Credible Allegation of Fraud Exists Against a Provider - Fraud

8.3.1.1 – Credible Allegation of Fraud Exists Against a Provider - Fraud Suspensions (Rev.: 13762; Issued: 05-27-26; Effective: 06-29-26; Implementation: 06-29-26) A payment suspension may be used when the UPIC, law enforcement, or CMS determines that a credible allegation of fraud exists against a provider or supplier (hereinafter referred to as provider). For purposes of section 8.3 et seq., these types of payment suspensions will be called “fraud suspensions.” Fraud suspensions may also be imposed for reasons not typically viewed within the context of false claims. For example: • The Quality Improvement Organization (QIO) has reviewed inpatient claims and determined that the diagnosis related groups (DRGs) have been upcoded. • The UPIC or MAC may suspect a violation of the physician self-referral ban. For this reason, the violation may be considered the cause for a payment suspension since claims submitted in violation of this statutory provision must be denied and any payments made would constitute an overpayment. • Even though services are rendered and may be determined as medically necessary and reasonable by the Medicare contractor, law enforcement has credible allegations of kickbacks. • Forged signatures on medical record documentation (e.g., Certificates of Medical Necessity (CMN), treatment plans, etc.) and/or other misrepresentations on Medicare claims or associated forms to obtain payment that would result in an overpayment determination. Whether or not the UPIC recommends a payment suspension to CMS, the final determination is determined on a case-by-case basis and requires review and analysis of the allegation and facts. The following information is provided to assist the UPIC in deciding when to recommend a payment suspension to CPI. A. Complaints There is considerable latitude with regard to complaints alleging fraud, waste, and abuse. The provider’s Medicare history, including the volume and frequency of complaints concerning the provider, and the nature of the complaints all contribute to whether a payment suspension should be referred to CPI. If there is a credible allegation(s) that a provider is submitting or may have submitted false claims, the UPIC may recommend a fraud suspension to CPI only after the UPIC has vetted the provider in accordance with Pub. 100-08, chapter 4, section 4.6. (If the MAC identifies the potential fraud issue from a complaint, the MAC shall refer its information to the respective UPIC for development). B. Requests for Suspension of Payment For initial UPIC requests to suspend payments, the UPIC shall inform its assigned BFL of the potential suspension. The BFL will discuss all findings with the UPIC. After informing the BFL about the suspension, the contractor shall complete the payment suspension Administrative Action Recommendation (AAR) and submit the payment suspension recommendation via the UCM if the contractor determines such action is warranted. The AAR shall serve as the UPIC’s documented recommendation for CMS’ consideration of a payment suspension and, when completed, include the UPIC’s findings and all pertinent provider/supplier information. The AAR, draft notice of suspension, and all other relevant documentation that supports the suspension recommendation shall be uploaded by the contractor as part of the UCM submission. The UPIC shall also prepare and submit, if appropriate, a payment suspension referral package to CPI via the UCM for all requests received from (but not limited to): • CMS • Office of Inspector General (OIG) • Federal Bureau of Investigation (FBI) • Assistant United States Attorney (AUSA) • Other law enforcement agencies C. Other Situations Other situations that may be considered when recommending a fraud suspension to CPI include, but are not limited to: • Provider has pled guilty to, or been convicted of, Medicare, Medicaid, TRICARE, or private health care fraud and is still billing Medicare for services; • Federal/State law enforcement has subpoenaed the records of, or executed a search warrant upon, a health care provider billing Medicare; • Provider has been indicted by a Federal Grand Jury for fraud, theft, embezzlement, breach of fiduciary responsibility, or other misconduct related to a health care program; • Provider presents a pattern of evidence of known false documentation or statements sent to the UPIC or the MAC; e.g., false treatment plans, false statements on provider application forms. D. Good Cause Exceptions Reference is made in 42 CFR §405.371(b)(1) that allows for good cause exceptions to not suspend payments or continue a payment suspension when there are credible allegations of fraud. These exceptions may be considered for approval by CMS if any apply: • Law enforcement has requested that a payment suspension not be imposed because such action may compromise or jeopardize its investigation; • CMS/CPI has determined that a beneficiary access to care issue may exist and potentially cause a danger to life or health in whole or part; • CMS/CPI has been determined that other administrative remedies may be implemented that would be more effective in protecting Medicare funds (such as revocation, prepayment review); or • CMS determines that the imposition or the continuation of a payment suspension is not in the best interest of the Medicare program. Every 180 calendar days after the initiation of a payment suspension based on credible allegations of fraud, CMS is required to evaluate whether there is good cause to terminate the payment suspension. Good cause to terminate a payment suspension is deemed to exist if the payment suspension has been in effect for 18 months. However, there are two exceptions. The first exception is that the case has been referred to and is being considered by the OIG for an administrative action such as a civil monetary penalty or permissive exclusion, or such administrative action is pending, and the OIG has made its request to not terminate the payment suspension in writing. The second exception is that the Department of Justice has submitted a written request to extend the payment suspension based on the ongoing investigation and its anticipation of filing a criminal or civil action or both, or based on a pending criminal or civil action or both. (See 42 CFR §405.371(b)(2) and §405.371(b)(3).) CMS/CPI makes the final decision on whether good cause to terminate exists, based on the totality of the circumstances. For all fraud suspensions, the UPICs shall submit requests to CPI via the UCM within 14 calendar days before the suspension expires. CPI will evaluate the request to consider whether good cause to terminate the payment suspension exists.