Health Care Programs: Fraud and Abuse; Revisions to the PRO Sanctions Process
Federal RegisterFeb 28, 1994
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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: Proposed rule.
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SUMMARY: This proposed rule would revise and update 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 necessitated by
statutory revisions addressing health care fraud and abuse issues and
the OIG sanctions process. In addition, this proposed rule also sets
forth new appeal and reinstatement procedures for practitioners and
other persons excluded by the OIG based on a PRO recommendation.
DATES: To assure consideration, public comments must be delivered to
the address provided below by April 29, 1994. Comments are available
for public inspection March 14, 1994.
ADDRESSES: Address comments to: Office of Inspector General, Department
of Health and Human Services, Attention: LRR-73-P, room 5246, 330
Independence Avenue, SW., Washington, DC 20201.
If you prefer, you may deliver your comments to room 5551, 330
Independence Avenue, SW., Washington, DC. In commenting, please refer
to file code LRR-73-P. Comments will be available for public inspection
in room 5551, 330 Independence Avenue, SW., Washington, DC on Monday
through Friday of each week from 9 a.m. to 5 p.m., (202) 619-3270.
FOR FURTHER INFORMATION CONTACT:
Joel Schaer, Legislation and Regulations Staff, (202) 619-3270
Joanne Lanahan, Office of Investigations, (410) 965-9609.
SUPPLEMENTARY INFORMATION:
I. Background
The Medicare Utilization and Quality Control Peer Review
Organization (PRO) program was established to ensure that Medicare
beneficiaries receive medical care that meets professionally recognized
standards. Section 1156 of the Social Security Act (the Act) sets forth
specific statutory obligations imposed on practitioners and other
persons to furnish necessary services meeting professionally recognized
standards. The statute also authorizes the Secretary, based on a PRO's
recommendation, to impose sanctions (exclusion from Medicare and any
State health care program participation as defined under section 1128
of the Act or a monetary penalty) on those who fail to comply with the
statutory obligations.
Under the PRO sanction process, no practitioner or other person is
recommended for exclusion or the imposition of a monetary penalty until
the PRO provides the opportunity for extensive discussion with the
practitioner or other person, and the opportunity to provide additional
information. After receipt of a recommendation from a PRO, the Office
of Inspector General (OIG) excludes, or imposes a monetary penalty,
only after a careful review of all the documentation submitted and a
separate determination that the practitioner or other person has
violated the statutory obligations to render only medically necessary
and appropriate care that meets professionally recognized standards or
has failed to provide evidence of medical necessity and quality, and is
unwilling or unable to comply with those obligations. A practitioner or
other person who is excluded from Medicare and any State health care
programs as defined in section 1128(h) of the Act, or assessed a
monetary penalty, on the basis of a PRO finding is entitled to
administrative and judicial review after the exclusion is imposed or
the monetary penalty is assessed.
Recent Statutory Changes
A. Public Law 100-93
Prior to the enactment of Public Law 100-93 (the Medicare and
Medicaid Patient and Program Protection Act of 1987), section 1156 of
the Act set forth obligations of practitioners and other persons
providing care to Medicare patients to provide care that was medically
necessary and appropriate that meets professionally recognized
standards of quality, and appropriately documented. It also provided
for the exclusion from Medicare of practitioners and other persons who,
upon the review and recommendation of a PRO, were found to have
violated those obligations. Section 6 of Public Law 100-93 extended
those obligations to encompass all health care services for which
payment may be made under the Act, and not just Medicare. Further, the
exclusion authority was extended to encompass violations occurring in,
and exclusions from, Medicaid, the title V Maternal and Child Health
Block Grant, and the title XX Social Services Block Grant programs.
B. Public Law 100-203
Section 4095 of Public Law 100-203, the Omnibus Budget
Reconciliation Act (OBRA) of 1987, amended section 1156 of the Act to
provide that an exclusion of a health care practitioner or other person
who practices in a country of less than 70,000 people or in a rural
health professional shortage area (HPSA) cannot be effectuated until an
opportunity is provided for a preliminary administrative hearing. The
purpose of this preliminary hearing is to determine whether the
practitioner's or other person's continued program participation,
through the conclusion of the administrative proceedings on the merits
of the exclusion, would place beneficiaries at serious risk. In
accordance with section 1156(b)(5) of the Act, unless the
administrative law judge (ALJ) at the preliminary hearing determines
that the practitioner or other person will pose a serious risk to
Medicare beneficiaries if permitted to continue furnishing such
services, the exclusion of a rural practitioner or other person may not
be effectuated until they are given an opportunity for an
administrative hearing on the merits of the exclusion itself.
C. Public Law 101-508
Section 4205 of Public Law 101-508, OBRA 1990, set forth new
statutory requirements with respect to PRO sanction activities.
Specifically, the statutory amendments require PROs, if appropriate, to
offer a corrective action plan to practitioners and other persons prior
to making a finding under section 1156 of the Act; and require the
Secretary to consider, in determining whether a practitioner or other
person is willing and able to comply with his, her or its obligations,
whether the practitioner or other person entered into and successfully
completed a corrective action plan prior to the PRO's submission of its
recommendation and report to the Secretary.
II. Provisions of the Proposed Rule
A. Inclusion of the OBRA 1990 Provisions Relating to PROs
On January 29, 1992, the OIG published a final rule (57 FR 3298)
setting forth amendments to the OIG's exclusion and civil money penalty
(CMP) authorities resulting from Public Law 100-93. Specifically, that
final rule revised Sec. 1004.130 of the regulations and deleted
Sec. 1004.100(g) in its entirety to be consistent with the
establishment of a new part 1005--Appeals of exclusions, civil money
penalties and assessments--which now governs ALJ hearings and
subsequent appeals to the Secretary for all CMP and other OIG sanction
cases.
The revisions to 42 CFR part 1004 of that final rule were meant
only to conform the regulations to new statutory changes resulting from
OBRA 1990, and were not meant to be a comprehensive rewrite of part
1004. This regulation sets forth a more complete and comprehensive
rewrite of this part. Among other revisions:
These proposed regulations would eliminate the current
procedural distinction between ``substantial'' violations and ``gross
and flagrant'' violations. This is an artificially created procedure
that has no basis in law or legislative history to provide a
distinction between the two types of violations. Experience in
processing these cases has shown that the second meeting is just a
repeat of the first meeting since the present regulations preclude any
new violations identified in the second meeting as serving as the basis
for a sanction recommendation. Under these proposed regulations, which
are consistent with a recommendation from the Administrative Conference
of the United States, an opportunity would be provided for a meeting
with the PRO and to provide additional information. The regulations
would also provide that any violations of the obligations that are
identified during a corrective action plan period would be used to
support the PRO's recommendation regarding unwillingness or inability
to comply with the statutory obligations.
These proposed regulations also codify the agreement
reached among the American Medical Association, the American
Association of Retired Persons, the Health Care Financing
Administration, and the Office of Inspector General with regard to PRO
physicians involved in the sanctions process. Under this agreement, no
physician member of the PRO panel may be in direct competition with, or
have a substantial personal bias against, the practitioner or other
person being considered for sanction.
Section 1004.30(e) of these proposed regulations would
provide instructions to the PROs on the actions to be taken when a
physician relocates after receiving a sanction notice.
Among the factors considered by the OIG in imposing an
exclusion, in addition to the practitioner's or other person's previous
sanction record, are any prior problems that such person has had with
the Medicare carrier or intermediary. We are now proposing to include
as an additional factor any prior problems that any State health care
program has had with such practitioner or other person.
The current language of Sec. 1004.90(b)(1) concerning the
OIG's review responsibilities (that would now be designated as
Sec. 1004.100(b)(1)) would be modified to state that the OIG will
review the PRO report to determine whether the PRO followed the
``regulatory requirements of part 1004.''
The existing definition of the term ``physician''
appearing in Sec. 1004.1 would be deleted in order to conform with the
HCFA definition of this term.
B. Preliminary Hearings
These proposed regulations would amend part 1004 by allowing a
practitioner or other person in specified rural areas or counties of a
specified population to request a preliminary hearing when notified of
an exclusion from participation in the Medicare program by the OIG as a
result of a PRO recommendation under section 1156(b) of the Act. 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.
Criteria for entitlement. Entitlement to such a preliminary hearing
would apply to providers or practitioners for whom an exclusion is
proposed who practice in a rural Health Professional Shortage Area
(HPSA) for their specialty or in a county with a population of less
than 70,000. For purposes of this entitlement, a practitioner's or
other person's practice is where over 50 percent of his, her or its
services are rendered.
Health professional shortage areas are designated by the Secretary
and are defined in regulations at 42 CFR 5.2. Since HPSAs are not
specifically designated by rural or urban classifications, we are
proposing that any HPSA not located in a Metropolitan Statistical Area
(MSA) would be considered a rural HPSA for purposes of these
regulations. Both section 1886(d)(2) of the Act and regulations at 42
CFR 412.62(f) use these MSAs as the basis for determining an urban area
or rural area for computing Medicare prospective payment rates.
Although Public Law 100-203 divided the definition of urban into large
urban and other urban areas, it did not change the differentiation
between urban and rural. Therefore, we are proposing to classify any
HPSA not located in a MSA as rural.
There are seven different HPSA specialty categories. These HPSA
specialty categories are described in current regulations at 42 CFR
part 5, Appendices A through G, and include primary medical care,
dental, psychiatric, vision care, podiatric, pharmacy and veterinary
manpower. In determining eligibility for a preliminary hearing, we are
proposing to use these categories for all practitioners and other
persons to whom they apply. For all practitioners not covered by the
specialty categories, we are proposing to use the ``primary medical
care'' specialty category for determining eligibility for a preliminary
hearing. This means that any practitioner who practices a specialty
other than those identified in 42 CFR part 5 will be regarded as
practicing in a rural HPSA only if that area is designated as an HPSA
for ``primary medical care.''
The ``primary medical care'' category will also be used for all
other persons and facilities, e.g., hospitals, with the exception of
those ``other persons'' qualified under the ``psychiatric'' manpower
category.
Information on a county's population size would be obtained by the
OIG from the responsible officials of that county.
Timeframes for hearing. The proposed regulations provide 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. Once
such a request is received, the preliminary hearing is to be held and a
decision rendered on the ``serious risk'' issue within 45 days. In
those cases where the ALJ grants a stay of the exclusion, a full
hearing must be held and a decision rendered within six months. These
timeframes developed for the ALJs are intended to balance the right of
a ``rural'' practitioner or other person to receive timely due process
against the OIG responsibility to ensure that substandard or
unnecessary health care services are not provided to program
beneficiaries.
C. Sanctions Notification Process
Section 1156(b)(2) of the Act requires reasonable notice to the
public of a sanction action being taken against a practitioner or other
person based on the PRO's recommendation. Under the current
implementing regulations, when a sanction action is taken by the OIG
against a practitioner or other person, the OIG is required to notify
the general public of such action. This notice to the public
specifically identifies: (1) The sanctioned practitioner or other
person; (2) the obligation that has been violated by this person; (3)
the specific sanction action imposed; and (4) if the sanction is an
exclusion, the effective date and duration of this action.
While this public notification process has worked well in most
instances, we believe the present publication procedure may not always
yield the most effective results of informing affected parties and
program beneficiaries of a specific sanction action taken under the
program. As a result, we are considering permitting practitioners and
other persons to select an alternative method of notification.
These proposed regulations would amend 42 CFR part 1004 to offer
sanctioned health care practitioners and other persons the option of
informing all their patients directly of a sanction action taken
against them. If they select this option and comply with its
requirements in a timely fashion, this compliance would constitute
public notice and would replace the public notice currently published
by the OIG. Among other things, a practitioner or other person opting
for this method of notification would be required to certify to the
Department that they have undertaken to inform all their patients of
the action taken and, in the case of exclusion, that they will notify
new patients before furnishing services.
Method of direct notification of patients by practitioner or other
person. We considered a variety of methods for practitioners and other
persons to notify and inform patients of a sanction action. For
example, we considered having the sanctioned party (1) post a sign in
his, her or its office; (2) verbally communicate the information to
patients when they called for an appointment or came to an office
visit; or (3) send written notification to each of his, her or its
patients. After evaluating the options, we believe that the first two
methods indicated above would not effectively meet the proposed
requirement that all existing patients be informed within 30 calendar
days since it is unlikely that all of these patients would make an
appointment or come for an office visit in the specified period. In
addition, the Department would be unable to verify that the proper
information had been adequately conveyed to the patients if either of
the first two notification methods were selected.
We, therefore, propose that each sanctioned practitioner or other
person opting for this alternative notification procedure alert both
his, her or its existing patients and all new patients through written
notification based on a suggested (non-mandatory) model that will be
provided to the sanctioned individual by the OIG. If the sanctioned
party is a hospital, the hospital would be required to notify all
physicians having privileges at the hospital, as well as post a sign in
its emergency room, business office and in all affiliated entities
regarding its sanction. (Practitioners and other persons must also
notify all new patients orally at the time an appointment is set to
provide services, as well as provide written notification to such
patients at the time they arrive to see the provider for treatment or
services.) We believe that only through this method can the OIG assure
that all patients are properly informed of a sanction action.
Certification of notice to patients. If the sanctioned practitioner
or other person chooses to use the alternative notification approach,
he, she or it would be given 30 calendar days from receipt of the
notification from the OIG to return an OIG-prepared certification form
stating that: (1) He, she or it has informed each of their existing
patients that a sanction has been imposed; (2) if excluded from Federal
programs, the program will not pay for items and services ordered,
furnished or prescribed by the practitioner or other person and that
this ban will remain in effect until the practitioner or other person
is reinstated; (3) if excluded, he, she or it will provide this
information, prior to providing services, to any new patient seen until
he, she or it is reinstated; and (4) he, she or it certifies to the
truthfulness and accuracy of the notification and the statements in the
certification.
Non-election of the alternative method of notification. If the
sanctioned practitioner or other person does not elect this alternative
method of notification of informing his, her or its patients and
returning the certification form within the proposed 30-day period, the
OIG would follow its standard procedure for public notification, which
consists of notifying the public directly of the identity of the
sanctioned practitioner or other person, the obligation that has been
violated, and the effective date and duration of any exclusion.
Failure to comply with alternative method of notification after
electing such method. If the sanctioned practitioner or other person
elects the alternative method of notification by returning the
certification form within the proposed 30-day period, but the OIG
receives reliable evidence that such practitioner or other person has
not adequately informed his, her or its new and existing patients of
the sanction, the OIG would follow its standard procedure for public
notification as described above. Once a practitioner or other person
has elected the alternative notification option by returning the
certification form to the OIG, his, her or its failure to follow
through and fully comply with the notification requirements will be
considered adversely at the time of his, her or its application for
reinstatement.
In order to ensure that patient notification is enforced and
provided in a timely manner so that patients are not at risk of
receiving poor quality of care, we are soliciting comments on how best
to enforce this provision. Under this proposed approach, when the OIG
learns through patient complaints or other forms that the practitioner
or other person has not fully complied, the IG at that point may
additionally consider specific action to remedy the situation, such as
pursuing penalties for the filing of a false statement. Comments on
this alternative notice process and on whether this enforcement
approach is reasonable and effective are specifically invited.
Notification of other entities. Under this proposed revision, as
under the current regulations, the OIG would continue its practice of
notifying hospitals at which a sanctioned practitioner has privileges,
as well as State licensing boards and other entities, of any sanction
action taken.
III. Additional Information
A. Regulatory Impact Statement
The Office of Management and Budget has reviewed this proposed rule
in accordance with the provisions of Executive Order 12866. As
indicated above, the revisions contained in this proposed 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 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, we generally prepare a regulatory flexibility analysis
that is consistent with the Regulatory Flexibility Act (5 U.S.C. 601
through 612), unless the Secretary certifies that a proposed regulation
would 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, since we have determined, and the Secretary
certifies, that this proposed rule would not have a significant
economic impact on a number of small business entities, we have not
prepared a regulatory flexibility analysis.
B. Response to Comments
Because of the number of comments we normally receive on proposed
regulations, we cannot acknowledge or respond to each letter
individually. Rather, in preparing the final rule, we will consider all
comments received timely and respond to the major issues in the
preamble of that rule.
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 would be revised be 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 determination of a violation.
1004.70 PRO action on final determination 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
1004.130 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 (PROs) 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 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.
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 for which
payment may be made (in whole or in part) under the Medicare or State
health care programs.
Pattern of care means that the care under question has been
demonstrated in more than three instances.
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 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 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 Officer 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 the obligations
specified in Sec. 1004.10 are 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 if the PRO determines that the practitioner or other person
has--
(1) Failed substantially to comply with any obligation in a
substantial number of instances; 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 determination of a violation or sanction recommendation, and
the originating PRO--
(1) Is able to make a determination, the originating PRO must, as
appropriate, close the case or forward a sanction recommendation to the
OIG; or
(2) Cannot make a determination, 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 obligations;
(4) A suggested method for correcting the situation and a time
period for corrective action, if appropriate;
(5) The sanction that the PRO could recommend to the OIG if the
violation continues;
(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.
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 a substantial personal bias 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's behalf;
(f) A reviewing physician who recommends to the PRO that a
practitioner or other person be sanctioned may not vote on the sanction
panel's determination;
(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 decision; 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 determination 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 findings, 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 issue has been resolved to the
PRO's satisfaction, the PRO may modify its initial finding and 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 who is a participant in the
finding to recommend to the OIG that a practitioner or other person be
sanctioned 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. 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 against, the
practitioner or other person being recommended for sanction.
Sec. 1004.70 PRO action on final determination of a violation.
If the issue 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 recommendation to the OIG with respect to a
physician 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 be 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 determination 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 determination;
(8) A copy of the corrective action plan that was developed and
documentation of the results of such plan or an explanation of why such
a corrective action plan was not appropriate. Any violations identified
during the corrective action plan 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.
(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 corrective action plan prior to the PRO's
recommendation and, if so, whether he, she or it successfully completed
such corrective action plan; 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 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.
(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 to provide alternative notification; 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. In addition, the practitioner or other person must notify all
new patients orally at the time such prospective patients set an
appointment for the provision of services. If the sanctioned party is a
hospital, it must notify all physicians having privileges at the
hospital, and must post a notice in its emergency room, business office
and in all affiliated entities regarding the exclusion. The date of
receipt 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.
(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 Federal 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 Federal programs, will provide new patients--
or if a hospital, physicians requesting privileges at that hospital--
oral information of both the sanction and that the programs will not
pay for services provided prior to furnishing or ordering (or in the
case of an excluded physician, medically directing or prescribing)
services, and written notification at the time of the provision of
services;
(D) If excluded from Federal programs and is an entity such as a
hospital, will post a notice in its emergency room, business office and
in all affiliated entities that the programs will not pay for services
provided prior to furnishing or ordering services; 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 or her 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
will see that the public is notified directly of the identity of the
sanctioned practitioner or other person, the obligation that has been
violated, and the effective date and duration of any exclusion.
(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, he, she or it would have 30 days, from the
date of receipt of the administrative law judge's (ALJ's) decision that
he, she or it poses a risk to program beneficiaries, to provide
certification to 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 not effected because a decision was
not made within 120 days after receipt of the PRO recommendation,
notification is as follows--
(1) The OIG notifies the practitioner or other person that the
exclusion is effective 20 days from the date of the notice;
(2) Notice of the sanction is also provided as specified in
paragraph (e) of this section; and
(3) As soon as possible after the 120th day, the OIG will issue a
notice to the practitioner or other person affirming the PRO
recommendation or modifying the recommendation based on the OIG's
review of the case.
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 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.
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 practitioners'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. Date
of receipt by the DAB is presumed to be 5 days after the date on the
request for a preliminary hearing, unless there is a reasonable showing
to the contrary. 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 at the preliminary
hearing is whether the practitioners'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.
(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
exclusion for the period that has not been served will be 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 the ALJ will
not 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 of 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 HHS 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.
Dated: October 18, 1993.
Bryan B. Mitchell,
Principal Deputy Inspector General.
Approved: December 2, 1993.
Donna E. Shalala,
Secretary.
[FR Doc. 94-4321 Filed 2-25-94; 8:45 am]
BILLING CODE 4150-04-M
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.