**Part A and Part B**

**Medicare Administrative Contractor**

**Statement of Work**

**[Attachment J-1]{.smallcaps}**

***RFP-CMS-2006-0033***

**[September 28, 2006]{.smallcaps}**

![](media/image1.jpeg){width="2.140277777777778in"
height="0.9020833333333333in"}

**Table of Contents**

[C.1 Scope 1](#scope)

[C.1.1 Purpose of Contract 1](#purpose-of-contract)

[C.1.2 Background 2](#background)

[C.1.3 Contracting Reform 4](#contracting-reform)

[C.1.4 Roles and Responsibilities 4](#roles-and-responsibilities)

[C.1.4.1 The Centers for Medicare & Medicaid Services
4](#the-centers-for-medicare-medicaid-services)

[C.1.4.1.1 Business Function Leads and Technical Monitors
5](#business-function-leads-and-technical-monitors)

[C.1.4.2 Medicare Administrative Contractor ("The Contractor")
5](#medicare-administrative-contractor-the-contractor)

[C.1.4.3 Unique Requirements for the MAC
6](#unique-requirements-for-the-mac)

[C.1.4.3.1 Unique Core Requirements 6](#unique-core-requirements)

[C.1.4.3.2 Jurisdiction-Specific Requirements
6](#jurisdiction-specific-requirements)

[C.2 Applicable Documents 8](#applicable-documents)

[C.2.1 Statutes 8](#statutes)

[C.2.1.1 Social Security Act (Public Law 74-271)
8](#social-security-act-public-law-74-271)

[C.2.1.2 Medicare Prescription Drug, Improvement and Modernization Act
(Public Law 108-173)
9](#medicare-prescription-drug-improvement-and-modernization-act-public-law-108-173)

[C.2.1.3 Health Insurance Portability and Accountability Act of 1996
(Public Law 104-191)
9](#health-insurance-portability-and-accountability-act-of-1996-public-law-104-191)

[C.2.1.4 Tax Equity and Fiscal Responsibility Act of 1982 (Public Law
97-248)
10](#tax-equity-and-fiscal-responsibility-act-of-1982-public-law-97-248)

[C.2.1.5 Benefit Improvement and Protection Act of 2000 (Public Law
106-554)
10](#benefit-improvement-and-protection-act-of-2000-public-law-106-554)

[C.2.2 Regulations 10](#regulations)

[C.2.3 Medicare Manuals 10](#medicare-manuals)

[C.3 Key Definitions 11](#key-definitions)

[C.4 Objectives 12](#objectives)

[C.4.1 Customer Service 12](#customer-service)

[C.4.2 Operational Excellence 13](#operational-excellence)

[C.4.3 Innovation and Technology 13](#innovation-and-technology)

[C.4.4 Financial Management 13](#financial-management)

[C.5 Functional Requirements 14](#functional-requirements)

[C.5.1 Workload Implementation Requirements
15](#workload-implementation-requirements)

[C.5.1.1 Jurisdiction Implementation Project Plan
16](#jurisdiction-implementation-project-plan)

[C.5.1.2 Segment Implementation Project Plans
16](#segment-implementation-project-plans)

[C.5.1.3 Risk Management Plan 16](#risk-management-plan)

[C.5.1.4 Segment Cutover Plan 17](#segment-cutover-plan)

[C.5.1.5 Segment Test Plan 17](#segment-test-plan)

[C.5.1.6 Lessons Learned Documentation
17](#lessons-learned-documentation)

[C.5.1.7 Accounts Receivable Reconciliation
17](#accounts-receivable-reconciliation)

[C.5.1.8 Consolidation of Part A and Part B Edits
17](#consolidation-of-part-a-and-part-b-edits)

[C.5.1.8.1 Consolidation of Reason Codes
18](#consolidation-of-reason-codes)

[C.5.1.8.2 Consolidation of Local Coverage Determinations
18](#consolidation-of-local-coverage-determinations)

[C.5.1.9 Implementation Stakeholder Communication
20](#implementation-stakeholder-communication)

[C.5.1.10 Implementation Meetings 20](#implementation-meetings)

[C.5.2 Contractor Responsibilities during the Workload Closeout Period
and at Contract End (Option that may be exercised at the End of the
Contract)
21](#contractor-responsibilities-during-the-workload-closeout-period-and-at-contract-end-option-that-may-be-exercised-at-the-end-of-the-contract)

[C.5.2.1 Workload Closeout Project Plan (Option that may be exercised at
the End of the Contract)
21](#workload-closeout-project-plan-option-that-may-be-exercised-at-the-end-of-the-contract)

[C.5.2.2 Workload Closeout Meetings (Option that may be exercised at the
End of the Contract)
22](#workload-closeout-meetings-option-that-may-be-exercised-at-the-end-of-the-contract)

[C.5.2.3 Workload Closeout Risk Management Plan (Option that may be
exercised at the End of the Contract)
22](#workload-closeout-risk-management-plan-option-that-may-be-exercised-at-the-end-of-the-contract)

[C.5.2.4 Accounts Receivable Reconciliation (Option that may be
exercised at the End of the Contract)
22](#accounts-receivable-reconciliation-option-that-may-be-exercised-at-the-end-of-the-contract)

[C.5.2.5 Cost Accounting/Audit (Option that may be exercised at the End
of the Contract)
22](#cost-accountingaudit-option-that-may-be-exercised-at-the-end-of-the-contract)

[C.5.2.6 Provider Cost Reports and Appeals (Option that may be exercised
at the End of the Contract)
23](#provider-cost-reports-and-appeals-option-that-may-be-exercised-at-the-end-of-the-contract)

[C.5.3 Infrastructure Requirements 23](#infrastructure-requirements)

[C.5.3.1 Enterprise Data Center 23](#enterprise-data-center)

[C.5.3.1.1 Local Hardware and Software Requirements
24](#local-hardware-and-software-requirements)

[C.5.3.1.1.1 COTS 24](#cots)

[C.5.3.1.1.2 Electronic Claims Retention
25](#electronic-claims-retention)

[C.5.3.2 Telecommunications 25](#telecommunications)

[C.5.3.2.1 Telecommunications for Electronic Data Interchange
26](#telecommunications-for-electronic-data-interchange)

[C.5.3.2.1.1 Electronic Data Interchange Enrollment Form
26](#electronic-data-interchange-enrollment-form)

[C.5.3.2.1.2 Receipt of Electronic Data Interchange Transactions
27](#receipt-of-electronic-data-interchange-transactions)

[C.5.3.2.1.3 Sending Electronic Data Interchange Transactions
27](#sending-electronic-data-interchange-transactions)

[C.5.3.2.1.4 Automated Clearing House transactions
27](#automated-clearing-house-transactions)

[C.5.3.2.1.5 Direct Data Entry Capability
27](#direct-data-entry-capability)

[C.5.3.2.2 Testing 28](#testing)

[C.5.3.2.2.1 Initial Edits 28](#initial-edits)

[C.5.3.2.3 Electronic Data Interchange Help Desk
29](#electronic-data-interchange-help-desk)

[C.5.3.2.4 Electronic Funds Transfer EFT Forms
30](#electronic-funds-transfer-eft-forms)

[C.5.3.2.4.1 Network Service Agreements 30](#network-service-agreements)

[C.5.3.2.5 HIPAA Code Set Updates 30](#hipaa-code-set-updates)

[C.5.3.3 Telephone Service 30](#telephone-service)

[C.5.3.4 CMS Audits and Reviews 30](#cms-audits-and-reviews)

[C.5.4 Administrative Requirements 31](#administrative-requirements)

[C.5.4.1 Key Personnel 31](#key-personnel)

[C.5.4.1.1 Project Manager 31](#project-manager)

[C.5.4.1.2 Claims Processing Manager 31](#claims-processing-manager)

[C.5.4.1.3 Chief Financial Officer 31](#chief-financial-officer)

[C.5.4.1.4 Compliance Officer 32](#compliance-officer)

[C.5.4.1.5 Program Safeguard Contractor Liaison
32](#program-safeguard-contractor-liaison)

[C.5.4.1.6 Chief Information Officer 33](#chief-information-officer)

[C.5.4.1.7 Systems Security Officer 33](#systems-security-officer)

[C.5.4.1.8 Implementation Project Director
34](#implementation-project-director)

[C.5.4.1.9 Provider Customer Service Program Manager
34](#provider-customer-service-program-manager)

[C.5.4.1.10 Contract Administrator 34](#contract-administrator)

[C.5.4.1.11 Contractor Medical Director
35](#contractor-medical-director)

[C.5.4.1.12 Audit and Reimbursement Manager/Director
35](#audit-and-reimbursement-managerdirector)

[C.5.4.2 Background Checks 36](#background-checks)

[C.5.4.2.1 Reserved 37](#reserved)

[C.5.4.3 Security 37](#security)

[C.5.4.3.1 Certification by Chief Information Officer for Compliance
with CMS Systems Security Requirements
37](#certification-by-chief-information-officer-for-compliance-with-cms-systems-security-requirements)

[C.5.4.3.2 Administer Security Program 37](#administer-security-program)

[C.5.4.3.3 Access to Systems 38](#access-to-systems)

[C.5.4.3.3.1 Data Use Agreements 38](#data-use-agreements)

[C.5.4.3.3.2 Other Systems Access Requirements
39](#other-systems-access-requirements)

[C.5.4.3.4 Correct Deficiencies 39](#correct-deficiencies)

[C.5.4.3.4.1 Corrective Action Attestation
40](#corrective-action-attestation)

[C.5.4.3.5 Security Review and Verification
40](#security-review-and-verification)

[C.5.4.4 Quality Control and Improvement
40](#quality-control-and-improvement)

[C.5.4.4.1 Quality Control Program 40](#quality-control-program)

[C.5.4.4.2 Quality Improvement Plan 41](#quality-improvement-plan)

[C.5.4.4.3 Continuous Quality Improvement
41](#continuous-quality-improvement)

[C.5.4.4.4 Contractor's Internal Education
42](#contractors-internal-education)

[C.5.4.5 Public Relations 42](#public-relations)

[C.5.4.5.1 Medicare Beneficiary Ombudsman
43](#medicare-beneficiary-ombudsman)

[C.5.4.6 Responses to Congressional Inquiries
43](#responses-to-congressional-inquiries)

[C.5.4.7 Participation in Conferences, Meetings, and Work Groups
43](#participation-in-conferences-meetings-and-work-groups)

[C.5.4.7.1 Participation in Conferences
43](#participation-in-conferences)

[C.5.4.7.1.1 Chief Financial Officer Financial Reporting Conference
44](#chief-financial-officer-financial-reporting-conference)

[C.5.4.7.2 Participation in Meetings and Work Groups
44](#participation-in-meetings-and-work-groups)

[C.5.4.7.3 Support Income Tax Reporting
45](#support-income-tax-reporting)

[C.5.4.8 Participation in Change Management Process
45](#participation-in-change-management-process)

[C.5.4.8.1 Review and Comment on Draft Change Requests
47](#review-and-comment-on-draft-change-requests)

[C.5.4.8.2 Early Involvement 48](#early-involvement)

[C.5.4.8.3 Successful Implementation of Change Requests
49](#successful-implementation-of-change-requests)

[C.5.4.8.3.1 Walkthroughs 50](#walkthroughs)

[C.5.4.8.4 Participation in Testing Changes to Systems
51](#participation-in-testing-changes-to-systems)

[C.5.4.8.5 Successful Post-Implementation Operation
51](#successful-post-implementation-operation)

[C.5.4.9 Business Continuity Planning and Disaster Recovery
52](#business-continuity-planning-and-disaster-recovery)

[C.5.4.10 Internal Control 52](#internal-control)

[C.5.4.10.1 Written Policies and Procedures
52](#written-policies-and-procedures)

[C.5.4.10.2 Attestation 53](#attestation)

[C.5.4.10.3 Correcting Internal Control Deficiencies
53](#correcting-internal-control-deficiencies)

[C.5.4.10.4 Statement on Auditing Standards No. 70 Audit
53](#statement-on-auditing-standards-no.-70-audit)

[C.5.4.11 Compliance Program 53](#compliance-program)

[C.5.4.12 Chain Provider Organizations
54](#chain-provider-organizations)

[C.5.5 Provider Enrollment 54](#provider-enrollment)

[C.5.5.1 Process Initial Enrollment Applications
55](#process-initial-enrollment-applications)

[C.5.5.2 Process Changes, Updates, Reassignments or Corrections
55](#process-changes-updates-reassignments-or-corrections)

[C.5.5.3 Revocations 56](#revocations)

[C.5.5.4 Provider Enrollment Appeals 56](#provider-enrollment-appeals)

[C.5.5.5 Maintain State-Specific Licensure/Certification Information
56](#maintain-state-specific-licensurecertification-information)

[C.5.5.6 Participating Physician Program Management
57](#participating-physician-program-management)

[C.5.6 Local Coverage Determinations 57](#local-coverage-determinations)

[C.5.6.1 Contractor Advisory Committee
58](#contractor-advisory-committee)

[C.5.7 Provider Customer Service Program
58](#provider-customer-service-program)

[C.5.7.1 Provider Outreach and Education
58](#provider-outreach-and-education)

[C.5.7.1.1 Data Analysis 60](#data-analysis)

[C.5.7.1.2 Provider Outreach and Education Advisory Group
60](#provider-outreach-and-education-advisory-group)

[C.5.7.1.3 "Ask-the-Contractor" Teleconferences
60](#ask-the-contractor-teleconferences)

[C.5.7.1.4 Provider Organization Partnerships
60](#provider-organization-partnerships)

[C.5.7.1.5 Promotion of Internal Communication and Development of
Provider Education Needs
60](#promotion-of-internal-communication-and-development-of-provider-education-needs)

[C.5.7.1.6 Bulletin/Newsletter Publication
60](#bulletinnewsletter-publication)

[C.5.7.1.7 Provider Service Plan 61](#provider-service-plan)

[C.5.7.1.8 Education Activity Report 61](#education-activity-report)

[C.5.7.2 Provider Contact Center 61](#provider-contact-center)

[C.5.7.2.1 Telephone Inquiries 62](#telephone-inquiries)

[C.5.7.2.2 Written Inquiries 62](#written-inquiries)

[C.5.7.2.3 Provider Relations Research Specialists
63](#provider-relations-research-specialists)

[C.5.7.2.3.1 Responding to Complex Beneficiary Inquiries
63](#responding-to-complex-beneficiary-inquiries)

[C.5.7.2.4 Inquiry Tracking System 65](#inquiry-tracking-system)

[C.5.7.3 Provider Self-Service Technology
65](#provider-self-service-technology)

[C.5.7.3.1 Interactive Voice Response 65](#interactive-voice-response)

[C.5.7.3.2 Web Technology 65](#web-technology)

[C.5.7.3.3 Provider Listserv 65](#provider-listserv)

[C.5.7.3.4 Provider Customer Service Program Staff Training
66](#provider-customer-service-program-staff-training)

[C.5.8 Claims Processing 67](#claims-processing)

[C.5.8.1 Standard Paper Remittance Advice Transactions
68](#standard-paper-remittance-advice-transactions)

[C.5.8.1.1 Direct Data Entry Support 68](#direct-data-entry-support)

[C.5.8.2 General Claims Processing 69](#general-claims-processing)

[C.5.8.2.1 Communication of Claims Processing Problems
70](#communication-of-claims-processing-problems)

[C.5.8.2.2 Resolution of Common Working File Rejected Claims Involving
another Medicare Administrative Contractor
70](#resolution-of-common-working-file-rejected-claims-involving-another-medicare-administrative-contractor)

[C.5.8.2.3 Resolution of Claims Transaction Replies from Common Working
File
71](#resolution-of-claims-transaction-replies-from-common-working-file)

[C.5.8.2.4 Resolution of Unsolicited Responses from Common Working File
71](#resolution-of-unsolicited-responses-from-common-working-file)

[C.5.8.2.4.1 Medicare Secondary Payer Claim with Complete Primary Payer
Notification of Benefits Paid: Explanation of Benefit, Remittance
Advice, or Such Other Acceptable Notice: Update Common Working File
71](#medicare-secondary-payer-claim-with-complete-primary-payer-notification-of-benefits-paid-explanation-of-benefit-remittance-advice-or-such-other-acceptable-notice-update-common-working-file)

[C.5.8.2.4.2 Identification of Potential MSP Existence
71](#identification-of-potential-msp-existence)

[C.5.8.2.5 Payment of Claims outside Common Working File
72](#payment-of-claims-outside-common-working-file)

[C.5.8.2.6 Handling of Medicare Advantage Claims
72](#handling-of-medicare-advantage-claims)

[C.5.8.2.6.1 Medicare Advantage Claims for Hospice Care
73](#medicare-advantage-claims-for-hospice-care)

[C.5.8.2.6.2 Medicare Advantage Claims for National Coverage Decision or
Legislative Change in Benefits
73](#medicare-advantage-claims-for-national-coverage-decision-or-legislative-change-in-benefits)

[C.5.8.2.7 Local System Edits 73](#local-system-edits)

[C.5.8.3 Development of Suspended Claims
73](#development-of-suspended-claims)

[C.5.8.4 Back-End Processing 74](#back-end-processing)

[C.5.8.4.1 Remittance Advice and Medicare Summary Notices
74](#remittance-advice-and-medicare-summary-notices)

[C.5.8.4.2 Coordination of Benefits Flat Files
74](#coordination-of-benefits-flat-files)

[C.5.8.4.3 Generate and Mail Claims Processing Documents
75](#generate-and-mail-claims-processing-documents)

[C.5.8.4.4 The Do Not Forward Initiative
75](#the-do-not-forward-initiative)

[C.5.8.5 Opt-Out Payment Provisions 75](#opt-out-payment-provisions)

[C.5.8.6 Physician Incentive Payments for Services in Health
Professional Shortage Area and Physician Scarcity Area
76](#physician-incentive-payments-for-services-in-health-professional-shortage-area-and-physician-scarcity-area)

[C.5.8.7 Participating Competitive Acquisition Program Physician Claims
for Administering Part B Drugs
76](#participating-competitive-acquisition-program-physician-claims-for-administering-part-b-drugs)

[C.5.8.7.1 Listing of Competitive Acquisition Program Participating
Physicians and Practitioners
76](#listing-of-competitive-acquisition-program-participating-physicians-and-practitioners)

[C.5.8.7.2 Monitoring Competitive Acquisition Program Physicians and
Practitioner Claims for Administering Part B Drugs
76](#monitoring-competitive-acquisition-program-physicians-and-practitioner-claims-for-administering-part-b-drugs)

[C.5.9 Reopening of Medicare Initial Claims Determinations
77](#reopening-of-medicare-initial-claims-determinations)

[C.5.9.1 Reopening 77](#reopening)

[C.5.9.1.1 Reopenings on the Contractor's Own Motion
77](#reopenings-on-the-contractors-own-motion)

[C.5.9.1.2 Reopenings on the Request of Party
77](#reopenings-on-the-request-of-party)

[C.5.9.1.2.1 Redetermination Resolutions for Clerical Errors
77](#redetermination-resolutions-for-clerical-errors)

[C.5.9.1.2.2 Documentation Requests 78](#documentation-requests)

[C.5.9.1.3 Reopening Appeal Cases 78](#reopening-appeal-cases)

[C.5.9.2 Establishing Good Cause for Reopening Initial Determinations
and Redeterminations
78](#establishing-good-cause-for-reopening-initial-determinations-and-redeterminations)

[C.5.9.3 Reopening Decisions 78](#reopening-decisions)

[C.5.10 Appeals of Medicare Initial Claims Determinations
79](#appeals-of-medicare-initial-claims-determinations)

[C.5.10.1 Redetermination Requests 79](#redetermination-requests)

[C.5.10.1.1 Controlling Receipt of Correspondence
79](#controlling-receipt-of-correspondence)

[C.5.10.1.2 Document Imaging and Indexing
80](#document-imaging-and-indexing)

[C.5.10.1.3 Acceptance of Valid Redetermination Requests
80](#acceptance-of-valid-redetermination-requests)

[C.5.10.1.4 Misdirected Redetermination Requests
81](#misdirected-redetermination-requests)

[C.5.10.1.5 Granting of Extensions for Late Redetermination Requests and
Determination of Good Cause
81](#granting-of-extensions-for-late-redetermination-requests-and-determination-of-good-cause)

[C.5.10.1.6 Consolidation of Multiple Requests for Same Claim
81](#consolidation-of-multiple-requests-for-same-claim)

[C.5.10.1.7 Withdrawals and Eligibility-Based Dismissals
82](#withdrawals-and-eligibility-based-dismissals)

[C.5.10.1.8 Assistance to Beneficiary 83](#assistance-to-beneficiary)

[C.5.10.1.9 Conduct of the Redetermination
83](#conduct-of-the-redetermination)

[C.5.10.1.10 Documenting the Redetermination Case Files
83](#documenting-the-redetermination-case-files)

[C.5.10.1.11 Notice of Redetermination 83](#notice-of-redetermination)

[C.5.10.2 Appeal Decision Effectuation
84](#appeal-decision-effectuation)

[C.5.10.3 Monthly Statistical Report on Appeals Activity (CMS -- 2592)
84](#monthly-statistical-report-on-appeals-activity-cms-2592)

[C.5.11 Financial Management of Trust Fund Dollars
84](#financial-management-of-trust-fund-dollars)

[C.5.11.1 Use of Trust Fund 85](#use-of-trust-fund)

[C.5.11.1.1 Certification of Chief Financial Officer for Medicare
Operations
85](#certification-of-chief-financial-officer-for-medicare-operations)

[C.5.11.1.2 Validation of Financial Data
86](#validation-of-financial-data)

[C.5.11.1.3 Resolution of Financial Deficiencies
86](#resolution-of-financial-deficiencies)

[C.5.11.2 Banking Relations 86](#banking-relations)

[C.5.11.2.1 Time Account Balance 87](#time-account-balance)

[C.5.11.2.2 Benefits Account 87](#benefits-account)

[C.5.11.2.3 Account Reconciliation 87](#account-reconciliation)

[C.5.11.2.4 Letter-of-Credit Limitation
88](#letter-of-credit-limitation)

[C.5.11.3 Cost Reporting and Reimbursement Payment Policy
88](#cost-reporting-and-reimbursement-payment-policy)

[C.5.11.3.1 The Medicare Cost Report 88](#the-medicare-cost-report)

[C.5.11.3.1.1 CMS Cost Report and Reimbursement Inquiries
89](#cms-cost-report-and-reimbursement-inquiries)

[C.5.11.3.2 Audit of Institutional Provider Cost Reports
89](#audit-of-institutional-provider-cost-reports)

[C.5.11.3.2.1 Cost Report Reminder Letter
89](#cost-report-reminder-letter)

[C.5.11.3.2.2 Cost Report Acceptance 89](#cost-report-acceptance)

[C.5.11.3.2.3 Late Cost Reports 90](#late-cost-reports)

[C.5.11.3.2.4 Rejected Cost Reports 90](#rejected-cost-reports)

[C.5.11.3.2.5 Tentative Settlements 90](#tentative-settlements)

[C.5.11.3.2.6 Desk Reviews of Providers' Cost Reports
90](#desk-reviews-of-providers-cost-reports)

[C.5.11.3.2.7 Wage Index 91](#wage-index)

[C.5.11.3.2.8 Cost Report Audits 91](#cost-report-audits)

[C.5.11.3.2.9 Audit Plan 91](#audit-plan)

[C.5.11.3.2.10 Final Settlement 91](#final-settlement)

[C.5.11.3.2.11 Cost Report Reopenings 92](#cost-report-reopenings)

[C.5.11.3.2.12 Reopening Notices or Denials
92](#reopening-notices-or-denials)

[C.5.11.3.2.13 Provider Change in Contractors
93](#provider-change-in-contractors)

[C.5.11.3.2.14 Audits of Home Office Cost Statements
93](#audits-of-home-office-cost-statements)

[C.5.11.3.2.15 Provider Permanent Files 93](#provider-permanent-files)

[C.5.11.3.2.16 Cost Report Hearings 93](#cost-report-hearings)

[C.5.11.3.2.17 Cost Report Appeals: Provider Reimbursement Review Board
94](#cost-report-appeals-provider-reimbursement-review-board)

[C.5.11.3.2.18 Cost Report Appeals: Court Hearing / Settlements
94](#cost-report-appeals-court-hearing-settlements)

[C.5.11.3.2.19 Cost Report Appeals: Final Decisions
94](#cost-report-appeals-final-decisions)

[C.5.11.3.2.20 Requests for Cost Report, Audit and Reimbursement
Information
95](#requests-for-cost-report-audit-and-reimbursement-information)

[C.5.11.3.3 Institutional Provider Reimbursement
95](#institutional-provider-reimbursement)

[C.5.11.3.3.1 Provider-Specific File Correctness
95](#provider-specific-file-correctness)

[C.5.11.3.3.2 Provider Statistical and Reimbursement Report
96](#provider-statistical-and-reimbursement-report)

[C.5.11.3.3.3 System for Tracking Audit and Reimbursement System
96](#system-for-tracking-audit-and-reimbursement-system)

[C.5.11.3.3.4 Hospice Cap 96](#hospice-cap)

[C.5.11.3.3.5 Target Limits: Tax Equity and Fiscal Responsibility Act
96](#target-limits-tax-equity-and-fiscal-responsibility-act)

[C.5.11.3.3.6 Exception Requests: End-Stage Renal Disease
97](#exception-requests-end-stage-renal-disease)

[C.5.11.3.3.7 Exception Requests: Tax Equity and Fiscal Responsibility
Act 97](#exception-requests-tax-equity-and-fiscal-responsibility-act)

[C.5.11.3.3.8 Health Care Provider Cost Report Information System
97](#health-care-provider-cost-report-information-system)

[C.5.11.3.3.9 Provider-Based Determinations
98](#provider-based-determinations)

[C.5.11.3.3.10 Special Payment Status 98](#special-payment-status)

[C.5.11.3.3.11 Interns and Residents Information System
98](#interns-and-residents-information-system)

[C.5.11.3.3.12 Institutional Provider Reimbursement - Reimbursement for
Federally Qualified Health Centers and Rural Health Clinics
99](#institutional-provider-reimbursement---reimbursement-for-federally-qualified-health-centers-and-rural-health-clinics)

[C.5.11.3.3.13 Medicare Supplemental Payments for FQHCs under contract
with Medicare Advantage Plans
99](#medicare-supplemental-payments-for-fqhcs-under-contract-with-medicare-advantage-plans)

[C.5.11.4 Non-Medicare Secondary Payer Overpayment
99](#non-medicare-secondary-payer-overpayment)

[C.5.11.4.1 Identification of Overpayment Cause
100](#identification-of-overpayment-cause)

[C.5.11.4.2 Applications for Extended Repayment Plan
100](#applications-for-extended-repayment-plan)

[C.5.11.5 Non-Medicare Secondary Payer Debt Collection
100](#non-medicare-secondary-payer-debt-collection)

[C.5.11.6 Non-Medicare Secondary Payer Debt Referral
100](#non-medicare-secondary-payer-debt-referral)

[C.5.11.6.1 Non-Medicare Secondary Payer Debt Collection Improvement Act
Intent to Refer Letter
101](#non-medicare-secondary-payer-debt-collection-improvement-act-intent-to-refer-letter)

[C.5.11.6.2 Non-Medicare Secondary Payer Debt Referral Inquiries
101](#non-medicare-secondary-payer-debt-referral-inquiries)

[C.5.11.6.3 Debt Collection System Database
101](#debt-collection-system-database)

[C.5.11.6.4 Posting of Debts Collected by Treasury
101](#posting-of-debts-collected-by-treasury)

[C.5.11.7 Refund Request 101](#refund-request)

[C.5.11.7.1 Unsolicited/Voluntary Refunds
101](#unsolicitedvoluntary-refunds)

[C.5.11.8 Overpayment Related to Bankruptcy
102](#overpayment-related-to-bankruptcy)

[C.5.11.8.1 Administrative Freeze Payments
103](#administrative-freeze-payments)

[C.5.11.8.2 Closed Bankruptcy Case 103](#closed-bankruptcy-case)

[C.5.11.9 Financial Reporting and Accounting
103](#financial-reporting-and-accounting)

[C.5.11.9.1 Accounts Receivable Trend Analyses
104](#accounts-receivable-trend-analyses)

[C.5.11.9.2 Financial Reporting Audits/Reviews
105](#financial-reporting-auditsreviews)

[C.5.12 Medical Review 105](#medical-review)

[C.5.12.1 Development of Medical Review Strategy
105](#development-of-medical-review-strategy)

[C.5.12.1.1 Medical Review Data: Data Analysis
106](#medical-review-data-data-analysis)

[C.5.12.1.2 Medical Review Data: Edit Effectiveness
106](#medical-review-data-edit-effectiveness)

[C.5.12.1.3 Medical Review Data: Probe Reviews
106](#medical-review-data-probe-reviews)

[C.5.12.1.4 Provider Tracking 107](#provider-tracking)

[C.5.12.1.5 Medical Review of Claims 107](#medical-review-of-claims)

[C.5.13 Coordination with Program Safeguard Contractors
107](#coordination-with-program-safeguard-contractors)

[C.5.13.1 Support of Benefit Integrity
108](#support-of-benefit-integrity)

[C.5.13.2 Support of Comprehensive Error Rate Testing
108](#support-of-comprehensive-error-rate-testing)

[C.5.14 Medicare Secondary Payer 108](#medicare-secondary-payer)

[C.5.14.1 Implementation of Medicare Secondary Payer Operations
109](#implementation-of-medicare-secondary-payer-operations)

[C.5.14.2 Electronic Correspondence Referral System Status Inquiries
109](#electronic-correspondence-referral-system-status-inquiries)

[C.5.14.3 Identification and Adjudication of Medicare Secondary Payer
Claims and Application of Benefits and Processing Formula
110](#identification-and-adjudication-of-medicare-secondary-payer-claims-and-application-of-benefits-and-processing-formula)

[C.5.14.3.1 Medicare Secondary Payer Claims Payment Determinations
110](#medicare-secondary-payer-claims-payment-determinations)

[C.5.14.3.2 Medicare Secondary Payer Claims Adjudication and Validation
110](#medicare-secondary-payer-claims-adjudication-and-validation)

[C.5.14.3.3 Medicare Secondary Payer Claims Inquiries
110](#medicare-secondary-payer-claims-inquiries)

[C.5.14.4 Transfer of Documentation and Phone Calls to the Coordination
of Benefits Contractor
110](#transfer-of-documentation-and-phone-calls-to-the-coordination-of-benefits-contractor)

[C.5.14.5 Medicare Secondary Payer Hospital Audits
111](#medicare-secondary-payer-hospital-audits)

[C.5.14.6 Medicare Secondary Payer Post Payment Recovery
111](#medicare-secondary-payer-post-payment-recovery)

[C.5.14.6.1 Duplicate Primary Payments 111](#duplicate-primary-payments)

[C.5.14.6.2 Inquiries Specific to Debt Collection Efforts for Providers,
Physicians and other Suppliers
112](#inquiries-specific-to-debt-collection-efforts-for-providers-physicians-and-other-suppliers)

[C.5.14.6.3 Debt Collection Referral Activities for Providers,
Physicians and other Suppliers
112](#debt-collection-referral-activities-for-providers-physicians-and-other-suppliers)

[C.5.14.6.4 Financial Reporting 113](#financial-reporting)

[C.5.14.6.5 Misrouted Medicare Secondary Payer Recovery Checks
113](#misrouted-medicare-secondary-payer-recovery-checks)

[C.5.14.6.6 Misrouted Medicare Secondary Payer Recovery Correspondence
114](#misrouted-medicare-secondary-payer-recovery-correspondence)

[C.5.15 Provider Oversight 114](#provider-oversight)

[C.5.15.1 Review of Provider Billing Records
114](#review-of-provider-billing-records)

[C.5.15.2 Review of Comprehensive Outpatient Rehabilitation Facility
Billing Records
114](#review-of-comprehensive-outpatient-rehabilitation-facility-billing-records)

[C.5.15.3 Review of Inpatient Rehabilitation Facilities and Critical
Access Hospitals' Rehabilitation Distinct Part Units
115](#review-of-inpatient-rehabilitation-facilities-and-critical-access-hospitals-rehabilitation-distinct-part-units)

[C.5.15.4 Conduct of Site Visits 115](#conduct-of-site-visits)

[C.5.16 Coordinated Care Benefits Demonstration
115](#coordinated-care-benefits-demonstration)

[C.5.17 End Stage Renal Disease Clinical Trial
116](#end-stage-renal-disease-clinical-trial)

[C.5.18 Freestanding Rural Health Clinics
116](#freestanding-rural-health-clinics)

[C.5.18.1 Education Materials 116](#education-materials)

[C.5.19 Federally Qualified Health Centers
117](#federally-qualified-health-centers)

[C.5.19.1 Education Materials 117](#education-materials-1)

[C.5.20 Foreign Claims 117](#foreign-claims)

[C.5.21 Laboratory Competitive Bidding Demonstration
117](#laboratory-competitive-bidding-demonstration)

[C.5.22 Shipboard/Foreign Travel Services
118](#shipboardforeign-travel-services)

[C.5.23 Program Management Office 118](#program-management-office)

[C.5.23.1 Post-Award Meeting 119](#post-award-meeting)

[C.5.23.2 Project Management Plan 119](#project-management-plan)

[C.5.23.3 Cost Management 119](#cost-management)

[C.5.23.4 Monthly Status Report and Meeting
119](#monthly-status-report-and-meeting)

[C.5.23.5 Ad Hoc Reporting 120](#ad-hoc-reporting)

[C.5.23.6 CMS ART 120](#cms-art)

[C.5.23.7 CAFM 121](#cafm)

[C.5.23.8 CROWD 121](#crowd)

[C.6 Interface Requirements 122](#interface-requirements)

[C.6.1 Successful Collaboration with Entities Requiring Joint Operating
Agreements
122](#successful-collaboration-with-entities-requiring-joint-operating-agreements)

[C.6.1.1 Joint Operating Agreement: Quality Improvement Organization
123](#joint-operating-agreement-quality-improvement-organization)

[C.6.1.1.1 Referrals to Quality Improvement Organization
123](#referrals-to-quality-improvement-organization)

[C.6.1.1.2 Referrals from Quality Improvement Organization
124](#referrals-from-quality-improvement-organization)

[C.6.1.1.2.1 Payment Adjustments 124](#payment-adjustments)

[C.6.1.1.2.2 Billing Errors 124](#billing-errors)

[C.6.1.2 Joint Operating Agreement: Qualified Independent Contractor
124](#joint-operating-agreement-qualified-independent-contractor)

[C.6.1.2.1 Supply of Appeals Case Files
124](#supply-of-appeals-case-files)

[C.6.1.2.2 Misrouted Requests for Reconsideration
125](#misrouted-requests-for-reconsideration)

[C.6.1.2.3 Preparation of Case Files 125](#preparation-of-case-files)

[C.6.1.3 Joint Operating Agreement: Medicare Secondary Payer Recovery
Contractor
125](#joint-operating-agreement-medicare-secondary-payer-recovery-contractor)

[C.6.1.4 Joint Operating Agreement: Beneficiary Contact Center
125](#joint-operating-agreement-beneficiary-contact-center)

[C.6.1.5 Joint Operating Agreement: Coordination of Benefits Contractor
126](#joint-operating-agreement-coordination-of-benefits-contractor)

[C.6.2 Successful Collaboration and Coordination with Other Internal and
External Entities
127](#successful-collaboration-and-coordination-with-other-internal-and-external-entities)

[C.6.2.1 State Agencies Responsible for Licensing Institutional
Providers (e.g., Survey and Certification, Licensing Authorities)
127](#state-agencies-responsible-for-licensing-institutional-providers-e.g.-survey-and-certification-licensing-authorities)

[C.6.2.2 Investigative Agencies 127](#investigative-agencies)

[C.6.2.2.1 Access to Files, Records, Data, and Personnel
128](#access-to-files-records-data-and-personnel)

[C.6.2.2.2 Search Warrants 128](#search-warrants)

[C.6.2.3 CMS Field Offices 128](#cms-field-offices)

[C.6.2.4 Medicare Advantage Plans, Prescription Drug Plans, and
Nontraditional Fee-for-Service Entities
128](#medicare-advantage-plans-prescription-drug-plans-and-nontraditional-fee-for-service-entities)

[C.6.2.5 Other Medicare Administrative Contractors
129](#other-medicare-administrative-contractors)

[C.6.2.6 Professional Associations 129](#professional-associations)

[C.6.2.7 Infrastructure Service Providers
129](#infrastructure-service-providers)

[C.6.2.8 Bank Interface 129](#bank-interface)

[C.6.2.9 Provider Reimbursement Review Board
129](#provider-reimbursement-review-board)

[C.7 Jurisdiction-Specific Requirements
130](#jurisdiction-specific-requirements-1)

[C.7.1 Centralized Billing for Mass Immunizers -- Jurisdiction Four
130](#centralized-billing-for-mass-immunizers-jurisdiction-four)

[C.7.2 Indian Health Services -- Jurisdiction Four
130](#indian-health-services-jurisdiction-four)

[C.7.2.1 Claims Processing 131](#claims-processing-1)

[C.7.2.2 Provider Relations 131](#provider-relations)

[C.7.2.2.1 Provider Inquiries 132](#provider-inquiries)

[C.7.2.2.2 Websites and Listserv 132](#websites-and-listserv)

[C.7.2.2.3 Bulletins / Newsletters 132](#bulletins-newsletters)

[C.7.2.2.4 Indian Health Services and Tribal Organizations Education
133](#indian-health-services-and-tribal-organizations-education)

[C.7.3 Low Vision Demonstration -- Jurisdiction Five
133](#low-vision-demonstration-jurisdiction-five)

[C.7.4 Rural Community Hospital Demonstration - Jurisdictions Four and
Five
134](#rural-community-hospital-demonstration---jurisdictions-four-and-five)

[C.7.5 Veterans Affairs Medicare Equivalent Remittance Advice Project-
Jurisdiction Four
134](#veterans-affairs-medicare-equivalent-remittance-advice-project--jurisdiction-four)

[C.7.6 Chiropractic Services Demonstration -- Jurisdictions Four and
Five
135](#chiropractic-services-demonstration-jurisdictions-four-and-five)

# Scope

The Contractor, as an independent Contractor and not as an agent of the
government, shall furnish all the necessary services, qualified
personnel, material, equipment, and facilities, not otherwise provided
by the government, as needed to perform the work described in this
Statement of Work (SOW).

The Contractor shall perform all Medicare Administrative Contractor
(MAC) functions specified in this SOW and outlined in both the
Internet-Only-Manuals (IOMs,
<http://www.cms.hhs.gov/Manuals/IOM/list.asp#TopOfPage>) and Paper-Based
Manuals. For purposes of this contract, when differences or conflicts
occur, **this SOW shall take precedence over the IOMs** unless otherwise
specified. The Contractor shall contact the Contracting Officer and the
Project Officer if budgetary concerns occur because of this conflict.
The Contractor is advised that any and all references in the SOW
(including manuals, IOMs, etc.) to "RO-Regional Office" shall be
replaced with "CO-Contracting Officer." Attachment J-5 contains
definitions of all abbreviations used in this SOW.

## Purpose of Contract

The purpose of this contract is to obtain a Medicare Administrative
Contractor (hereinafter, referred to as "the Contractor" or "MAC") to
provide specified health insurance benefit administration services,
including Medicare claims processing and payment services, in support of
the Medicare fee-for-service (FFS) program. The Contractor will perform
its responsibilities under the direction of the Centers for Medicare &
Medicaid Services (CMS).

Under this contract, the Contractor will perform numerous functions to
support health care services for Medicare beneficiaries, which include
performing claims-related activities and establishing relationships with
providers of health care services, both institutional and professional,
for a defined geographic area or "jurisdiction." The Contractor will
perform the requirements of this contract in accordance with applicable
laws, regulations, Medicare manuals, and CMS requirements to ensure the
financial integrity of the Medicare program. The Medicare program's
legal, policy, and operating environment is complex, and the Contractor
will utilize or interact with certain CMS-required payment schedules,
systems, equipment, and operational capabilities in the performance of
its functions. Further, the Contractor will coordinate its activities
not only with the CMS, but also with a broad range of agencies (at the
federal, state, and local levels of government), other CMS partners and
Contractors, and a diverse range of stakeholders within the health care
system of the United States.

The Contractor will receive and control Medicare claims from
institutional and professional providers, suppliers, and beneficiaries
within its jurisdiction and will perform standard or required editing on
these claims to determine whether the claims are complete and should be
paid. In addition, the Contractor will calculate Medicare payment
amounts and arrange for remittance of these payments to the appropriate
party. The Contractor also will enroll new providers; conduct
redeterminations on appeals of claims; operate a Provider Customer
Service Program that educates providers about the Medicare program and
responds to provider telephone and written inquiries; respond to complex
inquiries from Beneficiary Contact Centers (BCCs); and make coverage
decisions for new procedures and devices in local areas. The Contractor
also will conduct a variety of different provider services, such as
enrolling new providers in the program, answering written inquiries, and
educating providers on Medicare's rules, regulations, and billing
procedures. In addition, the Contractor will staff CMS' Medicare
provider toll-free lines to answer a wide range of provider questions
for its jurisdiction.

The mission of CMS is to ensure health care security for beneficiaries.
This contract specifically applies to that mission by fostering
excellence in the design and administration of CMS' programs.

## Background

The Medicare program is an integral component of the federal
government's commitment to the health and welfare of the American
people, which includes the Social Security system, the Medicaid program
(which is primarily administered by the states), and other programs. The
Medicare program provides affordable health insurance to (1) eligible
individuals aged 65 and over; (2) certain individuals, and their
dependents, eligible for disability benefits under the Social Security
system; and (3) individuals with acute kidney failure (end-stage renal
disease, or ESRD). Approximately 42 million people were enrolled for
Medicare coverage in FY2004.

Nearly all Medicare beneficiaries may access their insurance benefits
through one of two health care delivery systems:

-   First, in all areas of the country, a beneficiary may enroll in the
    traditional Medicare program (the Medicare FFS program) under which
    benefits are largely provided in keeping with an indemnity insurance
    model. That is, the beneficiary chooses his/her health care
    providers, the providers bill the appropriate Medicare claims
    administrator for their services, and the claims administrator pays
    the provider based on the eligibility, coverage, and payment rules
    of the Medicare Hospital Insurance (HI) and Supplementary Medical
    Insurance (SMI) programs. The federal government bears all financial
    (underwriting) risk for the cost of program benefits and develops
    detailed administrative requirements and processes to support the
    claim administration process. This national entitlement program has
    a strong imperative to provide a common level of benefits and
    service in all areas of the country, while maintaining adequate
    flexibility to account for local and regional medical practices.
    More than 87% of all Medicare beneficiaries---or about 36
    million---participate in the traditional Medicare program.

-   Second, in many areas of the country, beneficiaries have the option
    to enroll in one or more privately sponsored Medicare plans under
    the Medicare Advantage (formerly Medicare+ Choice) program. These
    private Medicare plans may organize themselves in keeping with one
    of several health care delivery and payment models (health
    maintenance organizations, preferred provider organizations, etc.).
    These private Medicare plans are required to cover the same basic
    benefits that the traditional Medicare program offers, but they are
    given fairly broad responsibility and latitude to set up their
    internal requirements and processes as they see fit. About 13% of
    Medicare beneficiaries are enrolled in Medicare Advantage.

The recently enacted Medicare Prescription Drug, Improvement and
Modernization Act of 2003 (MMA) includes significant incentives to
increase the participation in Medicare Advantage. However, for the next
decade at least, a significant majority of all Medicare beneficiaries
will likely remain enrolled in the traditional FFS Medicare program. FFS
coverage in the Medicare program consists of two distinct parts: (1) HI,
which also provides coverage for Medicare institutional benefits, and
(2) SMI, which provides coverage for the professional medical services
of physicians and certain other licensed practitioners, as well as
coverage for a variety of other services and items (ambulance, durable
medical equipment, etc.). In common usage, the HI program is known as
"Medicare Part A," although both the Part A and B trust funds are used
to reimburse institutional claims. The SMI program is known as "Medicare
Part B"; only the Medicare Part B trust fund is used to reimburse Part B
claims.

Nearly all Medicare beneficiaries are entitled to receive their Medicare
Part A (HI) without payment of any insurance premium. Beneficiaries must
elect to enroll in Medicare Part B (SMI), for which they must pay a
monthly premium, and nearly all do so. In Fiscal Year (FY) 2004, about
41.2 million individuals were enrolled in both Medicare Part A and Part
B. A relatively small number of beneficiaries were enrolled in Part A
only (2.5 million) or Part B only (0.4 million).

Under Medicare law, the Medicare HI (Part A) benefit is funded through
the HI trust fund. The primary revenue source for the HI trust fund is a
wage tax administered through the Social Security system. The HI trust
fund accumulates a significant balance in excess of the amount needed
for ongoing satisfaction of claims. The trustees of the HI trust fund
include the Secretaries of the Treasury, Labor, and Health and Human
Services. The Social Security Administration (SSA) Commissioner and two
members of the public also serve as trustees of the HI trust fund.

The Medicare SMI (Part B) benefit is administered through the SMI trust
fund. Unlike the HI fund, however, the SMI trust fund does not
accumulate a significant balance in excess of the amount needed for
ongoing satisfaction of claims. In addition to receipts from beneficiary
premiums, the primary revenue source for the SMI trust fund is an annual
congressional appropriation from the Treasury's general revenues. The
trustees for the SMI trust fund are the same as those for the HI trust
fund.

Medicare spending -- both HI and SMI -- is a substantial portion of the
federal government's annual budget and the health care economy of the
United States. In FY2004, total HI spending equated to \$170.6 billion
(offset by \$1.9 billion in premiums), and total SMI spending equated to
\$138.3 billion (offset by premiums of \$31.4 billion).

The CMS relies on a network of contractors to process Medicare claims;
enroll health care providers in the Medicare program and educate them on
Medicare billing requirements; handle claims appeals; and answer
beneficiary and provider inquiries. Fiscal intermediaries (FIs) handle
claims processing and benefit payment functions for institutional
providers under Part A and Part B of the Medicare program; carriers
perform the same functions for professional providers under Part B of
the program.

## Contracting Reform

On December 8, 2003, the President signed into law the MMA (Public Law
108-173). Section 911 of MMA directed implementation of Medicare FFS
Contracting Reform. Medicare Contracting Reform requires that the CMS
use competitive procedures to replace its current FIs and carriers with
a uniform type of administrative entity, referred to as a MAC.

## Roles and Responsibilities

The roles and responsibilities of the parties are outlined below.

### The Centers for Medicare & Medicaid Services

The Medicare program's authorizing statutes charge the Secretary of the
Department of Health and Human Services (DHHS) with administrative
responsibility for the Medicare program. The Secretary has delegated the
program authority for Medicare (both the traditional FFS program and
Medicare Advantage) to the CMS Administrator.

The CMS administers the Medicare program, including formulation and
promulgation of Medicare program policy and guidance, contract
execution, operation and management, maintenance and review of
utilization records, and general Medicare financing. The CMS is the
largest purchaser of health care in the United States and provides
health care coverage to nearly one in four Americans. The CMS' annual
budget places it among the largest businesses in the world; its programs
channel one out of every three dollars in the health care market, and
its policies influence the other two dollars. In FY 2004, CMS
Contractors processed approximately 1.13 billion Medicare claims.

As part of its responsibility to administer the Medicare program, the
CMS manages the work of the Contractors engaged in its day-to-day
operation. This management is accomplished through a variety of avenues
such as periodic conferences on topics of general interest; targeted
sessions with selected subsets of the Contractors; issuance of manual
updates describing changes in coverage, pricing, and eligibility; and
evaluation of the performance of those Contractors within the
description of the work the CMS engages them to do.

#### Business Function Leads and Technical Monitors

Within the CMS, specialists on various Medicare topics shall serve as
Business Function Leads (BFLs) and Technical Monitors (TMs) to assist
the Project Officer and the Contracting Officer in administering the
contract. These BFLs/TMs shall provide technical guidance to the
Contractor on matters within each BFL's/TM's area of responsibility. The
BFL/TM shall consult with the Project Officer on Technical Direction as
necessary. The BFL/TM is not authorized to direct changes to contract
work.

### Medicare Administrative Contractor ("The Contractor")

Section 1861 of the Social Security Act defines the items and services
for which Medicare may pay. It also defines the provider types
recognized by the Medicare program. Attachment J-3, Categories of
Benefits and Provider/Supplier Types for the MAC Contract, briefly lists
each category and provider type. The Contractor is responsible for
handling all the claims identified in Attachment J-3, and related
requirements identified in section C.5 of this SOW, that are within its
jurisdiction, except for the distinct types of claims that are
identified as additional services in section C.7 of this SOW. The MAC is
also responsible for processing Part A claims for Railroad Retirement
Board Beneficiaries. The types of claims identified as additional
services in section C.7 are also mandatory requirements under the
contract.

The complexity of Medicare payment systems and policies and the numbers
of Contractors, providers, and insurers involved in the Medicare FFS
program create vulnerabilities for error. To minimize these
vulnerabilities and reduce the Medicare claims payment error rate, CMS
has made paying claims right, the first time, one of its primary goals.
This means paying the right amount, to legitimate providers, for
Medicare-covered, reasonable and necessary services provided to eligible
beneficiaries. Paying right the first time saves resources required to
recover improper payments and ensures the proper expenditure of valuable
Medicare trust fund dollars.

In the interest of consistency across the Medicare program, during the
performance of this contract, the Contractor is expected to seek and
follow advice from CMS on questions of law and policy as they arise.

Information relating to A/B MAC claims processing, information flows,
interfaces and other supporting processes with "functional Contractors"
can be found in the Concept of Operations document located in Attachment
J-12.

### Unique Requirements for the MAC

Under Title XVIII of the Social Security Act ("the Act"), the CMS
contracted with individual fiscal intermediaries (FIs) and carriers to
perform unique work and tasks beyond the base scope of the FI and
Carrier contracts. These special contract arrangements were for work
that may have affected beneficiaries and/or providers in every state
and/or region.

#### Unique Core Requirements

Under Medicare Contracting Reform, the CMS has decided to include some
of these unique contract tasks within the core work requirements for
each A/B MAC jurisdiction. Table 1 lists the activities that are
incorporated into the core requirements for each A/B MAC jurisdiction.

Table 1: Unique Core Requirements

  -----------------------------------------------------------------------
  SOW Section     Requirement
  --------------- -------------------------------------------------------
  C.5.15          Coordinated Care Benefits Demo (Notice of Enrollment)

  C.5.16          ESRD Clinical Trial

  C.5.17          Freestanding Rural Health Clinics

  C.5.18          Federally Qualified Health Centers

  C.5.19          Foreign Claims

  C.5.20          Laboratory Competitive Bidding Demonstration

  C.5.21          Shipboard / Foreign Travel Services
  -----------------------------------------------------------------------

All bidders should ensure they understand the impact to the functional
requirements of these workloads.

#### Jurisdiction-Specific Requirements

In addition to the requirements described in section C.1.4.2.1, the CMS
has identified requirements for the MACs that are specific to a
jurisdiction. Table 2 lists the requirements that will be incorporated
into select A/B MAC jurisdictions.

Table 2: Jurisdiction-Specific Requirements

  --------------------------------------------------------------------------
  SOW Section  Requirement                                    Jurisdiction
  ------------ ---------------------------------------------- --------------
  C.7.1        Centralized Billing for Mass Immunizers        4

  C.7.2        Indian Health Services                         4

  C.7.3        Low Vision Demonstration                       5

  C.7.4        Rural Community Hospital Demonstration         4 and 5

  C.7.5        Veterans Affairs Medicare Equivalent           4
               Remittance Advice Project                      

  C.7.6        Chiropractic Services Demonstration            4 and 5
  --------------------------------------------------------------------------

# Applicable Documents

The following statutes, regulations, manuals, and documents apply to
this contract.

## Statutes

The Contractor must comply with all applicable laws. The major statute
governing the Medicare program is Title XVIII of the Social Security Act
("the Act"), as amended. The Act and major amendments to the Act are
outlined below. The identified amendments include legislation that
significantly changed the Medicare program, are being implemented, or
significantly affect the scope of work. Congress may pass new
legislation at any time, and the Centers for Medicare & Medicaid
Services (CMS) must act to implement such legislation as timely and
accurately as possible.

### Social Security Act (Public Law 74-271)

The Act was enacted on August 14, 1935, with subsequent amendments. The
Act consists of 20 titles, four of which have been repealed. The
Hospital Insurance (HI) and Supplementary Medical Insurance (SMI)
programs are authorized by Title XVIII of the Act. The vast bulk of the
traditional Medicare program's authorizing law is codified in Parts A, B
and E of Title XVIII. (Part C is primarily devoted to private Medicare
plans, and Part D governs the new Medicare prescription drug benefit.)
Other Medicare-related authorizing statutes are in Titles II and XI of
the Act; other governing provisions are in the Internal Revenue Code and
other statutes.

To the extent that there is no conflicting Medicare requirement, the
administration of the traditional Medicare program is also governed by
numerous statutes pertaining to the general administration of federal
programs. The following are among the general statutory authorities with
broad implications for the traditional Medicare program and the Medicare
Administrative Contractor (MAC) contract:

a.  Acquisition (Competition in Contracting Act, etc.)

b.  Federal Information Security Management Act of 2002 (FISMA)

c.  Government Performance and Results Act (GPRA)

d.  Personnel and civil rights law (Drug-Free Workplace Act, Americans
    with Disability Act)

e.  Privacy and information technology requirements (Privacy Act of
    1974, Information Technology Management Reform Act of 1996).

f.  Rehabilitation Act of 1998 (section 508, Accessibility Standards )

### Medicare Prescription Drug, Improvement and Modernization Act (Public Law 108-173)

On December 8, 2003, the President signed the Medicare Prescription
Drug, Improvement and Modernization Act (MMA) into law. This statute
makes the most sweeping changes in the structure of the Medicare program
since its inception in 1966. The significant changes made by this
statute include the following:

a.  Establishment of a temporary Medicare prescription drug discount
    card program.

b.  Establishment of a permanent Medicare prescription drug program.

c.  Renaming of the Medicare+ Choice to Medicare Advantage and provision
    of significant new incentives to facilitate the participation of
    private plans in Medicare.

d.  Provision of certain preventive benefits under both traditional
    Medicare and Medicare Advantage.

e.  Implementation of many changes in coverage and payment policy within
    traditional Medicare.

f.  Implementation of many administrative and regulatory reforms within
    traditional Medicare.

g.  Under section 911 of the MMA, restructuring of the acquisition
    statutes that govern traditional Medicare, commonly known as
    Medicare contracting reform.

h.  Under section 912 of the MMA, requirements for information security
    program and independent evaluations.

i.  Under section 921 of the MMA, provision requiring toll-free lines
    for provider inquiries and an expansion of provider education.

The work under this contract will be affected by many of these
provisions; however, the primary authority governing the terms and
conditions of this contract is section 911.

### Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191)

The Health Insurance Portability and Accountability Act (HIPAA) was
enacted on August 21, 1996. Title II, Subtitle F, of HIPAA gives the
Department of Health and Human Services (DHHS) the authority to mandate
the use of standards for the electronic exchange of health care data; to
specify what medical and administrative code sets should be used within
those standards; to require the use of national identification systems
for health care patients, providers, payers (or plans), and employers
(or sponsors); and to specify the types of measures required to protect
the security and privacy of personally identifiable health care
information.

### Tax Equity and Fiscal Responsibility Act of 1982 (Public Law 97-248) 

The Tax Equity and Fiscal Responsibility Act (TEFRA) made Medicare the
secondary payer for certain employees and dependents.

### Benefit Improvement and Protection Act of 2000 (Public Law 106-554)

Section 521 of the Benefit Improvement and Protection Act (BIPA) changed
the Medicare appeals process to create a uniform procedure for handling
all Medicare appeals (Parts A and B) and specified time frames for
filing appeals and rendering decisions.

## Regulations

Generally, Medicare regulations are located at Title 42 of the Code of
Federal Regulations (CFR).

## Medicare Manuals

Medicare manuals (e.g., Internet-only manuals---IOMs) are CMS program
instructions, day-to-day operating instructions, policies, and
procedures that are based on statutes and regulations, guidelines,
models, and directives. CMS program components, providers, Contractors,
and state survey agencies use Medicare manuals to administer CMS
programs. As CMS paper-based manuals are updated, the updated materials
are published in the IOMs and eliminated from the paper-based manuals.
The IOMs have precedence over paper-based manuals. The CMS will continue
this phase-out/phase-in process until all manual instructions are in the
IOMs. IOMs and paper-based manuals can be found at
<http://www.cms.hhs.gov/Manuals/IOM/list.asp#TopOfPage>. Attachment J-11
offers an index of Manual Citations sorted by requirement number, and a
summary of CFR Citations, sorted by requirement number.

Citations in this Statement of Work (SOW) are generally to an IOM
Publication (IOM Pub.). Paper-based manual citations are used only where
necessary (indicated as CMS Pub. XX).

# Key Definitions

Several Statement of Work (SOW) appendices contain definitions critical
to understanding this SOW. Attachment J-7 is an alphabetical listing of
key definitions and Attachment J-8 describes the different terms used to
describe the function of reevaluating a decision. These attachments are
not intended to be an all-inclusive list of definitions for terms used
throughout the SOW. Additional definitions are available on
[http://www.cms.hhs.gov](http://www.cms.hhs.gov/).

# Objectives 

This acquisition supports the mission of the Centers for Medicare &
Medicaid Services (CMS) to ensure health care security for
beneficiaries. The CMS' strategic goals and objectives, developed in
conjunction with the Department of Health and Human Services' strategic
plan, emphasize the themes of accountability, stewardship, and a renewed
focus on the customer. For the CMS, this has resulted in a commitment to
beneficiaries as the ultimate focus of all CMS activities, expenditures,
and policies. To ensure that the CMS remains a responsive, dynamic, and
relevant government agency that serves its citizens, the CMS is
committed to monitoring and evaluating the effectiveness of its
programs. The CMS will communicate, collaborate, and cooperate with key
customers, both public and private, to help achieve the desired
outcomes.

Consistent with Government Performance and Results Act principles, the
CMS has used a balanced-scorecard approach to develop objectives for the
Contractor in the following four categories: customer service,
operational excellence, innovation and technology, and financial
management. In this Statement of Work (SOW), the CMS has identified
meaningful, outcome-oriented performance standards and measures that
speak to fundamental program purposes and to CMS' role as a steward of
taxpayer dollars.

## Customer Service

Customer service addresses the ability to provide quality services
effectively and to increase the overall level of customer service and
satisfaction. In support of customer service, the Contractor shall do
the following:

a.  Provide an overall environment where providers understand the
    fee-for-service (FFS) Medicare program.

b.  Respond to provider telephone and written inquires promptly,
    clearly, and accurately.

c.  Maintain effective provider education that achieves accurate billing
    with prompt and correct provider payment.

d.  Maintain a high level of provider service and satisfaction by good
    communication and relationships with providers.

e.  Maintain a high level of beneficiary service and satisfaction
    related to the complex inquires referred to the MAC by the
    Beneficiary Contact Center.

## Operational Excellence

Operational excellence addresses the ability of employees, the quality
of information systems, and the effects of organizational alignment in
supporting the accomplishment of organizational goals. In support of
achieving operational excellence, the Contractor shall do the following:

a.  Effectively manage the combined administration of Medicare Parts A
    and B.

b.  Promote corporate integrity and establish internal controls and an
    effective compliance program to achieve contractual goals and
    objectives.

c.  Work collaboratively with CMS, providers, and other CMS contractors
    to foster integration of Medicare operations.

## Innovation and Technology

Innovation and technology addresses internal business results that lead
to financial success and satisfied customers. In support of innovation
and technology, the Contractor shall do the following:

a.  Develop and continually refine business processes to foster
    excellence and quality in the administration of the Medicare
    program.

b.  Foster efficiencies in the administration of the Medicare FFS
    program to promote best value for the government.

c.  Use innovative and creative solutions to improve program operations.

## Financial Management

Improving financial management is a key initiative in the President's
Management Agenda and has been a long-term focus in achieving CMS'
mission. Under the Medicare Integrity Program, the CMS is focused on
paying the right amount to legitimate providers for covered, reasonable
and necessary services. Financial management also addresses efforts to
promote cost efficiency and the ability to deliver maximum value to the
customer. In support of financial management, the Contractor shall do
the following:

a.  Promote the fiscal integrity of the Medicare FFS program and be an
    accountable steward of public funds.

b.  Pay claims timely, accurately, and reliably.

# Functional Requirements

The following sections list the Centers for Medicare & Medicaid
Services' (CMS') requirements, which are grouped by functional area.
Table 1 lists the requirements sections.

Table 3. Requirements Sections

  -----------------------------------------------------------------------
  Number   Name
  -------- --------------------------------------------------------------
  1        Workload Implementation Requirements

  2        Contractor Responsibilities during the Closeout Period and at
           Contract End

  3        Infrastructure Requirements

  4        Administrative Requirements

  5        Provider Enrollment

  6        Local Coverage Determinations

  7        Provider Customer Service Program

  8        Claims Processing

  9        Reopening of Medicare Initial Claims Determinations

  10       Appeals of Medicare Initial Claims Determinations

  11       Financial Management of Trust Fund Dollars

  12       Medical Review

  13       Coordination with Program Safeguard Contractor

  14       Medicare Secondary Payer

  15       Provider Oversight

  16       Coordinated Care Benefits Demonstration

  17       End Stage Renal Disease Clinical Trial

  18       Freestanding Rural Health Clinics

  19       Federally Qualified Health Centers

  20       Foreign Claims

  21       Laboratory Competitive Bidding Demonstration

  22       Shipboard/Foreign Travel Services

  23       Program Management Office
  -----------------------------------------------------------------------

Each requirement section presents the following information:

a.  Requirement number---unique number identifying the requirement

b.  Requirement name and description---descriptive title and words
    conveying the requirement (a few sections contain only a requirement
    name, relying on subsections to describe requirements)

c.  Background---information providing the context for a requirement
    (background information is provided as needed).

d.  Standards---defined levels of performance against which the quality
    of services can be determined.

## Workload Implementation Requirements

The Contractor shall carry out the orderly transfer of all Medicare
data, records, and operations from all outgoing carriers and
intermediaries (segments) within its jurisdiction in accordance with the
Jurisdiction Implementation Project Plan.

The Contractor shall establish and maintain through the course of the
implementation an experienced implementation management team.

  ---------------- -----------------------------------------------------------
  **Background**   Guidelines for conducting a successful implementation are
                   found in Attachment J-19, Medicare Administrative
                   Contractor (MAC) Implementation Handbook.

  **Standard 1**   A workload implementation is successful when the
                   implementation is completed within the required time
                   period, as stated in the Jurisdiction Implementation
                   Project Plan.

  **Standard 2**   A workload implementation is successful when there is no
                   disruption of claims processing and Medicare operations;
                   and

  **Standard 3**   A workload implementation is successful when there is
                   minimal disruption of payment, customer service, and other
                   benefits/services.

  **Standard 4**   The segment implementation is successful when all Medicare
                   functions specified in the SOW are performed by the
                   Contractor beginning on the Segment Operational Start Date
                   (SOSD).

  **Standard 5**   The jurisdictional operational cutover is successful when
                   the Contractor performs all Medicare functions under the
                   SOW for the entire jurisdiction on the Jurisdiction
                   Operational Start Date (JOSD).
  ---------------- -----------------------------------------------------------

### Jurisdiction Implementation Project Plan

The Contractor shall develop, execute, and maintain a Jurisdiction
Implementation Project Plan consistent with the Contractor's proposed
Jurisdiction Implementation Project Plan that was submitted in response
to the Request for Proposal (RFP) and report its status. The
Jurisdiction Implementation Project Plan shall include a detailed
description of all activities required to transfer all Medicare
operations from each carrier and intermediary in the Contractor's
jurisdiction.

### Segment Implementation Project Plans

The Contractor shall develop, update, and follow a detailed Segment
Implementation Project Plan for the transfer of each Part A and/or Part
B Medicare FFS workload (segments) and report its status for each
segment in its jurisdiction.

  ---------------- -----------------------------------------------------------
  **Background**   The Segment Implementation Project Plan is an expanded part
                   of the Jurisdiction Implementation Project Plan containing
                   more specific details for a particular segment.

  ---------------- -----------------------------------------------------------

### Risk Management Plan

The Contractor shall develop, execute, and maintain a Risk Management
Plan consistent with the Contractor's proposed Risk Management Plan
submitted in response to the RFP.

The Contractor shall deliver a Risk Management Plan to the Project
Officer and identified CMS business owners prior to each Segment
Kick-off Meeting. The Risk Management Plan shall include
jurisdiction-wide as well as segment-specific risks and a periodic
assessment, conducted monthly at a minimum, of new risks and mitigation
and contingency planning where appropriate.

  -------------- -----------------------------------------------------------
  **Standard**   The Contractor's Risk Management Plan is successful when it
                 is delivered within 30 calendar days of the of the Segment
                 Kick-off Meeting.

  -------------- -----------------------------------------------------------

### Segment Cutover Plan

The Contractor shall develop, maintain, and follow a Segment Cutover
Plan for each segment implementation identifying the daily processes and
procedures, some of which may be hour specific, that the Contractor will
follow during the cutover period to ensure a successful cutover.

  ---------------- -----------------------------------------------------------
  **Background**   The Segment Cutover Plan is an expanded part of the Segment
                   Implementation Project Plan containing more specific
                   details for the segment cutover period.

  ---------------- -----------------------------------------------------------

### Segment Test Plan

The Contractor shall develop, maintain, and follow a comprehensive test
plan for each segment. The test plan shall identify:

a.  The approach to testing,

b.  Types of tests,

c.  The schedule,

d.  Resources, and

e.  Documentation of progress.

### Lessons Learned Documentation

The Contractor shall identify the lessons learned during the
implementation of each segment in a Lessons Learned document.

  -------------- -----------------------------------------------------------
  **Standard**   The Contractor's Lessons Learned document is successful
                 when it is delivered within 40 after the segment cutover
                 date.

  -------------- -----------------------------------------------------------

### Accounts Receivable Reconciliation

The Contractor shall work with the outgoing Contractors in its
jurisdiction to achieve successful transfer and reconciliation of
accounts receivables from each in accordance with the Segment
Implementation Project Plans.

### Consolidation of Part A and Part B Edits

+----------+-----------------------------------------------------------+
| Ba       | The consolidation of shared system edits includes Local   |
| ckground | Coverage Determinations (LCDs) and Fiscal Intermediary    |
|          | Shared System (FISS) reason codes as well as any other    |
|          | FISS edits that implement local business rules. The       |
|          | consolidation of LCDs shall be done for both the FISS and |
|          | the Multi-Carrier System (MCS) shared systems. The        |
|          | consolidation of reason codes will be required for the    |
|          | FISS shared system but will not be required for the MCS   |
|          | shared system; however, a Contractor may propose to       |
|          | consolidate carrier business rules (MCS shared system     |
|          | edits) during the transition period or later in the       |
|          | operational period.                                       |
|          |                                                           |
|          | The criteria the Contractor uses to determine final edits |
|          | should include operational efficiency, minimization of    |
|          | disruption to the provider community, or other factors    |
|          | that the Contractor believes are pertinent. The single    |
|          | set of reason codes will include a unique, defined action |
|          | for each code.                                            |
|          |                                                           |
|          | The consolidation of FISS edits includes the implicit     |
|          | condition that Part A workload for each Jurisdiction will |
|          | be processed in one data processing cycle (one CICS       |
|          | region) \-- absent any other data processing,             |
|          | operational, or FISS constraints that might dictate the   |
|          | need for more than one cycle.                             |
|          |                                                           |
|          | The MAC shall consolidate existing shared system edits of |
|          | the outgoing contractors so that they are the same for    |
|          | the entire jurisdiction. This activity shall be completed |
|          | by the cutover date of the first segment; however, if     |
|          | circumstances arise wherein an unanticipated early        |
|          | departure of a contractor(s) occurs, the MAC shall keep   |
|          | existing edits (LCDs and reason codes) in place at the    |
|          | outgoing contractor, after cutover, until the first       |
|          | [planned]{.underline} contractor cutover date. At the     |
|          | time of the first planned cutover date, the contractor    |
|          | shall implement the consolidated edits at the first       |
|          | site(s). This is necessary in order to provide adequate   |
|          | time for possible provider billing changes.               |
|          |                                                           |
|          | CMS will provide edit documentation from all Part A       |
|          | segments in J4, J5 and J12 at the time of contract award. |
+----------+-----------------------------------------------------------+
| **       | The consolidation of shared system edits is successful    |
| Standard | when the edits are completed during the transition period |
| 1**      | by the first segment cutover date.                        |
+----------+-----------------------------------------------------------+

#### Consolidation of Reason Codes

The Contractor shall consolidate the existing shared system edits of the
outgoing Contractors so that they are the same for the entire
jurisdiction.

The Contractor shall analyze existing edits and determine the final
edits based on criteria that it proposes when implementing consolidated
reason codes.

The Contractor shall assure that the final edits have been tested and
significant changes have been communicated to the provider community.

#### Consolidation of Local Coverage Determinations

The MAC shall consolidate the existing shared system edits of the
outgoing contractors so that they are the same for the entire
jurisdiction.

The MAC shall select the least restrictive Local Coverage Determination
(LCD) from the existing LCDs on a single topic when consolidating LCDs
(see background for exception). The MAC shall not revise the LCDs until
the consolidation process is final.

Each draft LCD must be accompanied by a narrative justification
describing how least restrictive was applied for that particular policy.
This narrative must be submitted along with the proposed policy 30 days
before notification of the provider community, to CMS CO/RO business
function experts (BFEs), and is subject to their approval. The narrative
must also be sent to providers along with the final policy as part of
the consolidation process.

The MAC shall notify the provider community within its jurisdiction
which LCDs it has consolidated and adopted no less than 45 days prior to
those policies cutting over to the incoming MAC. .

**The Contractor shall educate the affected provider community and other
CMS-contracting entities, including Medicare Advantage (MA)
organizations, Prescription Drug Plans, and others, of any changes in
LCDs during the implementation period and prior to the cutover of any
workload from an outgoing Contractor to the incoming Contractor.**

+----------+-----------------------------------------------------------+
| **Back   | The outgoing Contractor will provide the MAC with any     |
| ground** | LCDs. The MAC is required to consolidate the existing     |
|          | LCDs of the outgoing FIs and/or Carriers within its       |
|          | jurisdiction so that they are the same throughout the     |
|          | jurisdiction. In situations where there is no policy in   |
|          | one or more states in a jurisdiction, the Contractor is   |
|          | permitted to have no LCD on that topic only with the      |
|          | prior approval of the CMS Central Office or Regional      |
|          | Office Business Owner.                                    |
|          |                                                           |
|          | The Contractor shall use the least restrictive policy of  |
|          | policies currently in place unless the CMS Business Owner |
|          | approves use of a more restrictive policy upon request on |
|          | an exception basis. The request must be sent with         |
|          | sufficient justification to explain why a more            |
|          | restrictive policy should be adopted.                     |
|          |                                                           |
|          | This activity shall be completed by the cutover date of   |
|          | the first segment; however, if circumstances arise        |
|          | wherein an unanticipated early departure of a             |
|          | contractor(s) occurs, the MAC shall keep existing edits   |
|          | (LCDs and reason codes) in place at the outgoing          |
|          | contractor, after cutover, until the first                |
|          | [planned]{.underline} contractor cutover date (as defined |
|          | in Section L of this Request for Proposal). At the time   |
|          | of the first planned cutover date, the Contractor shall   |
|          | implement the consolidated edits at the first site(s).    |
|          | This is necessary in order to provide adequate time for   |
|          | possible provider billing changes.                        |
|          |                                                           |
|          | The Contractor is not required to utilize the formal      |
|          | notice and comment revision process specified in Chapter  |
|          | 13 of the Program Integrity Manual (PIM) until the        |
|          | consolidation process is final. The Contractor has the    |
|          | discretion to involve the provider community in the       |
|          | selection of least restrictive policies. However, due to  |
|          | the short timeframes involved they are not required to go |
|          | through a formal Contractor Advisory Committee as defined |
|          | in the PIM. To allow for adequate notice, the contractor  |
|          | may allow current policies and edits at existing          |
|          | contractors to remain in place until all contractors cut  |
|          | over.                                                     |
|          |                                                           |
|          | A CAC is required for a new or revised policy developed   |
|          | after the cutover of existing workload to an incoming     |
|          | Contractor.                                               |
|          |                                                           |
|          | For more information regarding LCDs, see section C.5.5 of |
|          | this SOW.                                                 |
+----------+-----------------------------------------------------------+
| **       | Initial consolidation of inherited LCDs by subject area   |
| Standard | is successful when all LCDs are completed and the         |
| 1**      | policies posted on the web 45 days (or more) prior to the |
|          | first segment cutover date.                               |
+----------+-----------------------------------------------------------+
| **       | Notification of the provider community is successful when |
| Standard | the Contractor provides the notice 45 days (or more)      |
| 2**      | prior to the policy cutover date.                         |
+----------+-----------------------------------------------------------+

### Implementation Stakeholder Communication

The Contractor shall develop, execute, and maintain a Communication
Project Plan for each segment consistent with the Contractor's proposed
Communication Project Plan submitted in response to the RFP. The
Communication Plan shall identify the processes and procedures the
Contractor will follow to ensure that all implementation stakeholders
(i.e., hospital associations) are informed of the implementation, its
status, and progress and how changes may affect them.

  ---------------- -----------------------------------------------------------
  **Background**   Implementation stakeholders are those parties directly
                   involved in the implementation such as providers, the
                   outgoing Contractor(s), beneficiaries, etc., as well as
                   those with an interest in the implementation, such as
                   governmental entities, medical societies, medical specialty
                   groups, and law enforcement.

  ---------------- -----------------------------------------------------------

### Implementation Meetings

The Contractor shall organize, host, and provide toll-free
telecommunication lines and facilities for implementation meetings. The
meetings shall follow a prepared agenda and discuss the status of the
major tasks, issues, deliverables, schedule, delays, problem resolution,
and risk mitigation and contingencies.

The Contractor shall document the minutes of each implementation meeting
conducted.

The Contractor shall also maintain an issue log.

+----------+-----------------------------------------------------------+
| **Back   | Implementation meetings include:                          |
| ground** |                                                           |
|          | -   A jurisdiction kickoff meeting; the date will be      |
|          |     determined by the Project Officer, but will be no     |
|          |     later than 30 days after contract award.              |
|          |                                                           |
|          | -   Individual segment kickoff meetings, which are held   |
|          |     within ten (10) days after the scheduled              |
|          |     implementation start date of the segment, unless      |
|          |     otherwise directed by the Project Officer.            |
|          |                                                           |
|          | -   Jurisdiction status teleconferences or meetings,      |
|          |     which are held every two (2) weeks.                   |
|          |                                                           |
|          | -   Segment implementation workgroup teleconferences or   |
|          |     meetings which are held weekly.                       |
|          |                                                           |
|          | -   Segment implementation status teleconferences or      |
|          |     meetings, which are held every two (2) weeks.         |
|          |                                                           |
|          | -   After each segment implementation, a teleconference   |
|          |     (unless a face-to-face meeting is directed by CMS),   |
|          |     which is held to discuss the overall implementation   |
|          |     and the lessons- learned document prepared by the     |
|          |     Contractor.                                           |
|          |                                                           |
|          | -   Ad hoc meetings, as necessary.                        |
+----------+-----------------------------------------------------------+

## Contractor Responsibilities during the Workload Closeout Period and at Contract End (Option that may be exercised at the End of the Contract)

The outgoing Contractor shall cooperate fully, and shall transfer all
Medicare data and records to the replacement Contractor during the
workload closeout period at the end of the contract.

  ---------------- -----------------------------------------------------------
  **Background**   At contract end, Medicare Fee-for-Service (FFS) activities
                   will be transferred to a replacement Contractor.

  **Standard 1**   At the end of the contract, the outgoing Contractor
                   successfully meets this standard when Medicare data is
                   delivered to the new Contractor in accordance with the new
                   MAC's implementation project plan and by the contract end
                   date.

  **Standard 2**   At the end of the contract, the outgoing Contractor
                   successfully meets this standard when duplicate files or
                   data not required by the incoming Contractor are destroyed
                   in accordance with CMS data security requirements.

  **Standard 3**   At the end of the contract, the outgoing Contractor
                   successfully meets this standard when the Contractor
                   maintains an experienced workload closeout management team.
  ---------------- -----------------------------------------------------------

### Workload Closeout Project Plan (Option that may be exercised at the End of the Contract)

The outgoing Contractor shall develop, maintain, update, and follow a
Workload Closeout Project Plan to provide for the transfer of Medicare
functions and operations at contract end and report its status.

The outgoing Contractor's plan shall provide detailed tasks reflecting
the activities necessary for the outgoing Contractor to provide Medicare
data to the incoming Contractor, and to maintain operational standards
during the workload closeout period, and shall include all the tasks
required for the transition of benefits payments financial reporting.

The outgoing Contractor shall also provide the incoming MAC with its
Workload Closeout Project Plan and shall coordinate the plan with the
incoming Contractor's implementation plan.

### Workload Closeout Meetings (Option that may be exercised at the End of the Contract)

The Contractor shall attend meetings and provide appropriate staff to
participate in the various functional workgroups that may be established
during the workload closeout period, including:

a.  Kickoff meeting organized by the incoming Contractor;

b.  Weekly transition workgroup teleconferences or meetings;

c.  Biweekly transition status teleconferences or meetings with the
    incoming Contractor;

d.  Lessons-learned conference that will be held by the new Contractor;
    and

e.  Ad hoc meetings as necessary.

### Workload Closeout Risk Management Plan (Option that may be exercised at the End of the Contract)

The outgoing Contractor shall develop, execute, and maintain a Workload
Closeout Risk Management Plan. The Workload Closeout Risk Management
Plan shall include a monthly assessment of new risks and mitigation and
contingency planning where appropriate for the transition of its
operations and the transfer of Medicare data.

### Accounts Receivable Reconciliation (Option that may be exercised at the End of the Contract)

The outgoing Contractor shall accomplish Accounts Receivable
Reconciliation in accordance with
[C.5.11](#financial-management-of-trust-fund-dollars), provide detailed
supporting documentation, and cooperate fully with the incoming
Contractor to ensure the accuracy of any accounts receivable balances to
be transferred.

### Cost Accounting/Audit (Option that may be exercised at the End of the Contract)

The outgoing Contractor shall perform CMS-required post-cutover
financial and administrative activities and participate in a cost
accounting audit at the end of the contract.

### Provider Cost Reports and Appeals (Option that may be exercised at the End of the Contract)

The outgoing Contractor shall cooperate fully with the incoming
Contractor to identify all open provider cost reports and appeals.

The outgoing Contractor shall transfer all open and closed cost reports,
appeals, and audit documentation and any other pertinent files/records.

## Infrastructure Requirements 

The Contractor shall provide/use infrastructure to fulfill the
requirements of this contract.

  ---------------- ---------------------------------------------------------------
  **Background**   For information related to the Centers for Medicare & Medicaid
                   Services (CMS) required hours of operation, see the relevant
                   [Internet-only Manual
                   (IOM)](http://www.cms.hhs.gov/Manuals/IOM/list.asp#TopOfPage)
                   for the functional area.

  **Standard 1**   The infrastructure is successful when it is available during
                   all required hours of operation.
  ---------------- ---------------------------------------------------------------

### Enterprise Data Center

The Contractor shall provide infrastructure required, to integrate and
interact with the assigned CMS Enterprise Data Center (EDC) and to
accomplish services not provided by the EDC, to fulfill the requirements
of this contract.

The Contractor shall coordinate their transition schedule to the EDC
transition schedule in order to comply with the movement of the Medicare
FFS workloads

+----------+-----------------------------------------------------------+
| **Back   | The CMS EDC is managed by a Program Management Office     |
| ground** | (PMO) that is responsible for oversight of the EDCs. The  |
|          | EDC PMO will serve as the customer-facing organization    |
|          | responsible for:                                          |
|          |                                                           |
|          | -   Monitoring the EDCs' relationships with all customers |
|          |     and assisting them in using the EDCs and other CMS    |
|          |     data center capabilities                              |
|          |                                                           |
|          | -   Coordination of the transition of new applications    |
|          |     and the migration of Medicare FFS workloads to the    |
|          |     EDCs                                                  |
|          |                                                           |
|          | -   Providing "one-stop shopping" for EDC services and    |
|          |     the focal point for resolution of EDC-related issues  |
|          |                                                           |
|          | -   Oversight and program management of the deployment of |
|          |     new application and/or functionality to the EDCs      |
|          |                                                           |
|          | -   Ensuring the quality of EDC service delivery.         |
|          |                                                           |
|          | The EDC will provide the necessary infrastructure and     |
|          | environments required for hosting the Medicare FFS shared |
|          | systems (e.g., MCS, FISS, and CWF). The EDC operational   |
|          | environment will provide CMS and Medicare stakeholders    |
|          | with the flexibility to grow in size and capabilities to  |
|          | meet future Medicare FFS claims processing needs.         |
|          |                                                           |
|          | CMS will use a 3-Zone enterprise architecture for its     |
|          | EDC. The EDC enterprise architecture for new applications |
|          | is designed to facilitate robust security in three zones. |
|          | The 3-Zone architecture will be implemented               |
|          | incrementally. As an A/B Medicare Administrative          |
|          | Contractor (MAC) requires services, it will work through  |
|          | the CMS EDC-PMO to ensure that adequate capacity and      |
|          | connectivity exist. Any requirements for Fiscal Year (FY) |
|          | 2006 will be accomplished through the CMS Data Center     |
|          | with transition planned into the new EDC facilities FY    |
|          | 2007.                                                     |
|          |                                                           |
|          | The Data Use Agreement (DUA) can be found at the          |
|          | following website:                                        |
|          | <h                                                        |
|          | ttp://www.cms.hhs.gov/cmsforms/downloads/cms-r-0235.pdf>. |
+----------+-----------------------------------------------------------+
| **       | The Contractor's use of EDC is successful when it uses    |
| Standard | the operational processes and procedures the EDC          |
| 1**      | establishes with its users.                               |
+----------+-----------------------------------------------------------+

#### Local Hardware and Software Requirements

The Contractor shall provide hardware and utility software identified in
Attachment J-17, Contractor Furnished Property, as necessary to
accomplish the requirements of this contract and to communicate with and
utilize the CMS EDC.

The Contractor shall distribute the free or low cost Medicare billing
software compliant with the HIPAA 837, Medicare Remit Easy Print (MREP),
and 835 print software to requesting providers in accordance with [IOM
Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapters [22](../22) and
[24](http://www.cms.hhs.gov/manuals/downloads/clm104c24.pdf).

##### COTS

The Contractor shall provide a single COTS translation software package
for inbound (i.e., 837 claims and 276 claim status inquiries) and
outbound (835 remittance advice, 277 claim status response, 997
functional acknowledgement, TA1, X12 824, or other error report)
transactions.

+----------+-----------------------------------------------------------+
| **Back   | The translation/validation software package shall         |
| ground** | provide:                                                  |
|          |                                                           |
|          | -   Translation of the inbound HIPAA transactions into a  |
|          |     CMS-provided flat file format.                        |
|          |                                                           |
|          | -   Editing of the data to ensure HIPAA compliance (see   |
|          |     [IOM Pub.                                             |
|          |     100-04](http://www.cms.hhs                            |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912), |
|          |     Chapters                                              |
|          |     [22]                                                  |
|          | (http://www.cms.hhs.gov/manuals/downloads/clm104c22.pdf), |
|          |     [24                                                   |
|          | ](http://www.cms.hhs.gov/manuals/downloads/clm104c24.pdf) |
|          |     and                                                   |
|          |     [31]                                                  |
|          | (http://www.cms.hhs.gov/manuals/downloads/clm104c31.pdf), |
|          |     published implementation guides, and CMS companion    |
|          |     guides for the EDI transactions).                     |
|          |                                                           |
|          | -   The submission of a 997 functional acknowledgement    |
|          |     file, or TA1 (X12N transactions only).                |
|          |                                                           |
|          | -   The submission of error reports back to the           |
|          |     submitter.                                            |
|          |                                                           |
|          | -   Translation and editing of the outbound flat files    |
|          |     for the X12N 277 claim status and X12N 835 remittance |
|          |     advice received from the shared system into the       |
|          |     HIPAA-compliant X12N transactions.                    |
|          |                                                           |
|          | The ASC X12N Implementation guides are available at       |
|          | [www.wpc-edi.com](http://www.wpc-edi.com/) in the HIPAA   |
|          | section.                                                  |
+----------+-----------------------------------------------------------+

##### Electronic Claims Retention

The Contractor shall provide software and procedures to ensure that all
electronic claim transactions are copied as received and retained to
fully comply with the CMS data retention requirements for electronic
claims as received in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [24](http://www.cms.hhs.gov/manuals/downloads/clm104c24.pdf),
section 80.2.

  ---------------- -----------------------------------------------------------
  **Background**   This data shall be used to reconcile claim transactions,
                   indicate the number of claims received and the number of
                   claims transferred to each shared system, ensuring that
                   claims have not been dropped during processing.

  ---------------- -----------------------------------------------------------

### Telecommunications 

The Contractor shall use only the CMS-supplied telecommunications
network to transmit Medicare data to ensure the privacy and security of
this protected information for:

a.  Medicare communications between the Contractor and subcontractors,
    if any;

b.  Communication between the Contractor and other Medicare Contractors;
    and

c.  Communications between the Contractor and CMS.

+----------+-----------------------------------------------------------+
| **Back   | The CMS provides a telecommunications service -- The      |
| ground** | Medicare Data Communications Network (MDCN) -- which is   |
|          | used to transmit Medicare data between various Medicare   |
|          | processing sites. This service is provided through AT&T,  |
|          | with local access to the Contractor for linkage to:       |
|          |                                                           |
|          | -   The EDC;                                              |
|          |                                                           |
|          | -   The Common Working File (CWF);                        |
|          |                                                           |
|          | -   The CMS Data Center (HDC); and                        |
|          |                                                           |
|          | -   Other specialty Contractors such as the print mail    |
|          |     Contractor, when applicable.                          |
|          |                                                           |
|          | The Contractor may not utilize CMS-provided and MDCN      |
|          | telecommunications for health care providers to submit    |
|          | information and/or inquiries to development requests, or  |
|          | for any other communication with providers.               |
|          |                                                           |
|          | Section C.5.6.2 of this Statement of Work describes the   |
|          | toll-free line requirement for providers.                 |
+----------+-----------------------------------------------------------+

#### Telecommunications for Electronic Data Interchange

The Contractor shall interact with the [Individuals Authorized Access to
the CMS Computer Services
(IACs)](http://www.cms.hhs.gov/MMAHelp/07_IACS.asp) to ensure that the
EDI submitter/receiver is an authorized EDI submitter for each
transaction.

The Contractor shall adhere to the EDI front-end requirements for both
incoming and outgoing EDI transactions as defined in [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapters [22](http://www.cms.hhs.gov/manuals/downloads/clm104c22.pdf),
[24](http://www.cms.hhs.gov/manuals/downloads/clm104c24.pdf) and
[31](http://www.cms.hhs.gov/manuals/downloads/clm104c31.pdf); and in the
EDI standard format implementation guides published at
<http://www.wpc-edi.com/hipaa/HIPAA_40.asp>, which the CMS directs its
contractors to implement in accordance with HIPAA.

+----------+-----------------------------------------------------------+
| **Back   | **NOTE: The MAC is only responsible for                   |
| ground** | telecommunications to the MDCN. The MDCN to EDC interface |
|          | is the responsibility of the EDC.**                       |
|          |                                                           |
|          | IACS provides a single identity and associated            |
|          | authentication for each user. IACS is a set of common     |
|          | security services that will be deployed throughout CMS IT |
|          | systems to control both the issuance of electronic        |
|          | identities and access to CMS applications. IACS employs   |
|          | state-of-the-art technology to support:                   |
|          |                                                           |
|          | -   Delegated Administration                              |
|          |                                                           |
|          | -   Self-Registration                                     |
|          |                                                           |
|          | -   Self-Management (of user data)                        |
|          |                                                           |
|          | -   Approval workflows to manage access requests          |
|          |                                                           |
|          | -   Single Sign-on                                        |
|          |                                                           |
|          | A user who needs access to CMS applications or services   |
|          | will "self-register" via IACS. The user is responsible    |
|          | for entering all required personal, professional and      |
|          | official "role" information via online forms. The request |
|          | is managed via workflows defined for the type of access   |
|          | request. Approval is granted by the local administrator   |
|          | at the user's place of work, and (in some cases) a CMS    |
|          | approver. Upon approval, the user is granted a "role".    |
|          | That role will provide access to the full suite of        |
|          | applications which support that role. The user's access   |
|          | is restricted to only those data resources the role       |
|          | requires. Access to increasingly higher levels of data    |
|          | will be controlled by multiple levels of authorization    |
|          | and multiple factors of authentication.                   |
+----------+-----------------------------------------------------------+

##### Electronic Data Interchange Enrollment Form

The Contractor shall obtain an EDI Enrollment form from each provider
prior to electronic transfer of data and issuance of system
passwords/billing numbers to protect the security of transferred data.

  ---------------- ----------------------------------------------------------------------------------------------------------------------------------------------
  **Background**   The EDI Enrollment and Network Service Vendor Forms are contained in [IOM Pub.
                   100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
                   Chapter [24](http://www.cms.hhs.gov/manuals/downloads/clm104c24.pdf).

  ---------------- ----------------------------------------------------------------------------------------------------------------------------------------------

##### Receipt of Electronic Data Interchange Transactions

The Contractor shall direct X12N-based flat files received from EDI for
the 837 health care claims and the 276 claim status inquiry to the
shared system.

The Contractor shall edit each HIPAA transaction to ensure
HIPAA-compliant syntax.

The Contractor shall edit each HIPAA transaction to ensure it meets the
HIPAA implementation guide and companion guide requirements.

The Contractor shall edit each claim transaction against Medicare
"pre-screen" edits (e.g., Medicare return unprocessable edits) in
accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter 1, section 80.3.1.

The Contractor shall edit medical and non-medical code sets for HIPAA
compliance.

The Contractor shall use the CMS flat files as output from the
translation software and input to the shared system.

The Contractor shall implement date stamping processes and procedures to
ensure that all claims are provided with correct receipt dates.

##### Sending Electronic Data Interchange Transactions

The Contractor shall use the CMS flat files received from the shared
system as input to the translation process to build the outbound HIPAA
transactions.

The Contractor shall receive the X12N-based flat file for the 277 claim
status response and the 835 remittance advice from the shared system
maintainer. The Contractor shall translate those flat files to the
appropriate HIPAA 835 and 277 formats. The Contractor shall subject the
data to HIPAA syntax and implementation guide edits.

The Contractor shall load outbound files directly to the receiver's
(provider, clearinghouse, etc.,) electronic mailbox or queuing mechanism
for subsequent retrieval by the trading partner. The Contractor shall
retain file submissions on the "mailbox" retrieval system for a period
of five (5) days.

##### Automated Clearing House transactions 

The Contractor shall monitor, track, and provide direction in response
to Automated Clearing House (ACH) transactions for initiation of
electronic funds transfers (EFT) to providers if elected or required by
CMS.

##### Direct Data Entry Capability

  ---------------- ----------------------------------------------------------------------------------------------------------------------------------------------
  **Background**   The shared system and EDC will continue to support direct data entry capability (DDE) where it previously existed. The data elements in those
                   screens must be compliant with the data requirements of the corresponding HIPAA transaction implementation guides as specified in the HIPAA
                   transaction implementation instructions in [IOM Pub.
                   100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
                   Chapter [24](http://www.cms.hhs.gov/manuals/downloads/clm104c24.pdf).

  ---------------- ----------------------------------------------------------------------------------------------------------------------------------------------

#### Testing

The Contractor shall test inbound transaction receipt, translation,
front-end editing, and transfer exchange.

The Contractor shall test receipt of outbound flat files from the shared
system, translation, and routing to appropriate receiver (i.e.,
provider, clearinghouse, etc.) mailboxes or other queuing/retrieval
mechanism.

The Contractor shall test new EDI claim submitters (837) on the HIPAA
claim versions.

The Contractor shall test EDI claim submitters on new HIPAA versions.
The Contractor shall also test existing EDI claim submitters who plan to
begin to use new billing software not previously tested by the
Contractor.

The Contractor shall support a test environment for partners, EDI
transitions, and new software releases.

+----------+-----------------------------------------------------------+
| **Back   | The Contractor is not required to individually test       |
| ground** | submitters using software that is new to it, but which    |
|          | has been successfully used by other submitters to submit  |
|          | HIPAA-compliant claims to Medicare in the past.           |
|          |                                                           |
|          | The Contractor shall only test submitters on non-claim    |
|          | EDI transactions if specifically requested by a provider  |
|          | who is concerned about it s ability to use the software   |
|          | successfully, or when the Contractor has a reason to      |
|          | believe the submitter will incur usage difficulties.      |
|          |                                                           |
|          | [IOM Pub.                                                 |
|          | 100-04](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912), |
|          | Chapter                                                   |
|          | [24                                                       |
|          | ](http://www.cms.hhs.gov/manuals/downloads/clm104c24.pdf) |
|          | contains further information on the Medicare requirements |
|          | for provider and provider agent testing.                  |
+----------+-----------------------------------------------------------+

##### Initial Edits

The Contractor shall provide initial (pre-shared system) editing of
electronically submitted transactions to ensure the completeness and
correctness of transactions entering the system.

The Contractor shall establish a technique to detect duplicate
transmissions; have the capability to reject, or return as
unprocessable, at a file, batch or business transaction level, based
upon the edit(s) failed; and determine when all initial edits have been
passed.

The Contractor shall implement either the X12N 824 Application Advice
transaction set or other standard error report to report
application-level errors. The Contractor shall provide informational
warning messages to notify providers of new claim edits prior to
implementing new edits.

+----------+-----------------------------------------------------------+
| **Back   | Initial editing will include format and data editing:     |
| ground** |                                                           |
|          | -   Format edits validate the integrity of the incoming   |
|          |     transactions based upon the HIPAA adopted standards   |
|          |     and implementation guides which includes file layout, |
|          |     information sequencing, balancing,                    |
|          |     alpha-numeric/numeric/date file conventions, data     |
|          |     content values, and relational edits; and             |
|          |                                                           |
|          | -   Data editing validates business-specific transaction  |
|          |     data required for processing, e.g.,                   |
|          |     procedure/diagnosis codes, modifiers.                 |
|          |                                                           |
|          | Syntax compliance edits include edits of the standard     |
|          | such as alpha-numeric or numeric data formats, field      |
|          | lengths, valid qualifiers, mandatory loops and segments,  |
|          | appropriate segments within a given loop. Implementation  |
|          | guide edits vary depending on the implementation guide    |
|          | being used.                                               |
+----------+-----------------------------------------------------------+

#### Electronic Data Interchange Help Desk

The Contractor shall provide a centralized EDI Help Desk, which is
integrated and interactive with the EDC help desk.

The EDI Help Desk staff shall respond to telephone inquiries in
accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/com109c03.pdf).

+----------+-----------------------------------------------------------+
| **Back   | The EDC will triage incoming calls and will route         |
| ground** | appropriate EDI calls to the Contractor's EDI Help Desk.  |
|          |                                                           |
|          | All EDI Help Desk staff shall have experience with the    |
|          | X12N 837, 276/277, and 835 version 4010A1 transactions.   |
|          | All EDI Help Desk staff shall have experience with error  |
|          | reports. The EDI Help Desk staff shall have access to     |
|          | trading partner electronic mailboxes or other queuing     |
|          | mechanisms to track or re-queue reports and have access   |
|          | to transactional data.                                    |
|          |                                                           |
|          | Help Desk services shall include a centralized problem    |
|          | database where all problems shall be documented. This     |
|          | database shall record and track all problems, related     |
|          | changes, and status. Further, the problem database shall  |
|          | contain sufficient information to both operationally      |
|          | manage individual problems and provide the ability to     |
|          | analyze problems for trends. The problem database content |
|          | shall include, at a minimum:                              |
|          |                                                           |
|          | -   Name, company, security/sign-on ID, and the phone     |
|          |     number of the individual reporting the problem;       |
|          |                                                           |
|          | -   A detailed description of the problem;                |
|          |                                                           |
|          | -   The effect of the problem on the customer/user;       |
|          |                                                           |
|          | -   The relationship to other problem or change tickets   |
|          |     (i.e., AGNS, parent/child relationship);              |
|          |                                                           |
|          | -   The date and time the problem was reported;           |
|          |                                                           |
|          | -   Person/group that the problem was assigned to and     |
|          |     when it was assigned;                                 |
|          |                                                           |
|          | -   Problem status that is updated every 60 minutes for   |
|          |     severe problems;                                      |
|          |                                                           |
|          | -   The resolution of the problem;                        |
|          |                                                           |
|          | -   Date and time of the resolution; and                  |
|          |                                                           |
|          | -   Total time taken from time of report to time of       |
|          |     resolution (time is tracked during help desk hours).  |
|          |                                                           |
|          | In addition to this content, the Contractor should        |
|          | include any other information it deems appropriate.       |
+----------+-----------------------------------------------------------+

#### Electronic Funds Transfer EFT Forms

The Contractor shall obtain an Electronic Funds Transfer (EFT) form, as
applicable, from each provider prior to electronic transfer of funds.

##### Network Service Agreements

The Contractor shall obtain Network Service Agreements (NSA) from
provider agents, business associates, and subcontractors who transfer
provider EDI transactions, EFT data, and Coordination of Benefits (COB)
data electronically, as required in [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [24](http://www.cms.hhs.gov/manuals/downloads/clm104c24.pdf).

#### HIPAA Code Set Updates

The Contractor shall make system changes as needed to update claim
adjustment reason and remittance advice remark codes, claim status
category codes, and claim status codes up to four times per year as
directed by CMS.

### Telephone Service 

The Contractor shall provide telephone systems to meet minimum design
guidelines, make telephone service available, and connect with
CMS-provided toll-free lines.

  ---------------- -----------------------------------------------------------
  **Background**   The CMS provides toll-free service for provider inquiries
                   handled by provider contact centers. The Contractor
                   provides all other telephone services needed to fulfill the
                   requirements of the contract.

  ---------------- -----------------------------------------------------------

### CMS Audits and Reviews

The Contractor shall allow CMS the use of provided software and software
documentation, tools, and equipment to conduct audit reviews, tests, and
assessments of the Contractor at its facility and its data center.

## Administrative Requirements

### Key Personnel

Unless noted in the specific requirement, key personnel are neither
fully dedicated nor restricted only to Medicare lines of business.
Unless otherwise approved by the Contracting Officer, the key personnel
noted below shall possess the following minimum work experience and
educational requirements:

#### Project Manager

The Project Manager shall be fully dedicated to the A/B MAC.

The Project Manager shall possess:

> **Experience**
>
> Ten or more years of professional experience with at least three (3)
> years as a manager responsible for managing complex systems and work
> flow.
>
> **Education**
>
> A bachelor's degree from an accredited institution, plus a master's
> degree from an accredited institution or substitution of four (4)
> additional years of related work experience in lieu of the master's
> degree.

#### Claims Processing Manager

The Claims Processing Manager shall be fully dedicated to the A/B MAC
contract.

The Claims Processing Manager shall possess:

> **Experience**
>
> A minimum of three years prior work experience with Medicare or
> Medicare-equivalent Fee-for-Service claims processing operations.
> Prior experience with both Medicare Part A (intermediary) and Part B
> (intermediary and carrier) claims processing operations is highly
> desirable.

#### Chief Financial Officer

The Chief Financial Officer (CFO) shall not be responsible for other
external third party or corporate activities, however, the CFO may
oversee other Medicare contracts. To eliminate any conflict of interest
and ensure separation of duties, the CFO shall not serve as the
Compliance Officer, but is responsible for meeting all the compliance
requirements of the Medicare financial operations.

The CFO shall possess:

> **Experience**
>
> Knowledge of and extensive practical experience in financial
> management practices in large organizations and significant managerial
> or other practical involvement relating to financial management.
>
> **Education**
>
> An accounting degree from an accredited four-year college or
> university, or possessing an active Certified Public Accountant (CPA)
> license, or meeting the eligibility requirements to sit for the CPA
> examination.

#### Compliance Officer

The Compliance Officer shall possess:

> **Experience**
>
> A minimum of three years experience in compliance or related
> activities.
>
> **Education**
>
> A bachelors or more advanced degree.

#### Program Safeguard Contractor Liaison

The Contractor shall designate an individual to serve as a Program
Safeguard Contractor (PSC) liaison to support the PSC in all benefit
integrity and medical review related activities, and to assist the PSC
in all revisions to the Joint Operating Agreement (JOA). This individual
shall refer to [IOM Pub.
100-8](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033)
for guidance on supporting the PSC in all activities, including the JOA
and shall be able to report that all PSC activities are being executed
in accordance with the JOA and [IOM Pub.
100-8](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033).

The PSC Liaison shall perform the following duties:

a.  Coordinate and fulfill all PSC requests for information.

b.  Coordinate with the PSC to fulfill the Comprehensive Error Rate
    Testing Support functions.

c.  Ensure that the terms of the JOA are met and coordinate all updates
    to the JOA with the PSC on a timely basis.

d.  Schedule meetings with the PSC as appropriate.

The PSC Liaison shall possess:

> **Experience**
>
> A minimum of 3 years experience with Medicare that demonstrates
> extensive knowledge of the Medicare program.
>
> **Education**
>
> Bachelor's degree.

#### Chief Information Officer

The Chief Information Officer (CIO) may oversee other Medicare
Contracts, not just the A/B MAC. The CIO must be dedicated to Medicare
business line of work.

The CIO shall possess:

> **Experience**
>
> Knowledge of and extensive practical experience in information
> technology (IT) practices, including security controls, in large
> organizations and significant managerial or other practical
> involvement relating to IT management.
>
> **Education**
>
> An information technology degree from an accredited four-year college
> or graduate program or equivalent experience, preferably as a CIO.

#### Systems Security Officer

The Contractor's Systems Security Officer (SSO) may oversee other
Medicare Contracts, provided he has the necessary supporting staff, not
just the AB MAC contract. The SSO must be full time and dedicated to
Medicare business line of work. The SSO will perform duties in
accordance with [IOM Pub.
100-17](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019466),
the [CMS Business Partner System Security Manual
(BPSSM)](http://www.cms.hhs.gov/manuals/downloads/117_systems_security.pdf).

The SSO shall possess:

> **Experience**
>
> Knowledge of and extensive practical experience in information
> technology (IT) systems security policies, procedures and practices to
> manage security administrative duties in large organizations.
>
> **Education**
>
> An information technology (IT) degree from an accredited four-year
> college or equivalent experience. Security accreditations such as the
> Certified Information Systems Security Professional (CISSP) are highly
> desirable.

#### Implementation Project Director

The Implementation Project Director's activities will commence with
contract award and continue through the Jurisdiction Operational Start
Date until all implementation activities are completed. This position
must be fully dedicated until implementation activities are complete.

The Implementation Project Director shall possess:

> **Experience**
>
> A minimum of three (3) years experience as a Project Manager, with
> recent past experience managing Medicare Fee-for-Service workload
> transitions, systems conversions or a similar type of activity.

#### Provider Customer Service Program Manager

The Provider Customer Service Program Manager shall possess:

> **Experience**
>
> A minimum of two (2) years experience as manager of a customer service
> unit. Preferably the experience will have a focus on the handling of
> Medicare provider customer inquiries/questions and the education of
> those customers.
>
> **Education**
>
> The PCSM manager shall have a Bachelor's degree from an accredited
> college/university and related training in the area of customer
> service. Work experience may be substituted for the Bachelor's degree
> with a minimum of four years of work experience required.

#### Contract Administrator

The Contract Administrator is responsible for all contract
administration issues and shall act as the central point of contact with
the Government for all such issues.

The Contract Administrator shall possess:

> **Experience**
>
> Federal Acquisition Regulation (FAR) knowledge and the experience of
> applying such knowledge on a daily basis. This knowledge includes, but
> is not limited to, contract types, negotiating, contract
> changes/modifications, cost/price analysis, exercising options,
> conducting subcontract surveillance, managing contract close-out,
> roles, responsibilities, and authorities of Contractor and CMS
> personnel, Cost Accounting Standards, contract administration policies
> and procedures to sufficiently monitor and maintain uniform management
> controls over performance.
>
> **Education**
>
> A bachelors degree from an accredited educational institution
> authorized to grant baccalaureate degrees, with at least 24 semester
> hours in any combination of the following fields: Accounting,
> business, finance law, contracts, purchasing, economics, industrial
> management, marketing, quantitative methods or organization and
> management. In addition, the Contract Administrator shall have direct
> experience in administering contracts in accordance with the FAR.

#### Contractor Medical Director

The Contractor shall maintain as key personnel a Contractor Medical
Director (CMD) in accordance with [IOM Pub.
100-8](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/pim83c01.pdf),
section 1.5.

The CMD shall possess:

> **Experience**
>
> Prior work experience in the health insurance industry, a utilization
> review firm, or another health care claims processing organization in
> a role that involved developing coverage or medical necessity policies
> and guidelines.
>
> Extensive knowledge of the Medicare program, particularly the coverage
> and payment rules.
>
> Public relations experience such as working with physician groups,
> beneficiary organizations, and/or congressional offices is preferred.
>
> **Education**
>
> Experience practicing medicine for at least three (3) years as a
> board-certified doctor of medicine or doctor who is currently
> licensed.

#### **Audit and Reimbursement Manager/Director**

The Audit and Reimbursement Manager/Director shall be fully dedicated to
the A/B MAC.

The Audit and Reimbursement Manager/Director shall possess:

> **Experience**
>
> Five (5) or more years of Medicare Cost Report Audit and Reimbursement
> experience with a minimum of three (3) years as a manager of Medicare
> Cost Report Audit or Reimbursement.
>
> **Education**
>
> A bachelor's degree from an accredited institution with a minimum of
> 24 credit hours in accounting, or a Certified Public Accountant (CPA),
> and knowledge of Medicare laws, regulations and Government Auditing
> Standards (GAS). In lieu of education, fifteen (15) or more years of
> significant management experience in Medicare Audit and Reimbursement.

### Background Checks

At a minimum, Medicare Administrative Contractors shall perform
background checks on the following employees:

a.  Employees who will be working from home;

b.  Employees who will be granted the authority to manually override
    edits;

c.  All employees hired as complaint screeners who will be handling
    potential fraud and abuse complaints;

d.  In addition to complaint screeners, any staff at the MAC that may
    refer potential fraud and abuse situations to the Program Safeguard
    Contractor;

e.  All cost report staff that fulfill law enforcement requests for cost
    report information;

f.  Provider Enrollment staff who will issue provider numbers; and

g.  Employees encumbering personnel positions with access to CMS
    sensitive information in accordance with [IOM Pub.
    100-17](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019466),
    Attachment A, Core Security Requirement 2.5.5.

All candidates for employment with a MAC for the positions listed above
shall complete a job application form that requires the potential
employee to sign, date, and certify that all of the information on the
form is complete and accurate. In addition to the standard questions on
the application form, the following questions shall be included:

h.  Have you ever resigned in order to avoid termination?

i.  Have you ever been arrested for other than a traffic misdemeanor?

j.  Have you ever been convicted of a crime other than a traffic
    misdemeanor?

k.  Are criminal charges currently pending against you for other than a
    traffic misdemeanor?

Prior to employment for each type of employee listed above, MACs shall
verify, at a minimum, two prior employment references. In addition, MACs
shall conduct background checks prior to employment that include, at a
minimum, the following:

l.  Verification of name, social security, and U.S. citizenship;

m.  Federal and State felony and/or misdemeanor convictions/records
    other than traffic misdemeanors;

n.  Verification of licensure;

o.  Verification of listed educational degrees and/or history;

p.  Verification of applicant listed employment history;

q.  Verification of place of residence;

r.  Name search on General Services Administration Lists of Parties
    Excluded from Federal Procurement and Non-procurement Programs; and

s.  Name search on the Office of Inspector General List of Excluded
    Individuals/Entities.

#### Reserved

### Security 

#### Certification by Chief Information Officer for Compliance with CMS Systems Security Requirements

The Contractor's designated Chief Information Officer (CIO) shall
certify compliance with CMS' systems security requirements.

#### Administer Security Program

The Contractor shall conduct all security administration activities for
all parts of the Medicare claims process within its jurisdiction in
accordance with [IOM Pub.
100-17](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019466),
[BPSSM](../CMS%20Business%20Partner%20System%20Security%20Manual%20(BPSSM)),
the Core Security Requirements and its operational appendices (A, B, C
and D), found at
[www.cms.hhs.gov/informationsecurity](http://www.cms.hhs.gov/informationsecurity).

The Contractor shall adhere to all deadlines and formats outlined in
official CMS communications (e.g., Technical Direction Letter, or TDLs).

The Contractor shall comply with the CMS Information Security "Virtual
Handbook," found at
<http://www.cms.hhs.gov/InformationSecurity/Downloads/Handbook.pdf>, and
all CMS methodologies, policies, standards, and procedures contained
within the handbook.

The Contractor shall comply with the Federal Information Security
Management Act of 2002 (FISMA) requirements set forth in section 912 of
the Medicare Prescription Drug, Improvement and Modernization Act of
2003 (MMA).

The Contractor shall comply with and utilize standards and guidelines
promulgated by the National Institute of Standards and Technology (NIST)
in its entity-wide information security program.

The Contractor shall comply with the applicable standards,
implementation specifications, and requirements of the Health Insurance
Portability and Accountability Act (HIPAA) security rule, found at
<http://www.cms.hhs.gov/SecurityStandard/Downloads/securityfinalrule.pdf>,
covering electronically protected health information.

The Contractor shall fully cooperate with (including the timely
installation of CMS test software on the Contractor's systems) CMS
audits, reviews, evaluations, tests, and assessments of Contractor
systems, processes, and facilities.

The Contractor shall visit the CMS security website
([www.cms.hhs.gov/informationsecurity](http://www.cms.hhs.gov/informationsecurity))
at least monthly for updates to the CMS [IOM Pub.
100-17](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019466),
[BPSSM](../CMS%20Business%20Partner%20System%20Security%20Manual%20(BPSSM))
and related program materials and conference information.

The Contractor shall participate in the CMS Security Best Practices
conferences and audio conferences. (Details are found at
[www.cms.hhs.gov/informationsecurity](http://www.cms.hhs.gov/informationsecurity)).

The Contractor shall document its compliance with CMS security
requirements and maintain such documentation in the Systems Security
Profile as required by [IOM Pub.
100-17](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019466),
[BPSSM](../CMS%20Business%20Partner%20System%20Security%20Manual%20(BPSSM)).

#### Access to Systems

##### Data Use Agreements

The Contractor shall enter into a Data Use Agreement (DUA) with the CMS.

The Contractor shall complete the CMS DUA form located at
<http://www.cms.hhs.gov/cmsforms/downloads/cms-r-0235.pdf> and submit it
to the Project Officer and/or designees for review.

+----------+-----------------------------------------------------------+
| **Back   | The DUA must delineate confidentiality requirements of    |
| ground** | the Privacy Act, implement security safeguards, and       |
|          | explain CMS' data use policies and procedures. The DUA    |
|          | serves as both a means of informing the Contractor of     |
|          | these requirements and a means of obtaining their         |
|          | agreement to abide by these requirements.                 |
|          |                                                           |
|          | The Project Officer and/or designees will then coordinate |
|          | with the CMS Director of the Division of Privacy          |
|          | Compliance for authorization and assigning of a DUA       |
|          | number. If additional data not identified in the DUA is   |
|          | required, a second DUA may also be required to obtain     |
|          | access to that information.                               |
+----------+-----------------------------------------------------------+
| **       | The Contractor\'s DUA is successful when it is delivered  |
| Standard | to the Project Officer and/or designees no later than 30  |
| 1**      | days prior to the cutover date.                           |
+----------+-----------------------------------------------------------+

##### Other Systems Access Requirements

The Contractor shall have all employees requiring access to CMS systems
complete an Application for Access to CMS Computer Systems to obtain a
user ID. This form is available at:
<http://www.cms.hhs.gov/InformationSecurity/Downloads/EUAaccessform.pdf>.
The Contractor shall submit all completed forms to the Project Officer
and/or designees for routing to the CMS Access Administrator (formerly
the Resource Access Control Facility Administrator).

#### Correct Deficiencies

The Contractor shall correct any security deficiencies, conditions,
weaknesses, findings, or gaps identified by all audits, reviews,
evaluations, tests, and assessments in a timely manner, which include,
but are not limited to:

a.  Statement on Auditing Standards (SAS) 70 audits

b.  MMA section 912 evaluations and tests,

c.  Office of the Inspector General (OIG) audits,

d.  Self-assessments, and

e.  Vulnerability assessments

The Contractor shall develop Corrective Action Plans (CAPs) for all
identified weaknesses, findings, gaps, or other deficiencies in
accordance with [IOM Pub.
100-17](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019466),
[BPSSM](../CMS%20Business%20Partner%20System%20Security%20Manual%20(BPSSM))
or as otherwise directed by CMS.

The Contractor shall validate and document that corrective actions are
implemented, tested, and effective.

The Contractor shall provide CAPs and monthly progress reports to CMS in
accordance with [IOM Pub.
100-17](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019466),
[BPSSM](../CMS%20Business%20Partner%20System%20Security%20Manual%20(BPSSM))
or as otherwise directed by CMS.

  ---------------- -----------------------------------------------------------
  **Background**   Time is of the essence in correcting the deficiencies or
                   remediating the findings of an audit.

  **Standard 1**   The Contractor\'s corrective action procedures are
                   successful when its weaknesses, findings, gaps, or other
                   deficiencies are corrected within 90 calendar days of
                   receipt of the final audit or evaluation report unless
                   authorized by CMS otherwise.
  ---------------- -----------------------------------------------------------

##### Corrective Action Attestation

The Contractor shall provide attestation and documentation of corrective
actions to CMS upon request.

#### Security Review and Verification

The Contractor shall comply with the CMS certification and accreditation
(C&A) methodology, policies, standards, procedures, and guidelines for
Contractor facilities and systems.

The Contractor shall conduct or undergo an independent evaluation and
test of its systems security program in accordance with section 1874A,
as added by MMA section 912. The Contractor's first independent
evaluation and test of its systems security program shall be completed
prior to the Contractor commencing claims payment under the contract.

The Contractor shall conduct, at a minimum, annual vulnerability
assessments of its systems, programs, and facility.

The Contractor shall support CMS validation and accreditation of
Contractor systems and facilities in accordance with CMS C&A
methodology.

The Contractor shall provide annual certification, in accordance with
C&A methodology, that certifies it has examined the management,
operational, and technical controls for its systems supporting the
Medicare Administrative Contractor (MAC) function and considers these
controls adequate to meet CMS security standards and requirements.

  ---------------- -----------------------------------------------------------------------------------
  **Background**   The CMS C&A methodology can be found on the CMS web site at
                   [www.cms.hhs.gov/informationsecurity](http://www.cms.hhs.gov/informationsecurity)

  ---------------- -----------------------------------------------------------------------------------

### Quality Control and Improvement

#### Quality Control Program

The Contractor shall provide and maintain a comprehensive quality
program for the control of quality that is acceptable to the Government
and ensures the requirements of the contract are provided. The
Contractor's comprehensive quality program will include, but not be
limited to, the following:

a.  Documented procedures and processes for services to ensure that
    services of this Statement of Work (SOW) meet contract performance
    requirements.

b.  Documented change management program to ensure that correct
    procedures and processes are followed.

c.  Provide and maintain an inspection and audit system to ensure that
    services meet contract performance requirements.

d.  Provide a method of identifying nonconformance or deficiency in the
    quality of services performed.

e.  Provide a formal system to implement corrective action.

f.  Provide a file of all quality records relating to inspections and
    audits conducted by the Contractor and the corrective action
    implemented. This documentation shall be made available to the
    Government during the term of the contract.

g.  Provide for Government inspections and audits while work is in
    process or complete.

  ---------------- -----------------------------------------------------------
  **Background**   The Government will monitor the Contractor's performance
                   under this contract using systematic quality assurance
                   methods as defined in the Quality Assurance Surveillance
                   Plan (QASP).

  ---------------- -----------------------------------------------------------

#### Quality Improvement Plan

The Contractor shall develop and implement a quality improvement plan
that encompasses the requirements in this Statement of Work (SOW).

  ------------ -----------------------------------------------------------
  **Standard   The quality improvement plan is successful when the
  1**          Contractor makes improvements in its business process in
               accordance with the quality improvement plan.

  **Standard   The quality improvement plan is successful when trends and
  2**          their outcomes in all functional areas are captured and
               communicated to interrelated operational areas to improve
               the overall quality and efficiency of Medicare operations.
  ------------ -----------------------------------------------------------

#### Continuous Quality Improvement 

The Contractor shall continuously improve the quality and efficiency of
its functional operations under the contract.

  ---------------- -----------------------------------------------------------
  **Background**   This section contains requirements that are meant to
                   facilitate Contractor internal continuous processes
                   improvement. Requirements in this section target one of the
                   primary objectives of this contract, to ensure that
                   Contractors continually refine business processes to foster
                   excellence and quality in Medicare program claims
                   processing and administrative services.

  **Standard 1**   The Contractor's continuous quality improvement is
                   successful when the paid claims error rate is continuously
                   reduced.

  **Standard 2**   The Contractor's continuous quality improvement is
                   successful when the percentage of claims processed timely
                   is increased in accordance with the performance standards
                   at C.5.8.2.

  **Standard 3**   The Contractor's continuous quality improvement is
                   successful when claims submission errors are continuously
                   reduced.

  **Standard 4**   The Contractor's continuous quality improvement is
                   successful when the number of appeals (i.e.,
                   redetermination requests) decreases.

  **Standard 5**   The Contractor's continuous quality improvement is
                   successful when the accuracy and consistency of medical
                   review decisions is continuously improved.
  ---------------- -----------------------------------------------------------

#### Contractor's Internal Education

The Contractor shall conduct internal education for its employees and
periodically assess the continuing education needs of its staff to
continuously improve the quality and efficiency of operations.

  ------------ ------------------------------------------------------------
  **Standard   The Contractor's internal education is successful when the
  1**          Contractor maintains satisfactory performance levels, as
               measured by CMS, in regards to satisfaction surveys.

  **Standard   The Contractor's internal education is successful when
  2**          claims adjudication by all clinical staff for all functional
               lines of business result in accurate and consistent
               determinations.
  ------------ ------------------------------------------------------------

### Public Relations

The Contractor shall develop, execute, and manage a public relations
plan to utilize its resources to serve CMS stakeholders' Medicare needs
and concerns.

The Contractor shall, as a representative of CMS, be courteous and
responsive to all stakeholders at all times.

  ---------------- -----------------------------------------------------------
  **Background**   Public relations involves the Contractor representing
                   Medicare to stakeholders such as beneficiaries and their
                   advocacy groups, industry associations, data users,
                   standards setting organizations, and taxpayers, for
                   information about the Medicare programs and operations.
                   Providers are specifically excluded from the public
                   relations plan, because they are separately addressed in
                   Provider Customer Service. Public relations do not involve
                   the release of personally identifiable information or
                   information about specific claims.

  **Standard 1**   The Contractor's public relations plan is successful when
                   its processes and procedures are used to address problem
                   areas as they are identified.

  **Standard 2**   The Contractor's public relations plan is successful when
                   general information developed by the Contractor concerning
                   Medicare and its policies is approved by CMS before being
                   distributed to stakeholders.
  ---------------- -----------------------------------------------------------

#### Medicare Beneficiary Ombudsman

The Contractor shall provide a direct point of contact to CMS (Center
for Beneficiary Choices, or CBC) for the purposes of assisting the
Medicare Beneficiary Ombudsman with resolving beneficiary areas of
complaints, grievances, and inquires about any aspect of the Medicare
program.

The Contractor point of contact shall coordinate resolution of the
problem and involve appropriate functional areas within the MAC as
necessary to resolve the problem.

The Contractor shall contact the beneficiary directly with the
resolution, if requested by the Medicare Beneficiary Ombudsman. In most
instances, the Medicare Beneficiary Ombudsman will relay the resolution
directly to the beneficiary.

  ---------------- -----------------------------------------------------------
  **Background**   The Medicare Beneficiary Ombudsman was created by Section
                   923 of the MMA to provide assistance to beneficiaries in
                   the areas of complaints, grievances, and inquires about any
                   aspect of the Medicare program, including collecting
                   information necessary to file appeals and resolve Medicare
                   Advantage (MA) disenrollment problems and Medicare premium
                   adjustments.

  ---------------- -----------------------------------------------------------

### Responses to Congressional Inquiries

The Contractor shall furnish responses to congressional inquiries in
accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [2](http://www.cms.hhs.gov/manuals/downloads/com109c02.pdf),
section 20.2.2.

  ---------------- -----------------------------------------------------------
  **Background**   The BCC will be responsible for addressing Congressional
                   inquiries that are specifically related to the BCC (i.e. a
                   CSR is rude to a beneficiary, or why does it take so long
                   for someone to answer the phone when a beneficiary calls).
                   Any congressional inquiries received by the MAC that are
                   the responsibility of the BCC should be forwarded to the
                   BCC for response. All other congressional inquiries are the
                   responsibility of the MAC. If the BCC receives any
                   misdirected congressional inquiries, they will be forwarded
                   to the MAC.

  **Standard 1**   The standard is met when the Contractor seeks advice from
                   CMS, as necessary, on questions of law and policy in
                   advance of developing a draft for review, and when
                   congressional inquiries receive review and approval by CMS
                   before submitting to Congress.
  ---------------- -----------------------------------------------------------

### Participation in Conferences, Meetings, and Work Groups 

#### Participation in Conferences

The Contractor shall participate in, and ensure that appropriate
Contractor personnel attend a variety of conferences as directed by CMS,
including, but not limited to, the following:

a.  Best practices conferences

b.  Any CMS-sponsored provider enrollment conference(s), regularly
    scheduled conference calls and CMS-sponsored provider enrollment
    workgroups

c.  Annual CMS Medical Review (MR) Manager's conference

d.  Contractor Medical Director (CMD) conference

e.  Security best practices conferences

f.  Security Technical Advisory Group (TAG), as identified on the CMS
    Information Security homepage
    ([www.cms.hhs.gov/informationsecurity](http://www.cms.hhs.gov/informationsecurity))

g.  Provider Customer Service Program conferences

h.  CMS customer service (provider) conferences

i.  National Audit Conference, Provider Statistical and Reimbursement
    Reporting (PS&R) work group, and others as necessary

j.  Conferences related to electronic data interchange (EDI) and HIPAA
    requirements.

k.  Qualified Independent Contractor (QIC) and Administrative Qualified
    Independent Contractor (AdQIC) meetings.

l.  Medicare Secondary Payer (MSP) National Conferences.

##### Chief Financial Officer Financial Reporting Conference

The Contractor's Chief Financial Officer (CFO) shall attend the annual
CMS CFO Financial Reporting Conference.

#### Participation in Meetings and Work Groups 

The Contractor shall ensure that appropriate personnel attend a variety
of meetings and work groups as directed by CMS groups to present and
discuss operational requirements and propose changes to the Medicare
program, including, but not limited to, the following:

a.  Cost report audit, PS&R, reimbursement related work groups

b.  Audit and reimbursement meetings

c.  Workgroups and Joint Application Development sessions on proposed
    changes to the Medicare program

d.  Weekly operations TAG and Functional Work Group calls

e.  Teleconferences with the Office of Information Services and CMS
    program staff

f.  Ad hoc work groups

g.  Quarterly Change Control Board Meetings

  ------------ -----------------------------------------------------------
  **Standard   The participation requirement is successful when the
  1**          Contractor is represented at every meeting and workgroup
               for which attendance is mandatory or requested.

  ------------ -----------------------------------------------------------

#### Support Income Tax Reporting

The Contractor shall issue to every provider paid under this contract
\[a\] 1099 and/or any other forms required for income tax and reporting
purposes.

### Participation in Change Management Process 

The Contractor shall actively participate in and support the CMS change
management process in accordance with [IOM Pub.
100-01](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS050111),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/ge101c07.pdf).
**NOTE: The Contractor's participation in the CMS change management
process begins upon the award of the contract.**

+----------+-----------------------------------------------------------+
| **Back   | The current CMS Medicare change management process was    |
| ground** | formally implemented in October 1997 to manage and        |
|          | coordinate changes across the Medicare FFS program. These |
|          | changes typically arise from legislation, litigation, and |
|          | policy and result in CMS change requests (CRs). The CMS   |
|          | change management process allows CMS to control, plan,    |
|          | assess, communicate, and implement Medicare FFS changes   |
|          | timely and effectively.                                   |
|          |                                                           |
|          | CMS' Fee-for-Service Operations Board (FFSOB)             |
|          | prioritizes, plans, schedules, and controls the           |
|          | implementation of CMS changes to the computer software,   |
|          | functionality, or operations. The FFSOB is comprised of   |
|          | CMS senior management representatives. The FFSOB develops |
|          | and finalizes a model release schedule approximately five |
|          | (5) months prior to the start of a quarter (January,      |
|          | April, July and October). The model release consists of   |
|          | the CMS CRs scheduled for implementation by the Shared    |
|          | System Maintainers (SSMs), the Healthcare Integrated      |
|          | General Ledger Accounting System (HIGLAS) Maintenance     |
|          | Contractor, and Common Working File (CWF) Maintenance     |
|          | Contractor.                                               |
|          |                                                           |
|          | A User Change Control Board (CCB) is comprised of the     |
|          | SSM, the Contractor users, and CMS personnel from both    |
|          | Central and Regional Offices. The CCB is responsible for  |
|          | controlling and managing Contractor-initiated (or         |
|          | user-initiated) changes, otherwise known as "user         |
|          | changes." However, all changes to the shared systems will |
|          | be approved by CMS. User changes are implemented on a     |
|          | quarterly basis along with the CMS CRs. They usually      |
|          | involve corrections to processing problems or             |
|          | system-generated reports or enhancements to the shared    |
|          | system.                                                   |
|          |                                                           |
|          | The Contractor shall review and comment on all draft CRs  |
|          | issued by CMS and shall comply with all final CRs,        |
|          | including all revisions to the Internet-only manuals      |
|          | (IOMs). The Contractor shall provide a level of effort up |
|          | to 46,200 hours per contract year to (1) Participate in   |
|          | the Point of Contact (POC) Review process that is         |
|          | described in detail in Section C.5.3.8.1 of the SOW; (2)  |
|          | Implement CRs that require shared system changes; and (3) |
|          | Implement CRs that do not require changes to the shared   |
|          | systems. There will be an estimated ten (10) percent      |
|          | increase in hours for each contract year.                 |
|          |                                                           |
|          | The process of controlling changes helps to ensure that   |
|          | the shared systems, HIGLAS, and the Common Working File   |
|          | (CWF) operate as required and that only CMS-approved      |
|          | changes are made. Change requests that require changes to |
|          | the shared systems, HIGLAS, and CWF are implemented in    |
|          | one of four quarterly software releases. Large changes    |
|          | may span over multiple releases. The production date is   |
|          | generally the first Monday of the calendar year quarters  |
|          | (January, April, July, and October). In conjunction with  |
|          | the four quarterly software releases, "off-releases"      |
|          | and/or emergency releases occur as needed. The Shared     |
|          | System Maintainer will provide a release schedule of      |
|          | planned releases. Emergency releases are not scheduled    |
|          | and will occur as needed. These releases usually contain  |
|          | system fixes or priority code changes.                    |
|          |                                                           |
|          | As mentioned above, the FFSOB develops and finalizes a    |
|          | quarterly model release schedule approximately five       |
|          | months prior to the start of a quarter. This model        |
|          | release consists of the CMS change requests (CRs)         |
|          | scheduled for implementation by the SSM, HIGLAS           |
|          | Maintenance Contractor, and CWF Maintenance Contractor.   |
|          | Almost all CRs scheduled on the quarterly release have    |
|          | the same implementation date, which is the implementation |
|          | date of the release, but they may have different          |
|          | effective dates. CRs are either recurring or              |
|          | non-recurring. Recurring CRs are quarterly or annual      |
|          | changes, updates to CMS-supplied software and software    |
|          | documentation, fee schedules, and the federal interest    |
|          | rate percentage. Non-recurring CRs are new instructions   |
|          | or updates or clarifications to existing instructions.    |
|          |                                                           |
|          | CRs and formal instructions from CMS to the Contractors,  |
|          | SSMs, HIGLAS Maintenance Contractor, and CWF Maintenance  |
|          | Contractor are issued as one of the following documents:  |
|          |                                                           |
|          | -   Business Requirements Notification/Transmittal. This  |
|          |     document form is used to communicate Medicare         |
|          |     Fee-for-Service policy changes, new, updates or       |
|          |     clarifications to existing instructions, and can be   |
|          |     accompanied by Internet Only Manual (IOM) updates.    |
|          |                                                           |
|          | -   One-Time Notification. This document is used to       |
|          |     communicate one-time instructions to Contractors,     |
|          |     SSMs, HIGLAS Maintenance Contractor and the CWF       |
|          |     Maintenance Contractor.                               |
|          |                                                           |
|          | -   Confidential Notification. This document is used to   |
|          |     request system or non-system changes that are not to  |
|          |     be shared with the Medicare provider and beneficiary  |
|          |     community.                                            |
|          |                                                           |
|          | -   Recurring Update Notification. This document is used  |
|          |     to communicate quarterly or annual instructions,      |
|          |     changes and updates to CMS-supplied software and      |
|          |     software documentation, fee schedules, and the        |
|          |     federal interest rate percentage.                     |
|          |                                                           |
|          | -   Joint Signature Memorandum (JSM). A JSM is a formal   |
|          |     CMS communication vehicle used for administrative     |
|          |     announcements, emergency alerts, and one-time         |
|          |     informational requests that do not involve shared     |
|          |     system changes.                                       |
|          |                                                           |
|          | -   Contractor participation in the CMS change management |
|          |     process helps ensure that Medicare program changes    |
|          |     produce the expected results.                         |
+----------+-----------------------------------------------------------+

#### Review and Comment on Draft Change Requests

The Contractor shall review draft CRs for operational impacts and
provide timely comments to CMS.

+----------+-----------------------------------------------------------+
| **Back   | As part of the change management process, CMS sends the   |
| ground** | draft CR via an e-mail notification to all Contractors,   |
|          | SSMs, HIGLAS Maintenance Contractor, and the CWF          |
|          | Maintenance Contractor to review before final issuance.   |
|          | This is referred to as the "Point of Contact (POC) Review |
|          | process" or "POC Review." During the POC Review period,   |
|          | the Contractor is required to assess the impact and       |
|          | provide comments to CMS, specifically addressing how the  |
|          | draft CR affects the following:                           |
|          |                                                           |
|          | -   Claims or other workloads                             |
|          |                                                           |
|          | -   Level of effort- Contractor will provide an estimate  |
|          |     in terms of staffing hours                            |
|          |                                                           |
|          | -   Appeals volume                                        |
|          |                                                           |
|          | -   Provider inquiry volumes                              |
|          |                                                           |
|          | -   Provider education needs                              |
|          |                                                           |
|          | -   Provider reaction due to impact on business           |
|          |     operations                                            |
|          |                                                           |
|          | -   Shared systems from a user perspective                |
|          |                                                           |
|          | -   Any systems impact local or cycle run time.           |
|          |                                                           |
|          | -   Conflict in current process or CMS direction.         |
|          |                                                           |
|          | Contractors will provide comments by the closing date and |
|          | time of the POC Review comment period, which is specified |
|          | at the beginning of the POC Review cover letter. No       |
|          | response is required if the Contractor concurs with the   |
|          | CR. The POC Review comment period generally ranges from 4 |
|          | to 15 business days, depending on the length and urgency  |
|          | of the CR. Sometimes, it is necessary for the POC Review  |
|          | comment period for emergency CRs to be less than four     |
|          | days. CMS determines the length of the POC Review periods |
|          | based on the following:                                   |
|          |                                                           |
|          | -   Is it an emergency? This is usually driven by a       |
|          |     legislative mandate or quarterly release              |
|          |     implementation deadline.                              |
|          |                                                           |
|          | -   Length of the CR. CRs over 25 pages usually have a    |
|          |     longer review period.                                 |
|          |                                                           |
|          | -   Frequency of time the CR has been in the POC Review   |
|          |     process. CRs that are being re-reviewed may have a    |
|          |     shorter review timeframe.                             |
|          |                                                           |
|          | CMS issues almost all draft CRs electronically via the    |
|          | Electronic Change Information Management Portal (eChimp)  |
|          | or its equivalent via eChimp. Contractors receive an      |
|          | e-mail from eChimp@cms.hhs.gov that alerts them that a CR |
|          | is currently in POC review. Contractors will access       |
|          | eChimp via a link that is provided in the e-mail          |
|          | notification to review the CR and submit their comments   |
|          | through the POC Review Forum within eChimp.               |
+----------+-----------------------------------------------------------+
| **       | Timely CR review is successful when the Contractor        |
| Standard | provides comments by the closing date and time of the POC |
| 1**      | Review comment period, which is specified at the          |
|          | beginning of the POC Review cover letter.                 |
+----------+-----------------------------------------------------------+

#### Early Involvement 

The Contractor shall participate in early involvement in the change
management process.

The Contractor shall participate in an 'early involvement' call with the
SSMs and CMS personnel when invited to attend. The Contractor shall
review the business requirements of the subject CR and submit questions
before an early involvement call.

+----------+-----------------------------------------------------------+
| **Back   | During the early stages of a draft CR and occasionally    |
| ground** | before it has formally entered the change management      |
|          | process, CMS analysts may solicit input/feedback from the |
|          | Contractors, SSMs, HIGLAS Maintenance Contractor, and the |
|          | CWF Maintenance Contractor. This exchange usually occurs  |
|          | as part of weekly communication teleconference calls or   |
|          | subject-specific workgroup calls.                         |
|          |                                                           |
|          | An "early involvement" call is a conference call between  |
|          | the Contractor, the SSMs, and CMS during which the        |
|          | parties review a CR's business requirements. These        |
|          | teleconferences almost always occur before a CR is issued |
|          | in final, where discussions are held to improve           |
|          | understanding and clarify requirements. Early involvement |
|          | calls assist the SSMs in estimating the level of effort   |
|          | required to implement the CR. CMS has early involvement   |
|          | calls for CRs that are viewed as risky due to their size  |
|          | or complexity or simply need to be clarified. The SSM     |
|          | will notify CMS as to which CRs they would like to have   |
|          | early involvement calls. Generally, the SSMs select five  |
|          | to ten CRs that are targeted for an upcoming quarterly    |
|          | release. Occasionally, a CR may require more than one     |
|          | early involvement call if it is particularly complex or   |
|          | large. CMS invites the SSMs, the HIGLAS Maintenance       |
|          | Contractor, the CWF Maintenance Contractor, the CR's      |
|          | sponsoring Contractor, and Single Testing Contractor      |
|          | (STC) to participate in the early involvement call. All   |
|          | Contractors may or may not be invited to all of early     |
|          | involvement calls. The length of the call is usually one  |
|          | to one-and-a-half hours. Each call is dedicated to one    |
|          | CR.                                                       |
+----------+-----------------------------------------------------------+
| **       | Participation in Early Involvement Calls is successful    |
| Standard | when (1) the Contractor attends all Calls when invited by |
| 1**      | CMS and/or its SSM, (2) the Contractor has reviewed all   |
|          | documentation prior to the Call, and submitted their      |
|          | questions (3) the Contractor is represented by at least   |
|          | one subject matter expert (SME)                           |
+----------+-----------------------------------------------------------+

#### Successful Implementation of Change Requests

The Contractor shall implement CRs in accordance with the requirements
[IOM Pub.
100-01](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS050111),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/ge101c07.pdf).

+----------+-----------------------------------------------------------+
| **Back   | Once the POC Review period has ended, the CMS analyst     |
| ground** | addresses comments and resolves any issues or problems    |
|          | with the CR that arose during that time. The CMS analyst  |
|          | incorporates changes into the final version of the CR and |
|          | obtains the necessary CMS approvals for its issuance      |
|          | prior to presenting it to senior management. If the       |
|          | changes made due to comments made during POC have a       |
|          | serious impact on shared systems, contractors or          |
|          | providers, the CR may be subject to another POC review.   |
|          |                                                           |
|          | The approved/final CR is then issued via e-mail to the    |
|          | Contractors, SSMs, HIGLAS Maintenance Contractor, and the |
|          | CWF Maintenance Contractor for implementation based on    |
|          | the effective and implementation dates specified.         |
|          | Contractors SSMs, HIGLAS Maintenance Contractor, and the  |
|          | CWF Maintenance Contractor should begin work on CRs that  |
|          | are in final upon its receipt.                            |
|          |                                                           |
|          | CMS\' strives to meet the following goals when issuing    |
|          | final CRs in order to provide Contractors, SSMs, HIGLAS   |
|          | Maintenance Contractor, and the CWF Maintenance           |
|          | Contractor with adequate lead-time for implementation:    |
|          |                                                           |
|          | -   Non-recurring system changes are usually issued five  |
|          |     months in advance of the implementation date.         |
|          |                                                           |
|          | -   Recurring system changes are usually issued 60-90     |
|          |     days in advance of the implementation date.           |
|          |                                                           |
|          | -   Non-system changes are usually issued 30 days before  |
|          |     the implementation date if there is no provider       |
|          |     impact.                                               |
|          |                                                           |
|          | -   Non-system changes with provider impact are usually   |
|          |     issued 90 days before the implementation date.        |
|          |     Exceptions include CRs that are recurring,            |
|          |     corrections to finals, Contractor-specific, National  |
|          |     Coverage Determinations (NCDs), and cleared by the    |
|          |     CMS Administrator.                                    |
|          |                                                           |
|          | Shared systems and software changes are gathered into     |
|          | quarterly releases so that the claims processing systems  |
|          | follow a System Development Life Cycle (SDLC) discipline. |
|          | The software changes are made to all the systems at the   |
|          | same time and installed at all processing sites during    |
|          | the same quarterly release timeframes. Off-quarter        |
|          | releases are necessary in order to meet emergency         |
|          | legislative deadlines or correct serious problems. They   |
|          | are much smaller in scale than the quarterly releases and |
|          | may be implemented at any time throughout the quarter.    |
|          | Due to these emergency off-cycle releases, the            |
|          | Contractors may need to mass-adjust claims. The shared    |
|          | systems usually have software to assist with the mass     |
|          | adjustment process.                                       |
|          |                                                           |
|          | The Contractor is part of this SDLC discipline because    |
|          | its perspective is a necessary adjunct to the work of the |
|          | CMS subject matter specialists, the SSMs, HIGLAS          |
|          | Maintenance Contractor, the CWF Maintenance Contractor,   |
|          | and the STC. Successful implementation of the software    |
|          | releases demands that CMS be sure, before the "Go Live"   |
|          | date, that changes will produce the expected results and  |
|          | can be implemented into production without adverse or     |
|          | unintended effects on existing operations.                |
|          |                                                           |
|          | CRs are not implemented based on the draft instructions;  |
|          | Contractor implementation occurs when CMS issues the      |
|          | final CR. On rare occasions, CMS will instruct SSMs to    |
|          | begin work on a CR prior to CMS issuing it in final. This |
|          | is known as Draft Treat as Final. Its purpose is to allow |
|          | SSMs sufficient time to complete software development     |
|          | tasks for the CR by the quarterly release implementation  |
|          | date. For Draft Treat as Final CRs, Contractors           |
|          | participate in conference calls, early involvement calls, |
|          | and walkthroughs upon the request of the SSM and CMS.     |
|          | Contractors participate in testing and implementation of  |
|          | the shared system changes, although it is very unlikely   |
|          | that the CR will progress to this point of the SDLC while |
|          | it is in the Draft Treat as Final stage.                  |
+----------+-----------------------------------------------------------+

##### Walkthroughs

The Contractor shall review the functional specifications of the subject
CR before the walkthroughs and ensure that their SMEs shall participate
in the walkthrough with the SSMs and CMS personnel.

+----------+-----------------------------------------------------------+
| Ba       | After final release of a CR, the SSMs analyze the CR and  |
| ckground | develop the functional specifications. These              |
|          | specifications explain how the CR will be implemented in  |
|          | the shared system in non-technical, business function     |
|          | terminology. Before the CR is coded in the system, the    |
|          | SSM invites the Contractors (user group) and CMS to       |
|          | participate in a walkthrough of the functional            |
|          | specifications.                                           |
|          |                                                           |
|          | Walkthroughs occur for all non-recurring CRs in scheduled |
|          | in a quarterly release. Walkthroughs are usually held     |
|          | over a four-week period and occur 90-120 days prior to a  |
|          | CR's implementation. Walkthroughs provide the Contractor  |
|          | and CMS with an opportunity to obtain clarification from  |
|          | the maintainer to suggest an alternate approach.          |
|          |                                                           |
|          | All CRs with systems changes shall have a walk-through    |
|          | unless time does not allow because the CR is being        |
|          | fast-tracked. This means the CR is being implemented      |
|          | prior to the quarterly release production date.           |
|          |                                                           |
|          | One (1) to three (3) CRs may have a walk-through during   |
|          | the same teleconference. The length of the call is        |
|          | usually one to one-and-a-half hours.                      |
+----------+-----------------------------------------------------------+
| Standard | Participation in walkthroughs is successful when (1) the  |
| 1        | Contractor attends all walkthroughs when invited by CMS   |
|          | and/or its SSM, (2) the Contractor has reviewed all       |
|          | documentation prior to the walkthrough, and (3) the       |
|          | Contractor is represented by at least one SME.            |
+----------+-----------------------------------------------------------+

#### Participation in Testing Changes to Systems

The Contractor shall perform testing in accordance with the standards
and requirements specified for Contractors (Users) in [IOM Pub.
100-01](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS050111),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/ge101c07.pdf)
Section 40.3. The Contractor shall ensure that the required testing is
complete within the Medicare Contractor (User) testing period.

+----------+-----------------------------------------------------------+
| Ba       | Testing changes to the Medicare claims processing         |
| ckground | environment and systems involves four entities: the SSM,  |
|          | the Single Testing Contractor (STC), the Enterprise Data  |
|          | Center (EDC) Contractor, and the Contractor (MAC) who is  |
|          | a user of the shared system.                              |
|          |                                                           |
|          | SSMs and the STC have full responsibility for testing the |
|          | shared systems' base functionality, whereas the           |
|          | Contractor, in cooperation with the EDC that provides     |
|          | data center support services to the Contractor, has full  |
|          | responsibility to test ancillary software components,     |
|          | test non-base system unique programming/coding, and       |
|          | complete an end-to-end operational test. The EDC supports |
|          | the Contractor's testing activities by scheduling jobs,   |
|          | executing jobs, resubmitting jobs as needed, and          |
|          | resolving issues created by the EDC data center.          |
|          |                                                           |
|          | The Contractor's scope of testing includes all claims     |
|          | processing related components and coding, and an          |
|          | end-to-end operational test. The test must ensure that    |
|          | processing is contiguous from claims entry, to claims     |
|          | adjudication, and ultimately remittance and Medicare      |
|          | Summary Notice generation. As part of the Contractor\'s   |
|          | end-to-end operational test, the MAC is required to test  |
|          | the interfaces between all key claims processing          |
|          | components (excluding banking system interfaces).         |
|          |                                                           |
|          | The Contractor is not required to test the specific       |
|          | functionality implemented in the base shared system (i.e. |
|          | Fiscal Intermediary Shared System, or FISS; Multi-Carrier |
|          | System, or MCS) or CWF.                                   |
+----------+-----------------------------------------------------------+
| Standard | The Contractor completes test plans, test executions, and |
| 1        | test analysis in a timely manner.                         |
+----------+-----------------------------------------------------------+
| Standard | The Contractor promptly reports any issues or problems    |
| 2        | involving poor support from the EDC to their CMS Project  |
|          | Officer. Issues that may adversely affect Contractor      |
|          | testing performance shall be reported within 24 hours.    |
+----------+-----------------------------------------------------------+
| Standard | Errors or production problems that should have been       |
| 3        | identified through Contractor testing and are within the  |
|          | scope of Contractor testing do not occur in production.   |
+----------+-----------------------------------------------------------+
| Standard | All interfaces and data exchanges between the Shared      |
| 4        | System and ancillary claims processing components operate |
|          | in production without problems.                           |
+----------+-----------------------------------------------------------+

#### Successful Post-Implementation Operation

The Contractor shall report problems related to systems to both CMS and
the appropriate system maintainer as needed, indicating the correct
priority as defined in [IOM Pub.
100-01](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS050111),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/ge101c07.pdf),
Section 40.2.

### Business Continuity Planning and Disaster Recovery

The Contractor shall assess existing vulnerabilities and implement
disaster avoidance and prevention procedures, in accordance with [IOM
Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/com109c03.pdf),
section 20.1.1.D, and develop a comprehensive continuity of operations
(COOP) plan in accordance with Federal Preparedness Circular 65, Federal
Executive Branch Continuity of Operations, see Attachment J-14.

The Contractor shall participate in Business Continuity Planning and
Disaster Recovery activities for the Enterprise Data Center as needed.

  ------------ -----------------------------------------------------------
  Background   Policies and procedures developed by the Contractor to
               ensure essential business functions continue during a
               disaster. The COOP plan elements include protection of
               physical infrastructure, IT disaster recovery, business
               continuity (with or without system availability), and other
               topics.

  ------------ -----------------------------------------------------------

### Internal Control

The Contractor shall establish and maintain efficient and effective
internal controls to perform the requirements of this contract in
accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/fin106c07.pdf).

+----------+-----------------------------------------------------------+
| Ba       | Internal controls should not be looked upon as separate,  |
| ckground | specialized systems within an organization. Rather, they  |
|          | should be recognized as an integral part of each system   |
|          | that the Contractor's management uses to regulate and     |
|          | guide its operations. Internal controls facilitate the    |
|          | achievement of management objectives by serving as checks |
|          | and balances. Internal controls and the correction of     |
|          | internal control material weaknesses are essential to the |
|          | certification of CMS' financial statements by the Office  |
|          | of the Inspector General (OIG) and to provide CMS with    |
|          | knowledge and assurance that Contractor operations are    |
|          | complying with CMS instructions and directions.           |
|          |                                                           |
|          | The Contractor's management must take responsibility for  |
|          | implementing internal controls that accomplish these      |
|          | various operational goals.                                |
+----------+-----------------------------------------------------------+
| Standard | Internal controls are successful when no findings are     |
| 1        | identified by the Statement on Auditing Standards (SAS)   |
|          | 70 auditors during the audit's period of performance.     |
+----------+-----------------------------------------------------------+

#### Written Policies and Procedures

The Contractor shall have written policies and procedures for internal
controls in place and operating effectively in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/fin106c07.pdf),
sections 10--20.

#### Attestation

The Contractor shall attest to the adequacy of the internal controls
under its authority in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/fin106c07.pdf),
section 30.

#### Correcting Internal Control Deficiencies

The Contractor shall report and correct any internal control findings,
exceptions, or material weaknesses identified during audits and reviews
in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/fin106c07.pdf),
section 40--40.6.

  ----------- -----------------------------------------------------------
  Standard 1  The Contractor\'s corrective action procedures are
              successful when its deficiencies have been corrected within
              one year of being identified.

  ----------- -----------------------------------------------------------

#### Statement on Auditing Standards No. 70 Audit 

The Contractor shall contract with an independent certified public
accounting firm to perform an annual SAS 70 Type II audit in accordance
with Attachment J-6, Requirements for Performing a Statement on Auditing
Standards No. 70 (SAS 70) Audits.

### Compliance Program

The Contractor shall maintain a corporate compliance program consisting
of at least the following elements:

a.  A written code of conduct and written compliance policies and
    procedures;

b.  A Medicare compliance officer and Medicare compliance committee;

c.  An annual employee training and education program on compliance
    issues;

d.  A process to receive compliance-related complaints that permits
    anonymous reporting;

e.  An internal monitoring and auditing function to help ensure
    compliance with the requirements of the Medicare contracts;

f.  An enforcement and disciplinary process for violations of the
    contract, code and/or federal statutes and regulations; and

g.  A process to conduct investigations of compliance-related complaints
    and concerns, and act to prevent compliance-related problems from
    developing; policies and procedures consistent with applicable laws
    and regulations to address persons who are suspended, debarred, or
    excluded from participation in any federal program.

  ------------ -------------------------------------------------------------------------------
  Background   CMS has determined that all Medicare Contractors awarded contracts pursuant to
               the MMA shall have in place an effective compliance program. The compliance
               program may be tailored to the size and scope of the work to be performed under
               the MMA contract. CMS has published its own "Compliance Guidance for
               Fee-for-Service Contractors" (CMS Compliance Guidance) that may be found on the
               CMS web page
               (<http://www.cms.hhs.gov/MedicareContractingReform/Downloads/compliance.pdf>)
               that is based on the seven elements specified in the United States Sentencing
               Commission's Sentencing Guidelines for Organizational Defendants, as amended.
               Contractors that are designing, implementing or evaluating their compliance
               programs may find it useful to refer to the CMS Compliance Guidance. However,
               it is not to be read as the sole pronouncement of desired substantive or
               procedural elements of an effective compliance program. Most importantly, an
               effective program is not static, but is constantly evolving towards the
               ultimate goal of being proactive rather than reactive.

  ------------ -------------------------------------------------------------------------------

### Chain Provider Organizations

The Contractor shall be responsible for performing all required and
appropriate A/B MAC SOW functions for the chain home office and chain
members, regardless of the geographic locality of their members, if the
chain in question both enjoys CMS approved single MAC status and the
home office of that chain is located within the boundaries of the MAC
jurisdiction.

Similarly, the Contractor shall be responsible for servicing future
chain organizations meeting the above geographic criteria who are
subsequently approved for single MAC status by CMS.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------
  Background   Determination of a chain shall be made in accordance with [IOM Pub.
               100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
               Chapter [1](http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf), section 20.3 In cases where the providers are part of a chain but do not
               bill the chain home office, they shall bill their local MAC in their jurisdiction; however, they shall not bill a MAC outside of their
               jurisdiction.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------

## Provider Enrollment 

The Contractor shall manage the CMS provider enrollment process to
ensure that only qualified individuals and organizations are enrolled in
the Medicare Program via the processing of OMB approved CMS-855
applications (either electronic/web-based or paper) and by using the
government-furnished Provider Enrollment, Chain and Ownership System
(PECOS); both in accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [10](http://www.cms.hhs.gov/manuals/downloads/pim83c10.pdf).

+----------+-----------------------------------------------------------+
| Ba       | Using the government-furnished PECOS and a third party    |
| ckground | validation Contractor selected by CMS, the Contractor     |
|          | will input provider enrollment information into PECOS and |
|          | verify the enrollment data through a third-party          |
|          | Contractor, unless otherwise prescribed in [IOM Pub.      |
|          | 100-08](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033), |
|          | Chapter                                                   |
|          | [10                                                       |
|          | ](http://www.cms.hhs.gov/manuals/downloads/pim83c10.pdf). |
|          | Such provider enrollment information includes all data on |
|          | initial enrollment applications, change requests,         |
|          | revalidation applications, changes of ownership (which,   |
|          | for purposes of C.5.5 through C.5.5.6 of this SOW,        |
|          | include acquisitions/mergers and consolidations),         |
|          | reactivation applications, reassignments, voluntary       |
|          | terminations, and other information.                      |
|          |                                                           |
|          | For providers with records already entered into PECOS,    |
|          | the Contractor will change or update that information.    |
|          | For providers who do not have an established record in    |
|          | PECOS, the Contractor may be required to ask the          |
|          | providers to complete and submit enrollment data to       |
|          | establish such a record.                                  |
|          |                                                           |
|          | The MAC will maintain a consistent and uniform policy for |
|          | issuing and maintaining Medicare identification numbers   |
|          | for all providers/suppliers. This may require a change to |
|          | the numbering sequence previously used by Contractors     |
|          | within the assigned jurisdictions.                        |
+----------+-----------------------------------------------------------+

### Process Initial Enrollment Applications

The Contractor shall accurately and timely process initial enrollment
applications for providers enrolling in the Medicare program for the
first time or enrolling in another Contractor's jurisdiction.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------
  Background   The applications in this category include initial enrollment applications, reassignments and CMS-588 forms (electronic funds transfer, or EFT)
               submitted with initial applications; change of ownership (CHOW) applications submitted by the new owner; revalidation applications;
               reactivation applications; and opt-out affidavits.

  Standard 1   The applications described in C.5.5.1 of this SOW will be considered timely processed when 80% of applications are processed within 60
               calendar days of receipt or sooner, 90% in 120 calendar days of receipt or sooner and 99% of applications are processed within 180 calendar
               days of receipt.

  **Standard   The applications described in C.5.5.1 of this SOW will be considered accurately processed when 98% of applications are processed in accordance
  2**          with all of the instructions in [IOM Pub.
               100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
               Chapter [10](http://www.cms.hhs.gov/manuals/downloads/pim83c10.pdf), with the exception of the timeliness standards identified in Standard 1
               of C.5.5.1.
  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------

### Process Changes, Updates, Reassignments or Corrections 

The contactor shall timely and accurately process changes of
information; updates (i.e., changes not resulting in a submission of a
CMS-855, such as changes in participation status and date of death
reports); reassignments and CMS-588 forms that are not associated with
initial applications; CHOW applications submitted by the old owner;
voluntary terminations; or corrections to provider enrollment
information.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------
  Standard 1   The applications described in C.5.5.2 of this SOW will be considered timely processed when 80% of applications are processed within 45
               calendar days of receipt or sooner, 90% in 60 calendar days of receipt or sooner, and 99% of applications within 90 calendar days of receipt.

  **Standard   The applications described in C.5.5.2 of this SOW will be considered accurately processed when 98% of applications are processed in accordance
  2**          with all of the instructions in [IOM Pub.
               100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
               Chapter [10](http://www.cms.hhs.gov/manuals/downloads/pim83c10.pdf), with the exception of the timeliness standards identified in Standard 1
               of C.5.5.2.
  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------

### Revocations

The Contractor shall revoke a billing number (or recommend a number to
be revoked) if CMS or the MAC determines through investigation that a
revocation is appropriate based on the reasons listed in [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [10](http://www.cms.hhs.gov/manuals/downloads/pim83c10.pdf).

  ----------- ----------------------------------------------------------------------------------------------------------------------------------------------
  Standard 1  The Contractor shall process 100% of all revocation actions -- regardless of whether notification was received through investigation by CMS or
              by a Contractor -- in full accordance with all revocation instructions in [IOM Pub.
              100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
              Chapter [10](http://www.cms.hhs.gov/manuals/downloads/pim83c10.pdf).

  ----------- ----------------------------------------------------------------------------------------------------------------------------------------------

### Provider Enrollment Appeals

The Contractor shall interface with CMS, as requested, to handle appeals
of initial provider enrollment determinations that can be appealed to a
Contractor hearing officer.

+----------+-----------------------------------------------------------+
| Ba       | This appeal procedure ensures that a physician,           |
| ckground | non-physician practitioner, or entity that is entitled to |
|          | appeal rights under 42 CFR Part 498 receives a fair       |
|          | opportunity to be heard. The Contractor will need to:     |
|          |                                                           |
|          | -   Conduct appeals of initial provider enrollment        |
|          |     denials;                                              |
|          |                                                           |
|          | -   Participate, to the extent necessary, in provider     |
|          |     enrollment appeals conducted by an Administrative Law |
|          |     Judge at the Department Appeals Board; and            |
|          |                                                           |
|          | -   Participate, to the extent necessary, in appeals      |
|          |     heard by a Federal District Court.                    |
+----------+-----------------------------------------------------------+

### Maintain State-Specific Licensure/Certification Information

The Contractor shall collect and maintain information regarding state
licensure/certification requirements for all provider types, and notify
CMS of any changes to State laws pertaining to State
licensure/certification for enrollment.

  ------------ -----------------------------------------------------------
  Background   Note that this requirement does not apply with respect to
               (1) provider and supplier types that are enrolled via the
               CMS 855A, (2) ambulatory surgical centers, and (3) portable
               X-ray suppliers.

  ------------ -----------------------------------------------------------

### Participating Physician Program Management 

The Contractor shall perform physician participation enrollment,
limiting charge monitoring activities and dissemination of participation
information for FY 2006 in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf)
and [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/fin106c06.pdf).

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------
  Background   Participating physician enrollment, monitoring and information dissemination are vital functions to the operating efficiency of CMS. Some of
               the functions the Contractor will engage in are as follows: produce and mail enrollment packages, process enrollment and withdraws, furnish
               data to CMS and RRB Contractor ([IOM Pub.
               100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
               Chapter [1](http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf)), investigate beneficiary-initiated limiting charge violation complaints,
               respond to limiting charge inquiries from non-participating physicians, produce and store limiting charge reports (LCERs/LCMRs), respond to
               and produce requests for customized participation information and populating your internet website with MEDPARD information and informing
               physicians, practitioners, suppliers, hospitals, Social Security Offices, Congressional Offices, QIOs, senior citizen groups and State
               agencies of the Administration on Aging how to access the website information.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------

## Local Coverage Determinations

The Contractor shall develop and enter into the Medicare Coverage
Database (MCD) Local Coverage Determinations (LCDs) in accordance with
[IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [13](../IOM%20Pub.%20100-08).

The Contractor shall ensure that all LCDs are consistent with all
statutes, rulings, regulations, and national coverage, payment, and
coding policies.

+----------+-----------------------------------------------------------+
| Ba       | Section 522 of the Benefits Improvement and Protection    |
| ckground | Act created the term "local coverage determinations"      |
|          | (LCDs). An LCD is a decision by a Contractor whether to   |
|          | cover a particular service on a Part A-wide and/or Part   |
|          | B-wide basis in accordance with Section 1862(a)(1)(A) of  |
|          | the Social Security Act (i.e., a determination as to      |
|          | whether the service is reasonable and necessary).         |
|          |                                                           |
|          | LCDs specify under what clinical circumstances a service  |
|          | is considered to be reasonable and necessary. Contractors |
|          | publish LCDs to provide guidance to the public and        |
|          | medical community within their jurisdictions. Contractors |
|          | develop LCDs by considering medical literature, the       |
|          | advice of local medical societies and medical             |
|          | consultants, public comments, and comments from the       |
|          | provider community.                                       |
|          |                                                           |
|          | LCDs are entered into the CMS provided MCD system. The    |
|          | MCD acts as a central point of dissemination for both     |
|          | National and Local Medicare Coverage policies.  On the    |
|          | national side, the MCD houses National Coverage Analyses  |
|          | (NCAs), Coding Analyses for Laboratories (CALs), and      |
|          | National Coverage Decisions (NCDs). On the local side,    |
|          | the MCD houses LCDs, Local Medical Review Policies and    |
|          | Contractor articles. Besides these policies, the MCD      |
|          | contains downloadable indexes and reports. The MCD will   |
|          | notify Contractors of each LCD that is affected by an     |
|          | update to a HCPCS or ICD-9-CM code.                       |
|          |                                                           |
|          | A Contractor with LCD jurisdiction for two or more States |
|          | is strongly encouraged to develop uniform LCDs across all |
|          | its jurisdictions.                                        |
+----------+-----------------------------------------------------------+

### Contractor Advisory Committee

The Contractor shall establish a Contractor Advisory Committee (CAC) in
accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [13](../IOM%20Pub.%20100-08) (NOTE: The Contractor shall
reference the requirements for the Carrier Advisory Committee outlined
in this Manual).

+----------+-----------------------------------------------------------+
| Ba       | The purpose of the CAC is to provide:                     |
| ckground |                                                           |
|          | -   A formal mechanism for physicians in the State to be  |
|          |     informed of and participate in the development of an  |
|          |     LCD in an advisory capacity;                          |
|          |                                                           |
|          | -   A mechanism to discuss and improve administrative     |
|          |     policies that are within the Contractor's discretion; |
|          |     and                                                   |
|          |                                                           |
|          | -   A forum for information exchange between Contractors  |
|          |     and physicians.                                       |
|          |                                                           |
|          | After the initial consolidation period, the CAC will be   |
|          | tasked with advising the Contractor on the revision of    |
|          | consolidated LCDs, if appropriate, and the creation of    |
|          | new LCDs, as needed.                                      |
+----------+-----------------------------------------------------------+

## Provider Customer Service Program

The Contractor shall conduct a Provider Customer Service Program (PCSP)
in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
section 20.

+----------+-----------------------------------------------------------+
| Ba       | The PCSP is a comprehensive, coordinated and integrated   |
| ckground | program. The PCSP provides high-quality and timely        |
|          | information, education, and training and increases the    |
|          | overall level of provider satisfaction with Contractor    |
|          | interaction related to the Medicare program. Medicare     |
|          | providers need to receive clear, accurate, timely, and    |
|          | consistent information about the Medicare program in      |
|          | multiple ways. To meet provider information, education,   |
|          | and training goals, the Centers for Medicare & Medicaid   |
|          | Services (CMS) PCSP includes three major components:      |
|          |                                                           |
|          | -   Provider outreach and education (POE) for educating   |
|          |     providers and their staff.                            |
|          |                                                           |
|          | -   Provider Contact Center (PCC) for handling provider   |
|          |     inquiries.                                            |
|          |                                                           |
|          | ```{=html}                                                |
|          | <!-- -->                                                  |
|          | ```                                                       |
|          | -   Provider self-service (PSS), including web and        |
|          |     interactive voice response (IVR) technology allowing  |
|          |     access to Medicare information any time of the day.   |
+----------+-----------------------------------------------------------+

### Provider Outreach and Education 

The Contractor shall conduct provider outreach and education (POE)
activities in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf).

+----------+-----------------------------------------------------------+
| Ba       | The fundamental goal of the POE program is to reduce the  |
| ckground | provider compliance error rate and the claims payment     |
|          | error rate by giving Medicare providers the information   |
|          | they need to understand the Medicare program, be informed |
|          | timely about changes, and bill correctly. POE is driven   |
|          | by educating providers and their staffs about the         |
|          | fundamentals of the Medicare national and local program,  |
|          | polices, and procedures, new Medicare initiatives,        |
|          | significant changes to the Medicare program, and issues   |
|          | identified through analyses of such things as provider    |
|          | inquiries, claim submission errors, medical review data,  |
|          | and Comprehensive Error Rate Testing (CERT) data. These   |
|          | efforts are aimed at reducing the number of provider      |
|          | inquiries and claim submission errors.                    |
|          |                                                           |
|          | The Contractor shall educate and train providers about    |
|          | the Medicare program and billing issues in accordance     |
|          | with [IOM Pub.                                            |
|          | 100-09](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034), |
|          | Chapter                                                   |
|          | [6                                                        |
|          | ](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf) |
|          | §20.3. POE education may be delivered to groups, to       |
|          | individuals, and through various in-person and media      |
|          | channels at the complete discretion of the contractor,    |
|          | with the goal of effectively and efficiently using the    |
|          | POE funding to reduce the error rate. Provider outreach   |
|          | and education by the Contractor shall include new         |
|          | provider training, training tailored for small providers, |
|          | and education on preventive benefits, local coverage      |
|          | determinations, education resulting from medical review   |
|          | referrals, electronic claim submissions, and remittance   |
|          | advice.                                                   |
|          |                                                           |
|          | The Contractor shall communicate information from CMS     |
|          | program instructions (Change Requests, or CRs; and Joint  |
|          | Signature Memorandums, or JSMs) to providers in the       |
|          | manner specified in the instruction.                      |
|          |                                                           |
|          | Measurement tools will be provided to the contractors by  |
|          | CMS. See Attachment J-16 for more information.            |
+----------+-----------------------------------------------------------+
| Standard | The Contractor\'s POE activities are successful when the  |
| 1        | Contractor maintains satisfactory performance levels, as  |
|          | measured by CMS, in regards to website satisfaction, as   |
|          | measured using American Customer Satisfaction Index       |
|          | survey methodology, and provider education as measured by |
|          | the Medicare Contractor Provider Satisfaction Survey.     |
+----------+-----------------------------------------------------------+
| Standard | The Contractor\'s POE activities are successful when      |
| 2        | there is a decrease in the contractor-specific provider   |
|          | compliance error rate of 10% as compared to the           |
|          | contractor\'s baseline determined during the base year of |
|          | the contract (The decrease will be measured on an annual  |
|          | basis; the provider compliance error rate is the gross    |
|          | rate before any adjustments has been made, including      |
|          | errors based on the non-response rate).                   |
+----------+-----------------------------------------------------------+
| Standard | The Contractor's POE activities are successful when there |
| 3        | is a decrease in the state-specific Hospital Performance  |
|          | Monitoring Program error rate of 5% as compared to the    |
|          | contractor's baseline determined during the base year of  |
|          | the contract by the Quality Improvement Organization (The |
|          | decrease will be measured on an annual basis).            |
+----------+-----------------------------------------------------------+

#### Data Analysis

The Contractor shall analyze the data available in order to identify
outreach and educational needs of the providers in its jurisdiction in
accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§20.2.

  ------------ -----------------------------------------------------------
  Background   At a minimum, the Contractor shall perform inquiry
               analyses, claims submission error analyses, and review of
               the error rate data. The Contractor shall also use a
               consideration of referrals from medical review in setting
               education priorities.

  ------------ -----------------------------------------------------------

#### Provider Outreach and Education Advisory Group

The Contractor shall establish and maintain a POE Advisory Group in
accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§20.4.

#### "Ask-the-Contractor" Teleconferences

The Contractor shall organize toll-free "Ask-the-Contractor"
teleconferences (ACTs) in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§20.3.4.6. ACTs serve as a method to share information with the
Contractor's provider community and shall be offered at least quarterly.

#### Provider Organization Partnerships

The Contractor shall establish partnerships with provider organizations
to disseminate Medicare provider information in accordance with [IOM
Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§20.1.2.

#### Promotion of Internal Communication and Development of Provider Education Needs

The Contractor shall coordinate with appropriate staff within the
contractor's other business areas (medical review, provider inquiries;
Medicare Secondary Payer, or MSP; enrollment; appeals, systems; etc.) to
promote internal communication and development of provider education
needs in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§20.1.1.

#### Bulletin/Newsletter Publication

The Contractor shall publish and distribute paper bulletins/newsletters
in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§20.3.1.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------
  Background   The Contractor may use alternative approaches to printing and mailing paper bulletins, in accordance with [IOM Pub.
               100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
               Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf). Contractors interested in using alternative approaches shall have their
               plan approved by CMS. The alternative approaches shall ensure that the same information that would have appeared in the paper bulletins is
               available to providers electronically, include a mechanism for providers who have technical barriers to continue to receive paper copies, and
               include a process that providers will use to return to receiving paper copies. The alternative approach shall be sent to CMS for approval
               prior to ceasing the publication of paper bulletins and at any time the Contractor wants to modify its CMS-approved approach.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------

#### Provider Service Plan

The Contractor shall develop and submit an annual Provider Service Plan
(PSP) for the outreach and education activities the Contractor will
accomplish throughout the year in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§20.5.1. The PSP will include a self-evaluation of the Contractor's POE
activities during the previous contract year.

#### Education Activity Report 

The Contractor shall develop and submit a semiannual Education Activity
Report that summarizes and recounts the completed POE activities in
accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§20.5.2.

### Provider Contact Center

The Contractor shall establish and maintain a PCC in accordance with
[IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§30.

+----------+-----------------------------------------------------------+
| Ba       | The Contractor will choose and implement contact center   |
| ckground | technology that demonstrates innovation and efficiency in |
|          | providing excellent customer service. Because of the      |
|          | various communication channels available to providers     |
|          | today, it is important that all communication be          |
|          | coordinated to ensure consistency. The initial provider   |
|          | contact is normally made to a PCC. The PCC serves as the  |
|          | coordinating centerpiece for developing and managing the  |
|          | relationship with the Medicare providers.                 |
|          |                                                           |
|          | Measurement tools will be provided to the Contractors by  |
|          | CMS. See Attachment J-16 for more information.            |
+----------+-----------------------------------------------------------+
| Standard | The Contractor\'s PCC activities are successful when the  |
| 1        | Contractor maintains satisfactory performance levels, as  |
|          | measured by CMS, in regards to call center satisfaction,  |
|          | as measured using American Customer Satisfaction Index    |
|          | survey methodology, and provider inquiries as measured by |
|          | the Medicare Contractor Provider Satisfaction Survey.     |
+----------+-----------------------------------------------------------+

#### Telephone Inquiries 

The Contractor shall respond to provider telephone inquiries in a
timely, accurate, and consistent manner in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§30.2.

+----------+-----------------------------------------------------------+
| Ba       | The Contractor must divide provider telephone inquiry     |
| ckground | staff into at least two levels of Customer Service        |
|          | Representatives (CSRs). First level CSRs shall answer a   |
|          | wide range of basic questions that cannot be answered by  |
|          | the interactive voice response (IVR). Second level CSRs   |
|          | will answer more complex questions. Inquiries that        |
|          | require additional time or yet higher degree of expertise |
|          | and/or research shall be referred to the Provider         |
|          | Relations Research Specialists (PRRS) (see requirement    |
|          | C.5.7.2.3). Triage approaches must be consistent with the |
|          | guidance provided in [IOM Pub.                            |
|          | 100-09](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034), |
|          | Chapter                                                   |
|          | [6]                                                       |
|          | (http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf), |
|          | §30.1.                                                    |
|          |                                                           |
|          | If a Contractor chooses to have multiple call centers,    |
|          | the call centers shall be networked in such a way as to   |
|          | enable them to balance the call volume load, and assist   |
|          | with contingency planning and disaster recovery, with a   |
|          | goal of meeting performance metrics at a Contractor       |
|          | level.                                                    |
|          |                                                           |
|          | [Fraud and Abuse Complaints]{.underline} -- When a        |
|          | provider inquiry or complaint of potential fraud and      |
|          | abuse in received by the first level screening staff, it  |
|          | shall be referred to the second level screening staff.    |
|          | The second level screening staff shall not performance    |
|          | any screening, but prepare a referral package and send it |
|          | immediately to the PSC in accordance with [IOM Pub.       |
|          | 100-09](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034), |
|          | Chapter                                                   |
|          | [6]                                                       |
|          | (http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf), |
|          | §30.8.                                                    |
+----------+-----------------------------------------------------------+
| Standard | Telephone inquiries are successful when, for calls        |
| 1        | monitored for the quarter, the number of CSRs scoring as  |
|          | \"Achieves Expectations\" or higher for Knowledge Skills  |
|          | using the Quality Call Monitoring tool shall be no less   |
|          | than 93% (cumulative for the quarter).                    |
+----------+-----------------------------------------------------------+
| Standard | Telephone inquiries are successful when the corporate     |
| 2        | quarterly call completion rate is 95% for IVRs and 80%    |
|          | for CSRs.                                                 |
+----------+-----------------------------------------------------------+
| Standard | Telephone inquiries are timely when the corporate         |
| 3        | quarterly average speed of answer is 60 seconds.          |
+----------+-----------------------------------------------------------+

#### Written Inquiries

The Contractor shall respond to provider written inquiries in a timely,
accurate, and consistent manner in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf).

  ------------ -----------------------------------------------------------
  Background   Contractors have the discretion to develop a tiered
               approach to answering general written inquiries. Written
               inquiries shall include letters, faxes, and e-mails.
               Inquiries made through electronic transmission are
               considered written inquiries. Contractors shall handle the
               rare occurrence of a walk-in inquiry. Such inquiries are
               counted in the written inquiry workload.

  Standard 1   Written inquiries are successful when, of the written
               responses monitored for the quarter, the number of written
               inquiry respondents scoring as "Pass" for Knowledge Skills
               using the Quality Written Correspondence Monitoring (QWCM)
               tool shall be no less than 93% (cumulative for the
               quarter).

  Standard 2   Written inquiries are timely when at least 95% are answered
               with final responses within 45 business days of receipt and
               no more than 5% are answered with interim responses (this
               5% includes all PRRS interim responses -- see requirement
               C.5.7.2.3) within 45 business days of receipt.
  ------------ -----------------------------------------------------------

#### Provider Relations Research Specialists

The Contractor PRRS shall handle complex provider inquiries from the
contact center that require significant research and complex beneficiary
inquiries that cannot be resolved by the Beneficiary Contact Center
(BCC), in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§30.5 and §60.4.

+----------+-----------------------------------------------------------+
| Ba       | The PRRS is primarily responsible for resolving complex   |
| ckground | provider written and telephone inquiries. Referral of     |
|          | complex inquiries from the BCC will also be resolved by   |
|          | the PRRS. Responses to provider inquiries are in writing  |
|          | unless the inquiring party has requested a call back or   |
|          | the inquiry is best handled with a callback.              |
|          |                                                           |
|          | The PRRS is also responsible for developing job aids for  |
|          | CSRs, assisting in the development of training materials  |
|          | for the general inquiries staff, and serving as the point |
|          | of contact for Medicare Advantage plans about Medicare    |
|          | program coordination issues.                              |
+----------+-----------------------------------------------------------+
| Standard | PRRS responses are successful when of all provider and    |
| 1        | beneficiary responses monitored for the quarter, the      |
|          | number of PRRS respondents scoring as "Pass" for          |
|          | Knowledge Skills using the Quality Written Correspondence |
|          | Monitoring (QWCM) tool shall be no less than 93%          |
|          | (cumulative for the quarter).                             |
+----------+-----------------------------------------------------------+
| Standard | PRRS responses are timely when 75% of complex inquiries   |
| 2        | referred by provider telephone CSRs or from the BCC are   |
|          | answered within 25 business days from receipt.            |
+----------+-----------------------------------------------------------+
| Standard | PRRS responses are timely when at least 95% of complex    |
| 3        | inquiries referred by provider telephone CSRs or from the |
|          | BCC are answered within 45 business days from receipt and |
|          | no more than 5% are answered with interim responses (this |
|          | 5% includes all general inquiry interim responses -- see  |
|          | requirement C.5.7.2.2) within 45 business days of         |
|          | receipt.                                                  |
+----------+-----------------------------------------------------------+

##### Responding to Complex Beneficiary Inquiries 

The Contractor shall respond timely to complex beneficiary telephone and
written inquiries referred by the BCC in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf). The
Contractor shall respond directly to the beneficiary via telephone,
written mail or e-mail and document the response in the Next-Generation
Desktop (NGD).

Potential fraud and abuse complaints from beneficiaries shall also be
referred to the PRRS. The PRRS shall refer these complaints to the
second level screening staff that shall process them in accordance with
[IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/pim83c04.pdf)
Section 4.6.2.

+----------+-----------------------------------------------------------+
| Ba       | Once an inquiry is referred from the BCC, the PRRS        |
| ckground | researches and resolves the complex inquiry. The nature   |
|          | of the inquiries may be expected to range from Benefit    |
|          | Integrity Unit (BIU) complaints, Claim Adjustments,       |
|          | claims processing difficulties, Medicare Secondary Payer  |
|          | (MSP) adjustments, Check Reissue, Congressional Inquiries |
|          | that are MAC related, and Freedom of Information Act      |
|          | (FOIA) requests. These are examples of types of complex   |
|          | inquiries and not a complete list. The inquiries will not |
|          | come directly into the PRRS, but will instead be          |
|          | referrals transferred from BCCs to the PRRS               |
|          | electronically via the NGD. The MAC will take the         |
|          | appropriate necessary action and update the NGD record    |
|          | accordingly.                                              |
|          |                                                           |
|          | NGD is a CMS-furnished desktop application and the        |
|          | Contractor is required to use NGD only for complex        |
|          | beneficiary inquiry referrals. CMS will provide as many   |
|          | NGD licenses as needed to process the complex beneficiary |
|          | inquiries. The NGD technical specifications can be found  |
|          | in [IOM Pub.                                              |
|          | 100-09](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034), |
|          | Chapter                                                   |
|          | [2]                                                       |
|          | (http://www.cms.hhs.gov/manuals/downloads/com109c02.pdf). |
|          | CMS provides Siebel Systems' eHealthcare product and      |
|          | centrally located servers that the Contractor accesses    |
|          | via the Medicare Data Communications Network (MDCN). No   |
|          | special operating or Service-Level Agreements (SLAs) are  |
|          | required between the Contractor and the NGD               |
|          | developer/maintainer.                                     |
+----------+-----------------------------------------------------------+

1.  Acceptance and Tracking of Complex Beneficiary Inquiry Referrals

The Contractor shall use the NGD to accept referrals of complex
telephone and written inquiries from the BCC and to track the PRRS
caseload from referral receipt to response.

2.  English, Spanish, and Text Telephone Capabilities

The Contractor shall have adequate language capabilities (English;
Spanish; and Text Telephone, or TTY) to handle telephone communications
with all beneficiaries within their jurisdiction. For other beneficiary
language groups in its jurisdiction, the Contractor shall obtain foreign
language support service by contract.

3.  Review Written Responses for Reading Level (Fogging) Accuracy and
    Timeliness

The Contractor shall fog written responses for reading level (8th grade
or less), in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [2](http://www.cms.hhs.gov/manuals/downloads/com109c02.pdf),
section 20.2.1(3), and review for accuracy, clarity, tone, and
formatting.

4.  Feedback

The Contractor shall provide feedback via the NGD to the BCC identifying
inappropriate referrals (routine inquiries that should have been handled
by the BCC) to the PRRS.

#### Inquiry Tracking System

The contractor shall maintain a tracking and reporting system for all
provider inquiries and submit a quarterly contractor inquiry tracking
report in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§30.6.

  ------------ -----------------------------------------------------------
  Background   Data from the tracking system is used to analyze the number
               and types of inquiries in order to generate frequently
               asked questions (FAQs) to be posted on the website,
               identify areas for telephone Customer Service
               Representative (CSR) training, and identify areas for
               broader provider education. The tracking system will also
               be used to generate quarterly reports for CMS use.

  ------------ -----------------------------------------------------------

### Provider Self-Service Technology

The Contractor shall facilitate and encourage providers' use of
self-service technology, through marketing materials, educational
seminars, listserv messages, and instructions on websites and IVRs in
accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§50.

#### Interactive Voice Response

The Contractor shall use IVR technology to provide self-service options
for providers to perform beneficiary eligibility inquiries, claims
status inquiries, and access remittance advice code and definitions as
well as information to help providers resolve issues identified by these
code sets, 24 hours a day seven (7) days a week, with allowances for
normal system availability, updates, and maintenance provided in
accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§50.1.

+----------+-----------------------------------------------------------+
| Ba       | Medicare providers are required to use the IVR to access  |
| ckground | this information (unless Internet-based transactions are  |
|          | available, as approved by CMS).                           |
|          |                                                           |
|          | The Contractor shall identify providers who repeatedly    |
|          | call CSRs for information that is available on the IVR    |
|          | and contact them to teach them to effectively use the     |
|          | IVR.                                                      |
+----------+-----------------------------------------------------------+

#### Web Technology

The Contractor shall maintain web self-service technology to furnish
providers with timely, accessible, and understandable Medicare program
information in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§50.2

#### Provider Listserv

The Contractor shall offer electronic listservs for providers and
promote the availability of and benefits of registration to the
listservs in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§50.3.

  ----------- -----------------------------------------------------------
  Standard 1  The Contractor\'s listserv activities are successful when
              the Contractor maintains at least 25% of its active
              provider count as unique registrants to its provider
              listserv by the end of the first year of the contract
              (active providers are all individual providers who have had
              billing activity during the previous twelve (12) months).

  ----------- -----------------------------------------------------------

#### Provider Customer Service Program Staff Training 

The Contractor shall ensure that its staff is adequately trained to
provide a high level of customer service through both POE and its PCC.
At a minimum, the Contractor shall follow the training requirements in
[IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
§40.

## Claims Processing

The following graphic is an overview of Medicare claims processing.

\[\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--Area
1\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--\]

![](media/image4.wmf)

\[\-\-\-\-\-\-\-\-\-\-\--Area 2\-\-\-\-\-\-\-\-\-\--\]\[\-\-\-\--Area
3\-\-\-\--\]\[\-\-\-\-\-\-\-\--Areas 4, 5,
6\-\-\-\-\-\-\-\-\--\]\[\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--Areas 7,
8\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--\]

The diagram above is a graphical illustration of claims processing
showing flows of information. It is not intended to depict a time
sequence. In area 1 (at the top of the diagram), the Social Security
Administration (SSA) provides beneficiary enrollment data to the Centers
for Medicare & Medicaid Services (CMS). Medicare Advantage (MA)
organizations and other managed care plans (e.g., cost plans,
demonstrations, PACE organizations), and Prescription Drug sponsors
provide information on beneficiaries who have enrolled in Medicare
delivery systems other than the traditional Medicare Fee-for-Service
(FFS) program and then the information is used to adjudicate claims

In area 2 (the left side of the diagram), providers (or billing agents
and clearinghouses on their behalf) or, in specialized circumstances,
beneficiaries, send claims and other transactions (e.g., provider data,
beneficiary demographic data, claims attachments) to a collection point
that houses preprocessing functionality before entry into the shared
systems.

Area 3 is the front-end system that validates format and conformance
with Health Insurance Portability and Accountability Act (HIPAA) syntax,
translates HIPAA electronic transactions to a file that the shared
claims processing systems can receive as input; converts paper claims to
electronic to join input data stream of HIPAA-compliant electronic data
interchange (EDI) claims. Cost reports are also collected by CMS.

Areas 4, 5, and 6 are the claims processing core activities. In area 4,
the shared system (Fiscal Intermediary Standard System---FISS; or
Multi-Carrier System---MCS) begins processing: edits for consistency,
utilization, covered service, eligible beneficiary and provider, and
pricing algorithms. In area 5, the claim is sent to the Common Working
File (CWF) for eligibility and other checks such as lifetime service
limits, or cross-Contractor utilization editing. The CWF responds in one
of the following ways:

a.  OK to pay claim as submitted,

b.  Reject claim as submitted, or

c.  Claim needs additional information before it can be paid.

If CWF rejects or flags claim as needing further review, the reply will
contain information to assist in resolution. In area 6, the shared
system determines final claim action (pay, suspend, deny).

In area 7, back-end processing closes out the claim by sending notices
to beneficiaries and providers, checks and electronic funds transfer
(EFT), bank notices, and financial data. The Healthcare Integrated
General Ledger System (HIGLAS) is included in this area, for those
workloads using HIGLAS. In area 8, claims data and cost reports are
collected by CMS from providers, and beneficiary and provider files are
updated with new utilization information, tax and payment data.

### Standard Paper Remittance Advice Transactions

The Contractor shall maintain the capability to issue Standard Paper
Remittance Advices (SPRs) to those providers that are unable to receive
835 remittance advice transactions from Medicare in accordance with [IOM
Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [24](http://www.cms.hhs.gov/manuals/downloads/clm104c24.pdf),
[25](../25), and
[26](http://www.cms.hhs.gov/manuals/downloads/clm104c26.pdf).

#### Direct Data Entry Support 

The Contractor shall provide connectivity for the remote providers to
access Direct Data Entry (DDE), security clearance for such access,
training for the providers on how to use DDE, and answers to providers'
questions on maneuvering through the screens to institutional claims
submitters for DDE access to the shared systems for the purpose of
submitting and correcting claims in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [24](../24) and [25](../25).

+----------+-----------------------------------------------------------+
| Ba       | DDE is a mode of transmitting claims using secure,        |
| ckground | dedicated hardware and communications lines.              |
|          |                                                           |
|          | The standard front-end contractor shall support direct    |
|          | data entry capability (DDE), where it previously existed. |
|          | The shared system maintainer shall make the data elements |
|          | in those screens compliant with the data requirements of  |
|          | the corresponding HIPAA transaction implementation guides |
|          | as specified in the HIPAA transaction implementation      |
|          | instructions in [IOM Pub.                                 |
|          | 100-04](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912), |
|          | Chapter [24](../24).                                      |
+----------+-----------------------------------------------------------+

### General Claims Processing

The Contractor shall process to the point of payment, denial, or other
adjudicative action in a timely and accurate manner, usually by
operating shared system software, claims and claims-related transactions
for which it has processing jurisdiction. Jurisdiction of a claim is
determined based on the criteria listed in [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf),
section 10. The Contractor shall adhere to claims processing
instructions contained in [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912).

The Contractor shall recommend that CMS accept or deny a request to
process untimely claims in accordance with the requirements specified in
[IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf),
section 70.

+----------+-----------------------------------------------------------+
| Ba       | Most claims are processed automatically through the       |
| ckground | CMS-provided shared systems and CWF and are usually       |
|          | resolved without requiring manual intervention on the     |
|          | part of the Contractor.                                   |
|          |                                                           |
|          | CMS supplies the shared claims processing systems,        |
|          | including transmission to CWF, installed at the data      |
|          | center that the Contractor must use. FISS will process    |
|          | claims and transactions from institutional providers. MCS |
|          | will process claims and transactions from professional    |
|          | providers (physicians, practitioners, and suppliers). The |
|          | Contractor must have the expertise to interact with both  |
|          | systems.                                                  |
|          |                                                           |
|          | With the exception of special circumstances, CWF must     |
|          | approve each claim before it is paid. CWF returns         |
|          | information to the Contractor regarding the entitlement   |
|          | status of the beneficiary, information on actual or       |
|          | potential duplicate billing (although some duplicate      |
|          | editing is performed in the shared systems), conflicts    |
|          | between the submitted claim and previously-approved       |
|          | claims for which the Contractor may need to resolve       |
|          | issues with other agencies, individuals, or entities, as  |
|          | appropriate, including, but not limited to, SSA, other    |
|          | Medicare Contractors, the Medicare beneficiary, or the    |
|          | individual/ entity that furnished the service for which   |
|          | payment was requested.                                    |
|          |                                                           |
|          | There will, however, be instances where a claim that is   |
|          | submitted requires manual intervention on the part of the |
|          | Contractor. Many of the standards in the following        |
|          | sections relate to resolution of such claims.             |
|          |                                                           |
|          | Attachment J-4, Guide to Internet Only Manuals (IOM)      |
|          | Claims Processing Rules for CMS MAC SOW, to this SOW      |
|          | contains a guide to particularly relevant IOM claims      |
|          | processing rules. However, Attachment J-4 shall not be    |
|          | considered to be an all inclusive list of rules or        |
|          | requirements for which the Contractor shall be held       |
|          | responsible. The MAC is responsible for adhering to all   |
|          | rules relevant to claims processing contained in [IOM     |
|          | Pub.                                                      |
|          | 100-04](http://www.cms.hh                                 |
|          | s.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterBy |
|          | DID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912) |
|          | and other CMS IOM Publications for claims in its          |
|          | jurisdiction.                                             |
|          |                                                           |
|          | Interest is paid on clean claims that were not paid       |
|          | within the applicable payment ceiling in accordance with  |
|          | [IOM Pub.                                                 |
|          | 100-04](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912), |
|          | Chapter                                                   |
|          | [1]                                                       |
|          | (http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf), |
|          | section 80.2.2.                                           |
+----------+-----------------------------------------------------------+
| Standard | Claims processing is successful when claims are paid with |
| 1        | acceptable accuracy as evidenced by a contractor-specific |
|          | Comprehensive Error Rate Testing (CERT) error rate not to |
|          | exceed the Government Performance Results Act (GPRA)      |
|          | national paid claims error rate goal for the year (The    |
|          | goal for each year is published in the Report on Improper |
|          | Medicare Fee-for-Service Payments.                        |
|          | [www.cms.hhs.gov/cert](http://www.cms.hhs.gov/cert)).     |
+----------+-----------------------------------------------------------+
| Standard | Clean claims are processed timely when 95% of the claims  |
| 2        | are processed within the claims payment floor and ceiling |
|          | specified in [IOM Pub.                                    |
|          | 100-04](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912), |
|          | Chapter                                                   |
|          | [1]                                                       |
|          | (http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf), |
|          | sections 80.2.1.1 and 80.2.1.2.                           |
+----------+-----------------------------------------------------------+

#### Communication of Claims Processing Problems

The Contractor shall communicate to the shared system maintainers or to
CMS, as appropriate, in a timely manner on all claims processing
problems that significantly disrupt the processing of claims or that
require CMS intervention. The Contractor shall provide clear,
non-technical communication of problems and impacts to appropriate CMS
personnel or their designated agents (e.g., Shared System Maintainers,
or SSMs). The communication shall occur through regular conference calls
with CMS (e.g., weekly Technical Advisory Group, or TAG, calls), e-mail,
or phone calls to appropriate personnel, or in accordance with the user
agreement established with the SSMs.

  ----------- -----------------------------------------------------------
  Standard 1  Communication is timely when CMS receives notification
              within five (5) business days of (Contractor) discovering
              systematic and/or operational claims processing problems
              that do not cause disruption of claims processing payments.

  Standard 2  Communication is timely when CMS receives notification
              within 24 hours or within the same business day of
              identification, if the problem may cause disruption of
              benefit payments beyond a single provider.
  ----------- -----------------------------------------------------------

#### Resolution of Common Working File Rejected Claims Involving another Medicare Administrative Contractor

The Contractor shall resolve problems that prevent a claim from
processing correctly because another MAC processed and posted a prior
bill to CWF. The Contractor shall resolve these problems in accordance
with the instructions in [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [27](http://www.cms.hhs.gov/manuals/downloads/clm104c27.pdf),
sections 50--50.3, and the CWF system documentation for resolving
problems that prevent a claim from processing because of a conflict with
a prior claim submitted by another Contractor.

  ------------ -----------------------------------------------------------
  Background   When a Contractor cannot process a bill because another MAC
               processed and posted a prior bill to CWF (e.g., due to
               consolidated billing edits), the two Contractors must work
               together to resolve the error. The CWF reject trailer
               identifies the Contractor that should process the bill. It
               is possible that the same MAC will have processed both the
               professional and institutional claims causing the conflict.
               In these cases, the MAC shall resolve the problem
               internally.

  ------------ -----------------------------------------------------------

#### Resolution of Claims Transaction Replies from Common Working File

The Contractor shall act on replies from CWF prior to payment or denial
to ensure correct entitlement and to record utilization of benefits in
accordance with CMS documentation on the CWF maintenance Contractor
website.

#### Resolution of Unsolicited Responses from Common Working File

The Contractor shall process unsolicited responses from CWF by taking
action on pended, previously paid, or denied claims to ensure correct
entitlement, record utilization of benefits, and adjust payment as
necessary in accordance with CMS published instructions.

  ------------ -----------------------------------------------------------
  Background   Applicable CMS published instructions include IOMs, Joint
               Signature Memoranda (JSMs), and approved change requests
               (CRs).

  ------------ -----------------------------------------------------------

##### Medicare Secondary Payer Claim with Complete Primary Payer Notification of Benefits Paid: Explanation of Benefit, Remittance Advice, or Such Other Acceptable Notice: Update Common Working File

The Contractor shall identify an MSP claim with a complete explanation
of benefit (EOB) and update the Common Working File (CWF) in accordance
with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/msp105c05.pdf),
section 20.

  ------------ -----------------------------------------------------------
  Background   CWF can only be updated with a primary payer's notice of
               primary payment (e.g., EOB, Remittance Advice---RA).

  ------------ -----------------------------------------------------------

##### Identification of Potential MSP Existence 

The Contractor shall determine if the claim and/or the attachment is
complete in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf),
sections 70.2.3.1 and 70.2.3.2, and [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/msp105c03.pdf).

The Contractor, after identifying a complete attachment (EOB or primary
payer RA), a possible MSP claim, possible MSP situation, or CWF
exclusion, shall forward the information to the Coordination of Benefits
Contractor (COBC) in accordance with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/msp105c04.pdf),
section 10.3, and Chapter
[5](http://www.cms.hhs.gov/manuals/downloads/msp105c05.pdf), sections
10.1, 10.2, and 10.7.

  ------------ -----------------------------------------------------------
  Background   The COBC consolidates activities that support the
               collection, management, and reporting of all other health
               insurance coverage of Medicare beneficiaries, as well as
               all insurance coverage obligated to pay primary to
               Medicare. The COBC is charged with ensuring the accuracy
               and timeliness of updates to the CWF MSP auxiliary file.
               The COBC does not process any claims, nor does it handle
               any mistaken payment recoveries or claims-specific
               inquiries (telephone or written). The COB Contractor
               handles all MSP-related inquiries, including those seeking
               general MSP information, but not those related to specific
               claims or recoveries.

  ------------ -----------------------------------------------------------

#### Payment of Claims outside Common Working File 

The Contractor shall pay claims without prior CWF approval only in
accordance with CMS procedures found in [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [27](http://www.cms.hhs.gov/manuals/downloads/clm104c27.pdf),
sections 60--60.2.

+----------+-----------------------------------------------------------+
| Ba       | CWF must approve most claims before payment; however,     |
| ckground | there may be special circumstances when it is necessary   |
|          | to pay claims outside of the CWF system. CMS will         |
|          | instruct the Contractors to pay without CWF approval.     |
|          |                                                           |
|          | One example of special circumstances is enactment of new  |
|          | coverage policies with effective dates that preclude      |
|          | making the necessary changes to CWF timely. There also    |
|          | may be circumstances unique to individual Contractors     |
|          | that justify paying claims outside CWF approval. For such |
|          | situations, the Contractor must obtain CMS approval to    |
|          | pay the claims outside CWF.                               |
+----------+-----------------------------------------------------------+

#### Handling of Medicare Advantage Claims 

The Contractor shall pay, deny, return, or forward Medicare Advantage
(managed care) claims in accordance with CMS published instructions.

+----------+-----------------------------------------------------------+
| Ba       | CMS instructions include IOMs, JSMs, and approved CRs.    |
| ckground |                                                           |
|          | Generally, the MACs do not pay claims for beneficiaries   |
|          | enrolled in MA Plans. In certain situations (e.g.,        |
|          | hospice election, newly covered services, clinical        |
|          | trials), the MAC is required to pay claims for MA         |
|          | beneficiaries. CMS will instruct the MACs as these        |
|          | situations occur.                                         |
|          |                                                           |
|          | To ensure that Medicare is not paying twice for covered   |
|          | services, the Contractor is required to report, to the MA |
|          | Organizations, on payments to FFS providers for           |
|          | beneficiaries enrolled in the MA Plan.                    |
|          |                                                           |
|          | Medicare Advantage beneficiary elects the hospice         |
|          | benefit, they retain services under the MCO for           |
|          | conditions unrelated to the terminal or related           |
|          | conditions. The payment made to the MCO is adjusted to    |
|          | reflect the services under hospice which are paid for     |
|          | under fee-for-service.                                    |
+----------+-----------------------------------------------------------+

##### Medicare Advantage Claims for Hospice Care 

The Contractor shall pay, deny, return, or forward Medicare Advantage
(managed care) claims for hospice care in accordance with 42 Code of
Federal Regulations (CFR) 422.320, Special Rules for Hospice Care.

##### Medicare Advantage Claims for National Coverage Decision or Legislative Change in Benefits 

The Contractor shall pay, deny, return to providers or notify MA
organizations (where appropriate) for National Coverage Decision (NCD)
or legislative change in benefits in accordance with 42 CFR 422.109.

+----------+-----------------------------------------------------------+
| Ba       | When the patient is an enrollee in a MA Plan, the         |
| ckground | Contractor may be responsible for obtained services if:   |
|          |                                                           |
|          | -   CMS determines that an NCD or legislative change in   |
|          |     benefits meets the significant cost criteria, and     |
|          |                                                           |
|          | -   MA organization is not required to assume risk for    |
|          |     the costs of that service or benefit until the        |
|          |     contract year for which payments (to MA               |
|          |     organizations) are adjusted.                          |
+----------+-----------------------------------------------------------+

#### Local System Edits

The Contractor shall apply local system edits in accordance with CMS
mandates. The processes and procedures specified in the CMS notification
is applicable to each shared system and Contractor. Full compliance of
these mandates is required to ensure that the claims are processed
accurately.

  ------------ -----------------------------------------------------------
  Background   The Contractor applies local edits as necessary to the
               shared systems via Contractor-driven type tables (e.g.,
               entity action records, SuperOpEvents {add to Key
               Definitions}, System Control Facility (SCF) rules, or
               procedure/diagnosis code tables). The Contractor cannot
               alter or add edit logic to the shared systems, because the
               source code is unavailable to the Contractor.

  ------------ -----------------------------------------------------------

### Development of Suspended Claims

The Contractor shall investigate and resolve suspended claims in
accordance with 42 CFR 424.32 and [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
including but not limited to the references in Attachment J-4, Guide to
IOM Claims Processing Rules for CMS MAC SOW, to this Statement of Work
(SOW).

+----------+-----------------------------------------------------------+
| Ba       | Developing claims involves problem resolution for claims  |
| ckground | that require human intervention before they can be        |
|          | completely processed through the shared system. Some      |
|          | examples why a claim suspends for manual intervention     |
|          | would be:                                                 |
|          |                                                           |
|          | -   If they involve medical review,                       |
|          |                                                           |
|          | -   If they have incomplete information when Medicare is  |
|          |     the secondary payer, or                               |
|          |                                                           |
|          | -   If they entail non-automated edit resolution.         |
|          |                                                           |
|          | The issues arising under "non-automated edit resolution"  |
|          | are varied, complex, and require experts to resolve.      |
+----------+-----------------------------------------------------------+

### Back-End Processing

The Contractor shall perform back-end processing of Medicare claims and
shall update claims history files to include CWF claims resolution.

  ------------ -----------------------------------------------------------
  Background   A fully adjudicated claim is a claim that has gone through
               all core processes in the shared system. Claims processing
               actions that occur after the claim has been accepted by CWF
               are commonly referred to as back-end processes. The back
               end combines processes from both the claims and financial
               parts of the system.

  ------------ -----------------------------------------------------------

#### Remittance Advice and Medicare Summary Notices

The Contractor shall timely and accurately generate payment and deliver
Remittance Advices (RAs) to providers and Medicare Summary Notices
(MSNs) to beneficiaries.

The Contractor shall generate MSNs in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [21](http://www.cms.hhs.gov/manuals/downloads/clm104c21.pdf).

The Contractor shall generate RAs in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [22](http://www.cms.hhs.gov/manuals/downloads/clm104c22.pdf).

+----------+-----------------------------------------------------------+
| Ba       | EFT payments are generated and delivered electronically   |
| ckground | for providers who request EFT. Hard copy checks are       |
|          | generated and mailed to beneficiaries and providers who   |
|          | have not requested payment by EFT.                        |
|          |                                                           |
|          | Electronic RAs are generated and delivered electronically |
|          | to providers who request electronic RAs. Hard-copy RAs    |
|          | are generated and mailed to providers who do not request  |
|          | electronic RAs.                                           |
|          |                                                           |
|          | Hard-copy MSNs are generated and mailed to beneficiaries. |
+----------+-----------------------------------------------------------+

#### Coordination of Benefits Flat Files

The Contractor shall deliver the Coordination of Benefits (COB) flat
file received from the shared system to the Coordination of Benefits
Contractor (COBC) and perform Coordination of Benefits Agreement claims
crossover functions in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [28](http://www.cms.hhs.gov/manuals/downloads/clm104c28.pdf) and
[IOM Pub
100-20](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS020095).

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------
  Background   As discussed in the [IOM Pub.
               100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
               Chapter [28](http://www.cms.hhs.gov/manuals/downloads/clm104c28.pdf), section 70.6, Contractors will receive a Common Working File (CWF)
               Beneficiary Other Insurance (BOI) reply trailer (29) as part of their claims adjudication process when a crossover trading partner has signed
               a national Coordination of Benefits Agreement (COBA) with the Coordination of Benefits Contractor (COBC) and CWF has selected the claim for
               transference to the COBC. Upon receipt of a BOI reply trailer (29), the contractor is to send processed Medicare claims to the COBC via an 837
               flat file. Contractors will send two files to the COBC; one file for its Institutional claims, and one file for its Professional claims.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------

#### Generate and Mail Claims Processing Documents 

The Contractor shall generate and mail all claims processing documents
that are not transmitted electronically in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapters [21](http://www.cms.hhs.gov/manuals/downloads/clm104c21.pdf)
and [22](http://www.cms.hhs.gov/manuals/downloads/clm104c22.pdf).

  ------------ -----------------------------------------------------------
  Background   Claims processing documents include but are not limited to
               Notices of Utilization, MSNs, RAs, checks, and
               redeterminations

  Standard 1   MSN management is successful when the Contractor accurately
               generates and mails 98% of MSNs in accordance with IOM Pub.
               100-4, Chapter 21.

  Standard 2   Document management is successful when the Contractor mails
               all required documents that are not being transmitted
               electronically.
  ------------ -----------------------------------------------------------

#### The Do Not Forward Initiative

The Contractor shall implement the Do Not Forward (DNF) initiative on
professional claims in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf),
section 80.5.

  ------------ -----------------------------------------------------------
  Background   The DNF initiative entails the use of "Return Service
               Requested" envelopes to preclude the forwarding of Medicare
               checks to locations other than those recorded on the
               Medicare provider files. The use of these envelopes permits
               the U.S. Postal Service to return Medicare checks to the
               Contractor free of charge. Note that this initiative has
               been implemented for professional claims only. For full
               details of the DNF initiative, see IOM Pub. 100-4, Chapter
               1, section 80.5.

  ------------ -----------------------------------------------------------

### Opt-Out Payment Provisions

The Contractor shall follow beneficiary payment requirements for
physicians and practitioners who opt out of Medicare in accordance with
[IOM Pub.
100-2](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS012673),
Chapter [15](http://www.cms.hhs.gov/manuals/Downloads/bp102c15.pdf),
sections 40--40.15 and report data in accordance with [IOM Pub.
100-2](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS012673),
Chapter [15](http://www.cms.hhs.gov/manuals/Downloads/bp102c15.pdf),
section 40.40. Physicians who opt out of the program are monitored
through PECOS in accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [10](http://www.cms.hhs.gov/manuals/downloads/pim83c10.pdf).

### Physician Incentive Payments for Services in Health Professional Shortage Area and Physician Scarcity Area 

The Contractor shall make physician incentive (or bonus) payments for
primary care and mental health care services furnished in geographic
Health Professional Shortage Areas (HPSAs) and for primary or specialty
physician care furnished in Physician Scarcity Areas (PSAs) in
accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [12](http://www.cms.hhs.gov/manuals/downloads/clm104c12.pdf),
sections 90.4 and all subsections (HPSA) and 90.5 and all subsections
(PSA) and [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/clm104c04.pdf),
section 250 and all subsections.

### Participating Competitive Acquisition Program Physician Claims for Administering Part B Drugs

#### Listing of Competitive Acquisition Program Participating Physicians and Practitioners

The Contractor shall forward to the Contractor designated to process
approved Competitive Acquisition Program (CAP) vendor claims a list of
all the physicians and practitioners who have elected to participate in
CAP.

  ----------- -----------------------------------------------------------
  Standard 1  The Contractor's performance of the CAP physician election
              process is successful when it conforms with the activities
              and timeframes required in CRs 4044, 4064, 4306, and 4309.

  ----------- -----------------------------------------------------------

#### Monitoring Competitive Acquisition Program Physicians and Practitioner Claims for Administering Part B Drugs

The Contractor shall monitor claims for administering drugs by
participating CAP physicians and practitioners to ensure that the
participating CAP physicians and practitioners are complying with
Medicare payment rules in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912)
Chapters [17](http://www.cms.hhs.gov/manuals/downloads/clm104c17.pdf)
and [21](http://www.cms.hhs.gov/manuals/downloads/clm104c21.pdf) (CRs
4044, 4064, 4306, and 4309).

  ----------- -----------------------------------------------------------
  Standard 1  The Contractors monitoring of CAP physicians and
              practitioners claims for administering drugs is successful
              when the Contractor adjudicates CAP claims in accordance
              with IOM Pub. 100-4 Chapters 17 and 21 (CR 4044, 4064,
              4306, and 4309).

  ----------- -----------------------------------------------------------

## Reopening of Medicare Initial Claims Determinations

### Reopening 

Where appropriate, the Contractor shall reopen an initial determination
or a redetermination to review a decision in accordance with 42 Code of
Federal Regulations (CFR) 405.980 and Internet-only manual [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [29](http://www.cms.hhs.gov/manuals/downloads/clm104c29.pdf)
(disregard references to hearing officers and administrative law judge,
or ALJ hearings).

+----------+-----------------------------------------------------------+
| Ba       | The reopening process is separate and distinct from the   |
| ckground | Medicare fee-for-service (FFS) claim appeals process.     |
|          |                                                           |
|          | Generally, a reopening of an initial claim determination  |
|          | or a redetermination is a remedial action taken by the    |
|          | Contractor to correct a claim, where appeal rights have   |
|          | been exhausted. A Contractor may choose to reopen a claim |
|          | on its own motion or at the request of a party to the     |
|          | initial determination or redetermination. However, the    |
|          | regulations governing reopenings do not permit            |
|          | unrestricted reopenings of determinations and decisions.  |
+----------+-----------------------------------------------------------+

#### Reopenings on the Contractor's Own Motion

The Contractor shall conduct reopenings on the Contractor's own motion
in accordance with 42 CFR 405.980 (b).

#### Reopenings on the Request of Party

The Contractor shall conduct reopenings on the request of party to the
initial determination or redetermination in accordance with 42 CFR
405.980 (c).

##### Redetermination Resolutions for Clerical Errors

The Contractor shall resolve redetermination requests where the reason
for the denial involves only a clerical error or omission (for both
Contractor and provider errors) outside of the Medicare claim appeals
process in accordance with Medicare Prescription Drug, Improvement and
Modernization Act of 2003 (MMA) 937 and 42 CFR 405.980(a)(3).

  ------------ -----------------------------------------------------------
  Background   A Contractor must use the reopening process instead of the
               appeals process when an appeal has been requested to
               resolve claims denials where the reason for the denial
               involves a clerical error or omission. (Examples of
               clerical errors include but are not limited to human and
               mechanical errors on the part of the party or the
               Contractor such as mathematical or computational mistakes
               or inaccurate data entry).

  ------------ -----------------------------------------------------------

##### Documentation Requests

The Contractor shall process redetermination requests, where the
Contractor issued a denial because requested documentation was not
received during medical review, as reopening in accordance with 42 CFR
405.980(a)(2).

  ------------ -----------------------------------------------------------
  Background   If a Contractor issues a denial of a claim because it did
               not receive requested documentation during medical review,
               and the party subsequently requests a redetermination, the
               Contractor must process the redetermination request as a
               reopening and not as a redetermination. This re-opening
               shall be conducted by the MR staff.

  ------------ -----------------------------------------------------------

#### Reopening Appeal Cases

The Contractor shall reopen appeals cases remanded by the Qualified
Independent Contractor (QIC) to the Contractor

  ------------ -----------------------------------------------------------
  Background   If a QIC remands a case to the Contractor for a
               redetermination, the Contractor must reopen the
               redetermination and issue a revised redetermination. If a
               party has filed a valid request for a redetermination and
               subsequently requests a reopening, the Contractor must
               conduct the appeal redetermination and cannot conduct the
               reopening.

  ------------ -----------------------------------------------------------

### Establishing Good Cause for Reopening Initial Determinations and Redeterminations

The Contractor shall establish good cause for reopening a determination
or decision in accordance with 42 CFR 405.986.

The Contractor shall deny reopening requests based only on a change of
legal interpretation or policy by CMS in a regulation, CMS ruling, or
CMS general instruction, whether made in response to a judicial decision
or otherwise, or based on a third party payer's error in making a
primary payment determination.

  ------------ -----------------------------------------------------------
  Background   The Contractor establishes good cause to reopen a decision,
               either on its own motion or at the request of a party, when
               there is new or material evidence that may result in a
               different decision, or when the evidence considered in
               making the decision clearly shows that an obvious error
               existed at the time the decision was made. The requirements
               of this section do not preclude Contractors from conducting
               reopenings to effectuate coverage decisions issued under
               the authority of 1869(f) of the Act.

  ------------ -----------------------------------------------------------

### Reopening Decisions

The Contractor shall issue its revised determination or decision to the
parties to the initial determination or redetermination in accordance
with 42 CFR 405.982.

  ---------- ------------------------------------------------------------
  Standard 1 The revised determination or decision is timely when it is
             issued within 60 calendar days from the date of receipt of
             request or the date of QIC remand.

  ---------- ------------------------------------------------------------

## Appeals of Medicare Initial Claims Determinations

### Redetermination Requests

The Contractor shall process requests for redetermination of Medicare
initial claims determinations in accordance with 42 Code of Federal
Regulations (CFR) 405.940-958 and [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [29](http://www.cms.hhs.gov/manuals/downloads/clm104c29.pdf),
section 310.

+----------+-----------------------------------------------------------+
| Ba       | The Medicare fee-for-service (FFS) appeals function       |
| ckground | ensures that due process rights---of beneficiaries,       |
|          | providers, participating physicians, and other providers  |
|          | who are dissatisfied with initial claims determinations   |
|          | and subsequent appeal decisions---are protected under the |
|          | Medicare program. Previously, the Medicare program        |
|          | included different procedures for claim appeals. The      |
|          | first level of appeals consisted of reconsiderations      |
|          | under Part A of the program and reviews under Part B of   |
|          | the program. Section 1869 of the Social Security Act now  |
|          | requires that the Medicare program provide for a          |
|          | redetermination of a claim for a Medicare benefit that is |
|          | denied in whole or in part. A person or entity that is a  |
|          | party (hereinafter called the appellant or the party) to  |
|          | an initial determination made on a Medicare claim by a    |
|          | Contractor may request a redetermination of the claim. In |
|          | certain instances, a representative or a state agency may |
|          | also request a redetermination of a claim. A provider may |
|          | appeal any determination if the beneficiary to whom the   |
|          | service was rendered subsequently died and there is no    |
|          | other party available to appeal. The redetermination is   |
|          | the first level of the Medicare appeals process. The      |
|          | Contractor is responsible for processing                  |
|          | redeterminations. The second level of the appeals process |
|          | is called a reconsideration (not to be confused with the  |
|          | previous first level of appeals for Part A claims).       |
|          | Reconsiderations are processed by a separate appeals      |
|          | entity called a QIC.                                      |
|          |                                                           |
|          | The rules governing redeterminations are in 42 CFR        |
|          | 405.940-958.                                              |
|          |                                                           |
|          | Medicare Secondary Payer (MSP) postpay appeals are also   |
|          | processed in accordance with this section of the          |
|          | Statement of Work (SOW). For the purposes of MSP postpay  |
|          | appeals, "Initial Determinations" are as defined in 42    |
|          | CFR 405.924 and 926.                                      |
+----------+-----------------------------------------------------------+

#### Controlling Receipt of Correspondence

The Contractor shall control and track redetermination requests upon
receipt in the mailroom.

  ----------- -----------------------------------------------------------
  Standard 1  Controlling receipt of correspondence is successful if all
              redetermination requests are date-controlled on the same
              business day they are received in the Contractor's
              mailroom.

  ----------- -----------------------------------------------------------

#### Document Imaging and Indexing 

The Contractor shall electronically image and index all redetermination
correspondence upon receipt in the corporate mailroom.

#### Acceptance of Valid Redetermination Requests

The Contractor shall accept valid written redetermination requests filed
by a party to an initial determination in the form and manner prescribed
in regulation and at 42 CFR 405.944.

+----------+-----------------------------------------------------------+
| Ba       | The party must submit the redetermination request in      |
| ckground | writing to the Contractor indicated on the initial        |
|          | determination.                                            |
|          |                                                           |
|          | The requests must be filed within 120 calendar days of    |
|          | the party receiving the notice of initial determination.  |
|          | The initial determination receipt date shall be presumed  |
|          | to be five (5) calendar days after the date of the notice |
|          | of the initial determination, unless there is evidence to |
|          | the contrary.                                             |
|          |                                                           |
|          | A provider or state agency must submit the request on a   |
|          | standard CMS form or in a written format that contains    |
|          | the following required elements:                          |
|          |                                                           |
|          | -   Beneficiary's name.                                   |
|          |                                                           |
|          | -   Medicare health insurance claim number.               |
|          |                                                           |
|          | -   Specific service and/or item for which the            |
|          |     redetermination is being requested and the specific   |
|          |     date(s) of the service.                               |
|          |                                                           |
|          | -   Name and signature of the party or the appointed      |
|          |     representative of the party.                          |
|          |                                                           |
|          | Requests filed by a beneficiary do not have to contain    |
|          | the required elements stated above. Any written           |
|          | beneficiary communication that indicates disagreement     |
|          | with the initial determination should be treated as a     |
|          | request for redetermination. For example, a written       |
|          | inquiry asking "Why did you only pay \$10.00?" or         |
|          | stating, "My neighbor got paid for the same kind of       |
|          | claim. My claim should be paid too" should be considered  |
|          | a request for a redetermination. Also, the beneficiary    |
|          | may circle an item or service he or she disagrees with on |
|          | the MSN and return it to the Contractor. This action on   |
|          | the part of the beneficiary also constitutes a request    |
|          | for a redetermination. Any request or communication       |
|          | regarding the status of a claim is considered an inquiry  |
|          | and not a redetermination request.                        |
|          |                                                           |
|          | In addition, if the Contractor is in the process of       |
|          | recouping an identified overpayment and an appeal request |
|          | is received regarding the overpayment recoupment action,  |
|          | the overpayment area must be notified to stop recoupment  |
|          | efforts pending a decision on the appeal.                 |
+----------+-----------------------------------------------------------+

#### Misdirected Redetermination Requests

The Contractor shall timely forward misdirected redetermination requests
to the appropriate MAC or other Adjudicator (Qualified Independent
Contractors, or QICs; administrative law judges, or ALJs; Fiscal
Intermediaries, or FIs; Carriers; etc.).

  ---------- ------------------------------------------------------------
  Standard 1 Misdirected redetermination requests are timely when they
             are forwarded to the appropriate Medicare Administrative
             Contractor (MAC) or other Adjudicator within five (5)
             calendar days of receipt.

  ---------- ------------------------------------------------------------

#### Granting of Extensions for Late Redetermination Requests and Determination of Good Cause

In accordance with 42 CFR 405.942, the Contractor shall accept late
filed redetermination requests if the party demonstrates good cause for
missing the deadline to request a redetermination.

+----------+-----------------------------------------------------------+
| Ba       | If the 120-calendar-day period for filing a               |
| ckground | redetermination request has expired, a party to the       |
|          | initial determination may request an extension for filing |
|          | the redetermination request.                              |
|          |                                                           |
|          | The request for extension must be filed with the          |
|          | redetermination request and must:                         |
|          |                                                           |
|          | -   Be in writing,                                        |
|          |                                                           |
|          | -   State why the request for redetermination was not     |
|          |     filed within the required time frame,                 |
|          |                                                           |
|          | -   Demonstrate good cause,                               |
|          |                                                           |
|          | -   Be filed with the Contractor listed on the initial    |
|          |     determination notice, and                             |
|          |                                                           |
|          | -   Meet the requirements of C.5.9.1 above (See           |
|          |     Section 405. 944(b)). Reference: 42 CFR 405(b).       |
|          |                                                           |
|          | Good cause is determined after considering the following: |
|          |                                                           |
|          | -   The circumstances that kept the party from making the |
|          |     request on time.                                      |
|          |                                                           |
|          | -   Whether the Contractor's actions misled the party.    |
|          |                                                           |
|          | -   Whether the party had physical, mental, educational,  |
|          |     or linguistic limitations, including lack of facility |
|          |     with the English language, which prevented the party  |
|          |     from filing a timely request or from understanding or |
|          |     knowing about the need to file a timely request for   |
|          |     redetermination.                                      |
+----------+-----------------------------------------------------------+

#### Consolidation of Multiple Requests for Same Claim

The Contractor shall consolidate separate requests for redetermination
of the same claim into one redetermination proceeding when multiple
parties submit requests for redetermination of the same claim, and the
additional requests are received before a decision is made on the first
request.

  ------------ -----------------------------------------------------------
  Background   More than one party may file a timely request for
               redetermination of the same claim. If multiple requests for
               the same claim are received before a decision is issued,
               the Contractor must issue its decision within 60 days of
               the latest filed request (Reference: 42 CFR 405.944 (c)).

  ------------ -----------------------------------------------------------

#### Withdrawals and Eligibility-Based Dismissals

When dismissal is appropriate, the Contractor shall dismiss a request
for redetermination and provide a written notice of the dismissal in a
timely manner.

+----------+-----------------------------------------------------------+
| Ba       | The Contractor must provide a written notice of the       |
| ckground | dismissal of the redetermination request, clearly stating |
|          | the reasons for the dismissal either in its entirety or   |
|          | as to any stated issue, transmitted to the parties at     |
|          | their last known address under any of the following       |
|          | circumstances:                                            |
|          |                                                           |
|          | -   When the person or entity requesting a                |
|          |     redetermination is not a proper party under 42 CFR    |
|          |     405.906(b) or does not otherwise have a right to a    |
|          |     redetermination under section 1869 (a) of the Social  |
|          |     Security Act (the Act).                               |
|          |                                                           |
|          | -   When the Contractor determines that the party         |
|          |     submitted a request for redetermination that did not  |
|          |     contain all of the required elements listed in        |
|          |     section C.5.9.1.3.                                    |
|          |                                                           |
|          | -   When the party fails to file the redetermination      |
|          |     request within the proper time frames.                |
|          |                                                           |
|          | -   When the beneficiary or the beneficiary\'s            |
|          |     representative files a request for redetermination,   |
|          |     but the beneficiary dies while the request is         |
|          |     pending, and the beneficiary\'s surviving spouse or   |
|          |     estate has no remaining financial interest in the     |
|          |     case; no other individual or entity with a financial  |
|          |     interest in the case wishes to pursue the appeal; and |
|          |     no other party filed a valid and timely               |
|          |     redetermination request.                              |
|          |                                                           |
|          | -   When the party filing for redetermination submits a   |
|          |     timely written request of withdrawal to the           |
|          |     Contractor before a redetermination decision has been |
|          |     issued. A party that files a request for              |
|          |     redetermination may withdraw his or her request by    |
|          |     filing a written and signed request for withdrawal.   |
|          |     The request for withdrawal must contain a clear       |
|          |     statement that the appellant is withdrawing the       |
|          |     request for redetermination and does not intend to    |
|          |     proceed further with the appeal. The request must be  |
|          |     received in the Contractor's mail room before a       |
|          |     redetermination has been issued (Reference: 42 CFR    |
|          |     405.952 (a)).                                         |
|          |                                                           |
|          | -   When the Contractor has not issued an initial         |
|          |     determination on the claim for which a                |
|          |     redetermination is sought.                            |
+----------+-----------------------------------------------------------+

#### Assistance to Beneficiary 

The Contractor shall assist the beneficiary in obtaining from the
provider any additional information needed to process and complete the
redetermination.

The Contractor shall clearly annotate the redetermination case file with
any requests for additional information made on behalf of the
beneficiary.

#### Conduct of the Redetermination

The Contractor shall make a timely, independent, accurate, supportable
decision on each claim or issue in dispute, and issue a decision to
dismiss, fully affirm, partially reverse, or fully reverse the initial
determination in question, based on the evidence of record including
applicable laws, regulations, and policies.

+----------+-----------------------------------------------------------+
| Ba       | A redetermination is an independent review of an initial  |
| ckground | determination. Redeterminations are conducted in          |
|          | accordance with section 1869 of the Act, 42 CFR           |
|          | 405.948--405.958, and [IOM Pub.                           |
|          | 100-04](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912), |
|          | Chapter                                                   |
|          | [29]                                                      |
|          | (http://www.cms.hhs.gov/manuals/downloads/clm104c29.pdf), |
|          | section 310.                                              |
+----------+-----------------------------------------------------------+
| Standard | Redeterminations are successful when all redeterminations |
| 1        | (where no additional evidence is submitted after the      |
|          | request) are accurately processed and the redetermination |
|          | decision notice is mailed within 60 calendar days of      |
|          | receipt of the request in the corporate mailroom or       |
|          | within 60 calendar days of the latest filed request for   |
|          | consolidated redetermination requests for the same claim. |
|          |                                                           |
|          | **NOTE: The 60 calendar day decision-making time frame    |
|          | may be extended by 14 calendar days in accordance with 42 |
|          | CFR 405.946.**                                            |
+----------+-----------------------------------------------------------+

#### Documenting the Redetermination Case Files

The Contractor shall document the redetermination case files with all
relevant information, evidence, and supporting documentation and
identify the individuals involved in making the initial claims
determination and the redetermination.

#### Notice of Redetermination

The Contractor shall mail to all parties to the redetermination at their
last known addresses a written notice of the redetermination decision
that is accurate, clear, and concise. The written notice shall be in
printed form and written in a manner that is understandable to the
individual entitled to notice in accordance with section 1869(a) of the
Act and Change Request (CR) 3943.

+----------+-----------------------------------------------------------+
| Standard | Redetermination notices are successful when they are      |
| 1        | processed and mailed within 60 calendar days of the date  |
|          | the Contractor receives the valid and timely filed        |
|          | request. If the appellant submits additional evidence     |
|          | after filing the request for redetermination, the         |
|          | Contractor's timeframe for making the decision is         |
|          | extended by 14 calendar days.                             |
|          |                                                           |
|          | **Note: The 60 calendar day decision-making time frame    |
|          | may be extended by 14 calendar days in accordance with 42 |
|          | CFR 405.946.**                                            |
+----------+-----------------------------------------------------------+

### Appeal Decision Effectuation

The Contractor shall effectuate all levels of appeal decisions
(redeterminations, reconsiderations, ALJ, Medicare Appeals Council, and
federal court) received from the QIC or Administrative Qualified
Independent Contractor (AdQIC).

+----------+-----------------------------------------------------------+
| Ba       | See Key Definitions for definition of the term            |
| ckground | "effectuate."                                             |
+----------+-----------------------------------------------------------+
| Standard | Effectuation of Contractor redetermination is successful  |
| 1        | when all decisions are effectuated by the Contractor:     |
|          |                                                           |
|          | -   Within 30 calendar days of the date of the decision,  |
|          |     if a specific amount to be paid is stated, or         |
|          |                                                           |
|          | -   Within 30 calendar days after it computes the amount  |
|          |     to be paid, which must be done no later than 30       |
|          |     calendar days of the receipt of the decision.         |
+----------+-----------------------------------------------------------+

### Monthly Statistical Report on Appeals Activity (CMS -- 2592)

The Contractor shall prepare and submit to CMS a report summarizing
monthly appeals activity in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/fin106c06.pdf),
Section 460.

## Financial Management of Trust Fund Dollars

+----------+-----------------------------------------------------------+
| Ba       | The Chief Financial Officer (CFO) Act of 1990 (Public Law |
| ckground | 101-576) requires the Centers for Medicare & Medicaid     |
|          | Services (CMS) to prepare annual, audited financial       |
|          | statements reporting its financial position and results   |
|          | of operations. The Contractor financial reports provide a |
|          | method of reporting financial activities for benefit      |
|          | payment by Medicare Contractor according to the CFO Act   |
|          | of 1990. The Contractor is required to maintain           |
|          | accounting records according to government accounting     |
|          | principles and applicable government laws and             |
|          | regulations. This requirement complies with Office of     |
|          | Management and Budget (OMB) bulletins about the Federal   |
|          | Accounting Standards Advisory Board (FASAB).              |
|          |                                                           |
|          | The accounting principles and the auditing standards      |
|          | required are not substantially different from Generally   |
|          | Accepted Accounting Principles (GAAP) and Generally       |
|          | Accepted Auditing Standards (GAAS) as formulated by the   |
|          | accounting profession. However, government accounting     |
|          | principles, which are developed by FASAB, require         |
|          | maintaining records not only for preparing financial      |
|          | statements, but also to enforce applicable laws and       |
|          | regulations.                                              |
|          |                                                           |
|          | Medicare accounts receivable is a significant balance on  |
|          | CMS' financial statements that will require the           |
|          | Contractor's special attention. Accounts receivable       |
|          | consists primarily of the financial data provided by      |
|          | Contractors. The majority of the Medicare accounts        |
|          | receivable balances reported by CMS in its financial      |
|          | statements comprises overpayments made to providers,      |
|          | physicians, beneficiaries, insurers, employers, and other |
|          | entities. Other receivables arise from situations in      |
|          | which Medicare paid claims as the primary payer and it is |
|          | subsequently determined that Medicare should have been    |
|          | the secondary payer.                                      |
|          |                                                           |
|          | Medicare accounts payable consists of amounts due for     |
|          | services received. The accounts payable is due to         |
|          | unprocessed claims received that have not yet started     |
|          | processing and to claims that have completed processing   |
|          | checks, but the checks have not yet been issued or        |
|          | offsets applied. This includes, but is not limited to,    |
|          | underpayments resulting from cost report settlements,     |
|          | estimated Periodic Interim Payments (PIPs), PIP rate      |
|          | reviews, interim rate reviews, and adjustment bills.      |
|          |                                                           |
|          | The Contractor is required to report financial activity   |
|          | into CMS via the CMS Contractor Administrative, Budget,   |
|          | and Financial Management (CAFM) system, the Healthcare    |
|          | Integrated General Ledger System (HIGLAS), or both. When  |
|          | these two systems have different financial reporting      |
|          | requirements, the SOW will separately identify the system |
|          | unique requirements.                                      |
+----------+-----------------------------------------------------------+

### Use of Trust Fund

The Contractor shall ensure effective and efficient use of those trust
fund dollars under its authority and adhere to its financial management
responsibilities in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018).

  ---------- ------------------------------------------------------------
  Standard 1 The Contractor\'s use of trust fund dollars is successful
             when it will not cause CMS to be cited for financial
             management related deficiencies on the CMS annual CFO audit.

  ---------- ------------------------------------------------------------

#### Certification of Chief Financial Officer for Medicare Operations

The Contractor's designated CFO shall be able to certify that all
Medicare financial reporting by the Contractor is accurate and complete
and that an effective internal control structure over Medicare financial
management operations is in place and operating effectively by the
Contractor.

The Contractor's designated alternative CFO shall be able to perform the
duties and responsibilities of the CFO in the absence of the CFO.

#### Validation of Financial Data

The Contractor shall check the validity, accuracy, completeness, and
reconciliation of all financial data before submission to CMS.

The Contractor's designated CFO shall certify all Medicare financial
data stating that it conforms to [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
GAAP, GAAS, and Federal Accounting Standards Advisory Board (FASAB).

#### Resolution of Financial Deficiencies

The Contractor shall ensure prompt resolution of financial deficiencies
identified in audits or reviews that affect operations and
administration under this contract.

The Contractor shall timely submit an initial Corrective Action Plan
(CAP) report, which addresses all of the reported audit or review
findings and is certified by the CFO for Medicare operations in
accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/fin106c07.pdf),
section 40--40.6.

  ---------- ------------------------------------------------------------
  Standard 1 Initial CAP reports are timely when they are provided within
             45 days of receiving a final audit report.

  Standard 2 The Contractor\'s corrective action procedures are
             successful when its deficiencies have been corrected within
             one year of being identified.
  ---------- ------------------------------------------------------------

### Banking Relations 

The Contractor shall establish banking relations, including bank
accounts, with a CMS-approved bank.

A Tripartite agreement shall be established among CMS, bank, and the
Contractor in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf)
section 10-60.

+----------+-----------------------------------------------------------+
| Ba       | The Contractor, CMS, and a bank establish a tripartite    |
| ckground | agreement covering two types of accounts: benefits        |
|          | account and time account. The earnings from the time      |
|          | account are used to compensate the bank for services      |
|          | rendered.                                                 |
|          |                                                           |
|          | CMS issues a letter of credit to fund the Contractor's    |
|          | estimated annual claims amounts, which flow through a     |
|          | benefits account. The letter of credit covers claims paid |
|          | by the Contractor, either by check or electronic funds    |
|          | transfer (EFT), drawn from the benefits account.          |
|          |                                                           |
|          | The letter of credit authorizes a Federal Reserve Bank or |
|          | Branch to advance funds to a designated commercial bank   |
|          | on behalf of CMS. Under the Checks Paid Method of         |
|          | financing, a letter of credit is issued to authorize the  |
|          | designated commercial bank to withdraw funds for deposit  |
|          | only to the Contractor's benefits account when a bank     |
|          | issues a 1031 drawdown request. This method provides cash |
|          | availability to meet Medicare program requirements, while |
|          | controlling the timing of cash withdrawals to minimize    |
|          | the impact of the withdrawals on the public debt level    |
|          | and related financing costs.                              |
+----------+-----------------------------------------------------------+

#### Time Account Balance

The Contractor shall establish and maintain a time account balance in
accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf),
sections 110 -- 110.2.

  ------------ -----------------------------------------------------------
  Background   A time account balance is used to compensate the bank for
               its service fees. Part of maintaining a time account
               balance involves monitoring and adjusting quarterly the
               target balance to ensure that the target balance is
               sufficient to compensate the bank for services rendered.

  Standard 1   The time account is maintained successfully when it is
               timely reconciled with the bank statement in accordance
               with IOM Pub 100-6, Chapter 5, sections 70-90.7, 500-500.6
               and 510-510.9.
  ------------ -----------------------------------------------------------

#### Benefits Account

The Contractor shall establish and maintain a benefits account in
accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf),
section 120 -- 180.

  ---------- ------------------------------------------------------------
  Standard 1 The benefits account is maintained successfully when it is
             timely reconciled with the bank statement in accordance with
             IOM Pub 100-6, Chapter 5, sections 70-90.7, 500-500.6 and
             510-510.9.

  ---------- ------------------------------------------------------------

#### Account Reconciliation

The Contractor shall reconcile the Medicare program benefits account and
time account activity as follows:

a.  For non-HIGLAS transactions, the Contractor shall submit the monthly
    bank reconciliation (CMS Form 1521/1522) through the CAFM system in
    accordance with [IOM Pub.
    100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
    Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf),
    sections 70 -- 90.7. The reports accompanying the reconciliation
    between the Intermediary Benefit Payment Report (IBPR) and the
    CMS-1522 are input into the CAFM system 20 days following the report
    month.

b.  For HIGLAS transactions, the Contractor shall submit a monthly bank
    reconciliation utilizing the HIGLAS Accounts Payable (AP), Cash
    Management (CM), and General Ledger (GL) modules in accordance with
    HIGLAS process flow documents related to Bank Reconciliation
    procedures.

+----------+-----------------------------------------------------------+
| Ba       | When a workload segment is reported using CAFM            |
| ckground | (non-HIGLAS transactions), Form CMS-1522 is designed to   |
|          | provide a reconciliation of Medicare benefit dollars      |
|          | between CMS, the contractor, and the bank. HIGLAS will    |
|          | use CM, AP, and GL reports to perform necessary bank      |
|          | reconciliation.                                           |
|          |                                                           |
|          | When a segment is reported using CAFM (non-HIGLAS         |
|          | transactions), the IBPR is a report of current monthly    |
|          | information that covers the categories of benefits the    |
|          | contractor paid and selected statistical data relating to |
|          | those payments.                                           |
|          |                                                           |
|          | When a segment is reported using HIGLAS, the monthly bank |
|          | reconciliation utilizes the HIGLAS Accounts Receivable    |
|          | (AR), AP, CM, and GL modules and the HIGLAS Contractor    |
|          | Draws on Letter of Credit report.                         |
+----------+-----------------------------------------------------------+

#### Letter-of-Credit Limitation

The Contractor shall make requests for changes, when necessary, to the
monthly letter-of-credit limitation to CMS in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf),
section 100--100.3.

### Cost Reporting and Reimbursement Payment Policy

+----------+-----------------------------------------------------------+
| Ba       | Sections 1815 (a) and 1833 (e) of the Act provide that no |
| ckground | payments will be made to a provider unless it has         |
|          | furnished the information requested by the Secretary as   |
|          | needed to determine the amount of payments due the        |
|          | provider under the Medicare program. On an annual basis,  |
|          | providers are required to submit this information through |
|          | the Medicare Cost Report (MCR). Contractors determine     |
|          | payment amounts due the provider under the Medicare law   |
|          | and interpretative guidelines published by CMS. The       |
|          | instructions and policies the provider must adhere to in  |
|          | completing the MCR are found in the Provider              |
|          | Reimbursement Manuals (PRM) Parts I and II. The           |
|          | Contractor must ensure that providers follow the cost     |
|          | reporting principles and policies that are contained      |
|          | within this manual. These provisions are implemented by   |
|          | 42 CFR 413.20 and 413.24.                                 |
|          |                                                           |
|          | All providers participating in the Medicare program,      |
|          | whether they are paid on a reasonable cost basis or a     |
|          | system of prospective payment are required under 42 CFR   |
|          | 413.20 (a) to maintain sufficient financial records and   |
|          | statistical data for proper determination of costs. In    |
|          | addition providers must use standardized definitions to   |
|          | follow accounting, statistical and reporting practices    |
|          | that are widely accepted in the health care industry and  |
|          | related fields. The proper reporting and submission of    |
|          | the MCR is critical because data from the MCR is used for |
|          | payment reimbursement and various rate setting and        |
|          | payment refinement activities.                            |
+----------+-----------------------------------------------------------+

#### The Medicare Cost Report

The Contractor shall obtain and maintain CMS approved Automated Data
Reporting (ADR) cost reporting software necessary to receive, process,
and recreate institutional provider MCRs in accordance with the
[Provider Reimbursement Manual CMS Pub.
15-2](http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS021935),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/P152_01.zip).

The Contractor shall install updates to the ADR software in a timely
manner.

The Contractor shall attempt to resolve all compatibility issues arising
from discrepancies between the ADR software and the provider MCR
software communicating such discrepancies to CMS for final resolution.

The Contractor shall implement all CMS final resolutions.

The Contractor shall implement all corrective actions as directed by CMS
to facilitate and expedite MCR submissions (this includes resolution of
all level I edits to achieve an acceptable cost report).

The Contractor shall monitor all transmittals released by CMS to insure
consistency between the Contractors' cost reporting software and the
cost reporting instructions.

  ------------ -----------------------------------------------------------
  Background   The CMS uses an informal process to expeditiously
               communicate to Contractors, software vendors, and ROs
               revisions to the MCR. This informal process entails
               issuance of a Flash Report. The Flash Report is an interim
               step prior to the formal release of the CMS official
               instructions.

  ------------ -----------------------------------------------------------

##### CMS Cost Report and Reimbursement Inquiries

The Contractor shall research cost report inquiries forwarded from CMS.

The Contractor shall collect and review all relevant information to
facilitate discussion of issue (s) with CMS.

The Contractor shall assist in developing a reply to inquiries, and
propose resolutions.

#### Audit of Institutional Provider Cost Reports

The Contractor shall perform cost report acceptance, desk review, audit,
settlement, reopening, and cost report appeals activities for
institutional providers and related home offices in accordance with [IOM
Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapters [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf) and
[9](http://www.cms.hhs.gov/manuals/downloads/fin106c09.pdf), including
any backlog inherited from the outgoing Contractor.

##### Cost Report Reminder Letter 

The Contractor shall issue cost report reminder letters in accordance
with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 10.

##### Cost Report Acceptance

The Contractor shall verify that the submitted cost report is acceptable
in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 10.3 and cost report filing instructions in accordance with [CMS
Pub. 15-2](../Provider%20Reimbursement%20Manual%20CMS%20Pub.%2015-2)
Section [140](../1).

  ----------- ----------------------------------------------------------------------------------------------------------------------------------------------
  Standard 1  Cost report acceptance is timely if it is completed within 30 days from the receipt date of the provider's cost report.

  Standard 2  Cost report acceptance is accurate when a CMS review indicates that they are performed in accordance with [IOM Pub.
              100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
              Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf), section 10.3.
  ----------- ----------------------------------------------------------------------------------------------------------------------------------------------

##### Late Cost Reports

The Contractor shall issue a letter and suspend payments in accordance
with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 10.2, if a provider's cost report is not filed timely.

##### Rejected Cost Reports

The Contractor shall issue a letter and suspend payments in accordance
with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 10.2, if a provider's cost report is rejected after the due
date.

##### Tentative Settlements

The Contractor shall calculate and issue tentative settlements and
update cost to charge ratios in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 10.5.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------
  Background   A tentative settlement is an initial retroactive settlement made by the Contractor within 60 days of the acceptance of the cost report. The
               Contractor will estimate the amount the provider is owed or owes Medicare at tentative settlement and make payment to or take back money from
               the provider where necessary.

  Standard 1   Tentative settlements are timely when they are completed within 60 days of the acceptance of the provider's cost report.

  Standard 2   Tentative settlements are accurate when a CMS review indicates that they are performed in accordance with [IOM Pub.
               100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
               Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf), section 10.5

  Standard 3   Cost to Charge Ratios are calculated accurately when a CMS review indicates that they are in compliance with [IOM Pub.
               100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
               Chapter [3](http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf), section 20.1.2 and [IOM Pub.
               100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
               Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf), section 10.5.
  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------

##### Desk Reviews of Providers' Cost Reports

The Contractor shall perform desk reviews of institutional providers
filing Medicare cost reports (except Hospice and low/no Medicare
utilization cost reports) to determine the adequacy, completeness, and
reasonableness of the data in the reports utilizing the most current
Uniform Desk Review (UDR) program.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------
  Background   The objective of the desk review is to determine whether the provider's cost report can be settled without audit or whether an audit is
               necessary (see [IOM Pub.
               100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
               Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf), section 20 for specific guidelines in performing desk reviews).

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------

##### Wage Index

The Contractor shall perform wage index reviews annually on all cost
reports for short-term acute Inpatient Prospective Payment System (IPPS)
hospitals and hospitals that would otherwise be subject to IPPS if they
did not have a waiver in accordance with the latest wage index review
program released by CMS before the due date of the yearly wage index
reviews (see [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 20.4 and [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/clm104c04.pdf),
section 10.8.1).

  ------------ -----------------------------------------------------------
  Background   Section 1886 (d)(3)(E) of the Social Security Act,
               "Adjusting for Different Area Wage Levels," requires the
               Secretary to adjust the proportion of hospital costs
               attributable to wages and wage-related costs for area
               differences in hospital wage levels. This adjustment
               factor, the wage index, reflects the relative hospital wage
               level in the geographic area of the hospital compared to
               the national average hospital wage level.

  ------------ -----------------------------------------------------------

#####  Cost Report Audits

The Contractor shall conduct Medicare cost report audits using Medicare
audit programs and the Medicare reimbursement principles in accordance
with the guidelines outlined in [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapters [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf) and
[9](http://www.cms.hhs.gov/manuals/downloads/fin106c09.pdf), the
[Provider Reimbursement Manual CMS Pub.
15-1](http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS021929),
and applicable regulations.

  ------------ -----------------------------------------------------------
  Background   Medicare cost report audits are conducted to provide
               reasonable assurance that program payments are based on
               Medicare reimbursement principles.

  ------------ -----------------------------------------------------------

##### Audit Plan

The Contractor shall develop an audit plan to identify cost reports to
be audited and resources to be expended based on results of the desk
review and/or the Contractor's knowledge of the provider in accordance
with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
sections 40 and 50.

##### Final Settlement

The Contractor shall perform outlier reconciliation, when needed, prior
to final settlement of the cost report, in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf),
section 20.1.2.5.

The Contractor shall final settle cost reports by issuing the NPR for
cost reports that do not require an audit within 12 months of the
acceptance of a cost report in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 90.

The Contractor shall issue the NPR and issue a final adjustment report
for cost reports that are audited in accordance with CMS [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 90.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------
  Background   Upon completion of all audit activities related to a provider's cost report, the Contractor will issue an NPR, which is the final settlement
               of the cost report. The NPR signifies the settlement of the cost report and summarizes the reimbursable costs and determines the amount due to
               or due from the provider. The final settlement process is described in [IOM Pub.
               100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
               Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf), section 90.

  Standard 1   Cost reports that do not require an audit are settled timely when the NPR is issued within 12 months of the acceptance of a cost report

  Standard 2   Cost reports are settled accurately when CMS review determines compliance with Medicare payment policy as defined in the Medicare Provider
               Reimbursement Manuals.

  Standard 3   Cost reports that are audited shall have an NPR and final adjustment report issued within 60 days of the exit conference or 60 days after the
               adjustments are finalized if the exit conference is waived.

  Standard 4   Outlier reconciliations are considered accurate when a CMS review indicates that they are in compliance with [IOM Pub.
               100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
               Chapter [3](http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf), section 20.1.2.5.
  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------

##### Cost Report Reopenings

The Contractor shall reopen cost reports when appropriate in accordance
with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 100.

  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------
  Background   In accordance with 42 CFR 405.1885 and the [Provider Reimbursement Manual CMS Pub.
               15-1](http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS021929), Part
               I, sections 2931--2932, a cost report may be reopened if a written request is received from a provider within three (3) years of the date that
               the NPR was issued. A Contractor may also reopen on its own or at the request of CMS within the same three (3)-year reopening period.

  Standard 1   Revised NPRs are timely when they are issued within 180 days of receipt of all information and documentation necessary to resolve the
               reopening issue.

  Standard 2   Revised NPRs are accurate when a CMS review determines compliance with [IOM Pub.
               100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
               Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf), section 100.
  ------------ ----------------------------------------------------------------------------------------------------------------------------------------------

##### Reopening Notices or Denials

The Contractor shall issue reopening notices or a letter denying the
reopening in accordance with the procedures in [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 100.

##### Provider Change in Contractors

The Contractor shall be responsible for timely auditing and settling of
cost reports when a provider leaves the program, transfers ownership, or
transfers to a different MAC in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 110.

##### Audits of Home Office Cost Statements

The Contractor shall perform audits of home office cost statements in
accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 120.

  ------------ ------------------------------------------------------------------------------------------------------------------------------------------
  Background   When a provider is related to a chain organization (within the meaning of 42 CFR 413.17) and services are furnished to the provider by the
               home office or other organizational entity of the chain, the reasonable costs of the services furnished are includable in the provider's
               costs. The reasonable costs of home office services are determined under guidelines in the [Provider Reimbursement Manual CMS Pub.
               15-1](http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS021929),
               Part I, section 2150, and other sections relating to specific costs, and are subject to audit by the Contractor.

  ------------ ------------------------------------------------------------------------------------------------------------------------------------------

##### Provider Permanent Files

The Contractor shall maintain a permanent reference file on each
provider in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 130 that includes items for use during interim rate reviews,
desk reviews, and cost report audits and settlements.

##### Cost Report Hearings

The Contractor shall complete provider cost report hearing activities
for amounts in controversy of at least \$1,000 but less than \$10,000,
including designating a hearing officer and conducting the hearing, in
accordance with procedures outlined in the [Provider Reimbursement
Manual CMS Pub.
15-1](http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS021929),
Part I, sections 2913, 2914, 2915, and 2916.

+----------+-----------------------------------------------------------+
| Ba       | Per 42 CFR 405.1807, the Contractor's cost report         |
| ckground | determination is final and binding unless one of the      |
|          | following occur:                                          |
|          |                                                           |
|          | -   A Contractor hearing is requested in accordance with  |
|          |     42 CFR 405.1811 and a hearing decision is rendered in |
|          |     accordance with 42 CFR 405.1831, or                   |
|          |                                                           |
|          | -   The Contractor determination is revised (reopened) in |
|          |     accordance with 42 CFR 405.1885, or                   |
|          |                                                           |
|          | -   A Provider Reimbursement Review Board (PRRB) hearing  |
|          |     is requested in accordance with 42 CFR 405.1835 and a |
|          |     hearing decision is rendered.                         |
+----------+-----------------------------------------------------------+

##### Cost Report Appeals: Provider Reimbursement Review Board

The Contractor shall complete all activities related to provider cost
report appeals for amounts in controversy of \$10,000 or more in
accordance with PRRB instructions, and, when necessary, coordinate these
activities with the CMS Appeals Support Contractor (The Appeals Support
Contractor will continue with the Blue Cross and Blue Shield Association
under the Title XVIII contract). This may include Administrative
Resolutions of appeals prior to the hearing.

If the Contactor disagrees with the PRRB decision, the Contractor shall
provide comments to the CMS Attorney Advisor for potential CMS
Administrator review under 42 CFR 405.1875.

+----------+-----------------------------------------------------------+
| Ba       | A provider has the right to appeal a final determination  |
| ckground | made by the Contractor. If the amount in controversy is   |
|          | \$10,000 or more, the provider appeals to the PRRB. When  |
|          | the PRRB acknowledges a case, it distributes a list of    |
|          | required documents along with due dates for both the      |
|          | provider and Contractor. It is the Contractor's           |
|          | responsibility to adhere to the dates set forth by the    |
|          | PRRB. The Contractor is responsible for all appeal        |
|          | activities, as explained in the regulations at 42 CFR     |
|          | 405.1835--1873 and the PRRB instructions, found at        |
|          | <htt                                                      |
|          | p://new.cms.hhs.gov/PRRBReview/02_PRRB_Instructions.asp>. |
|          |                                                           |
|          | Cases are resolved by mediation or administrative         |
|          | resolution, when appropriate, consistent with Medicare    |
|          | reimbursement principles.                                 |
|          |                                                           |
|          | Some of the more significant activities related to        |
|          | provider cost report appeals for amounts in controversy   |
|          | of \$10,000 or more include maintaining a hearing file,   |
|          | preparing jurisdictional briefs, preparing position       |
|          | papers, conducting pre-hearing activities, discussing the |
|          | issues with the provider, and if the case proceeds to a   |
|          | PRRB hearing, defending its position, including arranging |
|          | for and preparing witnesses and submitting post-hearing   |
|          | briefs.                                                   |
+----------+-----------------------------------------------------------+

##### Cost Report Appeals: Court Hearing / Settlements

The Contractor shall assist CMS, the Office of the General Counsel
(OGC), the Department of Justice or other governmental counsel/staff in
defending or supporting the agency's position by providing
documentation, consultation in Medicare cost reporting and reimbursement
policy, ad hoc analysis and support staff.

##### Cost Report Appeals: Final Decisions

The Contractor shall implement decisions rendered by the PRRB, the
Administrator of CMS, or by a court (including completing any necessary
cost report reopenings) when the decision is determined to be final in
accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 100 and case-specific instructions.

##### Requests for Cost Report, Audit and Reimbursement Information

The Contractor shall assist CMS or other government staff in replying to
requests pertaining to cost report audit and reimbursement issues. This
may include researching or performing analytical analysis of the issue.

#### Institutional Provider Reimbursement

The Contractor shall compute/review PIP and other interim rates for
institutional providers in accordance with 42 CFR 412.105, 412.106,
412.113, 412.115, 412.116, and 413.64.

The Contractor shall monitor PIP providers to determine eligibility and
terminate PIP to providers when necessary.

  ------------ -----------------------------------------------------------
  Background   Section 1815(a) of the Social Security Act (the Act)
               requires each provider participating in the Medicare
               program to submit information, as requested by the
               Secretary, in order to determine the amount of payment due
               to the provider for services furnished under the Medicare
               program. Implementing regulations at 42 CFR 413.24(f)
               requires participating providers to submit cost reports
               that generally cover a consecutive twelve (12)-month period
               of the provider's operations. A provider may select any
               annual period for Medicare cost reporting purposes. Once a
               provider informs CMS of its selection, the provider is
               required to report annually for periods ending the same
               date unless that provider's Contractor approves a change.
               The Contractor may make interim payments to the provider
               during the provider's cost reporting year. Based on the
               annual cost report, a retroactive adjustment is made after
               the end of the provider's cost reporting year to bring the
               interim payments made during the period into agreement with
               the reimbursable amount payable to the provider.

  ------------ -----------------------------------------------------------

##### Provider-Specific File Correctness

The Contractor shall ensure that all provider-specific data is correctly
entered in the PSF in accordance with instructions in [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter 3, section 20.2.3.1. The file layout is contained in Addendum A
of [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter 3.

  ----------- ----------------------------------------------------------------------------------------------------------------------------------------------
  Standard 1  Data in the PSF is considered accurate when a CMS review indicates that it is in compliance with [IOM Pub.
              100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
              Chapter 3, section 20.2.3.1 and the file layout in Addendum A of [IOM Pub.
              100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
              Chapter 3.

  ----------- ----------------------------------------------------------------------------------------------------------------------------------------------

##### Provider Statistical and Reimbursement Report 

The Contractor shall operate the Provider Statistical and Reimbursement
Reporting (PS&R) system in accordance with the PS&R users guide,
implement any changes to the system within the required time frames, and
issue PS&R reports in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [9](http://www.cms.hhs.gov/manuals/downloads/fin106c09.pdf) and
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 10.1.

  ------------ -----------------------------------------------------------
  Background   The PS&R accumulates statistical and reimbursement data
               related to Medicare claims processed. It is used by the
               Contractor and institutional providers to accumulate key
               elements of the Medicare cost report.

  ------------ -----------------------------------------------------------

##### System for Tracking Audit and Reimbursement System

The Contractor shall enter all required data in the System for Tracking
Audit and Reimbursement (STAR) system accurately and timely in
accordance with the STAR manual.

  ------------ -----------------------------------------------------------
  Background   The STAR system is a CMS-owned and maintained system used
               by Contractors to track the receipt and other subsequent
               actions taken on all providers' costs reports. Each
               Contractor is responsible for maintaining its individual
               STAR database. In addition, STAR enables CMS to monitor
               audit savings.

  Standard 1   STAR database is maintained accurately and timely when a
               CMS review indicates that it is in compliance with the STAR
               manual.
  ------------ -----------------------------------------------------------

##### Hospice Cap

The Contractor shall compute Hospice reimbursement caps and ensure
payments made in excess of the caps are refunded by the Hospice, in
accordance with 42 CFR 418.308, 42 CFR 418.309 and [CMS Pub.
21](http://www.cms.hhs.gov/manuals/downloads/pub_21.zip) Section 407 and
[IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [11](http://www.cms.hhs.gov/manuals/downloads/clm104c11.pdf),
section 80.

  ------------ -----------------------------------------------------------
  Background   Overall aggregate payments made to a Hospice are subject to
               a "cap amount", calculated by the Contractor at the end of
               the Hospice cap period. The Contractor is responsible for
               the calculation of the initial cap amount and any
               subsequent adjustment to the cap.

  ------------ -----------------------------------------------------------

##### Target Limits: Tax Equity and Fiscal Responsibility Act

The Contractor shall compute Tax Equity and Fiscal Responsibility Act of
1982 (TEFRA) target limits accurately and timely in accordance with the
[Provider Reimbursement Manual CMS Pub.
15-1](http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS021929),
Part I, sections 3000-3004.

  ------------ -----------------------------------------------------------
  Background   Providers excluded from inpatient Prospective Payment
               System (PPS), and not covered by a special PPS, are subject
               to the payment limitations and incentives established in
               TEFRA. Each provider is paid on a reasonable cost basis
               subject to a rate of increase ceiling on inpatient
               operating costs. The ceiling is based on a target amount
               per discharge, as established from a base period increased
               by applicable update factors.

  Standard 1   Target Limits are timely when applications are processed to
               completion within 75 days after receipt by the Contractor
               or returned to the hospital as incomplete within 60 days of
               receipt.

  Standard 2   Target Limits are accurate when they comply with TEFRA
               payment policy.
  ------------ -----------------------------------------------------------

##### Exception Requests: End-Stage Renal Disease

The Contractor shall process exception requests for end-stage renal
disease (ESRD) facilities in accordance with 42 CFR 413.180 and [IOM
Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/clm104c08.pdf),
section 40.

##### Exception Requests: Tax Equity and Fiscal Responsibility Act

The Contractor shall process exception requests for TEFRA limits in
accordance with program instructions within 75 days of receipt or return
them to the provider within 60 days if the application was incomplete in
accordance with the [Provider Reimbursement Manual CMS Pub.
15-1](http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS021929),
Part I, section 3004.

+----------+-----------------------------------------------------------+
| Ba       | A hospital may request an adjustment to the payment       |
| ckground | allowed under the rate of increase ceiling (TEFRA target) |
|          | if its costs exceed the ceiling and there are differences |
|          | in inpatient costs incurred during the cost reporting     |
|          | period in question that make comparison to the base       |
|          | period inappropriate. Distortions in inpatient operating  |
|          | costs resulting in non-comparability of the cost          |
|          | reporting periods are generally the result of             |
|          | extraordinary circumstances or one or both of the         |
|          | following two factors:                                    |
|          |                                                           |
|          | -   Increases in the average length of stay of Medicare   |
|          |     patients.                                             |
|          |                                                           |
|          | -   Changes in the volume or intensity of direct patient  |
|          |     care services.                                        |
+----------+-----------------------------------------------------------+

##### Health Care Provider Cost Report Information System

The Contractor shall transmit an extract of the provider's Medicare cost
report to the Health Care Provider Cost Report Information System
(HCRIS) within 210 days of the cost report period end date or 60 days
after the receipt of the provider\'s Medicare cost report, whichever is
later, in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 10.4 and HCRIS specifications.

The Contractor shall transmit an extract of the provider's Medicare cost
report to HCRIS within 30 days of the issuance of any Notice of Program
Reimbursement (NPR) or revised NPR (RNPR) in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [8](http://www.cms.hhs.gov/manuals/downloads/fin106c08.pdf),
section 90.1 and HCRIS specifications.

  ------------ -----------------------------------------------------------
  Background   HCRIS is a cost report database developed and maintained by
               CMS. Contractors are required to transmit cost report data
               to the database. The database is available to all
               authorized CMS users, the public, and researchers and the
               cost report data files are available on the CMS website.

  ------------ -----------------------------------------------------------

##### Provider-Based Determinations

The Contractor shall process Provider-based determinations in accordance
with 42 CFR 413.65, the [Provider Reimbursement Manual CMS Pub.
15-1](http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS021929),
Section 2446, and Program Memorandum A-03-030 (April 18, 2003).

  ------------ -----------------------------------------------------------
  Background   CMS, with the assistance of the Contractor, will make
               determinations regarding provider-based and freestanding
               designation. These designation decisions pertain to any
               provider of services under the Medicare program, and also
               includes physicians' practices or clinics or other entities
               that are not themselves providers, but who state they are
               part of a provider. These decisions are needed to ensure
               that providers are paid appropriately, since Medicare
               payment for services provided in a provider-based (i.e.,
               hospital) setting is often higher than Medicare payment for
               a similar service in a freestanding (non-hospital) setting.

  ------------ -----------------------------------------------------------

##### Special Payment Status

The Contractor shall review provider requests for special payment
status, and if the provider's documentation is complete, forward
recommendations for special payment status to CMS in accordance with
[IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf). If
additional documentation is required, the Contractor shall return
requests that identify missing information to providers.

  ------------ -----------------------------------------------------------
  Background   A provider---such as an Sole Community Hospital (SCH),
               Medicare Dependent Hospital (MDH), Rural Referral Center
               (RRC), and Critical Access Hospital (CAH)---may request to
               be paid using a specialized methodology. It is the
               Contractor's responsibility to review the provider's
               request to determine if the provider is entitled to receive
               payments using the requested method.

  ------------ -----------------------------------------------------------

##### Interns and Residents Information System

The Contractor shall implement and notify providers that train residents
in approved graduate medical education (GME) programs of all Interns and
Residents Information System (IRIS) updates in accordance with CMS
instructions provided in periodic change requests (CRs).

  ------------ -----------------------------------------------------------
  Background   IRIS is a database developed and maintained by CMS. It
               contains information pertaining to a provider's interns and
               residents. It is used to detect duplicate interns and
               resident counts in instances where the interns and
               residents train at more than one provider during the cost
               reporting year; and is used for direct graduate medical
               education (GME) and indirect medical education (IME)
               payments. The information is submitted with the provider's
               cost report and the Contractor submits the data to CMS.

  ------------ -----------------------------------------------------------

##### Institutional Provider Reimbursement - Reimbursement for Federally Qualified Health Centers and Rural Health Clinics

The Contractor shall compute/review interim rates for Federally
Qualified Health Centers and Rural Health Clinics at least twice per
year using the prior-year's cost reports, the applicable prior-year's
adjustments, other reliable information, and empirical knowledge of the
provider with adjustments made as necessary in accordance with the
[Provider Reimbursement Manual CMS Pub.
15-1](http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS021929),
Chapter
[29](http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS021929),
42 CFR 405 Subchapter X, and Medicare Benefits Policy Manual, [IOM Pub.
100-02](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS012673),
Chapter [13](http://www.cms.hhs.gov/manuals/Downloads/bp102c13.pdf).

##### **[Medicare Supplemental Payments for FQHCs under contract with Medicare Advantage Plans]{.smallcaps}**

The Contractor shall ensure that providers properly receive supplemental
(wrap-around) payments in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [9](http://www.cms.hhs.gov/manuals/downloads/clm104c09.pdf),
section 110.3.

### Non-Medicare Secondary Payer Overpayment

The Contractor shall determine the amount of overpayments made to
institutional providers, professional providers, and beneficiaries and
demand repayment and timely issue a notification letter to the provider,
in accordance with 45 CFR Part 30 and [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/fin106c03.pdf).

+----------+-----------------------------------------------------------+
| Ba       | The majority of the Medicare accounts receivable balances |
| ckground | reported by CMS in its financial statements are           |
|          | overpayments made to providers, physicians,               |
|          | beneficiaries, insurers, employers, and other entities.   |
|          | The primary responsibility for identifying, recording,    |
|          | recovering, and reporting overpayments lies with CMS'     |
|          | Medicare Contractors. The CMS defines an "overpayment" as |
|          | Medicare funds that a provider, physician, beneficiary,   |
|          | or other entity has received in excess of amounts due and |
|          | payable under the Medicare statute and regulations.       |
|          |                                                           |
|          | Once an overpayment is discovered, the Medicare           |
|          | Contractors are required to notify the provider of the    |
|          | existence and amount of the overpayment and to request    |
|          | repayment.                                                |
|          |                                                           |
|          | When a potential overpayment has been identified, the     |
|          | Contractor must take actions under this section to        |
|          | determine whether an overpayment has been made and        |
|          | establish the amount of debt owed to the U.S. Government. |
|          | Once an overpayment has been determined, the Contractor   |
|          | is responsible for recovery of any cumulative debt in     |
|          | accordance with [IOM Pub.                                 |
|          | 100-06](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018), |
|          | Chapters                                                  |
|          | [3                                                        |
|          | ](http://www.cms.hhs.gov/manuals/downloads/fin106c03.pdf) |
|          | and                                                       |
|          | [4]                                                       |
|          | (http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf). |
+----------+-----------------------------------------------------------+
| Standard | Overpayment notification letters are timely when they are |
| 1        | sent to the provider within seven (7) calendar days of    |
|          | overpayment determination.                                |
+----------+-----------------------------------------------------------+

#### Identification of Overpayment Cause

The Contractor shall identify the nature and cause of the overpayment in
accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/fin106c03.pdf).

#### Applications for Extended Repayment Plan 

The Contractor shall process requests for an Extended Repayment Plan
(ERP) for provider overpayments in accordance with I[IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf). The
Contractor shall process requests for an ERP for beneficiary
overpayments in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/fin106c03.pdf).

  ------------ -----------------------------------------------------------
  Background   Providers may request an ERP for overpayments that will
               take more than 30 days to repay. Any provider that requests
               an ERP may be required to complete a package of required
               financial data. The Contractor will review the submission
               and may approve up to a 12-month repayment schedule. Any
               request for more than a year must be forwarded to CMS, with
               a recommendation for a specific period greater than 12
               months.

  ------------ -----------------------------------------------------------

### Non-Medicare Secondary Payer Debt Collection

The Contractor shall collect all debts in accordance with the Federal
Claims Collection Act and [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapters [3](http://www.cms.hhs.gov/manuals/downloads/fin106c03.pdf) and
[4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf).

+----------+-----------------------------------------------------------+
| Ba       | The Medicare Contractors have primary responsibility for  |
| ckground | collection of all debts and are expected to pursue        |
|          | recovery to the fullest extent possible, regardless of    |
|          | the identity of the debtor. The Debt Collection           |
|          | Improvement Act of 1996 (DCIA) requires federal agencies  |
|          | to refer eligible delinquent debt to a                    |
|          | Treasury-designated Debt Collection Center (DCC) for      |
|          | cross-servicing and offset through the Treasury Offset    |
|          | Program (TOP).                                            |
|          |                                                           |
|          | Demand letters for overpayments resulting from payments   |
|          | for services provided to beneficiaries enrolled in        |
|          | Medicare Advantage (MA) must include the MA organization  |
|          | number (normally, H####) for the MA so the provider can   |
|          | recover from the plan.                                    |
+----------+-----------------------------------------------------------+

### Non-Medicare Secondary Payer Debt Referral 

The Contractor shall develop, maintain, and implement debt referral
procedures in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf).

  ------------ -----------------------------------------------------------
  Background   This section covers non-Medicare Secondary Payer (MSP) debt
               referral. For all MSP requirements, including debt
               referral, see C.5.14.

  Standard 1   The Contractor\'s debt referral procedures are successful
               when its eligible delinquent debt has been referred by the
               180th day of delinquency
  ------------ -----------------------------------------------------------

#### Non-Medicare Secondary Payer Debt Collection Improvement Act Intent to Refer Letter

The Contractor shall send DCIA Intent-to-Refer Letters (IRLs) in
accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf).

#### Non-Medicare Secondary Payer Debt Referral Inquiries

The Contractor shall handle non-MSP debt referral inquiries and actions
resulting from the DCIA IRLs in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf).

#### Debt Collection System Database 

The Contractor shall enter all debt eligible for referral into the Debt
Collection System (DCS) database and continually verify that debts
transmitted remain valid and amounts are accurate in accordance with
[IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf),
section 70, Exhibit 4/DCS User Guide.

#### Posting of Debts Collected by Treasury

The Contractor shall post collections received as a result of DCIA
collection activity in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf).

### Refund Request

The Contractor shall process and return refund request forms in
accordance [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf).

  ------------ -----------------------------------------------------------
  Background   When CMS identifies an excess collection for debt that was
               referred for cross-servicing, the Contractor will receive a
               refund request form. An excess collection is the result of
               receiving a collection and recoupment for the same debt.

  ------------ -----------------------------------------------------------

#### Unsolicited/Voluntary Refunds 

The Contractor system shall respond to and perform all necessary
transactions related to unsolicited/voluntary refunds not related to an
existing debt (both MSP and non-MSP) in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf)
sections 410 and 411.

  ------------ -----------------------------------------------------------
  Background   The Contractors receive unsolicited/voluntary refunds from
               providers, physicians, suppliers, and third-party payers.
               An unsolicited/voluntary refund is money received with no
               established debt. When the monies are received, the
               Contractor must identify, process, track, and report the
               unsolicited/voluntary refund.

  ------------ -----------------------------------------------------------

### Overpayment Related to Bankruptcy

The Contractor shall immediately notify CMS regional counsel of any
contact or information provided to the Contractor related to a provider
bankruptcy or the potential bankruptcy (within 24 hours after any
contact or information is received) in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/fin106c03.pdf),
section 140 (see also Attachment J-10).

+----------+-----------------------------------------------------------+
| Ba       | The Medicare Contractors must take certain actions to     |
| ckground | safeguard the Medicare trust funds when a provider files  |
|          | for bankruptcy. Bankruptcy is litigation. Bankruptcy law  |
|          | and the bankruptcy court may affect any actions CMS and   |
|          | its Contractors take concerning a bankrupt Medicare       |
|          | provider. The Contractor should not send any              |
|          | correspondence to a bankrupt provider until the OGC or    |
|          | Contracting Officer reviews and approves it. An           |
|          | individual or company declares bankruptcy by filing a     |
|          | petition for bankruptcy in a United States Bankruptcy     |
|          | Court. The Bankruptcy Court then opens a bankruptcy case. |
|          | The Bankruptcy Court closely monitors the affairs of the  |
|          | individual or company (the debtor) including the          |
|          | creditors' treatment of the debtor. Title 11 of the       |
|          | United States Code (the Bankruptcy Code) identifies four  |
|          | types of bankruptcies that may involve Medicare           |
|          | providers: Chapters 7, 9, 11, and 13. The petition date   |
|          | (i.e., the date the debtor files its petition in          |
|          | bankruptcy with the Bankruptcy Court) draws a line        |
|          | between pre-petition and post petition actions. Events    |
|          | that occur on or before the petition date are             |
|          | pre-petition.                                             |
|          |                                                           |
|          | Recoupment and offset are two of Medicare\'s strongest    |
|          | tools for recovering overpayments to debtor providers.    |
|          | The Contractor should not take, omit, continue, or        |
|          | discontinue any recovery action without approval from the |
|          | RO and Regional Counsel. Jurisdictions vary in their      |
|          | decisions about how Medicare can use these tools. Once it |
|          | is discovered that a provider is in bankruptcy, Medicare  |
|          | may enact a temporary administrative freeze of            |
|          | post-petition payments for pre-petition services. An      |
|          | administrative freeze will allow time for Medicare to     |
|          | determine if there are any overpayments and to ask the    |
|          | bankruptcy court to allow set-off.                        |
|          |                                                           |
|          | An RO counsel has jurisdiction over a bankruptcy case     |
|          | when it has jurisdiction over the State in which the      |
|          | debtor files for bankruptcy (bankruptcy is filed in       |
|          | federal court). Each Contractor staff member who may come |
|          | in contact with a debtor is effectively a part of the     |
|          | Medicare \"bankruptcy team\" for that case, and must,     |
|          | through the Contractor point of contact for the           |
|          | bankruptcy, keep the Contracting Officer and regional     |
|          | counsel advised of all planned or completed actions       |
|          | concerning the bankrupt provider.                         |
|          |                                                           |
|          | Bankruptcy law permits a debtor to affirm ("assume") or   |
|          | reject each of its executory contracts, including the     |
|          | Health Insurance Benefit Agreement (commonly referred to  |
|          | as the Medicare provider agreement). The Contractor shall |
|          | have certain responsibilities regarding the bankrupt      |
|          | provider's assumption or rejection of the agreement (see  |
|          | regulations found at 42 CFR 489.55, Exceptions to         |
|          | effective date of termination. Payment is available for   |
|          | up to 30 days after the effective date of termination for |
|          |                                                           |
|          | -   Inpatient hospital services, including inpatient      |
|          |     psychiatric hospital services, and post hospital      |
|          |     extended care services furnished to a beneficiary who |
|          |     was admitted before the effective date of             |
|          |     termination; and                                      |
|          |                                                           |
|          | -   Home health services and hospice care furnished under |
|          |     a plan established before the effective date of       |
|          |     termination).                                         |
|          |                                                           |
|          | For example, the Contractor shall not reimburse the       |
|          | provider for services it performs after the date it       |
|          | rejects/terminates the agreement. The Contractor shall    |
|          | calculate net overpayments or underpayments due to the    |
|          | bankrupt provider.                                        |
+----------+-----------------------------------------------------------+

#### Administrative Freeze Payments

The Contractor shall produce accurate and detailed underpayment and
overpayment data to the Contracting Officer and regional counsel as soon
as it learns of a provider bankruptcy and update that information
whenever there is a change in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/fin106c03.pdf),
section 140.6.5.

As directed by CMS, the Contractor shall effectuate administrative
freezes for all categories of affected claims.

#### Closed Bankruptcy Case

The Contractor shall modify its financial records after the bankruptcy
closes with guidance from the Contracting Officer/regional counsel in
accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/fin106c03.pdf),
section 140.8.

  ------------ -----------------------------------------------------------
  Background   After a bankruptcy case is fully administered and the
               bankruptcy court has discharged the trustee (if there was
               one), the bankruptcy court closes the case.

  ------------ -----------------------------------------------------------

### Financial Reporting and Accounting 

The Contractor shall report financial activity into CMS via the CMS
Contractor Administrative, Budget, and Financial Management (CAFM)
system, Healthcare Integrated General Ledger Accounting System (HIGLAS),
or both.

For HIGLAS and non-HIGLAS workloads, the Contractor shall maintain
transaction-level documentation that supports all trust fund activity
under the control of the Contractor.

+----------+-----------------------------------------------------------+
| Ba       | Financial reporting for the existing Medicare contractor  |
| ckground | workloads is performed using HIGLAS or CAFM. Eventually,  |
|          | HIGLAS will be used by all Medicare contractors.          |
|          |                                                           |
|          | HIGLAS is a new dual-entry accounting system that         |
|          | replaces and modernizes Medicare Contractor accounting    |
|          | systems with a single standardized system. In addition to |
|          | processing Medicare claims, HIGLAS will replace the       |
|          | legacy Financial Accounting and Control System (FACS),    |
|          | which accumulates CMS\' financial activities, both        |
|          | programmatic and administrative, in its general ledger.   |
|          | HIGLAS is a component of the Department of Health and     |
|          | Human Services (DHHS) Unified Financial Management System |
|          | (UFMS).                                                   |
|          |                                                           |
|          | -   HIGLAS will not change the basic role of Medicare     |
|          |     contractors. Contractors will continue to be          |
|          |     responsible for the Medicare claims processing        |
|          |     activities they currently perform.                    |
|          |                                                           |
|          | -   Accounting functions that are now executed in         |
|          |     Medicare contractor selected shared claims processing |
|          |     systems will be incorporated into HIGLAS. For         |
|          |     example, once a Medicare claim has been approved for  |
|          |     payment, HIGLAS, not the selected shared system, will |
|          |     perform the payment calculations, formatting, and     |
|          |     accounting.                                           |
|          |                                                           |
|          | -   The General Ledger feature in HIGLAS will give CMS    |
|          |     enhanced oversight of contractor accounting systems   |
|          |     and provide high quality, timely data for             |
|          |     decision-making and performance measurement.          |
|          |                                                           |
|          | -   Eventually, all Contractors will use HIGLAS to        |
|          |     perform these functions on a daily basis.             |
|          |                                                           |
|          | -   HIGLAS will communicate with Medicare Contractors'    |
|          |     shared systems to process claim billing information,  |
|          |     provider profile information, beneficiary profile     |
|          |     information, check reconciliation, payment            |
|          |     information, and other claim related data. These      |
|          |     Medicare Contractor shared systems are the Federal    |
|          |     Intermediary Standard System (FISS) and the           |
|          |     Multi-Carrier System (MCS).                           |
+----------+-----------------------------------------------------------+
| Standard | For non-HIGLAS workloads, the Contractor shall produce    |
| 1        | all financial reports necessary to document the trust     |
|          | fund activity in accordance with [IOM Pub.                |
|          | 100-06](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018), |
|          | Chapter                                                   |
|          | [4]                                                       |
|          | (http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf), |
|          | sections 70.14 and 70.15, and Chapter                     |
|          | [5]                                                       |
|          | (http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf), |
|          | section 200--510.9.                                       |
+----------+-----------------------------------------------------------+
| Standard | For HIGLAS workloads, the Contractor shall produce all    |
| 2        | financial reports necessary to document the trust fund    |
|          | activity in accordance with [IOM Pub.                     |
|          | 100-06](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018), |
|          | Chapter                                                   |
|          | [4]                                                       |
|          | (http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf), |
|          | sections 70.14 and 70.15, and Chapter                     |
|          | [5]                                                       |
|          | (http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf), |
|          | section 200--510.9 along with the additional instructions |
|          | identified in Attachment J-30.                            |
+----------+-----------------------------------------------------------+

#### Accounts Receivable Trend Analyses

The Contractor shall perform and report accounts receivable trend
analyses in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf),
section 400.22.

+----------+-----------------------------------------------------------+
| Ba       | The primary emphasis for performing trend analysis is on  |
| ckground | changes in the Contractor's financial data. To ensure     |
|          | that the financial data reported are accurate, the        |
|          | Contractor is required to perform trending procedures.    |
|          | Trending procedures can be used as an important tool to   |
|          | identify potential errors, system weaknesses, or          |
|          | inappropriate patterns of financial data. Trending        |
|          | procedures involve comparisons of recorded amounts to     |
|          | expectations developed by the Contractor.                 |
|          |                                                           |
|          | For HIGLAS workloads, HIGLAS will generate automated      |
|          | supporting reports on accounts receivable trend analysis. |
+----------+-----------------------------------------------------------+

#### Financial Reporting Audits/Reviews

The Contractor shall participate in financial audits/reviews such as
Agreed Upon Procedures (AUP), CFO, CAPs, 1522 Reviews and Certification
Package for Internal Controls (CPIC).

The Contractor shall develop available financial reports and their
supporting documentation to CMS, Government Accountability Office (GAO),
Office of the Inspector General (OIG), and other parties designated by
CMS.

The Contractor shall make CAPs resulting from audit findings available
to attest to the implementation of procedures to correct deficiencies
identified during the current-year and prior-period audits/reviews in
accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/fin106c07.pdf),
sections 40-40.6.

  ---------- ------------------------------------------------------------
  Standard 1 The Contractor\'s corrective action procedures are
             successful when its deficiencies have been corrected within
             one year of being identified.

  ---------- ------------------------------------------------------------

## Medical Review 

The Contractor shall decrease the paid claims error rate and address
Medical Review (MR) -related coverage, coding, and billing errors in
accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033).

  ------------ -----------------------------------------------------------
  Background   The MR program is designed to promote a structured approach
               in the interpretation and implementation of Medicare
               policy, most often requiring the evaluation of medical
               records to determine the medical necessity of Medicare
               claims. The goal of the Contractor's MR program is to
               reduce the claims payment error rate by identifying,
               through analysis of data and evaluation of other
               information, program vulnerabilities concerning coverage
               and coding made by individual providers and by taking the
               necessary action to prevent or address the identified
               vulnerabilities.

  Standard 1   Claims processing is successful when claims are paid with
               acceptable accuracy as evidenced by a contractor-specific
               Comprehensive Error Rate Testing (CERT) error rate not to
               exceed the Government Performance Results Act (GPRA)
               national paid claims error rate goal for the year (The goal
               for each year is published in the Report on Improper
               Medicare Fee-for-Service Payments.
               [www.cms.hhs.gov/cert](http://www.cms.hhs.gov/cert)).
  ------------ -----------------------------------------------------------

### Development of Medical Review Strategy

The Contractor shall develop a problem-focused, outcome-based MR
strategy and Quarterly Strategy Analysis (QSA) that defines what risks
to the Medicare trust fund the Contractor's MR programs will address and
the interventions that will be used during the fiscal year in accordance
with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapters [1](http://www.cms.hhs.gov/manuals/downloads/pim83c01.pdf) and
[3](http://www.cms.hhs.gov/manuals/downloads/pim83c03.pdf).

  ------------ ----------------------------------------------------------
  Standard 1   The Contractor's MR strategy is successful when problems
               targeted in the strategy are addressed during the fiscal
               year using the progressive corrective action (PCA) process
               and the Contractor can demonstrate a change in billing
               behavior.

  ------------ ----------------------------------------------------------

#### Medical Review Data: Data Analysis

The Contractor shall analyze data to identify patterns of provider or
service billing aberrancies that may pose a risk to the Medicare trust
fund.

The Contractor's medical review data analysis shall include a
prioritized problem list in the MR strategy that is data driven in
accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/pim83c01.pdf).

  ------------ -----------------------------------------------------------
  Background   The Contractor uses CERT findings, internal data sources,
               review of claims, and information from other operational
               areas to identify patterns of erroneous billing submissions
               and areas of over utilization to target provider-specific
               review.

  ------------ -----------------------------------------------------------

#### Medical Review Data: Edit Effectiveness

The Contractor shall implement policies and concentrate their efforts on
automating edits for an efficient and effective means to safeguard the
program.

The Contractor shall focus medical review edits that suspend claims to
suspend only those claims with a high probability of being denied on
medical review in accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/pim83c03.pdf).

#### Medical Review Data: Probe Reviews

The Contractor shall validate data analysis findings by conducting probe
reviews and implementing the necessary PCAs in accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/pim83c03.pdf).

+----------+-----------------------------------------------------------+
| Ba       | The Contractor must determine whether the problem is      |
| ckground | widespread or provider specific. If the identified        |
|          | problem is widespread and evenly distributed among a wide |
|          | universe of providers, contractors should validate the    |
|          | concern by a review of generally up to 100 "potential"    |
|          | problem claims from a representative sample of providers. |
|          | The review is performed on either a prepayment or         |
|          | postpayment basis. If the identified problem is specific  |
|          | to a limited number of providers, contractors should      |
|          | validate the concern by a review of generally 20-40       |
|          | "potential" problem claims from each of the identified    |
|          | providers. Again, the review is performed on either a     |
|          | prepayment or postpayment basis.                          |
|          |                                                           |
|          | Once a problem has been verified, the Contractor          |
|          | implements the necessary PCA. This includes providing the |
|          | initial notification informing the provider of the        |
|          | results of the probe review, and collaborating with       |
|          | Provider Outreach and Education (POE) to share potential  |
|          | educational needs, and making referrals to POE and        |
|          | Program Safeguard Contractors Benefit Integrity (BI)      |
|          | units, as appropriate.                                    |
+----------+-----------------------------------------------------------+

#### Provider Tracking 

The Contractor shall track all contacts made by their MR unit with
providers during the course of medical review.

The Contractor shall take progressive corrective actions based on the
follow-up data analysis to improve provider error rates in accordance
with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapters [1](http://www.cms.hhs.gov/manuals/downloads/pim83c01.pdf),
[2](http://www.cms.hhs.gov/manuals/downloads/pim83c02.pdf) and
[3](http://www.cms.hhs.gov/manuals/downloads/pim83c03.pdf).

  ------------ ---------------------------------------------------------------------------------------------------------------------------------------------
  Background   Part of the Contractor's tracking activity consists of tracking notifications and referrals made to POE. The Contractor is responsible for
               tracking probe notification letters to providers and referrals made to POE. The Contractor should follow the instructions in [IOM Pub.
               100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033)
               for collaborating with POE for tracking potential educational interventions.

  ------------ ---------------------------------------------------------------------------------------------------------------------------------------------

#### Medical Review of Claims

The Contractor shall conduct medical review of claims submitted by
providers or services in accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033)
and the Contractor's MR strategy.

## Coordination with Program Safeguard Contractors

+----------+-----------------------------------------------------------+
| Ba       | In all its functions, the Contractor is responsible for   |
| ckground | deterring and detecting fraud and abuse. The Health       |
|          | Insurance Portability and Accountability Act (HIPAA) was  |
|          | enacted on August 21, 1996. Section 202 of Public Law     |
|          | 104-191 added Section, 1893, to the Social Security Act   |
|          | establishing the Medicare Integrity Program (MIP). MIP    |
|          | was established, in part, to strengthen CMS' ability to   |
|          | deter fraud and abuse in the Medicare program. It         |
|          | provides a separate and stable long-term funding          |
|          | mechanism for MIP activities. As part of this program,    |
|          | CMS created Program Safeguard Contractors (PSCs). PSCs    |
|          | can perform any or all of the following MIP activities:   |
|          | Benefit Integrity (BI), Medical Review (MR), Cost Report  |
|          | Audit, and Data Analysis. Additionally, PSCs perform      |
|          | specialty functions such as the Comprehensive Error Rate  |
|          | Testing (CERT).                                           |
|          |                                                           |
|          | The Contractor is responsible for referring all suspected |
|          | fraud and abuse to the PSC regardless of the source, such |
|          | as provider inquiries, medical review, and complex        |
|          | inquiries referred from the Beneficiary Contact Center    |
|          | (BCC). The roles and responsibilities of the Contractor   |
|          | as they relate to supporting the PSCs and BI functions    |
|          | are clearly delineated in [IOM Pub.                       |
|          | 100-08](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033), |
|          | Program Integrity Manual (PIM).                           |
+----------+-----------------------------------------------------------+

### Support of Benefit Integrity 

The Contractor shall handle and refer complaints of potential fraud and
abuse in accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033).

  ------------ -----------------------------------------------------------
  Background   Any PIM language mentioning "affiliated Contractor" or "AC"
               must be construed to read "MAC."

  ------------ -----------------------------------------------------------

### Support of Comprehensive Error Rate Testing 

The Contractor shall support the CERT program in accordance with [IOM
Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [12](http://www.cms.hhs.gov/manuals/downloads/pim83c12.pdf).

+----------+-----------------------------------------------------------+
| Ba       | CMS has developed the CERT program to produce national,   |
| ckground | Contractor-specific, and service-specific paid claim      |
|          | error rates. The program has independent reviewers who    |
|          | identify random samples of Medicare claims when they      |
|          | enter the claims processing system. The independent       |
|          | reviewers review the selected claims after they are paid  |
|          | or denied to ensure that the decision was appropriate.    |
|          | The outcome of the review is a provider compliance error  |
|          | rate and paid claims error rate.                          |
|          |                                                           |
|          | The CERT Contractors are responsible for operating the    |
|          | CERT operations center and for gathering information from |
|          | the Contractor.                                           |
+----------+-----------------------------------------------------------+

## Medicare Secondary Payer 

+----------+-----------------------------------------------------------+
| Ba       | The Medicare Secondary Payer (MSP) provisions of the      |
| ckground | Medicare program are intended to ensure that plans with   |
|          | primary insurer liability pay before Medicare makes       |
|          | payment Medicare may make (in some cases) conditional     |
|          | payment for services where payment cannot be expected to  |
|          | be made promptly by the responsible payer. The applicable |
|          | statutory MSP provisions are found in section 1862(b) of  |
|          | the Social Security Act (42 United States Code 1395y      |
|          | (b)). The applicable regulations are found in 42 Code of  |
|          | Federal Regulations (CFR) 411.                            |
|          |                                                           |
|          | Medicare is the secondary payer of health care benefits   |
|          | in the following Group Health Plan (GHP) situations:      |
|          |                                                           |
|          | -   Medicare is the secondary payer for beneficiaries     |
|          |     aged 65 or over who have GHP coverage because of      |
|          |     their current employment status or that of their      |
|          |     spouse. This includes multi-employer plans with at    |
|          |     least one employer with 20 employees (see 42 CFR      |
|          |     411.101 and 411.170 for more information related to   |
|          |     this provision).                                      |
|          |                                                           |
|          | -   Medicare is the secondary payer for individuals who   |
|          |     have GHP and Medicare entitlement or eligibility      |
|          |     because of permanent kidney failure, during the first |
|          |     30 months (coordination period) of that eligibility   |
|          |     of entitlement. The GHP is primary to Medicare during |
|          |     the coordination period regardless of current         |
|          |     employment status or the number of employees (see 42  |
|          |     CFR, 411.101 and 411.161 for more information related |
|          |     to this provision).                                   |
|          |                                                           |
|          | -   Medicare is the secondary payer for disabled          |
|          |     beneficiaries under age 65 who are covered under a    |
|          |     Large Group Health Plan (LGHP) by virtue of their     |
|          |     current employment status or through the current      |
|          |     employment status of a family member. LGHPs by        |
|          |     definition employ at least 100 or more employees.     |
|          |     This includes multi-employer plans with at least one  |
|          |     employer with 100 employees (see 42 CFR, 411.101 and  |
|          |     411.201 for more information related to this          |
|          |     provision).                                           |
|          |                                                           |
|          | Medicare is the secondary payer of health care benefits   |
|          | in the following non-GHP situations:                      |
|          |                                                           |
|          | -   Medicare is the secondary payer where there is        |
|          |     no-fault insurance coverage that pays for medical     |
|          |     expenses for injuries sustained on the property or    |
|          |     premises of the insured, or in the use, occupancy, or |
|          |     operation of an automobile, regardless of who may     |
|          |     have been responsible for causing the accident (see   |
|          |     42 CFR 411.50 for more information related to this    |
|          |     provision).                                           |
|          |                                                           |
|          | -   Medicare is the secondary payer where there is        |
|          |     liability insurance coverage (including a             |
|          |     self-insured plan) that provides payment based on     |
|          |     legal liability for injury or illness or damage to    |
|          |     property (see 42 CFR 411.50 for more information      |
|          |     related to this provision).                           |
|          |                                                           |
|          | -   Medicare is the secondary payer to federal and state  |
|          |     workers compensation benefits and other government    |
|          |     insurance programs (e.g., Federal Black Lung          |
|          |     Program), as well as the systems provided under the   |
|          |     Federal Employee' Compensation Act and Harbor         |
|          |     Workers' Compensation Act (see 42 CFR 411.40 for more |
|          |     information related to this provision).               |
|          |                                                           |
|          | MSP postpay appeals are processed in accordance with      |
|          | Statement of Work (SOW) C.5.10.1. For MSP postpay         |
|          | appeals, "initial determinations" are as defined in 42    |
|          | CFR 405.900 et seq.                                       |
+----------+-----------------------------------------------------------+

### Implementation of Medicare Secondary Payer Operations 

The Contractor shall implement a comprehensive MSP operations program in
accordance with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [2](http://www.cms.hhs.gov/manuals/downloads/msp105c02.pdf).

### Electronic Correspondence Referral System Status Inquiries 

The Contractor shall perform Electronic Correspondence Referral System
(ECRS) status inquiries to determine next actions (e.g., claims
adjustments/recovery) in accordance with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/msp105c02.pdf),
section 10.2.

  ------------ -----------------------------------------------------------
  Background   ECRS is a communication tool used by the Contractor to
               transmit information to the COBC and perform status
               inquiries of previously submitted requests.

  ------------ -----------------------------------------------------------

### Identification and Adjudication of Medicare Secondary Payer Claims and Application of Benefits and Processing Formula

#### Medicare Secondary Payer Claims Payment Determinations

The Contractor shall make accurate MSP claims payment determinations to
ensure that Medicare pays only for those services for which it is
responsible in accordance with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/msp105c01.pdf),
sections 40, 50, 60, and 70.

The Contractor shall adhere to the Working Aged, end-stage renal disease
(ESRD), Disability, Liability, Workers' Compensation (WC), and No-Fault
provisions in accordance with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [2](http://www.cms.hhs.gov/manuals/downloads/msp105c02.pdf),
sections 10, 20, 30, 40, 50, and 60, respectively.

#### Medicare Secondary Payer Claims Adjudication and Validation

The Contractor shall adjudicate and validate MSP claims to ensure that
Medicare pays only for those services for which it is responsible in
accordance with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/msp105c01.pdf),
section 30, and Chapter
[5](http://www.cms.hhs.gov/manuals/downloads/msp105c02.pdf), sections
30, 40, and 50.

#### Medicare Secondary Payer Claims Inquiries

The Contractor shall respond to inquiries from insurers and other
interested parties (e.g., attorneys) on MSP billing requirements to
assist with resolving claims inquiries accurately, timely, and
responsively in accordance with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/msp105c02.pdf),
section 20 and [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/com109c03.pdf),
section 20.2.

### Transfer of Documentation and Phone Calls to the Coordination of Benefits Contractor 

The Contractor shall transfer to the COBC documentation in accordance
with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/msp105c02.pdf),
sections 10.2 and 10.3 and telephone calls in accordance with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/msp105c02.pdf),
sections 10.6, 10.7, and 10.8.

### Medicare Secondary Payer Hospital Audits 

The Contractor shall perform hospital audits and reviews in accordance
with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/msp105c03.pdf),
sections 20 and 30, and Chapter [5](../5), section 70 (including
associated exhibits, 70.5.1--70.5.4).

Each year the Contractor shall conduct a review of 10% of the hospitals
up to a maximum of 20 per state in its jurisdiction.

+----------+-----------------------------------------------------------+
| Ba       | Hospitals must maintain documentation and maintain MSP    |
| ckground | information for Medicare beneficiaries in accordance with |
|          | Title 42 CFR 482.20 (f). This regulation states that the  |
|          | provider agrees to maintain a system that, during the     |
|          | admission process, identifies payers that are primary to  |
|          | Medicare, so that Medicare is not incorrectly billed and  |
|          | Medicare overpayments are prevented.                      |
|          |                                                           |
|          | Intermediaries use this information to perform audits,    |
|          | and CMS recommends that providers maintain this           |
|          | information on file for ten (10) years.                   |
+----------+-----------------------------------------------------------+

### Medicare Secondary Payer Post Payment Recovery

The Contractor shall recover and report MSP debts in accordance with
[IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapters [7](http://www.cms.hhs.gov/manuals/downloads/msp105c07.pdf) and
[8](http://www.cms.hhs.gov/manuals/downloads/msp105c08.pdf), and [IOM
Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapters [4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf) and
[5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf).

+----------+-----------------------------------------------------------+
| Ba       | [Post payment Recovery]{.underline} -- All activities for |
| ckground | which mistaken primary Medicare payments or conditional   |
|          | payments have been made and later identified as having    |
|          | another entity responsible for payment.                   |
|          |                                                           |
|          | For purposes of this contract, the MAC is responsible for |
|          | all activities included in the identification,            |
|          | communication, recovery, adjudication and reporting of    |
|          | MSP debts pertaining to providers, physicians or other    |
|          | suppliers. Some of the tasks to be completed in this      |
|          | process are: the identification of claims to be           |
|          | recovered, the request for repayment, posting checks      |
|          | received in response to the demand for repayment, sending |
|          | a second demand called an Intent to Refer (ITR) to        |
|          | Treasury letter, referring all unresolved debts meeting   |
|          | the eligibility requirements to Treasury via the Debt     |
|          | Collection System (DCS) system and the tracking of all    |
|          | actions taken on a debt.                                  |
|          |                                                           |
|          | The MSP Recovery Contractor (MSPRC) will be responsible   |
|          | for MSP recoveries and related activities associated with |
|          | the Group Health Plan (GHP) and non-GHP debts.            |
+----------+-----------------------------------------------------------+

#### Duplicate Primary Payments 

The Contractor shall pursue recoveries of provider, physician or other
supplier Duplicate Primary Payments (DPP) when notified of a DPP through
the receipt of either a voluntary/unsolicited refund or upon notice from
another Contractor having responsibility for GHP debts for which the
debtor responds "payment was made directly to the provider, physician
and other supplier" in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf) and
[IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/msp105c07.pdf).

  ------------ ----------------------------------------------------------
  Background   REMINDER: All checks shall be deposited within 24 hours of
               receipt.

  Standard 1   Voluntary/unsolicited refund adjudication is successful
               when all checks that have an associated debt are posted to
               established debts within 20 calendar days from receipt in
               the Contractor's mailroom.

  Standard 2   Voluntary/unsolicited refunds are successful when checks
               that do not have an associated debt, thus requiring
               further development, are referred to the COBC via ECRS
               within 20 calendar days of receipt.

  Standard 3   DPPs are successfully addressed when demands for repayment
               are made and collection efforts initiated within 45
               calendar days of receiving notice of a DPP situation.
  ------------ ----------------------------------------------------------

#### Inquiries Specific to Debt Collection Efforts for Providers, Physicians and other Suppliers

The Contractor shall acknowledge and respond to inquiries in accordance
with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf) and
[IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [7](http://www.cms.hhs.gov/manuals/downloads/msp105c07.pdf).

  ------------ -----------------------------------------------------------
  Background   The Contractor will receive inquiries from many sources.
               Sources may be the debtors themselves, the Treasury PCAs,
               the national MSP Recovery Contractor, providers/suppliers,
               and beneficiaries.

  Standard 1   Inquiries specific to debt collection efforts are
               successful when 95% of provider, physician and other
               supplier MSP inquiries shall be acknowledged or responded
               to within 45 calendar days of receipt, absent IOM
               instructions to the contrary.
  ------------ -----------------------------------------------------------

#### Debt Collection Referral Activities for Providers, Physicians and other Suppliers

The Contractor shall comply with all instructions within the [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017)
and [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018)
Chapters [4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf) and
[5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf) specific to
the acknowledgement, response and required activities necessary in
adjudicating a debt.

The Contractor shall comply with all debt referral requirements.

The Contractor shall take appropriate actions with providers, physicians
or other suppliers are identified as bankrupt.

The Contractor shall post all collections from Treasury interventions as
described in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/fin106c04.pdf),
section 70.

  ----------- -----------------------------------------------------------
  Standard 1  All checks are adjudicated and posted to established or
              newly identified debts within 20 calendar days from
              receipt.

  Standard 2  All eligible delinquent debts are referred to Treasury for
              cross-servicing prior to or by the time the debt is 180
              days delinquent.

  Standard 3  Bankrupt debts are identified and, if at Treasury, recalled
              and reported properly prior to the end of the current
              financial reporting period.
  ----------- -----------------------------------------------------------

#### Financial Reporting 

The Contractor shall implement and be compliant with all financial
reporting requirements in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018).
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf).

The Contractor shall comply with the reporting of MSP savings associated
with the recovery of provider, physician, or supplier debts in
accordance with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017).

  ----------- ----------------------------------------------------------------------------------------------------------------------------------------------
  Standard 1  Financial reports are submitted and certified within the required timeframes in [IOM Pub.
              100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018).

  Standard 2  MSP Savings reports are submitted within the CROWD system in the required timeframes in [IOM Pub.
              100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017).
  ----------- ----------------------------------------------------------------------------------------------------------------------------------------------

#### Misrouted Medicare Secondary Payer Recovery Checks

The Contractor shall deposit all checks within 24 hours of receipt while
investigating the type and reason associated with the receipt of the
check.

Upon identification of an MSP recovery check from an entity outside of
the scope of the contract (i.e. Employer, insurer, worker's
compensation, etc.), the Contractor shall copy the check and maintain
all attached documentation (along with envelop) in an isolated area for
transference to the MSPRC.

The Contractor shall issue a check for the amount of the copied check to
the MSPRC.

  ------------ -----------------------------------------------------------
  Background   Important Notice: The CMS has awarded and implemented a
               contract which consolidates all MSP GHP and non-GHP
               workloads. This section describes / allows for residual
               workloads that may remain at the MAC. These workloads,
               which are not anticipated to be large, should dissipate as
               the debtor community becomes more aware of the
               consolidation changes.

  Standard 1   The Contractor shall issue a new check and forward all
               check copies and correspondence to the MSPRC within five
               (5) business days of the original check deposit.
  ------------ -----------------------------------------------------------

#### **Misrouted** Medicare Secondary Payer **Recovery Correspondence**

The Contractor shall transfer all MSP GHP or non-GHP recovery
correspondence to the MSPRC.

The Contractor shall isolate, refer, and provide an inventory with
volumes of all correspondence transferred to the MSPRC (misrouted
correspondence may include faxes, emails, and hardcopy mail).

The Contractor shall provide callers with the MSPRC call center number,
if receiving calls specific to recoveries outside of their scope, to the
MSPRC.

  ------------ -----------------------------------------------------------
  Background   Important Notice: The CMS has awarded and implemented a
               contract which consolidates all MSP GHP and non-GHP
               workloads. This section describes / allows for residual
               workloads that may remain at the MAC. These workloads,
               which are not anticipated to be large, should dissipate as
               the debtor community becomes more aware of the
               consolidation changes.

  Standard 1   The Contractor shall transfer all misrouted MSP recovery
               correspondence to the MSPRC within five (5) business days
               of receipt.
  ------------ -----------------------------------------------------------

## Provider Oversight 

The Contractor shall establish and maintain an oversight program to
ensure compliance with Medicare regulations for providers currently
enrolled in the Medicare program.

  ------------ -----------------------------------------------------------
  Background   MACs may be requested by CMS to conduct site visits for the
               purpose of ensuring that providers continue to maintain
               facilities that conform to their enrollment agreement. If
               aberrant billing practices are noted, the CMS may request
               the MACs to conduct a site visit.

  ------------ -----------------------------------------------------------

### Review of Provider Billing Records

The Contractor shall review provider billing records annually after
enrollment is approved to determine any aberrant billing patterns, and
shall advise the Centers for Medicare & Medicaid Services (CMS)
immediately of aberrant billing.

  ------------ -----------------------------------------------------------
  Background   Annual reviews occur during one month per year on a
               rotational basis so that the audit is not performed in the
               same month each year.

  ------------ -----------------------------------------------------------

### Review of Comprehensive Outpatient Rehabilitation Facility Billing Records

The Contractor shall review Comprehensive Outpatient Rehabilitation
Facility (CORF) billing records annually after enrollment is approved to
determine if the CORFs are billing for mandatory CORF services, and the
Contractor shall immediately advise CMS of aberrant billing.

The Contractor shall work with CMS to develop the method of
communication for the notification of aberrant billing practices.

  ------------ -----------------------------------------------------------
  Background   Annual reviews occur during one month per year on a
               rotational basis so that the audit is not performed in the
               same month each year.

  ------------ -----------------------------------------------------------

### Review of Inpatient Rehabilitation Facilities and Critical Access Hospitals' Rehabilitation Distinct Part Units

The Contractor shall review Inpatient Rehabilitation Facilities' (IRFs')
and distinct part units (DPUs) annually to ensure that the IRFs and DPUs
meet the 75% rule, and the Contractor shall advise CMS of aberrant
billing, in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf),
sections 140.1.1--140.1.8.

The Contractor shall notify CMS of IRFs that are not meeting the current
compliance threshold of the "75%" rule.

The Contractor shall work with CMS to develop adequate notification time
frames to allow time for CMS to send the IRF letters terminating their
IRF classification status prior to the IRF's next cost report period.

### Conduct of Site Visits

The Contractor shall conduct site visits routinely, as directed by CMS,
and as needed for problematic providers as identified by complaints or
investigations in accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
Chapter [10](http://www.cms.hhs.gov/manuals/downloads/pim83c10.pdf),
section 18.

## Coordinated Care Benefits Demonstration

The Contractor shall process election notices for all Coordinated Care
Benefits Demonstration "Coordinated Care Entities" in accordance with
[IOM Pub
100-19](http://www.cms.hhs.gov/manuals/downloads/Pub100_19.pdf).
<http://www.cms.hhs.gov/Transmittals/Downloads/AB0130.pdf> .

  ------------ -----------------------------------------------------------
  Background   As required by §4016 of the Balanced Budget Act (BBA) of
               1997, CMS is conducting this demo to test whether
               coordinated care services furnished to certain
               beneficiaries improve outcomes of care and reduce Medicare
               expenditures under Parts A and B. The coordinated care
               services will be provided by entities whose approach
               follows either a case management model or a disease
               management model. Fifteen Coordinated Care Entities have
               been selected for the demonstration through a national
               solicitation.

  ------------ -----------------------------------------------------------

## End Stage Renal Disease Clinical Trial 

The Contractor shall process claims and perform the requirements for
Frequent Hemodialysis Network Payment for Approved Clinical Trial Costs
in accordance with [IOM Pub
100-20](http://www.cms.hhs.gov/manuals/downloads/Pub100_20.pdf),
<http://www.cms.hhs.gov/Transmittals/Downloads/R206OTN.pdf>.

  ------------ ---------------------------------------------------------------------------------------------------------------------------------------------------
  Background   The purpose of the two (2) End Stage Renal Disease (ESRD) Clinical Trials is to evaluate the effectiveness of more frequent hemodialysis sessions
               compared with conventional thrice-weekly hemodialysis. One of these trials compares daily in-center hemodialysis (6 times per week) with
               conventional in-center hemodialysis (three (3) times per week). The other compares nocturnal hemodialysis (six (6) times per week in the home) with
               conventional in-center hemodialysis. For additional information on the ESRD Clinical Trail:
               <http://www.cms.hhs.gov/DemoProjectsEvalRpts/MD/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=3&sortOrder=ascending&itemID=CMS042120>.

  ------------ ---------------------------------------------------------------------------------------------------------------------------------------------------

## Freestanding Rural Health Clinics

The Contractor shall process claims and perform the requirements for
Freestanding Rural Health Clinics (FRHCs) in accordance with [IOM Pub.
100-02](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS012673),
Chapter [13](http://www.cms.hhs.gov/manuals/Downloads/bp102c13.pdf) and
[IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [9](http://www.cms.hhs.gov/manuals/downloads/clm104c09.pdf).

NOTE: This will exclude FRHCs that are a facility of Indian Health
Services (IHS). For more information, see the requirements for IHS in
section C.7.2 of this SOW.

  ------------ -----------------------------------------------------------
  Background   The purpose of FRHCs is to increase the availability and
               accessibility of primary and emergency health care to
               people with Medicare, Medicaid, SCHIP and the uninsured in
               underserved of rural and urban communities (as well as
               tribal Indian outpatient health programs) where there is a
               shortage of health care service professionals.

  ------------ -----------------------------------------------------------

### Education Materials

The Contractor shall submit education material designed for use to train
FRHCs to CMS for approval prior to use.

  ------------ -----------------------------------------------------------
  Background   The Contractor is encouraged to use CMS-created national
               education materials when training RHCs.

  Standard 1   The Contractor is successful when educational materials are
               submitted to the Project Officer at least six (6) weeks
               before their intended use.
  ------------ -----------------------------------------------------------

## Federally Qualified Health Centers 

The Contractor shall process claims and perform the requirements for
Federally Qualified Health Centers (FQHCs), which include free-standing
FQHCs and any satellite locations of the free-standing FQHC, in
accordance with [IOM Pub.
100-02](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS012673),
Chapter [13](http://www.cms.hhs.gov/manuals/Downloads/bp102c13.pdf) and
[IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [9](http://www.cms.hhs.gov/manuals/downloads/clm104c09.pdf).

NOTE: This will exclude FQHCs that are a facility of Indian Health
Services (IHS). For more information, see the requirements for IHS in
section C. 7.2 of this SOW.

  ------------ -----------------------------------------------------------
  Background   The purpose of FQHCs is to provide primary care services to
               people with Medicare, Medicaid, SCHIP and the uninsured in
               underserved rural and urban communities, as well as tribal
               Indian outpatient health programs.

  ------------ -----------------------------------------------------------

### Education Materials

The Contractor shall submit education material it creates for use in
training FQHCs to CMS for approval prior to use.

  ------------ -----------------------------------------------------------
  Background   The Contractor is encouraged to use CMS-created national
               education materials when training FQHCs.

  Standard 1   The Contractor is successful when educational materials are
               submitted to the Project Officer at least six (6) weeks
               before their intended use.
  ------------ -----------------------------------------------------------

## Foreign Claims

The Contractor shall process claims and perform the requirements for
Foreign Claims in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf),
Section 10.1.4; [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [3](http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf),
Section 110; and [IOM Pub.
100-02](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS012673),
Chapter [16](http://www.cms.hhs.gov/manuals/Downloads/bp102c16.pdf),
Section 60.

  ------------ -----------------------------------------------------------
  Background   The purpose of Foreign Claims is to provide services for
               certain inpatient hospitals, inpatient physician's
               services, emergency room services, and ambulance services
               related to an inpatient stay (certain services rendered on
               board a ship) in Canada and Mexico.

  ------------ -----------------------------------------------------------

## Laboratory Competitive Bidding Demonstration

The Contractor shall process claims and perform the requirements for the
Laboratory Competitive Bidding Demonstration in accordance with [IOM
Pub. 100-19](http://www.cms.hhs.gov/manuals/downloads/Pub100_19.pdf).

  ------------ -----------------------------------------------------------
  Background   Section 302(b) of the Medicare Prescription Drug,
               Improvement, and Modernization Act of 2003 requires CMS to
               conduct a demonstration project on the application of
               competitive acquisition for payment of most clinical
               laboratory services that would otherwise be payable under
               the Medicare Part B fee schedule. Under this statute, pap
               smears and colorectal cancer screening tests are excluded
               from this demonstration. Requirements under the Clinical
               Laboratory Improvement Amendments as mandated in section
               353 of the Public Health Service Act are applicable. The
               payment basis determined for each competitive bidding area
               (CBA) will be substituted for payment under the existing
               clinical laboratory fee schedule. Multiple winners are
               expected in each CBA.

  ------------ -----------------------------------------------------------

## Shipboard/Foreign Travel Services

The Contractor shall process claims and perform the requirements for
Foreign Claims in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [1](http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf),
Section 10.1.4.

  ------------ -----------------------------------------------------------
  Background   The purpose of Shipboard / Foreign Travel Services is to
               provide coverage for emergency services rendered on board a
               ship and in a foreign country when certain criteria are
               met.

  ------------ -----------------------------------------------------------

## Program Management Office 

The Contractor shall establish and maintain a Program Management Office
(PMO) with clearly defined project management processes,
organizational/responsibilities, and approaches to manage the successful
execution of the program.

+----------+-----------------------------------------------------------+
| Ba       | The successful execution of Medicare activities contained |
| ckground | in this SOW is based on a strong collaboration effort     |
|          | both within the MAC and between the CMS. To achieve a     |
|          | strong collaborative approach, the Contractor's program   |
|          | management approach should be structured to satisfy the   |
|          | following aspects of effective program management:        |
|          |                                                           |
|          | -   Centrally manage the overall contract to promote      |
|          |     responsiveness and minimize costs.                    |
|          |                                                           |
|          | -   Provide a single point-of-contact for each functional |
|          |     area of the SOW services.                             |
|          |                                                           |
|          | -   Establish direct, simple lines of communication       |
|          |     between the Contractor management staff and their CMS |
|          |     counterparts.                                         |
|          |                                                           |
|          | -   Empower each level of the project organization with   |
|          |     appropriate authorities and responsibilities;         |
|          |     specifically, to put decision-making at the lowest    |
|          |     possible level of the organization, for effective,    |
|          |     operationally sound solutions.                        |
|          |                                                           |
|          | -   Apply best practices for managing large-scale         |
|          |     programs. These include both project management and   |
|          |     Medicare management processes, supplemented by        |
|          |     appropriate tools to streamline procedures and        |
|          |     provide visibility on progress and risk.              |
|          |                                                           |
|          | -   Respond efficiently to fluctuating workloads to       |
|          |     provide timely and appropriate supply of critical     |
|          |     resources.                                            |
+----------+-----------------------------------------------------------+

### Post-Award Meeting

The Contractor shall meet with CMS program staff at CMS Central Office
in Baltimore Maryland within ten (10) government business days of the
contract award.

The Contractor shall provide a written report of the discussion and
decisions reached within five (5) government business days of this
meeting.

  ------------ -----------------------------------------------------------
  Background   The purpose of this meeting will be introductions between
               the CMS and Contractor program staff, detailed review and
               discussion of the contract requirements, and for CMS to
               provide the Contractor with background material.

  ------------ -----------------------------------------------------------

### Project Management Plan

The Contractor shall develop and maintain a Project Management Plan
(PMP) to support the management of the program. The report format and
content shall be agreed upon by the Project Officer and Contractor post
award.

  ------------ -----------------------------------------------------------
  Background   The purpose of the PMP is to define the project, the scope
               of work to be performed; the project activities;
               deliverables; staffing requirements; and organization of
               program team and interfaces between the Contractor and CMS.
               It represents a level of detail sufficient to establish and
               maintain control of all program functions for successful
               execution of the program.

  ------------ -----------------------------------------------------------

### Cost Management

The Contractor shall produce on a monthly basis program Cost Management
Reports describing budget versus actual cost data by cost account.

  ------------ -----------------------------------------------------------
  Background   Budgets and actuals should be described on a monthly basis
               by program total, cost account total, hours by labor
               category program totals, hours by labor category cost
               account totals. Cost reports should include easy to read
               formats such as graphs, tables, etc.

  ------------ -----------------------------------------------------------

### Monthly Status Report and Meeting

The Contractor shall develop a monthly status report and conduct a
monthly status meeting. The report format and content shall be agreed
upon by the Project Officer and Contractor post award.

+----------+-----------------------------------------------------------+
| Ba       | Throughout the period of the contract, the Contractor     |
| ckground | shall provide a not-to-exceed 75-page description of the  |
|          | project status on a monthly basis. The information shall  |
|          | be delivered to the Project Officer by the 15th of the    |
|          | following month and shall provide, at a minimum, the      |
|          | following:                                                |
|          |                                                           |
|          | -   Executive summary, which highlights the important     |
|          |     events that took place during the covered period;     |
|          |                                                           |
|          | -   Contract information and issues, to include, but not  |
|          |     be limited to, budgeted cost to date, actual cost to  |
|          |     date, estimated cost to complete, award fee issues,   |
|          |     performance against the Award Fee Plan and any        |
|          |     outstanding procurement issues/actions;               |
|          |                                                           |
|          | -   A detailed narrative summary on the achievement of    |
|          |     milestones and deliverables;                          |
|          |                                                           |
|          | -   Changes in staffing assignments or responsibilities;  |
|          |                                                           |
|          | -   A summary of facility status and changes;             |
|          |                                                           |
|          | -   Personnel turnover rate;                              |
|          |                                                           |
|          | -   The length of time of each staffing vacancy in excess |
|          |     of the month being reported;                          |
|          |                                                           |
|          | -   Problems and risks encountered during the period;     |
|          |                                                           |
|          | -   Corrective action initiated on problems encountered   |
|          |     during the period;                                    |
|          |                                                           |
|          | -   Previously reported problems that were resolved       |
|          |     during the period;                                    |
|          |                                                           |
|          | -   The number of CRs remaining in the backlog;           |
|          |                                                           |
|          | -   The number of overall CRs reduced/increased; and      |
|          |                                                           |
|          | -   A breakout of proposed costs for travel expenses one  |
|          |     month in advance which includes the following:        |
|          |     Number, types and purpose of trips, number of         |
|          |     travelers along with their labor categories and       |
|          |     hourly rate, duration of trip for each destination,   |
|          |     mileage, per diem, air fare, miscellaneous expense,   |
|          |     etc. Project Officer approval must be received prior  |
|          |     to traveling.                                         |
|          |                                                           |
|          | -   Current and cumulative complementary credits          |
|          |                                                           |
|          | ```{=html}                                                |
|          | <!-- -->                                                  |
|          | ```                                                       |
|          | -   Any recommendations for improvements in functional    |
|          |     operations.                                           |
+----------+-----------------------------------------------------------+

### Ad Hoc Reporting

The CMS may require additional reporting requirements on an as needed
basis. In these instances, the Project Officer and Contractor will agree
on format, content and due date.

### CMS ART

The Contractor shall report data to the CMS Analysis, Reporting and
Tracking System (CMS ART) in accordance with the format described in the
cost proposal instructions.

  ------------ -----------------------------------------------------------
  Background   The CMS will use the CMS Analysis, Reporting and Tracking
               System (CMS ART) to track and analyze MAC costs, hours,
               certain workload, performance, production, and other
               information as reported by the MACs. This system is
               currently being modified for the MAC reporting and will be
               available to the MAC after contract award and upon
               completion of training.

  ------------ -----------------------------------------------------------

### CAFM

The Contractor shall report data to the Contractor Administrative Budget
and Financial Management (CAFM) System in accordance with [IOM Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf).

  ------------ -----------------------------------------------------------
  Background   CAFM is the mechanism used to report the results of program
               expenditures. The CMS will use the CAFM System to
               administer and monitor Medicare program payments.

  ------------ -----------------------------------------------------------

### CROWD

The Contractor shall report data to the Contractor Reporting of
Operational and Workload Data (CROWD) System in accordance with [IOM
Pub.
100-06](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019018),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/fin106c05.pdf).

  ------------ -----------------------------------------------------------
  Background   CROWD collects and reports on operational and Contractor
               workload data and types of claims processed for current
               Part A and B contractors. Summary data from each Contractor
               dealing with types of claims, overall number of claims,
               processing cost per claim, and similar information is
               provided to the CROWD system.

  ------------ -----------------------------------------------------------

# Interface Requirements

This section of the Statement of Work (SOW) describes ongoing activities
that the Contractor must conduct, as well as entities with which it must
interact, to ensure consistency of Medicare program operations. The
activities in C.6.1 require a mechanism (such as a Joint Operating
Agreement -- JOA -- or Service-Level Agreement -- SLA -- to ensure that
all parties understand their respective responsibilities. The activities
in C.6.2 do not require such mechanisms.

## Successful Collaboration with Entities Requiring Joint Operating Agreements

The Contractor shall execute, update, and perform associated duties in
accordance with a JOA that defines roles and responsibilities and
creating mutually agreed upon and cost-effective methods to work with
and support the Centers for Medicare & Medicaid Services' (CMS') mission
with each of the following parties:

a.  Program Safeguard Contractors (PSCs) with Benefit Integrity (BI)
    task orders, in accordance with [IOM Pub.
    100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033),
    Chapter [4](http://www.cms.hhs.gov/manuals/downloads/pim83c04.pdf),
    section 4.28.

b.  Qualified Independent Contractor (QIC), in accordance with [IOM Pub.
    100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
    Chapter
    [29](http://www.cms.hhs.gov/manuals/downloads/clm104c29.pdf),
    sections 320.1, 320.3 and 320.4.

c.  Administrative QIC (AdQIC), in accordance with [IOM Pub.
    100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
    Chapter
    [29](http://www.cms.hhs.gov/manuals/downloads/clm104c29.pdf),
    sections 320.3, 330.4 and 330.5.

d.  Quality Improvement Organization (QIO), in accordance with [IOM Pub.
    100-10](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019035),
    Chapter [3](http://www.cms.hhs.gov/manuals/downloads/qio110c03.pdf),
    section 3110.

e.  Beneficiary Contact Center (BCC), guidance on BCC JOA will be
    available in the BCC SOW.

f.  Enterprise Data Center, in accordance with Attachment J-9, Joint
    Operating Agreement for Enterprise Data Center and Medicare
    Administrative Contractor Testing Requirements.

g.  Medicare Secondary Payer Recovery Contractor (MSPRC), guidance on
    the MSPRC will be available in the MSPRC SOW.

h.  Coordination of Benefits Contractor (COBC), in accordance with [IOM
    Pub.
    100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
    Chapter [5](http://www.cms.hhs.gov/manuals/downloads/msp105c02.pdf).

+----------+-----------------------------------------------------------+
| Ba       | A JOA describes the work that needs to be accomplished,   |
| ckground | and the roles and responsibilities of each signatory to   |
|          | the success of the task or project. It includes specifics |
|          | about who will do what, when, and for whom. The JOA also  |
|          | spells out the process the parties will follow if either  |
|          | believes that the other is not following the agreement,   |
|          | including any alternative dispute resolution procedures.  |
|          |                                                           |
|          | Each JOA should include, but not be limited to, the       |
|          | following topics:                                         |
|          |                                                           |
|          | -   Confidentiality                                       |
|          |                                                           |
|          | -   Definitions                                           |
|          |                                                           |
|          | -   Workload                                              |
|          |                                                           |
|          | -   Contract Roles and Responsibilities                   |
|          |                                                           |
|          | -   Dispute Resolution                                    |
|          |                                                           |
|          | -   Connectivity                                          |
|          |                                                           |
|          | -   Communication                                         |
|          |                                                           |
|          | The Contractor is responsible for identifying and         |
|          | negotiating any changes required to appropriately address |
|          | the roles and responsibilities of the parties to the JOA. |
+----------+-----------------------------------------------------------+
| Standard | The execution of a JOA is successful when all parties to  |
| 1        | the JOA have signed the written agreement.                |
+----------+-----------------------------------------------------------+
| Standard | The update of a PSC JOA is successful when, for the first |
| 2        | year, the JOA is updated quarterly, by January 15th,      |
|          | April 15th, July 15th, and October 15th. After the first  |
|          | year, updates should occur semi-annually, by January 15th |
|          | and July 15th.                                            |
+----------+-----------------------------------------------------------+

### Joint Operating Agreement: Quality Improvement Organization 

#### Referrals to Quality Improvement Organization

The Contractor shall make appropriate referrals to the QIO for medical
necessity determinations in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [29](http://www.cms.hhs.gov/manuals/downloads/clm104c29.pdf),
section 3600; [IOM Pub.
100-10](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019035),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/qio110c04.pdf),
sections 4070 C and E; and 42 CFR 476.80(b).

  ------------ -----------------------------------------------------------
  Background   The QIO is an organization of a group of practicing doctors
               and other health care experts that are paid by the federal
               government to review and improve the care given to Medicare
               patients. QIOs review complaints about the quality of
               health care services given to Medicare beneficiaries and
               certain appeals determinations of services in acute care
               hospitals, skilled nursing facilities, Comprehensive
               Outpatient Rehabilitation Facilities, and home health
               agencies. QIOs also review cases from acute care hospitals
               and long-term care hospitals to make sure the care was
               medically necessary, provided in the appropriate setting,
               and coded correctly. In addition, QIOs provide assistance
               to hospitals, nursing homes, physician offices, and home
               health agencies in measuring and improving quality.

  ------------ -----------------------------------------------------------

#### Referrals from Quality Improvement Organization

The Contractor shall accept appropriate referrals from the QIO in
accordance with [IOM Pub.
100-10](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019035),
Chapter [4](http://www.cms.hhs.gov/manuals/downloads/qio110c04.pdf),
section 4070 D, and 42 Code of Federal Regulations (CFR) 480.136.

##### Payment Adjustments

The Contractor shall process payment adjustments submitted by the QIOs
based on medical necessity determinations and diagnosis-related group
validations, including corrections to the disposition code, in
accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [29](http://www.cms.hhs.gov/manuals/downloads/clm104c29.pdf),
section 40.3.1.

##### Billing Errors 

The Contractor shall receive all notifications of billing errors from
the QIO and work with the provider in submitting a claim to resolve the
error.

  ------------ -----------------------------------------------------------
  Background   When conducting required review of medical records, certain
               errors on a claim may preclude the QIO from completing the
               required review. Such errors result in a type of technical
               denial referred to as a billing error.

  ------------ -----------------------------------------------------------

### Joint Operating Agreement: Qualified Independent Contractor 

#### Supply of Appeals Case Files

The Contractor shall supply to the QIC all appeals case file
information, within five (5) calendar days of request.

The Contractor shall ensure that case files can be tracked in transit.

+----------+-----------------------------------------------------------+
| Ba       | The QIC is a contractor that conducts the second level of |
| ckground | appeal (reconsiderations of initial determinations and    |
|          | redeterminations of Medicare claims.) All reconsideration |
|          | requests are handled by the servicing QIC identified on   |
|          | the redetermination notice.                               |
|          |                                                           |
|          | The Contractor shall establish JOAs with the Part A and   |
|          | Part B QICs responsible for processing reconsiderations   |
|          | in the Contractor's jurisdiction. In addition, the        |
|          | Contractor shall establish a JOA with the Administrative  |
|          | QIC (AdQIC).                                              |
|          |                                                           |
|          | The AdQIC is responsible for receiving case files and     |
|          | decisions from the OMHA field offices and the             |
|          | Departmental Appeals Board. The AdQIC will fax or mail    |
|          | decision information to the MAC in accordance with [IOM   |
|          | Pub.                                                      |
|          | 100-04](http://www.cms.hhs                                |
|          | .gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByD |
|          | ID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912), |
|          | Chapter                                                   |
|          | [29]                                                      |
|          | (http://www.cms.hhs.gov/manuals/downloads/clm104c29.pdf), |
|          | section 330.4 and/or as otherwise agreed to in the        |
|          | MAC/AdQIC JOA.                                            |
+----------+-----------------------------------------------------------+

#### Misrouted Requests for Reconsideration

The Contractor shall forward all misrouted requests for reconsideration
to the servicing QIC within three (3) calendar days.

If the Contractor is the servicing MAC, the Contractor shall forward the
reconsideration request along with the appropriate redetermination case
file documentation to the servicing QIC within five (5) calendar days.

  ------------ -----------------------------------------------------------
  Background   Occasionally, the Contractor may erroneously receive a
               request for reconsideration, which is the next level of
               appeals after the redetermination.

  ------------ -----------------------------------------------------------

#### Preparation of Case Files

The Contractor shall organize and prepare the case files.

### Joint Operating Agreement: Medicare Secondary Payer Recovery Contractor

The Contractor shall receive and respond to all referred provider,
physician, or other supplier notices of duplicate primary payments;
misrouted provider, physician, or other supplier checks; and general
non-MSP recovery inquiries.

The Contractor shall transfer all MSP GHP or non-GHP recovery
correspondence to the MSPRC.

  ------------ -----------------------------------------------------------
  Background   The MSPRC contract is expected to be awarded and
               implemented prior to the contract for this MAC
               jurisdiction. Requirements for the Contractor interaction
               with the MSPRC are located in sections C.5.14.6.5 and
               C.5.14.6.6 of this SOW.

  ------------ -----------------------------------------------------------

### Joint Operating Agreement: Beneficiary Contact Center

+----------+-----------------------------------------------------------+
| Ba       | However, the JOA is meant to only serve as an outline of  |
| ckground | the principles, approaches, and processes that will be    |
|          | used to create, implement, and maintain effective working |
|          | relationships, communications and information flows       |
|          | between the BCC and the MAC. **It does not create any     |
|          | affirmative duties, rights or legal obligations between   |
|          | the parties nor does it create any rights in any third    |
|          | party**. All time frames set in the JOA are merely        |
|          | suggestive unless otherwise provided by law of the        |
|          | parties' respective contracts with CMS.                   |
|          |                                                           |
|          | The objectives of the BCC/MAC JOA are to:                 |
|          |                                                           |
|          | -   Familiarize BCC/MAC management and staff with BCC and |
|          |     MAC activities that require mutual support, define    |
|          |     areas where joint cooperation is critical, define     |
|          |     information sharing strategies and opportunities and  |
|          |     share final operating plan.                           |
|          |                                                           |
|          | -   Define processes/opportunities to promote the         |
|          |     strategic benefits of customer service activities     |
|          |     that promote both the BCC Contractor and the MAC.     |
|          |                                                           |
|          | -   Build mutually agreeable strategies to gain           |
|          |     acceptance for this major change in CMS's approach to |
|          |     beneficiary customer service activities and the       |
|          |     upcoming changes associated with its implementation.  |
|          |                                                           |
|          | -   Provide a clear map of the responsibilities of each   |
|          |     party and respective responsibilities to the other    |
|          |     party; such as defining complex inquiries and         |
|          |     complaint screening, define processes needed to be    |
|          |     followed to transfer issues between the BCC and MAC,  |
|          |     process for the notification of all parties as to key |
|          |     personnel changes, etc.                               |
|          |                                                           |
|          | -   Establish methods and processes that actively         |
|          |     encourage communications and information flows that   |
|          |     improve the contract performance of both the BCC      |
|          |     Contractor and the MAC. This would include defining   |
|          |     recurring meetings, establishing the ground rules of  |
|          |     what should be discussed, who should be required      |
|          |     participant, and who will have the responsibility to  |
|          |     lead each meeting.                                    |
|          |                                                           |
|          | -   Provide processes to jointly resolve issues such as   |
|          |     disputes between the BCC and MAC and addressing the   |
|          |     root causes of misdirected communications.            |
+----------+-----------------------------------------------------------+

### Joint Operating Agreement: Coordination of Benefits Contractor

To ensure that Medicare makes a proper payment, the contractor shall
coordinate MSP activities with the Coordination of Benefits Contractor
(COBC) in accordance with [IOM Pub.
100-05](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019017),
Chapter [5](http://www.cms.hhs.gov/manuals/downloads/msp105c02.pdf).

+----------+-----------------------------------------------------------+
| Ba       | The COBC consolidates activities that support the         |
| ckground | collection, management, and reporting of all other health |
|          | insurance coverage of Medicare beneficiaries, as well as  |
|          | all insurance coverage obligated to pay primary to        |
|          | Medicare. In April 2000, the COBC implemented the first   |
|          | two phases of the contract, which included the Initial    |
|          | Enrollment Questionnaire and the IRS/SSA/CMS Data Match.  |
|          | Effective January 1, 2001, the COBC assumed               |
|          | responsibility for virtually all initial MSP development  |
|          | activities formerly performed by contractors. The COBC is |
|          | charged with ensuring the accuracy and timeliness of      |
|          | updates to the Common Working File (CWF) MSP auxiliary    |
|          | file. The COBC does not process claims, nor handle any    |
|          | mistaken payment recoveries or claims specific inquiries  |
|          | (telephone or written). The COBC is responsible for       |
|          | developing to determine the existence or validity of MSP  |
|          | for Medicare beneficiaries. The COBC handles all MSP      |
|          | related inquiries, including those seeking general MSP    |
|          | information, but not those related to specific claims or  |
|          | recoveries. These inquiries (verbal and written) can come |
|          | from any source, including but not limited to             |
|          | beneficiaries, attorneys/beneficiary representatives,     |
|          | employers, insurers, providers, suppliers and             |
|          | contractors.                                              |
|          |                                                           |
|          | The COBC is primarily an information gathering entity.    |
|          | The COBC is dependent upon various sources to collect     |
|          | this information. With limited exceptions (e.g., claim    |
|          | clarification with provider to avoid returning the claim  |
|          | to the provider (RTP), contractors are no longer          |
|          | responsible for initiating MSP development and making MSP |
|          | determinations. It is imperative that all information     |
|          | contractors receive that might have MSP implications be   |
|          | forwarded to the COBC in a timely and accurate fashion.   |
|          | Only with this timely and accurate information can the    |
|          | COBC evaluate all relevant information to make the        |
|          | correct MSP determination and appropriately update CWF    |
|          | for proper claims adjudication. There must be a very      |
|          | close working relationship between the COBC and the       |
|          | contractors.                                              |
+----------+-----------------------------------------------------------+

## Successful Collaboration and Coordination with Other Internal and External Entities 

The CMS depends on a close and coordinated working relationship between
its internal components and external organizations. The Contractor shall
work with and coordinate with, as necessary, external entities
including, but not limited to, those described in the following
sections.

### State Agencies Responsible for Licensing Institutional Providers (e.g., Survey and Certification, Licensing Authorities)

The Contractor shall exchange information with appropriate state
agencies for providers who require a health insurance benefits agreement
(provider agreement) or a provider-based determination, or at the
direction of CMS, in accordance with [IOM Pub.
100-08](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019033)
Chapter 10, and CMS Pub. 7, [State Operations
Manual](http://www.cms.hhs.gov/SurveyCertificationGenInfo/).

  ------------ -----------------------------------------------------------
  Background   State agencies (SAs) survey providers for various purposes
               (e.g., conditions of Medicare participation, conditions for
               coverage, and other CMS requirements). During those
               surveys, the SA may ascertain compliance with CMS
               conditions on Medicare participation.

  ------------ -----------------------------------------------------------

### Investigative Agencies

The Contractor shall interface with the Office of the Inspector General
(OIG), Government Accountability Office (GAO), Federal Bureau of
Investigation, and other investigative agencies as necessary.

If the Contractor is contacted by an investigative agency concerning
Medicare fraud cases, with the exception of cost report fraud cases, the
Contractor shall advise the investigative agency to contact the PSC and
furnish the necessary PSC contact information.

+----------+-----------------------------------------------------------+
| Ba       | The Contractor may be contacted by investigative agencies |
| ckground | pursuing fraud information. If the Contractor is          |
|          | contacted by an investigative agency pursuing fraud       |
|          | information, with the exception of cost report            |
|          | information, the Contractor shall advise the              |
|          | investigative agency to contact the appropriate PSC and   |
|          | provide contact information for the PSC.                  |
|          |                                                           |
|          | If the Contractor is served with a search warrant, the    |
|          | Contractor must contact the CMS Central Office compliance |
|          | officer for Contractors.                                  |
|          |                                                           |
|          | If the Contractor is requested to provide information     |
|          | from GAO, Office of Evaluation and Inspections, or Office |
|          | of Audit Services for evaluation and report purposes, the |
|          | Contractor shall furnish the necessary information to the |
|          | requestor.                                                |
+----------+-----------------------------------------------------------+

#### Access to Files, Records, Data, and Personnel

The Contractor shall provide timely access, as needed, to its files,
records, data, and personnel to OIG, GAO auditors, and other
investigative agencies for evaluation and report purposes and promptly
address findings.

#### Search Warrants

The Contractor shall contact the CMS compliance officer for Contractors
when served with a search warrant.

### CMS Field Offices

The MACs shall support the CMS field offices in their efforts combat
fraud and abuse and protect the Medicare Trust Fund.

### Medicare Advantage Plans, Prescription Drug Plans, and Nontraditional Fee-for-Service Entities

To the extent permitted by statute, CMS, and other government
regulations, the Contractor shall share information that Medicare
Advantage (MA) organizations (including private fee-for-service (FFS)
plans), Prescription Drug Plan (PDP) sponsors, and nontraditional FFS
entities need to administer their plans. The Contractor shall maintain
an ongoing dialogue with these entities.

  ------------ -----------------------------------------------------------
  Background   CMS will advise the Contractor on the nature and extent of
               information sharing and coordination it may have with MA
               organizations (including private FFS plans), PDP sponsors,
               and nontraditional FFS entities.

  ------------ -----------------------------------------------------------

### Other Medicare Administrative Contractors 

The Contractor shall work with MACs outside its jurisdiction to share
ideas and coordinate its efforts as necessary (e.g., attend national and
Contractor Medical Director conferences, participate in national
conference calls, coordinate cost report appeals activities).

### Professional Associations

The Contractor shall meet as necessary with members of professional
associations in order to gain input from the society, particularly with
respect to the development of new/revised Contractor policies.

### Infrastructure Service Providers

The Contractor shall interface with infrastructure service providers in
accordance with the requirements at C.6.2.8.

### Bank Interface

The Contractor shall interface with its servicing bank in accordance
with the requirements at C.6.2.9.

### Provider Reimbursement Review Board

The Contractor shall interface with the Provider Reimbursement Review
Board in accordance with relevant subsections of C.6.2.10.

# Jurisdiction-Specific Requirements

This section of the Statement of Work (SOW) contains the services
requirements that are unique to a specific Medicare Administrative
Contractor (MAC) jurisdiction. The Contractor shall perform the C.7
requirements in conjunction with all the remaining requirements and
standards of sections C.5 and C.6.

## Centralized Billing for Mass Immunizers -- Jurisdiction Four

The Contractor shall process claims for Centralized Billing for Mass
Immunizers in accordance with [IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [18](http://www.cms.hhs.gov/manuals/downloads/clm104c18.pdf)
Section 10.

+-----------+----------------------------------------------------------+
| B         | In order to encourage providers to supply flu and        |
| ackground | pneumococcal (PPV) vaccinations to Medicare              |
|           | beneficiaries, the CMS currently authorizes a limited    |
|           | number of providers to centrally bill for flu and PPV    |
|           | immunization claims. Centralized billing is an optional  |
|           | program available to providers who qualify to enroll     |
|           | with Medicare as the provider type "Mass Immunizer," as  |
|           | well as to other individuals and entities that qualify   |
|           | to enroll as regular Medicare providers. Centralized     |
|           | billers must roster bill, must accept assignment, and    |
|           | must bill electronically.                                |
|           |                                                          |
|           | To qualify for centralized billing, a mass immunizer     |
|           | must be operating in at least three payment localities   |
|           | for which there are three different carriers processing  |
|           | claims. Centralized billers must send all claims for flu |
|           | and PPV immunizations to a single carrier for payment,   |
|           | regardless of the carrier jurisdiction in which the      |
|           | vaccination was administered and the carrier must make   |
|           | payment based on the payment locality where the service  |
|           | was provided. [IOM Pub.                                  |
|           | 100-04](http://www.cms.hhs.g                             |
|           | ov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDI |
|           | D=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912), |
|           | Chapter                                                  |
|           | [18](                                                    |
|           | http://www.cms.hhs.gov/manuals/downloads/clm104c18.pdf), |
|           | Sections 10.3 and 10.3.1 provide more specific           |
|           | information related to this activity.                    |
+-----------+----------------------------------------------------------+

## Indian Health Services -- Jurisdiction Four

+-----------+----------------------------------------------------------+
| B         | The Indian Health Service (IHS) is the primary health    |
| ackground | care provider to Medicare beneficiaries who are members  |
|           | of federally recognized tribes living on or near         |
|           | reservations. The Indian health care system, consisting  |
|           | of tribal, urban, and federally operated IHS health      |
|           | programs, delivers a spectrum of clinical and preventive |
|           | health services to its beneficiaries via a network of    |
|           | hospitals (including CAHs), freestanding clinics, FQHCs, |
|           | RHCs and other entities.                                 |
|           |                                                          |
|           | While §§1814(c) and 1835(d) of the Social Security Act   |
|           | (the Act), as amended, generally prohibit payment to any |
|           | Federal agency, passage of the Indian Health Care        |
|           | Improvement Act (IHCIA) in 1976 provided for an          |
|           | exception, amending §1880 of the Act, for facilities of  |
|           | the IHS whether operated by such Service or by an Indian |
|           | tribe or tribal organization (as defined in section 4 of |
|           | the IHCIA). The exception under § 1880 limited payment   |
|           | to Medicare services provided in hospitals and skilled   |
|           | nursing facilities.                                      |
|           |                                                          |
|           | Effective July 1, 2001, the Medicare, Medicaid, and      |
|           | SCHIP Benefits Improvement and Protection Act of 2000    |
|           | (BIPA), §432 extended payment on a fee-for-service (FFS) |
|           | basis to services of physician and non-physician         |
|           | practitioners furnished in IHS hospitals and             |
|           | freestanding clinics. This means that clinics associated |
|           | with hospitals and freestanding clinics that are owned   |
|           | and/or operated by IHS are authorized to bill only the   |
|           | Jurisdiction 4 MAC. Additionally, Tribal health          |
|           | facilities operated under Indian Self Determination      |
|           | Education and Assistance Act (ISDEAA) authorities are an |
|           | extension of the IHS and considered facilities of the    |
|           | IHS. By virtue of this, they are authorized to bill the  |
|           | Jurisdiction 4 MAC. ISDEAA authorities provide           |
|           | flexibilities to tribes in the administration of their   |
|           | programs that are not provided to general public         |
|           | providers.                                               |
|           |                                                          |
|           | The annual claims volume is estimated at about 1.2       |
|           | million per year.                                        |
+-----------+----------------------------------------------------------+

### Claims Processing

The Contractor shall perform the requirements for IHS in accordance with
[IOM Pub.
100-04](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS018912),
Chapter [19](http://www.cms.hhs.gov/manuals/downloads/clm104c19.pdf.).

Specifically, the Contractor shall process claims for:

a.  Services delivered at Indian Health Service (IHS) and tribal
    organization facilities; and

b.  Services performed by IHS and tribal organization physicians and
    non-physicians.

The Contractor shall provide additional reports on a periodic basis not
identified in section 40 of the manual referenced above.

### Provider Relations

The Contractor shall respond to inquiries from IHS and tribal
organization institutional and professional providers and educate these
providers and their staffs about the fundamentals of:

a.  The process and contact information for the implementation and
    management of the new MAC contracts;

b.  The Medicare national and local program, polices, and procedures;

c.  New Medicare initiatives;

d.  Changes to the Medicare program; and

e.  Indian-specific issues identified through analyses of such things as
    provider inquiries and claim submission errors.

  ------------ ----------------------------------------------------------
  Background   Education to this population may be delivered to groups,
               to individuals, and through various in-person and media
               channels.

  ------------ ----------------------------------------------------------

#### Provider Inquiries

The Contractor shall offer, and publicize, toll-free service for IHS and
each Indian Health tribal organization facility.

The Contractor shall have dedicated individuals, Provider Assistance
Liaisons (PALs), to provide timely and accurate responses to provider
telephone and written inquiries from IHS and tribal organization
providers.

+-----------+----------------------------------------------------------+
| B         | PALs serve as the single point of contact for IHS and    |
| ackground | tribal organization providers to pose their inquiries    |
|           | related to:                                              |
|           |                                                          |
|           | -   Medicare FFS,                                        |
|           |                                                          |
|           | -   FQHC,                                                |
|           |                                                          |
|           | -   Diagnostic Related Group (DRG), and                  |
|           |                                                          |
|           | -   The Office of Management and Budget (OMB) rate.      |
|           |                                                          |
|           | The PALs should have knowledge of the Medicare FFS,      |
|           | FQHC, DRG, and OMB rate programs and knowledge of unique |
|           | claims processing issues surrounding services delivered  |
|           | at different types of IHS and tribal organization        |
|           | facilities.                                              |
+-----------+----------------------------------------------------------+

#### Websites and Listserv

The Contractor shall maintain a website dedicated to the IHS and Indian
Health tribal organization facilities' Medicare information, issues, and
opportunities.

The Contractor shall maintain a dedicated and Indian Health tribal
organization facilities listserv for timely dissemination of Medicare
information to IHS and each tribal organization facility and provider.

#### Bulletins / Newsletters

The Contractor shall regularly publish and distribute Medicare provider
bulletins / newsletters in accordance with [IOM Pub.
100-09](http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS019034),
Medicare Contractor Beneficiary and Provider Communications Manual,
Chapter [6](http://www.cms.hhs.gov/manuals/downloads/com109c06.pdf),
Section 20.3.1 to the IHS and each tribal organization facility.

#### Indian Health Services and Tribal Organizations Education

The Contractor shall conduct and attend education events, both
face-to-face and web based outreach and education, to discuss and train
IHS and tribal organization providers about the Medicare program and
billing issues.

The Contractor shall attend a minimum of eight (8) of the following
meetings with at least one for the following:

a.  CMS Regional Tribal Consultation Meetings

b.  CMS Tribal Technical Advisory Committee

c.  IHS Annual Meeting and Business Office Coordinators (BOC)
    conferences

d.  IHS Medicare Part A / Part B workshops

e.  National Indian Health Board Conference

The Contractor shall provide technical assistance for tribal providers
in provider enrollment, claims processing, electronic claims interface,
FQHC cost reporting and other activities related to accommodating new
MACs.

  ------------ ----------------------------------------------------------
  Background   Specific Training Requests (STRs) from IHS and tribal
               organization providers shall be honored by the Contractors
               on a case-by-case basis as funding permits.

  ------------ ----------------------------------------------------------

## Low Vision Demonstration -- Jurisdiction Five

The Contractor shall process claims and perform the requirements for the
Low Vision Demonstration in accordance with [IOM Pub.
100-19](http://www.cms.hhs.gov/manuals/downloads/Pub100_19.pdf).

+----------+-----------------------------------------------------------+
| Ba       | The Secretary of the Department of Health and Human       |
| ckground | Services is directed to carry out an outpatient vision    |
|          | rehabilitation demonstration project as part of the FY    |
|          | 2004 appropriations conference report to accompany Public |
|          | Law HR 2673. This demonstration project will examine the  |
|          | impact of standardized Medicare coverage for vision       |
|          | rehabilitation services provided in the home, office, or  |
|          | clinic, under the general supervision of a physician. The |
|          | services may be supplied by the following:                |
|          |                                                           |
|          | -   Physicians;                                           |
|          |                                                           |
|          | -   Occupational therapists;                              |
|          |                                                           |
|          | -   Certified low vision therapists;                      |
|          |                                                           |
|          | -   Certified orientation and mobility specialists; and   |
|          |                                                           |
|          | -   Certified vision rehabilitation therapists.           |
|          |                                                           |
|          | Under this Low Vision Rehabilitation Demonstration,       |
|          | Medicare is extending coverage under Part B for the same  |
|          | rehabilitation services to treat vision impairment that   |
|          | would otherwise be payable when provided by an            |
|          | occupational or physical therapist if they are now        |
|          | provided by a certified vision rehabilitation             |
|          | professional under the general supervision of a qualified |
|          | physician.                                                |
|          |                                                           |
|          | This demonstration will last for five (5) years through   |
|          | March 31, 2011, and is limited to services provided       |
|          | specifically in New Hampshire, New York City (all 5       |
|          | boroughs), North Carolina, Atlanta, Kansas, and           |
|          | Washington State.                                         |
+----------+-----------------------------------------------------------+

## Rural Community Hospital Demonstration - Jurisdictions Four and Five

The Contractor shall process claims and perform the requirements for the
Rural Community Hospital (RCH) Demonstration in accordance with [IOM
Pub. 100-19](http://www.cms.hhs.gov/manuals/downloads/Pub100_19.pdf).

+----------+-----------------------------------------------------------+
| Ba       | The RCH Demonstration Program was mandated by section     |
| ckground | 410A of the Medicare Prescription, Drug, Improvement, and |
|          | Modernization Act of 2003. The Secretary is required to   |
|          | conduct the RCH Demonstration, lasting five (5) years, to |
|          | test the advisability and feasibility of establishing     |
|          | RCHs to provide Medicare covered inpatient hospital       |
|          | services in rural areas. This Demonstration will allow    |
|          | selected rural hospitals to benefit from cost-based       |
|          | reimbursement for inpatient services.                     |
|          |                                                           |
|          | The Secretary is required to select not more than fifteen |
|          | (15) hospitals to participate in the demonstration in     |
|          | States with low population densities. Currently, thirteen |
|          | (13) hospitals participate in the program, serviced by    |
|          | seven different Fiscal Intermediaries (FIs).              |
+----------+-----------------------------------------------------------+

## Veterans Affairs Medicare Equivalent Remittance Advice Project- Jurisdiction Four

The Contractor shall process claims for Department of Veterans Affairs
(VA) Medicare Eligible Claims in accordance with the [IOM Pub
100-20](http://www.cms.hhs.gov/manuals/downloads/Pub100_20.pdf).

+-----------+----------------------------------------------------------+
| B         | Current law permits the Department of VA to collect      |
| ackground | appropriate Medicare coinsurance and deductible amounts  |
|           | from supplemental insurers for claims for supplies and   |
|           | services ordinarily covered by Medicare but furnished:   |
|           |                                                          |
|           | -   At VA facilities; and                                |
|           |                                                          |
|           | -   For veterans eligible to receive both VA health and  |
|           |     Medicare benefits and also having Medicare           |
|           |     supplemental insurance.                              |
|           |                                                          |
|           | To facilitate this process, the Centers for Medicare &   |
|           | Medicaid Services (CMS) entered into an interagency      |
|           | agreement with the VA whereby the CMS will help the VA   |
|           | work with a CMS contractor to adjudicate these claims to |
|           | produce a remittance advice equivalent to that           |
|           | ordinarily produced for Medicare claims. The remittance  |
|           | advice, sent to the supplemental insurers, will help the |
|           | insurers determine payment amounts they owe to the VA.   |
|           | The CMS will not pay these claims. Trailblazer was the   |
|           | contractor selected to perform the work.                 |
|           |                                                          |
|           | Part of this process involves the calculation of the     |
|           | deductible applicable to the Medicare-equivalent VA      |
|           | claims. The Common Working File (CWF) calculates the     |
|           | deductible based on true Medicare claims (i.e., for      |
|           | Medicare services rendered by Medicare providers to      |
|           | Medicare beneficiaries) and sends this information back  |
|           | to the contractors for this project. The Multi-Carrier   |
|           | System (MCS) and the Fiscal Intermediary Standard System |
|           | (FISS) further adjust the deductible information         |
|           | received from the CWF with the deductible amounts that   |
|           | apply to the Medicare-equivalent VA claims. This         |
|           | arrangement results in an accurate calculation of the    |
|           | deductible for VA's equivalent of Part A claims.         |
|           | However, because the MCS and FISS calculations are       |
|           | separate, they cannot consider each other's Part B       |
|           | claims. Currently, if a veteran-beneficiary receives     |
|           | both outpatient hospital services and professional       |
|           | services, billed respectively to an FI and a Carrier,    |
|           | the deductible calculated will be incorrect beyond the   |
|           | first claim adjudicated. This problem does not occur for |
|           | Medicare claims, for which the CWF calculates a          |
|           | deductible that considers Part B claims processed by     |
|           | both MCS and FISS.                                       |
+-----------+----------------------------------------------------------+

## Chiropractic Services Demonstration -- Jurisdictions Four and Five

The Contractor shall process claims and perform the requirements for
Chiropractic Services Demonstration with [IOM Pub
100-20](http://www.cms.hhs.gov/manuals/downloads/Pub100_20.pdf).

  ------------ ----------------------------------------------------------
  Background   Section 651 of the Medicare Prescription Drug,
               Improvement, and Modernization Act of 2003 (MMA) requires
               the Centers for Medicare & Medicaid Services (CMS) to
               conduct the Expansion of Coverage for Chiropractic
               Services Demonstration. The purpose of the demonstration
               is to evaluate the feasibility and advisability of
               expanding coverage of chiropractic services under
               Medicare. The legislation requires CMS to expand coverage
               for chiropractic services to include "care for
               neuromusculoskeletal conditions typical among eligible
               beneficiaries and diagnostic and other services that a
               chiropractor is legally authorized to perform by the State
               or jurisdiction in which such treatment is provided." Any
               beneficiary enrolled under Part B, including one enrolled
               in an M+C (or MA) program, would be eligible to
               participate. No other physician approval is required for
               the receipt of chiropractic services under the
               demonstration. The demonstration is for two years and must
               be conducted in four geographic areas---two rural and two
               urban. One rural and one urban geographic area must be
               located in an area designated as a health professional
               shortage area (HPSA). A Report to Congress must be
               submitted not later than one year after the demonstration
               ends, which includes an evaluation of the costs of the
               demonstration, beneficiary satisfaction, and other matters
               as the Secretary deems appropriate.

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