[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Rules and Regulations]
[Pages 63634-63645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30130]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
42 CFR Part 1004
RIN 0991-AA73
Health Care Programs: Fraud and Abuse; Revisions to the PRO
Sanctions Process
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Final rule.
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SUMMARY: This final rule revises and updates the procedures governing
the imposition and adjudication of program sanctions predicated on
recommendations of State Utilization and Quality Control Peer Review
Organizations (PROs). These changes are being made as a result of
statutory revisions designed to address health care fraud and abuse
issues and the OIG sanctions process. In addition, this final rule sets
forth new appeal and reinstatement procedures for practitioners and
other persons excluded by the OIG based on a PRO recommendation.
EFFECTIVE DATE: December 12, 1995.
FOR FURTHER INFORMATION CONTACT:
Joe J. Schaer, Office of Management and Policy, (202) 619-3270
Joanne Lanahan, Office of Civil Fraud and Administrative Adjudication,
(410) 786-9609.
SUPPLEMENTARY INFORMATION:
I. Background
A. The PRO Sanctions Process
Section 1156 of the Social Security Act imposes specific statutory
obligations on practitioners and other persons to furnish necessary
services to Medicare and State health care program beneficiaries that
meet professionally recognized standards, and authorizes the
Secretary--based on a PRO's recommendation--to impose sanctions on
those who fail to comply with these statutory obligations.
Under the PRO sanctions process, no practitioner or other person is
recommended for an exclusion or a monetary penalty until the
practitioner or other person has an opportunity to provide additional
information and have an extensive discussion with the PRO. After the
receipt of a recommendation from a PRO, the OIG excludes or imposes a
monetary penalty only after a careful review of all submitted documents
and a separate determination that the practitioner or
[[Page 63635]]
other person (1) violated the statutory obligations to render medically
necessary and appropriate care or failed to provide evidence of medical
necessity and quality, and (2) was unwilling or unable to comply with
these obligations. A practitioner or other person who is excluded from
Medicare and any State health care programs, or assessed a monetary
penalty, on the basis of a PRO finding is entitled to administrative
and judicial review after such sanction is assessed.
B. Summary of Recent Statutory Changes
A number of recent statutory changes have resulted in revisions to
section 1156 of the Act--
Public Law 100-93: Section 6 of the Medicare and Medicaid Patient
and Program Protection Act extended the obligation to provide
appropriate and medically necessary care that meets professionally
recognized standards of quality, and the obligation to ensure that the
care is appropriately documented, to encompass all health care services
for which payment may be made under the Act, and not just Medicare. In
addition, the exclusion authority under section 1156 of the Social
Security Act was extended to encompass violations occurring in, and
exclusions from, the State health care programs.
Public Law 100-203: Section 4095 of the Omnibus Budget
Reconciliation Act (OBRA) of 1987 provided that an exclusion of a
practitioner or other person who practices in a county of less than
70,000 people or in a rural health professional shortage area (HPSA)
cannot be effectuated until an opportunity for a preliminary
administrative hearing is provided and, if requested, the
administrative law judge (ALJ) determines that the practitioner or
other person will pose a serious risk to beneficiaries if permitted to
continue furnishing services during the appeals process.
Public Law 101-508: Section 4205 of OBRA 1990 set forth new
statutory requirements for PROs, where appropriate, to offer a
corrective action plan (CAP) to practitioners and other persons prior
to making a finding; and, in determining whether a practitioner or
other person is willing and able to comply with his or her obligations,
require the Secretary to consider whether they entered into and
successfully completed a CAP prior to the PRO's submission of a
recommendation and report to the Secretary.
Public Law 103-432: Section 156 of the Social Security Act
Amendments of 1994 set forth the requirement that if a PRO, after
reasonable notice and opportunity for discussion with the physician or
practitioner concerned, finds that the physician or practitioner has
furnished services in violation of section 1156(a) of the Act and
determines that the physician or practitioner should enter into a CAP
under section 1156(b)(1), the PRO will notify the State board(s)
responsible for the licensing or disciplining of the physician or
practitioner of its finding and of any action taken as a result of the
finding. (See discussion regarding Sec. 1004.70 under the Response to
the Public Comments section regarding use of the term ``physician and
practitioner.'')
II. Summary of the Proposed Regulations
On February 28, 1994, the OIG published a notice of proposed
rulemaking in the Federal Register that set forth a comprehensive
rewrite of 42 CFR part 1004 consistent with the statutory revisions and
other proposed procedures and recommendations. The proposed regulations
were specifically designed to revise and update the administrative
procedures for the imposition and adjudication of the PRO sanctions
process. The proposed regulations addressed revisions in three broad
areas: (1) Procedural changes resulting from the OBRA 1990 provisions,
(2) the establishment of preliminary hearings for practitioners and
other persons in rural areas or counties, and (3) an alternative
sanctions notification process.
A. The OBRA 1990 Provisions Relating to PRO's
Among other things, the proposed regulations provided for--
The elimination of the procedural distinction between
``substantial'' violations and ``gross and flagrant'' violations.
The use of any violations of the obligations identified
during a CAP period in support of the PRO's recommendation regarding a
practitioner's or other person's unwillingness or inability to comply
with statutory obligations.\1\
\1\ If a PRO decides to use any of the violations identified
during a corrective action plan as a basis for a pending
recommendation for sanction, instead of a basis to support
unwillingness or inability, the PRO must send out a notification on
these violations in accordance with Sec. 1004.40.
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The inclusion of a provision that no physician member of
the PRO panel may be in direct competition with, or have a substantial
bias for or against, the practitioner or other person being considered
for sanction.
The revision of Sec. 1004.30(e) by setting forth
instructions to PROs on the actions to be taken when a physician
relocates after receiving a sanction notice.
The inclusion of any prior problems that any State health
care program has had with a practitioner or other person as an
additional factor to be considered by the OIG in imposing an exclusion.
B. Preliminary Hearings
The proposed regulations also set forth provisions to allow a
practitioner or other person in specified rural areas or counties of a
specified population to request a preliminary hearing when notified by
the OIG of an exclusion from participation in the Medicare program
resulting from a PRO recommendation. The preliminary hearing would be
solely on the issue of whether such practitioner's or other person's
continued participation in the program during the appeal to an ALJ
would place program beneficiaries at serious risk.
Entitlement to such a preliminary hearing would apply to
practitioners and other persons for whom an exclusion is proposed who
practice in a rural HPSA for their specialty or in a county with a
population of less than 70,000. A practitioner's or other person's
practice was considered to be where over 50 percent of his, her or its
services were rendered. The proposed regulations provided that a
practitioner's or other person's request for a preliminary hearing must
be received within 15 days of receipt of an OIG exclusion notice.
C. Sanctions Notification Process
The proposed regulations set forth an alternative sanctions
notification process that would allow sanctioned practitioners and
other persons the option of informing all their patients directly of
the sanction action taken against them. If they selected this option
and complied with its requirements in a timely fashion, sanctioned
practitioners and other persons would be exempted from current
requirement for public notice.
Under this proposed option, practitioners and other persons would
be required to certify to the Department that they have taken action to
inform all their patients of the sanction and, in the case of
exclusion, that they would notify new patients before furnishing
services. Each sanctioned practitioner or other person opting for this
alternative notice procedure would have to alert both existing patients
and all new patients through written notification based on a suggested,
non-mandatory model that would be provided by the OIG. For
[[Page 63636]]
those sanctioned practitioners or other persons not electing this
alternative method or failing to return the required certification form
within the proposed 30-day period, the OIG would follow its standard
procedure for public notification.
III. Response to the Public Comments
As a result of the proposed rulemaking published on February 28,
1994, the OIG received a total of 12 timely-filed public comments from
various practitioners and providers, medical and professional
associations, third party payers, peer review organizations and other
interested parties.
Set forth below is a summary of those comments and our response to
the issues and concerns raised.
Section 1004.1--Scope and Definitions
Comment: Three commenters stated that the term ``gross and
flagrant'' was confusing, and as currently defined, has been
erroneously interpreted to permit the Department and the PROs to focus
on the outcome of the procedure and not on the degree of the violation.
The commenters believed that under the existing definition the PROs
have been given broad authority to arbitrarily determine that any given
quality concern is potentially sanctionable, and that this, in turn,
has lead to the initiation of the sanction process in some questionable
cases.
Response: We believe it is important to retain the present
definition and classification for the term ``gross and flagrant'' so
that the severity of the violation can be demonstrated. While we have
considered alternative definitions for defining this term, we believe
that the current classification adequately and properly reflects the
severity of the violation of the obligation(s) and the risk to the
patient(s) which has already been identified. As to one commenter's
suggestion that the patient must be ``harmed'' before a violation can
be considered gross and flagrant, we disagree. We believe that a gross
and flagrant violation includes those situations where a patient is
placed in danger or in a high-risk situation, whether or not the
patient is harmed. Thus, we are retaining the current definition.
Comment: While agreeing that there needs to be a definition for the
term ``pattern of care,'' one commenter was concerned that the
definition for ``substantial violation in a substantial number of
cases''--which encompasses the requirement that there be an
inappropriate pattern of care--has been interpreted to support a
finding of a substantial violation exclusively on the basis of multiple
allegations of treatment deficiencies in a single patient. The
commenter believes this is unfair since, while a physician's course of
treatment with respect to one patient may be alleged to be negligent,
the treatment of a single individual does not indicate the ``pattern''
of professional negligence that the law was designed to address.
Response: We agree with the commenter's concern and have revised
the definition of ``pattern of care'' in substantial violation cases to
mean that the care under question has been demonstrated in more than 3
instances, which must involve different admissions. Under this revised
definition, the instances could involve the same patient but reflect
problems with the treatment occurring at different times. This is in
contrast with the definition of gross and flagrant violations in which
multiple violations may be found within the same admission.
Comment: One commenter objected to our defining the term ``practice
area'' as ``the location where over 50 percent of the practitioner's or
other person's patients are seen,'' and requested that the definition
be deleted. The commenter believed that a practitioner who has any
amount of practice in a rural area should be entitled to a preliminary
hearing on the issue of whether that person's continued participation
during the appeal of the exclusion would place program beneficiaries at
serious risk.
Response: We are rejecting this comment since we believe it is not
consistent with the statutory provision and congressional intent in
providing for such preliminary hearings. If Congress wanted to extend
the right to a preliminary hearing to all, or virtually all,
practitioners and other persons, it would have done so in the statutory
language. Rather, the statute and these regulations are targeted only
to those who ``practice'' in a HPSA or a county with a population of
less than 70,000, and not those who may occasionally see a patient in a
rural area. In order to carry out the intent of the statutory
provision, we believe that the definition for the term ``practice
area'' is appropriate, fair and reasonable.
Section 1004.40--Action on Identification of a Violation
Comment: While several commenters strongly supported the OIG's
proposal to eliminate the distinction between ``substantial''
violations and ``gross and flagrant'' violations, one commenter
believed that the elimination of this distinction would result in less
due process by removing the physician's right to receive two notices
and two hearings for any violation.
Response: As noted in the proposed rule, the second meeting in
substantial violation cases has proven simply to be a repeat of the
initial or 20-day meeting. This, in turn, has increased the risk of
serious patient harm due to this procedural delay. Experience has shown
that this dual meeting process has tended to be cumbersome, time-
consuming and confusing to both the physician responding to substantial
violations issues and the physician members of the PRO's sanction
panel. The OIG believes that this approach to eliminating the
violations' distinction will serve program beneficiaries well while
still continuing to provide adequate due process to all practitioners
and other persons.
Comment: One commenter strongly agreed with the additional
safeguards under Sec. 1004.40 that state that the notice must contain
information regarding the meeting, that an attorney may represent the
practitioner, and that the attorney may make opening and closing
remarks, ask clarifying questions at the meeting and assist the
practitioner in presenting testimony of expert witnesses who may appear
on behalf of the practitioner. However, the commenter believed that the
notice should also contain a provision stating that the attorney may
also cross-examine any physician or other expert who provided evidence
upon which the PRO relied in identifying a potential violation under
Sec. 1004.10.
Response: We do not agree with the commenter's recommendation under
Sec. 1004.40 that notice should also include a provision that would
allow attorney cross-examination. The meeting between the PRO and the
practitioner or other person is not a formal adversarial hearing or
trial. Rather, this meeting serves only as a medical dialogue to afford
the practitioner or other person an opportunity to discuss medical
issues.
Comment: Under Sec. 1004.40, when a PRO identifies a violation, it
must send a notice to the practitioner or provider identifying the
specific concerns. One commenter stated that, while traditionally it
has been up to the provider or practitioner to initiate a CAP before
the PRO would consider it, this rule change places the obligation on
the PRO to initiate resolution through a CAP. The commenter questioned
whether the absence of a CAP in the notice constituted a determination
by the PRO that the case cannot, at that
[[Page 63637]]
time, be resolved with a CAP, and opined that if a CAP is not
considered appropriate, perhaps the notice should state this along with
the reasons why. The commenter also wanted the practitioner or provider
to be given an opportunity to submit additional information within 15
days of receipt of notice without, at the same time, having to decide
to request a meeting.
Response: With regard to the use of a CAP, we believe that there
are times when the PRO will not know if, or what type of, a CAP is
appropriate until they have met with or heard from the practitioner or
other person in response to the letter. We are, therefore, dissuaded by
the comment raised. With regard to the commenter's second point, before
the PRO sends out a notice under this regulatory process, the
practitioner or other person is given at least one and, in most
instances, two opportunities to present clarifying information.
Therefore, we do not believe that another opportunity such as that
proposed by the commenter would be necessary.
Comment: One commenter indicated concern with the proposed language
in Sec. 1004.40(b)(5) that stated the PRO must advise the practitioner
or other person of ``the sanction that the PRO could recommend to the
OIG if the violation continues'' (italic added). The phrase ``if the
violation continues'' is not contained in the current ``gross and
flagrant'' notice, and the commenter believed that the use of these
words in the regulations would prevent an exclusion recommendation by
the PRO in the most egregious of circumstances if the PRO cannot
document that the violation continues. The commenter specifically
recommended that this phrase be deleted.
Response: We agree with the commenter and are deleting this wording
from Sec. 1004.40(b)(5).
Section 1004.50--Meeting With a Practitioner or Other Person
Comment: Several commenters strongly agreed with the codification
of the requirement that no physician member of the PRO panel may be in
direct competition with, or have a substantial bias against, the
practitioner or other person being considered for sanction. One
commenter urged, however, that this section be expanded to include
specific reference to the right of the practitioner's attorney to
cross-examine any reviewing physician who has made recommendations to
the PRO regarding the quality of care rendered by the practitioner
under review. The commenter also raised concern over the lack of a
requirement that physicians providing expertise to the PRO in regard to
the sanction investigation or other proceedings be in the same
specialty as the practitioner under review.
Response: As discussed above, we do not believe that it is
necessary that the physician's attorneys have the opportunity to cross-
examine physician panel members. The meeting between the PRO and the
physician or other person is not a formal adversarial hearing or trial.
Rather, it is intended to remain merely a medical dialogue designed to
afford the practitioner or other person an opportunity to discuss
medical issues. With respect to the suggestion that the medical
professional providing expertise be of the same or closely related
specialty and be practicing in similar circumstances to the
practitioner under review, we believe that proposed section (d) of this
section satisfies this specific concern. Specifically, Sec. 1004.50(d)
states that at least one member of the PRO panel meeting with the
practitioner or other person should practice in a similar geographic
area, and at least one member of the panel must be in the same
specialty. Both requirements can be met by a single individual.
Comment: One commenter asked that the composition of the sanctions
panel be expanded to include persons trained and experienced in
``hospital issues'' before any hospital can be appropriately subject to
a sanction.
Response: Since the obligations with regard to any violation
involve medical quality of care issues, necessary services and medical
documentation, we remain unclear as to what unique ``hospital issues''
are involved. As set forth, we believe that the changes contained in
the rulemaking adequately remove any bias from addressing the pertinent
issues in the ongoing sanction process.
Comment: Section 1004.50(g) provides that, when a practitioner or
other person requests a meeting with the PRO, ``[t]he PRO may allow the
practitioner or other person 5 working days after the meeting to
provide the PRO additional relevant information that may affect its
decision * * *.'' One commenter suggested that 5 working days was not
adequate time for a practitioner to provide additional information to
the PRO, and that 14 days would be a more reasonable amount of time.
Response: We believe that the 5-day period granted to provide
additional information after the meeting is adequate. We believe that
the practitioner or other person has been afforded several
opportunities up to this point to provide additional information, and
that 5 days, consistent with the American Medical Association (AMA)
understanding, is sufficient in this instance.
Comment: One commenter indicated that the terms ``determination,''
``decision'' and ``finding'' are used interchangeably in Secs. 1004.40
and 1004.50, and requested that the terms ``determination'' and
``decision'' be eliminated and the term ``finding'' be used
consistently throughout.
Response: We agree with the commenter's concern, and to be
consistent throughout these sections, we are deleting the terms
``decision'' and ``determination'' by a PRO and inserting the word
``finding'' in its place.
Section 1004.60--PRO Finding of a Violation
Comment: One commenter requested that we specifically clarify the
term ``issue'' in this section, and specify when it has been resolved
since no clear distinction is made between a ``issue,'' a
``determination'' and a ``finding.'' In addition, the commenter asked
that the last sentence in Sec. 1004.60(a) be eliminated and a new
sentence to paragraph (b) stating that ``(T)he PRO may, on the basis of
the additional information, modify either its finding or recommendation
or close the case.''
Response: While we have agreed to replace the term ``issue'' with
the word ``finding,'' there remain numerous ways for a ``finding'' to
be resolved by a PRO and believe it would not be appropriate in these
regulations to attempt to attempt further clarification of this term.
With regard to the commenter's second point, we have agreed instead to
modify the language in paragraph (a). As revised, the language in
Sec. 1004.60(a) will state that ``(I)f the finding has been resolved to
the PRO's satisfaction, the PRO may modify its initial finding or
recommendation or close the case.''
Section 1004.70--PRO Action on Final Finding of a Violation
Comment: A commenter stated that in Sec. 1004.70(c) the word
``physician'' should be replaced with the phrase ``physician or other
person'' to be consistent with other references found elsewhere in
these regulations.
Response: We agree that a revision to this section is appropriate.
In addition, a technical correction is being made over language in
section 1154(a)(9)(B) of the Act resulting from Pub. L. 103-432. With
regard to the requirement that the PRO notify licensure boards for
practitioners other than physicians when it submits a report and
recommendation to the OIG, section 1154(a)(9)(B) of the Social Security
Act, as recently amended by Pub. L. 103-
[[Page 63638]]
432, provides that if a PRO finds that a ``physician or practitioner
has furnished services in violation of section 1156(a) and the
organization determines that the physician or practitioner should enter
into a corrective action plan under section 1156(b)(1), the
organization shall notify the State board or boards responsible for the
licensing or disciplining of the physician or practitioner of its
finding and of any action taken as a result of the finding.''
The Secretary may require by regulation that the PRO notify
appropriate licensure boards for non-physician practitioners when those
practitioners are found in violation. Accordingly, we are revising
Sec. 1004.70(c) to include notification by the PRO of appropriate
licensure boards when it sends a report to the OIG regarding a
physician or other person.
Section 1004.100--Acknowledgement and Review of Report
Comment: While a number of respondents concurred with the content
of this section, one commenter stated that if the OIG believes that a
particular sanction recommendation is not warranted, procedures should
be in place for the OIG to discuss the matter with the PRO before
making a final decision. Accordingly, the commenter requested that we
add a provision requiring the OIG physician advisor to communicate with
one or more of the physicians on the PRO panel.
Response: We disagree with the need for this added requirement. We
believe such communication on the part of the OIG physician advisor
could raise specific concerns of due process. There would be no clear
way for the practitioner or other person to be made aware of the
questions raised and the responses made by the PRO through such
communication. In addition, since the PRO has provided all the
documentation on which it has based its recommendation, we believe that
it is unnecessary for such discussion to occur prior to the OIG making
a decision.
Section 1004.110--Notice of Sanction
Comment: Two commenters strongly opposed any alternative
notification process for sanctions. One of the commenters indicated
that an option of allowing the physician to notify privately both his
or her existing and new patients does not adequately protect the public
interest. While acknowledging the OIG's concerns that the current
public notification may not be effectively reaching all of the
physician's patients, the commenter stated that the same risk exists
with private notification and, therefore, suggested that private
notification be mandatory and that it be used in addition to the
current public notification process.
Response: We believe that the present public notification process
has not yielded the most effective results of informing affected
parties and program beneficiaries of a specific sanction action taken
under the program. As a result of preliminary discussions with the AMA,
the American Association of Retired Persons (AARP) and the Health Care
Financing Administration, we believe that this approach, with built-in
safeguards such as the certification of patient notice, would afford
both the provider community and the patient community with an
alternative for disseminating information regarding program sanctions.
By definition, this alternative approach will offer a second options
for public notification. Any effort to require both newspaper
publication and direct notice to a physician's patients would, in
effect, not offer an alternative as we have contemplated, but rather
impose an additional layer of burden on the practitioner or other
person. Our intent is for such notice to be both effective and cost-
efficient, and we believe that this approach will meet those
objectives. In addition, as indicated in the preamble to the proposed
rule, where the OIG receives reliable evidence that a practitioner or
other person has not adequately informed his, her or its new and
existing patients of the sanction, the OIG reserves the right to follow
existing procedures for public notification. Failure by the
practitioner or other person to comply with the alternative method of
notification once he, she or it has elected to do so will be adversely
considered by the OIG at the time of application for reinstatement.
Comment: While supportive of the alternative notification process,
two commenters requested that the regulations also include a
requirement that the OIG receive a copy of the notice sent to each
patient to determine its adequacy, or include in the regulations
certain minimum requirements for the content of such notice. One
commenter recommended that if providers are allowed to create their own
letters, then it should be required that the letters be reviewed and
approved first by the OIG prior to the provider sending them to the
patients.
Response: We believe that the requirements that were set forth in
proposed Sec. 1004.110(d) with regard to patient notification and
certification are adequate. As indicated, the OIG will provide the
sanctioned practitioner or other person a suggested model letter
designed to address the nature of the sanction, as well as the
exclusion's effective date and duration. In turn, the practitioner or
other person is to specifically certify to the OIG that the information
provided is truthful and accurate. Failure to properly inform one's
patients and return to the required certification to the OIG within 30
days, or the obtaining of reliable evidence by the OIG that the
practitioner or other person failed to adequately inform patients of
the sanction, will result in the publication of a public notice and
will be considered an aggravating factor at the time of the
practitioner's or other person's application for reinstatement. As a
result, we do not believe that the use of additional OIG staff time in
reviewing such individuals letters is necessary.
Comment: In order to have each practitioner or other person in full
compliance with the alternative notification approach, one commenter
asked that the term ``all existing patients'' be cleared defined. In
addition, the commenter questioned how notice to a new patient
presenting himself or herself for emergency care would be handled, and
whether such required notice would impede the provision or quality of
care to such patients.
Response: We agree that the term ``all existing patients'' could be
interpreted in different ways. In doing so, we believe it is necessary
to balance our intent of assuring that proper notice is provided to the
largest possible spectrum of program beneficiaries that may be affected
by this sanction, without insurmountable burdens being placed on
practitioners and other persons to contact their affected patient base.
For this reason, we have agreed to define the term ``all existing
patients'' to include all patients currently under active treatment
with the practitioner or other person, as well as all patients who have
been treated by the practitioner or other person within the last three
years. We believe that this definition will provide adequate
notification of the sanction to those most likely to be affected by it
while assuring that this alternative approach remains a viable,
effective option.
Patients being treated in an emergency situation could be notified
verbally at the point they seek treatment, and since excluded
physicians and others can be paid for emergency services, we do not
believe this to result in a significant quality of care problem.
[[Page 63639]]
Comment: One commenter believed that effective monitoring and
validation of timely and complete compliance with this notice option by
the OIG would be very difficult. A second commenter stated that
monitoring this option should include a signed statement of completion
by the sanctioned provider and a follow-up mail survey of a sample of
patients to determine if the requirements were met.
Response: The issue of ensuring that direct patient notification is
enforced was given full consideration during the development of the
alternative notification process. Specifically, we do not foresee
expending and designating an excessive amount of staff time to directly
monitor the alternative notification process. Rather, when the OIG
learns through patient complaints or other methods that the
practitioner or other person has not fully complied, it will at that
point taken an action to remedy the situation, such as pursuing
penalties for the filing of a false statement.
Comment: One commenter recommended that since PRO activity relates
only to Medicare patients, the alternative notification process should
be limited to Medicare patients only.
Response: Our rationale for selecting notification to all patients
rests with the statutory requirement for ``reasonable notice to the
public'' (underlining added). U.S.C. 1320c-5(b)(2). We believe that
such proper public notice would not be met by having sanctioned parties
limit notice to only their program-eligible patients. This selected
option is designed to protect both Medicare program beneficiaries and
future beneficiaries, and to ensure that the statutorily-required
notice to the public of a sanction action is as effective as possible.
As a result, in an effort to achieve proper notification and public
awareness in an effective manner, we have opted to require that
alternative notification be given to all patients.
Comment: While supportive of the alternative sanctions notification
process, one commenter believed that the requirement that hospitals
post a sign ``in all affiliated entities'' needs to be clarified to
indicate what would be required of a hospital electing this alternative
approach.
Response: We agree with the commenter over the need to define this
term. Accordingly, we are defining in Sec. 1004.110(d)(1)(i) the term
``in all affiliated entities'' to encompass all entities and properties
which provide services and in which the hospital has a direct or
indirect ownership interest of 5 percent or more and any management,
partnership or control of the entity.
Comment: One commenter was concerned with the timeframes provided
for in Sec. 1004.110(b). That section provides that ``the sanction is
effective 15 days from the date of receipt of the notice. The date of
receipt is presumed to be 5 days after the date on the notice, unless
there is a reasonable showing to the contrary.'' The commenter believed
that in order for the provisions of this rule to be consistent, the
effective date of a sanction should be 30 days from the date of the
receipt of the notice in order to allow the sanctioned practitioner's
patients adequate time to make other arrangements.
Response: Section 1156(b)(2) of the Social Security Act requires
the effective date of the sanction to be consistent with section
1128(c) of the Act. Therefore, we are retaining the effective date as
20 days from the date of notice.
Section 1004.140--Appeal Rights
Comment: The proposed regulations provided that a request for a
preliminary hearing must be received within 15 days of receipt of an
OIG exclusion notice. Two commenters indicated that they did not
believe 15 days is sufficient time to request a preliminary hearing,
with one of these commenters suggesting that providers be given 30
days, rather than 15 days, to request such a preliminary hearing of a
sanction.
Response: The OIG's concern remains with the protection of program
beneficiaries and with decisions being reached in a timely and
efficient manner. Accordingly, we believe that since the practitioner
or other person continues to participate in the program until the time
period for requesting a preliminary hearing has expired or a decision
is made after a preliminary hearing, this process must be expeditious.
Since all notices of exclusion under Sec. 1004.110 are sent by
overnight mail, we continue to believe that 15 days is sufficient time
to request a preliminary hearing when desired.
Comment: The proposed regulations provided for a preliminary
hearing prior to exclusion ``if the location where services are
rendered to over 50 percent of the practitioner's or other person's
patients at the time of the exclusion notice is in a rural HPSA or in a
county where the population is less than 70,000.'' Citing that it is
contrary to the public's interest to impose a specific, quantitative
requirement on the amount of services that a practitioner provides in a
rural area as a condition for eligibility for a hearing, one commenter
disagreed with limiting the right to a preliminary hearing to
physicians where over 50 percent of their practice is located in such a
rural area.
Further, a second commenter indicated that they believe it would be
difficult in many instances for the PRO to determine where 50 percent
of the practitioner's practice is located.
Response: Section 1156(a) of the Act specifically limits the right
to a preliminary hearing to those physicians who practice in a county
with a population of less than 70,000 or those practicing in a HPSA.
The statutory language was intentionally limiting and did not provide
the right to such a hearing to every practitioner or other person who
may occasionally provide a service in a rural HPSA. We believe that the
``over 50 percent'' standard is reasonable and is in keeping with the
statutory intent.
Comment: One commenter believed that there should be an additional
regulatory requirement that the OIG notify the PRO when a sanction
appeal is made. The commenter believed that they should have this
knowledge so that they can participate with and assist the OIG through
the administrative appeal process.
Response: The OIG does not receive specific notification when a
sanction is being appealed and, therefore, it cannot routinely notify
the PRO of such action. In most cases, it is the Regional Counsel's
office that notifies the PRO so that it can prepare the defense of the
practitioner's or other person's exclusion action.
IV. Technical Revisions to 42 CFR Part 1004
In addition to the public comments received on the proposed
rulemaking, the OIG received a number of internal technical comments
from two of the Department's Regional Counsel's offices. These comments
and recommendations for change were designed to further clarify
specific aspects of the regulatory language set forth in 42 CFR part
1004, and are technical, non-substantive and editorial in nature. We
have adopted a number of these suggestions and have incorporated them
into the revised text for part 1004 set forth below.
V. Regulatory Impact Statement
The Office of Management and Budget has reviewed this final rule in
accordance with the provisions of Executive Order 12866. As indicated
above, the revisions contained in this final rule are intended to
revise and update administrative procedures governing the imposition
and adjudication of program sanctions, based on PRO recommendations,
against practitioners and other persons who
[[Page 63640]]
violate the statute. We believe that the great majority of
practitioners and other persons do not engage in such prohibited
activities and practices, and that the aggregate economic impact of
these provisions should, in effect, be minimal, affecting only those
who have engaged in prohibited behavior in violation of statutory
intent. As such, these regulations should have no direct effect on the
economy or on Federal or State expenditures.
In addition, in accordance with the Regulatory Flexibility Act (5
U.S.C. 601 through 612), the Secretary certifies that this final
rulemaking will not have a significant economic impact on a substantial
number of small entities. While some sanctions and penalties may have
an impact on small entities, we do not anticipate that a substantial
number of these small entities would be significantly affected by this
rulemaking. Therefore, we have determined, and the Secretary certifies,
that this final rule should not have a significant economic impact on a
number of small business entities.
List of Subjects in 42 CFR Part 1004
Administrative practice and procedure, Health facilities, Health
professions, Medicare, Peer Review Organizations, Penalties, Reporting
and recordkeeping requirements.
Part 1004 is revised to read as follows:
PART 1004--IMPOSITION OF SANCTIONS ON HEALTH CARE PRACTITIONERS AND
PROVIDERS OF HEALTH CARE SERVICES BY A PEER REVIEW ORGANIZATION
Subpart A--General Provisions
Sec.
1004.1 Scope and definitions.
Subpart B--Sanctions Under the PRO Program; General Provisions
1004.10 Statutory obligations of practitioners and other persons.
1004.20 Sanctions.
Subpart C--PRO Responsibilities
1004.30 Basic responsibilities.
1004.40 Action on identification of a violation.
1004.50 Meeting with a practitioner or other person.
1004.60 PRO finding of a violation.
1004.70 PRO action on final finding of a violation.
1004.80 PRO report to the OIG.
1004.90 Basis for recommended sanction.
Subpart D--OIG Responsibilities
1004.100 Acknowledgement and review of report.
1004.110 Notice of sanction.
Subpart E--Effect and Duration of Exclusion
1004.120 Effect of an exclusion on program payments and services.
1004.130 Reinstatement after exclusion.
Subpart F--Appeals
1004.140 Appeal rights.
Authority: 42 U.S.C. 1302 and 1320c-5.
Subpart A--General Provisions
Sec. 1004.1 Scope and definitions.
(a) Scope. This part implements section 1156 of the Act by--
(1) Setting forth certain obligations imposed on practitioners and
providers of services under Medicare;
(2) Establishing criteria and procedures for the reports required
from peer review organizations (PROs) when there is failure to meet
those obligations;
(3) Specifying the policies and procedures for making
determinations on violations and imposing sanctions; and
(4) Defining the procedures for appeals by the affected party and
the procedures for reinstatements.
(b) Definitions. As used in this part, unless the context indicates
otherwise--
Dentist is limited to licensed doctors of dental surgery or dental
medicine.
Economically means the services are provided at the least
expensive, medically appropriate type of setting or level of care
available.
Exclusion means that items and services furnished or ordered (or at
the medical direction or on the prescription of a physician) by a
specified health care practitioner, provider or other person during a
specified period are not reimbursed under titles V, XVIII, XIX, or XX
of the Social Security Act and all other Federal non-procurement
programs.
Gross and flagrant violation means a violation of an obligation has
occurred in one or more instances which presents an imminent danger to
the health, safety, or well-being of a program patient or places the
program patient unnecessarily in high-risk situations.
Health care service or services means services or items for which
payment may be made (in whole or in part) under the Medicare or State
health care programs.
Health professional shortage area (HPSA) means an area designated
by the Secretary and defined in 42 CFR 5.2.
Metropolitan Statistical Area means an area as defined by the
Executive Office of Management and Budget.
Obligation means any of the obligations specified at section
1156(a) of the Act.
Other person means a hospital or other health care facility, an
organization or an agency that provides health care services or which
payment may be made (in whole or in part) under the Medicare or State
health care programs.
Pattern or care means that the care under question has been
demonstrated in more than three instances, each of which involved
different admissions.
Pharmacy professional is a term limited to individuals who are
licensed or registered to provide pharmaceutical services.
Podiatric professional is a term limited to licensed doctors of
podiatric medicine.
Practice area means the location where over 50 percent of the
practitioner's or other person's patients are seen.
Practitioner means a physician or other health care professional
licensed under State law to practice his or her profession.
Primary medical care professional is a term limited to:
(i) Licensed doctors of medicine and doctors of osteopathy
providing direct patient care who practice in the fields of general or
family practice, general internal medicine, pediatrics, obstetrics and
gynecology, surgery, and any other specialty that is not accommodated
by the remaining specialty HPSA designator, or
(ii) Those facilities where care and treatment is provided to
patients with health problems other than mental disorders.
Pro area means the geographic area subject to review by a
particular PRO.
Provider means a hospital or other health care facility, agency, or
organization.
Psychiatric professional is a term limited to licensed doctors of
medicine who limit their practice to psychiatry or to those facilities
where care and treatment is limited to patients with mental disorders.
Rural means any area outside an urban area.
Rural health professional shortage area means any health
professional shortage area located outside a Metropolitan Statistical
Area.
Sanction means an exclusion or monetary penalty that the Secretary
may impose on a practitioner or other person as a result of a
recommendation from a PRO.
Serious risk includes situations that may involve the risk of
unnecessary treatment, prolonged treatment, lack of treatment,
incorrect treatment, medical complication, premature discharge,
physiological or anatomical impairment, disability, or death.
State health care program means a State plan approved under title
XIX, any
[[Page 63641]]
program receiving funds under title V or from an allotment to a State
under such title, or any program receiving funds under title XX or from
an allotment to a State under such title.
Substantial violation in a substantial number of cases means a
pattern of providing care, as defined in this section, that is
inappropriate, unnecessary, or does not meet recognized professional
standards of care, or is not supported by the necessary documentation
of care as required by the PRO.
Urban means a Metropolitan Statistical Area as defined by the
Executive Office of Management and Budget.
Vision care professional is a term limited to licensed doctors of
medicine who limit their practice to ophthalmology and to doctors of
optometry.
Subpart B--Sanctions Under the PRO Program; General Provisions
Sec. 1004.10 Statutory obligations of practitioners and other
persons.
It is the obligation of any health care practitioner or other
person who furnishes or orders health care services that may be
reimbursed under the Medicare or State health care programs to ensure,
to the extent of his or her or its authority, that those services are--
(a) Provided economically and only when, and to the extent,
medically necessary;
(b) Of a quality that meets professionally recognized standards of
health care; and
(c) Supported by evidence of medical necessity and quality in the
form and fashion and at such time that the reviewing PRO may reasonably
require (including copies of the necessary documentation and evidence
of compliance with pre-admission or pre-procedure review requirements)
to ensure that the practitioner or other person is meeting the
obligations imposed by section 1156(a) of the Act.
Sec. 1004.20 Sanctions.
In addition to any other sanction provided under law, a
practitioner or other person may be--
(a) Excluded from participating in programs under titles V, XVIII,
XIX, and XX of the Social Security Act; or
(b) In lieu of exclusion and as a condition for continued
participation in titles V, XVIII, XIX, and XX of the Act, if the
violation involved the provision or ordering (or at the medical
direction or the prescription of a physician) of health care services
that were medically improper or unnecessary, required to pay an amount
not in excess of the cost of the improper or unnecessary services that
were furnished or ordered (and prescribed, if appropriate). The
practitioner or other person will be required either to pay the
monetary assessment within 6 months of the date of notice or have it
deducted from any sums the Federal government owes the practitioner or
other person.
Subpart C--PRO Responsibilities
Sec. 1004.30 Basic responsibilities.
(a) The PRO must use its authority or influence to enlist the
support of other professional or government agencies to ensure that
each practitioner or other person complies with the obligations
specified in Sec. 1004.10.
(b) When the PRO identifies situations where an obligation
specified in Sec. 1004.10 is violated, it will afford the practitioner
or other person reasonable notice and opportunity for discussion and,
if appropriate, a suggested method for correcting the situation and a
time period for a corrective action in accordance with Secs. 1004.40
and 1004.60.
(c) The PRO must submit a report to the OIG after the notice and
opportunity provided under paragraph (b) of this section and, if
appropriate, the opportunity to enter into and complete a corrective
action plan (CAP) if the PRO finds that the practitioner or other
person has--
(1) Failed substantially to comply with any obligation in a
substantial number of admissions; or
(2) Grossly and flagrantly violated any obligation in one or more
instances.
(d) The PRO report to the OIG must comply with the provisions of
Sec. 1004.80.
(e) If a practitioner or other person relocates to another PRO area
prior to a finding of a violation or sanction recommendation, and the
originating PRO--
(1) Is able to make a finding, the originating PRO must, as
appropriate, close the case or forward a sanction recommendation to the
OIG; or
(2) Cannot make a finding, the originating PRO must forward all
documentation regarding the case to the PRO with jurisdiction, and
notify the practitioner or other person of this action.
(f) The PRO must deny payment for services or items furnished or
ordered (or at the medical direction or on the prescription of an
excluded physician) by an excluded practitioner or other person when
the PRO identifies the services or items. It must report the findings
to the Health Care Financing Administration.
Sec. 1004.40 Action on identification of a violation.
When a PRO identifies a violation, it must--
(a) Indicate whether the violation is a gross and flagrant
violation or is a substantial violation in a substantial number of
cases; and
(b) Send the practitioner or other person written notice of the
identification of a violation containing the following information--
(1) The obligation(s) involved;
(2) The situation, circumstances or activity that resulted in a
violation;
(3) The authority and responsibility of the PRO to report
violations of any obligation under section 1156(a) of the Act;
(4) A suggested method for correcting the situation and a time
period for corrective action, if appropriate;
(5) The sanction that the PRO could recomment to the OIG;
(6) The right of the practitioner or other person to submit to the
PRO within 30 days of receipt of the notice additional information or a
written request for a meeting with the PRO to review and discuss the
finding, or both. The date of receipt is presumed to be 5 days after
the date on the notice, unless there is a reasonable showing to the
contrary. The notice will also state that if a meeting is requested--
(i) It will be held within 30 days of receipt by the PRO of the
request, but may be extended for good cause;
(ii) The practitioner or other person may have an attorney present;
and
(iii) The attorney, if present, will be permitted to make opening
and closing remarks, ask clarifying questions at the meeting and assist
the practitioner or other person in presenting the testimony of expert
witnesses who may appear on the practitioner's or other person's
behalf; and
(7) A copy of the material used by the PRO in arriving at its
finding except for PRO deliberations, as set forth in Sec. 476.139 of
this part.
Sec. 1004.50 Meeting with a practitioner or other person.
If the practitioner or other person requests a meeting with the
PRO--
(a) The PRO panel that meets with the practitioner or other person
must consist of a minimum of 3 physicians;
(b) No physician member of the PRO panel may be in direct economic
competition with the practitioner or other person being considered for
sanction;
(c) The PRO must ensure that no physician member of the PRO panel
has
[[Page 63642]]
a substantial bias for or against the practitioner or other person
being considered for sanction;
(d) At least one member of the PRO panel meeting with the
practitioner or other person should practice in a similar area, e.g.,
urban or rural, and at least one member of the panel must be in the
same specialty (both requirements could be met by a single individual);
(e) If the practitioner or other person has an attorney present,
that attorney will be permitted to make opening and closing remarks,
ask clarifying questions and assist the practitioner or other person in
presenting the testimony of expert witnesses who may appear on the
practitioner's or other person behalf;
(f) The physician who recommends to the PRO that a practitioner or
other person be sanctioned may not vote on that recommendation at the
meeting;
(g) The PRO may allow the practitioner or other person 5 working
days after the meeting to provide the PRO additional relevant
information that may affect its finding; and
(h) A verbatim record must be made of the meeting and must be made
available to the practitioner or other person promptly.
Sec. 1004.60 PRO finding of a violation.
(a) On the basis of any additional information received, the PRO
will affirm or modify its finding. If the PRO affirms its finding, it
may suggest in writing a method for correcting the situation and a time
period for corrective action. This CAP could correspond with, or be a
continuation of, a prior CAP or be a new proposal based on additional
information received by the PRO. If the finding has been resolved to
the PRO's satisfaction, the PRO may modify its initial finding or
recommendation or close the case.
(b) The PRO must give written notice to the practitioner or other
person of any action it takes as a result of the additional information
received, as specified in Sec. 1004.70.
(c) At least one member of the PRO participating in the process
which resulted in a recommendation to the OIG that a practitioner or
other person be sanctioned should practice in a similar geographic
area, e.g. urban or rural, and at least one member of the panel must be
in the same medical specialty. Both requirements can be met by a single
individual. In addition, no one at the PRO who is a participant in such
a finding may be in direct economic competition with, or have a
substantial bias for or against, that practitioner or other person
being recommended for sanction.
Sec. 1004.70 PRO action on final finding of a violation.
If the finding is not resolved to the PRO's satisfaction as
specified in Sec. 1004.60(a), the PRO must--
(a) Submit its report and recommendation to the OIG;
(b) Send the affected practitioner or other person a concurrent
final notice, with a copy of all the material that is being forwarded
to the OIG, advising that--
(1) The PRO recommendation has been submitted to the OIG;
(2) The practitioner or other person has 30 days from receipt of
this final notice to submit any additional written material or
documentary evidence to the OIG at its headquarters location. The date
of receipt is presumed to be 5 days after the date on the notice,
unless there is a reasonable showing to the contrary; and
(3) Due to the 120-day statutory requirement specified in
Sec. 1004.100(e), the period for submitting additional information will
not be extended and any material received by the OIG after the 30-day
period will not be considered; and
(c) Provide notice to the State medical board or to other
appropriate licensing boards for other practitioner types when it
submits a report and recommendations to the OIG with respect to a
physician or other person whom the board is responsible for licensing.
Sec. 1004.80 PRO report to the OIG.
(a) Manner of reporting. If the violation(s) identified by the PRO
have not been resolved, it must submit a report and recommendation to
the OIG at the field office with jurisdiction.
(b) Content of report. The PRO report must include the following
information--
(1) Identification of the practitioner or other person and, when
applicable, the name of the director, administrator or owner of the
entity involved;
(2) The type of health care services involved;
(3) A description of each failure to comply with an obligation,
including specific dates, places, circumstances and other relevant
facts;
(4) Pertinent documentary evidence;
(5) Copies of written correspondence, including reports of
conversations with the practitioner or other person regarding the
violation and, if applicable, a copy of the verbatim transcript of the
meeting with the practitioner or other person;
(6) The PRO's finding that an obligation under section 1156(a) of
the Act has been violated and that the violation is substantial and has
occurred in a substantial number of cases or is gross and flagrant;
(7) A case-by-case analysis and evaluation of any additional
information provided by the practitioner or other person in response to
the PRO's initial finding;
(8) A copy of the CAP that was developed and documentation of the
results of such plan or an explanation of why such the CAP will be used
to support the PRO's recommendation regarding inability or
unwillingness in accordance with Sec. 1004.80(c)(6) and not as a basis
for the sanction;
(9) The number of admissions by the practitioner or other person
reviewed by the PRO during the period in which the violation(s) were
identified;
(10) The professional qualifications of the PRO's reviewers; and
(11) The PRO's sanction recommendation.
(c) PRO recommendation. The PRO must specify in its report--
(1) The sanction recommended;
(2) The amount of the monetary penalty recommended, if applicable;
(3) The period of exclusion recommended, if applicable;
(4) The availability of alternative sources of services in the
community, with supporting information;
(5) The county or counties in which the practitioner or other
person furnishes services; and
(6) A recommendation, with supporting documentation, as to whether
the practitioner or other person is unable or unwilling substantially
to comply with the obligation that was violated and the basis for that
recommendation.
Sec. 1004.90 Basis for recommended sanction.
The PRO's specific recommendation must be based on documentation
provided to the OIG showing its consideration of--
(a) The type of offense involved;
(b) The severity of the offense;
(c) The deterrent value;
(d) The practitioner's or other person's previous sanction record;
(e) The availability of alternative sources of services in the
community; and
(f) Any other factors that the PRO considers relevant, such as the
duration of the problem.
Subpart D--OIG Responsibilities
Sec. 1004.100 Acknowledgement and review of report.
(a) Acknowledgement. The OIG will inform the PRO of the date it
received the PRO's report and recommendation.
[[Page 63643]]
(b) Review. The OIG will review the PRO report and recommendation
to determine whether--
(1) The PRO has followed the regulatory requirements of part 1004;
(2) A violation has occurred; and
(3) The practitioner or other person has demonstrated an
unwillingness or lack of ability substantially to comply with an
obligation.
(c) Rejection of the PRO recommendation. If the OIG decides that a
sanction is not warranted, it will notify the PRO that recommended the
sanction, the affected practitioner or other person, and the licensing
board informed by the PRO of the sanction recommendation that the
recommendation is rejected.
(d) Decision to sanction. If the OIG decides that a violation of
obligations has occurred, it will determine the appropriate sanction by
considering--
(1) The recommendation of the PRO;
(2) The type of offense;
(3) The severity of the offense;
(4) The previous sanction record of the practitioner or other
person;
(5) The availability of alternative sources of services in the
community;
(6) Any prior problems the Medicare or State health care programs
have had with the practitioner or other person;
(7) Whether the practitioner or other person is unable or unwilling
to comply substantially with the obligations, including whether he, she
or it entered into a CAP--where such plan was deemed appropriate by the
PRO--prior to the PRO's recommendation and, if so, whether he, she or
it successfully completed such CAP; and
(8) Any other matters relevant to the particular case.
(e) Exclusion sanction. If the PRO submits a recommendation for
exclusion to the OIG, and a determination is not made by the 120th day
after actual receipt by the OIG, the exclusion sanction recommended
will become effective and the OIG will provide notice in accordance
with Sec. 1004.110(f).
(f) Monetary penalty. If the PRO recommendation is to assess a
monetary penalty, the 120-day provision does not apply and the OIG will
provide notice in accordance with Sec. 1004.110 (a)-(e).
Sec. 1004.110 Notice of sanction.
(a) The OIG must notify the practitioner or other person of the
adverse determination and of the sanction to be imposed.
(b) The sanction is effective 20 days from the date of the notice.
Receipt is presumed to be 5 days after the date on the notice, unless
there is a reasonable showing to the contrary.
(c) The notice must specify--
(1) The legal and factual basis for the determination;
(2) The sanction to be imposed;
(3) The effective date and, if appropriate, the duration of the
exclusion;
(4) The appeal rights of the practitioner or other person;
(5) The opportunity and the process necessary to provide
alternative notification as set forth in paragraphs (d) and (e) of this
section; and
(6) In the case of exclusion, the earliest date on which the OIG
will accept a request for reinstatement.
(d) Patient notification. (1)(i) The OIG will provide a sanctioned
practitioner or other person an opportunity to elect to inform each of
their patients of the sanction action. In order to elect this option,
the sanctioned practitioner or other person must, within 30 calendar
days from receipt of the OIG notice, inform both new and existing
patients through written notification--based on a suggested (non-
mandatory) model provided to the sanctioned individual by the OIG--of
the sanction and, in the case of an exclusion, its effective date and
duration. Receipt of the OIG notice is presumed to be 5 days after the
date of the notice, unless there is a reasonable showing to the
contrary. Within this time period, the practitioner or other person
must also sign and return the certification that the OIG will provide
with the notice. For purposes of this section, the term ``all existing
patients'' includes all patients currently under active treatment with
the practitioner or other person, as well as all patients who have been
treated by the practitioner or other person within the last 3 years. In
addition, the practitioner or other person must notify all prospective
patients orally at the time such persons request an appointment. If the
sanctioned party is a hospital, it must notify all physicians who have
privileges at the hospital, and must post a notice in its emergency
room, business office and in all affiliated entities regarding the
exclusion. In addition, for purposes of this section, the term ``in all
affiliated entities'' encompasses all entities and properties in which
the hospital has a direct or indirect ownership interest of 5 percent
or more and any management, partnership or control of the entity.
(ii) The certification will provide that the practitioner or other
person--
(A) Has informed each of his, her or its patients in writing that
the practitioner or other person has been sanctioned, or if a hospital,
has informed all physicians having privileges at the hospital that it
has been sanctioned;
(B) If excluded from Medicare and the State health care programs,
has informed his, her or its existing patients in writing that the
programs will not pay for items and services furnished or ordered (or
at the medical direction or on the prescription of an excluded
physician) by the practitioner or other person until they are
reinstated, or if a hospital, has provided this information to all
physicians having privileges at that hospital;
(C) If excluded from Medicare and State health care programs, will
provide prospective patients--or if a hospital, physicians requesting
privileges at that hospital prior to furnishing or ordering (or in the
case of an excluded physician, medically directing or prescribing)
services--oral information of both the sanction and that the programs
will not pay for services provided and written notification of the same
at the time of the provision of services;
(D) If excluded from Medicare and State health care programs and is
an entity such as a hospital, has posted a notice in its emergency
room, business office and in all affiliated entities that the programs
will not pay for services provided; and
(E) Certifies to the truthfulness and accuracy of the notification
and the statements in the certification.
(2) If the sanctioned practitioner or other person does not inform
his, her or its patients and does not return the required certification
within the 30-day period, or if the sanctioned practitioner or other
person returns the certification within the 30-day period but the OIG
obtains reliable evidence that such person nevertheless has not
adequately informed new and existing patients of the sanction, the
OIG--
(i) Will see that the public is notified directly of the identity
of the sanctioned practitioner or other person, the finding that the
obligation ha been violated, and the effective date and duration of any
exclusion; and
(ii) May consider this failure to adhere to the certification
obligation as an adverse factor at the time the sanctioned practitioner
or other person requests reinstatement.
(3) If the sanctioned practitioner or other person is entitled to a
preliminary hearing in accordance with Sec. 1004.140(a) and requests
such a preliminary hearing, and if the administrative law judge (ALJ)
decides that he, she or it poses a risk to program beneficiaries, the
sanctioned practitioner or other person would have 30 days from the
date of receipt of the ALJ's decision to provide certification to
[[Page 63644]]
the OIG in accordance with Sec. 1004.110(d)(1). The date of receipt is
presumed to be 5 days after the date of the ALJ's decision, unless
there is a reasonable showing to the contrary.
(e) Notice of the sanction is also provided to the following
entities as appropriate--
(1) The PRO that originated the sanction report;
(2) PROs in adjacent areas;
(3) State Medicaid fraud control units and State licensing and
accreditation bodies;
(4) Appropriate program contractors and State agencies;
(5) Hospitals, including the hospital where the sanctioned
individual's case originated and where the individual currently has
privileges, if known; skilled nursing facilities, home health agencies,
and health maintenance organizations and Federally-funded community
health centers where the practitioner or other person works;
(6) Medical societies and other professional organizations; and
(7) Medicare carriers and fiscal intermediaries, health care
prepayment plans and other affected agencies and organizations.
(f) If an exclusion sanction is effectuated because a decision was
not made within 120 days after receipt of the PRO recommendation,
notification is as follows--
(1) As soon as possible after the 120th day, the OIG will issue a
notice to the practitioner or other person, in compliance with the
requirements of paragraph (c) of this section, affirming the PRO
recommendation or modifying the recommendation based on the OIG's
review of the case, and that the exclusion is effective 20 days from
the date of the notice; and
(2) Notice of the sanction is also provided as specified in
paragraph (e) of this section; and
* * * * *
Subpart E--Effect and Duration of Exclusion
Sec. 1004.120 Effect of an exclusion on program payments and services.
The effect of an exclusion is set forth in Sec. 1001.1901 of this
chapter.
Sec. 1004.130 Reinstatement after exclusion.
(a) A practitioner or other person who has been excluded in
accordance with this part may apply for reinstatement at the end of the
period of exclusion. The OIG will consider any request for
reinstatement in accordance with provisions of Secs. 1001.3001 through
1001.3005 of this chapter.
(b) The OIG may also consider a practitioner's or other person's
compliance with the certification obligation in Sec. 1004.110(d) at the
time of reinstatement.
Subpart F--Appeals
Sec. 1004.140 Appeal rights.
(a) Right to preliminary hearing. (1)(i) A practitioner or other
person excluded from participation in Medicare and any State health
care programs under section 1156 of the Act may request a preliminary
hearing if the location where services are rendered to over 50 percent
of the practitioner's or other person's patients at the time of the
exclusion notice is in a rural HPSA or in a county with a population of
less than 70,000.
(ii) Unless the practitioner's or other person's practice meets the
definition for psychiatric professional, vision care professional,
dental professional, podiatric professional or pharmacy professional,
the HPSA used by the OIG for determination of entitlement to a
preliminary hearing will be the HPSA list for primary medical care
professional.
(iii) Information on the population size of a county in order to
determine entitlement to a preliminary hearing will be obtained by the
OIG from the responsible officials of that county.
(2)(i) A request for a preliminary hearing must be made in writing
and received by the Departmental Appeals Board (DAB) no later than the
15th day after the notice of exclusion is received by a practitioner or
other person. The date of receipt of the notice of exclusion by the
practitioner or other person is presumed to be 5 days after the date
appearing on the notice, unless there is a reasonable showing to the
contrary.
(ii) A request for a preliminary hearing will stay the effective
date of the exclusion pending a decision of the ALJ at the preliminary
hearing, and all the parties informed by the OIG of the exclusion will
be notified of the stay.
(iii) A request for a preliminary hearing received after the 15-day
period has expired will be treated as a request for a hearing before an
ALJ in accordance with paragraph (b) of this section.
(iv) If the practitioner or other person exercises his, her or its
right to a preliminary hearing, such a hearing must be held by the ALJ
in accordance with paragraph (a)(3)(i) of this section unless the OIG
waives it in accordance with paragraph (a)(6)(i) of this section.
(v) The ALJ cannot consolidate the preliminary hearing with a full
hearing without the approval of all parties to the hearing.
(3)(i) The preliminary hearing will be conducted by an ALJ of the
DAB in a city that the ALJ deems equitable to all parties. The ALJ will
conduct the preliminary hearing and render a decision no later than 45
days after receipt of the request for such a hearing by the DAB. Unless
there is a reasonable showing to the contrary, date of receipt by the
DAB is presumed to be 5 days after the date on the request for a
preliminary hearing or, if undated, the date of receipt will be the
date the DAB actually received the request. A reasonable extension to
the 45-day period of up to 15 days may be requested by any party to the
preliminary hearing and such a request may be granted upon concurrence
by all parties to the preliminary hearing. Such request must be
received no later than 15 days prior to the scheduled date of the
preliminary hearing.
(ii) The only issue to be heard and decided on by the ALJ at the
preliminary hearing, based on the preponderance of the evidence, is
whether the practitioner's or other person's continued participation in
the Medicare and State health care programs during the appeal of the
exclusion before an ALJ would place program beneficiaries at serious
risk. The ALJ's decision is to be based on the preponderance of the
evidence.
(iii) In the interest of time, the ALJ may issue an oral decision
to be followed by a written decision.
(iv) In those cases where the ALJ has stayed an exclusion after a
preliminary hearing, a full hearing must be held and a decision
rendered by the ALJ within 6 months. If, for any reason, the request
for a full hearing before the ALJ is withdrawn or dismissed, the
practitioner or other person will be excluded effective 5 days after
the notice of the withdrawal or dismissal is received in the OIG
headquarters.
(4) The preliminary hearing decision is not appealable or subject
to further administrative or judicial review.
(5) A practitioner or other person found at the preliminary hearing
not to place program beneficiaries at serious risk, but later
determined to have been properly excluded from program participation
after a full hearing before an ALJ, is not entitled to have the
exclusion stayed further during an appeal to the DAB. Exclusions in
such instances will be effective 5 days after receipt of the ALJ
decision in the OIG headquarters.
(6)(i) After notice of a timely request for a preliminary hearing,
the OIG may determine that the practitioner's or other person's
continued program participation during the appeal before
[[Page 63645]]
the ALJ will not place program beneficiaries at serious risk and waive
the preliminary hearing. Under these circumstances, the exclusion will
be stayed pending the decision of the ALJ after a full hearing. the
hearing must be held, and a decision reached, within 6 months.
(ii) If the OIG decides to waive the preliminary hearing, the
request for the preliminary hearing will be considered a request for a
hearing before the ALJ in accordance with paragraph (b) of this
section.
(b) Right to administrative review. (1) A practitioner or other
person dissatisfied with an OIG determination, or an exclusion that
results from a determination not being made within 120 days, is
entitled to appeal such sanction in accordance with part 1005 of this
chapter.
(2) Due to the 120-day statutory requirement specified in
Sec. 1004.100(e), the following limitations apply--
(i) The period of time for submitting additional information will
not be extended.
(ii) Any material received by the OIG after the 30-day period
allowed will not be considered by the ALJ or the DAB.
(3) The OIG's determination continues in effect unless reversed by
a hearing.
(c) Rights to judicial review. Any practitioner or other person
dissatisfied with a final decision of the Secretary may file a civil
action in accordance with the provisions of section 205(g) of the Act.
Approved: October 23, 1995.
June Gibbs Brown,
Inspector General.
[FR Doc. 95-30130 Filed 12-11-95; 8:45 am]
BILLING CODE 4150-04-M
