Basis for Terminating Provider Participation - Citations and

3005 - Basis for Terminating Provider Participation - Citations and Discussion (Rev. 1, 05-21-04) 3005A - Medicare Provider Agreements (Rev. 1, 05-21-04) Provider agreements and agreements with clinics that provide Outpatient Physical Therapy (OPT) and Community Mental Health Centers (CMHCs) are terminated by the RO under the authority of §1866(b) of the Act. (See 42 CFR 489.52-489.57.) Medicare providers (as defined in §2002) must substantially meet each of the applicable CoPs or requirements for participation. 3005B - Termination of Coverage of Supplier Services Subject to Certification (Rev. 1, 05-21-04) Sections 1832(a), 1861(g), (p), (s), and (aa) and 1881(b) of the Act authorize the Secretary to establish CfCs of supplier services and thus implicitly authorize determinations that the Conditions cease to be met. Title 42 CFR 498.3(b) provides that the Secretary makes findings, setting forth pertinent facts and conclusions, and an initial determination as to whether a supplier meets the respective Conditions. The determination can be a result of the written request by the supplier to start or expand services or to establish that it continues to meet respective CfCs. An adverse determination may involve one or more areas of services offered by a supplier. While these adverse determinations are not in the regulations as “terminations,” their effect on payment for the supplier’s services is the same as when a provider agreement is terminated. Procedures for certifying supplier noncompliance parallel those for certifying provider noncompliance. For example, the agreement into which an Ambulatory Surgical Center (ASC) or Rural Health Clinic (RHC) enters is a specific agreement related to those suppliers, not a provider agreement. 3005D - Cause for Termination (Rev. 1, 05-21-04) The CMS may terminate Medicare provider participation if the provider does not comply with a CoP or Requirement for SNFs/NFs, or fails to provide an acceptable PoC for other requirements. (See 42 CFR 489.53.) Certain causes for termination are unrelated to certification and have no impact on the SA. The CMS may terminate provider participation if: 1. The provider places restrictions on the persons it accepts for treatment, and fails either to exempt Medicare beneficiaries from the restrictions, or to apply the same restrictions to Medicare beneficiaries as to all other persons seeking care; 2. The provider refuses to permit examination of its records by or on behalf of CMS for verification of information it furnished as a basis for payment; 3. The provider has knowingly and willfully made false statements or representations of a material fact for use in a request for payment; 4. The provider has submitted, or caused to be submitted, requests for payment under Medicare, or amounts for items and services, substantially in excess of the costs incurred; 5. The provider has furnished items or services which CMS determined to be substantially in excess of the needs of individuals or of a quality that failed to meet professionally recognized standards; or 6. The provider fails to: • Permit photocopying of any records necessary to determine compliance; • Furnish information necessary for CMS to determine whether payments are or were due under Medicare and the amount due; • Furnish information on business transactions as required; • Disclose information on convicted principals; • Furnish ownership information; • Comply with civil rights requirements; or • Furnish notice of discharge rights. 7. A hospital or critical access hospital that has reason to believe it may have received an individual by another hospital in violation of 42 CFR 489.24 fails to report the incident. 8. A hospital fails to furnish inpatient services to TRICARE or CHAMPVA beneficiaries or to veterans. 9. A critical access hospital fails to maintain an annual average length of stay of 96 hours or less. The SA certifies provider compliance with Medicare requirements. FIs generally are responsible for dealing with matters related to payment and coverage. However, in the course of a survey, the SA may encounter information indicative of program abuse or failure to meet requirements described in the above list. The SA communicates these areas of concern to the RO. 3005E - Termination of Title XIX-Only NFs, ICFs/IID, Hospitals and Psychiatric Hospitals (Rev. 123, Issued: 10-03-14, Effective: 10-03-14, Implementation: 10-03-14) Under 42 CFR 431.54(f), the State Medicaid Agency may “lock out,” i.e., restrict the participation of a Medicaid provider for a reasonable period if it has found that the provider has abused the Medicaid program. The SMA may take this action in response to, or independent of any SA or accrediting organization recommendation. Note that the Medicaid program, unlike the Medicare program, does not distinguish between “providers” and “suppliers” and the term “provider” applies to both for Medicaid purposes. In order to determine that a provider has abused the Medicaid program, the SMA must find that in a significant number or proportion of cases the provider has: • Furnished services at a frequency or amount not medically necessary (§431.54(f)(2)(i)); or • Furnished Medicaid services of a “quality that does not meet professionally recognized standards of health care.” (§431.54(f)(2)(ii)). Additional conditions required before imposing any restriction on a provider are found in §431.54(f). Medicaid-only NFs and ICFs/IIDs Medicaid regulations provide for terminations, and for ICFs/IID cancellations, but do not describe the implementing procedures. Each SMA has procedures for terminating agreements with NFs and ICFs/IID when they are not in substantial compliance with program requirements. In any Medicaid-only noncompliance situation, the SA initiates the action, prepares the necessary documents, and forwards them to the SMA, which has responsibility for the termination, nonrenewal, or cancellation of the agreement (see §7300 for the exception regarding State operated NFs). In this case, the SMA notifies CMS and the public of its action and affords the facility notice and opportunity for a hearing before an ALJ prior to termination. Medicaid-only Hospitals and Psychiatric Hospitals 42 CFR 482.1(a)(5) notes generally that any hospital or psychiatric hospital that participates in Medicaid must meet the Medicare CoPs. Medicaid regulations at 42 CFR 440.10 (hospitals) and §440.140 and 440.160 (psychiatric hospitals) require Medicaid- participating hospitals and psychiatric hospitals to comply with the Medicare CoPs. If a SA survey of a Medicaid-only hospital or psychiatric hospital finds substantial noncompliance, i.e., condition-level noncompliance, including immediate jeopardy, with the CoPs, the SA follows the standard SOM processes for requiring a plan of correction and conducting revisits. If the hospital or psychiatric hospital fails to come into substantial compliance in a timely manner, the SA notifies the SMA, which takes appropriate action in accordance with Federal Medicaid regulations and State plan provisions. Likewise, in the case of a hospital or psychiatric hospital that participates in Medicaid based on accreditation by a CMS-approved Medicare hospital or Medicare psychiatric hospital accreditation program, the accrediting organization (AO) must notify both CMS and the SMA if the facility’s accreditation is terminated for any reason. The SMA may in such cases request the SA to conduct a survey to determine the hospital’s or psychiatric hospital’s compliance with the CoPs, or may proceed directly to take appropriate action in accordance with Federal Medicaid regulations and State plan provisions. If the SMA decides to restrict the provider’s participation in Medicaid, the SMA is responsible for: • Giving notice to the provider and opportunity for appeal, in accordance with procedures established by the SMA (§431.54(f)(1)); • Notifying CMS and the general public of the provider’s restriction and its duration (§431.54(f)(3)); and • Ensuring that restrictions do not result in denying Medicaid recipient reasonable access to services of adequate quality (§431.54(f)(4)). If the SMA restricts a Medicaid-only hospital’s or psychiatric hospital’s Medicaid participation, it gives notice to CMS via the SA. The SA forwards the notice to the RO. The RO terminates the hospital’s or psychiatric hospital’s Medicaid-only CCN, unless the SMA notice contains a date certain when the provider’s participation in Medicaid will resume. 3005F - Termination Action Based Upon Onsite Survey by RO, or Validation Survey of a Deemed Provider or Supplier by RO or SA (Rev. 123, Issued: 10-03-14, Effective: 10-03-14, Implementation: 10-03-14) RO Conducts Survey: When substantial noncompliance, including immediate jeopardy to patient health and safety, is identified in the course of a survey conducted by RO staff, the RO initiates termination procedures. Survey findings and factual development are the responsibility of the RO. However, the SA may be asked to assist in documenting or developing aspects of the termination. The SA (and the SMA, if the provider/supplier also participates in Medicaid) is notified by the RO of the action taken. RO or SA Validation Survey of a Deemed Provider or Supplier Section 1864(c) of the Social Security Act provides that SAs conduct validation surveys of deemed providers and suppliers, at the direction of the CMS RO. The RO may also choose to conduct the validation survey with RO surveyors, or with a mixture of SA and RO surveyors. There are two types of validation surveys: • Full, standard surveys of a representative sample of deemed providers and suppliers, and • Focused substantial allegation, i.e., complaint investigation surveys. Representative Sample Validation Survey: If the representative sample validation survey identifies either an immediate jeopardy or substantial, i.e., condition-level, noncompliance and the RO agrees with this finding, the RO initiates termination of the deemed provider or supplier, including an opportunity for the provider/supplier to make a timely correction of the deficient practices to avoid termination. Substantial Allegation Validation Survey: • If the survey identifies an immediate jeopardy and the RO agrees with this finding, the RO initiates termination of the deemed provider or supplier, including an opportunity for the provider/supplier to make a timely correction of the deficient practices to avoid termination. • If the survey identifies substantial, i.e., condition-level, noncompliance and the RO agrees with this finding, the RO may either: • initiate termination of the deemed provider or supplier, including an opportunity for the provider/supplier to make a timely correction of the deficient practices to avoid termination; or • Require the SA to conduct a full survey of the provider or supplier. Termination action would be initiated if the full survey identifies substantial noncompliance. See Chapter 5, Section 5110 for more details on post-survey procedures after a substantial allegation validation survey. 3005G - Look Behind Authority of CMS (Rev. 1, 05-21-04) 3005G1 - “Look-Behind” Termination or Cancellation of ICF/IID Agreement by the Secretary (Rev. 92, Issued, 11-22-13, Effective: 11-22-13, Implementation: 11-22-13) The CMS has authority under §1910(b) of the Act to terminate approval of an ICF/IID to participate in the Medicaid program when it determines that the facility fails to comply substantially with the CoPs, 42 CFR Part 483, Subpart I, or to submit an acceptable PoC. The cancellation is prospective, usually after the provider has had the opportunity for a formal hearing before an ALJ. If there is no immediate jeopardy to resident health and safety and CMS elects to terminate, the ICF/IID is afforded an opportunity for a pre-termination hearing before an ALJ. If the effective date of termination is held in abeyance pending an ALJ’s ruling and the ICF/IID makes a credible allegation of compliance while the hearing is pending, it is up to the RO to determine whether it is in the recipients’ and the government’s interest to resurvey the facility and dispose of the case based on the findings. If a revisit is made and the ICF/IID failed to achieve compliance, adverse action continues based on the findings of the first Federal survey and the revisit. If the ALJ affirms the CMS decision, the effective date of termination is set by the ALJ. If there is an immediate jeopardy to resident health and safety, CMS terminates or cancels approval of the ICF/IID and affords it the opportunity for a post-termination ALJ hearing. Following termination, ICFs/IID wanting readmission must request a survey from the RO. The RO directs the SA to do a survey unless it feels that a Federal survey is necessary. The CMS must be satisfied that the reasonable assurance provision is met before the State executes a Medicaid agreement with the ICF/IID. 3005G2 - Old “Look-Behind” Termination of a NF or ICF/IID by the Secretary (Rev. 92, Issued, 11-22-13, Effective: 11-22-13, Implementation: 11-22-13) Under 42 CFR 442.30, a provider agreement of a SNF, NF, or ICF/IID is considered invalid for purposes of providing FFP to the State unless the State has followed proper survey and certification procedures. For example, the SMA may have issued the provider agreement even though it had not certified the facility as being in compliance. Other examples of procedural error include, but are not limited to: • The SA documents noncompliance yet certifies compliance; • The SA certifies compliance, but all cited deficiencies are not covered by an acceptable PoC; • The SA fails to survey against all applicable requirements; or • The SA fails to use federally approved survey and certification documents. When procedures are not followed by either the SA or SMA, CMS considers the provider agreement void from its inception, and the State is disallowed FFP for bills related to the facility for the period covered by that Medicaid agreement. This type of adverse action, referred to as “Old Look Behind,” is covered in more detail in §3042. 3005G3 - SMA Disagrees With SA Determination (Rev. 1, 05-21-04) With the exception of State-operated NFs, the SA surveys and certifies compliance of Medicaid facilities with health and safety requirements to the SMA. The SMA is responsible for reviewing certifications to ensure that the SA has adhered to procedural requirements. If the SMA disagrees with the SA’s certification, it first contacts the SA to resolve the issue. If the issue cannot be resolved, it contacts the RO. To resolve the dispute, the RO conducts a Federal survey of the facility or take other action as necessary.