they
perform these duties with ‘‘due care.’’
The commenter expressed that under
such a standard, the Federal
Government cannot sufficiently ensure
that the MICs will be held adequately
accountable for their actions.
Response: As explained in the
proposed rule, we believe that the due
care standard specified in § 455.202 is
the only standard consistent with the
statutory mandate of the Act. Section
1936 of the Act require us to limit a
contractor’s liability by employing the
same or comparable standards and
provisions as are contained in section
1157 of the Act. Section 1157 of the Act
limits a contractor’s liability under a
due care standard. We believe that
applying this standard to the MICs
strikes a reasonable balance between the
concerns of the contractors and those
subject to the contractors’ review. We
further believe the MICs will operate
with due care to avoid liability, and
those being reviewed have the assurance
that they have legal recourse if a
contractor fails to abide by that
standard.
E:\FR\FM\30NOR1.SGM
30NOR1
Federal Register / Vol. 72, No. 230 / Friday, November 30, 2007 / Rules and Regulations
Alternative Standards of Liability
Considered
In accordance with section 1936 of
the Act, we proposed to employ the
same standards for payment of legal
expenses as are contained in section
1157(d) of the Act. Therefore, in
§ 455.202(b) we proposed that we make
payment to Program contractors, their
members, employees, and anyone who
provides legal counsel or services to
them, for expenses incurred in the
defense of any legal action related to the
performance of the Program contract.
We also proposed that any and all
payment(s) and the amount of each
payment(s) if any, will be determined
exclusively by us, and conditioned
upon (1) the reasonableness of the
expense(s); (2) the amount of
government funds available for
payment(s); and (3) whether the
payment(s) is(are) allowable under the
terms of the contract.
In § 455.202, we considered
employing a standard for the limitation
of liability other than the due care
standard. We considered whether it
would be appropriate to provide that a
contractor would not be civilly liable by
reason of the performance of any duty,
function, or activity under its contract
provided the contractor was not grossly
negligent in that performance. However,
section 1936 of the Act requires that we
employ the same or comparable
standards and provisions as are
contained in section 1157 of the Act.
This approach is consistent with a
similar approach taken in the Medicare
Integrity Program (72 FR 48870), which
has virtually identical statutory
limitations on contractor liability
language. Therefore, we did not believe
that it would be appropriate to expand
the scope of immunity to a standard of
gross negligence, as it would not be a
comparable standard to that set forth in
section 1157(b) of the Act.
rwilkins on PROD1PC63 with RULES
III. Provisions of the Final Rule
In this final rule we are adopting the
provisions as set forth in the July 20,
2007 proposed rule (72 FR 39776) as
final.
IV. Collection of Information
Requirements
This document does not impose
information collection and
recordkeeping requirements.
Consequently, it need not be reviewed
by the Office of Management and
Budget under the authority of the
Paperwork Reduction Act of 1995.
V. Regulatory Impact Statement
We have examined the impact of this
rule as required by Executive Order
VerDate Aug<31>2005
16:09 Nov 29, 2007
Jkt 214001
12866 (September 1993, Regulatory
Planning and Review), the Regulatory
Flexibility Act (RFA) (September 19,
1980, Pub. L. 96–354), section 1102(b) of
the Social Security Act, the Unfunded
Mandates Reform Act of 1995 (Pub. L.
104–4), and Executive Order 13132.
Executive Order 12866 directs
agencies to assess all costs and benefits
of available regulatory alternatives and,
if regulation is necessary, to select
regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety effects, distributive impacts,
and equity). A regulatory impact
analysis (RIA) must be prepared for
major rules with economically
significant effects ($100 million or more
in any 1 year). This rule will not reach
the economic threshold and thus is not
considered a major rule.
The RFA requires agencies to analyze
options for regulatory relief of small
businesses. For purposes of the RFA,
small entities include small businesses,
nonprofit organizations, and small
governmental jurisdictions. Most
hospitals and most other providers and
suppliers are small entities, either by
nonprofit status or by having revenues
of $6 million to $29 million in any 1
year. Individuals and States are not
included in the definition of a small
entity. We are not preparing an analysis
for the RFA because we have
determined that this rule will not have
a significant economic impact on a
substantial number of small entities.
In addition, section 1102(b) of the Act
requires us to prepare a regulatory
impact analysis if a rule may have a
significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 604 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a Metropolitan Statistical Area and has
fewer than 100 beds. We are not
preparing an analysis for section 1102(b)
of the Act because we have determined
that this rule will not have a significant
impact on the operations of a substantial
number of small rural hospitals.
Section 202 of the Unfunded
Mandates Reform Act of 1995 also
requires that agencies assess anticipated
costs and benefits before issuing any
rule whose mandates require spending
in any 1 year of $100 million in 1995
dollars, updated annually for inflation.
That threshold level is currently
approximately $120 million. This rule
will have no consequential effect on
State, local, or tribal governments or on
the private sector.
PO 00000
Frm 00021
Fmt 4700
Sfmt 4700
67655
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a rule
that imposes substantial direct
requirement costs on State and local
governments, preempts State law, or
otherwise has Federalism implications.
Since this regulation will not impose
any costs on State or local governments,
the requirements of E.O. 13132 are not
applicable.
In accordance with the provisions of
Executive Order 12866, this regulation
was reviewed by the Office of
Management and Budget.
List of Subjects in 42 CFR Part 455
Fraud, Grant programs—health,
Health facilities, Health professions,
Investigations, Medicaid, Reporting and
recordkeeping requirements.
I For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR
chapter IV as set forth below:
PART 455—PROGRAM INTEGRITY;
MEDICAID
1. The authority citation for part 455
continues to read as follows:
I
Authority: Sec. 1102 of the Social Security
Act (42 U.S.C. 1302).
2. In § 455.1, add new paragraph (c) to
read as follows:
I
§ 455.1
Basis and scope.
*
*
*
*
*
(c) Subpart C implements section
1936 of the Act. It establishes the
Medicaid Integrity Program under
which the Secretary will promote the
integrity of the program by entering into
contracts with eligible entities to carry
out the activities of subpart C.
I 3. New subpart C, consisting of
§ 455.200 and § 455.202, is added to part
455 to read as follows:
Subpart C—Medicaid Integrity Program
Sec.
455.200 Basis and scope.
455.202 Limitation on contractor liability.
Subpart C—Medicaid Integrity Program
§ 455.200
Basis and scope.
(a) Statutory basis. This subpart
implements section 1936 of the Act that
establishes the Medicaid Integrity
Program under which the Secretary will
promote the integrity of the program by
entering into contracts with eligible
entities to carry out the activities under
this subpart C.
(b) Scope. This subpart provides for
the limitation on a contractor’s liability
to carry out a contract under the
Medicaid Integrity Program.
E:\FR\FM\30NOR1.SGM
30NOR1
67656
§ 455.202
Federal Register / Vol. 72, No. 230 / Friday, November 30, 2007 / Rules and Regulations
Limitation on contractor liability.
(a) A program contractor, a person, or
an entity employed by, or having a
fiduciary relationship with, or who
furnishes professional services to a
program contractor will not be held to
have violated any criminal law and will
not be held liable in any civil action,
under any law of the United States or of
any State (or political subdivision
thereof), by reason of the performance of
any duty, function, or activity required
or authorized under this subpart or
under a valid contract entered into
under this subpart, provided due care
was exercised in that performance and
the contractor has a contract with CMS
under this subpart.
(b) CMS pays a contractor, a person,
or an entity described in paragraph (a)
of this section, or anyone who furnishes
legal counsel or services to a contractor
or person, a sum equal to the reasonable
amount of the expenses, as determined
by CMS, incurred in connection with
the defense of a suit, action, or
proceeding, if the following conditions
are met:
(1) The suit, action, or proceeding was
brought against the contractor, person or
entity by a third party and relates to the
contractor’s, person’s or entity’s
performance of any duty, function, or
activity under a contract entered into
with CMS under this subpart.
(2) The funds are available.
(3) The expenses are otherwise
allowable under the terms of the
contract.
(Catalog of Federal Domestic Assistance
Program No. 93.778, Medical Assistance
Program)
Dated: September 27, 2007.
Kerry Weems,
Acting Administrator, Centers for Medicare
& Medicaid Services.
Approved: October 9, 2007.
Michael O. Leavitt,
Secretary.
[FR Doc. E7–23217 Filed 11–29–07; 8:45 am]
rwilkins on PROD1PC63 with RULES
BILLING CODE 4120–01–P
VerDate Aug<31>2005
16:09 Nov 29, 2007
Jkt 214001
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 484
[CMS–1541–CN2]
RIN 0938–AO32
Medicare Program; Home Health
Prospective Payment System
Refinement and Rate Update for
Calendar Year 2008; Corrections
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period;
correction notice.
AGENCY:
SUMMARY: This document corrects
typographical and technical errors that
appeared in the August 29, 2007
Federal Register, entitled ‘‘Medicare
Program; Home Health Prospective
Payment System Refinement and Rate
Update for Calendar Year 2008.’’
EFFECTIVE DATE: This correction notice is
effective January 1, 2008.
FOR FURTHER INFORMATION CONTACT:
Sharon Ventura, (410) 786–1985.
SUPPLEMENTARY INFORMATION:
I. Background
FR Doc. 07–4184 of August 29, 2007
(72 FR 49762) contained several
typographical and technical errors that
this notice serves to identify and
correct.
II. Summary of Errors
On page 49773, in the second
paragraph of the third column, the
reference to the McCall report is
incomplete. We are correcting the error
by providing the complete reference.
In the first column on page 49774, we
are clarifying and correcting an
erroneous reference to certain V codes
in our response to a comment.
In the first full paragraph of the first
column on page 49775, we
inadvertently imply that a table is
included in the August 29, 2007 final
rule. However, the referenced table is
found in the May 4, 2007 proposed rule.
We are correcting this by referencing the
proposed rule.
On page 49780, the example in
column 1 is revised to reflect the
updates made to Table 2A in the final
rule with comment period.
On page 49789, in the fourth column
of Table 2B, the Short Descriptions of
ICD–9–CM codes 161, 162, 163, 164,
and 165 incorrectly contain asterisks.
On page 49793, in Table 2B, the ICD–
9–CM code 321.8, we inadvertently did
PO 00000
Frm 00022
Fmt 4700
Sfmt 4700
not include an ‘M’ next to it under the
column titled, ‘‘Manifestation codes’’ in
order to properly identify it as a
manifestation code.
To more accurately reflect ICD–9–CM
coding terminology, we are correcting
the Diagnostic Category titles for ICD–9–
CM codes V55.0 and V55.5 on page
49817 of Table 2B. In addition we are
correcting the Diagnostic Category titles
for ICD–9–CM codes V55.5, V55.0, and
V55.6 and the Short Descriptions for
ICD–9–CM codes V55.5 and V55.0 on
page 49855 of Table 10B.
During production of Table 4 on pages
49826 through 49827, the decimal
amounts were incorrectly rounded
when computing the scaled coefficients.
We are revising Table 4 to reflect the
corrected rounded amounts.
The average cost amounts in Table 5
on pages 49828 through 49832 were also
rounded incorrectly. Therefore, we are
revising Table 5 to reflect the average
cost of each case-mix group. There are
no changes to the relative weights in
Table 5.
On page 49833, second paragraph, a
negative sign was inadvertently placed
before ‘‘8.7 percent.’’
On page 49844, we incorrectly stated
the acronym for the Health Insurance
Prospective Payment System (HIPPS)
code. The correct acronym is HIPPS. We
are correcting the acronym to HIPPS
wherever it appears.
On page 49853 the description for
Item #5 for selected skin conditions in
Table 10A incorrectly includes the
words ‘‘or other’’. Also on page 49853,
in the first column of the Note section
for Table 10A, we are correcting
punctuation errors. Therefore, in the
second column of the Note section for
Table 10A, the reference to Table 12B
should refer to Table 10B. Lastly, we
inadvertently excluded a footnote to
Table 10A that clarified how points are
awarded for ulcer related conditions.
On page 49854, we are correcting the
short description of ICD–9–CM code
250.8x & 707.10–707.9 from
‘‘(PRIMARY OR FIRST OTHER
DIAGNOSIS = 250.8x AND PRIMARY
OR FIRST OTHER DIAGNOSIS =
707.10–707.9).’’ to ‘‘(PRIMARY
DIAGNOSIS = 250.8x AND OTHER
DIAGNOSIS = 707.10–707.9).’’
On page 49855, we inadvertently
omitted ICD–9–CM code 948 from Table
10B under the traumatic wounds, burns
and post-operative complications
category. We are adding code 948 and
its short description to Table 10B.
Table 12 and 14 contain several
typographical errors. The CY 2007 pervisit amount for the speech-language
pathology discipline found in the
second column of both Table 12 on page
E:\FR\FM\30NOR1.SGM
30NOR1
]]>Agencies
[Federal Register Volume 72, Number 230 (Friday, November 30, 2007)]
[Rules and Regulations]
[Pages 67653-67656]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23217]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 455
[CMS-2264-F]
RIN 0938-AO88
Medicaid Integrity Program; Limitation on Contractor Liability
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Medicaid Integrity Program (the Program) provides that the
Secretary promote the integrity of the Medicaid program by entering
into contracts with contractors that will review the actions of
individuals or entities furnishing items or services (whether fee-for-
service, risk, or other basis) for which payment may be made under an
approved State plan and/or any waiver of the plan approved under
section 1115 of the Social Security Act; audit claims for payment of
items or services furnished, or administrative services furnished,
under a State plan; identify overpayments of individuals or entities
receiving Federal funds; and educate providers of services, managed
care entities, beneficiaries, and other individuals with respect to
payment integrity and quality of care. This final rule will provide for
limitations on a contractor's liability while performing these services
under the Program.
The final rule will, to the extent possible, employ the same or
comparable standards and other substantive and procedural provisions as
are contained in section 1157 (Limitation on Liability) of the Social
Security Act.
DATES: Effective Date: These regulations are effective on December 31,
2007.
FOR FURTHER INFORMATION CONTACT: Barbara Rufo, 410-786-5589 or Crystal
High, 410-786-8366.
SUPPLEMENTARY INFORMATION:
I. Background
A. Current Law
States and the Federal Government share in the responsibility for
safeguarding Medicaid program integrity. States must comply with
Federal requirements designed to ensure that Medicaid funds are
properly spent (or recovered, when necessary). The Centers for Medicare
& Medicaid Services (CMS) is the primary Federal agency responsible for
providing oversight of States' activities and facilitating their
program integrity efforts.
B. Medicaid Integrity Program
Section 6034 of the Deficit Reduction Act (DRA) of 2005 (Pub. L.
109-171, enacted on February 8, 2006) amended title XIX of the Social
Security Act (the Act), (42 U.S.C. 1396 et seq.) by redesignating the
old section 1936 as section 1937; and inserting the new section 1936 to
combat Medicaid fraud and abuse. For the first time, the Program
authorizes the Federal Government to directly identify, recover, and
prevent inappropriate Medicaid payments. It will also support the
efforts of the State Medicaid agencies through a combination of
oversight and technical assistance.
Although individual States work to ensure the integrity of their
respective Medicaid programs, the Program represents CMS' first
comprehensive national strategy to detect and prevent Medicaid fraud
and abuse. The Program will provide CMS with the ability to more
directly ensure the accuracy of Medicaid payments and to deter those
who would exploit the program.
The new section 1936 of the Act states that the Secretary shall
promote the integrity of the Medicaid program by entering into
contracts with eligible entities to carry out the following activities:
1. Review of the actions of individuals or entities furnishing
items or services (whether on a fee-for-service, risk or other basis)
for which payment may be made under a State plan approved under title
XIX (or under any waiver of this plan approved under section 1115 of
the Act) to determine whether fraud, waste, and/or abuse has occurred,
or is likely to occur, or whether these actions have any potential for
resulting in an expenditure of funds under title XIX in a manner that
is not intended under the provisions of title XIX.
2. Audit of claims for payment for items or services furnished, or
administrative services rendered, under a State plan under title XIX,
including cost reports, consulting contracts; and risk contracts under
section 1903(m) of the Act.
3. Identification of overpayments to individuals or entities
receiving Federal funds under title XIX.
4. Education of providers of services, managed care entities,
beneficiaries, and other individuals with respect to payment integrity
and quality of care.
Section 1936 of the Act also provides that the Secretary will, by
regulation, provide for the limitation of a contractor's liability for
actions taken to carry out a contract under the Medicaid Integrity
Program.
II. Provisions of the Proposed Regulation and Response to Comments
Limitations on Contractor Liability
Section 6034 of the Deficit Reduction Act of 2005 amended title XIX
of the Act by establishing, under the new section 1936, the Medicaid
Integrity Program to promote the integrity of the Medicaid program by
authorizing the Centers for Medicare & Medicaid Services (CMS) (on
behalf of the Secretary) to enter into contracts with contractors that
will (1) review the actions of individuals or entities
[[Page 67654]]
furnishing items or services (whether fee-for-service, risk, or other
basis) for which payment may be made under an approved State plan and/
or any waiver of the plan approved under section 1115 of the Social
Security Act; (2) audit claims for payment of items or services
furnished, or administrative services rendered, under a State plan; (3)
identify overpayments to individuals or entities receiving Federal
funds under title XIX; and (4) educate providers of services, managed
care entities, beneficiaries, and other individuals with respect to
payment integrity and quality of care. This final rule will set forth
limitations on a contractor's liability while performing these services
under the Program.
Contractors that perform activities under the Program will be
reviewing activities of providers and others seeking Medicaid payment
for providing services to Medicaid beneficiaries. In an effort to
reduce or eliminate the Program contractors' exposure to possible legal
action from entities they review, section 1936 of the Act requires that
we, by regulation, limit the Program contractor's liability for actions
taken in carrying out its contract. We must establish, to the extent we
find appropriate, standards and other substantive and procedural
provisions that are the same as, or comparable to, those contained in
section 1157 of the Act.
Section 1157 of the Act provides that any organization having a
contract (under Title XI, Part B of the Act) with the Secretary, as
well as its employees, fiduciaries, and anyone who furnishes
professional services to such an organization, is/are protected from
civil and criminal liability in performing its duties under the Act or
its contract, provided these duties are performed with due care.
In the July 20, 2007 Federal Register (72 FR 39766), we published
the proposed rule entitled, ``Medicaid Integrity Program; Limitation on
Contractor Liability,'' and provided for a 30-day public comment
period. We received a total of 1 timely comment from a health care
association. The comment questioned the proposed provisions and we
responded with further clarification in our response. Brief summaries
for each proposed provision, a summary of the public comments we
received, and our responses to comments, are set forth below.
General Comments
Comment: A commenter expressed concern that CMS has not provided
the health care community or the public any information about the
federal government's discussions on the Program's contractors, termed
Medicaid Integrity Contractor's, (MIC) roles, responsibilities, and
qualifications. The commenter also stated the MICs may not understand
state-specific payment methodologies, resulting in a significant
learning curve. The commenter also expressed concern that a lack of
public information about the capabilities of the contractors prevents
the transparency which all federal government programs should strive to
achieve.
Response: We appreciate the commenter's concerns regarding
information sharing and transparency, as well as the concern that the
MICs may face a significant learning curve in developing a knowledge
base and experience regarding state-specific practices. To address
these concerns, we have been working aggressively with our state and
federal partners and stakeholders (State Medicaid Directors, State
Program Integrity Directors, Medicaid Fraud Control Unit Directors, the
Federal Bureau of Investigation, and HHS' Office of Inspector General)
to share information and to obtain their input on our planning efforts.
We have also presented information regarding both the Program and MICs
at conferences of national and regional associations, including the
National Association of State Medicaid Directors and the National
Association for Medicaid Program Integrity. To address the MICs'
potential learning curve, we have engaged strategic development
contractors to help us build upon the tools and expertise we already
have. These strategic contractors are assisting by developing state
program integrity profiles, and developing audit protocols,
methodologies, and standards for the MICs to use. These tools will
establish a solid knowledge baseline for the MICs, enabling them to get
off to an aggressive, well-informed start. Moreover, we strive to
inform the public about our mission and accomplishments, and encourage
interested parties to utilize CMS' internet site to learn more about
Medicaid program integrity generally at: https://www.cms.hhs.gov/
MCAIDFraudAbuseGenInfo/, and more specific information about the CMS'
Medicaid integrity implementation plan and efforts at: https://
www.cms.hhs.gov/DeficitReductionAct/Downloads/
CMIPupdateaugust2007final.pdf.
Section 455.1 Basis and Scope
The proposed rule, in Sec. 455.1, Basis and scope, added a new
paragraph (c) stating that subpart C implements section 1936 of the
Act. Section 1936 of the Act establishes the Medicaid Integrity Program
under which the Secretary will promote the integrity of the program by
entering into contracts with eligible entities to carry out the
activities under subpart C. We did not receive public comments on this
provision, therefore we adopt the provision as final.
Subpart C--Medicaid Integrity Program
Section 455.200 Basis and Scope
In Sec. 455.200(a), we set forth the proposed statutory basis
which would implement section 1936 of the Act, which states that the
Secretary will promote the integrity of the Medicaid program by
entering into contracts with eligible entities to carry out the
activities under subpart C. In Sec. 455.200(b) we proposed the scope
for the limitation on a contractor's liability to carry out a contract
under the Medicaid Integrity Program as proposed under new Sec.
455.202. We did not receive public comments on this provision;
therefore we adopt the provision as final.
Section 455.202 Limitation on Contractor Liability
We proposed in Sec. 455.202 to protect Program contractors from
liability in the performance of their contracts provided they carry out
their contractual duties with due care.
Comment: A commenter questioned the proposed standard for the MICs
which states they will be protected from civil and criminal liability
in performing their duties so long as they perform these duties with
``due care.'' The commenter expressed that under such a standard, the
Federal Government cannot sufficiently ensure that the MICs will be
held adequately accountable for their actions.
Response: As explained in the proposed rule, we believe that the
due care standard specified in Sec. 455.202 is the only standard
consistent with the statutory mandate of the Act. Section 1936 of the
Act require us to limit a contractor's liability by employing the same
or comparable standards and provisions as are contained in section 1157
of the Act. Section 1157 of the Act limits a contractor's liability
under a due care standard. We believe that applying this standard to
the MICs strikes a reasonable balance between the concerns of the
contractors and those subject to the contractors' review. We further
believe the MICs will operate with due care to avoid liability, and
those being reviewed have the assurance that they have legal recourse
if a contractor fails to abide by that standard.
[[Page 67655]]
Alternative Standards of Liability Considered
In accordance with section 1936 of the Act, we proposed to employ
the same standards for payment of legal expenses as are contained in
section 1157(d) of the Act. Therefore, in Sec. 455.202(b) we proposed
that we make payment to Program contractors, their members, employees,
and anyone who provides legal counsel or services to them, for expenses
incurred in the defense of any legal action related to the performance
of the Program contract. We also proposed that any and all payment(s)
and the amount of each payment(s) if any, will be determined
exclusively by us, and conditioned upon (1) the reasonableness of the
expense(s); (2) the amount of government funds available for
payment(s); and (3) whether the payment(s) is(are) allowable under the
terms of the contract.
In Sec. 455.202, we considered employing a standard for the
limitation of liability other than the due care standard. We considered
whether it would be appropriate to provide that a contractor would not
be civilly liable by reason of the performance of any duty, function,
or activity under its contract provided the contractor was not grossly
negligent in that performance. However, section 1936 of the Act
requires that we employ the same or comparable standards and provisions
as are contained in section 1157 of the Act. This approach is
consistent with a similar approach taken in the Medicare Integrity
Program (72 FR 48870), which has virtually identical statutory
limitations on contractor liability language. Therefore, we did not
believe that it would be appropriate to expand the scope of immunity to
a standard of gross negligence, as it would not be a comparable
standard to that set forth in section 1157(b) of the Act.
III. Provisions of the Final Rule
In this final rule we are adopting the provisions as set forth in
the July 20, 2007 proposed rule (72 FR 39776) as final.
IV. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995.
V. Regulatory Impact Statement
We have examined the impact of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any 1 year). This rule
will not reach the economic threshold and thus is not considered a
major rule.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$6 million to $29 million in any 1 year. Individuals and States are not
included in the definition of a small entity. We are not preparing an
analysis for the RFA because we have determined that this rule will not
have a significant economic impact on a substantial number of small
entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. We are not preparing an
analysis for section 1102(b) of the Act because we have determined that
this rule will not have a significant impact on the operations of a
substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. That threshold
level is currently approximately $120 million. This rule will have no
consequential effect on State, local, or tribal governments or on the
private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a rule that imposes substantial
direct requirement costs on State and local governments, preempts State
law, or otherwise has Federalism implications. Since this regulation
will not impose any costs on State or local governments, the
requirements of E.O. 13132 are not applicable.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 455
Fraud, Grant programs--health, Health facilities, Health
professions, Investigations, Medicaid, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR chapter IV as set forth below:
PART 455--PROGRAM INTEGRITY; MEDICAID
0
1. The authority citation for part 455 continues to read as follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
0
2. In Sec. 455.1, add new paragraph (c) to read as follows:
Sec. 455.1 Basis and scope.
* * * * *
(c) Subpart C implements section 1936 of the Act. It establishes
the Medicaid Integrity Program under which the Secretary will promote
the integrity of the program by entering into contracts with eligible
entities to carry out the activities of subpart C.
0
3. New subpart C, consisting of Sec. 455.200 and Sec. 455.202, is
added to part 455 to read as follows:
Subpart C--Medicaid Integrity Program
Sec.
455.200 Basis and scope.
455.202 Limitation on contractor liability.
Subpart C--Medicaid Integrity Program
Sec. 455.200 Basis and scope.
(a) Statutory basis. This subpart implements section 1936 of the
Act that establishes the Medicaid Integrity Program under which the
Secretary will promote the integrity of the program by entering into
contracts with eligible entities to carry out the activities under this
subpart C.
(b) Scope. This subpart provides for the limitation on a
contractor's liability to carry out a contract under the Medicaid
Integrity Program.
[[Page 67656]]
Sec. 455.202 Limitation on contractor liability.
(a) A program contractor, a person, or an entity employed by, or
having a fiduciary relationship with, or who furnishes professional
services to a program contractor will not be held to have violated any
criminal law and will not be held liable in any civil action, under any
law of the United States or of any State (or political subdivision
thereof), by reason of the performance of any duty, function, or
activity required or authorized under this subpart or under a valid
contract entered into under this subpart, provided due care was
exercised in that performance and the contractor has a contract with
CMS under this subpart.
(b) CMS pays a contractor, a person, or an entity described in
paragraph (a) of this section, or anyone who furnishes legal counsel or
services to a contractor or person, a sum equal to the reasonable
amount of the expenses, as determined by CMS, incurred in connection
with the defense of a suit, action, or proceeding, if the following
conditions are met:
(1) The suit, action, or proceeding was brought against the
contractor, person or entity by a third party and relates to the
contractor's, person's or entity's performance of any duty, function,
or activity under a contract entered into with CMS under this subpart.
(2) The funds are available.
(3) The expenses are otherwise allowable under the terms of the
contract.
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
Dated: September 27, 2007.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: October 9, 2007.
Michael O. Leavitt,
Secretary.
[FR Doc. E7-23217 Filed 11-29-07; 8:45 am]
BILLING CODE 4120-01-P
