Rule: Medicare: Billing Privileges Establishment and Maintenance Requirements

Friday,
April 21, 2006
Part II
Department of
Health and Human
Services
Centers for Medicare & Medicaid Services
42 CFR Part 420, 424 et al.

Medicare Program; Requirements for
Providers and Suppliers To Establish and
Maintain Medicare Enrollment; Final Rule
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20754 Federal Register / Vol. 71, No. 77 / Friday, April 21, 2006 / Rules and Regulations
DEPARTMENT OF HEALTH AND libraries throughout the country that responsibilities that the law imposes.
HUMAN SERVICES receive the Federal Register. Our regional offices, State survey
This Federal Register document is agencies, carriers and FIs use statutes,
Centers for Medicare & Medicaid also available from the Federal Register regulations, and operating instructions
Services online database through GPO Access, a as guidance when assigning appropriate
service of the U.S. Government Printing identification numbers and determining
42 CFR Parts 420, 424, 489, and 498 Office. The Web site address is: http:// whether to grant billing privileges in the
[CMS–6002–F] www.gpoaccess.gov/nara/index.html. Medicare program to providers and
suppliers.
RIN 0938–AH73 I. Background
As Medicare program expenditures
A. General have grown, increased attention was
Medicare Program; Requirements for
The Medicare program, title XVIII of focused on strategies to curb improper
Providers and Suppliers To Establish
the Social Security Act (the Act), is the Medicare payments by implementing
and Maintain Medicare Enrollment
primary payer of health care costs for 43 business processes and standards that
AGENCY: Centers for Medicare & million enrolled beneficiaries. Under safeguard the Medicare program and its
Medicaid Services (CMS), HHS. section 1802 of the Act, a beneficiary beneficiaries, while ensuring that well
ACTION: Final rule. may obtain health services from any qualified individuals and health care
institution, agency, or person qualified organizations serve beneficiaries as
SUMMARY: This final rule requires that promptly as possible.
to participate in the Medicare program.
all providers and suppliers (other than Qualifications to participate are
physicians or practitioners who have B. Specific Authority To Collect
specified in statute and in regulations. Enrollment Information
elected to ‘‘opt-out’’ of the Medicare (See, for example, sections 1814, 1815,
program) complete an enrollment form 1819, 1833, 1834, 1842, 1861, 1866, and 1. Various sections of the Act and the
and submit specific information to us. 1891 of the Act; and 42 CFR Chapter IV, Code of Federal Regulations require
This final rule also requires that all subchapter E, which concerns standards providers and suppliers to furnish
providers and suppliers periodically and certification requirements.) information concerning the amounts
update and certify the accuracy of their Providers and suppliers furnishing due and the identification of individuals
enrollment information to receive and services must comply with the Medicare or entities who furnish medical services
maintain billing privileges in the requirements stipulated in the Act and to beneficiaries before payment can be
Medicare program. In addition, this in our regulations. These requirements made.
final rule implements provisions in the are meant to ensure compliance with • Sections 1102 and 1871 of the Act
statute that require us to ensure that all applicable statutes, as well as to provide general authority for the
Medicare providers and suppliers are promote the furnishing of high quality Secretary of Health and Human Services
qualified to provide the appropriate care. CMS, State survey and certification (the Secretary) to prescribe regulations
health care services. These statutory agencies, or both inspect facilities when for the efficient administration of the
provisions include requirements meant required, for compliance with regulatory Medicare program. Under this authority,
to protect beneficiaries and the and operational requirements before we this final rule will require the collection
Medicare Trust Funds by preventing allow them to participate in the of information from providers and
unqualified, fraudulent, or excluded Medicare program. Thereafter, we will suppliers for the purpose of enrolling in
providers and suppliers from providing review and re-verify the continued the Medicare program and granting
items or services to Medicare adherence to our requirements either as privileges to bill the program for health
beneficiaries or billing the Medicare part of a scheduled recertification care services furnished to Medicare
program or its beneficiaries. survey, or as a result of a complaint or beneficiaries.
DATES: Effective Date: These regulations other information received that will • Sections 1814(a), 1815(a), and
are effective on June 20, 2006. directly affect the provider’s or 1833(e) of the Act require the
FOR FURTHER INFORMATION CONTACT: supplier’s business relationship with submission of information necessary to
Michael C. Collett, (410) 786–6121. the Medicare program or indicate determine the amounts due a provider
SUPPLEMENTARY INFORMATION: noncompliance with this regulation. or other person.
Copies: To order copies of the Federal The initial certification and subsequent • Section 1842(r) of the Act requires
Register containing this document, send recertification ensure that Medicare us to establish a system for furnishing
your request to: New Orders, requirements are met, continue to be a unique identifier for each physician
Superintendent of Documents, P.O. Box met, and promote the appropriate who furnishes services for which
371954, Pittsburgh, PA 15250–7954. spending of the Medicare Trust Funds payment may be made. To complete
Specify the date of the issue requested by helping to ensure that unqualified this, we need to collect information
and enclose a check or money order providers and suppliers are not granted unique to that physician.
payable to the Superintendent of billing privileges with the Medicare • Section 1862(e)(1) of the Act states
Documents, or enclose your Visa or program. that no payment may be made when an
Master Card number and expiration Historically, a provider or supplier item or service was at the medical
date. Credit card orders can also be wishing to receive payment from direction of an individual or entity that
placed by calling the order desk at (202) Medicare or its beneficiaries would is excluded in accordance with sections
512–1800 (or toll-free at 1–888–293– contact a Medicare fiscal intermediary 1128, 1128A, 1156, or 1842(j)(2) of the
6498) or by faxing to (202) 512–2250. (FI), the State survey agency, or a Act.
The cost for each copy is $10. As an Medicare carrier. In compliance with • Section 1834(j)(1)(A) of the Act
alternative, you can view and sections 1816, 1842 and 1874 of the Act, states that no payment may be made for
photocopy the Federal Register as stipulated in 42 CFR Part 421, we items furnished by a supplier of durable
document at most libraries designated contract with fee-for-service contractors medical equipment, prosthetics,
as Federal Depository Libraries and at to administer payment for services and orthotics, and supplies (DMEPOS)
many other public and academic to manage other administrative unless that supplier obtains, and renews
Federal Register / Vol. 71, No. 77 / Friday, April 21, 2006 / Rules and Regulations 20755
at intervals as we may require, a billing In fiscal year (FY) 1998, we required exist and meet the requirements to
number. site visits for all new DMEPOS participate in the Medicare program,
Section 4313 of the Balanced Budget suppliers. The DMEPOS visits resulted particularly in the absence of State
Act of 1997 (BBA) (Pub. L. 105–33) in: 156 denials of new applicants out of licensure or regulation. Left unchecked,
amended sections 1124(a)(1) and 1124A 159 visits; and 656 revocations of Medicare program resources and the
of the Act to require disclosure of both existing suppliers out of 2,091 visits. health of Medicare beneficiaries may be
the Employer Identification Number In FY 1998 and FY 1999, our carriers vulnerable.
(EIN) and Social Security Number (SSN) and FIs submitted proposals to conduct
site visits for those provider or supplier II. Provisions of the Proposed Rule
of each provider or supplier, each
person with ownership or control types that they believed would yield the In the April 25, 2003 Federal Register
interest in the provider or supplier, any greatest benefit in their regions. After (68 FR 22064), we published a proposed
subcontractor in which the provider or reviewing the submitted proposals, we rule that builds on our collective
supplier directly or indirectly has a 5 funded 320 site visits to various experience and sets forth our standard
percent or more ownership interest, and enrolling and currently enrolled enrollment requirements in new subpart
any managing employees including Independent Diagnostic Testing P in part 424 of this chapter. We
Directors and Board Members of Facilities (IDTFs), skilled nursing proposed that all providers and
corporations and non-profit facilities (SNFs), home health agencies suppliers, other than the ‘‘opt-out’’
organizations and charities. The (HHAs), rural health clinics, physicians and ‘‘opt-out’’ practitioners
Secretary signed and sent to the comprehensive outpatient rehabilitation described below, must submit an
Congress a ‘‘Report to Congress on Steps facilities, physician groups, clinical enrollment application with specific
Taken to Assure Confidentiality of psychologists, and ambulance information to enroll in the Medicare
Social Security Account Numbers as companies. The project provided useful program, obtain a Medicare billing
Required by the Balanced Budget Act’’ information for making appropriate number, and receive Medicare billing
on January 26, 1999, with mandatory determinations for the eligibility to bill privileges. The provisions of the
collection of SSNs and EINs effective on Medicare. In the course of these proposed rule were designed to
or after April 26, 1999. reviews— supplement, but not replace or nullify,
• 219 provider numbers were existing regulations concerning the
2. Section 31001(i)(1) of the Debt
authorized or maintained; establishment of provider or supplier
Collection Improvement Act of 1996 • 30 provider numbers were
(DCIA) (Pub. L. 104–134) amended agreements, the issuance of provider or
deactivated;
section 7701 of 31 U.S.C. by adding • 37 provider applications were supplier billing numbers, and payment
paragraph (c) to require that any person denied; and for Medicare covered services or
or entity doing business with the • 34 providers were referred to supplies to eligible providers or
Federal Government must provide their contractor fraud units. suppliers.
Tax Identification Number (TIN). These site visits proved valuable to Specifically, we proposed to require
3. We are authorized to collect some providers and suppliers by that providers and suppliers prove their
information on the CMS 855–Provider/ helping them to enroll in the Medicare qualifications and identity and submit
Supplier Enrollment Application, program properly. The site visits were specified information to us before they
(Office of Management and Budget also helpful to us in ensuring that we are granted billing privileges in the
(OMB) approval number 0938–0685) to only conduct business with legitimate Medicare program. If the provider or
ensure that correct payments are made providers and suppliers. We believe that supplier fails to meet the requirements
to providers and suppliers under the site visits are an important component or submit the required information, we
Medicare program as established by of successful provider and supplier would not enroll it in the Medicare
Title XVIII of the Act. enrollment. We believe that there is program or, if it is currently in the
ample authority in the statute for this program, we would revoke its billing
C. Prior Enrollment Initiatives
approach. The statute confers upon the privileges. We believe the
For a number of years, concern about Secretary the authority to seek documentation and associated
easy entry into the Medicare program by information he needs to determine the verification methods we use to
unqualified or even fraudulent amounts due to providers and suppliers determine whether to grant a provider
providers or suppliers has led us to step of services. Part of that duty is fulfilled or supplier billing privileges are
up our efforts on a number of fronts to by reviewing documentation offered by necessary to ensure compliance with
establish more stringent controls on those entities submitting claims, but Medicare requirements and to prevent
provider and supplier entry into the part of that duty may also be performed abuse of the Medicare program and the
Medicare program. through the use of on-site reviews that inappropriate use of Medicare funds.
For example, in 1993 we established enable the Secretary to verify, for We also believe that the requirements
the National Supplier Clearinghouse example, that he is paying an entity that will not hinder qualified individuals
(NSC), our contractor for enrolling actually exists or that is providing a and organizations from enrolling or
suppliers of DMEPOS in Medicare. We service that it represented it would maintaining enrollment in the Medicare
instituted new procedures to use provide in its enrollment application. program.
validation software to certify the Often these kinds of determinations
A. Scope and Definitions
existence of the listed business address cannot be made solely based on the
for suppliers of DMEPOS. The NSC also review of paper documentation We proposed to establish our standard
checked the DMEPOS supplier submitted to contractors even though enrollment requirements in part 424,
telephone numbers against a national they bear heavily on the amounts that new subpart P. In proposed § 424.500
directory. This initial effort resulted in may be due to a particular provider or (Scope), we stated that these
the revocation of about 1,500 supplier supplier. As past experience has requirements apply to all providers and
billing numbers and an estimated demonstrated, in many cases site visits suppliers except those physicians and
savings of $7 million per month to the are the only method we have to ensure other eligible practitioners who have
Medicare Trust Funds. that providers and suppliers actually elected to ‘‘opt-out’’ of Medicare as
described in part 405, subpart D of our the General Services Administration before payment is authorized. Our
regulations. (GSA) ‘‘List of Parties Excluded from issuance of an identification number to
In proposed § 400.502 (Definitions), Federal Procurement and Non- a provider or supplier does not
we would establish the definitions for procurement Programs’’. These lists are automatically convey the privilege to
several key terms used throughout new commonly referred to as the ‘‘OIG bill Medicare. There must be a
subpart P. The terms ‘‘provider’’ and Sanction List’’ for those parties corresponding approval of the provider
‘‘supplier’’ are not defined in this excluded by the OIG from participation or supplier as meeting all Federal
subpart because their definitions are in any Federal health care programs (as requirements to bill Medicare for the
already established throughout 42 CFR. defined in section 1128B(f) of the Act), number to be an approved and active
The term ‘‘provider’’ is defined in both and the ‘‘GSA Debarment List’’ for those Medicare billing number.
§ 400.202 and § 488.1. Together these parties debarred, suspended or In § 424.510 (CMS 855), we proposed
sections define a provider as including otherwise excluded by other Federal that a provider or supplier must submit
a hospital, a critical access hospital, a agencies from participation in Federal to us the appropriate completed CMS
skilled nursing facility, a nursing procurement and non-procurement 855—Provider/Supplier Enrollment
facility, a comprehensive outpatient programs and activities, in accordance Application based on the type of
rehabilitation facility, a home health with the Federal Acquisition and provider or supplier enrolling. As part
agency, or a hospice, that has in effect Streamlining Act of 1994, and with the of our continuing efforts to improve the
an agreement to participate in Medicare; HHS Common Rule at 45 CFR part 76. enrollment process, the series of CMS
or a provider of outpatient physical Extending the term ‘‘managing 855 enrollment forms with proposed
therapy or speech pathology services; or employee’’ to include individuals revisions were submitted with the
a community mental health center. The performing managerial duties who are proposed rule, and were published in
term ‘‘supplier,’’ as defined in not technically employees would be the Federal Register concurrently for
§ 400.202, is a physician or other consistent with the legislative intent to review and public comment. Some of
practitioner, or an entity other than a require information on those the proposed revisions were the removal
provider (as defined in § 400.202 and individuals that have effective control of certain data collections from all forms
§ 488.1) that furnishes health care over a provider’s or supplier’s day-to- in the series such as information on
services under Medicare. Section 488.1 day operations. clearinghouses used in claims
also defines ‘‘supplier’’ to mean submission, practice locations from the
B. Basic Enrollment Requirement
independent laboratory; portable X-ray CMS 855R, and a shortened attachment
services; physical therapist in Proposed § 424.505 requires a
for ambulance companies in the CMS
independent practice; ESRD facility; provider or supplier to have a valid
855B. We also simplified the sections
rural health clinic; Federally-qualified Medicare billing number for the date a
for reporting owners and managers and
health center; or chiropractor. The term service was rendered in order to receive
added instructional clarifications. The
‘‘supplier’’ also includes ‘‘indirect payment for covered Medicare services
forms are identified as follows:
suppliers,’’ as indicated in 45 CFR 61.3. from either Medicare (in the case of
assigned claims) or the Medicare • CMS 855A—For providers billing
We proposed to define ‘‘managing
beneficiary (in the case of unassigned fiscal intermediaries.
employee’’ to be a general manager,
business manager, administrator, claims). • CMS 855B—For supplier
director, or other individual who Under longstanding policy and organizations billing carriers.
exercises operational or managerial operating procedures, any claim • CMS 855I—For individual health
control over, or who directly or submitted without an active billing care practitioners billing carriers.
indirectly conducts the day-to-day number is incomplete and cannot be • CMS 855R—For individual health
operations of, the institution, processed for payment. Providers and care practitioners to reassign benefits to
organization, or agency, either under suppliers who are not enrolled in the an organization.
contract or through some other Medicare program must adhere to the • CMS 855S—For DMEPOS Suppliers
arrangement, regardless of whether the mandatory claims submission rules at billing the NSC.
individual is a W–2 employee. § 424.32(a)(1) (Basic requirements for all The CMS 855 applications will be
Section 1124A of the Act and claims) and section 1848(g)(4) of the used to gather information on providers
§ 420.204 authorize the Secretary to Act. In addition, a claim submitted and suppliers for the purpose of
collect information about managing without a valid Medicare billing number authorizing billing numbers and
employees. Section 1124A of the Act would not be considered a valid claim establishing eligibility to furnish
incorporates by reference the definition and will be rejected. If the mandatory services to Medicare beneficiaries. The
of managing employee, contained in claims submission requirements are not information submitted will also
section 1126(b) of the Act as an met the provider or supplier could have uniquely identify the providers and
individual, including a general manager, sanctions imposed as outlined in suppliers for the purpose of
business manager, administrator, and section 1848(g)(4) of the Act for failure enumeration and payment. OMB
director, who exercises operational or to file a claim as required. approved the CMS 855 for these
managerial control over the entity, or purposes (OMB approval number 0938–
who directly or indirectly conducts the C. Requirements for Obtaining a Billing 0685).
day-to-day operations of the entity. We Number and Medicare Billing Privileges In § 424.510(a)(1), we proposed to
have found that a number of providers To obtain a Medicare billing number require that a provider or supplier
and suppliers are managed by and be eligible to receive payment for submit the following on its CMS 855:
individuals that have control over the Medicare covered services, providers • Complete and accurate responses to
day-to-day operations of the entity and and suppliers must enroll in the all information requested within each
are not employees. Some of these Medicare program and meet other section as applicable to the provider or
individuals are known to bill Medicare applicable Federal requirements. The supplier type.
fraudulently, and are on the Office of Medicare program, through its • Any documentation currently
Inspector General (OIG) ‘‘List of contractors, requires specific identifying required by CMS under this or other
Excluded Individuals and Entities’’ and information from a provider or supplier statutory or regulatory authority to
uniquely identify the provider or aware of, and will abide by, Medicare and the person(s) being delegated as an
supplier (for example, an SSN or a TIN). rules and regulations. official of the organization. The
• Any documentation currently To ensure that the individual signing signature of the delegated official would
required by CMS under this or other the form can bind the enrollee from a bind the organization both legally and
statutory or regulatory authority to financial and legal standpoint, we financially, as if the signature was that
establish the provider or supplier’s would require the following persons to of the authorized official. Once the
eligibility to furnish services to sign the enrollment form: delegation of authority is established,
beneficiaries in the Medicare program • In the case of an individual the signatures of the authorized official
(for example, a medical license or practitioner, the applying practitioner. or the assigned delegated official(s)
business license). • In the case of a sole proprietorship, would be the only acceptable
Under the authorities noted the applying sole proprietor. signature(s) on correspondence to report
• In the case of a corporation, updates or changes to the enrollment
previously in this preamble all
partnership, group, limited liability information.
providers, suppliers, and other health
company (LLC), or other organization, In § 424.510(b), we proposed to verify
care related individuals and entities
an authorized official as defined in initial compliance with statutes and
who would receive Medicare
§ 424.502. regulations before providers and
reimbursements, either directly or When an authorized official signs the
indirectly as a result of enrolling in the suppliers are granted billing privileges,
application, the signed application is as well as on a continuing basis. The
Medicare program, must furnish their considered binding upon the
SSN and TIN as a condition of verifications would be based on
corporation partnership, organization, information submitted by providers and
maintaining an active enrollment status group, or LLC (hereafter referred to in
and billing privileges. We also suppliers on the CMS 855.
this section as an organization), as We proposed to require in
maintained the right to require persons applicable. This requirement establishes § 424.510(c) that providers and
with ownership or control interests (as accountability for the accuracy of the suppliers, including those that are
that term is defined in section 1124(a)(3) information on the CMS 855 and deemed to meet Medicare health and
of the Act) in their providers and ensures that the provider or supplier is safety requirements by virtue of their
suppliers, and of all managing committed to taking the necessary steps accreditation by a national accrediting
employees (as that term is defined in to comply with these requirements. In body, must attest via signature on the
section 1126(b) of the Act and in addition to the signature requirements, CMS 855 that they have met all the
§ 420.201 of the regulations) of these we proposed to establish a delegation of requirements set forth in this regulation
providers and suppliers to also furnish authority. As stated in this section, the before they are granted billing
their SSN and TIN as a condition of original and all subsequent revalidation privileges. Those providers for which
enrollment. CMS 855s submitted by an organization certification is required must meet the
We proposed to require that providers to enroll or maintain enrollment in the provisions of part 488 concerning
and suppliers must certify that all the Medicare program must have mandatory State survey and certification
information furnished on the CMS 855 certification statements signed by the requirements. Providers also must have
is accurate, complete, truthful, and current authorized official(s) on file completed a provider agreement in
verifiable. Any concealment or with Medicare. Any subsequent updates accordance with part 489, which
misrepresentation of material or changes made outside the enrollment specifies the requirements for provider
information in these applications would or revalidation process may be signed agreements. In addition, in § 424.510(d)
constitute violation of this regulation by a delegated official of the enrolled and (e), we proposed to require that
and may result in the rejection, denial, organization. providers and suppliers must be
or revocation of the provider or The delegated official must be a W– operational as defined in § 424.502 and
supplier’s enrollment and billing 2 managing employee of the provider or must meet additional requirements that
privileges. In addition, the concealment supplier who is enrolling in, or apply to both enrolling and currently
or misrepresentation would be referred currently enrolled in, the Medicare enrolled providers and suppliers before
to the OIG for investigation and program, or be an individual with receiving a Medicare billing number and
appropriate criminal, civil or ownership or control interest in the becoming eligible for Medicare
administrative action. provider or supplier. payments.
In § 424.510(a)(2), we proposed to The delegation of signature authority In recognition of the effectiveness of
require that the CMS 855 must be signed would not apply for individual site visits, we proposed to require, at
by an individual who has the authority practitioners and sole proprietors. All § 424.510(f), a plan for integrating site
to bind the provider or supplier both CMS 855s submitted by individual visits as part of our enrollment
legally and financially to the practitioners or sole proprietors must be validation process and general program
requirements set forth in subpart P. This signed by the enrolling or enrolled oversight activities. We proposed to
person must be the individual individual. reserve the right to perform on-site
practitioner or have an ownership or As proposed in § 424.510(a)(2)(ii), the inspections of the provider or supplier
control interest in the provider or delegation of authority must be assigned when we deem necessary to ensure
supplier, as that term is defined in by the authorized official currently on compliance with Medicare enrollment
section 1124(a)(3) of the Act, such as, be file with us or the authorized official requirements. For certain providers and
the provider’s or supplier’s general who has signed the CMS 855 currently suppliers this practice has always been
partner, chairman of the board, chief being submitted to us. All delegations of the case (for example, hospitals, SNFs,
financial officer, chief executive officer, authority must be submitted via the and HHAs), but we are extending this to
president, or hold a position of similar CMS 855 and must include the title of all providers and suppliers when
status and authority within the provider each person delegated authority to deemed necessary based on
or supplier organization. The signature update or change the organization’s questionable enrollment information.
would attest that the information enrollment information. The assignment Site visits for enrollment purposes will
submitted is accurate, complete, and must be signed by both the authorized not affect those site visits performed for
truthful, and the provider or supplier is official currently on file with Medicare establishing conditions of participation.
The proposed site visits and on-site D. Requirements for Reporting Changes Routine revalidations may or may not be
inspections to ensure compliance with and Updates to, and the Periodic accompanied by site visits.
Medicare enrollment requirements are Revalidation of, Medicare Enrollment We will reserve the right to perform
unrelated to the compliance-related site Information non-routine revalidation and request the
visits already being conducted by the provider or supplier to recertify as to the
In § 424.515, we proposed to require
OIG. After a provider or supplier enters accuracy of the enrollment information
that a provider or supplier must update
into a corporate integrity agreement when warranted to assess and confirm
its enrollment information, and recertify
with the OIG, usually as the result of a the validity of the enrollment
as to its accuracy when any changes are
Federal False Claims Act settlement, the information. Non-routine revalidation
made. We would also periodically
OIG may conduct a site visit as part of may be triggered as a result of
require revalidation of the enrollment
its work in monitoring the provider or information indicating local problems,
information by all providers and
supplier’s compliance with the terms of national initiatives, fraud investigations,
suppliers when enrollment information
the corporate integrity agreement. complaints from beneficiaries, or other
has aged over 3 years. The revalidation
Upon the provider or supplier’s reasons that cause us to question the
successful completion of the enrollment process will ensure that we have integrity of the provider or supplier in
process, including State survey and complete and current information on all its relationship with the Medicare
certification, accreditation, and Medicare providers and suppliers and program. Like routine revalidation, non-
approval of the CMS 855, we would ensure continued compliance with routine revalidation may or may not be
grant Medicare billing privileges and Medicare requirements. In addition, this accompanied by site visits.
issue a billing number if one has not process further ensures that Medicare We proposed to require that the
already been issued. The effective date beneficiaries are receiving services revalidation of enrollment information
for reimbursement of Medicare covered furnished only by legitimate providers occur no more than once every 3 years.
services would continue to be and suppliers, and strengthens our We reserve the right to adjust this
determined based on current Medicare ability to protect the Medicare Trust schedule if we determine that
regulations and policy based on the type Funds. revalidation should occur on a more
of provider or supplier submitting The accuracy of the data describing frequent basis due to complaints or
claims. Currently, the effective dates for the individuals or organizations with evidence we receive indicating
reimbursement can be found at § 489.13 which we do business is essential to noncompliance with the statute or
for providers and suppliers requiring efficient and effective operation of the regulations by specific provider or
State survey or certification or Medicare program. For this reason, we supplier types. The schedule may also
accreditation, § 424.5 and § 424.44 for proposed to require at § 424.520(b), that be on a less frequent basis if we
nonsurveyed or certified/accredited individuals and organizations are determine that the integrity of and
suppliers, and § 424.57 and section responsible for updating their CMS 855 compliance with the statute and
1834(j)(1)(A) of the Act for DMEPOS information to reflect any changes in a regulations by specific provider or
suppliers. For those providers and timely manner. We would define timely supplier types indicates that less
suppliers seeking accreditation from a as meaning within 90 days, with the frequent validation is justified. If such a
CMS-approved accreditation exception of a change in ownership or change were to occur, we would notify
organization, the effective date for control of the provider or supplier all affected providers and suppliers in
reimbursement is the later of the date which must be reported within 30 days. writing at least 90 days in advance of
accreditation was received or the final Failure to do so may result in implementing the change. We would
approval of the CMS 855. Based on the deactivation or even revocation of their continue to revalidate enrollment
regulations cited previously, we would billing privileges. information for Ambulance Service
not issue Medicare billing numbers or We would determine, upon receipt of Suppliers in accordance with
grant Medicare billing privileges any changes, if continued enrollment in regulations set forth at § 410.41(c)(2)
retroactive to the date that the provider the Medicare program is proper. We (Requirements for ambulance suppliers),
or supplier received final approval of expect that in the vast majority of cases, and DMEPOS suppliers would continue
their enrollment application (CMS 855). updates or changes would not affect the to renew enrollment in accordance with
We proposed to use this process because status of the provider or supplier. Where regulations set forth at § 424.57(e)
we believe there is a relationship it does, we would follow the revocation (Special payment rules for items
between fulfilling the requirements procedures outlined later in this rule. furnished by DMEPOS suppliers and
stipulated in the Medicare program When no such changes or updates issuance of DMEPOS supplier billing
statutes and related laws, the integrity of were reported or submitted for a period numbers).
the provider and supplier, the quality of of time, we believe that it is prudent to We proposed to require at new
care furnished to Medicare take steps to confirm the continued § 424.515(a) that during the revalidation
beneficiaries, and the confidence of the validity of the information that was or update process all providers and
public in the Medicare program. previously submitted. We believe that suppliers must attest by way of a signed
In the future there will be universal this revalidation of enrollment certification statement that the
provider and supplier numbers, as information should be accomplished in requirements set forth in this regulation
required by the Health Insurance a way that minimizes the reporting continue to be met. This requirement
Portability and Accountability Act of burden to the provider or supplier, but would not only ensure continued
1996 (HIPAA), for uniquely identifying also mitigates the risk to the program of accuracy of the CMS 855 information,
a provider or supplier and for purposes maintaining incomplete or inaccurate but would also ensure that the provider
of billing all health plans, including information that materially affects the or supplier is committed to taking the
Medicare and Medicaid. When this relationship of the program to the necessary steps to maintain compliance
universal number is in place, it will still provider or supplier. For this reason, we with these requirements. However, it
be necessary for providers and suppliers proposed to require that we will initiate should be noted that periodic validation
to apply for enrollment as a Medicare a revalidation process for any individual of a provider or supplier’s Medicare
provider or supplier and be granted or organization that has not submitted a enrollment information is separate from
Medicare billing privileges. change or update within the last 3 years. the survey requirements for the provider
or supplier as contained in 42 CFR To reduce the burden when reporting section 2455). Therefore, consistent
Chapter IV, subchapter E (Standards and updates or changes in the future, we with the FASA, its implementing
certification). would require that all providers and regulation, and OIG regulations
We proposed to require the suppliers currently in the Medicare (§ 1001.1901(b)), we would deny or
information submitted for revalidation program complete, in its entirety, the revoke enrollment (revocation effective
or update to include any new or CMS 855 at least once if they have not on the date of the exclusion) if the
changed documentation as required by done so in the past. This would ensure provider or supplier is subject to an OIG
us under this or other statutory or that we have the most current and exclusion, or is debarred, suspended or
regulatory authority that identifies the accurate information, and would allow otherwise excluded by any other
provider or supplier, and any us to make full use of electronic data Federal health care program or agency.
documentation as required by us under submissions via the Internet. By having
this or other statutory or regulatory a complete enrollment record, we would F. Rejection of a Provider’s or Supplier’s
authority required to verify the provider be able to produce and transmit or mail CMS 855 for Medicare Enrollment
or supplier’s continued eligibility to the CMS 855, pre-populated with In new § 424.525, we proposed that if
furnish services to beneficiaries in the previously reported information, to the a provider or supplier enrolling in the
Medicare program. We would also provider or supplier for their review and Medicare program for the first time fails
require a signature on the completed signature certification as to the to furnish complete information on the
CMS 855 that meets the requirements continued accuracy of the information CMS 855, or fails to furnish missing
proposed in § 424.510(a)(3). and require them to update any information or any necessary supporting
In § 424.515(b), we also proposed to information that is no longer current. documentation as required by CMS
require that a provider or supplier must under this or other statutory or
submit a CMS 855 with complete E. Additional Provider and Supplier
Requirements for Enrolling and regulatory authority within 60 calendar
information for revalidation within 60 days of our request to furnish the
calendar days of our revalidation Maintaining Active Enrollment Status in
the Medicare Program information, we would reject the
notification. For those providers and provider or supplier’s CMS 855
suppliers who initially enrolled in the In new § 424.520, we proposed to application. Rejection would not occur
Medicare program via the CMS 855, we specify the additional requirements that if the provider or supplier is actively
would furnish a copy of the information providers and suppliers must meet to communicating with us to resolve any
currently on file for their review, enroll or maintain enrollment in the issues regardless of any timeframes.
request that they make any changes, and Medicare program. The provider or
supplier must certify that it meets, and Upon notification of a rejected CMS
certify via their signature that the
continues to meet, the following 855, the provider or supplier must again
information is accurate, complete, and
truthful. We estimate that completion of requirements: begin the enrollment process by
the form would require on average 8 • Compliance with title XVIII of the completing and submitting a new CMS
hours. Therefore, we believe 60 days is Act (Medicare Statutory Provisions) and 855 and all applicable documentation.
a reasonable timeframe for providers applicable regulations. We proposed to specify in § 424.525(b)
and suppliers to comply. • Compliance with all applicable that the new form must also update any
As part of the revalidation process, we Federal and State licensure and information that is different from that
would verify the accuracy of the regulatory requirements that apply to originally submitted. This would ensure
reported information on the applicable the specific provider or supplier type that we have the most recent
CMS 855. Because survey and that relate to providing health care information about the provider or
certification are independent program services. supplier. The enrollment process would
requirements distinct from the • Not employing or contracting with culminate in the granting of billing
revalidation of enrollment information individuals or entities excluded from privileges or denial or rejection of the
requirements set forth in this subpart, participation in Federal Health care application.
we proposed in § 424.515(c) that new programs for the provision of items and G. Denial of Enrollment
surveys or certifications are not required services reimbursable under these
for the revalidation process. However, programs in violation of section We would deny enrollment in the
providers must continue to meet the 1128A(a)(6) of the Act. Medicare program to providers or
provisions of § 488 and § 489 The OIG program exclusion suppliers whom we determine to be
concerning mandatory State survey and regulations were amended effective ineligible. Providers and suppliers who
certification requirements. When August 25, 1995, in accordance with the are denied enrollment would not
applicable, providers must also have Federal Acquisition Streamlining Act of receive Medicare billing privileges. In
completed a provider agreement in 1994 (FASA), and with the HHS § 424.530(a), we proposed to require
accordance with § 489, which specifies Common Rule at 45 CFR part 76, to that a provider or supplier applying for
the requirements for provider explain the scope and effect of an OIG enrollment in the Medicare program
agreements. We would also reserve the exclusion. In accordance with the may be denied enrollment for any of the
right, at proposed § 424.515(d), to FASA, government-wide reciprocal following reasons:
perform on-site inspections, to further effect will be given by all Federal • Under § 424.530(a)(1), enrollment
ensure compliance with Medicare agencies to an administrative sanction may be denied if the provider or
requirements. imposed by any Federal agency. supplier were found not to be in
We understand that the resubmission Specifically, the statute provides that: compliance (for example, failure to
and update of enrollment information ‘‘No agency shall allow a party to furnish required documentation, lack of
would place an obligation on providers participate in any procurement and qualified practice location) with the
and suppliers. We are considering a nonprocurement activity if any [other] Medicare enrollment requirements
variety of ways to minimize the burden agency has debarred, suspended, or applicable to the type of provider or
of this important information collection otherwise excluded, that party from supplier enrolling, unless the reason for
and verification provision (including participation in a procurement or noncompliance were corrected or the
the use of Internet technology). nonprocurement activity,’’ (FASA, provider or supplier has submitted a
plan of corrective action as outlined in supplier terminates its relationship with Under section 1128(a) of the Act, the
part 488. the relevant individual. The denial will Secretary must exclude individuals or
• In § 424.530(a)(2), we proposed to remain effective until that provider, entities convicted of certain crimes,
require that enrollment may also be supplier, managing employee, such as program-related crimes, crimes
denied if: a provider, supplier, an authorized or delegated official, medical related to patient abuse or neglect, and
owner, managing employee, authorized director, supervising physician, or other conviction of a felony related to health
or delegated official an supervising health care personnel furnishing care fraud or controlled substances. In
physician, medical director, or other Medicare reimbursable services, is no addition, the Secretary has authority to
health care personnel furnishing longer excluded or sanctioned. Section exclude individuals and entities for
Medicare reimbursable services who is 424.530(b)(3) also would provide that other adverse actions including when an
required to be reported on the providers’ the denial will be effective within 30 individual or entity is owned or
or suppliers’ CMS 855 (for example, an days of the denial notification. controlled by a sanctioned or convicted
ambulance crew member) — In § 424.530(a)(3), we also proposed to individual, in accordance with section
+ Is excluded from the Medicare, require that we may deny enrollment in 1128(b)(8) of the Act.
Medicaid, or any other Federal health the Medicare program if the provider or In cases where the provider or
care programs, as defined in § 1001.2, in supplier, or any owner of the provider supplier is not a convicted individual
accordance with § 1001.1901(a); or or supplier, has been convicted of a but, rather, has an ownership or
+ Is debarred, suspended, or Federal or State felony offense that we management relationship with a
otherwise excluded from participating determine to be detrimental to the best convicted or excluded individual, that
in any other Federal procurement or interests of the Medicare program or its provider or supplier may also be subject
nonprocurement activity in accordance beneficiaries. This authority is afforded to civil monetary penalties as stated in
with FASA, section 2455; (See HHS to us in many of the HIPAA fraud and section 1128A(a)(6) of the Act. In
Common Rule provisions that discuss abuse provisions and section 4302 of the addition, we may deny or revoke billing
the effect of a program exclusion under BBA. In making assessments, we privileges if such a relationship exists.
title XI of the Act, as well as other proposed to require including any However, the denial may be reversed if,
Federal agency debarments, felony convictions from the last 10 years within 30 days of the denial
suspensions, and exclusions found at 45 or more. In addition, we would consider notification, the provider or supplier
CFR 76.100(c) and (d)). the severity of the underlying offense.
We are required to ensure that no terminates its ownership or
Felonies that we determine to be
payments are made to any providers or management relationship with the
detrimental to the best interests of the
suppliers who are excluded from convicted or excluded individual or
Medicare program or its beneficiaries
participation in the Medicare program organization.
include the following:
under authorities found in sections • Within the last 10 years or more In § 424.530(a)(4), we proposed to
1128, 1156, 1862, 1867, and 1892 of the preceding enrollment or revalidation of require that we may deny enrollment if
Act, or who are debarred, suspended or enrollment, crimes against persons, the provider or supplier has deliberately
otherwise excluded as authorized by such as rape, murder, kidnapping, submitted false or misleading
FASA. This includes any individual, assault and battery, robbery, and other information on their CMS 855 to gain
entity, or any provider or supplier that similar crimes for which the individual enrollment in the Medicare program.
arranges or contracts with (by was convicted, including guilty pleas Offenders may be subject to fines or
employment or otherwise) an individual and adjudicated pretrial diversions. We imprisonment, or both, in accordance
or entity that the provider or supplier believe it is reasonable for the Medicare with current statute and regulation.
knows or should know is excluded from program to question the ability of the In § 424.530(a)(5), we proposed
participation in a Federal health care individual or entity with such a history possible denial of enrollment where
program for the provision of items or to respect the life and property of there are repeated instances in which,
services for which payment may be program beneficiaries. upon on-site review or other reliable
made under such a program (section • Within the last 10 years or more evidence, we do not find present those
1128A(a)(6) of the Act), and any preceding enrollment or revalidation of licensed medical professionals required
provider or supplier that has been enrollment, financial crimes, such as under the statute or regulations to
debarred, suspended, or otherwise extortion, embezzlement, income tax supervise treatment or provide Medicare
excluded from participation in any evasion, making false statements, covered services for Medicare patients;
other Executive Branch procurement or insurance fraud, and other similar or we determine that the provider or
nonprocurement programs or activity crimes for which the individual was supplier is not operational to furnish
(FASA, section 2455). convicted, including guilty pleas and Medicare covered services or supplies.
Therefore, when an individual or adjudicated pretrial diversions. We As outlined in § 424.530(b), if the
entity is excluded by the OIG under believe it is reasonable for the Medicare denied provider or supplier appeals the
section 1128 of the Act, the exclusion is program to question the honesty and decision, and the denial is upheld, that
applicable to participation in all Federal integrity of the individual or entity with provider or supplier may submit a new
health care programs (including such a history in providing services and CMS 855 after we notify it that the
Medicare and Medicaid as defined in claiming payment under the Medicare original determination was upheld. If
section 1128B(f) of the Act). In addition, program. the provider or supplier did not appeal
section 1862(e) of the Act prohibits the • Within the last 10 years or more the determination, it may submit a new
Secretary from paying for items and preceding enrollment or revalidation of CMS 855 when the timeframe for appeal
services furnished by excluded enrollment, any felony that placed the rights has lapsed. We proposed this
individuals. We believe that our general Medicare program or its beneficiaries at latter requirement to prevent
authorities, in combination with the immediate risk, such as a malpractice administrative difficulties that might
prohibition against paying for items or suit that resulted in a conviction of result in processing two enrollment
services furnished by excluded criminal neglect or misconduct. forms if a new one is submitted during
individuals, provides authority for us to • Any felonies referred to in section the time period when the provider or
deny enrollment unless a provider or 1128 of the Act. supplier may appeal an initial denial.
Medicare enrollment denials would suppliers not subject to State survey and do not believe it would be prudent for
impact the provider or supplier on a certification may have their payments us to maintain an active provider
national scale. In proposed § 424.530(c), suspended during the data review. agreement for a provider or supplier
we stated that when a provider or We also proposed to require that we whose business relationship with
supplier is denied enrollment in may revoke a provider or supplier’s Medicare was adverse enough as to
Medicare, we would review all other billing privileges if the provider or cause the revocation of its billing
related Medicare enrollment files that supplier establishes the following: privileges. Section 1866(b)(2)(A) of the
the denied provider or supplier has an • Repeated instances in which, upon Act specifies that the Secretary may
association with (for example, as an on-site review or other reliable terminate a provider agreement after the
owner or managing employee) to evidence, we do not find present those Secretary has determined that the
determine if the denial warrants an licensed medical professionals required provider fails to comply substantially
adverse action of the associated under the statute or regulation to with the provisions of title XVIII. We
Medicare provider or supplier. supervise treatment of, or to provide proposed to amend § 489.53 and § 498.3
Medicare covered service for, Medicare to reflect this proposal.
H. Revocation of Enrollment and Billing In new § 424.535(c), we proposed to
patients.
Privileges From the Medicare Program Additional proposed reasons that may require that upon notification of the
Revocation occurs when an enrolled result in the revocation of billing revocation of its billing number, if the
provider or supplier’s billing privileges privileges in § 424.535(a) includes the provider or supplier seeks to re-
are terminated. In proposed § 424.535, following: establish enrollment and billing
we outlined the causes for revocation • The provider or supplier, any privileges in the Medicare program
and what a provider or supplier would owner, managing employee, authorized (either after the appeals process is
need to do to re-enroll in the Medicare or delegated official, supervising exhausted or in place of the appeals
program after revocation. In considering physician or other health care personnel process), then the provider or supplier
whether to revoke enrollment and who must be reported on the CMS 855 must complete and submit a new CMS
billing privileges in the Medicare (for example, ambulance crew member) 855 as a new provider or supplier and
program, we would consider the of the provider or supplier, in applicable documentation. Providers
severity of the offenses, mitigating accordance with section 1862(e)(1) and must be resurveyed or recertified by the
circumstances, program and beneficiary (2) of the Act, becomes excluded from State survey agency as a new provider
risk if enrollment was to continue, the Medicare, Medicaid or any other and must establish a new provider
possibility of corrective action plans, Federal health care programs, as defined agreement with our Regional Office.
beneficiary access to care, and any other in § 1001.2, in accordance with section If the billing privileges are revoked
pertinent factors. 1128 or 1156 of the Act, or is debarred, due to the adverse activity of an
In general, we proposed to require suspended or otherwise by any Federal individual or organization other than
revocation criteria that are similar to our health care program or agency. the provider or supplier, the revocation
reasons for denial of initial Medicare • The provider or supplier, or any may be reversed if the provider or
program enrollment. In § 424.535(a)(1), owner of the provider or supplier, is supplier terminates its business
we proposed to require that a provider convicted of a Federal or State felony relationship with the individual or
or supplier’s enrollment and billing offense that we determine to be organization that was responsible for the
privileges may be revoked if, at any detrimental to the best interests of the revocation within 30 days.
time, it is determined to be out of program as outlined in ‘‘Denial of As with a denial of Medicare
compliance with the Medicare Enrollment’’ above. enrollment, revocations would impact
enrollment requirements outlined in • The provider or supplier certified as the provider or supplier on a national
subpart P including failure to report ‘‘true’’ deliberately submitted false or scale. As proposed in § 424.535(d), if a
changes to enrollment information misleading information on the CMS 855 provider or supplier’s billing privileges
timely or failure to adhere to corrective in order to enroll or maintain are revoked, we would review all other
action plans, and has not corrected the enrollment in the Medicare program. related Medicare enrollment files that
problem within 30 days of notice of (Offenders may be subject to criminal or the revoked provider or supplier has an
noncompliance or submitted a plan of civil prosecution, in accordance with association with (for example, as an
corrective action as cited earlier. We current laws and regulations). owner or managing employee) to
may request additional documentation • Upon on-site review, we determine determine if the revocation warrants an
from the provider or supplier to that the provider or supplier is no adverse action of the associated
determine compliance if adverse longer operational to furnish Medicare Medicare provider or supplier.
information is received or otherwise covered services or supplies. I. Deactivation of Medicare Billing
found concerning the provider or • The provider or supplier fails to
supplier. If requested documentation we Privileges
furnish complete and accurate
required under this or other statutory or information on the CMS 855 and any When a provider or supplier’s billing
regulatory authority is not submitted applicable documentation within 60 number is deactivated, billing privileges
within 30 calendar days of our request, calendar days of our notice to recertify are suspended, but can be restored upon
we would immediately begin revocation its enrollment information. the submission of updated or recertified
proceedings. If the documentation is • The provider or supplier knowingly information. In new § 424.540, we
received timely, we would review and sells to or allows another individual or proposed to continue to deactivate a
verify the information to determine if entity to use its billing number. provider or supplier’s Medicare billing
we should proceed with the revocation. In addition to the revocation of the number if no Medicare claims are
Providers requiring State survey and provider’s or supplier’s billing submitted for 2 consecutive calendar
certification would continue to receive privileges, we proposed to require at quarters (6 months) unless current
payment during the data verification § 424.535(b) that any provider policy or regulations specify otherwise
review under current regulations found agreement in effect at the time of for specific provider or supplier types.
at part 488 and under section revocation would also be terminated Our current policy requires deactivation
1819(h)(2)(c) of the Act. Providers and effective with the date of revocation. We of billing numbers after 4 consecutive
calendar quarters (12 months) of no J. Provider and Supplier Appeals the date of ownership change, in
claim submissions. We included this In new § 424.545, we proposed that a accordance with § 424.520, § 424.540,
reduction to the current requirement provider or supplier that has been and § 489.53. Failure of the new owner
because we are aware of a number of denied enrollment in the Medicare to submit the CMS 855 prior to the
program integrity issues related to program, or whose enrollment has been change of ownership may result in the
inactive Medicare billing numbers. We revoked, may appeal our decision in deactivation of the Medicare billing
wish to prevent, for example, accordance with our regulations at part number until the CMS 855 has been
questionable businesses from 405, subpart H, for suppliers or part 498,
submitted.
deliberately obtaining multiple numbers We may deactivate a Medicare billing
subpart A, for providers. We are
so that they could keep one ‘‘in reserve’’ number at any time before final
currently drafting a single regulatory transference of the provider agreement
in the event their practices result in
appeals process for all providers and to the new owner. This may occur as a
suspension of claims payment under
suppliers denied or revoked from result of the submission of a CMS 855
their active number. We also wish to
participation in the Medicare program. with material omissions, or preliminary
prevent fraudulent entities from
In keeping with current policy, we also information received or determined by
obtaining information about
proposed that no payments would be us that makes us question whether the
discontinued providers or suppliers, for
made during the appeals process. If the new owner would ultimately be granted
example, using the Medicare billing
provider or supplier is successful in a final transference of the provider
number of a deceased physician.
We also proposed to require overturning a denial or revocation, agreement. This allows us the right to
deactivation of a billing number if we unpaid claims for services furnished ensure that billing privileges are given
discover changes to the information during the overturned period may be only to a new owner for which we have
provided on the provider or supplier’s resubmitted. adequate information to, at a minimum,
CMS 855 that were not reported within In addition, we proposed in determine that the new owner should
90 days of the change. This includes, § 424.545(b) that a provider or supplier have billing privileges prior to the
but is not limited to, changes to billing whose billing privilege was deactivated complete validation of their CMS 855
services, a change in the practice may file a rebuttal using procedures and the transfer of the provider
location, or a change of any managing found at § 405.74. agreement.
employee. A change in ownership or K. Prohibitions on the Sale or Transfer We understand that not all enrollment
control must be reported within 30 of Billing Privileges information is available before the
calendar days. change of ownership. We will work
Deactivation of Medicare billing We proposed in new § 424.550 that a with the new owner(s) to ensure a
privileges is considered a temporary provider or supplier would be seamless transition, but it is the
action to protect the provider or prohibited from selling its Medicare provider’s or supplier’s responsibility to
supplier from misuse of their billing billing number to any individual or report this and any other changes to us
number and to also protect the Medicare entity, or allowing another individual or to prevent us from imposing any
Trust Funds from unnecessary entity to use its Medicare billing adverse action against it.
overpayments. The temporary number. Similarly, we would prohibit a For those providers and suppliers not
deactivation of a billing number would provider or supplier from transferring covered by part 489, any change in the
not have any effect on a provider or its Medicare billing privileges to any ownership or control of the provider or
supplier’s participation agreement or individual or entity, except during a supplier must be reported on the CMS
conditions of participation. change in ownership, as stated below. A 855 within 90 days of the change as
In § 424.540(b), we proposed that a provider or supplier does not have noted in § 424.540(a)(2). Generally, a
provider or supplier whose billing independent authority to sell or transfer change of ownership that also changes
number has been deactivated for any any billing number issued or the billing the tax identification number would
reason other than nonsubmission of a privileges granted with the billing require a new CMS 855 from the new
claim for 6 months and who wants to number assigned. owner.
reactivate its Medicare billing number We proposed this policy because only
must complete and submit a new CMS we and our agents have the authority to L. Payment Liability
855. Those providers and suppliers issue Medicare billing numbers and In new § 424.555, we proposed that
whose billing number are deactivated grant Medicare billing privileges. These any expenses for services furnished to a
after nonsubmission of a claim must numbers are issued only after the Medicare beneficiary by those categories
recertify that the enrollment information information about the provider or of suppliers covered by section 1834 of
currently on file with Medicare is supplier collected on the CMS 855 is the Act (that is, suppliers of DMEPOS)
correct before the claim would be paid. verified. Because it is used to uniquely are the responsibility of that supplier if
In addition, the provider or supplier identify a provider or supplier, the the supplier has been denied Medicare
must meet all current Medicare Medicare billing number we issue is billing privileges. We further proposed
requirements in place at the time of the solely for use by the specific provider or that no payment may be made for
reactivation. The provider or supplier supplier to whom it was issued. covered services furnished to a
must also be prepared to submit a valid In the case of a provider or supplier Medicare beneficiary by a provider or
claim or risk subsequent deactivation of undergoing a change of ownership as supplier whose billing privileges were
their billing number. Once notified, we described in part 489 subpart A, we deactivated or revoked. The Medicare
would give all reactivations of Medicare would require at § 424.550(b) that a beneficiary would have no financial
billing numbers priority handling to CMS 855 be completed and submitted responsibility for this type of expense,
ensure expedient payment of claims. by both the current owner and the new and the provider or supplier must
Reactivation of a Medicare billing owner before the completion of the refund on a timely basis any amounts
number would not require resurvey or ownership change. Failure of the collected from the beneficiary for those
certification by State agency, or the current owner to submit the CMS 855 covered services.
establishment of a new provider prior to the change of ownership may We proposed these provisions
agreement. result in sanctions and penalties, after because a provider or supplier who fails
to provide valid enrollment information, any matter within the jurisdiction of any In addition, the following two
or who is not a valid provider or department or agency of the United sanctions were added to the CMS 855
supplier type under the Medicare States knowingly and willfully falsifies, form:
program, cannot be verified as a conceals or covers up by any trick, • 18 U.S.C. 1035 authorizes criminal
legitimate provider or supplier for scheme or device a material fact, or penalties against individuals in any
purposes of this rule. Claims or bills makes or uses any false, fictitious, or matter involving a health care benefit
submitted for covered Medicare services fraudulent statements or program who knowingly and willfully
must have an active Medicare billing representations, or makes any false falsifies, conceals, or covers up by any
number. Claims or bills submitted by a writing or document knowing the same trick, scheme, or device a material fact;
provider or supplier who is not properly to contain any false, fictitious or or makes any materially false, fictitious,
enrolled, and does not have an active fraudulent statement or entry. or fraudulent statements or
Medicare billing number, would be Individual offenders are subject to fines representations, or makes or uses any
considered incomplete and would be of up to $250,000 and imprisonment for materially false fictitious, or fraudulent
returned. The provider or supplier up to 5 years. Offenders that are statement or entry, in connection with
would then be in violation of the organizations are subject to fines of up the delivery of or payment for health
mandatory claims submission to $500,000. 18 U.S.C. 3571(d) also care benefits, items, or services. The
requirements and could be fined for authorizes fines of up to twice the gross individual shall be fined or imprisoned
each occurrence. An incomplete claim gain derived by the offender. up to 5 years or both.
returned for this reason would not be • Section 1128B(a)(1) of the Act • 18 U.S.C. 1347 authorizes criminal
afforded appeal rights for the provider authorizes criminal penalties against an penalties against individuals who
or supplier. However, a provider or individual who ‘‘knowingly and knowing and willfully execute, or
supplier may appeal a denial or willfully makes or causes to be made attempt, to execute a scheme or artifice
revocation of enrollment in accordance any false statement or representation of to defraud any health care benefit
with regulations elsewhere in this a material fact in any application for any program, or to obtain, by means of false
subpart. benefit or payment under a Federal or fraudulent pretenses, representations,
Sections 1802(b), 1834(j), 1866, and health care program.’’ The offender is or promises, any of the money or
1870 of the Act, provide Medicare subject to fines of up to $25,000 or property owned by or under the control
beneficiaries with certain protections imprisonment for up to 5 years, or both. of, any health care benefit program in
against liabilities imposed by providers • The Civil False Claims Act, 31 connection with the delivery of or
and suppliers. In section 1834(j)(4), for U.S.C. 3729, imposes a civil penalty of payment for health care benefits, items,
example, the statute protects the $5,000 to $10,000 per violation, plus or services. Individuals shall be fined or
beneficiary against demands for three times the amount of damages imprisoned up to 10 years or both. If the
payment for covered Medicare services sustained by the Government and violation results in serious bodily
by certain categories of suppliers that injury, an individual will be fined or
imposes civil liability, in part, on any
have not been granted Medicare billing imprisoned up to 20 years, or both. If
person who—
privileges. Section 1866 of the Act the violation results in death, the
+ Knowingly presents, or causes to be
prohibits providers that have entered individual shall be fined or imprisoned
presented, to an officer or an employee
into agreements described in that for any term of years or for life, or both.
of the United States Government a false
section from charging the beneficiary for
or fraudulent claim for payment or III. Analysis and Responses to Public
covered items or services that are not
paid by Medicare because the provider approval; Comments
has failed to comply with certain + Knowingly makes, uses, or causes We received a total of 152 comments
requirements. Furthermore, section to be made or used, a false record or on the April 25, 2003 proposed rule.
1802(b) of the Act, which sets forth a statement to get a false or fraudulent Below is a summary of the comments
variety of criteria under which claim paid or approved by the received and our responses to them.
physicians and practitioners may enter Government; or Comment: Several commenters stated
into private contracts with Medicare + Conspires to defraud the that the language concerning ‘‘effective
beneficiaries, provides for additional Government by getting a false or billing dates’’ was confusing.
beneficiary protection. Section 1870 of fraudulent claim allowed or paid. Commenters stated that they thought we
the Act provides that, except under • Section 1128A(a)(1) of the Act were changing the current policy on
certain circumstances, any payment to a imposes administrative sanctions on a submitting claims retroactively after the
provider of services for items or services person for the submission to a Federal enrollment process was complete.
furnished shall be considered a payment health care program of false or Response: While we understand these
to the individual, but that the individual otherwise improper claims. concerns, it was never our intent to
will not be liable for overpayment to the These administrative sanctions change our policy on effective billing
provider where the individual is include a civil monetary penalty of up dates. We have clarified and referenced
without fault. to $10,000 for each item or service current policy citations in the final
In addition, section 1128A(a)(6) of the falsely or fraudulently claimed an regulation text. We will continue to pay
Act provides for criminal penalties for assessment of up to triple the amount claims under all current reimbursement
providers and suppliers having claimed, and exclusion from policies.
knowledge of events affecting the right participation in all Federal health care Comment: Several commenters
to benefit or payment, and concealing or programs. expressed concern about our proposal to
failing to disclose such an event with an The government may assert common reduce the period of nonbilling activity
intent to fraudulently secure benefit or law claims such as ‘‘common law to deactivate a Medicare billing number.
payment when it is not authorized. fraud,’’ ‘‘money paid by mistake,’’ and This period is currently 12 months and
The CMS 855 states that the following ‘‘unjust enrichment.’’ Remedies include we proposed reducing it to 6 months.
penalties may be imposed: compensatory and punitive damages, Response: Based on the expressed
• 18 U.S.C. 1001 authorizes criminal restitution, and recovery of the amount concerns, we will maintain the current
penalties against an individual who in of the unjust profit. 12-month period. In addition, to avoid
future misinterpretation, we have one entity can sign the CMS 855 on Response: We appreciate these
defined the 12-month time period as behalf of another entity. suggestions and will consider adopting
beginning the 1st day of the 1st month Comment: Several commenters made as we develop our electronic enrollment
without the submission of a claim comments regarding the provider/ process.
through the last day of the 12th supplier enrollment applications that Comment: One commenter
consecutive month without submitting a were published in 2001. recommended that we develop pre-
claim. Response: We considered these populated revalidation applications
Comment: Several commenters changes as we developed the latest which list the current information on
expressed concern regarding our version of the provider and supplier enrolled providers and suppliers. This
proposal to begin a 3-year revalidation enrollment applications. These fully would allow providers and suppliers to
process for all providers and suppliers revised applications were published in simply verify that the information is
billing Medicare. The concerns were the Federal Register in July 2005. Some correct, make necessary corrections, and
with our ability to efficiently handle the of the changes to the redesigned sign the document to attest to the
additional workload and continue to provider/supplier enrollment correctness of the information provided.
issue new Medicare billing numbers in applications were made in preparation Response: As we stated in the
a timely manner. for an electronic enrollment process. We preamble to the proposed rule, we
Response: While we appreciate this will continue to use the approved support this approach and appreciate
concern, we will not implement this version (November 2001) of the provider this recommendation. We believe that
initiative until OMB approves changes and supplier enrollment applications the electronic enrollment process will
to the November 2001 provider/supplier until the revised applications are allow providers and suppliers to verify
enrollment applications. approved by OMB. existing information, make necessary
Comment: One commenter requested corrections, and attest to the correctness
Comment: Several commenters
that we clarify if currently enrolled of the information submitted.
recommended that we add a number of Comment: One commenter
definitions, including provider, providers and suppliers are required to
complete a provider enrollment recommended postponing the effective
supplier, applicant, and managing date of revalidation until technology is
director to this final rule. Moreover one application.
Response: All providers and available for electronic submission.
of these commenters recommended that Response: We understand this
suppliers, including those currently
all definitions in the enrollment forms commenter’s concern. However, we do
billing Medicare, will be required to
be included in the regulation and that not believe that it is practical to delay
complete and submit an enrollment
all definitions included in the final rule implementation of revalidation until an
application. We will phase-in the
be included in the instructions to the electronic process is established.
revalidation process for providers and
enrollment forms. Moreover, section 902 of the Medicare
suppliers currently participating in the
Response: We decided not to include Prescription Drug, Improvement and
Medicare program.
additional definitions because many of Comment: One commenter questioned Modernization Act of 2003 (MMA)
the definitions that commenters the need to obtain a national provider amended section 1871(a) of the Act and
requested that we include in this final identifier and also enroll in the requires us to publish a final regulation
rule are already defined in statute. Medicare program. within 3 years of publishing proposed
However, to ensure consistency in Response: The National Provider or interim final regulation in order to
application and clarity for individual Identifier (NPI) will replace healthcare implement the proposed or interim final
and organizational applicants, our provider identifiers in use today in regulation.
manuals and the provider enrollment standard healthcare transactions. The Comment: A number of commenters
applications will include all necessary application and request for a NPI does recommended that CMS phase-in
definitions. We do not believe that it is not replace the enrollment process for requirements to submit an initial
necessary to include all of the Medicare. Enrolling in a particular enrollment application or respond to a
definitions included in the enrollment health plan authorizes providers and revalidation request.
applications in this regulation. suppliers to bill and be paid for services Response: We agree that a phased-in
Comment: One commenter covered under Medicare. approach will limit delays in the
recommended that we amend the Comment: A number of commenters enrollment process. While we note that
proposed regulation to affirmatively expressed the need for us to have an a provider or supplier may voluntarily
state that a W–2 employee of the electronic enrollment process, including submit an enrollment application at any
applicant parent corporation can serve the ability to update and report changes time, we will instruct our contractors to
as a delegated official, even though he to their enrollment information. process new enrollment applications
or she may or may not be a W–2 Response: We are currently first, request and process enrollment
employee of the applicant itself. developing a web-based electronic applications for providers and suppliers
Response: We believe that it is enrollment process which will also currently billing the program second,
essential that any individual assigned as allow for reporting changes and initiate revalidation activities for
a delegated official has a direct electronically. We expect this process to most providers and suppliers third.
relationship and connection with the be operational in 2007. It is expected Clearly, we will monitor the processing
applicant. We recognize that there are that this process will reduce the burden of enrollment applications to ensure
instances where an employee of a on the providers and suppliers and that all applications are processed
provider’s parent company may exercise speed the approval process for new within established time frames.
a tremendous degree of authority over applications. Comment: A number of commenters
the provider. However, in these cases Comment: Several commenters expressed concern about individual
the fact remains that the provider and expressed the need for us to establish an contractors’ ability to process the
the parent company are two separate electronic signature process. Another increased workload associated with
legal entities. For obvious legal reasons, commenter recommended that obtaining and validating new
we simply cannot establish a blanket providers and suppliers be allowed to enrollment applications for existing
provision whereby a W–2 employee of report changes electronically. providers.
Response: In addition to processing other providers and suppliers who are to immediately deny or revoke
enrollment applications for providers currently billing Medicare but who have enrollment in the Medicare program.
and suppliers seeking entry into the not completed and submitted an Response: We will consider that
Medicare program, we expect that our enrollment application. Moreover, we nature of the negative finding in
fee-for-service contractors will request will instruct our contractors to work determining whether to deny or revoke
enrollment applications from providers closely with individual providers and enrollment. We will use the criteria
and suppliers already billing the suppliers, provider organizations, and established in § 424.515(c)(1) and (2) to
Medicare program in FY 2006 and FY State and local associations to ensure conduct on-site inspections. In addition,
2007. In addition, we expect they will that enrollment process is implemented if it is determined to deny or revoke
conduct a limited number of in an efficient manner. We will closely enrollment, we will ensure that every
revalidations in FY 2006 and FY 2007, monitor fee-for-service contractor provider and supplier is afforded the
with an increased number of workloads and processing times to appropriate appeals rights. We believe
revalidations in FY 2008. By focusing ensure that all enrollment applications that providers and suppliers must meet
on processing enrollment applications are processed in a timely manner. the enrollment criteria prior to
for new applicants and existing Comment: Several commenters enrollment. Moreover, providers and
Medicare providers and suppliers who recommended that we allow providers suppliers have an obligation to notify
have not completed and submitted a and suppliers 90 days to respond to their fee-for-service contractor in a
Medicare enrollment application, we contractor’s initial or revalidation timely manner regarding any changes in
expect to process enrollment request. their enrollment application. Therefore,
applications in a timely manner. Response: We believe that provider we will not adopt this recommendation.
Comment: Several commenters and suppliers can routinely respond to Comment: One commenter
recommended that we establish a 5-year an initial or revalidation request within recommended that we provide
cycle rather than a 3-year cycle for 60 days. This is especially true for those permissive exemption from revalidation
revalidation. providers and suppliers who submit for providers that can demonstrate a
Response: We appreciate these changes to the fee-for-service contractor good reporting history or multi-facility
comments and agree that establishing a as they occur. For those providers or providers with a well-developed and
5-year revalidation cycle rather than a 3- effective reporting system for reporting
suppliers needing additional time to
year cycle reduces the burden on changes.
respond to a contractor’s request for
providers and suppliers. Therefore, we Response: We believe that an
enrollment data, providers and
have revised the final rule to establish exemption process for revalidation is
suppliers should notify the contractor
a 5-year revalidation cycle. We believe not viable because revalidation is a
that additional time is needed.
that extending the revalidation cycle by separate process from provider survey
However, if a provider or supplier fails
an additional 2 years from our proposed and certification procedures.
to submit the requested application and
approach will lessen the burden on Comment: One commenter
supporting documentation in a timely
providers and suppliers. Moreover, recommended that we establish a
manner, contractors will need to make
since providers and suppliers are process to ‘‘grandfather’’ providers who
a decision regarding revocation.
required to update their enrollment already have Medicare billing numbers.
when changes occur, we believe that we Comment: Several commenters Response: We believe that it is
will be able to ensure that we maintain recommended that we not conduct essential that all providers and
correct enrollment information for each unannounced site visits to verify suppliers who are billing the Medicare
provider or supplier billing the enrollment information. program furnish complete and accurate
Medicare program. Response: We believe that enrollment information that can be
Comment: Several commenters unannounced site visits are a useful tool validated to ensure compliance with
recommend that we describe how to ensure that providers and suppliers Medicare requirements. Therefore, we
providers and suppliers would be are meeting their enrollment will not establish a process to
notified about revalidation. requirements. Therefore, we will ‘‘grandfather’’ providers who already
Response: We expect that a fee-for- continue this practice to verify have Medicare billing numbers.
service contractor would notify the enrollment information. Comment: Several commenters
provider or supplier in writing Comment: Several commenters recommended that we provide
regarding the need to revalidate its recommended that we exclude certain additional information about the
enrollment information. Once notified, provider types (that is, SNFs) from the provider enrollment appeals process.
providers and suppliers would be revalidation site visit process. Response: We will establish an
expected to review, update and submit Response: While we understand these appeals process for providers and
any changes and supporting commenters’ concerns, we believe that a suppliers whose applications for
documentation regarding the enrollment revalidation site visit is a useful tool to enrollment or revalidation of enrollment
record within 60 days. If no changes ensure that providers and suppliers are denied or revoked in a separate
have occurred, a provider or supplier maintain their practice location and proposed regulation.
would simply sign, date, and return the other enrollment information on file Comment: One commenter
revalidation application. with Medicare. In addition, we have not recommended that all potential
Comment: Several commenters raised been able to develop an objective suppliers be accredited.
concerns about our contractors’ ability measure that would allow us to exclude Response: In implementing section
to review and validate enrollment some provider types from revalidation, 302 of the MMA, we will publish a
applications for the large numbers of but not others. Therefore, we will proposed rule that would implement a
physicians who are currently billing continue to use site visits in the competitive bidding program for
Medicare but who have not completed revalidation process as we deem suppliers of durable medical equipment,
an enrollment application. appropriate. prosthetics, orthotics, and supplies
Response: To mitigate any potential Comment: One commenter (DMEPOS). This proposed rule would
processing delays, we will phase-in the recommended that a negative finding also implement new quality and
enrollment of physicians along with all from a site visit not be used as a basis accreditation standards for all suppliers
of DMEPOS items and services, it would be practical to establish an Comment: One commenter
including suppliers who will participate exception policy at this time. We expect recommended that we continue the
in the DMEPOS competitive bidding that our contractors will prioritize the current practice of enrolling providers
program. While we are developing a need for site visits for both newly subject to certification surveys as of the
competitive bidding program for enrolling and existing providers and date of their initial survey.
DMEPOS suppliers, we do not suppliers. Response: We appreciate this
anticipate developing a separate Comment: One commenter raised comment and have clarified that we are
accreditation program for other supplier concerns about CMS charging user fees maintaining the effective dates for
types. to pay for costs associated with reimbursement that are specified in
Comment: Several commenters enrolling in the Medicare program. § 489.13 for providers and suppliers
recommended that we establish Response: As part of the rulemaking requiring State survey or certification or
provider enrollment processing process, we did not propose charging a accreditation, § 424.5 and § 424.44 for
timeliness standards. fee to enroll in the Medicare program. nonsurveyed or certified/accredited
Response: In implementing section Comment: One commenter asked that suppliers, and § 424.57 and section
936(a)(2) of the MMA, we expect to we clarify language contained in 1834(j)(1)(A) of the Act for DMEPOS
publish a proposed rule which specifies § 424.530(a)(3) and § 424.535(a)(3) suppliers.
the time frames in which the Medicare which refers to reporting felony Comment: One commenter stated that
fee-for-service contractors are expected convictions. the proposed rule blurs the concepts of
to process all provider and supplier Response: We have clarified that we ‘‘routine revalidation’’ with ‘‘non-
enrollment applications. routine revalidation’’ and that we
may deny or revoke a provider or
Comment: Several commenters should clarify these concepts.
supplier’s billing privileges if the
recommended that we clarify the Response: We appreciate this
provider or supplier was convicted of comment and have clarified the
definition of the term, ‘‘managing certain types of felonies as specified in
employee.’’ concepts of ‘‘revalidation’’ and ‘‘off
§ 424.530(a)(3) and § 424.535(a)(3) cycle revalidation.’’ We believe that
Response: We believe that the within the 10 years preceding
statutory language at section 1126(b) of revalidation activities would occur on a
enrollment or revalidation of scheduled basis (for example, every 5
the Act is clear and places no limits on enrollment.
the number of managing employees who years) while off cycle revalidations
Comment: Several commenters would occur when warranted to assess
must be reported. Accordingly, we are recommended that we notify providers
not making any changes to this and confirm the validity of the
regarding an upcoming revalidation by enrollment information provided to
definition. sending any request via certified mail to
Comment: Several commenters CMS.
the authorized representative listed on Comment: One commenter suggested
recommended that we allow physicians
the enrollment application. that the enrollment process be national
to revalidate their enrollment in
Response: We do not believe that this in scope where a provider or supplier
Medicare through the credentialing
level of operational detail is required in need only complete one application to
office of a hospital.
Response: We believe that this this final rule. We believe that requiring be able to render services anywhere in
approach would result in an increase in the use of certified mail will the country without completing another
the administrative burden on most significantly increase administrative application.
hospitals and thus are unable to adopt costs for the program. Moreover, we Response: While we have made every
this approach. believe that we should be able to effort to reduce the paperwork burden
Comment: One commenter maintain a level of flexibility regarding associated with enrolling in the
recommended that we remove the our notification procedures. Medicare program, we can not use a
surety bond section (Section 11) from Comment: One commenter asked that single enrollment application because of
the CMS 855S application. we clarify the distinction between the large number of different provider
Response: We concur with this enrolling in the Medicare program and and supplier types and specialties, each
recommendation and will remove the establishing and maintaining billing with different eligibility requirements
surety bond section from all versions of privileges. This commenter also asked for enrollment in the Medicare program.
the provider enrollment application that we provide an example of the This avenue was attempted in the past
when we update and republish these circumstances under which a provider and was unsuccessful. With the release
applications. would be issued an identification of the new Medicare enrollment
Comment: One commenter stated that number without activating the applications, we have simplified the
it was unclear whether our carriers and corresponding billing privileges. enrollment process and combined forms
FIs, or State agencies would conduct Response: Providers and suppliers are and or sections of information collection
provider enrollment site visits. required to enroll in Medicare prior to where possible. CMS will further
Response: Medicare carriers and FIs submitting a claim. The enrollment simplify multi-State enrollment burdens
will conduct provider enrollment site process allows Medicare to determine if when the web based forms and
visits. State agencies and other the provider or supplier meets all submission process are implemented.
accrediting bodies will continue to applicable Federal and State Thus, it is not administratively feasible
conduct the survey and certification of requirements. Once a provider or to adopt this comment.
providers separately. supplier is enrolled in a Medicare Comment: One commenter asked that
Comment: One commenter program, it can obtain Medicare billing we clarify that this rule only applies
recommended that we provide a site privileges. These privileges continue as when a provider or supplier is billing
visit exemption to selected provider long as the provider or supplier for ‘‘Medicare-covered’’ services or
groups, which have exhibited continues to meet applicable Federal supplies.

compliance with all Medicare and State requirements. Therefore, we Response: We agree with this
guidelines and requirements. have clarified in this final rule the commenter and have added the phrase
Response: We understand the requirements to enroll or remain ‘‘Medicare covered services or supplies’’
commenter’s concern, but do not believe enrolled in the Medicare program. to § 424.500.
Comment: One commenter requested Response: We will consider this issue In § 424.510, we adopted language to
that a change in the ‘‘control of an in future rulemaking. Initially, we clarify that the current policy remains
entity’’ not be held to the same stringent believe that it is essential that we obtain the same and that a provider or supplier
requirements as a change in valid enrollment information on all must submit to us the applicable
‘‘ownership’’ of an entity. providers and suppliers who have a provider/supplier enrollment
Response: Because past history has business relationship with the Medicare application based on the type of
shown this to be a problematic program. provider or supplier enrolling.
enrollment reporting area, we are not IV. Provisions of the Final Rule Currently, the applicable enrollment
able to adopt this request. applications are identified as follows:
Comment: One commenter asked that We are adopting the provisions of the • CMS 855A—Medicare Enrollment
we allow flexibility on the timeframe to proposed rule as final with the Application for Institutional Providers.
submit additional information when it following changes. • CMS 855B—Medicare Enrollment
is missing from the enrollment Section 936(a)(2) of the MMA Application for clinics, Group Practices
application. established section 1866(j)(1)(A) of the and Certain Other Suppliers.
Response: To assist providers and Act which requires that the Secretary • CMS 855I—Medicare Enrollment
establish a process by regulation for the Application for Physicians and Non-
suppliers in determining what
enrollment of providers and suppliers. Physician Practitioners.
documentation must be submitted with
an enrollment application, we are
Therefore, we refer to this authority to • CMS 855R—Medicare Enrollment
collect enrollment information. Application for Reassignment of
revising section 17 of the provider/
In § 424.530 and § 424.535, we revise Medicare Benefits.
supplier enrollment application to
clarify what documents must be
the regulation text to include the • CMS 855S—Medicare Enrollment
authority given to us in sections 1128A Application for Durable Medical
submitted with the enrollment
and 1842 of the Act regarding exclusion Equipment, Prosthetics, Orthotics, and
application. The fee-for-service
authorities. Supplies (DMEPOS) Suppliers.
contractor will notify a provider or In § 424.505, we clarify that we will • The appropriate CMS Internet web
supplier regarding any missing maintain our practice that all providers based electronic version of the provider/
documentation. In addition, § 424.525 and suppliers have a valid Medicare supplier enrollment applications.
states that a contractor may reject an billing number at the time that a claim
applicant’s enrollment application if it is being submitted for Medicare covered Note: CMS is currently developing these
fails to furnish all required supporting items or services. electronic enrollment applications and
documentation within 60 calendar days expects it to be available in 2007.
Under section 1834 (j)(1)(A) of the
of submitting the enrollment Act, DMEPOS suppliers must have an The applicable enrollment application
application. Contractors may extend the effective Medicare billing number for is used to gather information on
60-day period if the contractor the date an item or service was rendered providers and suppliers for the purposes
determines that the provider or supplier in order to receive payment for of authorizing billing numbers and
is actively working with CMS to resolve Medicare covered items or services. establishing eligibility to furnish
any outstanding issues. Under longstanding policy and services to Medicare beneficiaries. The
Comment: One commenter stated that operating procedures any claim information submitted also allows for
current regulations in § 489 do not allow submitted with an inactive billing the unique identification of the
termination of a provider agreement if number is incomplete and cannot be providers and suppliers for the purpose
billing privileges are terminated. processed for payment. Providers and of enumeration and payment. The CMS
Response: We are changing the suppliers who are not enrolled in the 855 forms have been used since 1996
provisions at § 489 which allow these Medicare program must adhere to the and were approved by OMB for these
terminations to occur. mandatory claims submission rules purposes (OMB approval number 0938–
Comment: One commenter asked that specified in section 1848(g)(4) of the Act 0685).
the requirements for reporting a change and § 424.32(a)(1) (Basic requirements At § 424.510(d)(2), we are adopting
of ownership be removed or lessened. for all claims). In addition, a claim the provisions which requires that a
Response: In order to maintain correct submitted without a valid Medicare provider or supplier submit the
provider and supplier enrollment billing number would not be considered following on the appropriate enrollment
information, we believe that it is a valid claim and will be rejected. If the application:
reasonable for providers to provide mandatory claims submission • Complete, accurate and truthful
information regarding changes in requirements are not met, the provider responses to all information requested
ownership in a timely manner. or supplier may have sanctions imposed within each section as applicable to the
Comment: A commenter suggested as outlined in section 1848(g)(4) of the provider or supplier type.
that we could reduce some Act for failure to file a claim as required. • All documentation required by
administrative burden if we specified We are adopting a position that the CMS under this or other statutory or
that the payment liability provisions issuance of an identification number, regulatory authority, or under the
only apply after all appeals processes including a NPI, to a provider or Paperwork Reduction Act of 1995 to
have been rendered. supplier does not automatically convey uniquely identify the provider or
Response: We appreciate this the privilege to bill Medicare. There supplier (for example, an NPI, a SSN or
comment, but are unable to adopt this must be a corresponding approval of the a TIN). We are including the NPI
suggestion because we must comply provider or supplier as meeting all because it closely resembles other types
with the limitation on patient liability Federal and State requirements to bill of information contained in the
as specified in section 1834(j)(4) of the Medicare for the identification number proposed rule. Further, CMS will not be
Act. to be an approved and active Medicare able to finalize the enrollment review
Comment: One commenter suggested billing number. The NPI, as defined in process after May 23, 2007, unless the
we only revalidate providers that are 45 CFR part 162, subpart D, will be the provider or supplier furnishes an NPI.
proven to be a potential threat to the Medicare billing number upon its • All documentation required by us
Medicare program or the beneficiary. adoption the Medicare program. under this or other statutory or
regulatory authority, or under the which also must be reported within 30 afforded to us in many of the HIPAA
Paperwork Reduction Act of 1995 to days. Failure to do so may result in fraud and abuse provisions and section
establish the provider or supplier’s deactivation or even revocation of their 4302 of the BBA. In making
eligibility to furnish items or services to billing privileges. assessments, we are stating that any
beneficiaries in the Medicare program In § 424.525, we are adopting a felony convictions within the last 10
(for example, a medical license or position that if a provider or supplier years preceding enrollment or
business license). enrolling in the Medicare program for revalidation of enrollment. In addition,
In § 424.515, we are adopting a 5-year the first time fails to furnish complete we would consider the severity of the
revalidation cycle. In adopting a 5-year information on the enrollment underlying offense.
revalidation cycle, we believe that we application, or fails to furnish missing Felonies that we determine to be
can address the concerns raised during information or any necessary supporting detrimental to the best interests of the
the public comment process about fee- documentation as required by CMS Medicare program or its beneficiaries
for-service contractor’s ability to under this or other statutory or include the following:
continue to process new enrollments regulatory authority within 60 calendar • Within the last 10 years preceding
while also conducting revalidation days of our request to furnish the enrollment or revalidation of
activities. Moreover, we believe that information, we would reject the enrollment, crimes against persons,
extending the revalidation cycle from 3 provider or supplier’s enrollment such as murder, kidnapping, rape,
years to 5 years will significantly application. Rejection would not occur assault and battery, robbery, and other
decrease the burden on providers and if the provider or supplier is actively similar crimes for which the individual
suppliers. communicating with us to resolve any was convicted, including guilty pleas
We will contact all providers and issues regardless of any timeframes. and adjudicated pretrial diversions. We
suppliers directly as to when their 5- Upon notification of a rejected believe it is reasonable for the Medicare
year revalidation cycle starts beginning enrollment application, if the provider program to question the ability of the
with those providers and suppliers or supplier still wishes to enroll in the individual or entity with such a history
currently enrolled in the Medicare Medicare program, they must begin the to respect the life and property of
program but that have not submitted a enrollment process over by completing program beneficiaries.
completed enrollment application. The and submitting a new enrollment • Within the last 10 years preceding
revalidation process would ensure that application and all applicable enrollment or revalidation of
we collect and maintain complete and documentation. Since CMS cannot enrollment, financial crimes, such as
current information on all Medicare process an incomplete enrollment extortion, embezzlement, income tax
providers and suppliers and ensure application, we must reject the evasion, making false statements,
continued compliance with Medicare application. Further, we clarify that insurance fraud and other similar
requirements. In addition, this process applications that are rejected are not crimes for which the individual was
further ensures that Medicare afforded appeal rights. convicted, including guilty pleas and
beneficiaries are receiving items or In § 424.530(a)(2) and § 424.535(a)(2), adjudicated pretrial diversions. We
services furnished only by legitimate we clarify that no payments will be believe it is reasonable for the Medicare
providers and suppliers, and made to any providers or suppliers who program to question the honesty and
strengthens our ability to protect the are excluded from participation in the integrity of the individual or entity with
Medicare Trust Funds. Medicare program under authorities such a history in providing services and
We will reserve the right to perform found in sections 1128, 1128A, 1156, claiming payment under the Medicare
off cycle (non-routine) revalidations and 1862, 1867, and 1892 of the Act, or who program.
request a provider or supplier to are debarred, suspended or otherwise • Within the last 10 years preceding
recertify as to the accuracy of the excluded as authorized by the FASA. enrollment or revalidation of
enrollment information when warranted This includes any individual, entity, or enrollment, any felony that placed the
to assess and confirm the validity of the any provider or supplier that arranges or Medicare program or its beneficiaries at
enrollment information. Off cycle contracts with (by employment or immediate risk, such as a malpractice
revalidations may be triggered as a otherwise) an individual or entity that suit that resulted in a conviction of
result of information indicating local the provider or supplier knows or criminal neglect or misconduct.
health care fraud problems, national should know is excluded from • Any felonies referred to in section
initiatives, fraud investigations, participation in a Federal health care 1128 of the Act.
complaints from beneficiaries, or other program for the provision of items or In § 424.530(a)(5), we are adopting a
reasons that cause us to question the services for which payment may be position that we may deny enrollment
integrity of the provider or supplier in made under such a program (section when, upon on-site review or other
its relationship with the Medicare 1128A(a)(6) of the Act), and any reliable evidence, we determine that the
program. Like routine revalidations, off provider or supplier that has been provider or supplier is not operational
cycle revalidations may or may not be debarred, suspended, or otherwise to furnish Medicare covered items or
accompanied by site visits. excluded from participation in any services or is not meeting these
In § 424.520(b), we are adopting a other Executive Branch procurement or Medicare enrollment requirements or
policy that individuals and nonprocurement programs or activity the requirements set forth in the
organizations are responsible for (FASA, section 2455). enrollment application.
updating their enrollment information In § 424.530(a)(3), we are adopting the As outlined in § 424.530(b), if the
to reflect any changes in a timely position that we may deny enrollment denied provider or supplier appeals the
manner. We would define timely as in the Medicare program if the provider decision, and the denial is upheld, that
meaning within 90 days, with the or supplier, or any owner of the provider or supplier may submit a new
exception of DMEPOS suppliers which provider or supplier has been convicted enrollment application after we notify it
are currently required to report changes of a Federal or State felony offense that that the original determination was
of enrollment information within 30 we determine to be detrimental to the upheld. If the provider or supplier did
days, or a change in ownership or best interests of the Medicare program not appeal the determination, it may
control of any provider or supplier or its beneficiaries. This authority is submit a new enrollment application
when the time frame for appeal rights Secretary has determined that the Deactivation of Medicare billing
has lapsed. We are adopting this latter provider fails to comply substantially privileges is considered an interim
requirement to prevent administrative with the provisions of title XVIII. We action to protect the provider or
difficulties that might result in proposed to amend § 489.53 and § 498.3 supplier from misuse of their billing
processing two enrollment forms if a to reflect this proposal. number and to also protect the Medicare
new one is submitted during the time In new § 424.535(c), we require upon Trust Funds from unnecessary
period when the provider or supplier notification of the revocation of its overpayments. The deactivation of a
may appeal an initial denial. billing privileges that the provider or billing number would not have any
In § 424.535, we are also adopting a supplier must complete and submit a effect on a provider or supplier’s
position that we may revoke a provider new enrollment application as a new participation agreement or conditions of
or supplier’s billing privileges if we provider or supplier and applicable participation.
find: documentation. Providers must be In § 424.540(b), we added language to
• The provider or supplier, any resurveyed or recertified by the State clarify the requirements of reactivation
owner, managing employee, authorized survey agency as a new provider and of billing privileges when a provider or
or delegated official, supervising must establish a new provider supplier’s billing number is deactivated,
physician or other health care personnel agreement with our Regional Office. but can be restored upon the submission
who must be reported on the enrollment If the billing privileges are revoked of updated or recertified information.
application, of the provider or supplier, due to the adverse activity of an We are requiring that a provider or
becomes excluded from the Medicare, individual or organization other than supplier whose billing number has been
Medicaid or any other Federal health the provider or supplier, the revocation deactivated for any reason other than
care programs, as defined in § 1001.2, or may be reversed if the provider or nonsubmission of a claim for 12 months
is debarred, suspended or otherwise supplier terminates its business and who wants to reactivate its
excluded from participating in any other relationship with the individual or Medicare billing number must complete
Federal health care program or agency. organization that was responsible for the and submit a new enrollment
• The provider or supplier, or any application as appropriate. Those
revocation within 30 days.
owner of the provider or supplier, is providers and suppliers whose billing
As with a denial of Medicare
convicted of a Federal or State felony number are deactivated after
enrollment, revocations would impact
offense that we determine to be nonsubmission of a claim must recertify
the provider or supplier on a national
detrimental to the best interests of the that the enrollment information
scale. In § 424.535(e), we added
program as outlined in ‘‘Denial of currently on file with Medicare is
language to clarify that if a provider or
Enrollment’’ above. correct before the claim would be paid.
• The provider or supplier certified as supplier’s billing privileges are revoked,
In addition, the provider or supplier
‘‘true’’ deliberately submitted false or we would review all other related
must meet all current Medicare
misleading information in order to Medicare enrollment files and practice
requirements in place at the time of the
enroll or maintain enrollment in the locations that the revoked provider or
reactivation. The provider or supplier
Medicare program. (Offenders may be supplier has an association with (for
must also be prepared to submit a valid
subject to criminal or civil prosecution, example, as an owner or managing claim or risk subsequent deactivation of
in accordance with current laws and employee of another enrolled their billing number. Once notified, we
regulations). organization, or member of a group would give all reactivations of Medicare
• Upon on-site review, we determine practice) to determine if the initial billing numbers priority handling to
that the provider or supplier is no revocation warrants additional ensure expedient payment of claims.
longer operational to furnish Medicare revocations of the other associated Reactivation of a Medicare billing
covered items or services. Medicare providers or suppliers. number would not require resurvey or
• The provider or supplier fails to In § 424.535(f) we added language that certification by State agency, or the
furnish complete and accurate the revocation becomes effective within establishment of a new provider
information on the enrollment 30 days of the initial revocation agreement.
application and any applicable notification. In § 424.540, we add that to In § 424.545(a), we clarify that
documentation within 60 calendar days continue to deactivate a provider or payment will not be made during the
of our notice to recertify its enrollment supplier’s Medicare billing number if no appeals process.
information. Medicare claims are submitted for 12 In § 424.545(c),we require that the
• The provider or supplier knowingly consecutive months unless current provider or supplier be able to
sells to or allows another individual or policy or regulations specify otherwise demonstrate that they meet the
entity to use its billing number. for specific provider or supplier types. enrollment requirements and be able to
In addition to the revocation of the The 12 month period will begin the 1st make available any documents and
provider’s or supplier’s billing day of the 1st month without a claims records that support the provisions of
privileges, we will require at submission through the last day of the this regulation and the Medicare
§ 424.535(b) that any provider 12th month without a submitted claim. enrollment application.
agreement or supplier agreement in We are also adopting a position to In § 424.550, we state that a provider
effect at the time of revocation would require deactivation of a billing number or supplier would be prohibited from
also be terminated effective with the if we discover changes to the selling its Medicare billing number to
date of revocation. We do not believe it information provided on the provider or any individual or entity, or allowing
would be prudent for us to maintain an supplier’s enrollment application that another individual or entity to use its
active provider agreement for a provider were not reported within 90 days of the Medicare billing number. Similarly, we
or supplier whose business relationship change. This includes, but is not limited would prohibit a provider or supplier
with Medicare was adverse enough as to to, changes to billing services, a change from transferring its Medicare billing
cause the revocation of its billing in the practice location, or a change of privileges to any individual or entity,
privileges. Section 1866(b)(2)(A) of the any managing employee. A change in except during a change of ownership, as
Act specifies that the Secretary may ownership or control must be reported stated below. A provider or supplier
terminate a provider agreement after the within 30 calendar days. does not have independent authority to
sell or transfer any billing number application and the transfer of the submission requirements and could be
issued or the billing privileges granted provider agreement. fined for each occurrence as set forth in
with the billing number assigned. We understand that not all enrollment Section 1848(g)(4) of the Act. An
We are adopting this policy because information is available before the incomplete claim returned for this
only CMS and its agents can enroll change of ownership. We will work reason would not afford appeal rights
providers and suppliers and grant with the new owner(s) to ensure a for the provider or supplier. However,
Medicare billing privileges. These seamless transition, but it is the as described earlier, a provider or
numbers are issued only after the provider’s or supplier’s responsibility to supplier may appeal a denial or
information about the provider or report this and any other changes to us revocation of enrollment in accordance
supplier collected on the applicable to prevent us from imposing any with regulations elsewhere in this
enrollment application is verified. adverse action against it. subpart.
Because it is used to uniquely identify For those providers and suppliers not
covered by part 489, and change in the V. Collection of Information
a provider or supplier, the Medicare Requirements
billing number we issue is solely for use ownership of control of the provider or
by the specific provider or supplier to supplier must be reported on the Under the Paperwork Reduction Act
whom it was issued. enrollment application within 30 days of 1995, we are required to provide 30-
of the change as noted in day notice in the Federal Register and
In the case of a provider or supplier § 424.540(a)(2). Generally, a change of solicit public comment before a
undergoing a change of ownership as ownership that also changes the tax collection of information requirement is
described in part 489 subpart A, we identification number would require a submitted to the Office of Management
would require at § 424.550(b) that an new enrollment application from the and Budget (OMB) for review and
enrollment application be completed new owner. approval. In order to fairly evaluate
and submitted by both the current In § 424.555, we clarify that no whether an information collection
owner and new owner before the payment may be made for otherwise should be approved by OMB, section
completion of the ownership change. covered items or services furnished to a 3506(c)(2)(A) of the Paperwork
Failure of the current owner to submit Medicare beneficiary by a provider or Reduction Act of 1995 requires that we
an enrollment application prior to the supplier whose billing privileges were solicit comment on the following issues:
change of ownership may result in deactivated or revoked. The Medicare • The need for the information
sanctions and penalties, after the date of beneficiary would have no financial collection and its usefulness in carrying
ownership change, in accordance with responsibility for this type of expense, out the proper functions of our agency.
§ 424.520, § 424.540, and § 489.53. and the provider or supplier must, after • The accuracy of our estimate of the
Failure of the new owner to submit the all appeal processes have been information collection burden.
enrollment application prior to the exhausted and if the billing privileges • The quality, utility, and clarity of
change of ownership may result in the have not been restored, refund on a the information to be collected.
deactivation of the Medicare billing timely basis any amounts collected from • Recommendations to minimize the
privileges until the enrollment the beneficiary for those otherwise information collection burden on the
application has been submitted. covered items or services. affected public, including automated
We may deactivate a Medicare billing We are adopting these provisions collection techniques.
number at any time before final because a provider or supplier who fails
transference of the provider agreement to provide valid enrollment information, Section 424.510 Requirements for
to the new owner. This may occur as a or who is not a valid provider or Obtaining a Billing Number and
result of the submission of an supplier type under the Medicare Medicare Billing Privileges
enrollment application with material program, cannot be verified as a To enroll in the Medicare program
omissions, or preliminary information legitimate provider or supplier for and obtain and activate a Medicare
received or determined by us that makes purposes of this rule. Claims or bills provider or supplier billing number,
us question whether the new owner submitted for otherwise Medicare § 424.510(a) requires a provider or
would ultimately be granted a final covered items or services must have an supplier to complete and submit an
transference of the provider agreement. active Medicare billing number. Claims enrollment application to us,
This allows us the right to ensure that or bills submitted by a provider or demonstrating that the provider or
billing privileges are given only to a supplier who is not properly enrolled, supplier meets all of the requirements
new owner for which we have adequate and does not have an active Medicare set forth in this section. The burden
information to, at a minimum, billing number, would be considered associated with these requirements are
determine that the new owner should incomplete and would be returned. The currently captured in form CMS 855
have billing privileges prior to the provider or supplier would then be in (OMB Approval Number 0938–0685)
complete validation of their enrollment violation of the mandatory claims and shown below in Table 1.
TABLE 1.—CURRENT ESTIMATED HOURS FOR COMPLETION OF CMS 855 FORMS FOR INITIAL ENROLLMENT
Total number of Total cost in
CMS form Estimated number Estimated time for completion per respondent hours for dollars
No. of respondents completion (millions)
855A ................. 5,000 6 hours ....................................................................................... 30,000 $4.5

855B ................. 35,000 6 hours ....................................................................................... 210,000 31.5
855I ................... 75,000 4 hours ....................................................................................... 300,000 6

855R ................. 100,000 15 minutes .................................................................................. 25,000 0.5
855S ................. 16,000 6 hours ....................................................................................... 96,000 14.4
Total Estimated Hourly and Financial Burden ....................................................................................... 661,000 56.9
The estimated number of respondents to conduct on-site visits of all new Approval Number 0938–0770). In
is based on FY 2004 Medicare suppliers of DMEPOS before they can addition, we intend to conduct
contractor workload reports. The cost in enroll in the Medicare program. The approximately 2,800 visits to IDTFs on
dollars is based on hourly salaries for burden associated with these an annual basis. We will seek OMB
applicable staff to complete the requirements are currently captured and approval for these visits. The burden
applications. approved in form HCFA–R–263 (OMB associated with this requirement is the
Section 424.510(a)(7) states that we Approval Number 0938–0749). time and effort necessary for a facility to
reserve the right to perform on-site We also intend to conduct provide documentation to verify
inspections of a provider or supplier to approximately 500 on-site visits to
information provided on their CMS 855
verify and ensure validity of the Community Mental Health Centers. The
form and to demonstrate that they meet
information submitted to us or our burden associated with these
agents and to determine compliance requirements are currently captured and other necessary Medicare requirements
with Medicare requirements. We intend approved in form HCFA–R–273 OMB and regulations.
TABLE 2.—ESTIMATED ANNUAL REPORTING BURDEN

Average
Annual burden per Annual burden
CFR sections number of Frequency Annual cost
reponse (hours)
responses (hours)
424.510(d) ............................................................................ 2,800 1 4 11,200 $0
Since these site visits are investigation, or audit is warranted. information once every 5 years. Section
unannounced and performed to ensure Information collected under these 424.515(b) states that within 60 calendar
proper physical location, equipment, situations is exempt from the PRA, as days of our notice to recertify their
and personnel to meet Medicare stipulated in 5 CFR 1320.4. enrollment information for revalidation,
requirements, we do not expect the a provider or supplier must submit any
Section 424.515 Requirements for
provider or supplier to incur any new or revised form CMS 855
Reporting Changes and Updates To, and
financial burden. information and documentation
We may also conduct on-site visits of the Periodic Revalidation of, Medicare
Enrollment Information necessary to demonstrate that they meet
providers or suppliers based on any the requirements set forth in this
information that leads us or our agents A provider or supplier must recertify
section.
to believe that an administrative action, for revalidation its enrollment

Average
Annual burden per Annual burden Annual cost
CFR sections number of Frequency reponse (hours) (millions)
responses (minutes)
424.515(b) ............................................................................ 232,000 ** 90 348,000 $23.2

** Where frequency is once every 5 years. (1.16 million providers and suppliers/5 years × 90 minutes/60 minutes.)
The burden hours shown above are The estimated cost is based on an information, a provider or supplier must
for the standard 5-year reporting period. average cost of $100 per application per report to us any changes to the
We are exploring various options on provider to review and return. information furnished on the CMS 855
ways of minimizing the burden on Section 424.520 Additional Provider or supporting documentation within 90
providers and suppliers during the and Supplier Requirements for Enrolling calendar days of the change.
process of revalidating their enrollment and Maintaining Active Enrollment
information. Status in the Medicare Program
Following enrollment and periodic
recertification of enrollment
Average
CFR section number of Frequency response (hours) (millions)
responses (hours)
424.20 .................................................................................. 100,000 1 1 100,000 $10

Section 424.525 Rejection of a documentation to us within 60 calendar provider or supplier must complete and
Provider or Supplier’s Medicare days of a request. We believe that the resubmit a new enrollment application
Enrollment Application burden associated with this requirement and all applicable documentation to
is captured in § 424.515, as we will resume the enrollment process and
We will reject a provider or supplier’s merely be seeking the information obtain a Medicare billing number and
enrollment application if the provider or initially requested in the CMS 855. billing privileges.
supplier does not furnish missing or Section 424.525(c) states that upon
necessary information and notification of a rejected CMS 855, the

Average
responses (min)
424.525(b) ............................................................................ 5,000 1 90 7,500 $0.5
The annual dollar cost is based on Section 424.535 Revocation of supplier seeks to re-establish enrollment
$100 per respondent to update and Enrollment and Billing Privileges From in the Medicare program it must re-
resubmit a previously submitted the Medicare Program enroll in the Medicare program through
enrollment application. Section 424.535(c) states that upon the completion and submission of a new
notification of the revocation of its CMS 855 and applicable
billing privileges, if the provider or documentation.

Average
responses (hours)
424.535(b) ............................................................................ 200 1 6 1,200 $0.12
The annual dollar cost is based on amended by the Medicare Catastrophic Section 424.540 Deactivation of
$600 per respondent to re-enroll in the Coverage Act of 1988 (Pub. L. 100–360). Medicare Billing Privileges
Medicare program. The burden associated with the Section 424.540(a)(1) states that if no
Providers must also be resurveyed or requirement to establish a new provider Medicare claims are submitted for 12
recertified by the State Survey Agency agreement (Form HCFA–460) is consecutive calendar months we will
and must establish a new provider currently approved under OMB deactivate a provider or supplier’s
agreement with our Regional Office. The Approval Number 0938–0373. Medicare billing number. The provider
burden associated with the survey and or supplier must complete and submit
certification requirement is exempt from an enrollment application for validation
the PRA, as provided in section 4204(c) to reactivate its Medicare billing number
of COBRA 87 (Pub. L. 100–203), as and billing privileges.

Average
Annual burden per Annual burden
CFR section number of Frequency Annual cost
response (hours)
responses (min)
424.540(a)(1) ....................................................................... 1200 1 90 1,800 $120,000
The annual cost is based on $100 per signature their previously submitted requirements outlined and proposed in
respondent to review and recertify via enrollment application/information. this rule.
Table 8 shows the total estimated
hourly and financial burden for all
TABLE 8.—ESTIMATED HOURLY AND FINANCIAL BURDEN FOR ALL REQUIREMENTS

Annual Annual burden
CFR section number of hours Annual cost

responses (millions)
424.500 ........................................................................................................................................ 572,200 1.13 $90.84
We have submitted a copy of this final hospitals. This analysis must conform to A. Rationale, Purpose, and Alternatives
rule to OMB for its review of the the provisions of section 604 of the Considered
information collection requirements in RFA. For purposes of section 1102(b) of We are responsible for protecting the
§ 424.510, § 424.515, § 424.520, the Act, we define a small rural hospital Medicare Trust Funds by ensuring that
§ 424.525, § 424.535, and § 424.540 and as a hospital that is located outside of unqualified, fraudulent, or excluded
related forms in the addendum. These a Metropolitan Statistical Area and has providers and suppliers do not bill the
requirements are not effective until they fewer than 100 beds. This final rule Medicare program. Past experience with
have been approved by OMB. does not significantly impact small rural a number of program integrity efforts
VI. Regulatory Impact Analysis hospitals. As noted above, there is a has identified that granting billing
minimum amount of time needed to privileges to entities that do not exercise
We have examined the impacts of this gather data and provide the information
final rule as required by Executive sound business practices can result in
requested on the enrollment application uncollectible overpayments. The ease of
Order 12866 (September 1993, when initially enrolling or when
Regulatory Planning and Review), the obtaining a billing number in the past
resubmitting enrollment information to has paved the way for unscrupulous
Regulatory Flexibility Act (RFA) obtain and maintain a Medicare billing
(September 19, 1980, Pub. L. 96–354), businesses to defraud the government
number. We are not preparing a rural deliberately by billing for items or
section 1102(b) of the Act, the impact statement since we have
Unfunded Mandate Reform Act of 1995 services never furnished or furnished at
determined, and certify, that we do not inflated prices.
(Pub. L. 104–4), and Executive Order expect this rule to impose any
13132. The provisions of this final rule
additional burden or otherwise supplement, but do not replace or
Executive Order 12866 (as amended significantly impact the operations of a
by Executive Order 13258, which nullify, existing regulations concerning
substantial number of small rural the establishment of provider or
merely reassigns responsibility of
hospitals. By default, due to their supplier agreements, the issuance of
duties) directs agencies to assess all
smaller size, the burden to small rural provider or supplier billing numbers,
costs and benefits of available regulatory
hospitals will actually be less than the and payment for Medicare covered
alternatives and, if regulation is
average provider. items or services to eligible providers
necessary, to select regulatory
approaches that maximize net benefits Section 202 of the Unfunded and suppliers.
(including potential economic, Mandates Reform Act of 1995 also Basically, this final rule consolidates
environmental, public health and safety requires that agencies assess anticipated current regulations found throughout
effects, distributive impacts, and costs and benefits before issuing any the Code of Federal Regulations and
equity). A regulatory impact analysis rule whose mandates require spending more clearly defines what Medicare
(RIA) must be prepared for major rules in any 1 year of $100 million in 1995 expects from providers and suppliers
with economically significant effects dollars, update annually for inflation. furnishing items or rendering services to
($100 million or more in any one year). That threshold level is currently the Medicare beneficiaries. We expect
This final rule will establish in approximately $120 million. This final this final rule to ensure that the
regulations specific provider and rule has no consequential adverse Medicare program has adequate
supplier initial enrollment procedures impact on State, local, or tribal information on those who seek to bill
and the periodic revalidation of governments. This final rule may reduce the program for items or services.
eligibility. It is not expected to have an some State burdens since they will no Furthermore, it assures us that
impact that will meet the threshold longer certify providers that are not information will be periodically
criteria to be considered economically qualified to participate in the Medicare updated and reviewed. We believe that
significant. program. The impact on the private establishing the foundation for a sound
The RFA requires agencies to analyze sector is well below the threshold. business relationship with providers
options for regulatory relief of small Executive Order 13132 establishes and suppliers will minimize billing
businesses. For the purposes of the RFA, certain requirements that an agency problems and otherwise protect the
small entities include small businesses, must meet when it issues a proposed Medicare Trust Funds. Similarly, we
nonprofit organizations, and small rule (and subsequent final rule) that believe it is necessary for us to impose
governmental jurisdictions. Most imposes substantial direct requirement the requirements of this regulation on
hospitals and most other providers and costs on State and local governments, existing providers and suppliers and to
suppliers are small entities, either by preempts State law, or otherwise has establish safeguards that enable us to
nonprofit status or having revenues of Federalism implications. This final rule deny enrollment of unqualified
$6 million to $29 million in any 1 year. has no substantial direct requirement providers and suppliers, and to revoke
Because of the scope of this final rule, costs or consequential adverse impact the billing privileges of egregious
all small entities that participate in the on State or local governments. This final offenders whose actions place the
Medicare program are considered rule will actually reduce some State Medicare Trust Funds at risk.
providers and suppliers and will be burdens since they will no longer certify The primary goal of this final rule,
affected, but we do not expect that effect providers that are not qualified to through standard enrollment
to be of a significant nature. As we show participate in the Medicare program. requirements and periodic revalidation
in section B of this impact analysis, the The following analysis, together with of the enrollment information, is to
annual burden on providers and the rest of this preamble, explains the allow us to collect and maintain (keep
suppliers for completing the CMS 855 rationale, purpose, and alternatives current) a unique and equal data set on
forms will not rise to the level of a considered in the final rule. This is an all current and future providers and
significant burden. administrative initiative that may result suppliers that are or will bill the
In addition, section 1102(b) of the Act in Medicare program savings but at this Medicare program for items or services
requires us to prepare a regulatory time those savings are inestimable. We rendered to our beneficiaries. By
impact analysis if a rule may have a believe the probable costs providers or achieving this goal, we will be better
significant impact on the operations of suppliers will incur as a result of this positioned to combat and reduce the
a substantial number of small rural rule to be negligible. number of fraudulent and abusive
providers and suppliers in the Medicare successes with our 3-year re-enrollment we do not expect this rule to impose any
program, thereby protecting the Trust policy currently in effect for DMEPOS additional burden or otherwise
Funds and the Medicare beneficiaries. suppliers, we are expanding this significantly impact the operations of a
This rule will also allow us to develop, requirement to all providers and substantial number of small rural
implement, and enforce national suppliers billing the Medicare program. hospitals. By default, due to their
provider and supplier enrollment We have already increased our efforts smaller size, the burden to small rural
procedures to be administered to seek more uniformity in the hospitals will actually be less than the
uniformly by all Medicare contractors. enrollment process. However, our average provider.
Over time, we strongly believe that any experience clearly shows that the best There are currently about 1.2 million
current burden imposed on the means for preventing payment errors providers (hospitals, HHAs, rural health
providers and suppliers will be greatly and, in worst cases, abuse by providers clinics, and SNFs) and suppliers
diminished through the use of computer and suppliers, is to discourage and (physicians, nurses, ambulance
storage and web-based internet prevent their entry into the Medicare companies, clinical laboratories, and
technology. program through this rule and the durable medical equipment suppliers)
Studies performed by our contractors, authority to deny enrollment or revoke enrolled in the Medicare program. In
the GAO, and OIG have shown their billing number. addition, about 74,000 new providers
numerous instances of fictitious While some entities may perceive our and suppliers apply to enroll in
applicants being granted Medicare requirements as a barrier to their access Medicare each year. Listed below is the
billing numbers. This final rule will to serving Medicare beneficiaries, we do current estimated annual burden on the
integrate the request for enrollment with not believe that bona fide businesses affected public in both hours and
sufficient data to substantiate an will experience any difficulty in dollars.
appropriate level of performance on the obtaining or maintaining a Medicare
1. Estimated Costs for Completion of
part of a new or continuing business. In billing number. We estimate that
CMS 855 Forms for Initial Enrollment
prior studies, the OIG has found furnishing the requested information
applicants who had submitted will require no more than 6 hours to Assumptions:
applications with nonexistent complete and that most businesses a. The monetary cost to the
addresses. In some instances, suppliers should have the information readily respondents is calculated as follows
had no inventory of goods to be sold, available. based on the following assumptions:
lacked business licenses, had no • The CMS 855I and CMS 855R will
financial investment, or lacked any B. Rural Hospital Impact Statement be completed by clerical staff
experience in the business venture. Section 1102(b) of the Act requires us (secretary).
The GAO report (GAO/T–HEHS–94– to prepare a regulatory impact analysis • The CMS 855A, CMS 855B, and
124), concluded: ‘‘Weaknesses in CMS’ if a rule may have a significant impact CMS 855S will be completed by
current provider enrollment process on the operations of a substantial professional staff (attorney or
have made Medicare vulnerable to number of small rural hospitals. Such accountant).
dishonest providers. To protect the an analysis must conform to the b. Estimated Cost per Form
integrity of Medicare, CMS and its provisions of section 604 of the RFA. The monetary cost to the respondent
contractors must have effective practices For purposes of section 1102(b) of the to complete and submit the necessary
for reviewing applicants to verify that Act, we define a small rural hospital as CMS 855 form is:
they are eligible for enrollment in the a hospital that is located outside of a • $900 for the CMS 855A, CMS 855B,
program, as well as the authority to Metropolitan Statistical Area and has and CMS 855S
deny or revoke enrollment to those that fewer than 100 beds. As noted above, • $80 for the CMS 855I, and
are not.’’ This report also concluded there is a minimum amount of time • $5 for the CMS 855R
that, ‘‘Periodic revalidation of provider needed to gather data and provide the c. Estimated Hourly Wage for Staff
enrollment data should be a valuable information requested on the enrollment Completing Forms
means of ensuring that we have current, application when initially enrolling or The cost per respondent per form was
useful data on active providers and that when resubmitting enrollment determined using the following wages:
providers no longer eligible to information to obtain and maintain a • $20.00 per hour (administrative
participate in Medicare are dropped Medicare billing number. We are not wage)
from the program.’’ Therefore, based on preparing a rural impact statement since • $150.00 per hour (professional
the above recommendation and our own we have determined, and certify, that wage)
TABLE 9.—CURRENT ESTIMATED HOURS FOR COMPLETION OF CMS 855 FORMS FOR INITIAL NEW ENROLLMENTS
Total number of Total cost in
CMS form Estimated number Estimated time for completion per respondent hours for dollars
No. of respondents completion (millions)
855A ................. 5,000 6 hours ....................................................................................... 30,000 $4.5

855B ................. 35,000 6 hours ....................................................................................... 210,000 31.5
855I ................... 75,000 4 hours ....................................................................................... 300,000 6
855R ................. 100,000 15 minutes .................................................................................. 25,000 0.5
855S ................. 16,000 6 hours ....................................................................................... 96,000 14.4
Total Estimated Hourly and Financial Burden ....................................................................................... 661,000 56.9

The estimated number of respondents SNFs) and suppliers (for example, Although we do not expect this final
is based on FY 2004 Medicare physicians, nurses, ambulance rule to have a significant economic
contractor workload reports. companies, clinical laboratories durable impact, we are revising the
2. Completing Forms to Report medical equipment suppliers) is $90.84 requirements for reporting changes to
Changes to Enrollment Information million. The 1997 revenue receipts for the provider or supplier’s enrollment
The hourly burden and monetary cost all classes of providers and suppliers information to reduce the current
estimate for this activity for all forms were $913.7 billion. The cost of burden. Currently, providers and
is— obtaining and maintaining billing suppliers must report any changes to
100,000 respondents × 1 hour each = privileges in the Medicare program on their enrollment information within 30
100,000 hours average is less than 1 percent of the total days. We are changing this requirement
Average cost per respondent = $100 revenue. to 90 days (or quarterly). We considered
Total cost for all respondents = $10 Although it is possible that a few retaining the current requirement but
million entities may be significantly affected by determined the 30-day timeframe as too
3. Completing Forms to Recertify this final rule, we do not expect that a stringent in light of the rapid changes
Enrollment Information (5 yr cycle) substantial number of affected entities seen in today’s health care industry.
The hourly burden and monetary cost will experience a significant increase in This change is expected to reduce the
estimate for this activity for all forms the reporting burden; therefore, the administrative burden for the providers,
is— Secretary certifies that this rule is not suppliers, our contractors, and us.
232,000 respondents × 1.5 hours each expected to impose any additional
D. Accounting Statement
= 348,000 hours burden or otherwise significantly
Average cost per respondent = $100 impact a substantial number of small As required by OMB Circular A–4
Total cost for all respondents = $23.2 entities. (available at http://
million www.whitehouse.gov/omb/circulars/
The estimated current total annual C. Alternatives Considered a004/a-4.pdf), in Table 10, we have
hour burden for all classes of providers Since this final rule is a codification prepared an accounting statement
(hospitals, HHAs, rural health clinics, of our current policies on provider and showing the classification of the
and SNFs) and suppliers (physicians, supplier enrollment, with the exception expenditures associated with the
nurses, ambulance companies, clinical of imposing a cyclical revalidation provisions of this final rule. This table
laboratories, and durable medical process, we did not consider provides our best estimate of the
equipment suppliers) is 1.13 million alternatives to this process. However, Medicare payments for providers and
hours. the current process was reviewed and, suppliers to establish and maintain
Based on the above, the estimated when possible, changes proposed or Medicare enrollment. All expenditures
current annual monetary burden for all made that will reduce the current are classified as transfers to Medicare
classes of providers (for example, burden, such as the time frame for providers (that is, fee for service
hospitals, HHAs, rural health clinics, reporting changes. contractors).
TABLE 10.—ACCOUNTING STATEMENT—CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM FY 2006 TO FY 2007

[In millions]
Category Transfers
Annualized Monetary Transfers ............................................................... $90.84.

From Whom to Whom? ............................................................................ Federal Government to Medicare Providers (that is, Fee for Service
Contractors).
In accordance with the provisions of professions, Medicare, Reporting and individual that exercises operational or
Executive Order 12866, this final rule recordkeeping requirements. managerial control over, or who directly
was reviewed by OMB. ■ For the reasons set forth in this or indirectly conducts, the day-to-day
List of Subjects preamble, 42 CFR chapter IV is operation of the institution,
amended as set forth below: organization, or agency, either under
42 CFR Part 420 contract or through some other
PART 420—PROGRAM INTEGRITY: arrangement, whether or not the
Fraud, Health facilities, Health MEDICARE
professions, Medicare. individual is a W–2 employee.
■ 1. The authority citation for part 420 * * * * *
42 CFR Part 424
continues to read as follows:
Emergency medical services, Health Authority: Secs. 1102 and 1871 of the PART 424—CONDITIONS FOR
facilities, Health professions, Medicare, Social Security Act (42 U.S.C. 1302 and MEDICARE PAYMENT
Reporting and recordkeeping 1395hh).
requirements. ■ 2. In § 420.201, the definition for ■ 1. The authority citation for part 424
42 CFR Part 489 ‘‘managing employee’’ is revised to read continues to read as follows:
as follows: Authority: Secs. 1102 and 1871 of the
Health facilities, Medicare, Reporting Social Security Act (42 U.S.C. 1302 and
and recordkeeping requirements. § 420.201 Definitions

1395hh)
* * * * *
42 CFR Part 498 ■ 2. Section 424.1(a)(1) is amended by
Managing employee means a general
Administrative practice and manager, business manager, adding in numerical order a statutory
procedure, Health facilities, Health administrator, director, or other reference to read as follows:
§ 424.1 Basis and scope. Approve/Approval means the Operational means the provider or
(a) * * * enrolling provider or supplier has been supplier has a qualified physical
(1) * * * determined to be eligible under practice location, is open to the public
* * * * * Medicare rules and regulations to for the purpose of providing health care
1833(e)—Requirement to furnish receive a Medicare billing number and related services, is prepared to submit
information to determine payment. be granted Medicare billing privileges. valid Medicare claims, and is properly
* * * * * Authorized official means an staffed, equipped, and stocked (as
appointed official (for example, chief applicable, based on the type of facility
Subparts N–O—[Reserved] executive officer, chief financial officer, or organization, provider or supplier
general partner, chairman of the board, specialty, or the services or items being
■ 3. Subparts N and O are reserved. or direct owner) to whom the rendered), to furnish these items or
■ 4. Subpart P is added to read as organization has granted the legal services.
follows. authority to enroll it in the Medicare Owner means any individual or entity
program, to make changes or updates to that has any partnership interest in, or
Subpart P—Requirements for the organization’s status in the Medicare that has 5 percent or more direct or
Establishing and Maintaining Medicare program, and to commit the indirect ownership of the provider or
Billing Privileges organization to fully abide by the supplier as defined in sections 1124 and
Sec. statutes, regulations, and program 1124A(A) of the Act.
424.500 Scope. instructions of the Medicare program. Reject/Rejected means that the
424.502 Definitions. Deactivate means that the provider or provider or supplier’s enrollment
424.505 Basic enrollment requirement. supplier’s billing privileges were application was not processed due to
424.510 Requirements for enrolling in the stopped, but can be restored upon the
Medicare program. incomplete information, or that
424.515 Requirements for reporting changes
submission of updated information. additional information or corrected
and updates to, and the periodic Delegated official means an information was not received from the
revalidation of Medicare enrollment individual who is delegated by the provider or supplier in a timely manner.
information. ‘‘Authorized Official,’’ the authority to Revoke/Revocation means that the
424.520 Additional provider and supplier report changes and updates to the provider or supplier’s billing privileges
requirements for enrolling and enrollment record. The delegated
maintaining active enrollment status in
are terminated.
official must be an individual with
the Medicare program. § 424.505 Basic enrollment requirement.
ownership or control interest in, or be
424.525 Rejection of a provider or
supplier’s enrollment application for a W–2 managing employee of the To receive payment for covered
Medicare enrollment. provider or supplier. Medicare items or services from either
424.530 Denial of enrollment. Deny/Denial means the enrolling Medicare (in the case of an assigned
424.535 Revocation of enrollment and provider or supplier has been claim) or a Medicare beneficiary (in the
billing privileges in the Medicare determined to be ineligible to receive case of an unassigned claim), a provider
program. Medicare billing privileges for Medicare
424.540 Deactivation of Medicare billing
or supplier must be enrolled in the
covered items or services provided to Medicare program. Once enrolled, the
privileges.
424.545 Provider and supplier appeal Medicare beneficiaries. provider or supplier receives billing
rights. Enroll/Enrollment means the process privileges and is issued a valid billing
424.550 Prohibitions on the sale or transfer that Medicare uses to establish number effective for the date a claim
of billing privileges. eligibility to submit claims for Medicare was submitted for an item that was
424.555 Payment liability. covered services and supplies. The furnished or a service that was
process includes— rendered. (See 45 CFR Part 162 for
Subpart P—Requirements for (1) Identification of a provider or information on the National Provider
Establishing and Maintaining Medicare supplier; Identifier and its use as the Medicare
Billing Privileges (2) Validation of the provider’s or billing number.)
§ 424.500 Scope. supplier’s eligibility to provide items or
services to Medicare beneficiaries; § 424.510 Requirements for enrolling in
The provisions of this subpart contain the Medicare program.
the requirements for enrollment, (3) Identification and confirmation of
periodic resubmission and certification the provider or supplier’s practice (a) Providers and suppliers must
of enrollment information for location(s) and owner(s); and submit enrollment information on the
revalidation, and timely reporting of (4) Granting the provider or supplier applicable enrollment application. Once
updates and changes to enrollment Medicare billing privileges. the provider or supplier successfully
information. These requirements apply Enrollment application means a CMS- completes the enrollment process,
to all providers and suppliers except for approved paper enrollment application including, if applicable, a State survey
physicians and practitioners who have or an electronic Medicare enrollment and certification or accreditation
entered into a private contract with a process approved by OMB. process, CMS enrolls the provider or
beneficiary as described in part 405, Managing employee means a general supplier into the Medicare program. To
subpart D of this chapter. Providers and manager, business manager, be enrolled, a provider or supplier must
suppliers must meet and maintain these administrator, director, or other meet enrollment requirements specified
enrollment requirements to bill either individual that exercises operational or in paragraph (c) of this section.
the Medicare program or its managerial control over, or who directly (b) The effective dates for
beneficiaries for Medicare covered or indirectly conducts, the day-to-day reimbursement are specified in § 489.13
services or supplies. operation of the provider or supplier, of this chapter for providers and
either under contract or through some suppliers requiring State survey or
§ 424.502 Definitions. other arrangement, whether or not the certification or accreditation, § 424.5
As used in this subpart, unless the individual is a W–2 employee of the and § 424.44 for non-surveyed or
context indicates otherwise— provider or supplier. certified/accredited suppliers, and
§ 424.57 and section 1834(j)(1)(A) of the statutes, regulations, and program CMS established electronic enrollment
Act for DMEPOS suppliers. instructions. process;
(c) The effective date for (i) Requirements. The signature (C) Include the title and SSN of each
reimbursement for providers and requirements specified in paragraphs person delegated authority to update or
suppliers seeking accreditation from a (d)(3)(i)(A) through (C) of this section change the organization’s enrollment
CMS-approved accreditation outline who must sign the enrollment information;
organization as specified in § 489.13(d). application for an enrolling provider or (D) Be an individual that has an
(d) Providers and suppliers must meet supplier. In the case of— ownership or control interest in the
the following enrollment requirements: (A) An individual practitioner, the organization or is a W–2 managing
(1) Submittal of the enrollment applying practitioner. employee as defined in section 1126(b)
application. A provider or supplier (B) A sole proprietorship, the of the Act; and
must submit a complete enrollment applying sole proprietor. (E) Be signed by the authorized
application and supporting (C) A corporation, partnership, group, official and the delegated official(s) of
documentation to the designated limited liability company, or other the organization.
Medicare fee-for-service contractor. organization (hereafter referred to (4) Verification of information. The
(2) Content of the enrollment collectively in this section as an information submitted by the provider
application. Each submitted enrollment organization), an authorized official, as or supplier on the applicable enrollment
application must include the following: defined in § 424.502. When an application must be such that CMS can
authorized official signs the certification validate it for accuracy at the time of
(i) Complete, accurate, and truthful
statement on behalf of an organization, submission.
responses to all information requested
(5) Completion of any applicable
within each section as applicable to the the signed statement is considered
State surveys, certifications, and
provider or supplier type. legally binding upon the organization.
provider agreements. The providers or
(ii) Submission of all documentation (ii) Delegation of authority. The suppliers who are mandated under the
required by CMS under this or other original enrollment application provision in part 488 of this chapter to
statutory or regulatory authority, or submitted for an organization’s initial be surveyed or certified by the State
under the Paperwork Reduction Act of enrollment and all subsequent survey and certification agency, and to
1995, to uniquely identify the provider enrollment applications submitted for also enter into and sign a provider
or supplier. This documentation may periodic revalidation of the agreement as outlined in part 489 of this
include, but is not limited to, proof of organization’s enrollment data (as chapter, must also meet those
the legal business name, practice required to maintain enrollment in the requirements as part of the process to
location, social security number (SSN), Medicare program) must be signed by an obtain Medicare billing privileges.
tax identification number (TIN), authorized official. Any updates or (6) Ability to furnish Medicare
National Provider Identifier (NPI), if changes reported outside of the initial covered items or services. The provider
issued, and owners of the business. enrollment or periodic revalidation or supplier must be operational to
(iii) Submission of all documentation, process may be signed by a delegated furnish Medicare covered items or
including all applicable Federal and official(s) of the organization. The services before being granted Medicare
State licensure and regulatory delegated official’s signature binds the billing privileges.
requirements that apply to the specific organization both legally and (7) Additional requirements.
provider or supplier type that relate to financially, as if the signature was that Providers and suppliers must meet the
providing health care services, required of the authorized official. Before the provisions of § 424.520 regarding
by CMS under this or other statutory or delegation of authority is established, additional compliance and reporting
regulatory authority, or under the the only acceptable signature on the requirements.
Paperwork Reduction Act of 1995, to enrollment application to report updates (8) On-site review. CMS reserves the
establish the provider or supplier’s or changes to the enrollment right, when deemed necessary, to
eligibility to furnish Medicare covered information is that of the authorized perform on-site inspections of a
items or services to beneficiaries in the official currently on file with Medicare. provider or supplier to verify that the
Medicare program. Once the delegation of authority is enrollment information submitted to
(3) Signature(s) required on the established, the only acceptable CMS or its agents is accurate and to
enrollment application. The signatures on correspondence to report determine compliance with Medicare
certification statement found on the updates or changes to the enrollment enrollment requirements. Site visits for
enrollment application must be signed information are those of the authorized enrollment purposes do not affect those
by an individual who has the authority official and the person(s) to whom this site visits performed for establishing
to bind the provider or supplier, both authority is delegated in accordance compliance with conditions of
legally and financially, to the with the requirements described in this participation.
requirements set forth in this chapter. section. Individual practitioners and (i) Medicare Part A providers. CMS
This person must also have an sole proprietors cannot delegate determines, upon on-site review, that
ownership or control interest in the signature authority when submitting an the provider is no longer operational to
provider or supplier, as that term is enrollment application for any reason. furnish Medicare covered items or
defined in section 1124(a)(3) of the Act, All enrollment applications submitted services, or the provider fails to satisfy
such as, the general partner, chairman of by individual practitioners and sole any of the Medicare enrollment
the board, chief financial officer, chief proprietors must be signed by the requirements.
executive officer, president, or hold a enrolling or enrolled individual. Each (ii) Medicare Part B suppliers. CMS
position of similar status and authority delegation of authority to a delegated determines, upon review that the
within the provider or supplier official must— supplier is no longer operational to

organization. The signature attests that (A) Be assigned by the authorized furnish Medicare covered items or
the information submitted is accurate official currently on file with CMS; services, or the supplier has failed to
and that the provider or supplier is (B) Be submitted to CMS using the satisfy any or all of the Medicare
aware of, and abides by, all applicable appropriate enrollment application or enrollment requirements, or has failed
to furnish Medicare covered items or purposes do not affect those site visits § 424.520 Additional provider and supplier
services as required by the statute or performed for establishing compliance requirements for enrolling and maintaining
regulations. with conditions of participation. active enrollment status in the Medicare
program.
§ 424.515 Requirements for reporting (1) Medicare Part A providers. CMS
(a) Certifying compliance. CMS
changes and updates to, and the periodic determines, upon on-site review, that
enrolls and maintains an active
revalidation of Medicare enrollment the provider is no longer operational to
enrollment status for a provider or
information. furnish Medicare covered items or
supplier when that provider or supplier
To maintain Medicare billing services, or the provider fails to satisfy
certifies that it meets, and continues to
privileges, a provider or supplier (other any of the Medicare enrollment
meet, and CMS verifies that it meets,
than a DMEPOS supplier) must requirements.
and continues to meet, all of the
resubmit and recertify the accuracy of (2) Medicare Part B suppliers. CMS following requirements:
its enrollment information every 5 determines, upon review that the (1) Compliance with title XVIII of the
years. All providers and suppliers supplier is no longer operational to Act and applicable Medicare
currently billing the Medicare program furnish Medicare covered items or regulations.
or initially enrolling in the Medicare services, or the supplier has failed to (2) Compliance with Federal and State
program are required to complete the satisfy any or all of the Medicare licensure, certification and regulatory
applicable enrollment application. The enrollment requirements, or has failed requirements, as required, based on the
provider or supplier then enters a 5-year to furnish Medicare covered items or type of services or supplies the provider
revalidation cycle once a completed services as required by the statute or or supplier type will furnish and bill
enrollment application is submitted and regulations. Medicare.
validated. (Ambulance service providers (d) Off Cycle revalidations. (1) CMS (3) Not employing or contracting with
must continue to resubmit enrollment reserves the right to perform off cycle individuals or entities—
information in accordance with revalidations in addition to the regular (i) Excluded from participation in any
§ 410.41(c)(2) of this chapter and 5-year revalidations and may request Federal health care programs, for the
DMEPOS suppliers must continue to that a provider or supplier recertify the provision of items and services covered
renew enrollment in accordance with accuracy of the enrollment information under the programs, in violation of
§ 424.57(e)). The requirements for the when warranted to assess and confirm section 1128A (a)(6) of the Act; or
resubmission, recertification and the validity of the enrollment (ii) Debarred by the General Services
reverification of enrollment information information maintained by CMS. Off Administration (GSA) from any other
include the following: cycle revalidations may be triggered as Executive Branch procurement or
(a) Submission of the enrollment a result of random checks, information nonprocurement programs or activities,
application and supporting indicating local health care fraud in accordance with the Federal
documentation. The provider or problems, national initiatives, Acquisition and Streamlining Act of
supplier must meet the submission, complaints, or other reasons that cause 1994, and with the HHS Common Rule
content, signature, verification, CMS to question the compliance of the at 45 CFR part 76.
operational, inspection, and other provider or supplier with Medicare (b) Reporting requirements. Following
requirements outlined in § 424.510. enrollment requirements. Off cycle enrollment, a provider or supplier must
(1) CMS contacts each provider or revalidations may be accompanied by report to CMS any changes to the
supplier directly when it is time to site visits. information furnished on the enrollment
revalidate their enrollment information. application and furnish supporting
(2) A provider or supplier must (2) CMS reserve the right to adjust the
routine 5-year revalidation schedule if documentation within 90 calendar days
submit to CMS the applicable of the change, with the exception of
enrollment application with complete we determine that revalidation should
occur on a more frequent basis due to DMEPOS suppliers which are required
and accurate information and applicable to report changes of information within
supporting documentation within 60 complaints or evidence we receive
indicating noncompliance with the 30 days as specified in § 424.57(c)(2), or
calendar days of our notification to a change of ownership or control of the
resubmit and certify to the accuracy of statute or regulations by specific
provider or supplier types. The provider or supplier that must also be
its enrollment information. reported within 30 calendar days.
(b) Completion of any applicable schedule may also be on a less frequent
basis if we determine that the integrity Failure to do so may result in the
State surveys, certifications and deactivation or revocation of the
provider agreements. A new of and compliance with the statute and
regulations by specific provider or provider or supplier’s Medicare billing
certification and a new provider privileges.
agreement are not required for the supplier types indicates that less
purpose of resubmission and frequent validation is justified. If a § 424.525 Rejection of a provider or
certification for revalidation of change occurs, CMS notifies all affected supplier’s enrollment application for
enrollment information. Providers and providers and suppliers at least 90 days Medicare enrollment.
suppliers must continue to meet the in advance of implementing the change. (a) Reasons for rejection. CMS may
requirements of parts 488 and 489 of (3) CMS revalidates enrollment reject a provider or supplier’s
this chapter, or any currently information for ambulance service enrollment application for the following
established supplier agreement, if suppliers in accordance with reasons:
applicable. § 410.41(c)(2) of this chapter (1) The provider or supplier fails to
(c) On-site inspections. CMS reserves (Requirements for ambulance suppliers), furnish complete information on the
the right to perform on-site inspections and DMEPOS suppliers renews provider/supplier enrollment
of a provider or supplier to verify that enrollment in accordance with application within 60 calendar days
the information submitted to CMS or its § 424.57(e) (Special payment rules for from the date of the contractor request
agents is accurate and to determine items furnished by DMEPOS suppliers for the missing information.
compliance with Medicare enrollment and issuance of DMEPOS supplier (2) The provider or supplier fails to
requirements. Site visits for enrollment billing numbers). furnish all required supporting
documentation within 60 calendar days (i) Offenses include—(A) Felony (c) Reversal of denial. If the denial
of submitting the enrollment crimes against persons, such as murder, was due to adverse activity (sanction,
application. rape, or assault, and other similar exclusion, debt, felony) of an owner,
(b) Extension of 60-day period. CMS, crimes for which the individual was managing employee, an authorized or
at its discretion, may choose to extend convicted, including guilty pleas and delegated official, medical director,
the 60-day period if CMS determines adjudicated pretrial diversions. supervising physician, or other health
that the provider or supplier is actively (B) Financial crimes, such as care personnel of the provider or
working with CMS to resolve any extortion, embezzlement, income tax supplier furnishing Medicare
outstanding issues. evasion, insurance fraud and other reimbursable services, the denial may be
(c) Resubmission after rejection. To similar crimes for which the individual reversed if the provider or supplier
enroll in Medicare and obtain Medicare was convicted, including guilty pleas terminates and submits proof that it has
billing privileges after notification of a and adjudicated pretrial diversions. terminated its business relationship
rejected enrollment application, the (C) Any felony that placed the with that individual or organization
provider or supplier must complete and Medicare program or its beneficiaries at within 30 days of the denial
submit a new enrollment application immediate risk (such as a malpractice notification.
and submit all supporting suit that results in a conviction of (d) Additional review. When a
documentation for CMS review and criminal neglect or misconduct). provider or supplier is denied
approval. (D) Any felonies outlined in section enrollment in Medicare, CMS
(d) Additional review. Enrollment 1128 of the Act. automatically reviews all other related
applications that are rejected are not (ii) Denials based on felony Medicare enrollment files that the
afforded appeal rights. convictions are for a period to be denied provider or supplier has an
determined by the Secretary, but not association with (for example, as an
§ 424.530 Denial of enrollment. less than 10 years from the date of owner or managing employee) to
(a) Reasons for denial. CMS may deny conviction if the individual has been determine if the denial warrants an
a provider’s or supplier’s enrollment in convicted on one previous occasion for adverse action of the associated
the Medicare program for the following one or more offenses. Medicare provider or supplier.
reasons: (4) False or misleading information. (e) Effective date of denial. Denial
(1) Compliance. The provider or The provider or supplier has submitted becomes effective within 30 days of the
supplier at any time is found not to be false or misleading information on the initial denial notification.
in compliance with the Medicare enrollment application to gain
enrollment requirements described in enrollment in the Medicare program. § 424.535 Revocation of enrollment and
this section or on the applicable billing privileges in the Medicare program.
(Offenders may be referred to the Office
enrollment application to the type of of Inspector General for investigation (a) Reasons for revocation. CMS may
provider or supplier enrolling, and has and possible criminal, civil, or revoke a currently enrolled provider or
not submitted a plan of corrective action administrative sanctions.) supplier’s Medicare billing privileges
as outlined in part 488 of this chapter. (5) On-site review. Upon on-site and any corresponding provider
(2) Provider or supplier conduct. A review or other reliable evidence, we agreement or supplier agreement for the
provider, supplier, an owner, managing determine that the provider or supplier following reasons:
employee, an authorized or delegated is not operational, or is not meeting (1) Noncompliance. The provider or
official, medical director, supervising Medicare enrollment requirements to supplier is determined not to be in
physician, or other health care furnish Medicare covered items or compliance with the enrollment
personnel furnishing Medicare services. Upon on-site review, CMS requirements described in this section
reimbursable services who is required to determines that— or in the enrollment application
be reported on the enrollment (i) A Medicare Part A provider is no applicable for its provider or supplier
application, in accordance with section longer operational to furnish Medicare type and has not submitted a plan of
1862(e)(1) of the Act, is— covered items or services, or the corrective action as outlined in part 488
(i) Excluded from the Medicare, provider fails to satisfy any of the of this chapter. All providers and
Medicaid and any other Federal health Medicare enrollment requirements. suppliers are granted an opportunity to
care programs, as defined in § 1001.2 of (ii) A Medicare Part B supplier is no correct the deficient compliance
this chapter, in accordance with section longer operational to furnish Medicare requirement prior to a final
1128, 1128A, 1156, 1842, 1862, 1867 or covered items or services, or the determination to revoke billing
1892 of the Act. supplier has failed to satisfy any or all privileges.
(ii) Debarred, suspended, or otherwise of the Medicare enrollment (i) CMS may request additional
excluded from participating in any other requirements, or has failed to furnish documentation from the provider or
Federal procurement or Medicare covered items or services as supplier to determine compliance if
nonprocurement activity in accordance required by the statute or regulations. adverse information is received or
with section 2455 of the Federal (b) Resubmission after denial. A otherwise found concerning the
Acquisition Streamlining Act (FASA). provider or supplier that is denied provider or supplier.
(3) Felonies. If within the 10 years enrollment in the Medicare program (ii) Requested additional
preceding enrollment or revalidation of cannot submit a new enrollment documentation must be submitted
enrollment, the provider, supplier, or application until the following has within 60 calendar days of request.
any owner of the provider or supplier, occurred if the denial: (2) Provider or supplier conduct. The
was convicted of a Federal or State (1) Was not appealed, the provider or provider or supplier, or any owner,
felony offense that CMS has determined supplier may reapply after its appeal managing employee, authorized or
to be detrimental to the best interests of rights have lapsed. delegated official, medical director,
the program and its beneficiaries. CMS (2) Was appealed, the provider or supervising physician, or other health
considers the severity of the underlying supplier may reapply after notification care personnel of the provider or
offense. that the determination was upheld. supplier is—
(i) Excluded from the Medicare, services for, Medicare patients. Upon reimbursable services, the revocation
Medicaid, and any other Federal health on-site review, CMS determines that— may be reversed if the provider or
care program, as defined in § 1001.2 of (i) A Medicare Part A provider is no supplier terminates and submits proof
this chapter, in accordance with section longer operational to furnish Medicare that it has terminated its business
1128, 1128A, 1156, 1842, 1862, 1867 or covered items or services, or the relationship with that individual within
1892 of the Act. provider fails to satisfy any of the 30 days of the revocation notification.
(ii) Is debarred, suspended, or Medicare enrollment requirements. (e) Additional review. When a
otherwise excluded from participating (ii) A Medicare Part B supplier is no provider or supplier is revoked from the
in any other Federal procurement or longer operational to furnish Medicare Medicare program, CMS automatically
nonprocurement program or activity in covered items or services, or the reviews all other related Medicare
accordance with the FASA supplier has failed to satisfy any or all enrollment files that the revoked
implementing regulations and the of the Medicare enrollment provider or supplier has an association
Department of Health and Human requirements, or has failed to furnish with (for example, as an owner or
Services nonprocurement common rule Medicare covered items or services as managing employee) to determine if the
at 45 CFR part 76. required by the statute or regulations. revocation warrants an adverse action of
(3) Felonies. The provider, supplier, (6) Inadequate reverification the associated Medicare provider or
or any owner of the provider or information. The provider or supplier supplier.
supplier, within the 10 years preceding fails to furnish complete and accurate (f) Effective date of revocation.
enrollment or revalidation of information and all supporting Revocation becomes effective within 30
enrollment, was convicted of a Federal documentation within 60 calendar days days of the initial revocation
or State felony offense that CMS has of the provider or supplier’s notification notification.
determined to be detrimental to the best from CMS to submit an enrollment
application and supporting § 424.540 Deactivation of Medicare billing
interests of the program and its privileges.
beneficiaries. documentation, or resubmit and certify
to the accuracy of its enrollment (a) Reasons for deactivation. CMS
(i) Offenses include— may deactivate a provider or supplier’s
(A) Felony crimes against persons, information.
(7) Misuse of billing number. The Medicare billing privileges for the
such as murder, rape, assault, and other following reasons:
provider or supplier knowingly sells to
similar crimes for which the individual (1) The provider or supplier does not
or allows another individual or entity to
was convicted, including guilty pleas submit any Medicare claims for 12
use its billing number. This does not
and adjudicated pretrial diversions. consecutive calendar months. The 12
include those providers or suppliers
(B) Financial crimes, such as month period will begin the 1st day of
who enter into a valid reassignment of
extortion, embezzlement, income tax the 1st month without a claims
benefits as specified in § 424.80 or a
evasion, insurance fraud and other submission through the last day of the
change of ownership as outlined in
similar crimes for which the individual 12th month without a submitted claim.
§ 489.18 of this chapter.
was convicted, including guilty pleas (b) Effect of revocation on provider (2) The provider or supplier does not
and adjudicated pretrial diversions. agreements. When a provider’s or report a change to the information
(C) Any felony that placed the supplier’s billing privilege is revoked, supplied on the enrollment application
Medicare program or its beneficiaries at any provider agreement in effect at the within 90 calendar days of when the
immediate risk, such as a malpractice time of revocation is terminated change occurred. Changes that must be
suit that results in a conviction of effective with the date of revocation. reported include, but are not limited to,
criminal neglect or misconduct. (c) Re-enrollment after revocation. If a a change in practice location, a change
(D) Any felonies that would result in provider or supplier seeks to re- of any managing employee, and a
mandatory exclusion under section establish enrollment in the Medicare change in billing services. A change in
1128(a) of the Act. program after notification that its billing ownership or control must be reported
(ii) Denials based on felony privileges is revoked (either after the within 30 calendar days as specified in
convictions are for a period to be appeals process is exhausted or in place § 424.520(b) and § 424.550(b).
determined by the Secretary, but not of the appeals process), the following (b) Reactivation of billing privileges.
less than 10 years from the date of conditions apply: (1) When deactivated for any reason
conviction if the individual has been (1) The provider or supplier must re- other than nonsubmission of a claim,
convicted on one previous occasion for enroll in the Medicare program through the provider or supplier must complete
one or more offenses. the completion and submission of a new and submit a new enrollment
(4) False or misleading information. applicable enrollment application and application to reactivate its Medicare
The provider or supplier certified as applicable documentation, as a new billing privileges or, when deemed
‘‘true’’ misleading or false information provider or supplier, for validation by appropriate, at a minimum, recertify
on the enrollment application to be CMS. that the enrollment information
enrolled or maintain enrollment in the (2) Providers must be resurveyed and currently on file with Medicare is
Medicare program. (Offenders may be recertified by the State survey agency as correct.
subject to either fines or imprisonment, a new provider and must establish a (2) Providers and suppliers
or both, in accordance with current law new provider agreement with CMS’s deactivated for nonsubmission of a
and regulations.) Regional Office. claim are required to recertify that the
(5) On-site review. CMS determines, (d) Reversal of revocation. If the enrollment information currently on file
upon on-site review, that the provider or revocation was due to adverse activity with Medicare is correct and furnish
supplier is no longer operational to (sanction, exclusion, or felony) against any missing information as appropriate.
furnish Medicare covered items or an owner, managing employee, or an The provider or supplier must meet all
services, or is not meeting Medicare authorized or delegated official; or a current Medicare requirements in place
enrollment requirements under statute medical director, supervising physician, at the time of reactivation, and be
or regulation to supervise treatment of, or other personnel of the provider or prepared to submit a valid Medicare
or to provide Medicare covered items or supplier furnishing Medicare claim.
(3) Reactivation of Medicare billing must complete and submit enrollment expense incurred for such otherwise
privileges does not require a new applications before completion of the Medicare covered item or service shall
certification of the provider or supplier change of ownership. If the current be the responsibility of the provider or
by the State survey agency or the owner fails to complete and submit an supplier. The provider or supplier may
establishment of a new provider enrollment application to report the also be criminally liable for pursuing
agreement. change, the current owner may be payments that may not be made by
(c) Effect of deactivation. Deactivation sanctioned or penalized, even after the reason of paragraph (b) of this section,
of Medicare billing privileges is date of ownership change, in in accordance with section 1128B(a)(3)
considered an action to protect the accordance with § 424.520, § 424.540, of the Act.
provider or supplier from misuse of its and § 489.53 of this chapter. If the
billing number and to protect the prospective new owner fails to submit a PART 489—PROVIDER AGREEMENTS
Medicare Trust Funds from unnecessary new enrollment application containing AND SUPPLIER APPROVAL
overpayments. The deactivation of information concerning the new owner
Medicare billing privileges does not within 30 days of the change of ■ 7. The authority citation for part 489
have any effect on a provider or ownership, CMS may deactivate the continues to read as follows:
supplier’s participation agreement or Medicare billing number. If an Authority: Secs. 1102, 1819, 1861,
any conditions of participation. incomplete enrollment application is 1864(m), 1866, 1869, and 1871 of the Social
submitted, CMS may also deactivate the Security Act (42 U.S.C. 1302, 1395i–3, 1395x,
§ 424.545 Provider and supplier appeal Medicare billing number based upon 1395aa(m), 1395cc, 1395ff, and 1395hh).
rights. material omissions on the submitted
(a) A provider or supplier that is enrollment application, or based on ■ 8. Section 489.53 is amended by
denied enrollment in the Medicare preliminary information received or adding paragraph (a)(15) to read as
program or whose Medicare enrollment determined by CMS that makes CMS follows:
has been revoked may appeal CMS’ question whether the new owner is § 489.53 Termination by CMS.
decision in accordance with part 405, ultimately granted a final transference of
subpart H, for suppliers, or part 498, the provider agreement. (a) * * *
subpart A for providers, of this chapter, (c) Suppliers not covered by part 489 (15) It had its enrollment in the
which set forth the appeals process for of this chapter. For those suppliers not Medicare program revoked in
providers and suppliers. When covered by part 489 of this chapter, any accordance to § 424.535 of this chapter.
revocation of billing privileges also change in the ownership or control of * * * * *
results in the termination of a that supplier must be reported on the
corresponding provider agreement, the enrollment application within 30 days PART 498—APPEALS PROCEDURES
provider may appeal CMS’ decision in of the change as noted in FOR DETERMINATIONS THAT AFFECT
accordance with part 498 of this chapter § 424.540(a)(2). Generally, a change of PARTICIPATION IN THE MEDICARE
with the final decision of the appeal ownership that also changes the tax PROGRAM AND FOR
applying to both the billing privileges identification number requires the DETERMINATIONS THAT AFFECT THE
and the provider agreement. Payment is completion and submission of a new PARTICIPATION OF ICFs/MR AND
not made during the appeals process. If enrollment application from the new CERTAIN NFs IN THE MEDICAID
the provider or supplier is successful in owner. PROGRAM
overturning a denial or revocation,
unpaid claims for services furnished § 424.555 Payment liability.
(a) No payment may be made for ■ 9. The authority citation for part 498
during the overturned period may be continues to read as follows:
resubmitted. otherwise Medicare covered items or
(b) A provider or supplier whose services furnished to a Medicare Authority: Secs. 1102 and 1871 of the
beneficiary by suppliers of durable Social Security Act (42 U.S.C. 1302 and
billing privileges are deactivated may
medical equipment, prosthetics, 1395hh).
file a rebuttal in accordance with
§ 405.374 of this chapter. orthotics, and other supplies unless the ■ 10. Section 498.3, is amended by
(c) The provider or supplier must be supplier obtains (and renews, as set adding paragraph (b)(17) as follows:
able to demonstrate that it meets the forth in section 1834(j) of the Act)
enrollment requirements and it must be Medicare billing privileges. § 498.3 Scope and applicability.
able to make available any documents (b) No payment may be made for (b) * * *
and records that support the provisions otherwise Medicare covered items or
services furnished to a Medicare (17) The revocation of a provider or
of this regulation and the Medicare supplier’s Medicare enrollment in
enrollment application if requested by beneficiary by a provider or supplier if
the billing privileges of the provider or accordance to § 424.535 of this chapter.
CMS or its agents.
supplier are deactivated, denied, or * * * * *
§ 424.550 Prohibitions on the sale or revoked. The Medicare beneficiary has (Catalog of Federal Domestic Assistance
transfer of billing privileges. no financial responsibility for expenses, Program No. 93.774, Medicare—
(a) General rule. A provider or and the provider or supplier must Supplementary Medical Insurance Program.)
supplier is prohibited from selling its refund on a timely basis to the Medicare Dated: August 30, 2005.
Medicare billing number or privileges to beneficiary any amounts collected from Mark B. McClellan,
any individual or entity, or allowing the Medicare beneficiary for these
Administrator, Centers for Medicare &
another individual or entity to use its otherwise Medicare covered items or Medicaid Services.
Medicare billing number. services.
(b) Change of ownership. In the case (c) If any provider or supplier Approved: February 17, 2006.
of a provider undergoing a change of furnishes an otherwise Medicare Michael O. Leavitt,
ownership in accordance with part 489, covered item or service for which Secretary.
subpart A of this chapter, the current payment may not be made by reason of [FR Doc. 06–3722 Filed 4–20–06; 8:45 am]
owner and the prospective new owner paragraph (b) of this section, any BILLING CODE 4120–01–P

Rule: Medicare: Billing Privileges Establishment and Maintenance Requirements

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Rule: Medicare: Billing Privileges Establishment and Maintenance Requirements

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Friday,

April 21, 2006

42 CFR Part 420, 424 et al.

groups, which have exhibited continues to meet applicable Federal supplies.

855A ................. 5,000 6 hours ....................................................................................... 30,000 $4.5

855I ................... 75,000 4 hours ....................................................................................... 300,000 6

Total Estimated Hourly and Financial Burden ....................................................................................... 661,000 56.9

TABLE 2.—ESTIMATED ANNUAL REPORTING BURDEN

424.510(d) ............................................................................ 2,800 1 4 11,200 $0

TABLE 3.—ESTIMATED ANNUAL REPORTING BURDEN

424.515(b) ............................................................................ 232,000 ** 90 348,000 $23.2

424.20 .................................................................................. 100,000 1 1 100,000 $10

TABLE 5.—ESTIMATED ANNUAL REPORTING BURDEN

424.525(b) ............................................................................ 5,000 1 90 7,500 $0.5

TABLE 6.—ESTIMATED ANNUAL REPORTING BURDEN

424.535(b) ............................................................................ 200 1 6 1,200 $0.12

TABLE 7.—ESTIMATED ANNUAL REPORTING BURDEN

424.540(a)(1) ....................................................................... 1200 1 90 1,800 $120,000

TABLE 8.—ESTIMATED HOURLY AND FINANCIAL BURDEN FOR ALL REQUIREMENTS

CFR section number of hours Annual cost

424.500 ........................................................................................................................................ 572,200 1.13 $90.84

855A ................. 5,000 6 hours ....................................................................................... 30,000 $4.5

Total Estimated Hourly and Financial Burden ....................................................................................... 661,000 56.9

TABLE 10.—ACCOUNTING STATEMENT—CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM FY 2006 TO FY 2007

Annualized Monetary Transfers ............................................................... $90.84.

and recordkeeping requirements. § 420.201 Definitions

within the provider or supplier official must— supplier is no longer operational to

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