Medicare Program; Surety Bond Requirement for Suppliers of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS); Technical Amendment, 69772-69775 [2014-27737]
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Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Rules and Regulations
G. Executive Order 13045: Protection of
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effect and if in taking such action the
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Incorporation by reference,
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Dated: November 14, 2014.
Janet G. McCabe,
Acting Assistant Administrator.
[FR Doc. 2014–27679 Filed 11–21–14; 8:45 am]
BILLING CODE 6560–50–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 424
[CMS–6006–F3]
Medicare Program; Surety Bond
Requirement for Suppliers of Durable
Medical Equipment, Prosthetics,
Orthotics, and Supplies (DMEPOS);
Technical Amendment
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule; technical
amendment.
AGENCY:
This technical amendment
corrects codification, terminology, and
technical errors in the requirements for
suppliers of durable medical equipment,
prosthetics, orthotics, and supplies
(DMEPOS) at 42 CFR 424.57.
DATES: This technical amendment is
effective November 24, 2014.
FOR FURTHER INFORMATION CONTACT:
Frank Whelan, (410) 786–1302.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
For purposes of the durable medical
equipment, prosthetics, orthotics and
supplies (DMEPOS) supplier standards,
the term ‘‘DMEPOS supplier’’ is defined
in § 424.57(a) as an entity or individual,
including a physician or Part A
provider, that sells or rents Part B
covered DMEPOS items to Medicare
beneficiaries and that meet the DMEPOS
supplier standards. The term
‘‘DMEPOS’’ encompasses the types of
items included in the definition of
medical equipment and supplies in
section 1834(j)(5) of the Act.
The term durable medical equipment
is defined at section 1861(n) of the Act.
Prosthetic devices are defined in section
1861(s)(8) of the Act as ‘‘devices (other
than dental) which replace all or part of
an internal body organ (including
colostomy bags and supplies directly
related to colostomy care), including
replacement of such devices, and
including one pair of conventional
eyeglasses or contact lenses furnished
subsequent to each cataract surgery with
insertion of an intraocular lens.’’
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II. Summary of Technical Errors in the
Regulations Text at § 424.57
In the January 2, 2009 Federal
Register (74 FR 166), we published a
final rule that implemented section
1834(a)(16) of the Act by requiring
certain Medicare DMEPOS suppliers to
furnish CMS with a surety bond. In
codifying the regulatory changes
included the January 2, 2009 final rule,
the Office of the Federal Register (OFR)
found an inaccurate amendatory
instruction for the amendments to
§ 424.57(d) and (e). OFR therefore,
added the regulatory text via an
editorial note in Code of Federal
Regulations (CFR). Subsequently, we
published a correcting amendment in
the March 27, 2009 Federal Register (74
FR 13345) to correct the amendatory
instruction errors made in the January 2,
2009 final rule. The correcting
amendment redesignated § 424.57(d)
and (e) as § 424.57(e) and (g). However,
the provisions of the correcting
amendment were inadvertently omitted
in OFR’s revisions to the CFR; therefore,
the editorial note was retained.
In the August 27, 2010 Federal
Register (75 FR 52629), we published a
final rule that clarified, expanded, and
added to the existing enrollment
requirements that DMEPOS suppliers
must meet to establish and maintain
billing privileges in the Medicare
program. In the August 27, 2010 final
rule, we included an amendment for
§ 424.57(e). This amendment revised the
‘‘failure to meet standards’’ provision
which was redesignated as paragraph (e)
in the March 27, 2009 correcting
amendment. The revisions to § 424.57(e)
specified the revocation and
overpayment requirements associated
with the failure of a supplier to meet the
standards in § 424.57(b) and (c). (For
more detailed information, see the
August 27, 2010 final rule (75 FR
52649).) However, the amendment to
paragraph (e) was inadvertently omitted
from OFR’s revisions to § 424.57 in the
CFR.
In the February 2, 2011 Federal
Register (76 FR 5862), we published a
final rule with comment period that,
among other things, stated our policy for
revalidation of billing privileges. This
final rule included an amendment to the
provision regarding revalidation of
billing privileges which is currently
printed in the CFR at § 424.57(e). The
revisions were incorporated for the
correct provision. However, § 424.57(e)
should have been redesignated as
§ 424.57(g) in accordance with the
provision included in our March 27,
2009 correcting amendment.
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As a result of the codification and
technical errors for § 424.57(d) and (e)
specified previously, the regulations
text of this technical amendment sets
forth the following:
• The surety bond requirements
specified in the January 2, 2009 final
rule as § 424.57(d).
• The ‘‘failure to meet standards’’
requirement specified in the August 27,
2010 final rule as § 424.57(e).
• The ‘‘revalidation of billing
privileges’’ language specified in the
February 2, 2011 final rule as
§ 424.57(g).
In our review of § 424.57(d) and (e),
we also determined that there were
other terminology and technical errors
that needed to be addressed. Therefore,
we are including the following
additional changes in the regulations
text of this technical amendment:
• Removal of the term ‘‘National
Supplier Clearinghouse (NSC)’’ from the
definitions in § 424.57(a). We are also
replacing term ‘‘NSC’’ with ‘‘CMS
contractor’’ in § 424.57(d). Removing the
name of the contractor and using the
term ‘‘CMS contractor’’ more accurately
reflects the possibility that different
CMS contractors may handle these
issues and eliminates the need to make
regulatory text changes when we make
contractual changes.
• Changing the terms ‘‘supplier’’ and
‘‘DME supplier’’ to ‘‘DMEPOS
supplier.’’ We note that throughout
§ 424.57(d), the terms ‘‘supplier,’’ ‘‘DME
supplier,’’ and ‘‘DMEPOS supplier’’ are
used interchangeably, though they have
the same meaning for purposes of the
applicability of § 424.57(d). However,
we are making the change to ensure
consistent terminology and accuracy.
We believe that this terminology change
would clarify that § 424.57(d) does not
apply to all Medicare suppliers but does
apply to all Medicare DMEPOS
suppliers.
• Updating Office of Management and
Budget (OMB) number for the Medicare
enrollment application form referenced
in § 424.57(d)(2)(i) from OMB number
0938–0685 to OMB control number
0938–1056. The OMB control number is
out of date and at our request given a
separate new control number.
• Revising the cross-references in
§ 424.515 (introductory text and
paragraph (d)(3).
III. Waiver of Proposed Rulemaking
and Delay in Effective Date
We ordinarily publish a notice of
proposed rulemaking in the Federal
Register to provide a period for public
comment before the provisions of a rule
take effect in accordance with section
553(b) of the Administrative Procedure
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69773
Act (APA) (5 U.S.C. 553(b)). However,
we can waive this notice and comment
procedure if the Secretary finds, for
good cause, that the 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.
Section 553(d) of the APA ordinarily
requires a 30-day delay in effective date
of final rules after the date of their
publication in the Federal Register.
This 30-day delay in effective date can
be waived, however, if an agency finds
for good cause that the delay is
impracticable, unnecessary, or contrary
to the public interest, and the agency
incorporates a statement of the findings
and its reasons in the rule issued.
This action merely corrects
codification, terminology, and technical
errors in 42 CFR 424.57. We are
correcting regulatory paragraph
designations, an omission, and a
technical correction to previously
published regulatory text as well as
making terminology and crossreferences changes. These revisions in
no way change the policies or
substantive regulatory text finalized in
the January 2, 2009, August 27, 2010,
and February 2, 2011 final rules. Since
this technical amendment corrects
codification and other technical errors
and incorporates regulatory text that
was inadvertently omitted, we find that
both public comment and a delay in
effective date of this technical
amendment is unnecessary. Therefore,
we find there is good cause to waive
notice and comment procedures and the
30-day delay in effective date for this
action.
List of Subjects in 42 CFR Part 424
Emergency medical services, Health
facilities, Health professions, Medicare.
For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR part
424 as set forth below:
PART 424—CONDITIONS FOR
MEDICARE PAYMENT
1. The authority citation for part 424
continues to read as follows:
■
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
2. Amend § 424.57 by—
A. In paragraph (a) by removing the
definition of ‘‘National Supplier
Clearinghouse’’ (NSC).
■ B. Revising paragraphs (d) and (e).
■ C. Adding paragraph (g).
The revisions and addition read as
follows:
■
■
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§ 424.57 Special payment rules for items
furnished by DMEPOS suppliers and
issuance of DMEPOS supplier billing
privileges.
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(d) Surety bonds requirements—(1)
Effective date of surety bond
requirements—(i) DMEPOS suppliers
seeking enrollment or with a change in
ownership. Except as provided in
paragraph (d)(15) of this section,
beginning May 4, 2009, DMEPOS
suppliers seeking to enroll or to change
the ownership of a supplier of DMEPOS
must meet the requirements of
paragraph (d) of this section for each
assigned NPI for which the DMEPOS
supplier is seeking to obtain Medicare
billing privileges.
(ii) Existing DMEPOS suppliers.
Except as provided in paragraph (d)(15)
of this section, beginning October 2,
2009, each Medicare-enrolled DMEPOS
supplier must meet the requirements of
paragraph (d) of this section for each
assigned NPI to which Medicare has
granted billing privileges.
(2) Minimum requirements for a
DMEPOS supplier. (i) A DMEPOS
supplier enrolling in the Medicare
program, making a change in
ownership, or responding to a
revalidation or reenrollment request
must submit to the CMS contractor a
surety bond from an authorized surety
of $50,000 and, if required by the CMS
contractor, an elevated bond amount as
described in paragraph (d)(3) of this
section with its paper or electronic
Medicare enrollment application (CMS–
855S, OMB number 0938–1056). The
term of the initial surety bond must be
effective on the date that the application
is submitted to the CMS contractor.
(ii) A supplier that seeks to become an
enrolled DMEPOS supplier through a
purchase or transfer of assets or
ownership interest must submit to the
CMS contractor surety bond from an
authorized surety of $50,000 and, if
required by the CMS contractor, an
elevated bond amount as described in
paragraph (d)(3) of this section that is
effective from the date of the purchase
or transfer in order to exercise billing
privileges as of that date. If the bond is
effective at a later date, the effective
date of the new DMEPOS supplier
billing privileges is the effective date of
the surety bond as validated by the CMS
contractor.
(iii) A DMEPOS supplier enrolling a
new practice location must submit to
the CMS contractor a new surety bond
from an authorized surety or an
amendment or rider to the existing
bond, showing that the new practice
location is covered by an additional
base surety bond of $50,000 or, as
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necessary, an elevated surety bond
amount as described in paragraph (d)(3)
of this section.
(3) Elevated surety bond amounts. (i)
If required, a DMEPOS supplier must
obtain and maintain a base surety bond
in the amount of $50,000 as specified in
paragraph (d)(2) of this section and an
elevated surety bond in the amount
prescribed by the CMS contractor as
described in paragraph (d)(3)(ii) of this
section.
(ii) The CMS contractor prescribes an
elevated surety bond amount of $50,000
per occurrence of an adverse legal
action within the 10 years preceding
enrollment, revalidation, or
reenrollment, as defined in paragraph
(a) of this section.
(4) Type and terms of the surety
bond—(i) Type of bond. A DMEPOS
supplier must submit a bond that is
continuous.
(ii) Minimum requirements of liability
coverage. (A) The terms of the bond
submitted by a DMEPOS supplier for
the purpose of complying with this
section must meet the minimum
requirements of liability coverage
($50,000) and surety and DMEPOS
supplier responsibility as set forth in
this section.
(B) CMS requires a DMEPOS supplier
to submit a bond that on its face reflects
the requirements of this section. CMS
revokes or denies a DMEPOS supplier’s
billing privileges based upon the
submission of a bond that does not
reflect the requirements of paragraph (d)
of this section.
(5) Specific surety bond requirements.
(i) The bond must guarantee that the
surety will, within 30 days of receiving
written notice from CMS containing
sufficient evidence to establish the
surety’s liability under the bond of
unpaid claims, CMPs, or assessments,
pay CMS a total of up to the full penal
amount of the bond in the following
amounts:
(A) The amount of any unpaid claim,
plus accrued interest, for which the
DMEPOS supplier is responsible.
(B) The amount of any unpaid claims,
CMPs, or assessments imposed by CMS
or OIG on the DMEPOS supplier, plus
accrued interest.
(ii) The bond must provide the
following: The surety is liable for
unpaid claims, CMPs, or assessments
that occur during the term of the bond.
(iii) If the DMEPOS supplier fails to
furnish a bond meeting the
requirements of paragraph (d) of this
section, fails to submit a rider when
required, or if the DMEPOS supplier’s
billing privileges are revoked, the last
bond or rider submitted by the DMEPOS
supplier remains in effect until the last
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day of the surety bond coverage period
and the surety remains liable for unpaid
claims, CMPs, or assessments that—
(A) CMS or the OIG imposes or asserts
against the DMEPOS supplier based on
overpayments or other events that took
place during the term of the bond or
rider; and
(B) Were imposed or assessed by CMS
or the OIG during the 2 years following
the date that the DMEPOS supplier
failed to submit a bond or required
rider, or the date the DMEPOS
supplier’s billing privileges were
terminated, whichever is later.
(6) Cancellation of a bond and lapse
of surety bond coverage. (i) A DMEPOS
supplier may cancel its surety bond and
must provide written notice at least 30
days before the effective date of the
cancellation to the CMS contractor and
the surety.
(ii) Cancellation of a surety bond is
grounds for revocation of the DMEPOS
supplier’s Medicare billing privileges
unless the DMEPOS supplier provides a
new bond before the effective date of the
cancellation. The liability of the surety
continues through the termination
effective date.
(iii) If CMS receives notification of a
lapse in bond coverage from the surety,
the DMEPOS supplier’s billing
privileges are revoked. During this
lapse, Medicare does not pay for items
or services furnished during the gap in
coverage, and the DMEPOS supplier is
held liable for the items or services (that
is, the DMEPOS supplier would not be
permitted to charge the beneficiary for
the items or services).
(iv) The surety must immediately
notify the CMS contractor if there is a
lapse in the surety’s coverage of the
DMEPOS supplier’s coverage.
(7) Actions under the surety bond.
The bond must provide that actions
under the bond may be brought by CMS
or by CMS contractors.
(8) Required surety information on the
surety bond. The bond must provide the
surety’s name, street address or post
office box number, city, state, and zip
code.
(9) Change of surety. A DMEPOS
supplier that obtains a replacement
surety bond from a different surety to
cover the remaining term of a previously
obtained bond must submit the new
surety bond to the CMS contractor at
least 30 days prior to the expiration of
the previous surety bond. There must be
no gap in the coverage of the surety
bond periods. If a gap in coverage exists,
the CMS contractor revokes the
DMEPOS supplier’s billing privileges
and does not pay for any items or
services furnished by the DMEPOS
supplier during the period for which no
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Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Rules and Regulations
bond coverage was available. If a
DMEPOS supplier changes its surety
during the term of the bond, the new
surety is responsible for any
overpayments, CMPs, or assessments
incurred by the DMEPOS supplier
beginning with the effective date of the
new surety bond. The previous surety is
responsible for any overpayments,
CMPs, or assessments that occurred up
to the date of the change of surety.
(10) Parties to the surety bond. The
surety bond must name the DMEPOS
supplier as Principal, CMS as Obligee,
and the surety (and its heirs, executors,
administrators, successors and
assignees, jointly and severally) as
surety.
(11) Effect of DMEPOS supplier’s
failure to obtain, maintain, and timely
file a surety bond.
(i) CMS revokes the DMEPOS
supplier’s billing privileges if an
enrolled DMEPOS supplier fails to
obtain, file timely, or maintain a surety
bond as specified in this subpart and
CMS instructions. Notwithstanding
paragraph (e) of this section, the
revocation is effective the date the bond
lapsed and any payments for items
furnished on or after that date must be
repaid to CMS by the DMEPOS supplier.
(ii) CMS denies billing privileges to a
DMEPOS supplier if the supplier
seeking to become an enrolled DMEPOS
supplier fails to obtain and file timely
a surety bond as specified with this
subpart and CMS instructions.
(12) Evidence of DMEPOS supplier’s
compliance. CMS may at any time
require a DMEPOS supplier to show
compliance with the requirements of
paragraph (d) of this section.
(13) Effect of subsequent DMEPOS
supplier payment. If a surety has paid
an amount to CMS on the basis of
liability incurred under a bond and
CMS subsequently collects from the
DMEPOS supplier, in whole or in part,
on the unpaid claim, CMPs, or
assessment that was the basis for the
surety’s liability, CMS reimburses the
surety the amount that it collected from
the DMEPOS supplier, up to the amount
paid by the surety to CMS, provided the
surety has no other liability to CMS
under the bond.
(14) Effect of review reversing
determination. If a surety has paid CMS
on the basis of liability incurred under
a surety bond and to the extent the
DMEPOS supplier that obtained the
bond is subsequently successful in
appealing the determination that was
the basis of the unpaid claim, CMP, or
assessment that caused the DMEPOS
supplier to pay CMS under the bond,
CMS refunds the DMEPOS supplier the
amount the DMEPOS supplier paid to
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CMS to the extent that the amount
relates to the matter that was
successfully appealed, provided all
review, including judicial review, has
been completed on the matter.
(15) Exception to the surety bond
requirement—(i) Qualifying entities and
requirements. (A) Government-operated
DMEPOS suppliers are provided an
exception to the surety bond
requirement if the DMEPOS supplier
has provided CMS with a comparable
surety bond under State law.
(B) State-licensed orthotic and
prosthetic personnel in private practice
making custom made orthotics and
prosthetics are provided an exception to
the surety bond requirement if—
(1) The business is solely-owned and
operated by the orthotic and prosthetic
personnel, and
(2) The business is only billing for
orthotic, prosthetics, and supplies.
(C) Physicians and nonphysician
practitioners as defined in section
1842(b)(18) of the Act are provided an
exception to the surety bond
requirement when items are furnished
only to the physician or nonphysician
practitioner’s own patients as part of his
or her physician service.
(D) Physical and occupational
therapists in private practice are
provided an exception to the surety
bond requirement if—
(1) The business is solely-owned and
operated by the physical or
occupational therapist;
(2) The items are furnished only to the
physical or occupational therapist’s own
patients as part of his or her
professional service; and
(3) The business is only billing for
orthotics, prosthetics, and supplies.
(ii) Loss of a DMEPOS supplier
exception. A DMEPOS supplier that no
longer qualifies for an exception as
described in paragraph (d)(15)(i) of this
section must submit a surety bond to the
CMS contractor in accordance with
requirements of paragraph (d) of this
section within 60 days after it knows or
has reason to know that it no longer
meets the criteria for an exception.
(e) Failure to meet standards—(1)
Revocation. CMS revokes a supplier’s
billing privileges if it is found not to
meet the standards in paragraphs (b)
and (c) of this section. Except as
otherwise provided in this section, the
revocation is effective 30 days after the
entity is sent notice of the revocation, as
specified in § 405.874 of this
subchapter.
(2) Overpayments associated with
final adverse actions. CMS or a CMS
contractor may reopen (in accordance
with § 405.980 of this chapter) all
Medicare claims paid on or after the
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69775
date of a final adverse action (as defined
in paragraph (a) of this section) in order
to establish an overpayment
determination.
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(g) Revalidation of billing privileges. A
supplier must revalidate its application
for billing privileges every 3 years after
the billing privileges are first granted.
(Each supplier must complete a new
application for billing privileges 3 years
after its last revalidation.)
§ 424.515
[Amended]
3. In § 424.515, the introductory text
and in paragraph (d)(3), the crossreference ‘‘§ 424.57(e)’’ is removed and
the cross-reference ‘‘§ 424.57(g)’’ is
added in its place.
■
Dated: November 14, 2014.
C’Reda Weeden,
Executive Secretary to the Department,
Department of Health and Human Services.
[FR Doc. 2014–27737 Filed 11–21–14; 8:45 am]
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Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
A petition for rulemaking was
filed by ION Media Kansas City License,
Inc. (‘‘ION Media’’), the licensee of
KPXE–TV, channel 51, Kansas City,
Missouri, requesting the substitution of
channel 30 for channel 51 at Kansas
City. ION Media filed comments
reaffirming its interest in the proposed
channel substitution and explained that
the channel substitution will allow it to
serve all viewers currently receiving
digital service while eliminating any
potential interference with wireless
operations in the Lower 700 MHZ A
Block located adjacent to channel 51 in
Kansas City. ION Media states that it
will file an application for a
construction permit for channel 30 and
implement the change in accordance
with the Commission’s rules upon
adoption of the channel substitution.
DATES: This rule is effective November
24, 2014.
FOR FURTHER INFORMATION CONTACT:
Joyce Bernstein, Joyce.Bernstein@
fcc.gov, Media Bureau, (202) 418–1647.
SUMMARY:
E:\FR\FM\24NOR1.SGM
24NOR1
]]>Agencies
[Federal Register Volume 79, Number 226 (Monday, November 24, 2014)]
[Rules and Regulations]
[Pages 69772-69775]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-27737]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 424
[CMS-6006-F3]
Medicare Program; Surety Bond Requirement for Suppliers of
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies
(DMEPOS); Technical Amendment
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule; technical amendment.
-----------------------------------------------------------------------
SUMMARY: This technical amendment corrects codification, terminology,
and technical errors in the requirements for suppliers of durable
medical equipment, prosthetics, orthotics, and supplies (DMEPOS) at 42
CFR 424.57.
DATES: This technical amendment is effective November 24, 2014.
FOR FURTHER INFORMATION CONTACT: Frank Whelan, (410) 786-1302.
SUPPLEMENTARY INFORMATION:
I. Background
For purposes of the durable medical equipment, prosthetics,
orthotics and supplies (DMEPOS) supplier standards, the term ``DMEPOS
supplier'' is defined in Sec. 424.57(a) as an entity or individual,
including a physician or Part A provider, that sells or rents Part B
covered DMEPOS items to Medicare beneficiaries and that meet the DMEPOS
supplier standards. The term ``DMEPOS'' encompasses the types of items
included in the definition of medical equipment and supplies in section
1834(j)(5) of the Act.
The term durable medical equipment is defined at section 1861(n) of
the Act. Prosthetic devices are defined in section 1861(s)(8) of the
Act as ``devices (other than dental) which replace all or part of an
internal body organ (including colostomy bags and supplies directly
related to colostomy care), including replacement of such devices, and
including one pair of conventional eyeglasses or contact lenses
furnished subsequent to each cataract surgery with insertion of an
intraocular lens.''
[[Page 69773]]
II. Summary of Technical Errors in the Regulations Text at Sec. 424.57
In the January 2, 2009 Federal Register (74 FR 166), we published a
final rule that implemented section 1834(a)(16) of the Act by requiring
certain Medicare DMEPOS suppliers to furnish CMS with a surety bond. In
codifying the regulatory changes included the January 2, 2009 final
rule, the Office of the Federal Register (OFR) found an inaccurate
amendatory instruction for the amendments to Sec. 424.57(d) and (e).
OFR therefore, added the regulatory text via an editorial note in Code
of Federal Regulations (CFR). Subsequently, we published a correcting
amendment in the March 27, 2009 Federal Register (74 FR 13345) to
correct the amendatory instruction errors made in the January 2, 2009
final rule. The correcting amendment redesignated Sec. 424.57(d) and
(e) as Sec. 424.57(e) and (g). However, the provisions of the
correcting amendment were inadvertently omitted in OFR's revisions to
the CFR; therefore, the editorial note was retained.
In the August 27, 2010 Federal Register (75 FR 52629), we published
a final rule that clarified, expanded, and added to the existing
enrollment requirements that DMEPOS suppliers must meet to establish
and maintain billing privileges in the Medicare program. In the August
27, 2010 final rule, we included an amendment for Sec. 424.57(e). This
amendment revised the ``failure to meet standards'' provision which was
redesignated as paragraph (e) in the March 27, 2009 correcting
amendment. The revisions to Sec. 424.57(e) specified the revocation
and overpayment requirements associated with the failure of a supplier
to meet the standards in Sec. 424.57(b) and (c). (For more detailed
information, see the August 27, 2010 final rule (75 FR 52649).)
However, the amendment to paragraph (e) was inadvertently omitted from
OFR's revisions to Sec. 424.57 in the CFR.
In the February 2, 2011 Federal Register (76 FR 5862), we published
a final rule with comment period that, among other things, stated our
policy for revalidation of billing privileges. This final rule included
an amendment to the provision regarding revalidation of billing
privileges which is currently printed in the CFR at Sec. 424.57(e).
The revisions were incorporated for the correct provision. However,
Sec. 424.57(e) should have been redesignated as Sec. 424.57(g) in
accordance with the provision included in our March 27, 2009 correcting
amendment.
As a result of the codification and technical errors for Sec.
424.57(d) and (e) specified previously, the regulations text of this
technical amendment sets forth the following:
The surety bond requirements specified in the January 2,
2009 final rule as Sec. 424.57(d).
The ``failure to meet standards'' requirement specified in
the August 27, 2010 final rule as Sec. 424.57(e).
The ``revalidation of billing privileges'' language
specified in the February 2, 2011 final rule as Sec. 424.57(g).
In our review of Sec. 424.57(d) and (e), we also determined that
there were other terminology and technical errors that needed to be
addressed. Therefore, we are including the following additional changes
in the regulations text of this technical amendment:
Removal of the term ``National Supplier Clearinghouse
(NSC)'' from the definitions in Sec. 424.57(a). We are also replacing
term ``NSC'' with ``CMS contractor'' in Sec. 424.57(d). Removing the
name of the contractor and using the term ``CMS contractor'' more
accurately reflects the possibility that different CMS contractors may
handle these issues and eliminates the need to make regulatory text
changes when we make contractual changes.
Changing the terms ``supplier'' and ``DME supplier'' to
``DMEPOS supplier.'' We note that throughout Sec. 424.57(d), the terms
``supplier,'' ``DME supplier,'' and ``DMEPOS supplier'' are used
interchangeably, though they have the same meaning for purposes of the
applicability of Sec. 424.57(d). However, we are making the change to
ensure consistent terminology and accuracy. We believe that this
terminology change would clarify that Sec. 424.57(d) does not apply to
all Medicare suppliers but does apply to all Medicare DMEPOS suppliers.
Updating Office of Management and Budget (OMB) number for
the Medicare enrollment application form referenced in Sec.
424.57(d)(2)(i) from OMB number 0938-0685 to OMB control number 0938-
1056. The OMB control number is out of date and at our request given a
separate new control number.
Revising the cross-references in Sec. 424.515
(introductory text and paragraph (d)(3).
III. Waiver of Proposed Rulemaking and Delay in Effective Date
We ordinarily publish a notice of proposed rulemaking in the
Federal Register to provide a period for public comment before the
provisions of a rule take effect in accordance with section 553(b) of
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we
can waive this notice and comment procedure if the Secretary finds, for
good cause, that the 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.
Section 553(d) of the APA ordinarily requires a 30-day delay in
effective date of final rules after the date of their publication in
the Federal Register. This 30-day delay in effective date can be
waived, however, if an agency finds for good cause that the delay is
impracticable, unnecessary, or contrary to the public interest, and the
agency incorporates a statement of the findings and its reasons in the
rule issued.
This action merely corrects codification, terminology, and
technical errors in 42 CFR 424.57. We are correcting regulatory
paragraph designations, an omission, and a technical correction to
previously published regulatory text as well as making terminology and
cross-references changes. These revisions in no way change the policies
or substantive regulatory text finalized in the January 2, 2009, August
27, 2010, and February 2, 2011 final rules. Since this technical
amendment corrects codification and other technical errors and
incorporates regulatory text that was inadvertently omitted, we find
that both public comment and a delay in effective date of this
technical amendment is unnecessary. Therefore, we find there is good
cause to waive notice and comment procedures and the 30-day delay in
effective date for this action.
List of Subjects in 42 CFR Part 424
Emergency medical services, Health facilities, Health professions,
Medicare.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR part 424 as set forth below:
PART 424--CONDITIONS FOR MEDICARE PAYMENT
0
1. The authority citation for part 424 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
2. Amend Sec. 424.57 by--
0
A. In paragraph (a) by removing the definition of ``National Supplier
Clearinghouse'' (NSC).
0
B. Revising paragraphs (d) and (e).
0
C. Adding paragraph (g).
The revisions and addition read as follows:
[[Page 69774]]
Sec. 424.57 Special payment rules for items furnished by DMEPOS
suppliers and issuance of DMEPOS supplier billing privileges.
* * * * *
(d) Surety bonds requirements--(1) Effective date of surety bond
requirements--(i) DMEPOS suppliers seeking enrollment or with a change
in ownership. Except as provided in paragraph (d)(15) of this section,
beginning May 4, 2009, DMEPOS suppliers seeking to enroll or to change
the ownership of a supplier of DMEPOS must meet the requirements of
paragraph (d) of this section for each assigned NPI for which the
DMEPOS supplier is seeking to obtain Medicare billing privileges.
(ii) Existing DMEPOS suppliers. Except as provided in paragraph
(d)(15) of this section, beginning October 2, 2009, each Medicare-
enrolled DMEPOS supplier must meet the requirements of paragraph (d) of
this section for each assigned NPI to which Medicare has granted
billing privileges.
(2) Minimum requirements for a DMEPOS supplier. (i) A DMEPOS
supplier enrolling in the Medicare program, making a change in
ownership, or responding to a revalidation or reenrollment request must
submit to the CMS contractor a surety bond from an authorized surety of
$50,000 and, if required by the CMS contractor, an elevated bond amount
as described in paragraph (d)(3) of this section with its paper or
electronic Medicare enrollment application (CMS-855S, OMB number 0938-
1056). The term of the initial surety bond must be effective on the
date that the application is submitted to the CMS contractor.
(ii) A supplier that seeks to become an enrolled DMEPOS supplier
through a purchase or transfer of assets or ownership interest must
submit to the CMS contractor surety bond from an authorized surety of
$50,000 and, if required by the CMS contractor, an elevated bond amount
as described in paragraph (d)(3) of this section that is effective from
the date of the purchase or transfer in order to exercise billing
privileges as of that date. If the bond is effective at a later date,
the effective date of the new DMEPOS supplier billing privileges is the
effective date of the surety bond as validated by the CMS contractor.
(iii) A DMEPOS supplier enrolling a new practice location must
submit to the CMS contractor a new surety bond from an authorized
surety or an amendment or rider to the existing bond, showing that the
new practice location is covered by an additional base surety bond of
$50,000 or, as necessary, an elevated surety bond amount as described
in paragraph (d)(3) of this section.
(3) Elevated surety bond amounts. (i) If required, a DMEPOS
supplier must obtain and maintain a base surety bond in the amount of
$50,000 as specified in paragraph (d)(2) of this section and an
elevated surety bond in the amount prescribed by the CMS contractor as
described in paragraph (d)(3)(ii) of this section.
(ii) The CMS contractor prescribes an elevated surety bond amount
of $50,000 per occurrence of an adverse legal action within the 10
years preceding enrollment, revalidation, or reenrollment, as defined
in paragraph (a) of this section.
(4) Type and terms of the surety bond--(i) Type of bond. A DMEPOS
supplier must submit a bond that is continuous.
(ii) Minimum requirements of liability coverage. (A) The terms of
the bond submitted by a DMEPOS supplier for the purpose of complying
with this section must meet the minimum requirements of liability
coverage ($50,000) and surety and DMEPOS supplier responsibility as set
forth in this section.
(B) CMS requires a DMEPOS supplier to submit a bond that on its
face reflects the requirements of this section. CMS revokes or denies a
DMEPOS supplier's billing privileges based upon the submission of a
bond that does not reflect the requirements of paragraph (d) of this
section.
(5) Specific surety bond requirements. (i) The bond must guarantee
that the surety will, within 30 days of receiving written notice from
CMS containing sufficient evidence to establish the surety's liability
under the bond of unpaid claims, CMPs, or assessments, pay CMS a total
of up to the full penal amount of the bond in the following amounts:
(A) The amount of any unpaid claim, plus accrued interest, for
which the DMEPOS supplier is responsible.
(B) The amount of any unpaid claims, CMPs, or assessments imposed
by CMS or OIG on the DMEPOS supplier, plus accrued interest.
(ii) The bond must provide the following: The surety is liable for
unpaid claims, CMPs, or assessments that occur during the term of the
bond.
(iii) If the DMEPOS supplier fails to furnish a bond meeting the
requirements of paragraph (d) of this section, fails to submit a rider
when required, or if the DMEPOS supplier's billing privileges are
revoked, the last bond or rider submitted by the DMEPOS supplier
remains in effect until the last day of the surety bond coverage period
and the surety remains liable for unpaid claims, CMPs, or assessments
that--
(A) CMS or the OIG imposes or asserts against the DMEPOS supplier
based on overpayments or other events that took place during the term
of the bond or rider; and
(B) Were imposed or assessed by CMS or the OIG during the 2 years
following the date that the DMEPOS supplier failed to submit a bond or
required rider, or the date the DMEPOS supplier's billing privileges
were terminated, whichever is later.
(6) Cancellation of a bond and lapse of surety bond coverage. (i) A
DMEPOS supplier may cancel its surety bond and must provide written
notice at least 30 days before the effective date of the cancellation
to the CMS contractor and the surety.
(ii) Cancellation of a surety bond is grounds for revocation of the
DMEPOS supplier's Medicare billing privileges unless the DMEPOS
supplier provides a new bond before the effective date of the
cancellation. The liability of the surety continues through the
termination effective date.
(iii) If CMS receives notification of a lapse in bond coverage from
the surety, the DMEPOS supplier's billing privileges are revoked.
During this lapse, Medicare does not pay for items or services
furnished during the gap in coverage, and the DMEPOS supplier is held
liable for the items or services (that is, the DMEPOS supplier would
not be permitted to charge the beneficiary for the items or services).
(iv) The surety must immediately notify the CMS contractor if there
is a lapse in the surety's coverage of the DMEPOS supplier's coverage.
(7) Actions under the surety bond. The bond must provide that
actions under the bond may be brought by CMS or by CMS contractors.
(8) Required surety information on the surety bond. The bond must
provide the surety's name, street address or post office box number,
city, state, and zip code.
(9) Change of surety. A DMEPOS supplier that obtains a replacement
surety bond from a different surety to cover the remaining term of a
previously obtained bond must submit the new surety bond to the CMS
contractor at least 30 days prior to the expiration of the previous
surety bond. There must be no gap in the coverage of the surety bond
periods. If a gap in coverage exists, the CMS contractor revokes the
DMEPOS supplier's billing privileges and does not pay for any items or
services furnished by the DMEPOS supplier during the period for which
no
[[Page 69775]]
bond coverage was available. If a DMEPOS supplier changes its surety
during the term of the bond, the new surety is responsible for any
overpayments, CMPs, or assessments incurred by the DMEPOS supplier
beginning with the effective date of the new surety bond. The previous
surety is responsible for any overpayments, CMPs, or assessments that
occurred up to the date of the change of surety.
(10) Parties to the surety bond. The surety bond must name the
DMEPOS supplier as Principal, CMS as Obligee, and the surety (and its
heirs, executors, administrators, successors and assignees, jointly and
severally) as surety.
(11) Effect of DMEPOS supplier's failure to obtain, maintain, and
timely file a surety bond.
(i) CMS revokes the DMEPOS supplier's billing privileges if an
enrolled DMEPOS supplier fails to obtain, file timely, or maintain a
surety bond as specified in this subpart and CMS instructions.
Notwithstanding paragraph (e) of this section, the revocation is
effective the date the bond lapsed and any payments for items furnished
on or after that date must be repaid to CMS by the DMEPOS supplier.
(ii) CMS denies billing privileges to a DMEPOS supplier if the
supplier seeking to become an enrolled DMEPOS supplier fails to obtain
and file timely a surety bond as specified with this subpart and CMS
instructions.
(12) Evidence of DMEPOS supplier's compliance. CMS may at any time
require a DMEPOS supplier to show compliance with the requirements of
paragraph (d) of this section.
(13) Effect of subsequent DMEPOS supplier payment. If a surety has
paid an amount to CMS on the basis of liability incurred under a bond
and CMS subsequently collects from the DMEPOS supplier, in whole or in
part, on the unpaid claim, CMPs, or assessment that was the basis for
the surety's liability, CMS reimburses the surety the amount that it
collected from the DMEPOS supplier, up to the amount paid by the surety
to CMS, provided the surety has no other liability to CMS under the
bond.
(14) Effect of review reversing determination. If a surety has paid
CMS on the basis of liability incurred under a surety bond and to the
extent the DMEPOS supplier that obtained the bond is subsequently
successful in appealing the determination that was the basis of the
unpaid claim, CMP, or assessment that caused the DMEPOS supplier to pay
CMS under the bond, CMS refunds the DMEPOS supplier the amount the
DMEPOS supplier paid to CMS to the extent that the amount relates to
the matter that was successfully appealed, provided all review,
including judicial review, has been completed on the matter.
(15) Exception to the surety bond requirement--(i) Qualifying
entities and requirements. (A) Government-operated DMEPOS suppliers are
provided an exception to the surety bond requirement if the DMEPOS
supplier has provided CMS with a comparable surety bond under State
law.
(B) State-licensed orthotic and prosthetic personnel in private
practice making custom made orthotics and prosthetics are provided an
exception to the surety bond requirement if--
(1) The business is solely-owned and operated by the orthotic and
prosthetic personnel, and
(2) The business is only billing for orthotic, prosthetics, and
supplies.
(C) Physicians and nonphysician practitioners as defined in section
1842(b)(18) of the Act are provided an exception to the surety bond
requirement when items are furnished only to the physician or
nonphysician practitioner's own patients as part of his or her
physician service.
(D) Physical and occupational therapists in private practice are
provided an exception to the surety bond requirement if--
(1) The business is solely-owned and operated by the physical or
occupational therapist;
(2) The items are furnished only to the physical or occupational
therapist's own patients as part of his or her professional service;
and
(3) The business is only billing for orthotics, prosthetics, and
supplies.
(ii) Loss of a DMEPOS supplier exception. A DMEPOS supplier that no
longer qualifies for an exception as described in paragraph (d)(15)(i)
of this section must submit a surety bond to the CMS contractor in
accordance with requirements of paragraph (d) of this section within 60
days after it knows or has reason to know that it no longer meets the
criteria for an exception.
(e) Failure to meet standards--(1) Revocation. CMS revokes a
supplier's billing privileges if it is found not to meet the standards
in paragraphs (b) and (c) of this section. Except as otherwise provided
in this section, the revocation is effective 30 days after the entity
is sent notice of the revocation, as specified in Sec. 405.874 of this
subchapter.
(2) Overpayments associated with final adverse actions. CMS or a
CMS contractor may reopen (in accordance with Sec. 405.980 of this
chapter) all Medicare claims paid on or after the date of a final
adverse action (as defined in paragraph (a) of this section) in order
to establish an overpayment determination.
* * * * *
(g) Revalidation of billing privileges. A supplier must revalidate
its application for billing privileges every 3 years after the billing
privileges are first granted. (Each supplier must complete a new
application for billing privileges 3 years after its last
revalidation.)
Sec. 424.515 [Amended]
0
3. In Sec. 424.515, the introductory text and in paragraph (d)(3), the
cross-reference ``Sec. 424.57(e)'' is removed and the cross-reference
``Sec. 424.57(g)'' is added in its place.
Dated: November 14, 2014.
C'Reda Weeden,
Executive Secretary to the Department, Department of Health and Human
Services.
[FR Doc. 2014-27737 Filed 11-21-14; 8:45 am]
BILLING CODE 4120-01-P
