DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard 
Baltimore, MD 21244-1850 
 
 
 
CPI-CMCS INFORMATIONAL BULLETIN       
 
 
DATE:  January 20, 2012              CPI-B 12-02 
 
 
FROM:  Peter Budetti         
    Director 
    Center for Program Integrity (CPI)           
 
    Cindy Mann  
Director  
Center for Medicaid and CHIP Services (CMCS) 
 
SUBJECT:  Affordable Care Act Program Integrity Provisions - Guidance to States --  
Section 6501 - Termination of Provider Participation under Medicaid if 
Terminated under Medicare or other State Plan  
 
This Informational Bulletin clarifies earlier guidance the Centers for Medicare & Medicaid 
Services (CMS) provided in a May 31, 2011, Informational Bulletin and accompanying 
Frequently Asked Questions (FAQs) on section 6501 of the Patient Protection and Affordable 
Care Act, Pub. L. 111-148, as amended by the Health Care and Education Reconciliation Act of 
2010, Pub. L. 111-152, together called the Affordable Care Act.  See 
http://www.cms.gov/CMCSBulletins/downloads/6501-Term.pdf.   
 
Section 6501 of the Affordable Care Act amends section 1902(a)(39) of the Social Security Act 
(the Act) and requires State Medicaid agencies to terminate the participation of any individual or 
entity if such individual or entity is terminated under Medicare or any other State Medicaid 
plan.1   In final implementing regulations at 42 CFR  455.101, CMS generally defined 
termination as occurring when a State Medicaid program, CHIP, or the Medicare program has 
taken action to revoke a Medicaid or CHIP providers or Medicare provider or suppliers billing 
privileges and the provider has exhausted all applicable appeal rights or the timeline for appeal has 
expired.  CMS also indicated in final implementing regulations at 42 CFR  455.101, that the 
requirement to terminate under section 6501 of the Affordable Care Act only applies in cases  
 
                                                 
1 Although Section 6501 of the Affordable Care Act does not specifically include terminations from CHIP, CMS has 
required CHIP, through Federal regulations, to take similar action regarding termination of a provider that is also 
terminated or had its billing privileges terminated under Medicare or any State Medicaid plan.   
 
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Mailstop: AR-18-50 
Baltimore, MD 21244  Page 2  CPI-CMCS- Informational Bulletin 
 
where providers, suppliers or eligible professionals have been terminated or had their billing 
privileges revoked for cause.   
  
For Cause Terminations  
 
Certain States have requested clarification regarding CMSs definition of for cause 
terminations.  For example, some States consider providers who were terminated because they 
no longer maintain an active medical license in the State, regardless of the reason for the inactive 
license, e.g., the provider relocated to another State, as meeting the definition of a for cause 
termination.  CMS does not consider this type of termination to be a for cause termination 
within the meaning of the final rule.  Accordingly, we neither expect States to share information 
regarding this type of termination with other States, nor do we expect other States to initiate their 
own termination action based upon such termination.    
 
As indicated in the FAQs, for cause does not include any voluntary action taken by the 
provider to end its participation in the Medicaid program, except where that voluntary action is 
taken to avoid sanction.   Accordingly, CMS believes that providers who are terminated by 
States because they allow their medical license to expire due to relocation to another State does 
not qualify as a for cause termination and should not be reported or shared with other States.  
CMS believes that this type of termination is not within the spirit of the final rule and does not 
meet the definition of for cause.  We clarify here that for cause terminations that are shared 
with other States should be limited to terminations based upon fraud, integrity, or quality.     
 
Examples of For Cause Terminations 
 
CMS understands that States must follow their own State law regarding terminations.  CMS 
recognizes that there are numerous circumstances which may qualify as for cause terminations 
and that States may have different interpretations of what constitutes for cause terminations.  
The following list reflects examples of conduct for which providers may be terminated and that 
CMS believes meet the definition of for cause terminations and should be shared with other 
States.  The list is not exhaustive and is intended only to give States guidance as to the type of 
for cause terminations that CMS believes to be within the spirit of the final rule.  Although the 
examples provided below are limited to the Medicaid program, the same type of conduct would 
constitute for cause terminations in CHIP. 
 
1.  Providers that are terminated by State Medicaid Agencies as a result of adverse 
licensure actions, e.g., providers who are reported into the National Practitioner 
Data Bank (NPDB).   
2.  Providers that are terminated by State Medicaid Agencies because they have 
engaged in fraudulent conduct. 
 
 
 
 
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Mailstop: AR-18-50 
Baltimore, MD 21244   
Page 3  CPI-CMCS- Informational Bulletin 
 
3.  Providers that are terminated by State Medicaid Agencies due to abuse of billing 
privileges, e.g., billing for services not rendered or for medically unnecessary 
services. 
4.  Providers that are terminated by State Medicaid Agencies due to misuse of their 
billing number. 
5.  Providers that are terminated by State Medicaid Agencies due to falsification of 
information on enrollment application or information submitted to maintain 
enrollment. 
6.  Providers that are terminated by State Medicaid Agencies due to continued billing 
after the suspension or revocation of the providers medical license.  
7.  Providers that are terminated by State Medicaid Agencies based on a State and/or 
Federal exclusion. 
8.  Providers that are terminated by State Medicaid Agencies due to falsification of 
medical records which support services billed to Medicaid.  
Waivers 
 
Section 6501 of the statute provides for the same limitations on termination that apply to 
exclusion under  1128(c)(3)(B) and 1128(d)(3)(B) of the Act.  Accordingly, States may 
request a waiver from the Secretary of the Department of Health and Human Services from 
carrying out a for cause termination.  A State may request a waiver from CMS of the 
requirement to terminate a particular providers participation if the termination would impose a 
hardship on Medicaid beneficiaries in the case of an individual or entity that is the sole 
community physician or sole source of essential specialized services in a community.  State 
agencies may submit such waiver request to their respective CMS Regional Offices.  
 
As a reminder, CMS has established a secure web-based application that allows States to share 
information regarding terminated providers.  Using this web-based application, commonly 
referred to as MCSIS, a State is able to download information regarding terminated providers in 
other States and Medicare and to upload information regarding its own terminations.  We 
strongly encourage all States to use this web-based application to share information on 
terminated providers.  We believe it is a valuable tool that states can use to facilitate compliance 
with this requirement.  If you have any questions regarding the system or the list of users for 
your State, please send an email to: providerterms@cms.hhs.gov.  
  
Thank you for your continued commitment to combating fraud, waste and abuse in the Medicaid 
program. We look forward to continuing to work with States in order to successfully implement 
the requirements of Section 6501 of the Affordable Care Act.  Questions regarding this 
information can be directed to Angela Brice-Smith at 410-786-4340 or via email at 
Angela.Brice-Smith@cms.hhs.gov.  
 
7500 Security Boulevard 
Mailstop: AR-18-50 
Baltimore, MD 21244