Medicare, Medicaid, and Children's Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process, 10719-10753 [2016-04312]

Agencies

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

[Federal Register Volume 81, Number 40 (Tuesday, March 1, 2016)]
[Proposed Rules]
[Pages 10719-10753]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04312]



[[Page 10719]]

Vol. 81

Tuesday,

No. 40

March 1, 2016

Part II





 Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 405, 424, 455, et al.





Medicare, Medicaid, and Children's Health Insurance Programs; Program 
Integrity Enhancements to the Provider Enrollment Process; Proposed 
Rule

Federal Register / Vol. 81 , No. 40 / Tuesday, March 1, 2016 / 
Proposed Rules

[[Page 10720]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 424, 455, and 457

[CMS-6058-P]
RIN 0938-AS84


Medicare, Medicaid, and Children's Health Insurance Programs; 
Program Integrity Enhancements to the Provider Enrollment Process

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement sections of the Affordable 
Care Act that require Medicare, Medicaid, and Children's Health 
Insurance Program (CHIP) providers and suppliers to disclose certain 
current and previous affiliations with other providers and suppliers. 
This proposed rule would also provide CMS with additional authority to 
deny or revoke a provider's or supplier's Medicare enrollment. In 
addition, this proposed rule would require that to order, certify, 
refer or prescribe any Part A or B service, item or drug, a physician 
or, when permitted, an eligible professional must be enrolled in 
Medicare in an approved status or have validly opted-out of the 
Medicare program.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on April 25, 2016.

ADDRESSES: In commenting, please refer to file code CMS-6058-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
proposed rule to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address only: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-6058-P, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address only: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-6058-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments only to the following addresses prior to 
the close of the comment period:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    Comments erroneously mailed to the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: 
    Frank Whelan, (410) 786-1302.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that Web site to 
view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

I. Executive Summary and Background

A. Executive Summary

1. Purpose and Need for Regulatory Action
    This proposed rule would implement a provision of the Affordable 
Care Act that requires Medicare, Medicaid, and Children's Health 
Insurance Program (CHIP) providers and suppliers to disclose any 
current or previous direct or indirect affiliation with a provider or 
supplier that--(1) has uncollected debt; (2) has been or is subject to 
a payment suspension under a federal health care program; (3) has been 
excluded from Medicare, Medicaid or CHIP; or (4) has had its Medicare, 
Medicaid or CHIP billing privileges denied or revoked. This provision 
permits the Secretary to deny enrollment based on affiliations that the 
Secretary determines pose an undue risk of fraud, waste or abuse. Also, 
this proposed rule would revise various provider enrollment provisions 
in 42 CFR part 424, subpart P.
    As discussed in greater detail in section II of this rule, our 
proposed provisions are necessary to address various program integrity 
issues and vulnerabilities that require regulatory action. We believe 
that our proposals would help make certain that entities and 
individuals who pose risks to the Medicare program are removed from and 
kept out of Medicare for extended periods of time; in particular, the 
rule would crack down on providers and suppliers who attempt to 
circumvent Medicare requirements through name and identity changes as 
well as through elaborate, inter-provider relationships. In short, the 
rule would enable us to take action against unqualified and potentially 
fraudulent entities and individuals, which in turn could deter other 
parties from engaging in improper behavior.
    The following are the five principal legal authorities for our 
proposed provisions:
     Sections 1102 and 1871 of the Social Security Act (the 
Act), which provide general authority for the Secretary to prescribe 
regulations for the efficient administration of the Medicare program.
     Section 1866(j) of the Act, which provides specific 
authority with respect to the enrollment process for providers and 
suppliers.

[[Page 10721]]

     Section 1866(j)(5) of the Act, as amended by section 
6401(a)(3) of the Affordable Care Act, which states that a provider or 
supplier that submits a Medicare, Medicaid or CHIP application for 
enrollment or a revalidation application must disclose any current or 
previous affiliation (direct or indirect) with a provider or supplier 
that--(1) has uncollected debt; (2) has been or is subject to a payment 
suspension under a federal health care program; (3) has been excluded 
from participation in Medicare, Medicaid or CHIP; or (4) has had its 
billing privileges denied or revoked, and permits the Secretary to deny 
enrollment based on affiliations that the Secretary determines pose an 
undue risk of fraud, waste or abuse.
     Section 1902(kk)(3) of the Act,\1\ as amended by section 
6401(b) of the Affordable Care Act, which mandates that states require 
providers and suppliers to comply with the same disclosure requirements 
established by the Secretary under section 1866(j)(5) of the Act.\2\
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    \1\ Because section 6401(b) of the Affordable Care Act 
erroneously added a duplicate section 1902(ii) of the Act, the 
Congress enacted a technical correction in the Medicare and Medicaid 
Extenders Act of 2010 (MMEA) (Pub. L. 111-309) to redesignate 
section 1902(ii) of the Act as section 1902(kk) of the Act, a 
designation we will use in this proposed rule.
    \2\ Section 1304 of the Health Care and Education Reconciliation 
Act (Pub. L. 111-152) added a new paragraph (j)(4) to section 1866 
of the Act, thus redesignating the subsequent paragraphs. 
Accordingly, we are interpreting the reference in section 
1902(kk)(3) of the Act to ``disclosure requirements established by 
the Secretary under section 1866(j)(4)'' of the Act to mean the 
disclosure requirements described in section 1866(j)(5) of the Act.
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     Section 2107(e)(1) of the Act, as amended by section 
6401(c) of the Affordable Care Act, which makes the requirements of 
section 1902(kk) of the Act, including the disclosure requirements, 
applicable to CHIP.
2. Summary of the Major Provisions
    The major provisions in this proposed rule would do the following:
     Implement a provision of the Affordable Care Act that 
requires certain Medicare, Medicaid, and CHIP providers and suppliers 
to disclose if a provider or supplier has any current or previous 
direct or indirect affiliation with a provider or supplier that has 
uncollected debt; has been or is subject to a payment suspension under 
a federal health care program; has been excluded from Medicare, 
Medicaid or CHIP; or has had its Medicare, Medicaid or CHIP billing 
privileges denied or revoked, and that permits the Secretary to deny 
enrollment based on an affiliation that the Secretary determines pose 
an undue risk of fraud, waste or abuse.
    + Describe the terms ``affiliation'', ``disclosable event,'' 
``uncollected debt,'' and ``undue risk'' as they pertain to this 
Affordable Care Act provision.
     Provide CMS with the authority to do the following:
    ++ Deny or revoke a provider's or supplier's Medicare enrollment if 
CMS determines that the provider or supplier is currently revoked under 
a different name, numerical identifier or business identity, and the 
applicable reenrollment bar period has not expired.
    ++ Revoke a provider's or supplier's Medicare enrollment--including 
all of the provider's or supplier's practice locations, regardless of 
whether they are part of the same enrollment--if the provider or 
supplier billed for services performed at or items furnished from a 
location that it knew or should have known did not comply with Medicare 
enrollment requirements.
    ++ Revoke a physician's or eligible professional's Medicare 
enrollment if he or she has a pattern or practice of ordering, 
certifying, referring or prescribing Medicare Part A or B services, 
items or drugs that is abusive, represents a threat to the health and 
safety of Medicare beneficiaries or otherwise fails to meet Medicare 
requirements.
    ++ Increase the maximum reenrollment bar from 3 to 10 years, with 
exceptions.
    ++ Prohibit a provider or supplier from enrolling in the Medicare 
program for up to 3 years if its enrollment application is denied 
because the provider or supplier submitted false or misleading 
information on or with (or omitted information from) its application in 
order to gain enrollment in the Medicare program.
    ++ Revoke a provider's or supplier's Medicare enrollment if the 
provider or supplier has an existing debt that CMS refers to the United 
States Department of Treasury.
    ++ Require that to order, certify, refer or prescribe any Part A or 
B service, item or drug, a physician or, when permitted under state 
law, an eligible professional must be enrolled in Medicare in an 
approved status or have validly opted-out of the Medicare program. 
Also, the provider or supplier furnishing the Part A or B service, item 
or drug, as well as the physician or eligible professional who ordered, 
certified, referred or prescribed the service, item or drug, would have 
to maintain documentation for 7 years from the date of the service and 
furnish access to that documentation upon a CMS or Medicare contractor 
request.
    ++ Deny a provider's or supplier's Medicare enrollment application 
if--(1) the provider or supplier is currently terminated or suspended 
(or otherwise barred) from participation in a particular state Medicaid 
program or any other federal health care program; or (2) the provider's 
or supplier's license is currently revoked or suspended in a state 
other than that in which the provider or supplier is enrolling.
3. Summary of Costs and Benefits
    As explained in greater detail in sections III. and V. of this 
proposed rule, we estimate an average annual cost to providers and 
suppliers of $289.8 million in each of the first 3 years of this rule. 
This cost involves the information collection burden associated with 
the following proposals:
     The requirement that Medicare, Medicaid and CHIP providers 
and suppliers disclose certain current and prior affiliations.
     The requirement that a physician or, when permitted under 
state law, an eligible professional, be enrolled in Medicare in an 
approved status or have opted-out of the Medicare program to order, 
certify, refer or prescribe a Part A or B service, item or drug.
    Other potential costs which we are unable to calculate are 
discussed in sections III. and V. of this proposed rule.
    We believe there would be benefits, although unquantifiable, 
associated with this rule, because problematic providers would be kept 
out of or removed from Medicare, Medicaid, and CHIP, thus saving 
program dollars.

B. General Overview

1. Medicare
    The Medicare program (title XVIII of the Act) is the primary payer 
of health care for approximately 54 million enrolled beneficiaries. 
Under section 1802 of the Act, a beneficiary may obtain health services 
from an individual or an organization qualified to participate in the 
Medicare program. Qualifications to participate are specified in 
statute and in regulations (see, for example, sections 1814, 1815, 
1819, 1833, 1834, 1842, 1861, 1866, and 1891 of the Act; and 42 CFR 
chapter IV, subchapter G of the regulations, which concerns standards 
and certification requirements).
    Providers and suppliers furnishing services must comply with the 
Medicare requirements stipulated in the Act and in our regulations. 
These requirements are meant to confirm compliance with applicable 
statutes, as well as to promote the furnishing of high quality care. As 
Medicare program expenditures

[[Page 10722]]

have grown, we have increased our efforts to make certain that only 
qualified individuals and organizations are allowed to enroll in and 
maintain their enrollment in Medicare.
2. Medicaid and CHIP
    The Medicaid program (title XIX of the Act) is a joint federal and 
state health care program that covers nearly 70 million low-income 
individuals. States have considerable flexibility in how they 
administer their Medicaid programs within a broad federal framework, 
and programs vary from state to state. CHIP (title XXI of the Act) is a 
joint federal and state health care program that provides health care 
coverage to more than 7.7 million children. In operating Medicaid and 
CHIP, states historically have permitted the enrollment of providers 
who meet the state requirements for program enrollment as well as any 
applicable federal requirements (such as those in 42 CFR part 455).

C. General Background on the Enrollment Process

1. The 2006 Provider Enrollment Final Rule
    In the April 21, 2006 Federal Register (71 FR 20754), we published 
a final rule titled, ``Medicare Program; Requirements for Providers and 
Suppliers to Establish and Maintain Medicare Enrollment.'' The final 
rule set forth certain requirements in 42 CFR part 424, subpart P that 
providers and suppliers must meet in order to obtain and maintain 
Medicare billing privileges. We cited in that rule sections 1102 and 
1871 of the Act as general authority for our establishment of these 
requirements, which were designed for the efficient administration of 
the Medicare program.
2. The 2011 Provider Enrollment Final Rule
    In the February 2, 2011 Federal Register (76 FR 5861),we published 
a final rule with comment period titled, ``Medicare, Medicaid, and 
Children's Health Insurance Programs; Additional Screening 
Requirements, Application Fees, Temporary Enrollment Moratoria, Payment 
Suspensions and Compliance Plans for Providers and Suppliers.'' This 
final rule implemented various Affordable Care Act provisions, 
including the following:
     Submission of application fees by institutional providers 
and suppliers as part of the Medicare, Medicaid, and CHIP provider 
enrollment processes.
     Establishment of Medicare, Medicaid, and CHIP provider 
enrollment screening categories and corresponding screening 
requirements.
     Imposition of temporary moratoria on the enrollment of new 
Medicare, Medicaid, and CHIP providers and suppliers of a particular 
type (or the establishment of new practice locations of a particular 
type) in a geographic area.
3. Form CMS-855--Medicare Enrollment Application
    Under Sec.  424.510, a provider or supplier must complete, sign, 
and submit to its assigned Medicare contractor the appropriate Form 
CMS-855 (OMB Control No. 0938-0685) application in order to enroll in 
the Medicare program and obtain Medicare billing privileges. The Form 
CMS-855, which can be submitted via paper or electronically through the 
Internet-based Provider Enrollment, Chain, and Ownership System (PECOS) 
process, captures information about the provider or supplier that is 
needed for CMS or its contractors to determine whether the provider or 
supplier meets all Medicare requirements. The enrollment process helps 
ensure that unqualified and potentially fraudulent individuals and 
entities do not bill Medicare and that the Medicare Trust Funds are 
accordingly protected. Data collected during the enrollment process 
include, but are not limited to--(1) general identifying information 
(for example, legal business name, tax identification number); (2) 
licensure data; (3) practice locations; and (4) information regarding 
the provider's or supplier's owning and managing individuals and 
organizations. The application is used for a variety of provider 
enrollment transactions, including the following:
     Initial enrollment--The provider or supplier is--(1) 
enrolling in Medicare for the first time; (2) enrolling in another 
Medicare contractor's jurisdiction; or (3) seeking to enroll in 
Medicare after having previously been enrolled.
     Change of ownership--The provider or supplier is reporting 
a change in its ownership.
     Revalidation--The provider or supplier is revalidating its 
Medicare enrollment information in accordance with Sec.  424.515.
     Reactivation--The provider or supplier is seeking to 
reactivate its Medicare billing privileges after it was deactivated in 
accordance with Sec.  424.540.
     Change of information--The provider or supplier is 
reporting a change in its existing enrollment information in accordance 
with Sec.  424.516.
    Besides the aforementioned 2006 and 2011 final rules, we have made 
several other regulatory changes to 42 CFR part 424, subpart P to 
address various payment safeguard issues that have arisen.

D. Statutory Background on Medicare Requirements for Physicians and 
Eligible Professionals Who Order or Certify Services or Items

    The Affordable Care Act addressed the problem of certain Medicare 
services and items being ordered or certified by physicians or eligible 
professionals (as the latter term is defined in section 1848(k)(3)(B) 
of the Act) who may not be qualified to do so. The Affordable Care Act 
included the following provisions:
     Section 6405(a) of the Affordable Care Act amended section 
1834(a)(11)(B) of the Act to specify, with respect to DME suppliers, 
that payment may be made under section 1834(a)(11)(B) of the Act only 
if the written order for the item has been communicated to the DMEPOS 
supplier by a physician or eligible professional who is enrolled under 
section 1866(j) of the Act before delivery of the item.
     Section 6405(b) of the Affordable Care Act, as amended by 
section 10604 of the Affordable Care Act, amended sections 1814(a)(2) 
and 1835(a)(2) of the Act and specifies, with respect to Part A home 
health services, that payment may be made to providers of services if 
they are eligible and only if a physician enrolled under section 
1866(j) of the Act certifies (and recertifies, as required) that the 
services are or were required in accordance with section 1814(a)(1)(C) 
of the Act. Section 1835(a)(2) of the Act specifies, with respect to 
Part B home health services, that payments may be made to providers of 
services if they are eligible and only if a physician enrolled under 
section 1866(j) of the Act certifies (and recertifies, as required) 
that the services are or were medically required in accordance with 
section 1835(a)(1)(B) of the Act.
     Section 6405(c) of the Affordable Care Act gives the 
Secretary the authority to extend the requirements of subsections (a) 
and (b) to all other categories of items or services under title XVIII 
of the Act, including covered Part D drugs as defined in section 1860D-
2(e) of the Act, that are ordered, prescribed or referred by a 
physician or eligible professional enrolled under section 1866(j) of 
the Act.
    In addition, section 6406(b)(3) of the Affordable Care Act amended 
section 1866(a)(1) of the Act to require that providers maintain and, 
upon request, provide to the Secretary, access to

[[Page 10723]]

written or electronic documentation relating to written orders or 
requests for payment for DME, certifications for home health services 
or referrals for other items or services written or ordered by the 
provider as specified by the Secretary. Under section 6406(a) of the 
Affordable Care Act, which amended section 1842(h) of the Act, the 
Secretary may revoke a physician's or supplier's enrollment if the 
physician or supplier fails to adhere to these requirements. .

E. Background on Disclosure of Affiliations for Medicare, Medicaid, and 
CHIP (Section 1866(j)(5) of the Act)

    As previously mentioned, providers and suppliers must complete and 
submit (via paper or through Internet-based PECOS) a Form CMS-855 
application to their Medicare contractor in order to enroll or 
revalidate their enrollment in the Medicare program. The Form CMS-855 
requires the provider or supplier to disclose certain information, such 
as general identifying data (for example, legal business name), the 
provider's or supplier's practice locations, and the provider's or 
supplier's owning and managing employees and organizations.
    In operating Medicaid and CHIP, states may have somewhat different 
enrollment processes, although all states must comply with the federal 
requirements in 42 CFR part 455, subparts B and E. Under 42 CFR part 
455, subpart B, providers and disclosing entities must furnish 
disclosures regarding ownership and control of the provider or supplier 
entity, certain business transactions, and criminal convictions related 
to federal health care programs. States must also comply with their 
individual medical programs and procurement laws and rules, which may 
include additional provider or supplier disclosures.
    Section 6401(a)(3) of the Affordable Care Act, which amended 
section 1866(j) of the Act to add new paragraph (5), states that a 
provider or supplier that submits an enrollment application or a 
revalidation application shall disclose (in a form and manner and at 
such time as determined by the Secretary) any current or previous 
affiliation (directly or indirectly) with a provider or supplier that 
has uncollected debt; has been or is subject to a payment suspension 
under a federal health care program (as defined in section 1128B(f) of 
the Act); has been excluded from participation from Medicare, Medicaid 
or CHIP; or has had its billing privileges denied or revoked. The 
Secretary may deny an application under section 1866(j)(5)(B) of the 
Act if the Secretary determines that the affiliation poses an undue 
risk of fraud, waste or abuse.
    We mentioned earlier that section 6401(b) of the Affordable Care 
Act added a new section 1902(kk)(3) to the Act, mandating that states 
require providers and suppliers to comply with the same disclosure 
requirements established by the Secretary under section 1866(j)(5) of 
the Act. Section 6401(c) of the Affordable Care Act amended section 
2107(e)(1) of the Act to make the requirements of section 1902(kk) of 
the Act, including the disclosure requirements, applicable to CHIP.

II. Provisions of the Proposed Regulations

A. Disclosure of Affiliations

    We propose to carry out the legislative mandate of section 
1866(j)(5) of the Act as previously discussed in section I.A. of this 
proposed rule.
    Consistent with the text of section 1866(j)(5) of the Act, we 
believe that implementing these disclosure provisions would help combat 
fraud, waste, and abuse by enabling CMS and the states to: (1) Better 
track current and past relationships between and among different 
providers and suppliers; and (2) identify and take action on 
affiliations among providers and suppliers that pose an undue risk to 
Medicare, Medicaid, and CHIP. While the Form CMS-855 captures 
information on parties that have ownership or managerial interests in 
the enrolling or enrolled provider or supplier, it does not collect 
data about prior affiliations or about entities in which the provider 
or supplier (or its owning or managing individuals or organizations) 
has or had an interest. We believe that our knowledge of these 
affiliations and interests would greatly assist our program integrity 
efforts, for such data could reveal inter-provider schemes involving 
inappropriate behavior and lead to the denial or revocation of 
enrollment.
    In November 2008, the Department of Health and Human Services 
Office of Inspector General (OIG) issued an Early Alert Memorandum 
titled ``Payments to Medicare Suppliers and Home Health Agencies 
Associated with `Currently Not Collectible' Overpayments'' (OEI-06-07-
00080). The memorandum stated that anecdotal information from OIG 
investigators and Assistant United States Attorneys indicated that 
DMEPOS suppliers with outstanding Medicare debts may inappropriately 
receive Medicare payments by, among other means, operating businesses 
that are publicly fronted by business associates, family members or 
other individuals posing as owners. In its study, the OIG selected a 
random sample of 10 DMEPOS suppliers in Texas that each had Medicare 
debt of at least $50,000 deemed currently not collectible (CNC) by CMS 
during 2005 and 2006. The OIG found that 6 of the 10 reviewed DMEPOS 
suppliers were associated with 15 other DMEPOS suppliers or home health 
agencies (HHAs) that received Medicare payments totaling $58 million 
during 2002 through 2007. Most associated DMEPOS suppliers had lost 
billing privileges by January 2005 and had accumulated a total of $6.2 
million of their own CNC debt to Medicare. The OIG also found that most 
of the reviewed DMEPOS suppliers were connected to other DMEPOS 
suppliers and HHAs through shared owners or managers.
    On March 2, 2011, the OIG testified before the Congress that fraud 
schemes in South Florida often rely on the use of networks of 
affiliations among fraudulent owners.\3\ In those schemes, Medicare 
providers and suppliers disguise true ownership by the use of nominee 
owners in order to bill Medicare fraudulently on a temporary basis in 
order to evade detection. Providers and suppliers will--(1) hide their 
true ownership through the use of nominee owners; (2) bill the Medicare 
program for millions of dollars; and (3) close down and then take over 
another company, and then repeat the process in another location. In 
addition to OIG reports, our experience has found that networks of 
individuals and entities can be behind widespread fraud schemes; in 
some instances, shared owners were behind multiple providers and 
suppliers engaging in improper billings.
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    \3\ https://oig.hhs.gov/testimony/docs/2011/perez_testimony_03022011.pdf.
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    We have long shared these and other concerns the OIG has expressed 
regarding individuals and entities that enroll in Medicare (or own or 
operate Medicare providers or suppliers), accumulate large debts or 
otherwise engage in inappropriate activities, and depart the Medicare 
program voluntarily or involuntarily, yet continue their behavior by--
(1) reentering the program in some capacity (for instance, as an 
owner); and/or (2) shifting their activities to another enrolled 
Medicare provider or supplier with which they are affiliated. To 
illustrate, a provider or supplier may engage in inappropriate billing, 
exit Medicare prior to detection, and then change its name or business 
identity in

[[Page 10724]]

order to reenroll in Medicare under this new identity. Another example 
involves an entity that owns or manages several Medicare providers and 
suppliers. One of the providers or suppliers may be involved in abusive 
behavior with the approval or at the instigation of that owner or 
managing entity. In this example, if the abusive provider's enrollment 
is revoked, the owning/managing entity shifts its behavior to another 
of its enrolled entities.
    In these situations, and absent the owning or managing individual's 
or organization's felony conviction, exclusion from Medicare by the OIG 
or debarment from participating in any federal procurement or non-
procurement program, CMS does not currently have a regulatory basis to 
prevent such individuals or entities from continuing their activities 
through other enrolled or newly enrolling providers and suppliers. Put 
another way, providers and suppliers currently can be denied, revoked 
or terminated from participating in Medicare, Medicaid or CHIP; but 
absent a felony conviction, exclusion or debarment, their owners and 
managers can often remain as direct or indirect participants in these 
programs. Consider this illustration: Individual X owns 100 percent of 
three enrolled DMEPOS suppliers, each of which has submitted a 
revalidation application to Medicare. Individual X completes each 
application. He submits false information on one application in order 
to retain that supplier's Medicare enrollment, but not on the other two 
applications. CMS revokes the first DMEPOS supplier's enrollment under 
Sec.  424.535(a)(4). However, we cannot revoke the other two suppliers 
because false information was not submitted on their applications; this 
means that two Medicare suppliers whose owner has furnished false 
information to Medicare are still enrolled in the program.
    We believe that we must address this and similar situations. In 
many cases, the owners and managers of fraudulent entities hide behind 
the organizational structure itself when in fact they are, for purposes 
of their behavior, one in the same. This proposed rule would allow CMS 
to take immediate action against such persons and entities to ensure 
that they do not continue to use the provider or supplier organization 
as a shield for their conduct. If finalized, the proposal would help 
protect the Medicare Trust Funds, the taxpayers, Medicare 
beneficiaries, and honest and legitimate Medicare providers and 
suppliers. The changes described later in this section serve these 
goals by implementing section 1866(j)(5) of the Act. We further propose 
applying these changes to Medicaid and CHIP, such that states must 
require providers and suppliers to comply with the same disclosure 
requirements established by the Secretary.
1. Medicare
a. Definition of Affiliation
    In Sec.  424.502, we propose to define ``affiliation'' as meaning, 
for purposes of applying Sec.  424.519, any of the following:
     A 5 percent or greater direct or indirect ownership 
interest that an individual or entity has in another organization.
     A general or limited partnership interest (regardless of 
the percentage) that an individual or entity has in another 
organization.
     An interest in which an individual or entity exercises 
operational or managerial control over or directly or indirectly 
conducts the day-to-day operations of another organization (including, 
for purposes of Sec.  424.519 only, sole proprietorships), either under 
contract or through some other arrangement, regardless of whether or 
not the managing individual or entity is a W-2 employee of the 
organization.
     An interest in which an individual is acting as an officer 
or director of a corporation.
     Any reassignment relationship under Sec.  424.80.
    The first four types of interests are consistent with the 
definitions of--(1) ``owner'' and ``managing employee'' in Sec.  
424.502; and (2) ``ownership or control interest'' in section 
1124(a)(3) of the Act. We also note that consistent with sections 1124 
and 1124A of the Act, entities and individuals that have one or more of 
these four interests in an enrolling or enrolled Medicare provider or 
supplier must be reported on the provider's or supplier's Form CMS-855 
enrollment application. Likewise, reassignment relationships must be 
reported to Medicare via the Form CMS-855R (OMB Control No. 0938-1179); 
this form facilitates the reassignment of benefits from a physician or 
non-physician practitioner to another Medicare provider or supplier. To 
make certain that there is uniformity with these other reporting 
requirements and that we are aware of prior and current relationships 
that could present risks of fraud, waste or abuse, we believe that the 
``affiliation'' definition should include these five interests.
    We believe there is a sufficiently close relationship between the 
reassignor (the physician or practitioner) and the reassignee (the 
provider or supplier) to warrant including reassignments within the 
definition of ``affiliation''. Indeed, a W-2 employee or independent 
contractor may have a closer day-to-day relationship with the entity or 
person he or she works for and reassigns benefits to than, for 
instance, an indirect owner has with an entity in which he or she has a 
5 percent ownership interest. We request comment on the regularity of 
close reassignor and reassignee relationships and whether inclusion of 
these relationships is likely to lead to additional information that 
may prevent fraud, waste and abuse.
b. Disclosable Events (Sec.  424.519)
    In new Sec.  424.519, we propose in paragraph (b) that a provider 
or supplier that is submitting an initial or revalidating Form CMS-855 
application must disclose whether it or any of its owning or managing 
employees or organizations (consistent with the terms ``owner'' and 
``managing employee'' as defined in Sec.  424.502) has or, within the 
previous 5 years, has had an affiliation with a currently or formerly 
enrolled Medicare, Medicaid or CHIP provider or supplier that--
     Currently has an uncollected debt to Medicare, Medicaid or 
CHIP, regardless of--(1) the amount of the debt; (2) whether the debt 
is currently being repaid (for example, as part of a repayment plan); 
or (3) whether the debt is currently being appealed. For purposes of 
Sec.  424.519 only, and as stated in proposed Sec.  424.519(a), the 
term ``uncollected debt'' only applies to--
    ++ Medicare, Medicaid or CHIP overpayments for which CMS or the 
state has sent notice of the debt to the affiliated provider or 
supplier;
    ++ Civil money penalties (CMP) (as defined in Sec.  424.57(a)); and
    ++ Assessments (as defined in Sec.  424.57(a)).
     Has been or is subject to a payment suspension under a 
federal health care program (as that term is defined in section 
1128B(f) of the Act), regardless of when the payment suspension 
occurred or was imposed;
     Has been or is excluded from participation in Medicare, 
Medicaid or CHIP, regardless of whether the exclusion is currently 
being appealed or when the exclusion occurred or was imposed (although 
section 1866(j)(5) of the Act states ``has been excluded,'' we believe 
it is appropriate to clarify that a current exclusion is also a 
disclosable event); or
     Has had its Medicare, Medicaid or CHIP enrollment denied, 
revoked or terminated, regardless of--(1) the reason for the denial, 
revocation or

[[Page 10725]]

termination; (2) whether the denial, revocation or termination is 
currently being appealed; or (3) when the denial, revocation or 
termination occurred or was imposed. For purposes of Sec.  424.519 
only, and as stated in proposed paragraph (a), the terms ``revoked,'' 
``revocation,'' ``terminated,'' and ``termination'' would include 
situations where the affiliated provider or supplier voluntarily 
terminated its Medicare, Medicaid or CHIP enrollment to avoid a 
potential revocation or termination.
    Regarding proposed Sec.  424.519(b), it is important to note that 
the affiliated provider or supplier need not have been enrolled in 
Medicare, Medicaid or CHIP when the disclosing party had its 
relationship with the affiliated provider or supplier. To illustrate, 
assume Provider A sold its 30 percent interest in an affiliated 
provider in January 2016. In March 2016, the affiliated provider 
enrolled in Medicare yet had its enrollment revoked in September 2016. 
In April 2017, Provider A applied for Medicare enrollment. If we 
limited the reporting of affiliations to periods when the affiliated 
provider was enrolled in Medicare, Medicaid or CHIP, Provider A would 
not have to report--and we would perhaps not learn of--its relationship 
with a provider that was revoked only 8 months after the affiliation 
ended. We believe that such information would be valuable in helping us 
determine whether the affiliation poses an undue risk of fraud, waste 
or abuse.
    We also propose that the Sec.  424.519(b) event (hereafter referred 
to as the ``disclosable event'') could have occurred or been imposed 
either before the affiliation began or after it ended. If disclosure of 
an affiliation were restricted to the time period of the disclosing 
party's relationship with the affiliated provider, we might remain 
unaware of situations where, for instance--(1) a disclosing party sold 
its majority interest in an affiliated provider or supplier that was 
terminated from Medicaid 2 months after the sale; and (2) a 40 percent 
owner of a Medicare-enrolled affiliated provider engages in 
questionable billing practices, sells its share, and seeks to 
separately enroll in Medicare, shortly after which the affiliated 
provider is notified that it has a large Medicare debt that must be 
repaid. We are particularly concerned about the latter scenario; as 
previously mentioned, we have seen instances where providers and 
suppliers with significant overpayments close down their businesses and 
attempt to enroll under other business identities.
    All affiliations that meet the requirements of Sec.  424.519(b) 
would have to be reported. To illustrate, suppose a revalidating 
Medicare provider has three owners: A, B, and C. Owner A had an 
affiliation 30 months ago with a revoked Medicare provider. Owner B had 
an affiliation 2 years ago with a terminated Medicaid provider. Owner C 
currently serves as a management company for a CHIP provider with an 
uncollected debt. Each of these three affiliations would have to be 
disclosed on the revalidating provider's Form CMS-855 application.
    We believe the actions identified in Sec.  424.519(b) should be 
reported regardless of whether an appeal is pending. We want to avoid 
situations where an initially enrolling provider or supplier would not 
have to disclose, for example, an affiliated provider that was revoked 
from Medicare 6 months ago (based on a felony conviction) because the 
revocation is under appeal; without this information, the provider or 
supplier in question might become enrolled in Medicare without CMS 
knowing of its relationship with a recently convicted affiliated 
provider or supplier. Conversely, actions that are overturned on appeal 
or otherwise reversed need not be reported. For purposes of this rule 
only, the reversal of a disclosable event would effectively nullify 
said event.
    Section 1866(j)(5) of the Act refers to the disclosure of current 
or previous affiliations ``directly or indirectly.'' We believe this 
concept should apply to ownership interests. Consequently, affiliations 
involving a 5 percent or greater indirect ownership interest must be 
disclosed to the same extent as those involving direct ownership. 
Consider the following example: A newly-enrolling provider listed in 
section 2 of the Form CMS-855A (OMB Control No. 0938-0685) application 
is wholly (100 percent) owned by Company A. Company B wholly owns 
Company A. Companies C and D each own 50 percent of Company B. Here, 
Company A is considered a direct owner of the newly-enrolling provider 
because it actually owns the assets of the business. Companies B, C, 
and D are considered indirect owners of the provider. Unlike Company A, 
they do not own the provider's assets. However, Company B directly owns 
Company A's assets, while Companies C and D own Company B's assets.
    We believe that the disclosure of indirect ownership interests is 
important. We have seen cases where the direct owner of the provider or 
supplier is a mere holding company, while the actual management and 
control of the provider or supplier is exercised by the provider's or 
supplier's indirect owner(s). Restricting the disclosure requirements 
to direct owners could deprive CMS of important information about the 
entities that are actually running the provider's or supplier's 
operations.
    We are proposing a ``look-back'' period of 5 years for previous 
affiliations. A sufficient look-back period is necessary because a past 
affiliation could be an indicator of a disclosing party's future 
behavior. For instance, suppose a physician who is enrolling in 
Medicare was a 50 percent owner of an affiliated provider from July 
2013 through December 2013. In October 2013, the affiliated provider's 
Medicare enrollment was revoked for falsifying information on a Form 
CMS-855 change of information request. Considering the physician's 
degree of involvement with the affiliated provider, we believe this 
scenario would raise questions regarding the level of risk posed to the 
Medicare program. In short, a 5-year look-back period would divulge to 
us past situations that could present future concerns. We believe that 
a 5-year look-back period would be less onerous for providers and 
suppliers than, for instance, a 10-year period, while still providing 
us with enough information to make a proper decision as to whether an 
undue risk of fraud, waste or abuse exists. For purposes of this rule, 
the look-back period would be the 5-year timeframe prior to the date on 
which the disclosing provider or supplier submits its Form CMS-855; 
thus, the affiliation must have occurred within the 5-year period 
preceding the date on which the application is submitted. However, we 
note that only part of the affiliation period would have to have 
occurred inside the 5-year timeframe; the entire affiliation (from 
beginning to end) need not fall within the 5-year window. To 
illustrate, if an affiliation began 8 years prior to enrollment and 
ended 4 years before enrollment, it would have to be reported because 
at least part of the affiliation occurred within the previous 5 years.
    While we propose to limit disclosure to affiliations that occurred 
within the previous 5 years, the event triggering the disclosure (for 
example, a revocation) could have occurred or been imposed more than 5 
years previously. In other words, we are proposing a 5-year look-back 
period for the affiliation; but we are not proposing a specific look-
back period for when the disclosable event occurred or was imposed. 
Consider the following examples:
     A provider is submitting an initial Form CMS-855A 
application in May 2017. The provider was the owner of a

[[Page 10726]]

Medicaid-enrolled group practice from August 2014 to January 2015. The 
group practice had its Medicaid enrollment terminated in January 2010. 
Although the disclosable event (the termination) was imposed more than 
5 years ago, it must be reported because the affiliation occurred 
within the previous 5 years.
     A supplier is submitting a Form CMS-855B (OMB Control No. 
0938-0685) revalidation application. The supplier currently has a 
managerial interest in an ambulance company that was subject to a 
Medicare payment suspension 8 years ago. The affiliation and the 
payment suspension must be disclosed even though the latter was imposed 
outside of the 5-year affiliation look-back period.
    Our proposed 5-year look-back limit for affiliation disclosures, as 
already indicated, is partly intended to reduce the burden on providers 
and suppliers. Yet we believe that a similar time restriction on the 
underlying event that is triggering the disclosure could present 
program integrity concerns. To illustrate, assume Individual X 
purchased Medicare Provider Y in 2007. In 2009, Provider Y was revoked 
from Medicare for falsifying information on its Form CMS-855A 
revalidation application. In 2017, Provider Z submits a Form CMS-855A 
initial application; Individual X (which still owns revoked Provider Y) 
is the sole owner of Provider Z. If we restricted the look-back period 
for disclosable events to 5 years rather than having an unlimited 
period, we may not learn that the sole owner of an enrolling provider 
was (and remains) the owner of another provider that was revoked for 
furnishing false information to Medicare. Even if the action happened 
more than 5 years ago, it could still raise concerns about the 
potential risk the newly enrolling provider poses. For this reason, we 
must retain the flexibility to address a variety of factual scenarios, 
regardless of when the underlying event occurred or was imposed.
    If the affiliated provider or supplier had its Medicare, Medicaid 
or CHIP enrollment denied, revoked or terminated, this must be reported 
regardless of the reason for the denial, revocation or termination. 
Since all denial, revocation, and termination reasons are of concern to 
us, we do not believe certain reasons should be excluded from 
disclosure. Nonetheless, we seek comment on whether disclosure should 
be restricted to certain denial, revocation and termination reasons 
and, if so, what those reasons should be.
    We also propose to define the term ``uncollected debt'' in proposed 
Sec.  424.519(b) as--
    ++ Medicare, Medicaid or CHIP overpayments for which CMS or the 
state has sent notice of the debt to the affiliated provider or 
supplier;
    ++ CMPs (as defined in Sec.  424.57); and
    ++ Assessments (as defined in Sec.  424.57).
    We are proposing this definition, which is included in proposed 
Sec.  424.519(a), because it is consistent with our requirements for 
DMEPOS surety bond coverage under Sec.  424.57(d). Under Sec.  
424.57(d)(5), a DMEPOS supplier's surety 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 amounts described in 
Sec.  424.57(d)(5)(i). We believe it is appropriate to use a concept of 
unpaid debt for which there is precedent in 42 CFR part 424. However, 
we seek comment on the following issues regarding our proposed 
definition of ``uncollected debt'': (1) Whether there should be a 
threshold for the level of debt that would need to be reported; (2) 
whether a provider or supplier should be exempt from reporting an 
uncollected debt if it is complying with a repayment plan; and (3) 
whether the level of reporting burden is low enough to merit collection 
of this information without any threshold or exemption.
    Section 1866(j)(5)(B) of the Act states that if an undue risk of 
fraud, waste or abuse is found, the Secretary shall deny the 
application in question. Revocation of enrollment is not mentioned. 
However, we believe that section 1866(j)(5)(A) of the Act's reference 
to a revalidation application, which can only be submitted by an 
enrolled provider or supplier, suggests that a provider's or supplier's 
Medicare enrollment may be revoked if an undue risk is found. 
Furthermore, we believe that having the ability to revoke the 
enrollment of providers or suppliers with affiliations that we have 
determined to pose an undue risk is necessary to protect the integrity 
of the Medicare program. Therefore, we are proposing to use our general 
rulemaking authority in sections 1102 and 1871 of the Act to--(1) 
require the submission of a Form CMS-855 change of information request 
to report a new or changed affiliation (per proposed Sec.  424.519(h)); 
and (2) permit revocation (per proposed Sec.  424.519(i)) if an undue 
risk is found outside of the provider's or supplier's submission of an 
initial, revalidating or change of information application.
    We believe that the terms ``revoked,'' ``revocation,'' 
``terminated,'' and ``termination,'' for purposes of disclosure under 
Sec.  424.519(b), should include situations where the affiliated 
provider or supplier voluntarily terminated its Medicare, Medicaid or 
CHIP enrollment to avoid a potential revocation or termination; this is 
referenced in proposed Sec.  424.519(a). As explained in more detail in 
section II.B.11. of this proposed rule, we have seen instances where 
the provider or supplier engages in inappropriate behavior, recognizes 
that its enrollment may soon be revoked, and then voluntarily withdraws 
from Medicare prior to the imposition of a revocation so as to avoid 
the revocation itself as well as a subsequent reenrollment bar under 
Sec.  424.535(c). (See section II.B.4. of this proposed rule for more 
information on reenrollment bars.) Since the provider or supplier is 
not revoked from Medicare, it could immediately reenroll in Medicare 
without having to wait until the reenrollment bar expires. We believe 
such behavior poses a risk to the Medicare program in that the provider 
or supplier is seeking to avoid Medicare rules and, in the process, 
possibly reenter the Medicare program to continue its improper 
activities. We thus believe that for purposes of Sec.  424.519(b), such 
actions should be included within the category of ``revocations'' and 
``terminations.''
c. Affiliation Data, ``Reasonableness'' Standard, and Mechanism of 
Disclosure
    In Sec.  424.519(c), we propose to require the disclosure of the 
following information about the affiliation:
     General identifying data about the affiliated provider or 
supplier. This would include the following:
    ++ Legal name as reported to the Internal Revenue Service or the 
Social Security Administration (if the affiliated provider or supplier 
is an individual).
    ++ ``Doing business as'' name (if applicable).
    ++ Tax identification number.
    ++ National Provider Identifier (NPI).
     Reason for disclosing the affiliated provider or supplier 
(for example, uncollected Medicare debt or Medicaid payment 
suspension).
     Specific data regarding the relationship between the 
affiliated provider or supplier and the disclosing party. Such data 
would include the--(1) length of the relationship; (2) type of 
relationship (for example, an owner of the initially enrolling provider 
or supplier was a managing employee of the affiliated provider or 
supplier); and (3) degree of affiliation (for example,

[[Page 10727]]

percentage of ownership; whether the ownership interest was direct or 
indirect; the individual's specific managerial position; the scope of 
the individual's or entity's managerial duties; whether the partnership 
interest was general or limited).
     If the affiliation has ended, the reason for the 
termination.
    We believe the information in proposed Sec.  424.519(c) is 
necessary so that we can--(1) conclusively identify the affiliated 
provider or supplier and the disclosing party's relationship therewith; 
and (2) assess the risk of fraud, waste or abuse that the affiliation 
poses.
    However, we also believe it is appropriate to build a 
``reasonableness'' standard into Sec.  424.519(b) and (c), such that we 
would require particular information to be reported only if the 
disclosing provider or supplier knew or should reasonably have known of 
said data. For instance, while we believe a provider or supplier would 
typically know of a past affiliation, it may not necessarily know 
whether a Sec.  424.519(b) action occurred or was imposed after the 
affiliation ended. We will review each situation on a case-by-case 
basis in determining whether the disclosing entity knew or should have 
known of the information.
d. Affiliation and Disclosure Examples, Methodology, and Consequences 
of Non-Disclosure
(1) Examples
    The following are examples of when the information described in 
Sec.  424.519 would or would not have to be disclosed.

    Example 1:  Physician Group X was a 10 percent indirect owner of 
a medical provider (the affiliated provider) between January 2015 
and March 2015. The affiliated provider was not enrolled in Medicare 
during this timeframe because its Medicare enrollment had been 
revoked in December 2014. Physician Group X is revalidating its 
Medicare enrollment in January 2017. Though the affiliated provider 
was not enrolled in Medicare during the period of affiliation, 
Physician Group X would need to disclose the affiliation as part of 
its revalidation because--(1) it was a 5 percent or greater owner of 
a formerly enrolled Medicare provider; (2) the formerly enrolled 
Medicare provider had its Medicare enrollment revoked; and (3) the 
affiliation occurred within the previous 5 years.
    Example 2:  Ambulance Company X had a limited partnership 
interest in a Medicaid provider (the affiliated provider) between 
February 2015 and April 2015. The affiliated provider voluntarily 
terminated its Medicaid enrollment in May 2015. In June 2015, the 
state notified the affiliated provider that it had a large Medicaid 
overpayment that must be repaid. In September 2017, Ambulance 
Company X is enrolling in Medicare for the first time. The 
affiliated provider's debt is still outstanding. Ambulance Company X 
must report the affiliation as part of its initial Medicare 
enrollment because--(1) it had a partnership interest in an 
affiliated Medicaid provider; (2) the formerly enrolled Medicaid 
provider has an uncollected debt; and (3) the affiliation occurred 
within the previous 5 years.
    Example 3:  In February 2017, Provider X is preparing to submit 
a Form CMS-855 application to enroll in Medicare. Between January 
2014 and June 2014, one of its owners, Owner Y, functioned as a 
managing company for Home Health Agency Z (the affiliated provider). 
Home Health Agency Z attempted to enroll in Medicare in December 
2013, but its application was denied. Provider X would have to 
disclose this information as part of its enrollment because--(1) one 
of its 5 percent or greater owners (Owner Y) was a managing employee 
(as that term is defined in Sec.  424.502) of Home Health Agency Z, 
whose Medicare enrollment application was denied; and (2) the 
affiliation occurred within the previous 5 years.
    Example 4:  In March 2017, Physician Group X is revalidating its 
Medicare enrollment information. X was a 50 percent owner of a 
Medicaid provider (the affiliated provider) between January 2008 and 
December 2008. The affiliated provider's enrollment was revoked in 
April 2009. Physician Group X would not need to disclose this 
information because the affiliation ended more than 5 years ago.
    Example 5:  In June 2017, Provider Y is initially enrolling in 
Medicare. Between May 2014 and July 2014, Provider Y had a 25 
percent ownership interest in a medical group (the affiliated 
provider) whose Medicare enrollment was revoked in August 2014. 
However, the revocation was reversed on appeal prior to Provider Y's 
application submission. Though the affiliation occurred within the 
previous 5 years, Provider Y need not report it because the 
revocation was overturned on appeal.

    Considering the statute's explicit flexibility regarding disclosure 
methodology, we are interested in comments on proposed Sec.  424.519(b) 
and (c), particularly:
     Whether the types of disclosable affiliations should 
include additional ownership or managerial interests or other 
relationships;
     Whether 5 years is an appropriate look-back period for 
affiliations;
     Whether exclusions, denials and revocations that are being 
appealed should be exempt from disclosure.
     Whether we should establish a ``reasonableness'' test, 
whereby we explain what constitutes a sufficient effort to obtain 
information in the context of the ``should reasonably have known'' 
standard;
     If we establish such a test, what the specific elements of 
this standard should be (for example, what constitutes a reasonable 
inquiry; the minimum steps that the provider must undertake in 
researching information); and
     Whether there should be a lookback period for disclosable 
events and, if so, how long (for example, 15 years, 10 years, 7 years).
(2) Methodology and Non-Disclosure
    In Sec.  424.519(d), we propose that the information required under 
Sec.  424.519 be furnished to CMS or its contractors via the Form CMS-
855 application (paper or the Internet-based PECOS enrollment process). 
This is to ensure that all enrollment information continues to be 
reported via a single vehicle.
    In Sec.  424.519(e), we propose that the disclosing provider's or 
supplier's failure to fully and completely furnish the information 
specified in Sec.  424.519(b) and (c) when the provider or supplier 
knew or should reasonably have known of this information may result in 
either of the following:
     The denial of the provider's or supplier's initial 
enrollment application under Sec.  424.530(a)(1) and, if applicable, 
Sec.  424.530(a)(4).
     The revocation of the provider's or supplier's Medicare 
enrollment under Sec.  424.535(a)(1) and, if applicable, Sec.  
424.535(a)(4).
e. Undue Risk
    In Sec.  424.519(f), we propose that upon receiving the information 
described in Sec.  424.519(b) and (c) (and consistent with section 
1866(j)(5)(B) of the Act), we would determine whether any of the 
disclosed affiliations poses an undue risk of fraud, waste or abuse. 
The following factors would be considered:
     The duration of the disclosing party's relationship with 
the affiliated provider or supplier.
     Whether the affiliation still exists and, if not, how long 
ago it ended.
     The degree and extent of the affiliation (for example, 
percentage of ownership).
     If applicable, the reason for the termination of the 
affiliation.
     Regarding the disclosable event--
    ++ The type of action (for example, payment suspension);
    ++ When the action occurred or was imposed;
    ++ Whether the affiliation existed when the action (for example, 
revocation) occurred or was imposed;
    ++ If the action is an uncollected debt--(1) the amount of the 
debt; (2) whether the affiliated provider or supplier is repaying the 
debt; and (3) to whom the debt is owed (for example, Medicare); and
    ++ If a denial, revocation, termination, exclusion or payment

[[Page 10728]]

suspension is involved, the reason for the action (for example, felony 
conviction; failure to submit complete information).
     Any other evidence that CMS deems relevant to its 
determination.
    In summary, these factors would focus largely, though not 
exclusively, on--(1) the length and period of the affiliation; (2) the 
nature and extent of the affiliation; and (3) the type of disclosable 
event and when it occurred. A closer, longer, and more recent 
affiliation involving, for instance, an excluded provider or a large 
uncollected debt might pose a greater risk to the Medicare program than 
a brief affiliation that occurred 5 years ago. Yet it should not be 
assumed that the latter situation would never pose an undue risk. We 
are not prepared in this proposed rule to make specific conclusions as 
to what would constitute an undue risk. Affiliations vary widely. For 
this reason, we must retain the flexibility to deal with each situation 
on a case-by-case basis, utilizing the aforementioned factors. We do, 
nevertheless, solicit comment on the following issues related to these 
factors:
     Whether additional factors should be considered.
     Which, if any, of the proposed factors should not be 
considered.
     Which, if any, factors should be given greater or lesser 
weight than others.
    In Sec.  424.519(g), we propose that a CMS determination that a 
particular affiliation poses an undue risk of fraud, waste or abuse 
would result in, as applicable, the denial of the provider's or 
supplier's initial enrollment application under new Sec.  
424.530(a)(13) or the revocation of the provider's or supplier's 
Medicare enrollment under new Sec.  424.535(a)(19). We stress that an 
actual finding of fraud, waste or abuse would not be necessary for 
Sec.  424.519(g) to be invoked. Only a determination that an ``undue 
risk'' of fraud, waste or abuse exists would be required.
    On December 5, 2014, we published in the Federal Register (79 FR 
72499) a final rule titled ``Medicare Program; Requirements for the 
Medicare Incentive Reward Program and Provider Enrollment.'' In that 
rule, we finalized new Sec.  424.530(a)(6)(ii), which states that CMS 
may deny enrollment if the enrolling provider, supplier or owner (as 
defined in Sec.  424.502) thereof was previously the owner of a 
provider or supplier that had a Medicare debt that existed when the 
latter's enrollment was voluntarily terminated, involuntarily 
terminated or revoked, and all of the following criteria are met:
     The owner left the provider or supplier with the Medicare 
debt within 1 year before or after that provider or supplier's 
voluntary termination, involuntary termination or revocation.
     The Medicare debt has not been fully repaid.
     CMS determines that the uncollected debt poses an undue 
risk of fraud, waste or abuse.
    We are not proposing to modify this provision in this rule. Our 
proposed affiliation provision would supplement but not supplant Sec.  
424.530(a)(6)(ii). We would be able to deny enrollment under Sec.  
424.530(a)(6)(ii), Sec.  424.530(a)(13) or both if the conditions for 
the denial reason(s) are met.
f. Additional Affiliation Provisions
    In Sec.  424.519, we propose in paragraph (h)(1) that providers and 
suppliers must report new or changed information regarding existing 
affiliations, consistent with our requirement in Sec.  424.516 to 
submit changes in enrollment information; this would include the 
reporting of new affiliations. However, under paragraph (h)(2) 
providers and suppliers would not be required to report either of the 
following:
     New or changed information regarding past affiliations 
(except as part of a Form CMS-855 revalidation application).
     Affiliation data in that portion of the Form CMS-855 that 
collects affiliation information if the same data is being reported in 
the ``owning or managing control'' (or its successor) section of the 
Form CMS-855.
    We believe that requiring providers and suppliers to report new or 
changed information regarding past affiliations would impose an 
unnecessarily excessive burden; providers and suppliers would have to 
constantly monitor and track information changes involving parties with 
whom they, their owners or their managers no longer have a 
relationship. Regarding the second exception, we believe this would 
limit duplicate reporting and ease the burden on providers and 
suppliers.
    In Sec.  424.519(i), we propose that CMS may apply proposed Sec.  
424.530(a)(13) or Sec.  424.535(a)(19) (as applicable) to situations 
where a disclosable affiliation poses an undue risk of fraud, waste or 
abuse, but the provider or supplier has not yet disclosed or is not 
required at that time to disclose the affiliation to CMS. We believe 
that section 1866(j)(5) of the Act is aimed at protecting Medicare, 
Medicaid and CHIP against undue risks of fraud, waste or abuse at all 
times, not merely upon a provider's or supplier's initial enrollment, 
revalidation or reporting of new or changed affiliation information. 
There may be time lapses between these events during which a particular 
affiliation poses an undue risk based on changed circumstances. 
Consider the following examples:

    Example 1:  An enrolled disclosing provider had an affiliation 
with Supplier Q that ended on January 1. On May 1, Q's Medicare 
enrollment was revoked. As this is a past affiliation, the provider 
under Sec.  424.519(h) need not disclose the revocation as part of a 
Form CMS-855 change of information. However, we should have the 
authority to consider whether, in light of Q's revocation--(1) the 
recently terminated affiliation poses an undue risk of fraud, waste 
or abuse; and (2) the provider's enrollment should accordingly be 
revoked.
    Example 2:  Three months after Sec.  424.519's effective date 
but before the Form CMS-855 is updated to capture affiliation data, 
we receive information that Medicare-enrolled Provider X owns 35 
percent of a Medicaid supplier that--(1) was recently terminated 
under Sec.  455.106(c)(2) for concealing information that must be 
disclosed per Sec.  455.106(a), and (2) up until 4 months ago, owned 
one-half of a Medicare supplier whose enrollment was recently 
revoked. Although X need not report this information until the Form 
CMS-855 is revised, we should not have to wait to take action under 
Sec.  424.519. Permitting a provider or supplier with an affiliation 
that we know poses an undue risk of fraud, waste or abuse to enroll 
or remain enrolled in Medicare would be inconsistent with section 
1866(j)(5) of the Act.

    As with all other Medicare denials and revocations, these providers 
and suppliers would be notified if their enrollment is denied or 
revoked per Sec.  424.519(i).
g. Conclusion
    To summarize, the process for disclosing information under Sec.  
424.519 would be as follows.
    First, the provider or supplier must determine whether it or any of 
its owning or managing individuals or organizations has or has had an 
affiliation (as defined in Sec.  424.502).
    Second, if an affiliation exists or existed within the applicable 
5-year timeframe, the provider or supplier must determine whether a 
disclosable event in Sec.  424.519(b) has occurred. If it has, it must 
be disclosed.
    Third, we would determine whether the affiliation poses an undue 
risk of fraud, waste or abuse. If it does, the provider's or supplier's 
application would be denied or, if applicable, the provider's or 
supplier's enrollment would be revoked. The provider or supplier may 
appeal the denial or revocation under Sec.  405.874 or part 498, 
respectively.

[[Page 10729]]

2. Medicaid
    Consistent with our discussion in section II.A.1.a. of this 
proposed rule and for the reasons stated therein, we propose to revise 
the Medicaid provisions in 42 CFR part 455.
    In Sec.  455.101, we propose to add the same definition of 
``affiliation'' that we are proposing to add to Sec.  424.502, with the 
exception of the paragraph regarding ``reassignment.'' Section Sec.  
424.80 only applies to Medicare. However, we propose to include payment 
assignments under Sec.  447.10(g) within the definition of 
``affiliation'' in Sec.  455.101. Under Sec.  447.10(g), payment for 
services provided by an individual practitioner may be made to--
    ++ The employer of the practitioner, if the practitioner is 
required as a condition of employment to turn over his fees to the 
employer;
    ++ The facility in which the service is provided, if the 
practitioner has a contract under which the facility submits the claim; 
or
    ++ A foundation, plan or similar organization operating an 
organized health care delivery system, if the practitioner has a 
contract under which the organization submits the claim.
    As with Medicare reassignments, we believe that the relationships 
described in Sec.  447.10(g) are sufficiently close to warrant their 
inclusion within the definition of ``affiliation'' in Sec.  455.101; 
again, a W-2 employee or independent contractor may have a closer day-
to-day relationship with the individual or organization he or she works 
for than, for instance, an indirect owner has with an entity in which 
he or she has a 5 percent ownership interest. We also note that these 
provisions are similar to those in Sec.  424.80.
    In revised Sec.  455.103, we propose that a state plan must provide 
that the requirements of Sec. Sec.  455.104 through 455.107 are met. 
Section 455.103 currently only references Sec. Sec.  455.104 through 
455.106. Our revision would include a reference to new Sec.  455.107.
    In new Sec.  455.107, we propose several paragraphs.
    In paragraph (b), we propose that a provider that is submitting an 
initial or revalidating Medicaid application must disclose whether it 
or any of its owning or managing employees or organizations (consistent 
with the definitions of ``person with an ownership or control 
interest'' and ``managing employee'' in Sec.  455.101) has or, within 
the previous 5 years, has had an affiliation with a currently or 
formerly enrolled Medicare, Medicaid or CHIP provider or supplier 
that--
     Currently has an uncollected debt to Medicare, Medicaid or 
CHIP, regardless of--(1) the amount of the debt; (2) whether the debt 
is currently being repaid (for example, as part of a repayment plan); 
or (3) whether the debt is currently being appealed. For purposes of 
Sec.  455.107 only, and as stated in proposed Sec.  455.107(a), the 
term ``uncollected debt'' only applies to--
    ++ Medicare, Medicaid or CHIP overpayments for which CMS or the 
state has sent notice of the debt to the affiliated provider or 
supplier;
    ++ CMPs (as defined in Sec.  424.57(a)); and
    ++ Assessments (as defined in Sec.  424.57(a));
     Has been or is subject to a payment suspension under a 
federal health care program (as that latter term is defined in section 
1128B(f) of the Act), regardless of when the payment suspension 
occurred or was imposed;
     Has been or is excluded from participation in Medicare, 
Medicaid or CHIP, regardless of whether the exclusion is currently 
being appealed or when the exclusion occurred or was imposed; or
     Has had its Medicare, Medicaid or CHIP enrollment denied, 
revoked or terminated, regardless of--(1) the reason for the denial, 
revocation or termination; (2) whether the denial, revocation or 
termination is currently being appealed; or (3) when the denial, 
revocation or termination occurred or was imposed. For purposes of 
Sec.  455.107 only, the terms ``revoked,'' ``revocation,'' 
``terminated,'' and ``termination'' would include situations where the 
affiliated provider or supplier voluntarily terminated its Medicare, 
Medicaid or CHIP enrollment to avoid a potential revocation or 
termination. This clarification is included in proposed Sec.  
455.107(a).
    In paragraph (c), we propose that the following information about 
the affiliation must be disclosed:
     General identifying data about the affiliated provider or 
supplier. This would include the following:
    ++ Legal name as reported to the Internal Revenue Service or the 
Social Security Administration (if the affiliated provider or supplier 
is an individual).
    ++ ``Doing business as'' name (if applicable).
    ++ Tax identification number.
    ++ NPI.
    ++ Reason for disclosing the affiliated provider or supplier (for 
example, uncollected CHIP debt; payment suspension).
    ++ Specific data regarding the affiliation relationship. Such data 
would include the--(1) length of the relationship; (2) type of 
relationship; and (3) degree of affiliation.
    ++ If the affiliation has ended, the reason for the termination.
    In paragraph (d), we propose that the information described in 
Sec.  455.107(b) and (c) must be furnished to the state in a manner 
prescribed by the state.
    In paragraph (e), we propose that the disclosing provider's failure 
to fully and completely furnish the information in Sec.  455.107(b) and 
(c) when the provider knew or should reasonably have known of this 
information may result in--
     The denial of the provider's initial enrollment 
application; or
     The revocation of the provider's Medicaid or CHIP 
enrollment.
    In paragraph (f), we propose that upon receiving the information 
described in Sec.  455.107(b) and (c), the state, in consultation with 
CMS, would determine whether any of the disclosed affiliations poses an 
undue risk of fraud, waste or abuse. The state, in consultation with 
CMS, would consider the following factors in its determination:
     The duration of the disclosing party's relationship with 
the affiliated provider or supplier.
     Whether the affiliation still exists and, if not, how long 
ago it ended.
     The degree and extent of the affiliation.
     If applicable, the reason for the termination of the 
affiliation.
     Regarding the affiliated provider's or supplier's 
disclosable event--
    ++ The type of action;
    ++ When the action occurred or was imposed; and
    ++ Whether the affiliation existed when the action occurred or was 
imposed.
    ++ If the action is an uncollected debt--(1) the amount of the 
debt; (2) whether the affiliated provider or supplier is repaying the 
debt; and (3) to whom the debt is owed (for example, Medicare);
     If a denial, revocation, termination, exclusion or payment 
suspension is involved, the reason for the action; and
     Any other evidence that the state, in consultation with 
CMS, deems relevant to its determination.
    In paragraph (g), we propose that a determination that a particular 
affiliation poses an undue risk of fraud, waste or abuse results in, as 
applicable, the denial of the provider's initial enrollment application 
or the termination of the provider's Medicaid or CHIP enrollment.
    In paragraph (h), we propose the following:
     Providers would be required to report new or changed 
information regarding existing affiliations. This would include the 
reporting of any new affiliations.

[[Page 10730]]

     Providers would not be required to report new or changed 
information regarding past affiliations (except as part of a 
revalidation application).
    In paragraph (i), we propose that the state, in consultation with 
CMS, may apply paragraph (g) to situations where a reportable 
affiliation poses an undue risk of fraud, waste or abuse, but the 
provider has not yet disclosed or is not required at that time to 
disclose the affiliation to the state.
c. CHIP
    Section 2107(e) of the Act states that sections 1902(a)(77) and 
(kk) of the Act (which relate to Medicaid provider screening, 
oversight, and reporting requirements) apply to CHIP to the same extent 
that they apply to Medicaid. Therefore, we would apply our proposed 
Medicaid affiliation disclosure requirements to CHIP providers for two 
principal reasons. First, section 1866(j)(5) of the Act specifically 
references the need to disclose current and prior affiliations with 
CHIP providers. We believe it logically follows that CHIP providers 
should have to disclose similar affiliation information. Second, and 
for reasons already explained, the disclosure of affiliation 
information would assist our efforts in deterring fraud, waste, and 
abuse in CHIP.
    Section 457.990(a) states that part 455, subpart P, applies to a 
state under Title XXI in the same manner as it applies to a state under 
Title XIX. We propose to revise Sec.  457.990(a) such that Sec.  
455.107 would also apply to Title XXI. Paragraph (a) would thus read: 
``(a) part 455, subpart E and Sec.  455.107, of this chapter.''

B. Other Proposed Regulations Affecting the Medicare Program Only

    Except as stated otherwise, the legal authorities for our proposals 
in section II.B, are as follows. First, sections 1102 and 1871 of the 
Act give the Secretary the authority to establish requirements for the 
efficient administration of the Medicare program. Second, section 
1866(j) of the Act states that the Secretary shall establish by 
regulation a process for the enrollment of providers of services and 
suppliers.
1. Revoked Under Different Name, Numerical Identifier or Business 
Identity
    We propose in new Sec.  424.530(a)(12) that CMS may deny a 
provider's or supplier's Medicare enrollment application if CMS 
determines that the provider or supplier is currently revoked under a 
different name, numerical identifier or business identity, and the 
applicable reenrollment bar period has not expired. Likewise, we 
propose in new Sec.  424.535(a)(18) that CMS may revoke a provider's or 
supplier's Medicare enrollment if CMS determines that the provider or 
supplier is revoked under a different name, numerical identifier or 
business identity.
    As discussed in section II.A.1.a. of this proposed rule, we have 
identified instances in which a provider or supplier has its Medicare 
enrollment revoked but tries to evade the revocation and reenrollment 
bar by opening a new provider or supplier organization to effectively 
``replace'' the revoked entity. The OIG indicated in the previously-
mentioned memorandum that some providers and suppliers operate 
``fronts,'' whereby associates, family members or other individuals 
pose as owners or managers of the entity on behalf of the persons who 
actually operate, run or profit from the business. We believe that such 
behavior must be stemmed, hence our proposed additions of Sec. Sec.  
424.530(a)(12) and 424.535(a)(18).
    In determining whether a provider or supplier is in fact a 
currently revoked provider or supplier under a different name, 
numerical identifier or business identity, CMS would investigate the 
degree of commonality by considering the following factors:
     Owning and managing employees and organizations, 
regardless of whether they have been disclosed on the Form CMS-855 
application (for the definitions of ``owner'' and ``managing employee'' 
in Sec.  424.502 do not require the individual or organization to be 
listed on the Form CMS-855 in order to qualify as such).
     Geographic location (for example, same city or county).
     Provider or supplier type (for example, same provider 
type).
     Business structure.
     Any evidence indicating that the two parties are similar 
or that the provider or supplier was created to circumvent the 
revocation or the reenrollment bar.
    It should not be assumed that having different owners, locations or 
business structures would automatically result in a finding that the 
two are not the same. CMS would consider any evidence indicating 
whether the entities are effectively identical or that the new entity 
was established to evade the revocation or reenrollment bar. Therefore, 
even if several factors suggest that the entities may be distinct, we 
would reserve the right to apply Sec. Sec.  424.530(a)(12) or 
424.535(a)(18) if we find evidence of evasion.
    Unlike with Sec.  424.519(f), no finding of ``undue risk'' would be 
required in a determination under Sec. Sec.  424.530(a)(12) or 
424.535(a)(18). We could invoke the latter two provisions even if there 
is no finding that the revoked entity, the newly enrolling entity or 
the currently enrolled entity (as applicable) poses an undue risk of 
fraud, waste or abuse. This is because we are not relying upon section 
1866(j)(5) of the Act as authority for these two provisions. We are 
instead relying upon our general rulemaking authority in sections 1102 
and 1871, as well as 1866(j) of the Act, which provides specific 
authority with respect to the enrollment process for providers and 
suppliers.
2. Non-Compliant Practice Location
    We propose in new Sec.  424.535(a)(20) that we may revoke a 
provider's or supplier's Medicare enrollment--including all of the 
provider's or supplier's practice locations, regardless of whether they 
are part of the same enrollment--if the provider or supplier billed for 
services performed at or items furnished from a location that it knew 
or should have known did not comply with Medicare enrollment 
requirements.
    CMS has identified examples of providers or suppliers operating 
from multiple practice locations (either as part of the same enrollment 
or, for DMEPOS suppliers and independent diagnostic testing facilities 
(IDTFs), through separately enrolled locations), of which one or more 
of the locations does not meet Medicare enrollment requirements. For 
instance, a particular location may not be operational, does not comply 
with certain DMEPOS or IDTF supplier standards or is otherwise 
noncompliant, yet the provider or supplier continues to perform 
services at or furnish items from this location (or claims to do so) 
when it knows or should know that the location does not meet Medicare 
enrollment requirements. We have seen this with providers and suppliers 
that operate locations that either do not exist or are false 
storefronts, meaning that the location appears legitimate from the 
outside but is in fact a vacant site or a nonmedical business.
    We have conducted site visits uncovering several similar situations 
and revocations of providers and suppliers locations have accordingly 
ensued. However, we believe more must be done. Dishonest providers and 
suppliers must realize that if they submit claims for services or items 
furnished at or from non-compliant locations, they risk not only the 
revocation of that location but also of their other locations. As an 
illustration,

[[Page 10731]]

assume that a DMEPOS supplier has four separately enrolled locations. 
The supplier shifts one of its locations without notifying Medicare, 
and the new site is a false storefront. The supplier furnishes no items 
from this location, but it submits bills for DME allegedly provided 
from this site. Under our proposal, CMS could revoke this location as 
well as the three other sites. Even if the other sites had different 
numerical identifiers, legal business names or ownership, we could take 
action against them if there is evidence to suggest that they are 
effectively under the control of similar parties. This is to ensure 
that suppliers do not attempt to circumvent Sec.  424.535(a)(20) by 
opening locations under different identities or with different ``front 
men'' (such as family members).
    We would consider the following factors when determining whether 
and how many of the provider's or supplier's other locations should be 
revoked:
     The reason(s) for and facts behind the location's non-
compliance (for example, false storefront; otherwise non-operational; 
other violation of supplier standards).
     The number of additional locations involved.
     Whether the provider or supplier has any history of final 
adverse actions (as that term is defined in Sec.  424.502) or Medicare 
or Medicaid payment suspensions.
     The degree of risk that the location's continuance poses 
to the Medicare Trust Funds.
     The length of time that the non-compliant location was 
non-compliant.
     The amount that was billed for services performed at or 
items furnished from the non-compliant location.
     Any other evidence that we deem relevant to our 
determination.
    We emphasize that our proposal is primarily designed to identify 
and pursue providers and suppliers that knowingly operate fictitious or 
otherwise non-compliant locations in order to circumvent CMS policies.
3. Improper Ordering, Certifying, Referring or Prescribing of Part A or 
B Services, Items or Drugs
    In the previously mentioned December 5, 2014 final rule, we 
finalized Sec.  424.535(a)(8)(ii), which states that we may revoke a 
provider's or supplier's Medicare billing privileges if the provider or 
supplier has a pattern or practice of submitting claims that fail to 
meet Medicare requirements such as, but not limited to, the requirement 
that the service be reasonable and necessary. This provision is 
intended to place providers and suppliers on notice that they have a 
legal obligation to always submit correct and accurate claims; the 
provider's or supplier's repeated failure to do so poses a risk to the 
Medicare Trust Funds.
    On May 23, 2014 we published a final rule in the Federal Register 
(79 FR 29843) titled ``Medicare Program; Contract Year 2015 Policy and 
Technical Changes to the Medicare Advantage and the Medicare 
Prescription Drug Benefit Programs.'' Under Sec.  424.535(a)(14), we 
may revoke a physician's or eligible professional's Medicare billing 
and prescribing privileges if we determine that he or she has a pattern 
or practice of prescribing Part D drugs that falls into one of the 
following categories:
     The pattern or practice is abusive, represents a threat to 
the health and safety of Medicare beneficiaries or both.
     The pattern or practice of prescribing fails to meet 
Medicare requirements.
    In the January 10, 2014 Federal Register proposed rule (79 FR 
1917), which resulted in the aforementioned May 23, 2014 final rule, we 
expressed our view that the concept behind proposed Sec.  
424.535(a)(8)(ii) should extend to revoking Medicare enrollment for 
Part D prescribers who engage in abusive prescribing practices. We 
explained that if a physician or eligible professional consistently 
fails to exercise reasonable judgment in his or her prescribing 
practices, we should be able to remove such individuals from the 
Medicare program in order to protect beneficiaries' safety and health, 
as well as the Medicare Trust Funds.
    However, neither Sec.  424.535(a)(14) nor Sec.  424.535(a)(8)(ii) 
address the improper ordering or certifying of Medicare services and 
items or the prescribing of Part B drugs. We have received numerous 
reports of physicians and eligible professionals engaging in abusive or 
otherwise inappropriate ordering. While the particular circumstances of 
each case have varied, they frequently fall within one or more of the 
following categories: (1) The ordered service or item was not 
reasonable, not necessary or both; or (2) the physician or eligible 
professional misrepresents his or her diagnosis to justify the service 
or test.
    Such behavior increases the risk of improper payment for 
inappropriate services, items or Part B drugs. It also endangers 
Medicare beneficiaries by unnecessarily exposing them to potentially 
harmful services and tests. As with the threats that abusive 
prescribing and billing pose, we believe that the risks of improper 
ordering, certifying, referring, and prescribing of Part B drugs must 
be stemmed in order to protect the Medicare program.
    Accordingly, we propose in new Sec.  424.535(a)(21) that CMS may 
revoke a physician's or eligible professional's Medicare enrollment (as 
the term ``enrollment'' is defined in Sec.  424.502) if he or she has a 
pattern or practice of ordering, certifying, referring or prescribing 
Medicare Part A or B services, items or drugs that is abusive, 
represents a threat to the health and safety of Medicare beneficiaries 
or otherwise fails to meet Medicare requirements. Recognizing that not 
all patterns and practices involve inappropriate behavior, we would 
consider the following factors in determining whether a pattern or 
practice of improper ordering, certifying, referring or prescribing 
exists:
     Whether the physician's or eligible professional's 
diagnoses support the orders, certifications, referrals or 
prescriptions in question.
     Whether there are instances where the necessary evaluation 
of the patient for whom the service, item or drug was ordered, 
certified, referred or prescribed could not have occurred (for example, 
the patient was deceased or out of state at the time of the alleged 
office visit).
     The number and type(s) of disciplinary actions taken 
against the physician or eligible professional by the licensing body or 
medical board for the state or states in which he or she practices, and 
the reason(s) for the action(s).
     Whether the physician or eligible professional has any 
history of final adverse actions (as that term is defined in Sec.  
424.502).
     The length of time over which the pattern or practice has 
continued.
     How long the physician or eligible professional has been 
enrolled in Medicare.
     The number and type(s) of malpractice suits that have been 
filed against the physician or eligible professional related to 
ordering, certifying, referring or prescribing that have resulted in a 
final judgment against the physician or eligible professional or in 
which the physician or eligible professional has paid a settlement to 
the plaintiff(s) (to the extent this can be determined).
     Whether any state Medicaid program or any other public or 
private health insurance program has restricted, suspended, revoked or 
terminated the physician's or eligible professional's ability to 
practice medicine, and the reason(s) for any such restriction, 
suspension, revocation or termination.

[[Page 10732]]

     Any other information that we deem relevant to our 
determination.
    We emphasize that we are focused on egregious patterns of ordering, 
certifying, referring or prescribing that fall well outside standard, 
acceptable practices.
4. Reenrollment Bar Period
    Under Sec.  424.535(c), if a provider, supplier, owner or managing 
employee has their billing privileges revoked, they are barred from 
participating in Medicare from the date of the revocation until the end 
of the reenrollment bar. The reenrollment bar begins 30 days after CMS 
or its contractor mails notice of the revocation and lasts a minimum of 
1 year, but not greater than 3 years, depending on the severity of the 
basis for revocation.
    We are proposing the following changes to Sec.  424.535(c).
    First, we propose to incorporate the existing version of Sec.  
424.535(c) into a new paragraph (1) that would increase the current 
maximum reenrollment bar from 3 years to 10 years (with the exception 
of the situations described in new paragraphs (c)(2) and (c)(3), 
discussed later in this section). We believe it would be reasonable in 
certain cases to prevent a provider or supplier from participating in 
Medicare for longer than 3 years. Indeed, certain behavior could prove 
so harmful to Medicare, its beneficiaries, and/or the Trust Funds that 
a very lengthy bar from Medicare is warranted. We believe that a 10-
year maximum period is appropriate, both to ensure that providers and 
suppliers that engage in such activities are kept out of Medicare and 
to deter others from potentially duplicating this behavior. We chose 10 
years because there is precedent for this timeframe; under Sec.  
424.535(a)(3)(iii), it constitutes the minimum revocation period for 
providers that have been convicted of multiple felonies. However, we do 
not expect to impose longer reenrollment bars for certain existing 
revocation reasons. For instance, revocations that currently involve 
only a 1-year reenrollment bar would not necessarily result in a longer 
period under new Sec.  424.535(c)(1).
    Second, we propose in new Sec.  424.535 paragraph (c)(2) that CMS 
may add up to 3 more years to the provider's or supplier's reenrollment 
bar (even if such period exceeds the maximum period otherwise allowable 
under paragraph (c)(1)) if CMS determines that the provider or supplier 
is attempting to circumvent its existing reenrollment bar by enrolling 
in Medicare under a different name, numerical identifier or business 
identity. We believe that such efforts to avoid Medicare rules warrant 
the provider's or supplier's prohibition from Medicare for a longer 
period than was originally imposed.
    The affected provider or supplier could appeal CMS' imposition of 
additional years to the provider's or supplier's existing reenrollment 
bar under Sec.  424.535(c)(2). These appeals rights would be governed 
by 42 CFR part 498. However, they would not extend to the imposition of 
the original enrollment bar under Sec.  424.535(c)(1); they would be 
limited to the additional years imposed under Sec.  424.535(c)(2).
    Third, we propose in new Sec.  424.535 paragraph (c)(3) that CMS 
may impose a reenrollment bar of up to 20 years if the provider or 
supplier is being revoked from Medicare for the second time. Multiple 
revocations indicate that the provider or supplier cannot be considered 
a reliable partner of the Medicare program. The reenrollment bar under 
paragraph (c)(3) would be in lieu of the reenrollment bar described in 
paragraph (c)(1). We would determine the bar's length by considering 
the following factors: (1) The reasons for the revocations; (2) the 
length of time between the revocations; (3) whether the provider or 
supplier has any history of final adverse actions (other than Medicare 
revocations) or Medicare or Medicaid payment suspensions; and (4) any 
other information that CMS deems relevant to its determination. We 
could apply paragraph (c)(3) even if the two revocations occurred under 
different names, numerical identifiers or business identities so long 
as we can determine that the two actions effectively involved the same 
provider or supplier.
    Fourth, we propose in new Sec.  424.535(c)(4) that a reenrollment 
bar would apply to a provider or supplier under any of its current, 
former or future business names, numerical identifiers or business 
identities. This would help ensure that revoked providers and suppliers 
do not attempt to circumvent a revocation and reenrollment bar by 
changing their name, identity, business structure, etc.
    We recognize that some providers and suppliers may be concerned 
about our reenrollment bar proposals. Our sole objective is to ensure 
that unscrupulous providers and suppliers are kept out of Medicare for 
as long as possible. Longer bars of 10 and 20 years would be reserved 
for egregious cases of fraudulent, dishonest or abusive behavior.
5. Reapplication Bar
    We propose in new Sec.  424.530(f) that CMS may prohibit a 
prospective provider or supplier from enrolling in Medicare for up to 3 
years if its enrollment application is denied because the provider or 
supplier submitted false or misleading information on or with (or 
omitted information from) its application in order to gain enrollment 
in Medicare. This ``reapplication'' bar would apply to the individual 
or organization under any current, former or future name, numerical 
identifier or business identity.
    The purpose of this provision is to keep untrustworthy providers 
and suppliers from entering the Medicare program and to forestall 
future efforts to enroll. We believe the submission of false 
information or the withholding of information relevant to the 
provider's or supplier's enrollment eligibility represents a 
significant program integrity risk. For this reason, and to provide 
consequences for such behavior, we believe that our proposed 
reapplication bar is warranted.
    When determining the reapplication bar's length, we would consider 
the following factors: (1) The materiality of the information in 
question; (2) whether there is evidence to suggest that the provider or 
supplier purposely furnished false or misleading information or 
deliberately withheld information; (3) whether the provider or supplier 
has any history of final adverse actions or Medicare or Medicaid 
payment suspensions; and (4) any other information that we deem 
relevant to our determination.
6. Referral of Debt to the United States Department of Treasury
    The Debt Collection Improvement Act of 1996 requires federal 
agencies to refer eligible delinquent debt to the United States 
Department of Treasury-designated Debt Collection Center (DCC) for 
cross-servicing and offset. CMS must refer all eligible debt over 120 
days delinquent for cross-servicing and offset. Prior to sending a debt 
to the Department of Treasury, CMS attempts to recoup it via the 
procedures outlined in CMS Publication 100-06, chapter 4. Generally 
speaking, we refer a debt to the Department of Treasury only if it 
cannot recover the debt through its existing procedures. However, in 
all cases, a provider or supplier is given adequate opportunity to 
repay the debt or make arrangements to do so (for example, via a 
repayment plan) before the debt is sent to the Department of Treasury.
    We believe that referral to the Department of Treasury may indicate 
the provider's or supplier's unwillingness to repay a debt, which 
consequently brings into doubt whether

[[Page 10733]]

the provider or supplier can be a reliable partner of the Medicare 
program. Accordingly, we propose in new Sec.  424.535(a)(17) that CMS 
may revoke a provider's or supplier's Medicare enrollment if the 
provider or supplier has an existing debt that CMS refers to the 
Department of Treasury. In determining whether a revocation is 
appropriate, we would consider the following factors:
     The reason(s) for the failure to fully repay the debt (to 
the extent this can be determined).
     Whether the provider or supplier has attempted to repay 
the debt.
     Whether the provider or supplier has responded to our 
request(s) for payment.
     Whether the provider or supplier has any history of final 
adverse actions or Medicare or Medicaid payment suspensions.
     The amount of the debt.
     Any other information that we deem relevant to our 
determination.
7. Failure To Report
    Section 424.535(a)(9) permits CMS to revoke the Medicare enrollment 
of a physician, non-physician practitioner, physician group or non-
physician practitioner group if the provider or supplier fails to 
comply with Sec.  424.516(d)(1)(ii) or (iii), which require the 
provider or supplier to report a change in its practice location or 
final adverse action status within 30 days of the change.
    We propose to expand Sec.  424.535(a)(9) in two ways. First, we 
propose that CMS may apply Sec.  424.535(a)(9) to all of the reporting 
requirements in Sec.  424.516(d), not merely those in Sec.  
424.516(d)(1)(ii) and (iii). Thus, we could revoke the Medicare 
enrollment of a physician, non-physician practitioner, physician group 
or non-physician practitioner group if the supplier fails to report 
either of the following:
     A change of ownership, final adverse action or practice 
location within 30 days of the change (as required under Sec.  
424.516(d)(1)(i), (ii) and (iii), respectively).
     Any other change in enrollment data within 90 days of the 
change (as required under Sec.  424.516(d)(2)).
    Second, we propose that CMS may apply Sec.  424.535(a)(9) to the 
reporting requirements in Sec.  410.33(g)(2) (pertaining to IDTFs), 
Sec.  424.57(c)(2) (pertaining to DMEPOS suppliers), and Sec.  
424.516(e) (pertaining to all other provider and supplier types). 
Consequently, we could revoke a provider or supplier under Sec.  
424.535(a)(9) if any of the following occur:
     An IDTF fails to report a change in ownership, location, 
general supervision or final adverse action within 30 days of the 
change or fails to report any other change in its enrollment data 
within 90 days of the change.
     A DMEPOS supplier fails to submit any change in its 
enrollment information within 30 days of the change.
     A provider or supplier other than a physician, non-
physician practitioner, physician group, non-physician practitioner 
group, IDTF or DMEPOS supplier fails to report any of the following:
    ++ A change in ownership or control within 30 days of the change.
    ++ A revocation or suspension of a federal or state license or 
certification within 30 days of the revocation or suspension.
    ++ Any other change in its enrollment data within 90 days of the 
change.
    We do not believe our revocation authority under Sec.  
424.535(a)(9) should be restricted to certain provider and supplier 
types that have omitted reporting a change in practice location or 
final adverse action. Any failure to report changed enrollment data, 
regardless of the provider or supplier type involved, is of concern to 
us. We must have complete and accurate data on each provider and 
supplier to help confirm that the provider or supplier still meets all 
Medicare requirements and that Medicare payments are made correctly. 
Inaccurate or outdated information puts the Medicare Trust Funds at 
risk.
    While we would retain the discretion to revoke a provider's or 
supplier's enrollment for any failure to meet the reporting 
requirements in Sec.  424.516(d) or (e), Sec.  410.33(g)(2) or Sec.  
424.57(c)(2), our proposal is focused on egregious cases of non-
reporting. For instance, a provider's belated omission to report a ZIP 
code change until 120 days after the change does not represent the 
level of program integrity risk of a complete failure to report a new 
practice location. We would consider the following factors in 
determining whether a Sec.  424.535(a)(9) revocation is appropriate: 
(1) Whether the data in question was reported; (2) if the data was 
reported, how belatedly; (3) the materiality of the data in question; 
and (4) any other information that we deem relevant to our 
determination.
8. Payment Suspensions
    Section 424.530(a)(7) permits the denial of a provider's or 
supplier's Medicare enrollment application if the current owner, 
physician or non-physician practitioner has been placed under a 
Medicare payment suspension in accordance with Sec. Sec.  405.370 
through 405.372. Under Sec.  405.371, a Medicare payment suspension may 
be imposed if CMS determines that a credible allegation of fraud 
against a provider or supplier exists. The general purpose of a payment 
suspension is to temporarily halt the payment of Trust Fund dollars to 
a provider or supplier pending the resolution of a particular matter, 
such as an investigation as to whether the provider or supplier has 
engaged in fraudulent activity.
    We propose several revisions to Sec.  424.530(a)(7) and one 
revision to Sec.  405.371.
    First, we propose to expand Sec.  424.530(a)(7)'s applicability to 
all provider and supplier types and to any owning or managing employee 
or organization of the provider or supplier. We believe the existing 
scope of Sec.  424.530(a)(7), which is limited to owners, physicians, 
and non-physician practitioners, does not address the continuum of 
program vulnerabilities in this area; providers and suppliers other 
than physicians and non-physician practitioners are currently not 
prohibited from enrolling in Medicare based on a payment suspension. 
Furthermore, a managing individual or entity often has as much (or 
more) day-to-day control over a provider or supplier as an owner. In 
our view, permitting a provider or supplier to enroll in Medicare even 
though one of its managing officials or organizations is under a 
payment suspension poses a risk to Medicare and its beneficiaries.
    Second, we propose to include Medicaid payment suspensions within 
the scope of Sec.  424.530(a)(7). Under Sec.  455.23, the state 
Medicaid agency must suspend all Medicaid payments to a provider or 
supplier after the agency determines there is a credible allegation of 
fraud for which a Medicaid investigation is pending (unless the agency 
has good cause to not suspend payments). We see no significant 
difference between Medicare and Medicaid payment suspensions in terms 
of the threat posed to federal health care program integrity; indeed, 
potentially fraudulent behavior in the Medicaid program could be 
repeated in the Medicare program. As such, we must be able to prevent 
such providers and suppliers from entering Medicare.
    Third, we propose to incorporate these revised provisions into a 
new Sec.  424.530(a)(7)(i).
    Fourth, we propose to establish a new Sec.  424.530(a)(7)(ii) that 
would permit

[[Page 10734]]

CMS to apply Sec.  424.530(a)(7) to the following:
     Any of the provider's or supplier's or owning or managing 
employee's or organization's current or former names, numerical 
identifiers or business identities.
     Any of the provider's or supplier's existing enrollments.
    This reflects our desire to ensure that questionable parties are 
unable to reenter the Medicare program (be it as a provider, supplier, 
owner or manager) by using alternate identifiers. We are also concerned 
about situations where the provider or supplier has multiple 
enrollments, including those under different business structures, tax 
identification numbers, etc.
    We would consider the following factors in determining whether a 
denial is appropriate:
     The specific behavior in question.
     Whether the provider or supplier is the subject of other 
similar investigations.
     Any other information that we deem relevant to our 
determination.
    Fifth, we propose to expand Sec.  405.371 to state that a Medicare 
payment suspension may be imposed if a state Medicaid program suspends 
payment pursuant to Sec.  455.23(a)(1). Again, we are concerned that 
possible fraudulent behavior in the Medicaid program might be repeated 
in the Medicare program.
9. Other Federal Program Termination
    To further protect Medicare from inappropriate activities occurring 
in other programs, we propose two changes regarding denials and 
revocations.
(a) Denials
    We propose in new Sec.  424.530(a)(14) that CMS may deny a 
provider's or supplier's Medicare enrollment application if the 
provider or supplier is currently terminated or suspended (or otherwise 
barred) from participation in a particular state Medicaid program or 
any other federal health care program, or the provider's or supplier's 
license is currently revoked or suspended in a state other than that in 
which the provider or supplier is enrolling. We note that under Sec.  
455.416(c), a Medicaid state agency must deny a provider's or 
supplier's enrollment application if the provider or supplier is 
presently revoked from Medicare; Sec.  424.530(a)(14) would help ensure 
consistency with the framework of Sec.  455.416(c). As mentioned 
previously, we are concerned that a provider's or supplier's improper 
behavior in another federal health care program may be duplicated in 
Medicare. Similarly, we believe that a Medicare provider's or 
supplier's actions that led to a licensure revocation or suspension in 
one state could be repeated with respect to its prospective enrollment 
in another state.
    We believe that the presence of a relevant suspension warrants 
additional scrutiny for providers or suppliers attempting to enroll in 
Medicare, for the conduct underlying the suspension could raise 
questions as to the prospective provider's or supplier's ability to be 
a dependable Medicare participant. We recognize that licensure and 
federal program suspensions are generally temporary rather than 
permanent actions. However, under certain conditions, license 
suspensions may be imposed for extended periods and involve serious 
transgressions. We believe that under conditions indicating significant 
risks to program integrity, we should consider such conduct and 
determine the risk it poses before allowing the provider or supplier to 
enroll.
    We note that Sec.  424.530(a)(14) could apply regardless of whether 
any appeals are pending. Under current Sec.  424.535(a)(12)(ii), we may 
not revoke a provider's or supplier's Medicare enrollment based on a 
Medicaid termination unless the provider or supplier has exhausted all 
applicable appeal rights regarding the Medicaid termination. We do not 
believe a similar clause should apply to Sec.  424.530(a)(14). Akin to 
what we stated in the previous paragraph, we believe it would be 
inappropriate to permit a Medicaid-terminated provider or supplier (or 
a provider or supplier terminated under any federal program) into 
Medicare simply because the provider or supplier has not yet exhausted 
its appeal rights. Indeed, such a clause might encourage the provider 
or supplier to file a frivolous appeal in order to enroll in Medicare 
prior to the exhaustion of its appeal rights.
    In determining whether to invoke Sec.  424.530(a)(14) in a 
particular case, we would consider the following factors:
     The reason(s) for the termination, revocation or 
suspension.
     Whether, as applicable, the provider or supplier is 
currently terminated or suspended (or otherwise barred) from more than 
one program (for example, more than one state's Medicaid program), has 
been subject to any other sanctions during its participation in other 
programs or by any other state licensing boards or has had any other 
final adverse actions imposed against it.
     Any other information that we deem relevant to our 
determination.
    Consistent with our discussion throughout this proposed rule, we 
further propose that Sec.  424.530(a)(14) would apply to the provider 
or supplier under any of its current or former names, numerical 
identifiers or business identities.
(b) Revocations
    Under Sec.  424.535(a)(12), Medicare may revoke a provider's or 
supplier's enrollment if a state Medicaid agency terminates the 
provider's or supplier's Medicaid enrollment. Similar to our discussion 
concerning Sec.  424.530(a)(14), we propose to expand Sec.  
424.535(a)(12)(i) such that CMS may revoke a provider's or supplier's 
Medicare enrollment if the provider or supplier is terminated or 
revoked (or otherwise barred) from participation in any other federal 
health care program. In determining whether a revocation is 
appropriate, CMS would consider the following factors:
     The reason(s) for the termination or revocation.
     Whether the provider or supplier is currently terminated, 
revoked or otherwise barred from more than one program (for example, 
more than one state's Medicaid program) or has been subject to any 
other sanctions during its participation in other programs.
     Any other information that we deem relevant to our 
determination.
    Section 424.535(a)(12)(ii) states that Medicare may not terminate a 
provider's or supplier's enrollment unless and until a provider or 
supplier has exhausted all applicable appeal rights. We are not 
proposing to modify this provision. We would not revoke a provider's or 
supplier's enrollment under paragraph (a)(12)(i) unless all applicable 
appeal rights have been exhausted.
    Also, for reasons previously explained, we propose to add new Sec.  
424.535(a)(12)(iii) under which we may apply Sec.  424.535(a)(12)(i) to 
the provider or supplier under any of its current or former names, 
numerical identifiers or business identities.
10. Extension of Revocation
    We propose in new Sec.  424.535(i) that CMS may revoke any and all 
of a provider's or supplier's Medicare enrollments--including those 
under different names, numerical identifiers or business identities and 
those under different types (for example, an entity is enrolled as a 
group practice via the Form CMS-855B and as a DMEPOS supplier via the 
Form CMS-855S (OMB Control No. 0938-1056))--if the provider or supplier 
is revoked under Sec.  424.535(a).

[[Page 10735]]

    This provision is designed to ensure that individuals and entities 
that are revoked for inappropriate behavior are not permitted to remain 
enrolled in Medicare in any capacity. Consider the following examples:
     A physician's State X enrollment is revoked because his 
license in X was revoked. Under Sec.  424.535(i), we also could revoke 
the physician's state Y enrollment even if he is still licensed in Y.
     An entity has two enrollments: One via the Form CMS-855A 
as a certified supplier, another via the Form CMS-855B as a group 
practice. The entity's Form CMS-855A enrollment is revoked under Sec.  
424.535(a)(4). Under Sec.  424.535(i), CMS could also revoke the 
organization's Form CMS-855B enrollment, even if that enrollment is in 
another state.
     A non-physician practitioner is enrolled via the Form CMS-
855I (OMB Control No. 0938-0685)) as an individual supplier and as a 
DMEPOS supplier via the Form CMS-855S. The individual's Form CMS-855I 
enrollment is revoked for abusive billing practices. Under Sec.  
424.535(i), CMS could also revoke her Form CMS-855S enrollment.
    In determining whether to revoke a provider's or supplier's other 
enrollments under Sec.  424.535(i), we would consider the following 
factors:
     The reason for the revocation and the facts of the case.
     Whether any final adverse actions have been imposed 
against the provider or supplier regarding its other enrollments (for 
example, licensure suspensions imposed by the state, prior revocations, 
payment suspensions).
     The number and type(s) of other enrollments (for instance, 
Form CMS-855B).
     Any other information that we deem relevant to our 
determination.
    This provision would be applied in highly exceptional cases where 
the provider's or supplier's conduct was particularly egregious or the 
maintenance of the provider's or supplier's other enrollments would 
jeopardize the Medicare Trust Funds. Moreover, Sec.  424.535(i) would 
not be an ``all or nothing'' provision, meaning that we would not be 
required to revoke all of the provider's or supplier's enrollments if 
we chose to invoke Sec.  424.535(i). We would apply the previously 
listed factors to each enrollment in determining whether it should be 
revoked.
11. Voluntary Termination Pending Revocation
    As mentioned in section II.A. of this proposed rule, we have seen 
instances of providers and suppliers failing to meet Medicare 
requirements or otherwise engaging in improper behavior, and then 
voluntarily terminating their Medicare enrollment in order to avoid a 
potential revocation of their enrollment and a consequent reenrollment 
bar. For instance, assume that we perform a site visit of a provider's 
lone location. The location does not comply with our requirements. 
Knowing that its Medicare enrollment may soon be revoked, the provider 
submits a Form CMS-855 to voluntarily terminate its enrollment; the 
purpose, again, is to depart Medicare to avoid a formal revocation and 
reenrollment bar and any other consequences stemming therefrom.
    We believe that such attempts to circumvent the revocation process 
represent a risk to the Medicare program. Not only do these actions 
reflect dishonesty on the provider's or supplier's part, but also that 
the provider or supplier may be deliberately taking advantage of 
program vulnerabilities because no reenrollment bar has been imposed. 
To this end, we propose in new Sec.  424.535(j)(1) that we may revoke a 
provider's or supplier's Medicare enrollment if we determine that the 
provider or supplier voluntarily terminated its Medicare enrollment in 
order to avoid a revocation under Sec.  424.535(a) that CMS would have 
imposed had the provider or supplier remained enrolled in Medicare. In 
making our determination, we would consider all of the following:
     If there is evidence to suggest that the provider knew or 
should have known that it was or would be out of compliance with 
Medicare requirements.
     If there is evidence to suggest that the provider knew or 
should have known that its Medicare enrollment would be revoked.
     If there is evidence to suggest that the provider 
voluntarily terminated its Medicare enrollment in order to circumvent 
such revocation.
     Any other evidence or information that CMS deems relevant 
to its determination.
    In new paragraph (j)(2), we propose that a revocation under Sec.  
424.535(j)(1) would be effective the day before the Medicare contractor 
receives the provider's or supplier's Form CMS-855 voluntary 
termination application. This date is appropriate because the 
provider's or supplier's submission of the voluntary termination 
application is the basis for a revocation under paragraph (j)(1); 
procedurally, the voluntary termination would be reversed (if the 
Medicare contractor processed the application to completion) and then 
the provider's or supplier's enrollment would be revoked.
12. Enrollment for Ordering/Certifying/Referring/Prescribing of All 
Part A and B Services, Items, and Drugs; Maintenance of Documentation.
a. Enrollment
    We stated earlier that section 6405(c) of the Affordable Care Act 
gives the Secretary the authority to extend the requirements of section 
6405(a) and (b) of the Affordable Care Act to all other categories of 
items or services under title XVIII of the Act (including covered Part 
D drugs) that are ordered, prescribed or referred by a physician or 
eligible professional enrolled under section 1866(j) of the Act. Under 
this authority, Sec.  424.507(a) and (b) collectively state that to 
receive payment for ordered imaging services, clinical laboratory 
services, DMEPOS items or home health services, the service or item 
must have been ordered or certified by a physician or, when permitted, 
an eligible professional who--(1) is enrolled in Medicare in an 
approved status; or (2) has a valid opt-out affidavit on file with an 
A/B MAC.
    Sections 424.507(a) and (b) were implemented via an April 27, 2012 
final rule titled: ``Medicare and Medicaid Programs; Changes in 
Provider and Supplier Enrollment, Ordering and Referring, and 
Documentation Requirements; and Changes in Provider Agreements'' (77 FR 
25284). Also, in the previously mentioned May 23, 2014 final rule (79 
FR 29843), we finalized provisions under which the prescriptions of a 
physician or eligible professional who is not enrolled in Medicare and 
does not have a valid opt-out affidavit on file with an A/B MAC would 
not be covered under the Part D program.
    The purpose of the provider enrollment process is to ensure that 
providers and suppliers that furnish services and items to Medicare 
beneficiaries meet all Medicare requirements. Section 424.507(a) and 
(b) were designed to help us confirm that individuals who order or 
certify certain types of Medicare services and items were qualified to 
do so. Indeed, without the enrollment process, we cannot determine 
whether these persons meet all Medicare requirements. There could be 
situations where an unqualified individual is ordering numerous 
Medicare services other than those currently listed in Sec.  424.507 
(such as tests) that are potentially dangerous to beneficiaries. 
Moreover, unnecessary services and items could result in

[[Page 10736]]

wasted Medicare expenditures. In short, we must be able to screen all 
physicians and eligible professionals to ensure that Medicare 
requirements are met, and that Medicare beneficiaries and the Trust 
Funds are protected.
    We believe that the importance of confirming that all physicians 
and eligible professionals who order, certify, refer or prescribe Part 
A or B services, items or drugs (and not simply those services and 
items described in Sec.  424.507) are qualified to do so dictates that 
we expand the purview of Sec.  424.507. To this end, we propose the 
following changes to Sec.  424.507(a) and (b):
    The heading to paragraph (a) currently reads: ``Conditions for 
payment of claims for ordered covered imaging and clinical laboratory 
services and items of durable medical equipment, prosthetics, 
orthotics, and supplies (DMEPOS).'' We propose to change this to state: 
``Conditions for payment of claims for ordered, certified, referred or 
prescribed covered Part A or B services, items or drugs.''
    The heading to existing paragraph (a)(1) reads: ``Ordered covered 
imaging, clinical laboratory services, and DMEPOS item claims.'' We 
propose to change this to state: ``Ordered, certified, referred or 
prescribed covered Part A or B services, items or drugs.''
    The opening sentence in paragraph (a)(1) currently states in part: 
``To receive payment for ordered imaging, clinical laboratory services, 
and DMEPOS items (excluding home health services described in Sec.  
424.507(b), and Part B drugs)''. We propose to change this language to 
read: ``To receive payment for ordered, certified, referred or 
prescribed covered Part A or B services, items or drugs''.
    Paragraph (a)(1)(i) states in part: ``The ordered covered imaging, 
clinical laboratory services, and DMEPOS items (excluding home health 
services described in paragraph (b) of this section, and Part B drugs) 
must have been ordered by''. We propose to change this language to: 
``The ordered, certified, referred or prescribed covered Part A or B 
service, item or drug must have been ordered, certified, referred or 
prescribed by''.
    In paragraph (a)(2), we propose to change the heading from ``Part B 
beneficiary claims'' to ``Part A and B beneficiary claims.'' We also 
propose to change the language that states ``To receive payment for 
ordered covered items and services listed at Sec.  424.507(a)'' to ``To 
receive payment for ordered, certified, referred or prescribed covered 
Part A or B services, items or drugs''.
    In paragraphs (a)(1)(ii), (a)(1)(iii), and (a)(2)(i), we propose to 
change the language that reads ``who ordered the item or service'' to 
``who ordered, certified, referred or prescribed the Part A or B 
service, item or drug''.
    We propose to change the existing language in paragraphs (a)(1)(iv) 
and (a)(2)(ii) that reads ``If the item or service is ordered by'' to 
``If the Part A or B service, item or drug is ordered, certified, 
referred or prescribed by''.
    We propose to revise the existing language in paragraphs 
(a)(1)(iv)(A)(1) and (a)(2)(ii)(A)(1) from ``As the ordering supplier'' 
to ``As the ordering, certifying, referring or prescribing supplier''.
    We propose to change the current language in paragraphs 
(a)(1)(iv)(B) and (a)(2)(ii)(B) that reads ``order such items and 
services'' to ``order, certify, refer or prescribe such services, 
items, and drugs''.
    In paragraphs (a)(1)(iv)(B)(1) and (a)(2)(ii)(B)(1), we propose to 
replace the word ``order'' with ``order, certify, refer or prescribe''.
    We propose to delete the existing version of paragraph (b), which 
deals with home health services. Such services would be addressed in 
revised paragraph (a). We propose to redesignate current paragraph (c) 
as revised paragraph (b). We also propose in this paragraph to--
     Change the language that reads ``covered items and 
services'' to ``ordered, certified, referred or prescribed Part A or B 
services, items or drugs;''
     Delete ``or (b)'' and ``and (b)'', since the existing 
version of paragraph (b) would be replaced;
     Change ``paragraphs (a)(1)'' to ``paragraph (a)(1)''; and
     Delete ``respectively.''
    We propose to redesignate current paragraph (d) as revised 
paragraph (c). We also propose in this paragraph to do the following:
     Change the language that reads ``covered items or 
services'' to ``ordered, certified, referred or prescribed covered Part 
A or B services, items or drugs''.
     Change the language that states ``paragraphs (a) and (b)'' 
to ``paragraph (a).''Delete paragraph (d).
    Our proposal would include drugs that are covered under Part B. 
This, combined with Sec.  423.120(c), would help confirm that all 
prescribers of Medicare drugs are thoroughly vetted for compliance with 
Medicare requirements.
    We further propose that our changes to Sec.  424.507 would become 
effective on January 1, 2018, in order to give sufficient time for--(1) 
providers and suppliers to complete the enrollment or opt-out process; 
(2) stakeholders (including CMS and its contractors) to prepare for, 
operationalize, and implement these requirements; and (3) provider and 
beneficiary education. The current version of Sec.  424.507 would 
remain in effect through December 31, 2017.
    In the April 27, 2012 final rule (77 FR 25291), we agreed with 
commenters that there were a number of operational issues associated 
with a requirement that services of a specialist be ordered or 
referred, and we removed that requirement. However, with the successful 
implementation of the current version of Sec.  424.507, we believe that 
the expansion of Sec.  424.507 to include other services can be fully 
operationalized.
b. Maintenance of Documentation
    In the November 19, 2008 Federal Register, we published a final 
rule with comment period titled, ``Medicare Program; Payment Policies 
Under the Physician Fee Schedule and Other Revisions to Part B for CY 
2009; E-Prescribing Exemption for Computer-Generated Facsimile 
Transmissions; and Payment for Certain Durable Medical Equipment, 
Prosthetics, Orthotics, and Supplies'' (73 FR 69726). In that rule, we 
established Sec.  424.516(f) stating that--(1) a provider or supplier 
is required to maintain ordering and referring documentation, including 
the NPI, received from a physician or eligible non-physician 
practitioner for 7 years from the date of service; and (2) physicians 
and non-physician practitioners are required to maintain written 
ordering and referring documentation for 7 years from the date of 
service.
    Section 6406(b)(3) of the Affordable Care Act amended section 
1866(a)(1) of the Act to require that providers and suppliers maintain 
and, upon request, provide to the Secretary, access to written or 
electronic documentation relating to written orders or requests for 
payment for durable medical equipment, certifications for home health 
services or referrals for other items or services written or ordered by 
the provider as specified by the Secretary. Under section 6406(a) of 
the Affordable Care Act, which amended section 1842(h) of the Act, the 
Secretary may revoke a physician's or supplier's enrollment if the 
physician or supplier fails to maintain and, upon request of the 
Secretary, provide access to documentation relating to written orders 
or requests for payment for durable medical equipment, certifications 
for home health services or referrals for

[[Page 10737]]

other items or services written or ordered by such physician or 
supplier, as specified by the Secretary.
    Consistent with the authority given to the Secretary in sections 
6406(a) and (b)(3) of the Affordable Care Act, we revised Sec.  
424.516(f) in the previously referenced April 27, 2012 final rule to 
state as follows:
     Under paragraph (f)(1), a provider or supplier that 
furnishes covered ordered items of DMEPOS, clinical laboratory, imaging 
services or covered ordered/certified home health services is required 
to maintain documentation for 7 years from the date of service, and 
provide access to that documentation upon the request of CMS or a 
Medicare contractor.
     Under paragraph (f)(2), a physician who orders/certifies 
home health services and the physician or, when permitted, other 
eligible professional who orders items of DMEPOS or clinical laboratory 
or imaging services is required to maintain documentation for 7 years 
from the date of service, and provide access to that documentation upon 
the request of CMS or a Medicare contractor.
    The documentation in paragraphs (f)(1) and (2) includes written and 
electronic documents (including the NPI of the physician who ordered/
certified the home health services and the NPI of the physician or, 
when permitted, other eligible professional who ordered items of DMEPOS 
or clinical laboratory or imaging services) relating to written orders 
and certifications and requests for payments for items of DMEPOS and 
clinical laboratory, imaging, and home health services.
    We propose to expand these requirements in Sec.  424.516(f) to 
include all Part A and Part B services, items, and drugs that are 
ordered, certified, referred or prescribed by a physician or, when 
permitted, eligible professional. Thus, the provider or supplier 
furnishing the Part A or B service, item or drug, as well as the 
physician or, when permitted, eligible professional who ordered, 
certified, referred or prescribed the service, item or drug, would have 
to maintain documentation for 7 years from the date of the service and 
furnish access to that documentation upon a CMS or Medicare contractor 
request. The documentation would include written and electronic 
documents (including the NPI of the ordering/certifying/referring/
prescribing physician or, when permitted, eligible professional) 
relating to written orders, certifications, referrals, prescriptions, 
and requests for payments for a Part A or B service, item or drug.
    We believe it is important that our expansion of Sec.  424.516(f) 
include all Part A and B services, items, and drugs be consistent with 
our proposed revisions to Sec.  424.507. Both provisions are intended 
to help make certain that payments for Part A and B services, items, 
and drugs are made correctly. To require all persons who order, 
certify, refer, and prescribe Part A and B services, items or drugs to 
enroll in Medicare without requiring them (or the billing provider) to 
retain supporting documentation would undercut the effectiveness of 
Sec.  424.507. Without being able to review this documentation, we may 
lack the ability to confirm that the order, certification, referral or 
prescription was proper and that the ordering, certifying, referring or 
prescribing individual was qualified.
13. Opt-Out Physicians and Practitioners
    As previously mentioned, no Medicare payment (either directly or 
indirectly) will be made for services furnished by opt-out physicians 
or practitioners, except as permitted in accordance with Sec.  
405.435(c) and Sec.  405.440. The effects of opting-out are described 
in Sec.  405.425. Section 405.425(i) states that an opt-out physician 
or practitioner who has not been excluded under sections 1128, 1156 or 
1892 of the Act may order, certify the need for or refer a beneficiary 
for Medicare-covered items and services, provided he or she is not paid 
directly or indirectly for such services (except as provided in Sec.  
405.440). Under Sec.  405.425(j), an excluded physician or practitioner 
may not order, prescribe or certify the need for Medicare-covered items 
and services except as provided in 42 CFR 1001.1901, and must otherwise 
comply with the terms of the exclusion in accordance with 42 CFR 
1001.1901.
    We propose to revise Sec.  405.425(i) and (j) by including opt-out 
physicians and practitioners who are revoked under Sec.  424.535. Thus, 
a revoked opt-out physician or practitioner would be unable to order, 
prescribe, and certify the need for or refer a beneficiary for 
Medicare-covered services and items except as otherwise provided in 
those paragraphs.
    We are concerned that revoked physicians and practitioners who have 
opted-out could, through inappropriate ordering and certifying 
practices, pose a risk to Medicare beneficiaries. Our concern is 
heightened because opt-out physicians and practitioners are not subject 
to the same stringent enrollment and verification processes that 
enrolled physicians and practitioners are. Therefore, we believe that 
these proposed changes are necessary.
14. Moratoria
    Under Sec.  424.570(a), CMS may impose a temporary moratorium on 
the enrollment of new Medicare providers and suppliers of a particular 
type or the establishment of new practice locations of a particular 
type in a particular geographic area. Per Sec.  424.570(a)(2)(i), a 
moratorium is imposed when CMS determines that there is a significant 
potential for fraud, waste or abuse with respect to a particular 
provider or supplier type or a particular geographic area or both. 
Consistent with this authority, we have published several Federal 
Register documents announcing the imposition of a temporary moratorium 
on the enrollment of HHAs and ambulance suppliers. (See, for example, 
the July 31, 2013 (78 FR 46339) and February 4, 2014 (79 FR 6475) 
Federal Register.)
    We are proposing several changes to Sec.  424.570(a).
a. Change in Practice Location
    Section 424.570(a)(1)(iii) states that a temporary moratorium does 
not apply to changes in practice locations, changes in provider or 
supplier information (such as phone numbers) or changes in ownership 
(except changes in ownership of HHAs that would require an initial 
enrollment under Sec.  424.550)).
    We are proposing three revisions to Sec.  424.570(a)(1)(iii).
    The first proposal would divide the current version of Sec.  
424.570(a)(1)(iii) into paragraphs (A), (B), and (C) so that each 
requirement mentioned in paragraph (iii) could be addressed 
individually.
    Secondly, we would clarify in paragraph (a)(1)(iii)(A), which would 
address practice locations, that a temporary moratorium applies to 
situations in which a provider or supplier is changing a practice 
location from a location outside the moratorium area to a location 
inside the moratorium area. We see no difference between this situation 
and one in which a provider or supplier is opening a brand new practice 
location in the moratorium area. In both cases, an additional site is 
being established in the moratorium area, something the moratorium is 
designed to prevent. Therefore, we believe this change is necessary.
    Lastly, we would clarify the existing policy in paragraph 
(a)(1)(iii)(C) by removing the language ``under Sec.  424.550''. Under 
Sec.  489.18(c), if an HHA changes ownership as specified in Sec.  
489.18(a), the existing provider agreement is automatically assigned to

[[Page 10738]]

the new owner. However, if the new owner declines to accept the assets 
and liabilities of the HHA and refuses assignment of the provider 
agreement, Sec.  489.18(c) does not apply and the HHA must enroll as a 
new provider, that is, via an initial enrollment. The existing 
reference to Sec.  424.550 in paragraph (a)(1)(iii) may have caused 
some confusion on this point. Accordingly, we are proposing to remove 
this reference in order to clarify current policy.
b. Application of Moratorium
    Section 424.570(a)(1)(iv) currently states that a temporary 
enrollment moratorium does not apply to any enrollment application that 
has been approved by the enrollment contractor but not yet entered into 
PECOS at the time the moratorium is imposed. We propose to revise this 
paragraph to state that a temporary moratorium does not apply to any 
enrollment application that has been received by the Medicare 
contractor prior to the date the moratorium is imposed.
    In the moratoria that have been imposed, some providers and 
suppliers have spent many thousands of dollars preparing for enrollment 
only to have their Form CMS-855 applications denied near the end of the 
enrollment process because of the sudden imposition of a moratorium. 
This has been especially problematic for HHAs--(1) whose Form CMS-855A 
applications have been recommended for approval by the contractor; (2) 
that have successfully completed a state survey; and (3) whose 
applications and survey results have been forwarded by the state to the 
CMS regional office for final review. This entire process can take a 
substantial amount of time, and the considerable resources the provider 
or supplier may have expended by this point are effectively lost when 
CMS imposes a moratorium.
    We believe this has been an unintended consequence of the 
moratoria. In our view, the overall objective of the moratoria--the 
need to reduce the potential for fraud, waste or abuse in certain 
geographic areas--can be equally satisfied by applying a moratorium to 
applications submitted after the moratorium is imposed. Thus, we 
believe that our proposed ``prior to the moratorium date'' threshold is 
appropriate.
    We also propose in Sec.  424.570(a)(1)(iv) to change the term 
``enrollment contractor'' to ``Medicare contractor.'' We believe the 
latter term is more consistent with CMS' use of Medicare Administrative 
Contractors.
15. Surety Bonds
    Since 2009, certain DMEPOS suppliers have been required under Sec.  
424.57(d) to obtain, submit, and maintain a surety bond in an amount of 
at least $50,000 as a condition of enrollment. Paragraph (d)(5)(i) 
states that the surety 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: (1) The amount of any 
unpaid claim, plus accrued interest, for which the DMEPOS supplier is 
responsible; and (2) the amount of any unpaid claims, CMPs or 
assessments imposed by CMS or the OIG on the DMEPOS supplier, plus 
accrued interest. Further, paragraph (d)(5)(ii) states that the surety 
bond must provide that the surety is liable for unpaid claims, CMPs or 
assessments that occur during the term of the bond.
    We have specific procedures for collecting monies from sureties in 
accordance with Sec.  424.57(d)(5) and have recouped several million 
dollars via these procedures. However, we have encountered instances 
where the surety has failed to submit payment to CMS, notwithstanding 
its obligation to do so under both Sec.  424.57(d)(5) and the surety 
bond's terms. We do not believe we should permit a DMEPOS supplier to 
use that particular surety when the latter has not fulfilled its legal 
responsibilities to us as the obligee under the surety bond. We thus 
propose in new Sec.  424.57(d)(16) that CMS may reject an enrolling or 
enrolled DMEPOS supplier's new or existing surety bond if the surety 
that issued the bond has failed to make a required payment to CMS in 
accordance with Sec.  424.57(d). This means that we could reject any 
and all surety bonds furnished by the surety to enrolling or enrolled 
DMEPOS suppliers under Sec.  424.57(d), not just the surety bond(s) on 
which the surety refused to make payment. If we reject a surety bond 
under proposed Sec.  424.57(d)(16), the enrolling or enrolled DMEPOS 
supplier would have to obtain a bond from a new surety in order to 
enroll in or maintain its enrollment in Medicare.
    To illustrate how Sec.  424.57(d)(16) would operate, suppose a 
surety has issued surety bonds for DMEPOS suppliers W, X, Y, and Z, all 
of which are enrolled in Medicare. CMS sought to collect from the 
surety on the bond issued for Supplier X, but the surety failed to make 
payment. We would have the discretion to--(1) reject the bonds for W, 
X, Y, and Z, thus requiring the suppliers to obtain new bonds from a 
different surety; and (2) refuse to accept future bonds issued to 
DMEPOS suppliers by the non-compliant surety. In making a determination 
under items (1) and (2) in the previous sentence, CMS would consider 
the following several factors:
     The total number of Medicare-enrolled DMEPOS suppliers to 
which the surety has issued surety bonds.
     The total number of instances in which the surety has 
failed to make payment to CMS.
     The reason(s) for the surety's failure(s) to pay.
     The percentage of instances in which the surety has failed 
to pay.
     The total amount of money that the surety has failed to 
pay.
     Any other information that CMS deems relevant to its 
determination.
    Although CMS would reserve the right to reject all of a surety's 
existing bonds with Medicare-enrolled DMEPOS suppliers if the surety 
failed to make even one required payment, CMS would take into account 
the circumstances surrounding the surety and its failure to make 
payment per the aforementioned factors.
16. Reactivation
    Under Sec.  424.540(a), a provider's or supplier's Medicare billing 
privileges may be deactivated if the provider or supplier fails to--(1) 
submit any Medicare claims for 12 consecutive calendar months; (2) 
report a change to its Medicare enrollment information within 90 
calendar days (or, for changes in ownership or control, within 30 
days); or (3) furnish complete and accurate information and all 
supporting documentation within 90 calendar days of receipt of 
notification from CMS to submit an enrollment application and 
supporting documentation, or to resubmit and certify the accuracy of 
its enrollment information. To reactivate its billing privileges, the 
provider or supplier must follow the requirements of Sec.  424.540(b). 
Specifically--
     Section 424.540 paragraph (b)(1) states that if the 
provider or supplier is deactivated for any reason other than non-
submission of a claim, the provider or supplier must submit a new 
enrollment application or, when deemed appropriate, recertify that the 
enrollment information currently on file with Medicare is correct; and
     Paragraph (b)(2) states that if the provider or supplier 
is deactivated for non-submission of a claim, it must recertify that 
the enrollment information currently on file with Medicare is

[[Page 10739]]

correct and furnish any missing information as appropriate.
    We propose to revise subsection (b) in two ways. Paragraph (1) 
would state that in order for a deactivated provider or supplier to 
reactivate its Medicare billing privileges, it must recertify that its 
enrollment information currently on file with Medicare is correct and 
furnish any missing information as appropriate. Paragraph (2) would 
state that notwithstanding paragraph (1), CMS may for any reason 
require a deactivated provider or supplier to submit a complete Form 
CMS-855 application as a prerequisite for reactivating its billing 
privileges:
    There are several reasons for these proposed changes. First, the 
existing language in Sec.  424.540(b)(1) has been a source of confusion 
to providers and suppliers because it does not articulate what the 
phrase ``when deemed appropriate'' means; there also is some repetition 
between paragraphs (b)(1) and (b)(2), for both indicate that a 
recertification is acceptable. Our proposed version of paragraph 
(b)(1), which combines parts of existing paragraphs (b)(1) and (b)(2), 
would clarify that a provider or supplier may use recertification--
regardless of the deactivation reason--as a means of reactivation.
    Second, we believe CMS should have the discretion to require at any 
time the submission of a complete Form CMS-855 reactivation application 
irrespective of the deactivation reason. The Form CMS-855 captures 
information about the provider or supplier that, in the case of a 
reactivation, would help us determine whether the provider or supplier 
is still in compliance with Medicare enrollment requirements. A 
recertification, meanwhile, generally only consists of a statement from 
the provider or supplier that the information on file is correct and, 
if necessary, the submission of Form CMS-855 pages containing updated 
information. Therefore, the Form CMS-855 collects more information than 
the recertification submission, and there may be situations where CMS 
determines that a complete application must be submitted. These could 
include, but are not limited to, the following:
     The provider or supplier was deactivated for failing to 
submit a claim for 12 consecutive months and has been deactivated for 
at least 6 months.
     The provider or supplier does not have access to Internet-
based PECOS.
     The provider or supplier was deactivated for failing to 
report a change of information.
    In these circumstances, respectively, the provider or supplier--(1) 
has not submitted a claim for at least 18 months; (2) cannot view its 
existing enrollment data and thus may be unable to determine the 
accuracy of this information; and (3) previously failed to comply with 
Medicare requirements by not timely reporting changed enrollment data. 
Such instances, in our view, raise questions as to the validity of the 
provider's or supplier's current enrollment information and possibly 
its compliance with existing Medicare requirements, thus warranting a 
complete Form CMS-855 if we deem it necessary. We stress that we could 
request a complete application in any reactivation situation, not 
simply those outlined in this proposed section. However, we solicit 
comments on whether we should restrict the reasons for which CMS may 
request a complete reactivation application and, if so, what those 
reasons should be.
    While we propose to revise Sec.  424.540(b)(1) and (2) as 
previously described, we are not proposing any changes to Sec.  
424.540(b)(3).
17. Changes to Definition of Enrollment
    We propose several additional changes to 42 CFR part 424 to address 
the general concept of enrollment as it pertains to the Form CMS-855O 
(OMB Control No. 0938-1135), which is used by physicians and eligible 
professionals seeking to enroll in Medicare solely to order and certify 
certain items or services and/or prescribe Part D drugs.
a. Definition of ``Enroll/Enrollment'' (Sec.  424.502)
    We propose several revisions of the existing definition of 
``Enroll/Enrollment'' in Sec.  424.502.
    First, the opening sentence of the definition currently states: 
``Enroll/Enrollment means the process that Medicare uses to establish 
eligibility to submit claims for Medicare-covered items and services, 
and the process that Medicare uses to establish eligibility to order or 
certify Medicare-covered items and services.'' We propose to change 
this to read: ``Enroll/Enrollment means the process that Medicare uses 
to establish eligibility to submit claims for Medicare-covered items 
and services, and the process that Medicare uses to establish 
eligibility to order, certify, refer or prescribe Medicare-covered Part 
A or B services, items or drugs or to prescribe Part D drugs.'' There 
are two reasons for this change. One is to align this definition with 
the language in our proposed revisions to Sec.  424.507(a) and (b). 
(See section II.A.12. of this proposed rule.) The second is to address 
in this definition the enrollment provisions in Sec.  423.120(c)(6) 
relating to Part D drugs. In both cases, we are clarifying that the 
enrollment process includes a physician's or eligible professional's 
completion of the Form CMS-855O in order to meet the requirements of 
Sec. Sec.  424.507(a) and (b) and 423.120(c)(6).
    Second, the current version of paragraph (2) of the definition of 
``Enroll/Enrollment'' states: ``Except for those suppliers that 
complete the Form CMS-855O form, CMS-identified equivalent, successor 
form or process for the sole purpose of obtaining eligibility to order 
or certify Medicare-covered items and services, validating the provider 
or supplier's eligibility to provide items or services to Medicare 
beneficiaries.'' We propose to change this to read: ``Except for those 
suppliers that complete the Form CMS-855O, CMS-identified equivalent, 
successor form or process for the sole purpose of obtaining eligibility 
to order, certify, refer or prescribe Medicare-covered Part A or B 
services, items or drugs or to prescribe Part D drugs, validating the 
provider's or supplier's eligibility to provide items or services to 
Medicare beneficiaries.'' This revision is to clarify that a supplier's 
completion of the Form CMS-855O solely to obtain eligibility to order, 
certify, refer or prescribe Medicare-covered Part A or B services, 
items or drugs or to prescribe Part D drugs, does not convey Medicare 
billing privileges to the supplier.
    Third, and for reasons similar to those involving our proposed 
change to paragraph (2) of the definition of ``Enroll/Enrollment,'' we 
propose to revise paragraph (4) thereof. The new version of paragraph 
(4) would read: ``Except for those suppliers that complete the Form 
CMS-855O, CMS-identified equivalent, successor form or process for the 
sole purpose of obtaining eligibility to order, certify, refer or 
prescribe Medicare-covered Part A or B services, items or drugs or to 
prescribe Part D drugs, granting the Medicare provider or supplier 
Medicare billing privileges.''
b. Revision to Sec.  424.505
    We also propose to replace the language in Sec.  424.505 that 
states ``to order or certify Medicare-covered items and services'' with 
``to order, certify, refer or prescribe Medicare-covered Part A or B 
services, items or drugs or to prescribe Part D drugs.'' This is to 
clarify that completion of the Form CMS-855O does not convey Medicare 
billing privileges to the supplier.

[[Page 10740]]

c. Revision to Sec.  424.510(a)(3)
    Section 424.510(a)(3) currently reads: ``To be enrolled solely to 
order and certify Medicare items or services, a physician or non-
physician practitioner must meet the requirements specified in 
paragraph (d) of this section except for paragraphs (d)(2)(iii)(B), 
(d)(2)(iv), (d)(3)(ii), and (d)(5), (6), and (9) of this section.'' We 
propose to revise this to state: ``To be enrolled solely to order, 
certify, refer or prescribe Medicare-covered Part A or B services, 
items or drugs or to prescribe Part D drugs, a physician or non-
physician practitioner must meet the requirements specified in 
paragraph (d) of this section except for paragraphs (d)(2)(iii)(B), 
(d)(2)(iv), (d)(3)(ii), and (d)(5), (6), and (9) of this section.'' 
This change is intended to include within the purview of Sec.  
424.510(a)(3) those suppliers who are enrolling via the Form CMS-855O 
pursuant to Sec.  423.120(c)(6) or pursuant to our proposed revisions 
to Sec.  424.507(a) and (b).
d. Revision to Sec.  424.535(a)
    We also propose to change the term ``billing privileges'' in the 
opening paragraph of Sec.  424.535(a) to ``enrollment.'' The paragraph 
would thus read: ``CMS may revoke a currently enrolled provider's or 
supplier's Medicare enrollment and any corresponding provider agreement 
or supplier agreement for the following reasons''. This is to clarify 
that the revocation reasons in Sec.  424.535(a) apply to all enrolled 
parties, including suppliers who are enrolled solely to order, certify, 
refer or prescribe Medicare-covered Part A or B services, items or 
drugs, or to prescribe Part D drugs; the reasons are not limited to 
providers and suppliers that have Medicare billing privileges. Thus, 
for instance, a Part D prescriber's Medicare enrollment may be revoked 
if one of the revocation reasons in Sec.  424.535(a) applies.
    We note also that the opening paragraph of Sec.  424.530(a), which 
deals with denials, uses the term ``enrollment'' as well. Our change to 
Sec.  424.535(a) would achieve consistency with Sec.  424.530(a) in 
this regard.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    Concerning our affiliation proposal (Sec. Sec.  424.519 and 
455.107), and in the following discussion, the principal burden would 
come from completion of the applicable enrollment application sections 
and the time involved in researching data. However, we do solicit 
public comment and feedback regarding these burdens.
    There are also burdens associated with our remaining proposals as 
discussed later in this section.

A. ICRs Related to Affiliations (Sec. Sec.  424.519 and 455.107)

    Proposed Sec. Sec.  424.519 and 455.107 require, respectively, that 
a Medicare, Medicaid or CHIP provider or supplier disclose information 
about present and past affiliations with certain currently or formerly 
enrolled Medicare, Medicaid or CHIP providers and suppliers. Medicare 
providers and suppliers would need to furnish this information via the 
paper or Internet-based version of the Form CMS-855 application. Though 
the specific vehicle for collecting this data from Medicaid and CHIP 
providers and suppliers would be left to the state's discretion, we 
anticipate that the information would be provided on an existing 
enrollment form or through a separate form created by the state. The 
principal burden involved with this collection would be the time and 
effort needed to--(1) obtain this information; and (2) complete and 
submit the appropriate section of the applicable form.
1. Medicare
a. Initially Enrolling Providers and Suppliers (Sec.  424.519(b))
    Based on CMS data, an average of approximately 70,000 providers and 
suppliers seek to initially enroll in the Medicare program in any given 
12-month period. This includes physicians; physician groups; non-
physician practitioners; non-physician practitioner groups; Part A 
certified providers; Part B certified suppliers; Part B non-certified 
suppliers; and DMEPOS suppliers. Each of these providers and suppliers 
would be required to furnish the information described in Sec.  424.519 
on the appropriate Form CMS-855 enrollment application.
    We estimate that it would take each provider or supplier an average 
of 10 hours to obtain and furnish this information. We believe this is 
a high-end estimate because providers and suppliers will generally 
know, or be able to research, their present and past affiliations and 
their relationship with Medicare, Medicaid, and CHIP. Also, many 
enrolling physicians, non-physician practitioners, and other small 
providers and suppliers will have few, if any, reportable affiliations 
due to, for example, the limited number of owners and managing 
employees they may have or have had. However, we do not wish to 
underestimate the potential burden and we acknowledge that there may be 
instances where the provider or supplier would need to contact the 
affiliated provider or supplier regarding certain information. With a 
10-hour burden for 70,000 providers and suppliers, we estimate that the 
annual hourly burden for compliance with Sec.  424.519 would be 700,000 
hours.
    Based on our experience, we believe that the reporting provider's 
or supplier's administrative staff (for example, officer managers and 
support staff) would be responsible for securing and listing 
affiliation data on the Form CMS-855. According to the most recent wage 
data provided by the Bureau of Labor Statistics (BLS) for May 2014, the 
mean hourly wage for the general category of ``Office and 
Administrative Support Occupations'' is $17.08 per hour (see https://www.bls.gov/oes/current/oes_nat.htm#43-0000 With fringe benefits and 
overhead, the per hour rate is $34.16.
    Using this per hour rate, we estimate the annual ICR cost burden 
for initially enrolling providers and suppliers to be $23,912,000 
(700,000 hours x $34.16).
b. Revalidating Providers and Suppliers (Sec.  424.519(b))
    Medicare providers and suppliers, other than DMEPOS suppliers, are 
required to revalidate their Medicare enrollment every 5 years. (DMEPOS 
suppliers must revalidate every 3 years.) There are approximately 1.5 
million providers and suppliers enrolled in the Medicare program; of 
this figure, roughly 87,000 are DMEPOS suppliers. For purposes of this 
ICR statement only, we project that future revalidations will be 
performed in relative accordance with the previously-referenced 5-year 
and 3-year periods.

[[Page 10741]]



  Table 1--Estimated Number of Non-DMEPOS Supplier Revalidations: 2017-
                                  2021
------------------------------------------------------------------------
                                                            Number of
                     Calendar year                        revalidations
------------------------------------------------------------------------
2017...................................................          300,000
2018...................................................          300,000
2019...................................................          300,000
2020...................................................          300,000
2021...................................................          300,000
------------------------------------------------------------------------


  Table 2--Estimated Number of DMEPOS Supplier Revalidations: 2017-2021
------------------------------------------------------------------------
                                                            Number of
                     Calendar year                        revalidations
------------------------------------------------------------------------
2017...................................................           29,000
2018...................................................           29,000
2019...................................................           29,000
2020...................................................           29,000
2021...................................................           29,000
------------------------------------------------------------------------


         Table 3--Estimated Number of Revalidations: 2015-2019 *
------------------------------------------------------------------------
                                                            Number of
                     Calendar year                        revalidations
------------------------------------------------------------------------
2017...................................................          329,000
2018...................................................          329,000
2019...................................................          329,000
2020...................................................          329,000
2021...................................................          329,000
------------------------------------------------------------------------
* Table 3 combines the figures in Tables 1 and 2.

    We note that we have the authority to perform ``off-cycle'' 
revalidations under Sec.  424.515(e), that is, revalidations occurring 
more frequently than the 5-year and 3-year periods. Also, certain years 
may see fewer revalidations than others, for example, as a result of 
higher levels of attrition during a previous year. Since we cannot 
predict the exact number of revalidations (off-cycle or otherwise) that 
may occur in future, the figures in Table 2 represent our best 
estimates.
    Through the revalidation process, providers and suppliers generally 
need to provide the same information as initially enrolling providers 
and suppliers. Hence, we estimate it would take revalidating providers 
and suppliers 10 hours to obtain and furnish affiliation information, 
and the work would be performed by administrative staff.
    Using our estimate of 329,000 affected providers and suppliers each 
year, we project an annual ICR cost burden of $112,386,400 (329,000 x 
10 hours x $34.16).
c. New and Changed Affiliations (Sec.  424.519(h))
    Generally speaking, the Form CMS-855 does not presently collect 
information regarding the provider's or supplier's (or the provider's 
or supplier's owning or managing individuals' and organizations') 
interests in other Medicare providers and suppliers. As such, we cannot 
reasonably estimate the number of providers and suppliers that would 
submit Form CMS-855 change of information applications reporting a new 
or changed affiliation based on historical data. However, we project 
that it would take approximately 30 minutes (or .5 hours) for a 
provider or supplier to report and submit new or changed affiliation 
information to its Medicare contractor. We request comment on how often 
reportable affiliations are created or are changed, therefore 
necessitating reporting to CMS.
    We estimate a total annual ICR burden on Medicare providers and 
suppliers from Sec.  424.519 of 3,990,000 hours (700,000 + 3,290,000) 
at a cost of $136,298,400 ($23,912,000 + $112,386,400).
2. Medicaid and CHIP
a. Initially Enrolling Providers and Suppliers (Sec.  455.107(b))
    Based on existing data, we estimate that 56,250 providers and 
suppliers in a given 12-month period seek to enroll in the Medicaid 
program or CHIP. As stated before, the mechanism for collecting the 
data required under Sec.  455.107 would lie within the state's 
discretion. While burden may vary depending on the specific collection 
vehicle, we estimate it would take each provider or supplier an average 
of 10 hours to obtain and furnish this information, similar to our 
estimate for Medicare providers and suppliers. This would result in an 
annual ICR hour burden of 562,500 hours. At a per hour rate of $34.16, 
we estimate the annual cost burden to be $19,215,000 (562,500 hours x 
$34.16).
b. Revalidating Providers and Suppliers (Sec.  455.107(b))
    According to State Program Integrity Assessment data, there are 
approximately 1.9 million Medicaid-enrolled and CHIP-enrolled providers 
nationwide. These providers must revalidate their enrollments every 5 
years in accordance with Sec.  455.414. For purposes of this ICR 
statement, we project that an average of one-fifth or 380,000 (1.9 
million x 0.20), of existing Medicaid and CHIP providers would be 
required to revalidate their enrollment each year and, consequently, 
furnish the information required under Sec.  455.107(b). This would 
result in an annual ICR hour burden of 3,800,000 hours. Using an hourly 
rate of $34.16, we estimate the annual ICR cost burden for revalidating 
Medicaid and CHIP providers suppliers to be $129,808,000 (3,800,000 
hours x $34.16).
c. New and Changed Affiliations (Sec.  455.107(h))
    Some states do not collect information regarding the provider's (or 
the provider's owning or managing individuals' and organizations') 
interests in other Medicaid or CHIP providers or Medicare providers or 
suppliers. Therefore, we cannot reasonably estimate the number of 
Medicaid and CHIP providers that would report data regarding new or 
changed affiliations. We have no past data on which to base such a 
projection. However, we project that it would take approximately 30 
minutes (or 0.5 hours) for a provider or supplier to report and submit 
new or changed affiliation information. We are soliciting comments on 
how often reportable affiliations are created or changed therefore 
necessitating reporting to the states.
    We estimate a total annual ICR burden on Medicaid and CHIP 
providers and suppliers from Sec.  455.107 of 4,362,500 hours at a cost 
of $149,023,000 ($19,215,000 + $129,808,000).
3. Collection of Information From States
    It is possible that states may be required to report to CMS certain 
information regarding its processing of data submitted pursuant to 
Sec.  455.107. This could include, for example, the number of 
applications in which an affiliation was reported and the number of 
cases in which the state determined that an affiliation posed an undue 
risk. However, we are unable to estimate the possible ICR burden 
because we do not know whether, to what extent, and by what vehicle 
data concerning Sec.  455.107 would be reported to CMS.
4. Total Burden
    We estimate a total annual ICR hour burden on Medicare, Medicaid, 
and CHIP providers and suppliers from our proposal of 8,352,500 hours 
at a cost of $285,321,400.

B. ICRs Related to Different Name, Numerical Identifier or Business 
Identity (Sec. Sec.  424.530(a)(12) and 424.535(a)(18))

    We do not have historical data to predict the number of instances 
in which we would determine that a

[[Page 10742]]

revoked provider or supplier is attempting to enroll in Medicare or is 
enrolled under a different name, numerical identifier or business 
identity. Since evidence of these activities are confined to the 
results of unique investigations, we believe the examples cited in the 
preamble text cannot form the basis of a representative sample from 
which to inform projections. Consequently, we cannot estimate the ICR 
burden that may result from such denials and revocations, which would 
primarily involve the submission of Form CMS-855 applications following 
denials or following the expiration of reenrollment bars. To enhance 
our ability to formulate an estimate of the ICR burden associated with 
this provision, we are soliciting comment on--(1) whether an annual 
figure of 8,000 potentially affected providers and suppliers could 
serve as a reasonable approximation; and (2) the potential cost burden 
to providers and suppliers. However, we stress that this is not an 
estimate because we do not have sufficient data to provide an estimate 
at this time.

C. ICRs Related To Billing for Non-Compliant Location (Sec.  
424.535(a)(20))

    We do not have sufficient historical data to form an estimate of 
the potential ICR burden of this proposal, which would primarily 
involve the submission of Form CMS-855 applications following the 
expiration of reenrollment bars. While there is data concerning the 
number of locations that are terminated from Medicare for non-
compliance each year, we cannot predict the number of ``additional'' 
locations that would be terminated due to Sec.  424.535(a)(20). In 
other words, if a provider or supplier has five locations and one is 
terminated for non-compliance, we have no way to predict whether any or 
all of the remaining four locations would be terminated. This is 
because each provider's and supplier's circumstances are different. 
Consequently, we are unable to project the total number of terminated 
locations.

D. ICRs Related to Abusive Ordering, Certifying, Referring or 
Prescribing of Part A or B Services, Items or Drugs (Sec.  
424.535(a)(21))

    As this is a new provision for which there is no historical data, 
we cannot project the number of instances in which we would revoke 
enrollment under Sec.  424.535(a)(21). Therefore, we are unable to 
estimate the total potential ICR burden associated with this proposal, 
which would primarily involve the submission of Form CMS-855 
applications following the expiration of reenrollment bars. To enhance 
our ability to formulate an estimate of the ICR burden associated with 
this provision, we are soliciting comment on--(1) whether an annual 
figure of 4,000 potentially affected physicians and eligible 
professionals could serve as a reasonable approximation; and (2) the 
potential cost burden to physicians and eligible professionals. 
However, we stress that this is not an estimate since we do not have 
sufficient data on which to make an estimate at this time.

E. ICRs Related to Changes in Maximum Reenrollment Bars (Sec.  
424.535(c))

    We do not anticipate any collection burden resulting from our 
revisions to Sec.  424.535(c). In fact, the burden may actually 
decrease because certain providers and suppliers may be barred from 
Medicare for a longer period of time and thus would submit Form CMS-855 
applications less frequently.

F. ICRs Related to Reapplication Bar (Sec.  424.530(f))

    We do not anticipate any collection burden resulting from our 
addition of Sec.  424.530(f). Additional applications would not be 
submitted because of our proposal.

G. ICRs Related to Revocation for Referral of Debt to the United States 
Department of Treasury (Sec.  424.535(a)(17))

    Each year on average, roughly 2,000 Medicare providers and 
suppliers have debts that are referred to the Department of Treasury. 
However, we are unable to predict the number of revocations that would 
result from our proposal because the circumstances of each case would 
be different. We believe that any ICR burden associated with this 
proposal would principally involve the submission of Form CMS-855 
applications following the expiration of reenrollment bars. We note 
that as with several of our other proposals, Sec.  424.535(a)(17) is a 
new provision for which there is no historical data, and it cannot be 
assumed that all 2,000 providers and suppliers would have their 
Medicare enrollments revoked. Therefore, to enhance our ability to 
formulate an estimate of the ICR burden associated with this provision, 
we are soliciting comment on--(1) whether 2,000 potentially impacted 
providers and suppliers could serve as a reasonable approximation; and 
(2) the potential cost burden on providers and suppliers. However, we 
stress that this is not an estimate since we do not have sufficient 
data on which to make an estimate at this time.

H. ICRs Related to Reporting Requirements (Sec.  424.535(a)(9))

    We believe there would be an increase in the number of revoked 
providers and suppliers resulting from our expansion of Sec.  
424.535(a)(9). However, we cannot estimate this number, for the 
specific facts of each case would be different. As such, we cannot 
project the potential collection burden associated with this proposal, 
which would primarily involve the submission of Form CMS-855 
applications following the expiration of reenrollment bars. To enhance 
our ability to formulate a projection of potential collection burden 
associated with this proposal, we are soliciting comment on--(1) 
whether an annual figure of 10,000 potentially impacted providers and 
suppliers could serve as a reasonable approximation; and (2) the 
potential cost burden to providers and suppliers.

I. ICRs Related to Payment Suspensions (Sec.  424.530(a)(7) and Sec.  
405.371)

    We are unable to estimate the total ICR burden of these provisions, 
for we cannot predict the number of instances in which we would deny 
enrollment under Sec.  424.530(a)(7) or suspend payment under Sec.  
405.371. Nor do we have sufficient historical data on which we can 
estimate the burden of payment suspensions, which would consist mostly 
of potential lost payments the amount of which we are unable to 
quantify; the principal ICR burden associated with Sec.  424.530(a)(7) 
would be the submission of Form CMS-855 applications following denials. 
To enhance our ability to formulate an estimate of the burden 
associated with this provision, we are soliciting comment on--(1) 
whether an annual figure of 1,000 potentially affected providers and 
suppliers could serve as a reasonable approximation; and (2) the 
potential cost burden to providers and suppliers. However, we stress 
that this is not an estimate since we do not have sufficient data on 
which to make an estimate at this time.

J. ICRs Related to Denials and Revocations for Other Federal Program 
Termination or Suspension (Sec.  424.530(a)(14))

    The principal ICR burden associated with this provision would 
involve the submission of Form CMS-855 applications following denials 
or following the expiration of reenrollment bars. However, we cannot 
project the total ICR burden associated with these new provisions 
because we cannot predict the number of instances in which we would 
deny or revoke

[[Page 10743]]

enrollment. To enhance our ability to formulate projections of the ICR 
burden associated with this provision, we are soliciting comment on--
(1) whether an annual figure of 2,500 potentially impacted providers 
and suppliers could serve as a reasonable approximation; and (2) the 
potential cost burden to providers and suppliers. However, we stress 
that this is not an estimate since we do not have sufficient data on 
which to make an estimate at this time.

K. ICRs Related to Extension of Revocation (Sec.  424.535(i))

    As this is a new prevision and there is no historical data on which 
to make an estimate, we cannot predict the number of instances in which 
we would revoke enrollment for this reason or the number of locations 
or enrollments that would be involved; thus, we are unable to estimate 
the total potential collection burden, which would mostly involve the 
submission of Form CMS-855 applications following the expiration of 
reenrollment bars To enhance our ability to formulate an estimate of 
the ICR burden associated with this provision, we are soliciting 
comment on--(1) whether annual figures of 5,000 potentially impacted 
providers and suppliers and 12,000 potentially revoked enrollments and 
terminated practice locations could serve as reasonable approximations; 
and (2) the potential cost burden to providers and suppliers. However, 
we stress that this is not an estimate since we do not have sufficient 
data on which to make an estimate at this time.

L. Voluntary Termination Pending Revocation (Sec.  424.535(j))

    As this is a new provision and there is no historical data on which 
to base a projection, we are unable to predict the number of instances 
in which we would revoke enrollment. Therefore, we cannot estimate the 
potential collection burden associated with Sec.  424.535(j), which 
would principally involve the submission of Form CMS-855 applications 
following the expiration of reenrollment bars. Moreover, since evidence 
of these activities is confined to the results of unique 
investigations, we believe the examples cited in the preamble text 
cannot form the basis of a representative sample from which to inform 
projections. However, to enhance our ability to project of the ICR 
burden associated with this provision, we are soliciting comment on--
(1) whether an annual figure of 2,000 potentially impacted providers 
and suppliers could serve as a reasonable approximation; and (2) the 
potential cost burden to providers and suppliers. However, we stress 
that this is not a projection since we do not have sufficient data on 
which to make a projection at this time.

M. ICRs Related to Part A/B Ordering, Certifying, Referring, and 
Prescribing (Sec. Sec.  424.507 and 424.516)

1. Enrollment
    The principal burden associated with this proposal would involve 
the completion of the applicable Form CMS-855.
    Based on CMS statistics, we estimate that approximately 200,000 
non-enrolled and non-opted out physicians and, when eligible under 
state law, non-physician practitioners, are ordering, certifying, 
referring or prescribing Part A or B services, items or drugs. Per 
revised Sec.  424.507, these individuals would be required to enroll in 
or opt-out of Medicare by January 1, 2018.
    We believe that these persons, assuming they do not opt-out, would 
complete the Form CMS-855O in lieu of the Form CMS-855I because the 
former application is shorter and the applicants are not seeking 
Medicare Part B billing privileges. As we are unable to precisely 
determine the percentage of the 200,000-individual universe that 
consists of physicians as opposed to non-physician practitioners, we 
will assume that 100,000 physicians and 100,000 non-physician 
practitioners would be affected, though we welcome comments on this 
estimate.
    Because of the relative brevity of the Form CMS-855O, we believe 
that physicians and non-physician practitioners would themselves 
complete the application, rather than delegating this task to staff. 
According to the most recent wage data provided by the Bureau of Labor 
Statistics (BLS) for May 2014 (see https://www.bls.gov/oes/current/oes_nat.htm#43-0000), the mean hourly wage for the general category of 
``Physicians and Surgeons'' is $93.74, and the mean hourly wage for the 
general BLS category of ``Health Diagnosing and Treating Practitioners, 
All Other'' is $40.89. With fringe benefits and overhead, the 
respective per hour rates are $187.48 and $81.78.
    On average, we project that it takes individuals approximately .5 
hours to complete and submit the Form CMS-855O (OMB Control No. 0938-
1135) or an opt-out affidavit. This results in an ICR burden for 
physicians of $9,374,000 (50,000 hours x $187.48). The burden for non-
physician practitioners would be $4,089,000 (50,000 hours x $81.78). 
The total ICR burden would thus be 100,000 hours at a cost of 
$13,463,000. We believe this burden would generally be incurred in 
2017, prior to the January 1, 2018 effective date.
2. Documentation
    We are also proposing in revised Sec.  424.516(f) that a provider 
or supplier furnishing a Part A or B service, item or drug, as well as 
the physician or, when permitted, eligible professional who ordered, 
certified, referred or prescribed the Part A or B service, item or drug 
must maintain documentation for 7 years from the date of the service 
and furnish access to that documentation upon a CMS or Medicare 
contractor request.
    The burden associated with the requirements in Sec.  424.516(f) 
would be the time and effort necessary to both maintain documentation 
on file and to furnish the information upon request to CMS or a 
Medicare contractor. While the requirement is subject to the PRA, we 
believe the associated burden is negligible. As discussed in the 
previously referenced November 19, 2008 final rule (73 FR 69915) and 
the April 27, 2012 final rule (77 FR 25313), we believe the burden 
associated with maintaining documentation and furnishing it upon 
request is a usual and customary business practice.

N. ICRs Related to Temporary Moratorium (Sec.  424.570)

    We are unable to estimate the number of applications that would be 
approved or denied as a result of our changes to Sec.  424.570, for we 
have insufficient data on which to base a precise projection. 
Consequently, we cannot estimate the ICR burden of these revisions; 
which would mostly involve the submission of Form CMS-855 applications 
by previously denied providers and suppliers following the lifting of a 
moratorium. To enhance our ability to formulate an estimate of the ICR 
burden associated with this provision, we are soliciting comment on--
(1) whether an annual figure of 2,000 potentially impacted providers 
and suppliers could serve as a reasonable approximation; and (2) the 
potential cost burden to providers and suppliers. However, we stress 
that this is not an estimate since we do not have sufficient data on 
which to make an estimate at this time.

O. ICRs Related to Surety Bonds (Sec.  424.57(d))

    We believe that CMS may reject some new and existing surety bonds 
based on surety non-payment, which would require the DMEPOS supplier to 
obtain a new surety bond in order to enroll in or maintain its 
enrollment in Medicare. This would require a supplier to do additional 
paperwork to obtain and

[[Page 10744]]

submit a new surety bond and to report this information to Medicare via 
the Form CMS-855S. This burden is approved under OMB Control Number 
0938-1065 and is estimated to take 3 hours to complete. However, we do 
not have adequate data to help us estimate the number of suppliers 
whose bonds would be rejected, or the number that would obtain new 
bonds, though we welcome public feedback regarding the possible burden.

P. ICRs Related to Reactivations (Sec.  424.540(b))

    We are unable to project the number of certifications that would be 
submitted versus the number of complete Form CMS-855 applications; 
therefore, we cannot predict the number of instances in which a Form 
CMS-855 would be requested. To enhance our ability to formulate a 
projection of the ICR burden associated with this provision, we are 
soliciting comment on--(1) whether an annual figure of 10,000 instances 
in which a Form CMS-855 would be requested could serve as a reasonable 
approximation; and (2) the potential cost burden to providers and 
suppliers. However, we stress that this is not an estimate since we do 
not have sufficient data on which to make an estimate at this time.

Q. Revision to Definition of Enrollment (Sec. Sec.  424.502; 424.505; 
424.510; 424.535(a))

    As these revisions are primarily technical in nature, we do not 
foresee an associated ICR burden.

R. Total ICR Overall Burden

    Based on the foregoing, Table 4 estimates the total ICR hour and 
Table 5 estimates the total ICR cost burdens in the first 3 years of 
this rule. For purposes of this estimate, the burden for revised Sec.  
424.507 would be incurred in the first year (projected to be 2017).

                          Table 4--Estimated Annual Reporting/Recordkeeping Hour Burden
----------------------------------------------------------------------------------------------------------------
                                                                      Year 1          Year 2          Year 3
----------------------------------------------------------------------------------------------------------------
Affiliations....................................................       8,352,500       8,352,500       8,352,500
Sec.   424.507..................................................         100,000               0               0
                                                                 -----------------------------------------------
    Total.......................................................       8,452,500       8,352,500       8,352,500
----------------------------------------------------------------------------------------------------------------


                          Table 5--Estimated Annual Reporting/Recordkeeping Cost Burden
----------------------------------------------------------------------------------------------------------------
                                                                      Year 1          Year 2          Year 3
----------------------------------------------------------------------------------------------------------------
Affiliations....................................................    $285,321,400    $285,321,400    $285,321,400
Sec.   424.507..................................................      13,463,000               0               0
                                                                 -----------------------------------------------
    Total.......................................................     298,784,400     285,321,400     285,321,400
----------------------------------------------------------------------------------------------------------------

    Since 3 years is the maximum length of an OMB approval, we must 
average these totals over a 3-year period. This results in an annual 
burden of 8,385,833 hours at a cost of $289,809,067.
    We welcome comments on all aspects of and estimates in our ICR 
section.
    If you comment on these information collection and recordkeeping 
requirements, please do either of the following:
    1. Submit your comments electronically as specified in the 
ADDRESSES section of this proposed rule; or
    2. Submit your comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Attention: CMS Desk Officer, 
[CMS-6058-P], Fax: (202) 395-6974; or Email: 
OIRA_submission@omb.eop.gov.

IV. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

V. Regulatory Impact Analysis

A. Statement of Need

    As previously stated, this proposed rule is necessary to implement 
sections 1866(j)(5) and 1902(kk)(3) of the Act, which require providers 
and suppliers to disclose information related to any current or 
previous affiliation with a provider or supplier that has uncollected 
debt; has been or is subject to a payment suspension under a federal 
health care program; has been excluded from participation under 
Medicare, Medicaid or CHIP; or has had its billing privileges denied or 
revoked. This proposed rule is also necessary to address other program 
integrity issues that have arisen. We believe that all of these 
provisions would--(1) enable CMS and the states to better track current 
and past relationships involving different providers and suppliers; and 
(2) assist our efforts to stem fraud, waste, and abuse, hence 
protecting the Medicare Trust Funds.

B. Overall Impact

1. Background
    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4) and Executive Order 13132 on Federalism (August 4, 
1999) and the Congressional Review Act (5 U.S.C. 804(2)).
    Section 3(f) of Executive Order 12866 defines a ``significant 
regulatory action'' as an action that is likely to result in a rule--
(1) having an annual effect on the economy of $100 million or more in 
any 1 year, or adversely and materially affecting a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or state, local or tribal governments or communities 
(also referred to as ``economically significant''); (2) creating a 
serious inconsistency or otherwise interfering with an action taken or

[[Page 10745]]

planned by another agency; (3) materially altering the budgetary 
impacts of entitlement grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (4) raising novel 
legal or policy issues arising out of legal mandates, the President's 
priorities or the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). The costs of our proposals would exceed $100 million in each of 
the first 3 years of this proposed rule. (See sections III. and V.C. of 
this proposed rule.) We estimate that this rulemaking is ``economically 
significant'' as measured by the $100 million threshold, and thus also 
a major rule under the Congressional Review Act. Accordingly, we have 
prepared a Regulatory Impact Analysis, which to the best of our ability 
presents the costs and benefits of the rulemaking. Therefore, OMB has 
reviewed these proposed regulations, and the Departments have provided 
the following assessment of their impact.
2. Impact
    There are several categories of costs that would be associated with 
this rule.
    First, providers and suppliers would incur costs in completing all 
or part of the applicable Form CMS-855. Those costs that we are able to 
estimate are outlined in section III. of this proposed rule.
    Second, denied and revoked suppliers could incur costs associated 
with potential lost billings and the filing of appeals of denials and 
revocations. However, no estimate is possible because--(1) we cannot 
project the number of providers and suppliers that would be denied or 
revoked, as these are new provisions for which there is no precedent 
upon which to base an estimate; and (2) each provider and supplier and 
their billing amounts are different.
    Third, we believe that CMS, Medicare contractors, and the states 
would incur costs, in implementing and enforcing our proposed 
affiliation disclosure provision. These could include information 
technology system changes and provider education. We have no means of 
predicting these costs, as these are new provisions for which there is 
little precedent upon which to base cost estimates; moreover, each 
state Medicaid program varies in terms of size, system needs, and 
provider outreach activities. We solicit comment, however, on the types 
of costs that may be incurred and the potential amount of those costs.
    We believe this rule would have benefits resulting from the denial 
or revocation of providers and suppliers that pose program integrity 
risks to Medicare, Medicaid, and CHIP. However, we are unable to 
project the resultant potential savings to these programs.
    This rule would not involve transfers from providers and suppliers 
to the federal government.

C. Anticipated Effects

    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organization, and small governmental 
jurisdictions. Most entities and most other providers and suppliers are 
small entities, either by nonprofit status or by having revenues less 
than $7.5 million to $38.5 million in any 1 year. Individuals and 
states are not included in the definition of a small entity.
    For several reasons, we do not believe that this proposed rule 
would have a significant economic impact on a substantial number of 
small businesses. First, the furnishing of affiliation data and the 
completion of the Form CMS 855O would be required very infrequently, in 
many cases either only one time or once every several years. The cost 
burden per provider or supplier (only 0.5 hours for the Form CMS-855O 
and 10 hours for affiliation data, the latter of which is a high end 
estimate) would be less than $1,000, which would not be a significant 
burden on a provider or supplier. (See section III. of this proposed 
rule.) Second, it is true that some small businesses could be denied 
enrollment or have their enrollments revoked under our provisions. Yet 
the number of denials and revocations per year is currently--and would 
continue to be under our new provisions--very small when compared to 
the total number of enrolled providers and suppliers nationwide. 
Therefore, we do not believe that our new denial and revocation reasons 
would impact a substantial number of small businesses.

D. Effects on Small Rural Hospitals

    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 603 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, and 
therefore the Secretary has determined, that this proposed rule would 
not have a significant impact on the operations of a substantial number 
of small rural hospitals.

E. Unfunded Mandates

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 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. In 2015, that 
is approximately $144 million. This rule does not mandate any 
requirements for state, local or tribal governments or for the private 
sector, although we noted earlier the possibility that states may incur 
costs associated with system changes, provider education, and reporting 
data to CMS concerning Sec.  455.107.

F. Executive Order 13132

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law or otherwise has federalism 
implications. Since this regulation does not impose any costs on state 
or local governments, the requirements of Executive Order 13132 are not 
applicable.

G. Accounting Statement and Table

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/omb/circulars/a0004/a-4/pdf), in Table 6 we have 
prepared an accounting statement showing estimates, over the first 3 
years of the rule's implementation, of the total cost burden to 
providers and suppliers for reporting data using, respectively, 7 
percent and 3 percent annualized discount rates.

[[Page 10746]]



                         Table 6--Accounting Statement Classification of Estimated Costs
                                                 [$ in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                Units
                                                    ------------------------------------------------------------
         Category  Costs *              Estimates                     Discount rate
                                                       Year dollar        (90%)             Period covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($million/               289.8            2015               7  FY 2017-FY 2019
 year).                                       289.8            2015               3  FY 2017- FY 2019
----------------------------------------------------------------------------------------------------------------
* Cost associated with the information collection requirements.

H. Alternatives Considered

    We considered and adopted several alternatives to reduce the 
overall burden of our provisions.
    First, we contemplated a 10-year timeframe for the affiliation 
``look-back'' period, but we propose to limit the timeframe to 5 years. 
We believe this would ease the burden on Medicare, Medicaid, and CHIP 
providers and suppliers by restricting the volume of information that 
must be reported. Similarly, we propose that changed data regarding 
past affiliations need not be reported.
    Second, we proposed a ``knew or should reasonably have known'' 
standard for disclosing affiliations. We believe this would reduce the 
burden on providers and suppliers in terms of researching and 
investigating information on entities and individuals with whom they 
have or have had a relationship. We recognize that providers and 
suppliers may occasionally experience difficulty in obtaining certain 
affiliation data if, for instance, they must contact a previously 
affiliated provider or supplier for the information. We have also 
decided to solicit feedback from the public concerning whether we 
should establish a ``reasonableness'' test, whereby we explain what 
constitutes a sufficient effort to obtain information in the context of 
the ``should reasonably have known'' standard.
    Third, we have established a January 1, 2018 effective date for 
compliance with revised Sec.  424.507. We contemplated possible 
effective dates in 2017, but we believe that a January 1, 2018 date 
would help give providers and suppliers sufficient time to enroll in or 
opt-out of Medicare.
    Although we considered 5-year and 10-year lookback periods for 
disclosable events, we are not proposing a specific lookback period. 
Even if a particular action occurred more than 5 or years ago, it could 
still raise concerns about the potential risk a newly enrolling 
provider poses. For this reason, we must retain the flexibility to 
address a variety of factual scenarios. Nonetheless, we recognize that 
a definitive lookback period would be less burdensome (in terms of 
researching and reporting information) than an unlimited period, and 
have solicited public comment regarding whether a specific period 
should be used and, if so, the appropriate length.

I. Uncertainties

    There are two principal uncertainties associated with this proposed 
rule.
    First, we have no means of projecting the number of providers and 
suppliers that would be denied or revoked under our new and revised 
provisions. This is because we have little historical data on which we 
can base a precise estimate.
    Second, we are uncertain as to the number of physicians or non-
physician practitioners who would be required to enroll in or opt-out 
of Medicare pursuant to revised Sec.  424.507. The figures we used in 
sections III.L. of this proposed rule are merely rough estimates, and 
we would appreciate comments from providers and suppliers regarding the 
potential number of affected parties.
    In accordance with the provisions of Executive Order 12866, this 
rule was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 405

    Administrative practice and procedure, Health facilities, Health 
professions, Kidney diseases. Medical devices, Medicare Reporting and 
recordkeeping requirements, Rural areas, X-rays.

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare, Reporting and recordkeeping requirements.

42 CFR Part 455

    Fraud, Grant programs--health, Health facilities, Health 
professions, Investigations, Medicaid Reporting and recordkeeping 
requirements.

42 CFR Part 457

    Administrative practice and procedure, Grant programs--health, 
Health insurance, Reporting and recordkeeping requirements.
    For the reasons stated in the preamble of this proposed rule, the 
Centers for Medicare & Medicaid Services proposes to amend 42 CFR 
Chapter IV as follows:

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

0
1. The authority citation for part 405 continues to read as follows:

    Authority:  Secs. 205(a), 1102, 1861, 1862(a), 1869, 1871, 1874, 
1881, and 1886(k) of the Social Security Act (42 U.S.C. 405(a), 
1302, 1395x, 1395y(a), 1395ff, 1395hh, 1395kk, 1395rr and 
1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C. 
263a).

0
2. Amend Sec.  405.371 by--
0
a. Revising paragraph (a) introductory text.
0
b. Amending paragraph (a)(1) by removing the ``;'' at the end of the 
paragraph and adding in its place ``.''
0
c. Amending paragraph (a)(2) by removing ``; or'' at the end of 
paragraph and adding in its place ``.''.
0
d. Adding a new paragraph (a)(4).
    The revision and addition read as follows.


Sec.  405.371  Suspension, offset, and recoupment of Medicare payments 
to providers and suppliers of services.

    (a) General rules--Medicare payments to providers and suppliers, as 
authorized under this subchapter (excluding payments to beneficiaries), 
may be one of the following:
* * * * *
    (4) Suspended, in whole or in part, by CMS or a Medicare contractor 
if the provider or supplier has been subject to a Medicaid payment 
suspension under Sec.  455.23(a)(1) of this chapter.
* * * * *

[[Page 10747]]

0
3. Amend Sec.  405.425 by revising paragraphs (i) and (j) to read as 
follows:


Sec.  405.425  Effects of opting--out of Medicare.

* * * * *
    (i) The physician or practitioner who has not been excluded under 
sections 1128, 1156 or 1892 of Social Security Act or whose Medicare 
enrollment is not revoked under Sec.  424.535 of this chapter may 
order, certify the need for, or refer a beneficiary for Medicare--
covered items and services, provided the physician or practitioner is 
not paid, directly or indirectly, for such services (except as provided 
in Sec.  405.440).
    (j) The physician or practitioner who is excluded under sections 
1128, 1156 or 1892 of the Social Security Act or whose Medicare 
enrollment is revoked under Sec.  424.535 of this chapter may not 
order, prescribe or certify the need for Medicare-covered items and 
services except as provided in Sec.  1001.1901 of this title, and must 
otherwise comply with the terms of the exclusion in accordance with 
Sec.  1001.1901 effective with the date of the exclusion.

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
4. 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
5. Amend Sec.  424.57 by adding paragraph (d)(16) to read as follows:


Sec.  424.57  Special payment rules for items furnished by DMEPOS 
suppliers and issuance of DMEPOS supplier billing privileges.

* * * * *
    (d) * * *
    (16) Surety non-payment. CMS may reject an enrolling or enrolled 
DMEPOS supplier's new or existing surety bond if the surety that issued 
the bond has failed to make a required payment to CMS under paragraph 
(d) of this section. In making its determination, CMS considers the 
following factors:
    (i) The total number of Medicare-enrolled DMEPOS suppliers to which 
the surety has issued surety bonds.
    (ii) The total number of instances in which the surety has failed 
to make payment to CMS.
    (iii) The reason(s) for the surety's failure(s) to pay.
    (iv) The percentage of instances in which the surety has failed to 
pay.
    (v) The total amount of money that the surety has failed to pay.
    (vi) Any other information that CMS deems relevant to its 
determination.
* * * * *
0
6. Amend Sec.  424.502 by adding the definitions of ``Affiliation'', 
``NPI'', and ``PECOS'' in alphabetical order, and by amending the 
definition of ``Enroll/Enrollment'' by revising the introductory text 
and paragraphs (2) and (4) to read as follows:


Sec.  424.502  Definitions.

* * * * *
    Affiliation means, for purposes of applying Sec.  424.519, any of 
the following:
    (1) A 5 percent or greater direct or indirect ownership interest 
that an individual or entity has in another organization.
    (2) A general or limited partnership interest (regardless of the 
percentage) that an individual or entity has in another organization.
    (3) An interest in which an individual or entity exercises 
operational or managerial control over or directly or indirectly 
conducts the day-to-day operations of another organization (including, 
for purposes of this provision, sole proprietorships), either under 
contract or through some other arrangement, regardless of whether or 
not the managing individual or entity is a W-2 employee of the 
organization.
    (4) An interest in which an individual is acting as an officer or 
director of a corporation.
    (5) Any reassignment relationship under Sec.  424.80.
* * * * *
    Enroll/Enrollment means the process that Medicare uses to establish 
eligibility to submit claims for Medicare-covered items and services, 
and the process that Medicare uses to establish eligibility to order, 
certify, refer or prescribe Medicare-covered Part A or B services, 
items or drugs, or to prescribe Part D drugs.
* * * * *
    (2) Except for those suppliers that complete the Form CMS-855O, 
CMS-identified equivalent, successor form or process for the sole 
purpose of obtaining eligibility to order, certify, refer, or prescribe 
Medicare-covered Part A or B services, items or drugs, or to prescribe 
Part D drugs, validating the provider's or supplier's eligibility to 
provide items or services to Medicare beneficiaries.
* * * * *
    (4) Except for those suppliers that complete the Form CMS-855O, 
CMS-identified equivalent, successor form or process for the sole 
purpose of obtaining eligibility to order, certify, refer or prescribe 
Medicare-covered Part A or B services, items or drugs, or to prescribe 
Part D drugs, granting the Medicare provider or supplier Medicare 
billing privileges.
* * * * *
    NPI stands for National Provider Identifier.
* * * * *
    PECOS stands for Internet--based Provider Enrollment, Chain, and 
Ownership System.
* * * * *
0
7. Revise Sec.  424.505 to read as follows:


Sec.  424.505  Basic enrollment requirement.

    To receive payment for covered Medicare items or services from 
either Medicare (in the case of an assigned claim) or a Medicare 
beneficiary (in the case of an unassigned claim), a provider or 
supplier must be enrolled in the Medicare program. Except for those 
suppliers that complete the Form CMS-855O or CMS-identified equivalent, 
successor form or process for the sole purpose of obtaining eligibility 
to order, certify, refer, or prescribe Medicare-covered Part A or B 
services, items or drugs, or to prescribe Part D drugs, once enrolled 
the provider or supplier receives billing privileges and is issued a 
valid billing number effective for the date a claim was submitted for 
an item that was furnished or a service that was rendered. (See 45 CFR 
part 162 for information on the NPI and its use as the Medicare billing 
number.)
0
8. Revise Sec.  424.507 to read as follows:


Sec.  424.507  Ordering, certifying, referring and prescribing covered 
services, items, and drugs for Medicare beneficiaries.

    (a) Conditions for payment of claims for ordered, certified, 
referred, or prescribed covered Part A or B services, items or drugs--
(1) Ordered, certified, referred, or prescribed covered Part A or B 
services, items or drugs. To receive payment for ordered, certified, 
referred, or prescribed covered Part A or B services, items or drugs, a 
provider or supplier must meet all of the following requirements:
    (i) The ordered, certified, referred, or prescribed covered Part A 
or B service, item or drug must have been ordered, certified, referred 
or prescribed by a physician or, when permitted, an eligible 
professional (as defined in Sec.  424.506(a)).
    (ii) The claim from the provider or supplier must contain the legal 
name and the NPI of the physician or the eligible professional (as 
defined in Sec.  424.506(a)) who ordered, certified, referred or 
prescribed the Part A or B service, item or drug.
    (iii) The physician or, when permitted, other eligible 
professional, as defined in Sec.  424.506(a), who ordered,

[[Page 10748]]

certified, referred, or prescribed the Part A or B service, item or 
drug must--
    (A) Be identified by his or her legal name;
    (B) Be identified by his or her NPI; and
    (C)(1) Be enrolled in Medicare in an approved status; or
    (2) Have validly opted-out of the Medicare program.
    (iv) If the Part A or B service, item or drug is ordered, 
certified, referred, or prescribed by--
    (A) An unlicensed resident (as defined in Sec.  413.75 of this 
chapter), or by a non-enrolled licensed resident (as defined in Sec.  
413.75 of this chapter), the claim must identify a teaching physician, 
who must be enrolled in Medicare in an approved status, as follows:
    (1) As the ordering, certifying, referring or prescribing supplier.
    (2) By his or her legal name.
    (3) By his/her NPI.
    (B) A licensed resident (as defined in Sec.  413.75 of this 
chapter), he or she must have a provisional license or be otherwise 
permitted by State law, where the resident is enrolled in an approved 
graduate medical education program, to practice or to order, certify, 
refer or prescribe such services, items, and drugs, the claim must 
identify by legal name and NPI either of the following:
    (1) Resident, who is enrolled in Medicare in an approved status to 
order, certify, refer or prescribe.
    (2) Teaching physician, who is enrolled in Medicare in an approved 
status.
    (2) Part A and B beneficiary claims. To receive payment for 
ordered, certified, referred, or prescribed covered Part A or B 
services, items or drugs, a beneficiary's claim must meet all of the 
following requirements:
    (i) The physician or, when permitted, other eligible professional 
(as defined in Sec.  424.506(a)) who ordered, certified, referred, or 
prescribed the Part A or B service, item or drug must--
    (A) Be identified by his or her legal name; and
    (B)(1) Be enrolled in Medicare in an approved status; or
    (2) Have validly opted out of the Medicare program.
    (ii) If the Part A or B service, item or drug is ordered, 
certified, referred or prescribed by--
    (A) An unlicensed resident (as defined in Sec.  413.75 of this 
chapter) or a non-enrolled licensed resident, (as defined in Sec.  
413.75 of this chapter) the claim must identify a teaching physician, 
who must be enrolled in Medicare in an approved status as follows:
    (1) As the ordering, certifying, referring or prescribing supplier.
    (2) By his or her legal name.
    (B) A licensed resident (as defined in Sec.  413.75 of this 
chapter), he or she must have a provisional license or are otherwise 
permitted by State law, where the resident is enrolled in an approved 
graduate medical education program, to practice or to order, certify, 
refer, or prescribe such services, items or drugs, the claim must 
identify by legal name the--
    (1) Resident, who is enrolled in Medicare in an approved status to 
order, certify, refer or prescribe; or
    (2) Teaching physician, who is enrolled in Medicare in an approved 
status.
    (b) Denial of provider or supplier submitted claims. 
Notwithstanding Sec.  424.506(c)(3), a Medicare contractor denies a 
claim from a provider or a supplier for ordered, certified, referred or 
prescribed Part A or B covered services, items or drugs described in 
paragraph (a) of this section if the claim does not meet the 
requirements of paragraph (a)(1) of this section.
    (c) Denial of beneficiary-submitted claims. A Medicare contractor 
denies a claim from a Medicare beneficiary for ordered, certified, 
referred or prescribed covered Part A or B services, items or drugs as 
described in paragraph (a) of this section if the claim does not meet 
the requirements of paragraph (a)(2) of this section.
0
9. Amend Sec.  424.510 by revising paragraph (a)(3) to read as follows:


Sec.  424.510  Requirements for enrolling in the Medicare program.

    (a) * * *
    (3) To be enrolled solely to order, certify, refer or prescribe 
Medicare-covered Part A or B services, items or drugs, or to prescribe 
Part D drugs, a physician or non-physician practitioner must meet the 
requirements specified in paragraph (d) of this section except for 
paragraphs (d)(2)(iii)(B), (d)(2)(iv), (d)(3)(ii), and (d)(5), (6), and 
(9) of this section.
* * * * *
0
10. Amend Sec.  424.516 by revising paragraphs (f)(1)(i) introductory 
text, (f)(1)(ii), (f)(2)(i) introductory text, and (f)(2)(ii) to read 
as follows:


Sec.  424.516  Additional provider and supplier requirements for 
enrolling and maintaining active enrollment status in the Medicare 
program.

* * * * *
    (f) * * *
    (1)(i) A provider or a supplier that furnishes covered ordered, 
certified, referred, or prescribed Part A or B services, items or drugs 
is required to--
* * * * *
    (ii) The documentation includes written and electronic documents 
(including the NPI of the physician or, when permitted, other eligible 
professional who ordered, certified, referred, or prescribed the Part A 
or B service, item or drug) relating to written orders, certifications, 
referrals, prescriptions, and requests for payments for Part A or B 
services, items or drugs.
    (2)(i) A physician or, when permitted, an eligible professional who 
orders, certifies, refers, or prescribes Part A or B services, items or 
drugs is required to--
* * * * *
    (ii) The documentation includes written and electronic documents 
(including the NPI of the physician or, when permitted, other eligible 
professional who ordered, certified, referred, or prescribed the Part A 
or B service, item or drug) relating to written orders, certifications, 
referrals, prescriptions or requests for payments for Part A or B 
services, items, or drugs.
0
11. Add Sec.  424.519 to read as follows:


Sec.  424.519  Disclosure of affiliations.

    (a) Definitions. For purposes of this section only, the following 
terms apply:
    (1) ``Uncollected debt'' only applies to the following:
    (i) Medicare, Medicaid or CHIP overpayments for which CMS or the 
state has sent notice of the debt to the affiliated provider or 
supplier.
    (ii) Civil money penalties (as defined in Sec.  424.57(a)).
    (iii) Assessments (as defined in Sec.  424.57(a)).
    (2) ``Revoked,'' ``Revocation,'' ``Terminated,'' and 
``Termination'' include situations where the affiliated provider or 
supplier voluntarily terminated its Medicare, Medicaid or CHIP 
enrollment to avoid a potential revocation or termination.
    (b) General. A provider or supplier that is submitting an initial 
or revalidating Form CMS-855 enrollment application (via paper or 
Internet--based PECOS) must disclose whether it or any of its owning or 
managing employees or organizations (consistent with the terms 
``owner'' and ``managing employee'' as defined in Sec.  424.502) has 
or, within the previous 5 years, has had an affiliation with a 
currently or formerly enrolled Medicare, Medicaid or CHIP provider or 
supplier that has or had any of the following:
    (1) Currently has an uncollected debt to Medicare, Medicaid or 
CHIP, regardless of the following:

[[Page 10749]]

    (i) The amount of the debt.
    (ii) Whether the debt is currently being repaid.
    (iii) Whether the debt is currently being appealed.
    (2) Has been or is subject to a payment suspension under a federal 
health care program (as that term is defined in section 1128B(f) of the 
Act), regardless of when the payment suspension occurred or was 
imposed.
    (3) Has been or is excluded from participation in Medicare, 
Medicaid or CHIP, regardless of whether the exclusion is currently 
being appealed or when the exclusion occurred or was imposed.
    (4) Has had its Medicare, Medicaid or CHIP enrollment denied, 
revoked or terminated, regardless of the following:
    (i) The reason for the denial, revocation or termination.
    (ii) Whether the denial, revocation or termination is currently 
being appealed.
    (iii) When the denial, revocation or termination occurred or was 
imposed.
    (c) Information. The provider or supplier must disclose the 
following information about each reported affiliation:
    (1) General identifying data about the affiliated provider or 
supplier. This includes:
    (i) Legal name as reported to the Internal Revenue Service or the 
Social Security Administration (if the affiliated provider or supplier 
is an individual).
    (ii) ``Doing business as'' name (if applicable).
    (iii) Tax identification number.
    (iv) NPI.
    (2) Reason for disclosing the affiliated provider or supplier.
    (3) Specific data regarding the affiliation relationship, including 
the following:
    (i) Length of the relationship.
    (ii) Type of relationship.
    (iii) Degree of affiliation.
    (4) If the affiliation has ended, the reason for the termination.
    (d) Mechanism. The information required to be disclosed under 
paragraphs (b) and (c) this section must be furnished to CMS or its 
contractors via the Form CMS-855 application (paper or the Internet-
based PECOS enrollment process).
    (e) Denial or revocation. The failure of the provider or supplier 
to fully and completely disclose the information specified in 
paragraphs (b) and (c) of this section when the provider or supplier 
knew or should reasonably have known of this information may result in 
either of the following:
    (1) The denial of the provider's or supplier's initial enrollment 
application under Sec.  424.530(a)(1) and, if applicable, Sec.  
424.530(a)(4).
    (2) The revocation of the provider's or supplier's Medicare 
enrollment under Sec.  424.535(a)(1) and, if applicable, Sec.  
424.535(a)(4).
    (f) Undue risk. Upon receiving the information described in 
paragraphs (b) and (c) of this section, CMS determines whether any of 
the disclosed affiliations poses an undue risk of fraud, waste or abuse 
by considering the following factors:
    (1) The duration of the affiliation.
    (2) Whether the affiliation still exists and, if not, how long ago 
it ended.
    (3) The degree and extent of the affiliation.
    (4) If applicable, the reason for the termination of the 
affiliation.
    (5) Regarding the affiliated provider's or supplier's action under 
paragraph (b) of this section:
    (i) The type of action.
    (ii) When the action occurred or was imposed.
    (iii) Whether the affiliation existed when the action occurred or 
was imposed.
    (iv) If the action is an uncollected debt:
    (A) The amount of the debt.
    (B) Whether the affiliated provider or supplier is repaying the 
debt.
    (C) To whom the debt is owed.
    (v) If a denial, revocation, termination, exclusion or payment 
suspension is involved, the reason for the action.
    (6) Any other evidence that CMS deems relevant to its 
determination.
    (g) Determination of undue risk. A determination by CMS that a 
particular affiliation poses an undue risk of fraud, waste or abuse 
will result in, as applicable, the denial of the provider's or 
supplier's initial enrollment application under Sec.  424.530(a)(13) or 
the revocation of the provider's or supplier's Medicare enrollment 
under Sec.  424.535(a)(19).
    (h) New or changed information. (1) A provider or supplier must 
report the following:
    (i) New or changed information regarding existing affiliations.
    (ii) Information regarding new affiliations.
    (2) A provider or supplier is not required to do either of the 
following:
    (i) Report new or changed information regarding past affiliations 
(except as part of a Form CMS-855 revalidation application).
    (ii) Report affiliation data in that portion of the Form CMS-855 
application that collects affiliation information if the same data is 
being reported in the ``owning or managing control'' (or its successor) 
section of the Form CMS-855 application.
    (i) Undisclosed affiliations. CMS may apply Sec.  424.530(a)(13) or 
Sec.  424.535(a)(19) to situations where a disclosable affiliation (as 
described in Sec.  424.519(b) and (c)) poses an undue risk of fraud, 
waste or abuse, but the provider or supplier has not yet reported or is 
not required at that time to report the affiliation to CMS.
0
12. Amend Sec.  424.530 by revising paragraph (a)(7) and adding 
paragraphs (a)(12), (13), (14), and (f) to read as follows:


Sec.  424.530  Denial of enrollment in the Medicare program.

    (a) * * *
    (7) Payment suspension. (i) The provider or supplier, or any owning 
or managing employee or organization of the provider or supplier, is 
currently under a Medicare or Medicaid payment suspension as defined in 
Sec. Sec.  405.370 through 405.372 or in Sec.  455.23, of this chapter.
    (ii) CMS may apply this provision to the provider or supplier under 
any of the provider's, supplier's, or owning or managing employee's or 
organization's current or former names, numerical identifiers, or 
business identities or to any of its existing enrollments.
    (iii) In determining whether a denial is appropriate, CMS considers 
the following factors:
    (A) The specific behavior in question.
    (B) Whether the provider or supplier is the subject of other 
similar investigations.
    (C) Any other information that CMS deems relevant to its 
determination.
* * * * *
    (12) Revoked under different name, numerical identifier or business 
identity. The provider or supplier is currently revoked under a 
different name, numerical identifier or business identity, and the 
applicable reenrollment bar period has not expired. In determining 
whether a provider or supplier is a currently revoked provider or 
supplier under a different name, numerical identifier or business 
identity, CMS investigates the degree of commonality by considering the 
following factors:
    (i) Owning and managing employees and organizations (regardless of 
whether they have been disclosed on the Form CMS-855 application).
    (ii) Geographic location.
    (iii) Provider or supplier type.
    (iv) Business structure.
    (v) Any evidence indicating that the two parties are similar or 
that the provider or supplier was created to circumvent the revocation 
or reenrollment bar.
    (13) Affiliation that poses undue risk of fraud. CMS determines 
that the

[[Page 10750]]

provider or supplier has or has had an affiliation under Sec.  424.519 
that poses an undue risk of fraud, waste or abuse to the Medicare 
program.
    (14) Other program termination or suspension. (i) The provider or 
supplier is currently terminated or suspended (or otherwise barred) 
from participation in a particular State Medicaid program or any other 
federal health care program, or the provider's or supplier's license is 
currently revoked or suspended in a State other than that in which the 
provider or supplier is enrolling. In determining whether a denial 
under this paragraph is appropriate, CMS considers the following 
factors:
    (A) The reason(s) for the termination, suspension or revocation.
    (B) Whether, as applicable, the provider or supplier is currently 
terminated or suspended (or otherwise barred) from more than one 
program (for example, more than one State's Medicaid program), has been 
subject to any other sanctions during its participation in other 
programs or by any other State licensing boards or has had any other 
final adverse actions imposed against it.
    (C) Any other information that CMS deems relevant to its 
determination.
    (ii) CMS may apply paragraph (a)(14)(i) of this section to the 
provider or supplier under any of its current or former names, 
numerical identifiers or business identities, and regardless of whether 
any appeals are pending.
* * * * *
    (f) Reapplication bar. CMS may prohibit a prospective provider or 
supplier from enrolling in Medicare for up to 3 years if its enrollment 
application is denied because the provider or supplier submitted false 
or misleading information on or with (or omitted information from) its 
application in order to gain enrollment in the Medicare program.
    (1) The reapplication bar applies to the prospective provider or 
supplier under any of its current, former, or future names, numerical 
identifiers or business identities.
    (2) CMS determines the bar's length by considering the following 
factors:
    (i) The materiality of the information in question.
    (ii) Whether there is evidence to suggest that the provider or 
supplier purposely furnished false or misleading information or 
deliberately withheld information.
    (iii) Whether the provider or supplier has any history of final 
adverse actions or Medicare or Medicaid payment suspensions.
    (iv) Any other information that CMS deems relevant to its 
determination.
0
13. Amend Sec.  424.535 by--
0
a. In paragraph (a) introductory text by removing the term ``billing 
privileges'' and adding in its place the phrase ``enrollment''.
0
b. Revising paragraphs (a)(9) and (12).
0
c. Adding and reserving paragraphs (a)(15) and (16).
0
d. Adding paragraphs (a)(17) through (21).
0
e. Revising paragraph (c).
0
f. Adding paragraphs (i) and (j).
    The additions and revisions read as follows:


Sec.  424.535  Revocation of enrollment in the Medicare program.

* * * * *
    (a) * * *
    (9) Failure to report. The provider or supplier did not comply with 
the reporting requirements specified in Sec.  424.516(d) or (e), Sec.  
410.33(g)(2) of this chapter or Sec.  424.57(c)(2). In determining 
whether a revocation under this paragraph is appropriate, CMS considers 
the following factors:
    (i) Whether the data in question was reported.
    (ii) If the data was reported, how belatedly.
    (iii) The materiality of the data in question.
    (iv) Any other information that CMS deems relevant to its 
determination.
* * * * *
    (12) Other program termination. (i) The provider or supplier is 
terminated, revoked or otherwise barred from participation in a 
particular Medicaid program or any other federal health care program. 
In determining whether a revocation under this paragraph is 
appropriate, CMS considers the following factors:
    (A) The reason(s) for the termination or revocation.
    (B) Whether the provider or supplier is currently terminated, 
revoked or otherwise barred from more than one program (for example, 
more than one State's Medicaid program) or has been subject to any 
other sanctions during its participation in other programs.
    (C) Any other information that CMS deems relevant to its 
determination.
    (ii) Medicare may not terminate unless and until a provider or 
supplier has exhausted all applicable appeal rights.
    (iii) CMS may apply paragraph (a)(12)(i) of this section to the 
provider or supplier under any of its current or former names, 
numerical identifiers or business identities.
* * * * *
    (15)-(16) [Reserved]
    (17) Debt referred to the United States Department of Treasury. The 
provider or supplier has an existing debt that CMS refers to the United 
States Department of Treasury. In determining whether a revocation 
under this paragraph is appropriate, CMS considers the following 
factors:
    (i) The reason(s) for the failure to fully repay the debt (to the 
extent this can be determined).
    (ii) Whether the provider or supplier has attempted to repay the 
debt.
    (iii) Whether the provider or supplier has responded to CMS' 
requests for payment.
    (iv) Whether the provider or supplier has any history of final 
adverse actions or Medicare or Medicaid payment suspensions.
    (v) The amount of the debt.
    (vi) Any other evidence that CMS deems relevant to its 
determination.
    (18) Revoked under different name, numerical identifier or business 
identity. The provider or supplier is currently revoked under a 
different name, numerical identifier or business identity, and the 
applicable reenrollment bar period has not expired. In determining 
whether a provider or supplier is a currently revoked provider or 
supplier under a different name, numerical identifier or business 
identity, CMS investigates the degree of commonality by considering the 
following factors:
    (i) Owning and managing employees and organizations (regardless of 
whether they have been disclosed on the Form CMS-855 application).
    (ii) Geographic location.
    (iii) Provider or supplier type.
    (iv) Business structure.
    (v) Any evidence indicating that the two parties are similar or 
that the provider or supplier was created to circumvent the revocation 
or reenrollment bar.
    (19) Affiliation that poses an undue risk. CMS determines that the 
provider or supplier has or has had an affiliation under Sec.  424.519 
that poses an undue risk of fraud, waste or abuse to the Medicare 
program.
    (20) Billing from non-compliant location. CMS may revoke a 
provider's or supplier's Medicare enrollment, including all of the 
provider's or supplier's practice locations regardless of whether they 
are part of the same enrollment, if the provider or supplier billed for 
services performed at or items furnished from a location that it knew 
or should have known did not comply with Medicare enrollment 
requirements. In determining whether and how many of the provider's or 
supplier's other locations should be revoked, CMS considers the 
following factors:

[[Page 10751]]

    (i) The reason(s) for and the specific facts behind the location's 
non-compliance.
    (ii) The number of additional locations involved.
    (iii) Whether the provider or supplier has any history of final 
adverse actions or Medicare or Medicaid payment suspensions.
    (iv) The degree of risk that the location's continuance poses to 
the Medicare Trust Funds.
    (v) The length of time that the non-compliant location was non-
compliant.
    (vi) The amount that was billed for services performed at or items 
furnished from the non-compliant location.
    (vii) Any other evidence that CMS deems relevant to its 
determination.
    (21) Abusive ordering, certifying, referring, or prescribing of 
Part A or B services, items or drugs. The physician or eligible 
professional has a pattern or practice of ordering, certifying, 
referring or prescribing Medicare Part A or B services, items or drugs 
that is abusive, represents a threat to the health and safety of 
Medicare beneficiaries or otherwise fails to meet Medicare 
requirements. In making its determination as to whether such a pattern 
or practice exists, CMS considers the following factors:
    (i) Whether the physician's or eligible professional's diagnoses 
support the orders, certifications, referrals or prescriptions in 
question.
    (ii) Whether there are instances where the necessary evaluation of 
the patient for whom the service, item or drug was ordered, certified, 
referred or prescribed could not have occurred (for example, the 
patient was deceased or out of state at the time of the alleged office 
visit).
    (iii) The number and type(s) of disciplinary actions taken against 
the physician or eligible professional by the licensing body or medical 
board for the state or states in which he or she practices, and the 
reason(s) for the action(s).
    (iv) Whether the physician or eligible professional has any history 
of final adverse actions (as that term is defined in Sec.  424.502).
    (v) The length of time over which the pattern or practice has 
continued.
    (vi) How long the physician or eligible professional has been 
enrolled in Medicare.
    (vii) The number and type(s) of malpractice suits that have been 
filed against the physician or eligible professional related to 
ordering, certifying, referring or prescribing that have resulted in a 
final judgment against the physician or eligible professional or in 
which the physician or eligible professional has paid a settlement to 
the plaintiff(s) (to the extent this can be determined).
    (viii) Whether any State Medicaid program or any other public or 
private health insurance program has restricted, suspended, revoked or 
terminated the physician's or eligible professional's ability to 
practice medicine, and the reason(s) for any such restriction, 
suspension, revocation or termination.
    (ix) Any other information that CMS deems relevant to its 
determination.
* * * * *
    (c) Reapplying after revocation. (1) After a provider or supplier 
has had their enrollment revoked, they are barred from participating in 
the Medicare program from the effective date of the revocation until 
the end of the reenrollment bar. The reenrollment bar--
    (i) Begins 30 days after CMS or its contractor mails notice of the 
revocation and lasts a minimum of 1 year, but not greater than 10 years 
(except for the situations described in paragraphs (c)(2) and (3) of 
this section), depending on the severity of the basis for revocation.
    (ii) Does not apply in the event a revocation of Medicare 
enrollment is imposed under paragraph (a)(1) of this section based upon 
a provider's or supplier's failure to respond timely to a revalidation 
request or other request for information.
    (2)(i) CMS may add up to 3 more years to the provider's or 
supplier's reenrollment bar (even if such period exceeds the 10-year 
period identified in paragraph (c)(1) of this section) if it determines 
that the provider or supplier is attempting to circumvent its existing 
reenrollment bar by enrolling in Medicare under a different name, 
numerical identifier or business identity.
    (ii) A provider's or supplier's appeal rights regarding paragraph 
(c)(2)(i) of this section--
    (A) Are governed by part 498 of this chapter; and
    (B) Do not extend to the imposition of the original reenrollment 
bar under paragraph (c)(1) of this section; and
    (C) Are limited to any additional years imposed under paragraph 
(c)(2)(i) of this section.
    (3) CMS may impose a reenrollment bar of up to 20 years on a 
provider or supplier if the provider or supplier is being revoked from 
Medicare for the second time. In determining the length of the 
reenrollment bar under this paragraph (c)(3), CMS considers the 
following factors:
    (i) The reasons for the revocations.
    (ii) The length of time between the revocations.
    (iii) Whether the provider or supplier has any history of final 
adverse actions (other than Medicare revocations) or Medicare or 
Medicaid payment suspensions.
    (iv) Any other information that CMS deems relevant to its 
determination.
    (4) A reenrollment bar applies to a provider or supplier under any 
of its current, former or future names, numerical identifiers or 
business identities.
* * * * *
    (i) Extension of revocation. (1) If a provider's or supplier's 
Medicare enrollment is revoked under paragraph (a) of this section, CMS 
may revoke any and all of the provider's or supplier's Medicare 
enrollments, including those under different names, numerical 
identifiers or business identities and those under different types.
    (2) In determining whether to revoke a provider's or supplier's 
other enrollments under this paragraph (i), CMS considers the following 
factors:
    (i) The reason for the revocation and the facts of the case.
    (ii) Whether any final adverse actions have been imposed against 
the provider or supplier regarding its other enrollments.
    (iii) The number and type(s) of other enrollments.
    (iv) Any other information that CMS deems relevant to its 
determination.
    (j) Voluntary termination. (1) CMS may revoke a provider's or 
supplier's Medicare enrollment if CMS determines that the provider or 
supplier voluntarily terminated its Medicare enrollment in order to 
avoid a revocation under paragraph (a) of this section that CMS would 
have imposed had the provider or supplier remained enrolled in 
Medicare. In making its determination, CMS considers the following 
factors:
    (i) Whether there is evidence to suggest that the provider knew or 
should have known that it was or would be out of compliance with 
Medicare requirements.
    (ii) Whether there is evidence to suggest that the provider knew or 
should have known that its Medicare enrollment would be revoked.
    (iii) Whether there is evidence to suggest that the provider 
voluntarily terminated its Medicare enrollment in order to circumvent 
such revocation.
    (iv) Any other evidence or information that CMS deems relevant to 
its determination.
    (2) A revocation under paragraph (j)(1) of this section is 
effective the day before the Medicare contractor receives the 
provider's or supplier's Form CMS-855 voluntary termination 
application.

[[Page 10752]]

0
14. Amend Sec.  424.540 by revising paragraphs (b)(1) and (2) to read 
as follows:


Sec.  424.540  Deactivation of Medicare billing privileges.

* * * * *
    (b) * * *
    (1) In order for a deactivated provider or supplier to reactivate 
its Medicare billing privileges, the provider or supplier must 
recertify that its enrollment information currently on file with 
Medicare is correct and furnish any missing information as appropriate.
    (2) Notwithstanding paragraph (b)(1) of this section, CMS may, for 
any reason, require a deactivated provider or supplier to, as a 
prerequisite for reactivating its billing privileges, submit a complete 
Form CMS-855 application.
* * * * *
0
15. Amend Sec.  424.570 by revising paragraphs (a)(1)(iii) and (iv) to 
read as follows:


Sec.  424.570  Moratoria on newly enrolling Medicare providers and 
suppliers.

    (a) * * *
    (1) * * *
    (iii) The temporary moratorium does not apply to any of the 
following:
    (A) Changes in practice location (except if the location is 
changing from a location outside the moratorium area to a location 
inside the moratorium area).
    (B) Changes in provider or supplier information, such as phone 
numbers.
    (C) Changes in ownership (except changes in ownership of home 
health agencies that would require an initial enrollment).
    (iv) A temporary moratorium does not apply to any enrollment 
application that has been received by the Medicare contractor prior to 
the date the moratorium is imposed.
* * * * *

PART 455--PROGRAM INTEGRITY: MEDICAID

0
16. 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
17. Amend Sec.  455.101 by adding the definition of ``Affiliation'' in 
alphabetical order to read as follows:


Sec.  455.101  Definitions.

    Affiliation means, for purposes of applying Sec.  455.107, any of 
the following:
    (1) A 5 percent or greater direct or indirect ownership interest 
that an individual or entity has in another organization.
    (2) A general or limited partnership interest (regardless of the 
percentage) that an individual or entity has in another organization.
    (3) An interest in which an individual or entity exercises 
operational or managerial control over or directly or indirectly 
conducts the day-to-day operations of another organization (including, 
for purposes of this provision, sole proprietorships), either under 
contract or through some other arrangement, regardless of whether or 
not the managing individual or entity is a W-2 employee of the 
organization.
    (4) An interest in which an individual is acting as an officer or 
director of a corporation.
    (5) Any payment assignment relationship under Sec.  447.10(g) of 
this chapter.
* * * * *
0
18. Revise Sec.  455.103 to read as follows:


Sec.  455.103  State plan requirement.

    A State plan must provide that the requirements of Sec. Sec.  
455.104 through 455.107 are met.
0
19. Add Sec.  455.107 to subpart B to read as follows:


Sec.  455.107  Disclosure of affiliations.

    (a) Definitions. For purposes of this section only, the following 
terms apply:
    (1) ``Uncollected debt'' only applies to the following:
    (i) Medicare, Medicaid or CHIP overpayments for which CMS or the 
State has sent notice of the debt to the affiliated provider or 
supplier.
    (ii) Civil money penalties (as defined in Sec.  424.57(a) of this 
chapter).
    (iii) Assessments (as defined in Sec.  424.57(a) of this chapter).
    (2) ``Revoked,'' ``Revocation,'' ``Terminated,'' and 
``Termination'' include situations where the affiliated provider or 
supplier voluntarily terminated its Medicare, Medicaid or CHIP 
enrollment to avoid a potential revocation or termination.
    (b) General. A provider that is initially enrolling in the Medicaid 
program or is revalidating its Medicaid enrollment information must 
disclose whether it or any of its owning or managing employees or 
organizations (consistent with the terms ``person with an ownership or 
control interest'' and ``managing employee'' as defined in Sec.  
455.101) has or, within the previous 5 years, has had an affiliation 
with a currently or formerly enrolled Medicare, Medicaid or CHIP 
provider or supplier that--
    (1) Currently has an uncollected debt to Medicare, Medicaid or 
CHIP, regardless of--
    (i) The amount of the debt;
    (ii) Whether the debt is currently being repaid; or
    (iii) Whether the debt is currently being appealed.
    (2) Has been or is subject to a payment suspension under a federal 
health care program (as that latter term is defined in section 1128B(f) 
of the Act), regardless of when the payment suspension occurred or was 
imposed;
    (3) Has been or is excluded from participation in Medicare, 
Medicaid or CHIP, regardless of whether the exclusion is currently 
being appealed or when the exclusion occurred or was imposed; or
    (4) Has had its Medicare, Medicaid or CHIP enrollment denied, 
revoked or terminated, regardless of any of the following:
    (i) The reason for the denial, revocation or termination.
    (ii) Whether the denial, revocation or termination is currently 
being appealed.
    (iii) When the denial, revocation or termination occurred or was 
imposed.
    (c) Information. The initially enrolling or revalidating provider 
must disclose the following information about each affiliation:
    (1) General identifying information about the affiliated provider 
or supplier, which includes the following:
    (i) Legal name as reported to the Internal Revenue Service or the 
Social Security Administration (if the affiliated provider or supplier 
is an individual).
    (ii) ``Doing business as'' name (if applicable).
    (iii) Tax identification number.
    (iv) National Provider Identifier (NPI).
    (2) Reason for disclosing the affiliated provider or supplier.
    (3) Specific data regarding the affiliation relationship, including 
the following:
    (i) Length of the relationship.
    (ii) Type of relationship.
    (iii) Degree of affiliation.
    (4) If the affiliation has ended, the reason for the termination.
    (d) Mechanism. The information described in paragraphs (b) and (c) 
of this section must be furnished to the State in a manner prescribed 
by the State.
    (e) Denial or revocation. The failure of the provider to fully and 
completely report the information required in this section when the 
provider knew or should reasonably have known of this information may 
result in, as applicable, the denial of the provider's initial 
enrollment application or the termination of the provider's enrollment 
in Medicaid or CHIP.
    (f) Undue risk. Upon receipt of the information described in 
paragraphs (b)

[[Page 10753]]

and (c) of this section, the State, in consultation with CMS, 
determines whether any of the disclosed affiliations poses an undue 
risk of fraud, waste or abuse by considering the following factors:
    (1) The duration of the affiliation.
    (2) Whether the affiliation still exists and, if not, how long ago 
the affiliation ended.
    (3) The degree and extent of the affiliation.
    (4) If applicable, the reason for the termination of the 
affiliation.
    (5) Regarding the affiliated provider's or supplier's action under 
paragraph (b) of this section, all of the following:
    (i) The type of action.
    (ii) When the action occurred or was imposed.
    (iii) Whether the affiliation existed when the action occurred or 
was imposed.
    (iv) If the action is an uncollected debt--
    (A) The amount of the debt;
    (B) Whether the affiliated provider or supplier is repaying the 
debt; and
    (C) To whom the debt is owed.
    (v) If a denial, revocation, termination, exclusion or payment 
suspension is involved, the reason for the action.
    (6) Any other evidence that the state, in consultation with CMS, 
deems relevant to its determination.
    (g) Determination of undue risk. A determination by the state, in 
consultation with CMS, that a particular affiliation poses an undue 
risk of fraud, waste or abuse will result in, as applicable, the denial 
of the provider's initial enrollment in Medicaid or CHIP or the 
termination of the provider's enrollment in Medicaid or CHIP.
    (h) New or changed information. (1) A provider must report the 
following:
    (i) New or changed information regarding existing affiliations.
    (ii) Information regarding new affiliations.
    (2) A provider is not required to report new or changed information 
regarding past affiliations (except as part of a revalidation 
application).
    (i) Undisclosed affiliations. The State, in consultation with CMS, 
may apply paragraph (g) of this section to situations where a 
reportable affiliation (as described in paragraphs (b) and (c) of this 
section) poses an undue risk of fraud, waste or abuse, but the provider 
has not yet disclosed or is not required at that time to disclose the 
affiliation to the State.

PART 457--ALLOTMENTS AND GRANTS TO STATES

0
20. The authority citation for part 457 continues to read as follows:

    Authority: Section 1102 of the Social Security Act (42 U.S.C. 
1302).

0
21. Amend Sec.  457.990 by:
0
a. Redesignating paragraphs (a) and (b) as paragraphs (b) and (c), 
respectively.
0
b. Adding a new paragraph (a).
    The addition reads as follows:


Sec.  457.990  Provider and supplier screening, oversight, and 
reporting requirements.

* * * * *
    (a) Section 455.107.
* * * * *

    Dated: November 25, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Dated: December 8, 2015.
Sylvia Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2016-04312 Filed 2-25-16; 11:15 am]
BILLING CODE 4120-01-P