Medicare & TRICARE Provider and Supplier Suspensions

Presented byEllen Bonner

Callaway BonnerJanuary 21, 2016

Important Information

This presentation is similar to any other seminar designed to provide general information on pertinent legal topics. The statements made and any materials distributed as part of this presentation are provided for educational purposes only. They do not constitute legal advice nor do they necessarily reflect the views of Holland & Hart LLP or any of its attorneys or of Callaway Bonner other than the speakers. This presentation is not intended to create an attorney-client relationship between you and Holland & Hart LLP or Callaway Bonner. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

Medicare Suspensions

Medicare has the authority to withhold payment in whole or in part payments to providers and suppliers – not beneficiaries - for claims otherwise determined to be payable.

• 42 CFR 405.370-377

• Medicare Program Integrity Manual – Chapter 8

Types of Medicare Suspension

There are two types of Medicare suspension• Fraud Suspension• General Suspension

Medicare Suspensions

Suspension of payment may be used when:

• Fraud or willful misrepresentations exists - Fraud Suspension;

• An overpayment exists but the amount of the overpayment is not yet determined – General Suspension;

• The payments to be made may not be correct - General Suspension; or

• The provider fails to furnish records and other requested information needed to determine the amounts due the provider or supplier - General Suspension.

Determination of Suspension

Who determines when Medicare payment is suspended?

• Recommendation to CMS - The CMS contractors (Medicare Administrative Contractors, Program Safeguard Contractors, ZPIC contractors) make a recommendation to CMS when there is a “credible allegation of fraud” that a provider has submitted false claims.

• Credible allegation of fraud. A credible allegation of fraud is an allegation from any source, including but not limited to the following:

(1) Fraud hotline complaints; (2) Claims data mining; (3) Patterns identified through provider audits, civil false claims cases, and law enforcement investigations. Allegations are considered to be credible when they have indicia of reliability. 42 CFR § 405.370(a)

The CO DBIMO FASS Team

CMS’ Central Office (CO), Division of Benefit Integrity Management Operations Fraud and Abuse Suspensions and Sanctions (DBIMO FASS) Team – Approves the payment suspension action after CMS contractor forwards to the CO DBIMO FASS team:

• A draft of the proposed suspension ; and• A brief summary of the evidence

Medicare Suspension Duration

• Medicare suspensions are for 180 days, unless extended by CMS – on a one-time basis – for an additional 180 days.

• All suspensions of payment for credible evidence of fraud will be temporary and will not continue after the resolution of an investigation - unless a suspension is warranted because of reliable evidence of an overpayment of that the payments to be made may not be correct.

• Medicare Fraud Suspensions – Suspensions based upon credible allegations of fraud under 42 CFR §405.371(a)(2)

Good Cause Exceptions - FraudCMS may find that good cause exists not to suspend, or continue to suspend payments if:

• OIG or other law enforcement agency has specifically requested that a payment suspension not be imposed because such a payment suspension may compromise or jeopardize an investigation;

• A determination that beneficiary access to items or services would be so jeopardized by a payment suspension in whole or part as to cause a danger to life or health;

• It is determined that other available remedies implemented by CMS or a Medicare contractor more effectively or quickly protect Medicare funds than would implementing a payment suspension; or

• CMS determines that a payment suspension or a continuation of a payment suspension is not in the best interests of the Medicare program.

Re-evaluation of Suspension

Re-evaluation of claims suspension – • Every 180 days after the initiation of a

suspension of payments based on credible allegations of fraud, CMS will:– Evaluate whether there is good cause to not

continue such suspension under this section; and – Request a certification from the OIG or other law

enforcement agency that the matter continues to be under investigation warranting continuation of the suspension.

Good Cause Deemed

After 18 months of suspension, good cause to discontinue suspension is deemed to exist if there has not been a resolution of the investigation except CMS may extend if:• The case has been referred to, or is being

considered by, the OIG for administrative action, or administrative action is pending; or

• The DOJ submits a written request to CMS that suspension of payments be continued along with additional documentation.

Unfiled Cost Reports

• If a provider has failed to timely file an acceptable cost report, payment to the provider is immediately suspended in whole or part until a cost report is filed and determined by the Medicare contractor to be acceptable.

• No notice is required to the provider for Medicare payment suspension due to Unfiled Cost Report

42 CFR 405.372(a)(2)

Unfiled Hospice Cap Reports

Unfiled Hospice Cap Determination Reports –• If a provider fails to file timely an acceptable

cost report, payment to the provider is immediately suspended in whole or part until a cost report is filed and determined by the Medicare contractor to be acceptable.

• No notice is required to the provider for Medicare payment suspension due to Unfiled Hospice Cap Determination Report - 42 CFR 405.372(a)(2)

Notification of Suspension

Notification Prior to Suspension - CMS or the Medicare contractor must notify the provider or supplier of the intention to suspend the payments either in whole or part and the reason for making the suspension unless the suspension is based on:• Failure to furnish information such as

failure to file Cost Reports or Hospice Cap Reports;

• Harm to trust funds; or• Fraud.

Rebuttal

Rebuttal – When Prior Notice Required• When prior notice of a suspension is required,

the Medicare contractor must give the provider or supplier an opportunity before the suspension to submit a statement including pertinent information as to why the suspension should not be put into effect on the date specified in the notice

• Provider has at least 15 days following the date of the unless CMS imposes shorter time or extends the time.

CMS Response to Rebuttal

• Within 15 days after the rebuttal statement is received, CMS must consider:– The statement – Any pertinent evidence submitted,

and– Any additional material bearing upon

the case.• CMS must then determine if the

facts justify the suspension or if initiated justify the termination of the suspension

Rebuttal Determination

• The Medicare notification of determination must be:– In writing;– Contain specific findings on the conditions upon

which the suspension is initiated, continued, or removed; and

– An explanatory statement of the determination.• Medicare determination of suspension is not:– An initial determination; and– Is not appealable.

TRICARE Suspensions

• The Director of the Defense Health Agency has the authority to exclude or suspend an otherwise authorized TRICARE provider from the program based upon:– Criminal conviction or civil judgment involving

fraud by the provider;– Fraud or abuse under TRICARE by the provider; – Exclusion or suspension of the provider by

another agency of the Federal Government, a state, or local licensing authority;

TRICARE Suspensions (Con’t)

– Participation in a conflict of interest situation by the provider; or

–When it is in the best interests of the program or TRICARE beneficiaries to suspend a provider.

• TRICARE suspensions are effective 15 calendar days from the date on the written initial determination.

Temporary TRICARE Suspension

TRICARE may temporarily suspend claims processing activity. 32 CFR § 199.9(h)(1)• Invoked to protect the interests of the

Government for a period reasonably necessary to complete investigation or appropriate criminal, civil, and administrative proceedings.

• Delays the ultimate payment of otherwise appropriate claims.

Participation Agreements

• TRICARE participating provider cannot repudiate the participation agreement. It remains in full force and effect.

• TRICARE claims subject to a temporary suspension are eligible to be paid once the temporary suspension ends unless such action is deemed inappropriate as a result of criminal, civil or administrative remedies ultimately invoked in the case.

TRICARE Notification

– Notice is given to the affected provider and Uniformed Services Medical Treatment Facilities, Health Benefits Advisors, TRICARE beneficiaries and sponsors;

– Notice may be given to any information or news media and any other individual, professional provider, or institutional provider as deemed appropriate;

TRICARE Notification (Con’t)

• The Director of the Defense Health Agency may suspend TRICARE claims processing with no notice to the provider or beneficiary.

TRICARE Notification (Con’t)

• Once a temporary suspension is ordered the provider receives:– Notification of the temporary suspension; and– A statement of the basis of the decision to suspend

payment

• Unless the suspension is based upon an indictment or initiation of criminal charges, the notice shall describe the suspected actions or omission in terms sufficient to place the provider or beneficiary on notice without disclosing the Government’s evidence.

Presentation of Evidence

Within 30 days from the date of the notice – which may extended to 60 days for good cause – the provider or beneficiary may:• Submit written information,

evidence and argument in opposition to the suspension – provided the additional specific information raises a genuine dispute over the material facts - to the Director of the Defense Health Agency; or

Presentation of Evidence (con’t)

• Submit a written request to present in person evidence or argument to the Director of the Defense Health Agency or a designee.

• In-person presentations are made at the Defense Health Agency in Aurora, Colorado at the provider’s or beneficiary’s own expense.

Disputed Material Facts

• Additional proceedings to determine disputed material facts may be conducted as a hearing under 32 CFR 199.10 unless:– The suspension is based upon fraud, criminal

charges, etc. (See 32 CFR 199.9(H)(1)(ii)(B)); or– A determination is made on the basis of advice

of the responsible Government official that substantial interests of the Government in pending or contemplated legal or administrative proceedings based on the same facts as the suspension would be prejudiced.

Suspension Modification or Termination

A suspension of TRICARE claims processing may be modified or terminated for:• Newly discovered evidence;• Elimination of any of the causes for

which the suspension was invoked; or

• Other reasons the Defense Health Agency Director, or a designee, deems appropriate.

Appeal Rights – 32 CFR 199.10

No right to appeal Initial Determination if:• Suspension is based upon suspension

or exclusion by another Federal Agency;

• Suspension is based upon a criminal conviction or civil judgment against the provider;

TRICARE Suspension Duration

• If legal or administrative proceedings are not initiated within 12 months after the date of the suspension notice, the suspension shall be terminated unless the Government official responsible for the action requests its extension.– Extension is for an additional 6 months– Suspension may not be extended beyond 18

months unless legal or administrative proceedings have been initiated during that period

Suspending Official’s Decision

• After presentation of evidence either in writing or person, the Director of the Defense Health Agency shall issue a suspending official’s decision which:–Modifies– Terminates, or– Leaves in force the suspension of claims

processing

Initial Determination

• If the Defense Health Agency Director, or designee invokes an administrative remedy of exclusion, suspension or termination of a TRICARE provider, written notice by certified mail must be sent to the provider.

• Unless the sanction has a retroactive effective date, the written notice shall be dated no later than 15 days before the decision becomes effective.

Initial Determination (Con’t)

The initial determination shall include:• A statement of the sanction being invoked;• A statement of the effective date of the

sanction;• A statement of the facts, circumstance or

actions which form the basis for the sanction;• A discussion of any information submitted by

the provider relevant to the sanction;• A statement of the factors considered in

determining the sanction period;

Initial Determination (Con’t)

• The earliest date on which a request for reinstatement under TRICARE will be accepted;

• The requirements and procedures for reinstatement; and

• Notice of the available hearing upon request of the sanctioned provider.

References

• Medicare – 42 CFR §§405.370-377• Medicare Program Integrity Manual –

Chapter 8 Administrative Actions and Statistical Sampling for Overpayment Estimates

• TRICARE – 32 CFR §§199.9-199.10• TRICARE Operations Manual (“TOM”) Chapter 13, Section 6-7 and Chapter 12 Section 1

Ellen Bonner – Callaway BonnerEllen Bonner practices law at Callaway Bonner. Formerly she was Of Counsel with Holland & Hart LLP. Earlier in her career she was an attorney with the TRICARE Management Activity – now known as the Defense Health Agency – for the TRICARE program. She has also served as an executive and legal counsel for TRICARE contractors and Medicare Administrative Contractors. Ms. Bonner represents clients on Medicare and TRICARE matters, including suspensions from Medicare and TRICARE.

ellen.bonner@callawaybonner.com615-810-8422