Medicare Program; Appeals of Carrier Determinations That a Supplier Fails to Meet the Requirements for Medicare Billing Privileges

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 405

[HCFA-6003-P]

RIN 0938-AI49

Medicare Program; Appeals of Carrier Determinations That a

Supplier Fails to Meet the Requirements for Medicare Billing Privileges

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would extend appeal rights to all suppliers

whose enrollment applications for Medicare billing privileges are

disallowed by a carrier or whose Medicare billing privileges are

revoked, except for those suppliers covered under other existing

appeals provisions of our regulations. In addition, we propose to

revise certain appeal provisions to correspond with the existing appeal

provisions in those other sections of our regulations. We also would

extend appeal rights to all suppliers not covered by existing

regulations to ensure they have a full and fair opportunity to be

heard. Although we are not required by the Administrative Procedure Act

to publish this rule as a proposed rule (see 5 U.S.C. section

553(b)(3)(A), we are doing so in order to allow interested parties the

opportunity for prior notice and comment.

DATES: Written comments will be considered if we receive them at the

appropriate address, as provided below, no later than 5 p.m. Eastern

time on December 27, 1999.

ADDRESSES: Mail written comments (1 original and 3 copies) to the

following address: Health Care Financing Administration, Department of

Health and Human Services, Attention: HCFA-6003-P, P.O. Box 26688,

Baltimore, MD 21207-0488.

If you prefer, you may deliver your written comments (1 original

and 3 copies) to one of the following addresses:

Room 443-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,

Washington, DC 20201-0001, or

Room C5-16-03, Central Building, 7500 Security Boulevard, Baltimore, MD

21244-1850.

Because of staffing and resource limitations, we cannot accept

comments by facsimile (FAX) transmission. In commenting, please refer

to file code HCFA-6003-P. Written comments received timely will be

available for public inspection as they are received, generally

beginning approximately 3 weeks after publication of a document, in

Room 443-G of the Department's offices at 200 Independence Avenue, SW.,

Washington DC, on Monday through Friday of each week from 8:30 a.m. to

5 p.m. Eastern time (phone: (202) 690-7890).

FOR FURTHER INFORMATION CONTACT: Charles Waldhauser, (410) 786-6140.

SUPPLEMENTARY INFORMATION:

I. Background

A Medicare beneficiary generally may obtain covered Medicare

services from any person, agency or institution that is qualified to

participate in the Medicare program and that undertakes to furnish

those services. Various provisions of the statutes and regulations

establish conditions of participation or standards that a health care

supplier or provider must meet in order to receive Medicare payment.

These standards differ depending on the type of provider or supplier

involved and whether the services are furnished under parts A, B, or C

of the Medicare statute. There are also differences in qualifications

between providers and suppliers of services, and differences among the

various types of suppliers, in how they are enrolled in the Medicare

program. For some classifications of providers and suppliers, an on-

site survey is required. For other individuals or entities, a

determination can be made based largely on the information provided by

the applicant.

The Medicare regulations in Part 498 provide appeal rights for

certain suppliers that have been found to not meet certain conditions

of participation or established standards. For the purposes of part

498, these suppliers include independent laboratories; suppliers of

portable x-ray services; rural health clinics; federally qualified

health centers; ambulatory surgical centers; organ procurement

organizations; end-stage renal disease treatment facilities; and

chiropractors and physical therapists in independent practice.

In addition, our regulations at Sec. 405.874 provide an appeals

process for Durable Medical Equipment, Prosthetics and Orthotics and

Supplies (DMEPOS) suppliers that wish to contest a disallowance of an

application for a billing number or the revocation of an existing

billing number. The Sec. 405.874 appeals process afforded DMEPOS

suppliers includes the right to a carrier hearing before a carrier

official who was not involved in the original determination, and the

right to seek a review before a HCFA official designated by the HCFA

Administrator.

The purpose of this proposed rule would be to establish an

administrative appeals process for certain other suppliers, such as

physicians or physician assistants, who have had an application for

billing privileges disallowed or existing billing privileges revoked,

but who are not specifically included under either the Part 498 or

Sec. 405.874 appeals processes. Because the adverse determinations with

respect to these other suppliers are similar to those described above

for DMEPOS suppliers, we are proposing to amend the existing appeals

process at Sec. 405.874 to include appeal rights for these other

suppliers.

In December, 1998, we issued HCFA Ruling 98-1, regarding the

appeals process Medicare carriers must provide to physicians, non-

physician practitioners, and to certain entities that receive

reassigned benefits from physicians and non-physician practitioners.

HCFA Rulings are decisions of the Administrator that serve as precedent

final opinions and orders and statements of policy and interpretation.

They provide clarification and interpretation of complex or ambiguous

provisions of law or regulations relating to Medicare, Medicaid,

Utilization and Quality Control Peer Review, private health insurance,

and related matters. HCFA Rulings are binding on all HCFA components,

Medicare contractors, the Provider Reimbursement Review Board, the

Medicare Geographic Classification Review Board, the Departmental

Appeals Board, and Administrative Law Judges (ALJs) who hear Medicare

appeals. These Rulings promote consistency in interpretation of policy

and adjudication of disputes. This proposed rule is very similar to

HCFA Ruling 98-1, but expands the types of suppliers covered.

II. Provisions of the Proposed Rule

We are proposing to revise the scope of Sec. 405.874 (``Appeals of

carrier decisions that supplier standards are not met.'') to extend

appeal rights to all

[[Page 57432]]

suppliers whose enrollment applications for Medicare billing privileges

are disallowed or whose Medicare billing privileges are revoked, except

for those suppliers covered under the appeals provisions of Part 498.

These administrative appeal rights would now apply to suppliers of

durable medical equipment, prosthetics, orthotics, and supplies;

ambulance service providers; independent diagnostic testing facilities;

physicians; and other entities such as physician assistants.

We would also revise the existing procedures in Sec. 405.874. These

procedural changes would be as follows:

Carrier Time Limit to Process Enrollment Application

Currently, Sec. 405.874(a) provides that a carrier must accept or

reject an entity's enrollment application for a billing number or

request additional information within 15 days of the receipt of the

enrollment application. We believe the 15-day requirement restricts our

ability to properly evaluate enrollment applications. Although the

majority of supplier applicants to the Medicare program are legitimate,

our mandate to ensure the integrity of the Medicare program requires

stringent review of supplier enrollment applications, including

verifying information with outside agencies, for example State

licensing boards. These application verifications require additional

amounts of time, sometimes beyond the current 15-day period, and the

amount of time is not always predictable. In addition, such a

requirement is not germane to appeals provisions. Therefore, for the

proposed revision to Sec. 405.874(a), we would remove the 15-day

requirement. In order to ensure that time frames do not become

excessively burdensome to suppliers, we monitor the time required by

carriers to process enrollment applications as part of our oversight of

carrier operations. In addition, we are considering placing a

timeliness requirement for processing of applications for supplier

billing privileges in another part of our regulations.

Terminology

Current Sec. 405.874(b) provides that a carrier can disallow or

revoke an entity's request for a billing number but must notify the

supplier of its right to appeal. The supplier then has 90 days after

the postmark of the notice to request an appeal. For purposes of this

section and to parallel language used in other appeals provisions of

Part 405, in revised Sec. 405.874(a) and Sec. 405.874(b), we propose to

clarify the language concerning when a notice is received by the

supplier from ``postmark of the notice'' to ``the date of receipt of

the carrier's notice.'' We would specify that ``the date of receipt of

the notice'' is presumed to be five days after the date of the notice.

The burden would be on the supplier to show that more than five days

actually elapsed between the date of the notice and the date it

received the notice in order for the supplier to be granted relief from

the requirement to file an appeal within 65 days from the date of the

notice. In Sec. 405.874(b)(1), we would clarify also that a Medicare

billing number is the identification number of a provider or supplier

to which we have granted Medicare billing privileges.

Disallowances and Revocations

Current Sec. 405.874(b) discusses the procedures that carriers

follow in disallowing a request for a Medicare supplier billing number

and in revoking an enrolled supplier's Medicare billing number. We

would now set forth the procedures to be followed by carriers

concerning notifying a supplier of the disallowance of an enrollment

application for supplier billing privileges in the proposed revision to

Sec. 405.874(a) and the revocation of an already enrolled supplier's

billing number in the proposed revision to Sec. 405.874(b). We would

separate these procedures because we believe the prior language was not

sufficiently clear.

Also, existing Sec. 405.874(b) provides a 90-day time frame under

which a supplier may appeal a carrier's determination or a supplier or

carrier may appeal a carrier hearing officer's decision. We are

proposing the revision of the 90-day appeal period to a 60-day appeal

period in new paragraphs (a)(3), (b)(1)(iii), and (c)(3)(iii) in order

to expedite the proceedings and to parallel the standard time frames

for Medicare appellants who file Part A or Part B claim appeals with

administrative law judges. We believe 60 days is a sufficient amount of

time in which to file an appeal.

In the proposed revision to Sec. 405.874(b)(2), we would clarify

that a revocation of a supplier billing number that is based on a

Federal exclusion or debarment is effective with the effective date of

the exclusion or debarment, regardless of the date of the notice from

the carrier that the billing number is revoked. We would further

clarify in the proposed revision to Sec. 405.874(b)(3) that suppliers

are not paid for services or supplies furnished during a period in

which their supplier billing number has been revoked. With respect to

DMEPOS suppliers, section 1834(j)(1) of the Act states that, with the

exception of medical equipment and supplies furnished incident to a

physician's service, no payment may be made by Medicare for items and

supplies unless the supplier has a valid, active Medicare billing

number. Therefore, any expenses for items or supplies furnished to a

Medicare beneficiary on or after the effective date of the inactivation

(or revocation) of a DMEPOS supplier's billing number are the DMEPOS

supplier's responsibility. Unless the DMEPOS supplier has proof it

notified the beneficiary, in accordance with section 1834(a)(18)(A)(ii)

of the Act, that Medicare payment may not be made and that the

beneficiary agreed to take financial responsibility, the DMEPOS

supplier is responsible for the expenses incurred for the items and

services furnished. Without this proof of beneficiary notification and

agreement, the DMEPOS supplier is required to refund on a timely basis

to the beneficiary (and is liable to the beneficiary for) any amounts

collected from the beneficiary for items or services furnished during

the period of inactivation or revocation. If the DMEPOS supplier fails

to refund as required, sanctions such as civil money penalties,

assessments, and exclusions may be imposed. (See section 1879(h)(3) of

the Act). In contrast, other, non-DMEPOS suppliers, for example,

physicians, currently may bill for services furnished before they are

issued a supplier billing number, assuming they meet Medicare

requirements. We propose that claims submitted to carriers for services

or supplies furnished during a period of supplier ineligibility are to

be rejected by the carrier, not denied. Rejections of claims by

carriers are not appealable by suppliers.

Hearing by Carrier

In the proposed revision to Sec. 405.874(c)(1), we would change the

language in current Sec. 405.874(c) that requires a carrier hearing

officer to ``schedule a hearing to be held within one week,'' to

require that the hearing must be held within ``60 days of receipt of

the appeal request.'' The previous ``one week'' language was unclear as

to the intent--whether it was the ``scheduling'' or the ``hearing''

that was required within one week. We believe that it is unreasonable

to require that a hearing be scheduled or held within 1 week of

receiving the request for appeal. The carrier needs time to prepare the

case and forward it to the hearing officer. The person or entity

seeking review may also need more than one

[[Page 57433]]

week to prepare for the case. With respect to the time frame for

issuing hearing officer decisions, the new provision would parallel the

timeliness requirement in Sec. 405.834.

In addition, current Sec. 405.874(c) also discusses the procedures

to be followed in a carrier hearing in consideration of the

disallowance or revocation of a supplier billing number. In the

proposed revision to Sec. 405.874(c)(2), we would change the language

to clarify that the supplier is required to prove that it is in

compliance with all Medicare requirements for billing privileges, and

that the carrier incorrectly disallowed or revoked the supplier's

billing number. The ultimate burden of proof is on the supplier to show

that it meets all requirements upon application, and to show at any

time that it continues to meet any requirements that may be in place to

bill Medicare. It is presumed that the carrier made a reasonable

determination to disallow or revoke a supplier's billing number based

on information it had at the time of the decision. The supplier would

be required to furnish the evidence that clearly shows the

determination was in error at the time it was made.

In new Sec. 405.874(c)(3), we would revise the timeliness

requirement in current Sec. 405.874(c) for the hearing officer to issue

a decision from ``two weeks'' to ``as soon as practicable after the

hearing'' because the hearing officer must be allowed sufficient time

to adjudicate the facts and make a reasoned decision. In addition, the

proposed revision requirement would parallel the timeliness requirement

for other hearing officer decisions in part 405.

Implementation of Reversal of Carrier Determination

We propose to conclude our revision of current Sec. 405.874(c) by

adding paragraphs (5), (6), and (7) to allow carrier discretion in

deciding whether to put into effect a carrier hearing officer's

reversal of the carrier's determination to disallow or revoke a

supplier billing number, pending a possible appeal by the carrier. If

the carrier were to decide to appeal the carrier hearing officer's

decision to HCFA, the carrier would be permitted to continue to hold

the supplier billing number as disallowed or revoked, pending the HCFA

official's decision. The carrier would also have the discretion to

implement the reversal (that is, grant or reinstate billing privileges)

even though it is appealing the carrier hearing officer's decision. A

carrier would implement a reversal decision immediately if it decides

not to appeal the carrier hearing officer's decision to HCFA.

In the event that a supplier were to decide to appeal a carrier

hearing officer's partial reversal to HCFA, and the carrier were to

decide not to appeal, the carrier would implement the partial reversal.

A partial reversal could be, for example, a decision to reinstate a

revoked billing number, but not back to the date of the revocation;

thus, there would be a period of non-eligibility for the supplier from

the date of revocation to the reinstatement date. If the supplier were

to appeal to the HCFA official to be reinstated for full eligibility,

and the carrier were to decide not to appeal, the carrier would still

implement only the partial reinstatement until the HCFA official would

issue a decision on the appeal for full reinstatement.

Hearing by HCFA

In the proposed revision to Sec. 405.874(d), we would change the

language that currently appears in Sec. 405.874(d) to specify that the

HCFA official bases his or her decision on the carrier hearing

officer's decision and the case file (record) established by the

carrier hearing officer. In other words, this is not a de novo hearing.

However, the HCFA official would be permitted to supplement the record

as deemed necessary to clarify any issues. The HCFA official would

issue a decision as soon as practicable in light of the issues involved

and his or her workload. The HCFA official's decision would be the last

administrative process available to either the carrier or the supplier.

Reversal of Carrier Determination

We would revise current Sec. 405.874(e) to clarify that we will not

pay for services furnished by suppliers during a period in which the

supplier's billing privileges have been revoked. Therefore, any

reversals of carrier decisions must indicate the effective date of the

reversal. No appeal rights for suppliers accrue to rejections of claims

or parts of claims that were made because the services or items were

furnished during a period of supplier ineligibility. Claims for items

or services furnished during a period for which the supplier's

eligibility is established upon reversal would be adjudicated by the

carrier in accordance with normal procedures, and would be denied or

approved on their own merits.

Reinstatement of Supplier Billing Number Following Corrective Action

Current Sec. 405.874(f) addresses corrective action plans. We would

revise this paragraph to clarify that the supplier must be in

compliance with all requirements in order to have its billing number

reinstated, and that we must be satisfied that the supplier is in

compliance and will remain in compliance. The burden of proof again

would be on the supplier to demonstrate that it can operate in

accordance with Medicare requirements. It would not be enough for the

supplier to submit a plan for corrective action. If we were to decide

to reinstate a billing number, we would establish the date of

reinstatement, and the carrier would be able to pay for services

furnished on or after the effective date of reinstatement.

Reopening of Carrier Determination, Carrier Hearing Officer Decision,

or HCFA Decision

We propose to add new Sec. 405.874(g) to permit the carrier,

carrier hearing officer, or HCFA official to reopen and revise its

determination or decision in accordance with Secs. 405.841 and 405.842.

This means, for example, that the carrier would not be permitted to

revise a carrier hearing officer's or HCFA official's decision.

Effective Date for DMEPOS Supplier Billing Number

We propose to add new Sec. 405.874(h), wherein we would address the

situation that a DMEPOS supplier may not be paid for items or services

furnished prior to the date its billing number is issued. Any decision

to change, either through appeal or reopening, a disallowance of an

enrollment application would establish the effective date of the

billing number. Any claims for services or items furnished prior to the

effective date of the billing number would be rejected and no appeal

rights would apply for those claims--see Sec. 405.803. Further,

sections 1834(a)(18)(A)(ii) and 1834(j)(4) of the Act apply to those

claims and provide that no payment may be made, and that the supplier

may not charge the beneficiary, for services furnished prior to the

effective date, unless the beneficiary explicitly agreed to pay even

though Medicare would not pay.

Submission of Claims

Finally, we would add new Sec. 405.874(i) to describe the procedure

for submitting claims after a reversal of a supplier enrollment

application disallowance or billing number revocation, or after a

billing number reinstatement. We would specify that if a supplier is

reinstated, any claims for items or services, furnished during the

period of supplier ineligibility that became a period of eligibility

upon reinstatement, may be submitted for adjudication as long as the

period for

[[Page 57434]]

filing claims has not elapsed. If the claims previously were filed

timely but were rejected, they would be considered filed timely upon

resubmission.

III. Regulatory Impact Statement

We have examined the impact of this proposed rule under Executive

Order 12866 and the Regulatory Flexibility Act (RFA) (Pub. L. 96-354).

Executive Order 12866 directs agencies to assess all costs and benefits

of available regulatory alternatives and, when regulation is necessary,

to select regulatory approaches that maximize net benefits (including

potential economic, environmental, public health and safety effects;

distributive impacts; and equity). The RFA requires agencies to analyze

options for regulatory relief for small businesses. For purposes of the

RFA, most hospitals, and most other providers, physicians, and health

care suppliers are small entities, either by nonprofit status or by

having revenues of $5 million or less annually.

According to data submitted to us by carriers in calendar year

1997, 129,000 enrollment applications were submitted to the Medicare

carriers by suppliers seeking to receive billing privileges. We believe

that a vast majority of these applicants were small businesses. Of

those applications, 2,310 were denied. A total of 291 applicants

requested an appeal of their denial.

Also, section 1102(b) of the Act requires us to prepare a

regulatory impact analysis for any proposed rule that may have a

significant impact on the operations of a substantial number of small

rural hospitals. That analysis must conform to the provisions of

section 604 of the RFA. For purposes of section 1102(b) of the Act, we

define a small rural hospital as a hospital that is located outside of

a Metropolitan Statistical Area and has fewer than 50 beds.

We are not preparing analyses for either the RFA or section 1102(b)

of the Act because we have determined, and we certify, that this

proposed rule will not have a significant economic impact on a

substantial number of small entities or a significant impact on the

operations of a substantial number of small rural hospitals. As

discussed in detail, under section II., Provisions of the Proposed

Rule, the purpose of the proposed changes to our current regulations

would be to extend appeal rights to all suppliers whose enrollment

applications for Medicare billing privileges are disallowed or whose

Medicare billing privileges are revoked, except for those suppliers

covered under the appeals provisions of part 498.

We believe that this proposed rule would have no adverse impact on

small entities; in fact, it would afford small suppliers a measure of

protection against adverse actions by HCFA, and extend protection to a

larger group of suppliers beyond the DMEPOS suppliers currently covered

under Sec. 405.874. Because this proposed rule would merely clarify,

expand, and update our current policy and administrative appeal rights,

we anticipate slight, if any, economic impact on small entities. We

are, however, inviting comments as to whether this rule would have a

significant impact on a substantial number of small rural hospitals or

entities.

IV. Response to Comments

Because of the large number of items of correspondence we normally

receive on Federal Register documents published for comment, we are not

able to acknowledge or respond to them individually. We will consider

all comments we receive by the date and time specified in the DATES

section of this preamble, and, when we issue the final rule, we will

respond to the comments in the preamble to that document.

V. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995 (PRA), agencies are

required to provide a 60-day notice in the Federal Register and solicit

public comment before a collection of information requirement is

submitted to the Office of Management and Budget (OMB) for review and

approval. In order to fairly evaluate whether an information collection

should be approved by OMB, section 3506(c)(2)(A) of the PRA requires

that we solicit comment on the following issues:

Whether the information collection is necessary and useful

to carry out the proper functions of the agency;

The accuracy of the agency's estimate of the information

collection burden;

The quality, utility, and clarity of the information to be

collected; and

Recommendations to minimize the information collection

burden on the affected public, including automated collection

techniques.

However, we believe the information collection activities

referenced in Sec. 405.874 are exempt under the terms of the PRA for

the following reasons:

As defined in 5 CFR 1320.4, information collections

conducted or sponsored during the conduct of criminal or civil action,

or during the conduct of an administrative action, investigation, or

audit involving an agency against specific individuals or entities are

exempt from the PRA;

As described in 5 CFR 1320.3(h)(9), facts or opinions

obtained or solicited through nonstandardized follow-up questions

designed to clarify responses to approved collections, are exempt from

the PRA; and/or

Nonstandardized information collections directed to less

than ten persons do not constitute information collections as outlined

in 5 CFR 1320.3(c).

Since we believe that the collection requirements are either part

of the administrative, audit and/or adjudicatory process, collected in

a nonstandardized manner, and/or collected from less than ten persons,

they fall under these exceptions.

If you comment on any of these information collection and

recordkeeping requirements, please mail copies directly to the

following:

Health Care Financing Administration, Office of Information Services,

Information Technology Investment Management Group, Division of HCFA

Enterprise Standards, Room C2-26-17, 7500 Security Boulevard,

Baltimore, MD 21244-1850. Attn.: John Burke, HCFA-1907-P

Office of Information and Regulatory Affairs, Office of Management and

Budget, Room 10235, New Executive Office Building, Washington, DC

20503. Attn.: Allison Herron Eydt, HCFA Desk Officer

List of Subjects in 42 CFR Part 405

Administrative practice and procedure, Health facilities, Health

professions, Kidney diseases, Medicare, Reporting and recordkeeping

requirements, Rural areas, X-rays.

42 CFR Chapter IV would be amended as set forth below:

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

Subpart H--Appeals Under the Medicare Part B Program

1. The authority citation for part 405, subpart H, continues to

read as follows:

Authority: Secs. 1102, 1842(b)(3)(C), and 1869(b) of the Social

Security Act (42 U.S.C. 1302, 1395u(b)(3)(C), and 1395ff(b)).

2. Section 405.874 is revised to read as follows:

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Sec. 405.874 Appeals of carrier determinations that a supplier fails

to meet the requirements for Medicare billing privileges.

(a) Disallowance of supplier enrollment application. If a carrier

disallows a supplier's enrollment application, the carrier must notify

the supplier by certified mail. The notice must include the following:

(1) The reason for the disallowance.

(2) The right to appeal.

(3) The date by which the supplier must file the appeal, that is,

60 days after the date of receipt of the carrier's notice. (The date of

receipt of the carrier's notice is presumed to be 5 days after the date

of the notice.)

(4) The address to which the written appeal must be mailed.

(b) Revocation of Medicare billing number--(1) Notice of

revocation. If a carrier revokes a supplier's Medicare billing number,

that is the identification number of a provider or supplier to which

HCFA has granted Medicare billing privileges, the carrier must notify

the supplier by certified mail. The notice must include the following:

(i) The reason for the revocation.

(ii) The right to appeal.

(iii) The date by which the supplier must file that appeal, that

is, 60 days after the date of receipt of the carrier's notice. (The

date of receipt of the carrier's notice is presumed to be 5 days after

the date of the notice.)

(iv) The address to which the written appeal must be mailed.

(2) Effective date. Revocation of a supplier billing number is

effective 15 days after the carrier mails the notice of its

determination to the supplier. A revocation based on a Federal

exclusion or debarment is effective with the date of the exclusion or

debarment.

(3) Payment. Carriers do not pay for services furnished by the

supplier beginning with the effective date of a revocation. Claims for

services furnished to Medicare beneficiaries after the effective date

of the revocation are rejected. Rejections of claims because a supplier

does not have a valid billing number may not be appealed by the

supplier. If the supplier is successful in overturning a revocation,

rejected claims for services that were furnished during the overturned

period of revocation may be resubmitted. (See paragraph (i) of this

section).

(c) Hearing by carrier. (1) For suppliers, other than those whose

appeal rights are defined in part 498 of this chapter, a carrier

hearing officer, not involved in the original determination to disallow

a supplier's enrollment application, or to revoke a current billing

number, must hold a hearing within 60 days of receipt of the appeal

request, or later if requested by the supplier.

(2) Both the supplier and the carrier may offer new evidence. The

ultimate burden of proof is on the supplier to show that its enrollment

application was incorrectly disallowed or that the revocation of its

billing number was incorrect.

(3) The hearing officer issues a written decision as soon as

practicable after the hearing and forwards the decision by certified

mail to HCFA, the carrier, and the supplier. This decision includes the

following:

(i) Information about the carrier's and supplier's further right to

appeal.

(ii) The address to which the written appeal must be mailed.

(iii) The date by which the appeal must be filed, that is, 60 days

after the date of receipt of the notice. (The date of receipt of the

carrier's notice is presumed to be 5 days after the date of the

notice.)

(4) Either the carrier or supplier may appeal the carrier hearing

officer's decision to HCFA.

(5) A carrier hearing officer's partial or complete reversal of a

carrier's determination is not implemented pending the carrier's

decision to appeal the reversal to HCFA, unless the carrier, in its

sole discretion, and without prejudice to its right to appeal, decides

to implement the reversal pending an appeal.

(6) The carrier implements a reversal if it decides not to appeal a

reversal to HCFA, or the time to appeal expires.

(7) A carrier may implement a carrier hearing officer's partial

reversal even if the supplier has appealed the partial reversal to

HCFA, or the time for the supplier to file an appeal has not expired.

(d) Hearing by HCFA. A HCFA official, designated by the

Administrator of HCFA, issues a decision based on the decision and the

record established by the carrier hearing officer. The HCFA official

may supplement the record by requesting and obtaining any additional

information from the carrier or the supplier. The HCFA official's

decision--

(1) Is issued in writing as soon as practicable after the HCFA

official determines that there is sufficient information to decide the

appeal (or that no additional information is forthcoming), unless the

party appealing the hearing officer's decision requests a delay;

(2) Is forwarded by certified mail to both the carrier and the

supplier; and

(3) Contains information that no further administrative appeals are

available.

(e) Impact of reversal of carrier determination on claims

processing. If a revocation of a supplier billing number is reversed

upon appeal, the appeal decision establishes the date the reinstated

supplier number is effective. Claims for services furnished to Medicare

beneficiaries during a period in which the supplier billing number was

not effective are rejected. If a supplier is determined not to have

qualified for a billing number in one period but qualified in another,

carriers process claims for services furnished to beneficiaries during

the period for which the supplier was Medicare-qualified. Subpart C of

this part sets forth the requirements for recovery of overpayments.

(f) Reinstatement of supplier billing number following corrective

action. If a supplier completes a corrective action and provides

sufficient evidence to the carrier that it has complied fully with the

Medicare requirements, the carrier may reinstate the supplier's billing

number. The carrier may pay for services furnished on or after the

effective date of the reinstatement. A carrier's refusal to reinstate a

billing number is not an initial determination under Sec. 405.803.

(g) Reopening of carrier determination, carrier hearing officer

decision, or HCFA decision. An initial carrier determination, a

decision of a carrier hearing officer, or a decision of a HCFA official

may be reopened by the carrier, hearing officer, or HCFA official in

accordance with Secs. 405.841 and 405.842.

(h) Effective date for DMEPOS supplier billing number. If a

carrier, carrier hearing officer, or HCFA official determines that a

DMEPOS supplier's disallowed enrollment application meets the standards

in Sec. 424.57 of this chapter, the determination establishes the

effective date of the billing number as not earlier than the date the

carrier made the determination to disallow the supplier's enrollment

application. Claims are rejected for services furnished before that

effective date.

(i) Submission of claims. A supplier succeeding in having its

enrollment application disallowance or billing number revocation

reversed, or in having its billing number reinstated, may submit claims

to the carrier for services furnished during periods of Medicare

qualification, subject to the limitations in Sec. 424.44 of this

chapter regarding the timely filing of claims. If the claims previously

were filed timely but were rejected, they will be considered filed

timely upon resubmission.

[[Page 57436]]

(Catalog of Federal Domestic Assistance Program No. 93.773,

Medicare--Hospital Insurance Program; and No. 93.774, Medicare--

Supplementary Medical Insurance Program)

Dated: July 7, 1999.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing Administration.

Dated: July 13, 1999.

Donna E. Shalala,

Secretary.

[FR Doc. 99-27623 Filed 10-22-99; 8:45 am]

BILLING CODE 4120-01-P