25284 Federal Register / Vol. 77, No. 82 / Friday, April 27, 2012 / Rules and Regulations 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 424 and 431 

[CMS–6010–F] 

RIN 0938–AQ01 

Medicare and Medicaid Programs; 

Changes in Provider and Supplier 

Enrollment, Ordering and Referring, 

and Documentation Requirements; and 

Changes in Provider Agreements 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: This final rule finalizes 

several provisions of the Affordable 

Care Act implemented in the May 5, 

2010 interim final rule with comment 

period. It requires all providers of 

medical or other items or services and 

suppliers that qualify for a National 

Provider Identifier (NPI) to include their 

NPI on all applications to enroll in the 

Medicare and Medicaid programs and 

on all claims for payment submitted 

under the Medicare and Medicaid 

programs. In addition, it requires 

physicians and other professionals who 

are permitted to order and certify 

covered items and services for Medicare 

beneficiaries to be enrolled in Medicare. 

Finally, it mandates document retention 

and provision requirements on 

providers and supplier that order and 

certify items and services for Medicare 

beneficiaries. 

DATES: Effective June 26, 2012 the 

interim final rule amending 42 CFR 

parts 424 and 431 that published on 

May 5, 2010 (75 FR 24437) is confirmed 

as final with changes. 

FOR FURTHER INFORMATION CONTACT: 

Katie Mucklow Lehman, (410) 786– 

0537, for Medicare issues. 

Donna Schmidt, (410) 786–5532 for 

Medicaid issues. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Medicare program, title XVIII of 

the Social Security Act (the Act), is the 

primary payer of health care for 

approximately 50 million beneficiaries. 

Under section 1802 of the Act, a 

beneficiary may obtain health services 

from an individual or organization 

qualified to participate in the Medicare 

program. 

Providers and suppliers furnishing 

services must comply with the Medicare 

requirements stipulated in the Act and 

in implementing regulations. These 

requirements are meant to promote the 

furnishing of quality care, while 

protecting the integrity of the program. 

As Medicare program expenditures have 

grown, the Centers for Medicare & 

Medicaid Services (CMS) has increased 

its efforts to ensure that only qualified 

individuals or organizations are allowed 

to enroll in Medicare and maintain 

Medicare billing privileges. 

The Medicaid program, established 

under title XIX of the Act pays for 

medical benefits to tens of millions of 

people. Medicaid is a joint Federal and 

State health care program for eligible 

low-income individuals. The Medicaid 

program works within a broad Federal 

framework and States have considerable 

flexibility in how the program is 

administered. 

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) (collectively known as the 

Affordable Care Act) makes many 

changes to the Medicare and Medicaid 

programs, some of which involve 

strengthening tools for quality and 

integrity. To maintain program integrity 

and ensure quality, we must make 

certain that only qualified providers and 

suppliers participate in the programs 

and that they bill accurately for their 

services. With respect to Medicaid, our 

regulations provide States with 

considerable flexibility. However, the 

Federal framework includes some key 

requirements to ensure program 

integrity while providing quality care. 

For example, Medicaid providers must 

generally meet all State licensing and 

scope-of-practice requirements, and may 

be subject to additional Federal and 

State quality standards. Additionally, 

the Medicare and Medicaid regulations 

require timely filing of claims by 

providers. 

In the May 5, 2010 Federal Register 

(75 FR 24437), we published an interim 

final rule with comment period (IFC) 

that implemented several provisions of 

the Affordable Care Act regarding 

provider and supplier enrollment, 

ordering and referring; documentation 

requirements, and changes in provider 

agreements. 

II. Provisions of the Interim Final Rule 

With Comment Period and Summary of 

Responses to Comments 

In this section of the final rule, we 

provide the following for each of the 

provisions of the May 5, 2010 IFC: 

• Background. 

• Statutory changes based on the 

Affordable Care Act. 

• The provisions of the IFC. 

• Summary of the comments and 

responses to the public comments 

received on the IFC. We received 

approximately 224 timely comments on 

the May 5, 2010 IFC. 

With regard to the Medicare 

provisions, we also note that the term 

‘‘provider,’’ as used throughout the IFC 

and in this final rule, has the meaning 

specified in § 400.202. 

For Medicaid, the term ‘‘provider,’’ as 

used throughout the IFC and in this 

final rule, has the meaning specified in 

§ 400.203. That is, for purposes of this 

rule provider means any individual or 

entity furnishing Medicaid services 

under an agreement with the Medicaid 

agency. 

We also note that the use of the term 

‘‘supplier,’’ in the IFC and in this final 

rule, as defined at § 400.202, with regard 

to the Medicare provisions, is ‘‘a 

physician or other practitioner, or an 

entity other than a provider that 

furnishes health care services under 

Medicare.’’ In portions of this final rule, 

the commenters and CMS may only use 

the term ‘‘provider(s)’’ or ‘‘supplier(s).’’ 

However, the reader should consider 

these terms as relating to both providers 

and suppliers, unless explicitly stated 

otherwise. The regulatory text, however, 

uses precise language. 

Finally, throughout this final rule, we 

have attempted to remain consistent 

with our terminology regarding the term 

‘‘resident.’’ We draw the reader’s 

attention to § 413.75(b) where a resident 

is defined as ‘‘* * * an intern, resident, 

or fellow who participates in an 

approved medical residency program, 

including programs in osteopathy, 

dentistry, and podiatry, as required in 

order to become certified by the 

appropriate specialty board.’’ We want 

to be explicit in stating that the term 

‘‘resident’’ incorporates interns, 

residents, and fellows and we will use 

this term to refer to all three 

professionals throughout this final rule. 

A. Inclusion of the National Provider 

Identifier (NPI) on All Medicare and 

Medicaid Enrollment Applications and 

Claims 

1. Background 

Historically, we have identified 

vulnerabilities in Medicare enrollment 

procedures that have permitted the 

enrollment of providers and suppliers 

whose qualifications for meeting all of 

our enrollment standards were 

sometimes questionable. This raised 

concerns that certain providers and 

suppliers in our program may be underqualified or even fraudulent and has led 

us to increase our efforts to establish 

more stringent controls on provider and 

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Federal Register / Vol. 77, No. 82 / Friday, April 27, 2012 / Rules and Regulations 25285 

supplier entry into the Medicare 

program. These efforts include the 

publication of the following rules: 

• A final rule with comment titled, 

‘‘Additional Supplier Standards’’ 

(October 11, 2000, 65 FR 60366). 

• A final rule titled, ‘‘Requirements 

for Providers and Suppliers to Establish 

and Maintain Medicare Enrollment’’ 

(April 21, 2006, 71 FR 20754). 

• A final rule titled, ‘‘Medicare 

Program; Revisions to Payment Policies, 

Five-Year Review of Work Relative 

Value Units, Changes to the Practice 

Expense Methodology Under the 

Physician Fee Schedule, and Other 

Changes to Payment Under Part B; 

Revisions to the Payment Policies of 

Ambulance Services Under the Fee 

Schedule for Ambulance Services; and 

Ambulance Inflation Factor Update for 

CY 2007’’ (December 1, 2006, 71 FR 

69624). 

• A final rule titled, ‘‘Competitive 

Acquisition for Certain Durable Medical 

Equipment, Prosthetics, Orthotics, and 

Supplies (DMEPOS)’’ (April 10, 2007, 

72 FR 17992). 

• A final rule titled, ‘‘Medicare 

Program; Revisions to Payment Policies 

Under the Physician Fee Schedule, and 

Other Part B Payment Policies for CY 

2008; Revisions to the Payment Policies 

of Ambulance Services Under the 

Ambulance Fee Schedule for CY 2008; 

and the Amendment of the EPrescribing Exemption for Computer 

Generated Facsimile Transmissions; 

Final Rule’’ (72 FR 66222). 

• A final rule titled, ‘‘Appeals of CMS 

or CMS Contractor Determinations 

When a Provider or Supplier Fails to 

Meet the Requirements for Medicare 

Billing Privileges’’ (June 27, 2008, 73 FR 

36448). 

• A final rule with comment titled, 

‘‘Payment Policies Under the Physician 

Fee Schedule and Other Revisions to 

Part B for CY 2009; E-Prescribing 

Exemption for Computer Generated 

Facsimile Transmissions; and Payment 

for Certain Durable Medical Equipment, 

Prosthetics, Orthotics, and Supplies 

(DMEPOS)’’ (November 19, 2008, 73 FR 

69726). 

• A final rule titled, ‘‘Medicare 

Program; Surety Bond Requirement for 

Suppliers of Durable Medical 

Equipment, Prosthetics, Orthotics, and 

Supplies (DMEPOS); Final Rule’’ 

(January 2, 2009, 74 FR 166). 

• A final rule titled, ‘‘The National 

Provider Identifier Rule’’ (January 23, 

2004, 69 FR 3434). 

• A final rule titled ‘‘Medicare, 

Medicaid, and Children’s Health 

Insurance Programs; Additional 

Screening Requirements, Application 

Fees, Temporary Enrollment Moratoria, 

Payment Suspensions and Compliance 

Plans for Providers and Suppliers’’ 

(February 2, 2011, 76 FR 5862). 

The NPI provisions of this final rule 

are an extension of the aforementioned 

program integrity initiatives, consistent 

with the direction of the Affordable Care 

Act as described later in this section, 

designed to ensure that only legitimate 

providers and suppliers that meet and 

maintain our standards can be enrolled 

and/or paid by the Medicare program. 

Similarly, consistent with the NPI 

final rule and subsequent guidance from 

the Secretary, beginning May 23, 2008, 

Medicaid providers have also been 

required to report their NPIs on their 

Medicaid claims. 

2. Provisions of the Affordable Care Act 

Section 6402(a) of the Affordable Care 

Act added a new section 1128J of the 

Act, titled ‘‘Medicare and Medicaid 

Program Integrity Provisions.’’ Section 

1128J(e) of the Act requires the 

Secretary to promulgate a regulation 

that requires, not later than January 1, 

2011, all providers of medical or other 

items or services and suppliers under 

the programs under titles XVIII and XIX 

that qualify for an NPI to include their 

NPI on all applications to enroll in such 

programs and on all claims for payment 

submitted under such programs. In 

Medicaid, there is no Federally required 

‘‘enrollment application,’’ although all 

Medicaid providers are required to enter 

into a provider agreement with the State 

as a condition of participating in the 

program under section 1902(a)(27) of 

the Act. Therefore, in the Medicaid 

context we are including the submission 

of an NPI to the State agency as a 

requirement under the provider 

agreement. The NPI requirements in this 

final rule are thus applicable to the 

reporting of NPIs—(1) pursuant to 

Medicaid provider agreements; (2) for 

inclusion in Medicare enrollment 

records; and (3) on Medicare and 

Medicaid claims. 

3. Requirements Established by the IFC 

a. NPI and the Medicare Program 

(1) NPI and the Medicare Program 

Requirements Established by IFC 

For the Medicare program, we 

established the following: 

• At § 424.506(a), the definition of 

‘‘eligible professional’’ refers to any of 

the professionals specified in section 

1848(k)(3)(b) of the Act. 

• At § 424.506(b), requirements that a 

provider or supplier who is eligible for 

an NPI must report the NPI on the 

Medicare enrollment application; and, if 

the provider or supplier enrolled in 

Medicare prior to obtaining an NPI and 

the NPI is not in the provider’s or 

supplier’s enrollment record, the 

provider or supplier must report the NPI 

to Medicare in an enrollment 

application so that the NPI will be 

added to the provider’s or supplier’s 

enrollment record in PECOS. 

• At § 424.506(c)(1), a requirement 

that a provider or supplier who is 

enrolled in fee-for-service (FFS) 

Medicare report its NPI, as well as the 

NPI of any other provider or supplier 

who is required to be identified in those 

claims, on any electronic or paper 

claims that the provider or supplier 

submits to Medicare. 

• At § 424.506(c)(2) that a claim 

submitted by a Medicare beneficiary 

contain the legal name and, if the 

beneficiary knows the NPI, the NPI of 

any provider or supplier who is 

required to be identified in that claim. 

If a Medicare beneficiary does not know 

the NPI of a provider or supplier who 

is required to be identified in the claim 

that he or she is submitting, the 

beneficiary may submit the claim 

without the NPI(s) as long as the claim 

contains the legal name(s) of the health 

care provider(s). If a beneficiary so 

desires, he or she can obtain a 

provider’s or a supplier’s NPI by 

requesting it directly from the provider 

or supplier or from a member of his or 

her office staff, or by looking it up in the 

NPI Registry at https://nppes.cms.gov/ 

NPPES/NPIRegistryHome.do. 

• At § 424.506(c)(3), a Medicare claim 

from a provider or a supplier will be 

rejected if it does not contain the 

required NPI(s). 

(2) Summary of and Responses to the 

IFC Comments Regarding the NPI and 

the Medicare Program 

(a) Effective/Implementation Date 

Comment: A commenter noted that 

the preamble states that the NPI 

requirements set forth in the IFC, 

referencing section 6402(a) of the 

Affordable Care Act, requires the 

Secretary to promulgate a regulation to 

implement the NPI requirement no later 

than January 2011. Therefore, there is 

confusion as to why July 6, 2010 is the 

effective date for NPI requirements. 

Response: Section 6402(a) of the 

Affordable Care Act requires the 

Secretary to promulgate rules 

implementing the NPI requirement no 

later than January 2011. However, we 

have had existing regulations since 

2008, as mentioned in the IFC, requiring 

the use of NPIs on all enrollment 

applications and claims forms, if NPIs 

were assigned to the provider. The NPI 

requirements set forth in the IFC are 

necessary to implement the data 

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reporting requirements in section 

1128J(e) of the Act, as added by section 

6402(a) of the Affordable Care Act, 

which require that the Secretary 

promulgate a regulation to implement 

this requirement no later than January 

2011. Moreover these NPI requirements 

are needed to implement the Medicare 

ordering and certifying requirements 

specified in section 6405 of the 

Affordable Care Act (discussed in 

section II.B.2. of this final rule) that are 

effective July 1, 2010. Section 6406 of 

the Affordable Care Act (discussed in 

section II.B.4.a. of this final rule) was 

effective January 1, 2010. It was 

imperative that the NPI regulatory 

provisions be set forth as soon as 

possible to deliver the guidance 

necessary to enact the document 

retention provisions. For this reason, the 

NPI requirement was included in the 

IFC published on May 5, 2010, with an 

effective date of July 6, 2010. 

(b) Deactivation 

Comment: A commenter suggested 

that CMS permit the use of Electronic 

File Interface (EFI), which is used for 

submitting NPI applications to the 

National Plan and Provider 

Enumeration System (NPPES), to 

reactivate Medicare Provider 

Transaction Access Numbers (PTANs) 

that have been deactivated for nonbilling for 12 consecutive months. This 

would reduce the burden on physicians 

and other providers and suppliers who 

must submit enrollment applications to 

re-enroll in Medicare if they have been 

deactivated due to non-billing. 

Response: We appreciate the 

commenter’s concerns and desire to use 

a fully electronic mechanism for 

reenrollment after deactivation. 

Currently, all enrollees must sign their 

paper enrollment application or the 

Certification Statement for their 

Internet-based PECOS application. We 

continue to work with our Medicare 

contractors to reduce the delays in the 

enrollment process. We believe these 

measures will alleviate the concerns of 

the commenter. 

After review of the public comments 

received, we are retaining the provisions 

regarding the NPI for the Medicare 

program with the modification specified 

in this section and in section III. of this 

final rule. 

To clarify, it is not necessary for the 

providers and suppliers to fill out an 

entire enrollment application simply to 

provide an NPI, we have revised the 

language in existing § 424.506(b)(2), 

which has been redesignated as 

§ 424.506(b)(1)(ii), to specify that 

providers and suppliers that are eligible 

for an NPI must update their enrollment 

records with this information. NPIs 

must be provided to the Medicare 

contractors by using a CMS–855 paper 

form or through Internet-based PECOS. 

After consideration of the comments, 

we are finalizing our policy as it relates 

to the NPI and the Medicare definitions, 

enrollment, and claims reporting with a 

few modifications. We made some 

technical changes to the language by 

redesignating and revising language, 

specifically in § 424.506(b). Section 

424.506(b)(3) was redesignated as 

§ 424.506(b)(2) and revised to clarify 

that opt-out physicians and 

nonphysician practitioners will not be 

required to submit an enrollment 

application for any reason, including to 

order and certify. We also revised 

§ 424.506(c)(1) to specifically address 

and clarify the NPIs that were required 

on the claims. 

b. NPI and the Medicaid Program 

(1) NPI Requirements for the Medicaid 

Program Established by IFC 

Consistent with the requirements of 

section 6402(a) of the Affordable Care 

Act, we added a new (b)(5)(i) and (ii) to 

§ 431.107 to require that the provider 

agreement between a State agency and 

each provider delivering services under 

the State plan include a requirement 

that the provider furnish to the State 

agency its NPI (if eligible for an NPI); 

and include its NPI on all claims 

submitted under the Medicaid program. 

In Medicaid, under section 1902(a)(77) 

of the Act, States are required to comply 

with the provider screening, oversight, 

and reporting requirements outlined in 

section 1902(kk) of the Act including 

the process for screening providers 

established under section 1866(j) of the 

Act. In addition, there are new Federal 

regulatory requirements for provider 

enrollment and screening, published in 

the February 2, 2011 Federal Register 

(76 FR 5862). The requirements under 

section 1902(a)(77) of the Act and under 

these new Federal regulatory 

requirements for provider enrollment 

and screening provide guidance for 

certain aspects of provider enrollment 

but do not provide Federal requirements 

for the entire process. However, 

providers are required to enter into a 

provider agreement with the State as a 

condition of participating in the 

program under section 1902(a)(27) of 

the Act. For purposes of the IFC, we 

interpreted the Affordable Care Act’s 

reference to ‘‘applications to enroll’’ to 

refer to provider agreements in the 

Medicaid context. Additionally, we 

required that the NPI be submitted on 

all claims for payment to the Medicaid 

program on and after July 6, 2010. 

(2) Summary of and Responses to the 

Public Comments Related to the NPI 

and the Medicaid Program 

Comment: A commenter requested 

clarification regarding NPIs on 

pharmacy claims specifically when a 

pharmacy submits a prescriber Drug 

Enforcement Administration (DEA) 

number or State license number in lieu 

of the NPI. Is it expected that the 

pharmacy and physician NPIs are 

submitted on the claim for payment? 

Should the claims processor reject the 

claim if one or both provider 

identification numbers are not NPIs? 

Response: The statute and this 

regulation require that NPIs be included 

on all claims for payment for Medicaid, 

including pharmacy claims. The 

requirement for an NPI does not replace 

the function of the DEA number, which 

must appear on all prescriptions for 

scheduled drugs, or the State license 

number, which is issued by an 

applicable State licensing authority; 

however, these numbers have different 

purposes and are not to be used to 

identify the prescriber when billing a 

claim at point of sale. The NPI was 

adopted to identify a health care 

provider as a health care provider in 

standard transactions adopted under the 

HIPAA. Effective July 6, 2010, NPI 

numbers are required on pharmacy 

claims. 

Comment: A commenter stated that if 

pharmacy claims must include the NPI 

of the prescriber, the July 6, 2010 date 

will be impossible to meet due to the 

systems changes that would need to be 

made. The commenter believed that the 

date of January 1, 2011, which is the 

date in the Affordable Care Act, would 

be a more realistic compliance date. 

Response: We believe the commenter 

is inquiring about the requirement that 

the NPI of the ordering or referring 

provider be included on all Medicaid 

claims for payment. This requirement 

was finalized in a February 2, 2011 final 

rule (76 FR 5862) and was effective 

March 25, 2011. Thus, this comment is 

outside the scope of this final rule, 

which, for purposes of Medicaid, only 

requires that the NPI of the provider 

furnishing the services/submitting the 

claim (for example, the pharmacy) be 

included on the claim. 

Comment: A commenter requested 

clarification on the process for 

physician assistants (PAs) under 

different State Medicaid programs. PAs 

qualify for NPIs and are providers of 

medical services in some State Medicaid 

programs. However, not all States enroll 

PAs and in some States, the PA’s NPI is 

not included on the claim form. Will 

this rule mean a change in policy and 

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procedure and that all States will now 

be required to include the PA’s NPI on 

claims? 

Response: If a PA is independently 

licensed to practice in a State and that 

State has included PAs as a provider 

type under the Medicaid State plan, the 

NPI number for that PA is required to 

be included on all claims for payment 

and pursuant to the PA’s provider 

agreement. If the PA is not 

independently licensed within the State 

but rather is under the supervision of 

the physician, and/or is not described as 

a provider type that bills for Medicaid 

services under the State Plan, the NPI of 

the PA is irrelevant since the PA is not 

directly billing Medicaid; however, the 

supervising physician must have an NPI 

on submitted claims for payment and 

pursuant to the provider agreement. 

Comment: Commenters expressed 

concern that adding and using NPI 

numbers on claims could result in 

burdensome investigations or liability 

for dentists in cases where their NPI 

numbers could be used fraudulently or 

criminally. These commenters requested 

procedures to protect practitioners from 

any unreasonable additional compliance 

burden that may be incident to the 

misuse of their NPIs by others. 

Other commenters acknowledged that 

the NPI registry permits anyone with a 

computer and internet access to look up 

a provider’s NPI by name. The 

commenters inquired how CMS is able 

to determine whether the NPI that is on 

a claim was put there by a physician 

who meant to order the test, or by 

someone who simply downloaded the 

NPI from the open file, thereby 

identifying attempts at theft and fraud? 

Response: Under Medicaid, a claim 

submitted for payment that does not 

include the provider’s NPI will be 

denied. In cases where claims submitted 

for payment do include an NPI number, 

the State’s Medicaid Management 

Information System will match NPI 

numbers for providers with other data 

included in the State’s provider 

enrollment file to ensure the provider’s 

identity. This cross-checking with other 

data within the State ensures that the 

NPI number is valid and that it matches 

with all data in the provider enrollment 

file in an effort to verify each provider’s 

identity. Additionally, this crosschecking is done at the State level and 

does not impose any additional 

compliance burdens on providers. 

Comment: A commenter requested 

clarification regarding whether States 

need only to collect NPIs through the 

usual annual agreements and no 

additional actions for physicians will be 

required this year to report NPIs. 

Response: NPIs must be added 

pursuant to provider agreements for 

new providers effective July 6, 2010. 

Existing providers must submit their 

NPIs pursuant to their provider 

agreements at the time in which they are 

revalidated or at the time in which 

changes are made to existing provider 

agreements. The NPI for all providers in 

Medicaid must be included on all 

claims submitted for payment effective 

July 6, 2010. We wish to note that since 

provider NPIs must be submitted on all 

claims for payment under Medicaid 

effective July 6, 2010, it may make sense 

for all providers (new and existing) to 

consider adding NPIs pursuant to 

provider agreements at the time in 

which they also submit a claim for 

payment. 

Comment: A commenter questioned 

patient access and home health 

agencies’ requests for payments for dual 

Medicaid/Medicare patients in the 

following scenario—a patient has been 

admitted to Medicaid Home Health after 

meeting the Medicaid homebound 

criteria, but not Medicare homebound 

criteria at the level of receiving skilled 

nursing care (for example wound care). 

The patient regresses, and now meets 

Medicare homebound criteria. A new 

Medicare Start of Care begins, and 

claims can be submitted to Medicare. 

What would the process be if this 

patient’s physician is not enrolled in 

PECOS? 

Response: Under the Medicaid 

program, the provider is required to 

include an NPI number on all claims for 

payment and pursuant to the provider 

agreement with the State. If the home 

health agency submits a claim to 

Medicare for home health services and 

the certifying physician is not enrolled 

in Medicare or has not validly optedout, as required by the provisions of this 

rule, the claim will be denied by 

Medicare once the automated edits are 

activated. 

After consideration of the comments, 

we are finalizing our policy as it relates 

to the NPI and Medicaid claims; that is, 

the effective date for the inclusion of the 

NPI on all Medicaid claims for payment 

remains July 6, 2010. The effective date 

for submission of NPIs pursuant to 

provider agreements for new providers 

also remains July 6, 2010. However, we 

are revising our policy as it relates to the 

NPI pursuant to provider agreements for 

existing providers; that is, the effective 

date for inclusion of the submission of 

NPIs pursuant to provider agreements 

for existing providers will be upon the 

next date that a change must be made 

to the provider agreement or upon the 

date of revalidation. This policy 

revision does not impact the regulatory 

text (§ 431.107(b)(5)) as specified in the 

IFC (75 FR 24437). Therefore, we are not 

amending the regulatory text in this 

final rule. 

B. Ordering and Referring Covered Items 

and Services for Medicare Beneficiaries 

1. Background 

Section 1833(q) of the Act requires 

that claims for items or services for 

which payment may be made under Part 

B and for which there was a referral by 

a referring physician shall include the 

name and the unique identification 

number of the referring physician. 

Physicians are doctors of medicine and 

osteopathy, optometry, podiatry, dental 

medicine, dental surgery, and 

chiropractic. 

In the past, prior to the Medicare 

implementation of the NPI on May 23, 

2008, physicians and eligible 

professionals were identified in claims 

as ordering or referring suppliers by 

their Unique Physician Identification 

Numbers (UPINs). Further discussion on 

Medicare’s use of UPINs can be found 

in the IFC (75 FR 24441 and 24442). 

Physicians and eligible professionals 

applied for and were assigned UPINs as 

part of the process of enrolling in the 

Medicare program; therefore, physicians 

and eligible professionals were expected 

to be identified in claims as ordering or 

referring suppliers by their UPINs. 

Analysis of Medicare claims data 

prior to 2008 (UPINs were not permitted 

to be used in Medicare claims after May 

23, 2008) revealed that unauthorized 

and incorrect use of UPINs was 

widespread and, as a result, we had 

reason to believe that many physicians 

and eligible professionals were unaware 

of the requirement that their assigned 

UPINs were intended to uniquely 

identify them as ordering or referring 

suppliers and, more importantly, that 

they needed to apply for UPINs. As a 

result, Medicare may have paid claims 

for covered ordered and referred items 

and services that may have been ordered 

or referred by professionals who were 

not of a profession eligible to order and 

refer; by physicians or eligible 

professionals who were not enrolled in 

the Medicare program; or by physicians 

or eligible professionals who were not 

in an approved Medicare enrollment 

status (for example, they were 

sanctioned, their licenses were 

suspended or revoked, their billing 

privileges were terminated, or they were 

deceased). 

With the Medicare implementation of 

the NPI in May 2008, Medicare 

discontinued the assignment of UPINs 

and no longer allowed UPINs to be used 

in Medicare claims. Because physicians 

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and non physician practitioners are 

eligible for NPIs, only the NPI may be 

used in Medicare claims to identify 

ordering and referring suppliers. To 

ensure the unique identification of 

ordering and referring suppliers and 

that they were qualified to order and 

refer, Medicare implemented claims 

edits in 2009 that require the ordering 

and referring suppliers identified in Part 

B claims for items of DMEPOS and 

services of laboratories, imaging 

suppliers, and specialists be identified 

by their legal names and their NPIs and 

that they have enrollment records in 

PECOS. The claims edits implemented 

in 2009 do not result in nonpayment. 

However, claims edits are under 

development to ensure that claims for 

Part B covered items and services 

(specifically DMEPOS, imaging and 

clinical laboratory services) and Part A 

and Part B home health services covered 

under this final rule identify the 

physicians and eligible professionals 

who ordered the item or services by 

their legal names and their NPIs and 

that those physicians and eligible 

professionals have enrollment records 

in Medicare. 

2. Provisions of the Affordable Care Act 

Section 6405(a) of the Affordable Care 

Act amended section 1834(a)(11)(B) of 

the Act to specify, with respect to 

suppliers of durable medical equipment, 

that payment may be made under that 

subsection only if the written order for 

the item has been communicated to the 

DMEPOS supplier by a physician who 

is enrolled under section 1866(j) of the 

Act or an eligible professional under 

section 1848(k)(3)(B) who is enrolled 

under section 1866(j) before delivery of 

the item. Section 1128J(e) of the Act 

requires that he or she be identified by 

his or her NPI in claims for those 

services. Medicare requires the ordering 

supplier (the physician or the eligible 

professional) to be identified by legal 

name and NPI in the claim submitted by 

the supplier of DMEPOS. 

Section 6405(b) of the Affordable Care 

Act, as amended by section 10604 of the 

Affordable Care Act, amended the Act, 

and establishes new requirements for 

home health services. These provisions 

amended: (1) Section 1814(a)(2) of the 

Act and specifies, with respect to home 

health services under Part A, that 

payment may be made to providers of 

services if they are eligible and only if 

a physician enrolled under section 

1866(j) of the Act certifies (and 

recertifies, as required) that the services 

are or were required in accordance with 

section 1814(a)(1)(C) of the Act; and (2) 

section 1835(a)(2) of the Act specifies, 

with respect to home health services 

under Part B, that payments may be 

made to providers of services if they are 

eligible and only if a physician enrolled 

under section 1866(j) of the Act certifies 

(and recertifies, as required) that the 

services are or were medically required 

in accordance with section 1835(a)(1)(B) 

of the Act. Section 1128J(e) of the Act 

requires that the physician be identified 

by his or her NPI in claims for those 

services. Medicare requires the ordering 

supplier (the physician) to be identified 

by legal name and NPI in the claim 

submitted by the provider of home 

health services. 

In addition, section 6405(c) of the 

Affordable Care Act gives the Secretary 

the authority to extend the requirements 

made by subsections (a) and (b) to all 

other categories of items or services 

under title XVIII of the Social Security 

Act, including covered Part D drugs as 

defined in section 1860D–2(e) of the 

Act, that are ordered, prescribed, or 

referred by a physician enrolled under 

section 1866(j) of the Act or an eligible 

professional under section 1848(k)(3)(B) 

of the Act. Section 1128J(e) of the Act 

requires that he or she be identified by 

his or her NPI in claims for those 

services. Medicare requires the ordering 

or referring supplier (the physician or 

the eligible professional) to be identified 

by legal name and NPI in the claims 

submitted by the suppliers of laboratory, 

imaging, and specialist services. These 

amendments are effective on or after 

July 1, 2010. 

3. IFC Requirements Regarding Ordering 

and Referring of Covered Items and 

Services for Medicare Beneficiaries 

a. Claims From Providers and Suppliers 

for Ordered/Referred Part B DMEPOS, 

Imaging, Laboratory, Specialist Items/ 

Services (§ 424.507(a)(1)) 

The IFC required that claims from 

Part B providers and suppliers for 

covered ordered or referred items or 

services (excluding home health 

services and Part B drugs) meet the 

following requirements: 

• The Part B items and services must 

have been ordered or referred by a 

physician or, when permitted by 

regulation or law, by an eligible 

professional. 

• The claim from the Part B provider 

or supplier must contain the legal name 

and the NPI of the physician or the 

eligible professional who ordered or 

referred the item or service. 

• The physician or the eligible 

professional who ordered the Part B 

item or service must have an approved 

enrollment record or a valid opt-out 

record in PECOS. 

The IFC also required that if the Part 

B items or services were ordered or 

referred by a resident or an intern, the 

claim must identify the teaching 

physician as the ordering or referring 

supplier, and the teaching physician 

must be identified in the claim by his 

or her legal name and NPI, and he or she 

must have an approved enrollment 

record or a valid opt-out record in 

PECOS. 

b. Claims From Medicare Beneficiaries 

for Ordered/Referred Part B DMEPOS, 

Imaging, Laboratory, Specialist Items/ 

Services (§ 424.507(a)(2)) 

The IFC stated that claims from 

Medicare beneficiaries for ordered or 

referred covered Part B items and 

services (excluding home health 

services and Part B drugs) must meet the 

following requirements: 

• The Part B items and services must 

have been ordered or referred by a 

physician or, when permitted by 

regulation or law, an eligible 

professional. 

• The claim must contain the legal 

name of the physician or the eligible 

professional who ordered or referred the 

item or service. 

• The physician or the eligible 

professional who ordered or referred the 

item or service must have an approved 

enrollment record or a valid opt-out 

record in PECOS. 

The IFC stated that if the Part B items 

or services were ordered or referred by 

a resident or an intern, the claim must 

identify the teaching physician as the 

ordering or referring supplier, and the 

teaching physician must be identified in 

the claim by his or her legal name, and 

he or she must have an approved 

enrollment record or a valid opt-out 

record in PECOS. 

c. Claims From Providers for Ordered 

Part A and Part B Home Health Services 

(§ 424.507(b)(1)) 

The IFC stated that claims from home 

health agencies for covered Part A or 

Part B home health services must meet 

these requirements: 

• The Part A or Part B home health 

services must have been ordered by a 

physician. 

• The claim must contain the legal 

name and the NPI of the physician who 

ordered the service. 

• The physician who ordered the 

service must have an approved 

enrollment record or a valid opt-out 

record in PECOS. 

The IFC stated that if the Part A or 

Part B home health services are ordered 

by a resident or an intern, the claim 

must identify the teaching physician as 

the ordering or referring supplier. The 

teaching physician must be identified in 

the claim by his or her legal name and 

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NPI, and he or she must have an 

approved enrollment record or a valid 

opt-out record in PECOS. 

d. Claims From Beneficiaries for 

Ordered Part A and Part B Home Health 

Services (§ 424.507(b)(2)) 

The IFC required that claims from 

Medicare beneficiaries for ordered 

covered Part A or Part B home health 

services must meet the following 

requirements: 

• The Part A or Part B home health 

services must have been ordered by a 

physician. 

• The claim must contain the legal 

name of the physician who ordered the 

services. 

• The physician who ordered the 

services must have an approved 

enrollment record or a valid opt-out 

record in PECOS. 

The IFC stated that if the Part A or 

Part B home health services are ordered 

by a resident or an intern, the claim 

must identify the teaching physician as 

the ordering or referring supplier, and 

the teaching physician must be 

identified in the claim by his or her 

legal name, and he or she must have an 

approved enrollment record or a valid 

opt-out record in PECOS. 

e. Rejecting Claims From a Provider or 

Supplier That Do Not Meet the 

Requirements (§ 424.507(a)(1) or 

§ 424.507(b)(1) Through § 424.507(c)) 

The IFC provided that a Medicare 

contractor will reject a claim from a 

provider or a supplier for covered 

ordered or referred items and services 

described in § 424.507(a) and (b) if the 

claim does not meet the requirements of 

§ 424.507(a)(1) (for Part B items and 

services except Part B home health 

services and Part B drugs) and 

§ 424.507(b)(1) (for Part A and Part B 

home health services). 

f. Denying Claims From Medicare 

Beneficiaries That Do Not Meet the 

Ordering/Referring Supplier 

Requirements (§ 424.507(d)) 

The IFC stated that a Medicare 

contractor may deny a claim from a 

Medicare beneficiary for covered 

ordered or referred items and services 

described in § 424.507(a) and (b) if the 

claim does not meet the requirements of 

§ 424.507(a)(2) (for Part B items and 

services except Part B home health 

services and Part B drugs) and 

§ 424.507(b)(2) (for Part A and Part B 

home health services). 

4. Summary of and Responses to Public 

Comments Regarding Ordering and 

Referring of Covered Items and Services 

for Medicare Beneficiaries 

As a point of clarification, we use the 

term ‘‘ordering/referring provider’’ in 

this preamble because that is the 

terminology used in the implementation 

specifications for the standard Part B 

claim format and in the Part B paper 

claim to denote the individual (the 

person) who ordered, referred, or 

certified an item or service reported in 

that claim. The term ‘‘ordering/referring 

provider’’ is used in several contexts in 

this final rule. The term ‘‘order’’ for 

instance, refers to a provider who orders 

non physician items or services for the 

beneficiary, such as DMEPOS, clinical 

laboratory services, or imaging services. 

A ‘‘certifying’’ provider generally means 

a person who orders/certifies home 

health services for a beneficiary. 

The terms ‘‘ordered,’’ ‘‘referred,’’ 

‘‘certified,’’ and ‘‘ordering or referring’’ 

and ‘‘ordered or referred’’ are often used 

interchangeably within the health care 

industry and were used interchangeably 

by parties that commented on the IFC. 

Generally, we have used the terms 

applicable to this final rule, which are 

‘‘ordered’’ when referring to items of 

DMEPOS, imaging and clinical 

laboratory services, and ‘‘certified’’ 

when referring to home health services. 

However, to be technically correct in 

every instance of the use of these terms 

in this preamble would require that we 

qualify every use in each instance. We 

believe that would be cumbersome and 

unnecessary and, therefore, did not do 

so. However, the regulatory text uses the 

technically correct terms. 

a. Technical, Administrative, and 

Procedural Modifications and 

Corrections 

Comment: Several commenters 

suggested that the agency did not 

provide a valid rationale for avoiding 

the procedural safeguards specified in 

sections 1871(a)(2) and (b)(1) of the Act, 

which address rulemaking. Moreover, 

they stated that the statute (at section 

6405(a) of the Affordable Care Act) 

merely authorized the Secretary to 

require a PECOS enrollment date of July 

1, 2010 but did not require it. 

Response: Section 6405 of the 

Affordable Care Act requires physicians 

or eligible professionals who order or 

refer DMEPOS or home health services 

be enrolled in Medicare under section 

1866(j) of the Act, and authorizes the 

Secretary to extend those requirements 

to other Medicare services. Section 

6405(d) of the Affordable Care Act states 

that the amendments made by section 

6405 of the Affordable Care Act ‘‘shall 

apply to written orders and 

certifications made on or after July 1, 

2010.’’ We find section 6405(d) of the 

Affordable Care Act to be a clear 

statutory imperative. 

Section 6406 of the Affordable Care 

Act requires physicians to retain 

necessary documentation and provide 

access to records for orders, referrals, 

and certifications for home health 

services, DMEPOS, and other items and 

services as designated by the Secretary, 

upon request. Section 6406(d) of the 

Affordable Care Act states ‘‘the 

amendments made by this section shall 

apply to orders, certifications, and 

referrals made on or after January 1, 

2010.’’ 

These two provisions fall within the 

exception to section 1871 of the Act that 

generally requires us to issue a notice of 

proposed rulemaking prior to issuing a 

final rule under the Medicare program. 

Section 1871(b)(1)(b) of the Act 

provides that the Secretary is not 

required to issue a notice of proposed 

rulemaking before issuing a final rule if 

‘‘a statute establishes a specific deadline 

and the deadline is less than 150 days 

after the date of enactment of the statute 

in which the deadline is contained.’’ 

Section 6405 of the Affordable Care Act 

establishes an effective date of July 1, 

2010, 100 days after March 23, 2010, 

and section 6406 of the Affordable Care 

Act established an effective date of 

January 1, 2010 that passed before the 

Affordable Care Act was enacted. 

Additionally, implementing section 

6402(a) of the Affordable Care Act, 

which adds section 1128J(e) to the Act 

and requires the use of the NPI on all 

enrollment applications and claims, 

does not add significant new burdens 

because the Medicare and Medicaid 

programs had already required the NPI 

on claims, applications, and agreements. 

The Affordable Care Act instructed the 

Secretary to promulgate a rule that adds 

this requirement no later than January 1, 

2011, and the IFC executed that 

authority. Finally, a delay in 

implementing these provisions would 

be contrary to the public interest and to 

our efforts to reduce and eliminate fraud 

and abuse in the Medicare and 

Medicaid programs. For these reasons, 

we found good cause to waive the notice 

of proposed rulemaking and to issue 

these provisions on an interim final 

basis. 

Additionally, the IFC carried a 60-day 

public comment period, to be followed 

by the publication of a final rule, as 

would a proposed rule. As a result, the 

public was afforded an opportunity to 

comment. 

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Comment: A commenter stated that 

the Affordable Care Act names DMEPOS 

and home health services as the only 

ordered or referred items or services to 

which the statutory requirements apply. 

While the law allows CMS to expand 

the scope, which CMS did by including 

laboratory services, there is no 

compelling reason for CMS to have 

done so. 

Response: As stated by the 

commenter, section 6405(c) of the 

Affordable Care Act permits the 

Secretary to extend the requirement to 

all other categories of items or services 

under title XVIII of the Act, including 

covered Part D drugs as defined in 

section 1866(j) of Act. As noted in the 

regulation text at § 424.507(a), this 

regulation has extended the 

requirements to both laboratories and 

imaging services. We believe that in the 

past, some laboratories have abused the 

reporting of the ordering or referring 

provider by reporting surrogate UPINs 

for the ordering or referring providers in 

all of their claims, when UPINs were 

permitted to be used in Medicare 

claims, instead of reporting UPINs that 

had been assigned to specific physicians 

or other eligible professionals. These 

laboratories have also used a single (the 

same) NPI to identify the ordering or 

referring providers in all of their claims, 

having had earlier claims paid when 

using that NPI. Later, many laboratories 

used their own NPIs as the NPI of the 

ordering or referring providers even 

though the NPI Registry and the NPPES 

downloadable file were readily available 

for determining the NPI of the ordering 

or referring provider. We believe that 

these are compelling reasons to impose 

ordering or referring provider edits on 

clinical laboratory service claims. 

Additional efforts to ensure accuracy 

of claims has also led us to impose NPI 

requirements on Part D sponsors 

through the final rule with comment 

period titled, ‘‘Changes to the Medicare 

Advantage and the Medicare 

Prescription Drug Benefit Program for 

Contract Year 2013’’ published in the 

April 12, 2012 Federal Register. This 

rule requires Part D plan sponsors to 

submit an active and valid individual 

prescriber NPI on all prescription drug 

event (PDE) records submitted to CMS. 

This rule does not require all physician 

prescribers to enroll in Medicare. 

Rather, it mandates that PDE records 

include active and valid individual 

prescriber identifiers effective for 

January 1, 2013 dates of service and 

later. 

Comment: A commenter noted that 

laboratory services were not subject to 

the provisions of the Affordable Care 

Act; therefore, if CMS exercises its 

statutorily-given discretion and 

determines that they must meet the 

requirements of the IFC, CMS should 

give laboratories until January 3, 2011 to 

be in compliance and must allow 

laboratories to continue to use their own 

NPI as the ordering or referring 

provider’s NPI until that date. 

Response: As stated previously, 

section 6405(c) of the Affordable Care 

Act permits the Secretary to extend the 

requirement to all other categories of 

items or services, including laboratories. 

The NPI is the primary metric for us to 

verify Medicare enrollment and for that 

reason the two requirements are being 

implemented simultaneously, as 

described in the preamble of this final 

rule. We have been validating the 

ordering or referring providers reported 

in clinical laboratory claims since 

October 2009 to ensure they are 

properly identified in the claims and 

have enrollment records in PECOS or in 

a Medicare legacy system as of the claim 

receipt date. Such claims have not been 

denied or rejected due to the lack of the 

ordering or referring provider’s 

enrollment record. However, our 

revalidation of the enrollment records in 

PECOS or a Medicare legacy system has 

allowed us to alert these providers that 

they do not have an enrollment record. 

Clinical laboratories have information 

available to them that will indicate the 

NPI of the physicians and other eligible 

professionals who order services from 

them. Therefore, we will not permit 

clinical laboratories to report their own 

NPIs as the NPIs of the ordering or 

referring providers. We have not 

modified the compliance date. 

Comment: A commenter stated that 

the Affordable Care Act does not give 

the Secretary the authority to determine 

who may order or refer items or services 

that are not covered and for which 

payment will not be made under a 

Federal insurance plan. The commenter 

stated that State medical practice acts 

determine the scope of practice of 

professionals, and that this regulation is 

creating a Federalism issue. 

Response: We agree with the 

commenter in so far as this rule does not 

establish who may order or refer items 

or services that are not covered and for 

which payment will not be made under 

a Federal insurance plan. Although this 

rule finalizes conditions of payment for 

ordered items and services, it does not 

address broader payment policy 

questions. Rather, this rule implements 

the statutory requirement that 

individuals who order and certify 

particular Medicare-covered services be 

enrolled in the Medicare program. The 

Medicaid provisions relating to ordering 

and referring were finalized in a 

February 2, 2011 final rule (76 FR 5862). 

Comment: Several commenters noted 

that the word ‘‘must’’ was omitted from 

the regulatory text at § 424.506(c), there 

was a typographical error in another 

word in § 424.506(c), and noted the 

omission of the word ‘‘claim’’ in the 

regulatory text at § 424.507(a)(1). 

Response: We have corrected these 

errors. 

Comment: Several commenters 

indicated that the preamble discussed 

requirements for those who order 

DMEPOS, laboratory, imaging, and 

specialist services, whereas the text at 

§ 424.507 indicates that the 

requirements apply to ‘‘Part B items and 

services (excluding home health 

services and Part B drugs),’’ which is 

broader in scope than what was 

discussed in the preamble. 

Response: We have revised the 

regulatory text in this final rule at 

§ 424.507 to be consistent with the 

language in the preamble with respect to 

clinical laboratory and imaging services. 

Further, specialist services are 

discussed in greater detail later in this 

final rule. 

b. Terminology 

Comment: A commenter stated that 

under Federal law, claims for which 

payment may be made under Part B and 

for which there was a referral by a 

physician must include the name and 

the UPIN of the referring physician. The 

commenter stated that this provision 

incorporates the Stark law definition of 

‘‘referral,’’ and the preamble suggests 

the term ‘‘referral’’ should be 

interpreted in that manner. 

Response: Based upon review of the 

public comments received, we have 

decided to remove specialist services 

from the requirements of this rule. The 

covered items and services for this final 

rule include imaging and clinical 

laboratory services, DMEPOS, and home 

health. The terms ‘‘ordered’’ and 

‘‘certified’’ more accurately reflect these 

covered items and services. Therefore, 

we have removed reference to 

‘‘referrals’’ in our regulatory text, due to 

the exclusion of specialist services from 

this final rule. 

Comment: Several commenters 

requested that CMS define ‘‘specialist 

services,’’ as there is no requirement 

that a Medicare beneficiary obtain a 

referral from a physician to receive 

services from another physician, 

particularly since Medicare no longer 

pays for consultations. Another 

commenter stated that, because patients 

can determine for themselves the need 

to see a specialist, it will be difficult for 

Medicare claims contractors to 

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determine that a referring physician 

should have been reported on a claim. 

Also, the commenters questioned how a 

contractor would know that the visit to 

the specialist was not based on the 

patient’s own decision and not that of 

another physician. 

Response: We agree with the 

commenters that there are a number of 

operational issues associated with a 

requirement that services of a specialist 

be ordered or referred. We have 

removed such requirements from this 

rule. 

Comment: Several commenters 

questioned what is meant by ‘‘imaging 

services’’ and ‘‘imaging suppliers.’’ 

Commenters questioned if the term 

applies only to the technical component 

of imaging services (or global services) 

or if it also applies to the professional 

component. They also requested 

clarification on whether claims for 

imaging services provided in the 

hospital outpatient setting would be 

affected, if independent diagnostic 

testing facilities (IDTFs) and portable 

x-ray suppliers are considered ‘‘imaging 

suppliers’’, and if ‘‘services’’ apply to 

claims for routine x-rays performed in a 

physician’s own office. 

Response: The IFC and this final rule 

specifically refer to the technical 

components of imaging services that are: 

(1) Ordered by physicians and, where 

permitted, other eligible professionals; 

(2) furnished by IDTFs, mammography 

centers, portable X-ray facilities, and 

radiation therapy centers that are 

enrolled in Medicare via the CMS–855B; 

and (3) billed by these Part B suppliers 

to the Part B claims system (MCS) on an 

X12N 837P or a paper form CMS–1500. 

Comment: A commenter stated that 

dentists order few clinical laboratory 

tests but frequently submit orders to 

dental laboratories, and the items and 

services provided by dental laboratories 

are unlikely to be covered by Medicare; 

thus, such orders and services would 

pose little risk of waste and abuse of 

Medicare funds. The commenter urged 

CMS to define ‘‘laboratory’’ as to 

exclude dental laboratories in order to 

clarify dentists’ compliance 

requirements and to relieve dentists of 

an unnecessary compliance burden. 

Response: We do not believe that 

dental laboratories should be excluded 

from the requirements of this final rule. 

We decline to define laboratories in this 

final rule; however, dental laboratories 

are, in fact, laboratories. These 

laboratories, from time to time, provide 

covered services under the limited 

circumstances in which dental services 

are covered by Medicare. 

c. Beneficiary Submissions 

Comment: Several commenters noted 

that the IFC contains requirements for 

beneficiary-submitted claims for home 

health services. These commenters 

stated that Medicare home health 

payments may only be made to 

Medicare certified home health agencies 

under assignment, not to beneficiaries. 

Response: The commenter is correct 

in that beneficiaries do not submit 

claims to Medicare for home health 

services. This is because home health 

agencies are obligated by their 

institutional provider agreement to do 

all of the billing for services that may 

potentially be covered by Medicare. 

Therefore, we are removing the 

requirement that was added at 

§ 424.507(b)(2) of the IFC and have 

revised the language in other sections of 

this rule in accordance with this change. 

Comment: A commenter stated that 

there is no mechanism for ordered or 

referred items and services to be billed 

to a beneficiary when the beneficiary 

requests that the provider or supplier 

submit a claim to Medicare (which 

providers and suppliers are required to 

do under Medicare rules) in situations 

where the provider or supplier is aware 

that the ordering or referring provider 

does not have an approved enrollment 

record or a valid opt-out record in 

PECOS. 

Response: We adhere to a 

longstanding position that if a 

beneficiary receives services that are 

certified by a physician who is not 

enrolled in Medicare and if that 

certifying physician refuses to enroll so 

that a proper claim can be submitted on 

the beneficiary’s behalf, then the 

beneficiary cannot be charged for those 

services. A provider or supplier may be 

able to avoid the circumstances 

described in the comment if they ask the 

ordering or certifying provider if they 

are enrolled in Medicare before the 

ordered or certified services have been 

provided. 

d. Effective/Implementation Dates 

Comment: A commenter pointed out 

that the preamble stated that CMS 

expects that most, if not all, enrolled 

physicians and other eligible 

professionals who do not have 

enrollment records in PECOS, would 

have submitted enrollment applications 

by the end of 2010. Therefore, having an 

effective date of July 6, 2010 for claims 

to be rejected if they do not have records 

in PECOS is very confusing. 

Response: The statement in the 

preamble was meant to convey the 

historical transition and progression of 

program enrollment requirements that 

occurred prior to the passage of the 

Affordable Care Act, and that physicians 

and eligible professionals had been 

complying with the previously stated 

deadline of January 3, 2011. However, it 

does not preempt the effective date 

stated in the IFC. The effective date for 

the provisions contained in sections 

6405 and 6406 of the Affordable Care 

Act, remains July 6, 2010. Because this 

rule was issued as an interim final rule 

with comment period, the provisions 

that implemented the statutory 

provisions became effective 2 months 

after the publication in the Federal 

Register. That interim final rule remains 

in effect until modified and finalized by 

this final rule. 

Comment: A commenter stated that 

the Affordable Care Act gives CMS the 

authority and discretion to maintain the 

original published deadline of January 

3, 2011 and urged CMS to adhere to that 

previously announced deadline. 

Response: As stated in an earlier 

response, section 6405(d) of the 

Affordable Care Act states that the 

amendments made by section 6405 

‘‘shall apply to written orders and 

certifications made on or after July 1, 

2010.’’ We find section 6405(d) of the 

Affordable Care Act to be a clear 

statutory imperative. 

Comment: Multiple commenters 

expressed concern that the July 1, 2010 

date provided 6 months less time to 

implement these requirements than 

previously stated by CMS. Commenters 

believed that the date leaves inadequate 

time for CMS to notify the affected 

physicians (especially those who order 

home health services) and eligible 

professionals of the requirement to 

establish an enrollment record in 

PECOS if one does not already exist. 

These commenters believed the July 6, 

2010 date created an undue burden on 

many providers, especially large 

medical groups, because many of their 

physicians and other professionals are 

affected by this requirement, creating an 

enormous workload on them, as well as 

the CMS contractors. Other commenters 

believe that the Medicare enrollment 

application for physicians is lengthy 

and complex and takes a great deal of 

time to complete, and requires details 

and supporting documents that only the 

physician would be able to provide. The 

commenters also stated that there are 

postal delays when mailing 

applications, and that physicians and 

their staff schedule vacations around 

that time of year. 

Response: The commenters have 

referenced an announcement during an 

open door forum in February of 2010 

wherein we noted a delay of in the 

enforcement of the requirement to enroll 

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in PECOS to January 2011. However, 

this delay was preempted by the new 

statutory effective date in the Affordable 

Care Act, passed on March 23, 2010. 

The Affordable Care Act includes 

amendments to the Act that apply to 

written orders and certifications made 

on or after July 1, 2010. Because we 

must follow the statutory effective date, 

we have instituted these regulations 

accordingly. 

To provide the physician and eligible 

professional communities with the 

opportunity to comply with this 

regulation, we have made some 

modifications to the final rule which we 

believe will assist in that effort. The 

Affordable Care Act mandated that 

physicians and eligible professionals 

who order and refer must be enrolled in 

Medicare, the program. This final rule 

mandates the same, mirroring the 

statutory language. The IFC required an 

enrollment in PECOS, our data 

repository system for storing enrollment 

records. The Medicare legacy systems 

predate the PECOS system. However, 

those systems are being phased out and 

in the near future will no longer be 

used. At this time, the only way to 

enroll in Medicare is to establish an 

enrollment record in PECOS. We have 

been working towards fully populating 

PECOS and transferring those providers 

and suppliers in the legacy systems over 

to PECOS. This is being done by 

requiring that providers and suppliers 

revalidate their enrollment records, 

which we have separate and established 

authority to do. By revalidating, 

providers and suppliers will then have 

an enrollment record in PECOS. Those 

physicians and eligible professionals 

who only have an enrollment record in 

a local legacy system have been asked 

to revalidate first, so that they may be 

included on the Ordering Referring 

Report (explained in subsequent 

responses). We have made it clear to the 

physician and eligible professional 

communities that we would not turn on 

the automated edits that would cause a 

claim not to be paid until all physicians 

and eligible professionals have been 

asked to revalidate and have been given 

the opportunity to complete that process 

through their respective Medicare 

Administrative Contractors (MACs). In 

this final rule, although we have 

expanded our requirement from 

requiring enrollment in PECOS to one 

requiring enrollment in Medicare, 

which includes enrollment in PECOS or 

the local legacy systems, our 

requirements have not practically 

changed. 

We believe that the aforementioned 

modification of the IFC will not create 

an additional burden because 

information will be gathered through 

the normal revalidation process. To 

address the commenters’ concerns 

regarding the lengthy enrollment forms, 

we have modified the enrollment 

process for those enrolling only to order 

and certify. The CMS–855O form is 

available now for use and is 

significantly shorter than the original 

enrollment forms. Additionally, 

although those physicians and eligible 

professionals who wish to enroll in 

Medicare to order and certify, but do not 

wish to bill the Medicare program, will 

need to provide information to us via 

the CMS–855O form, they will not be 

required to submit financial 

information, including filling out a 

CMS–588 Electronic Funds Transfer 

(EFT) form. We believe that these 

modifications have addressed the 

concerns raised by these commenters. 

Comment: A commenter suggested 

that CMS should delay implementation 

of these requirements until 5 percent or 

fewer physicians and other eligible 

professionals lack approved enrollment 

records or valid opt-out records in 

PECOS. 

Response: The Affordable Care Act 

requires that physicians who order 

certain items or services must be 

enrolled in Medicare. As previously 

stated, we have changed the enrollment 

requirement from one mandating 

enrollment in PECOS to one requiring 

enrollment in Medicare—including 

PECOS or other legacy Medicare 

enrollment systems. In addition, as we 

have indicated in this final rule and in 

open door forums, we have not yet 

activated the automated edits that 

would cause claims for services or 

supplies not to be paid for lack of an 

approved enrollment record in 

Medicare. We will provide advance 

notice of activation of the automated 

edits. We believe these changes alleviate 

the concerns of the commenter. 

Comment: A commenter suggested 

that if the July 6, 2010 date remains in 

effect, consideration should be given to 

processing and paying claims if the 

ordering or referring provider has an 

enrollment application in process at a 

CMS contractor. 

Response: We have changed the 

enrollment requirement from one 

requiring enrollment in PECOS to one 

requiring enrollment in Medicare— 

including PECOS or other legacy 

Medicare enrollment systems. However, 

physicians and eligible professionals 

must have an approved enrollment 

record in Medicare, not a pending 

record in Medicare to order and certify 

services for Medicare beneficiaries. 

Comment: Several commenters 

questioned whether the practice of 

providers billing for services after July 

6, 2010 and the ordering or referring 

provider’s failure to have a record in 

PECOS at that time, could trigger 

liability under the False Claim Act. 

Response: The False Claims Act 

(FCA), 31 U.S.C. 3729 through 3733, 

imposes civil liability for the knowing 

submission of a false or fraudulent 

claim for payment and the Department 

of Justice investigates and litigates 

alleged FCA violations. Therefore, any 

question related to FCA liability is 

beyond the scope of this rule. 

Comment: Another commenter asked 

if providers that submitted claims 

between July 2010 and December 2010 

that fail the edits because the ordering 

or referring provider or eligible 

professional did not have an enrollment 

record in PECOS may eventually be 

held liable for non-compliance and 

could face rejected claims and 

recoupment by Zone Program Integrity 

Contractors (ZPICs), Contractor Error 

Rate Testing (CERT), Durable Medical 

Equipment Medicare Administrative 

Contractors (DME MACs), and Recovery 

Audit Contractors (RACs), and other 

contractors at any point after July 1, 

2010, noting that a tremendous number 

of claims would have failed those edits 

during that timeframe. 

Response: We have delayed the 

implementation of automated edits that 

would cause a claim not to be paid due 

to the lack of an approved enrollment 

record in Medicare for the ordering or 

certifying physician or eligible 

professional. This final rule does not in 

any way provide relief to providers 

whose claims would be subject to 

recoupment by any CMS contractor, 

including ZPICs, RACs, and MACs, as 

well as any law enforcement partner, 

due to improper payments resulting 

from any other reason unrelated to the 

ordering or certifying requirements. We 

always retain the right to pursue fraud 

and recoup money for claims that did 

not meet the requirements of the IFC. 

However, for operational reasons, we do 

not believe it would be a prudent use of 

resources to pursue large-scale 

recoveries against claims with dates of 

service from July 2010 until such time 

as we activate prepayment edits that 

identify claims that do not have proper 

documentation of enrolled ordering 

and/or certifying suppliers. 

Comment: Commenters stated that 

claims for home health services are 

reimbursed on a 60-day episode basis, 

and claims submitted on or after July 6, 

2010 would be for services provided in 

April, May, and June. The commenters 

stated that because the IFC was 

published on May 5, 2010, it may apply 

to home health services ordered before 

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May 5, and would not be fair to require 

retroactive compliance with a new 

regulation. 

Response: We will provide advance 

notice to providers and suppliers of the 

date we plan to activate the automated 

edits that would cause a claim not to be 

paid for the lack of an enrollment record 

in Medicare. No part of this final rule 

will require retroactive compliance for 

periods of time before July 6, 2010. 

Further, the edits will apply to only 

those claims with a date of service on 

or after the date the edits are activated. 

Comment: Commenters argued that 

the July 6, 2010 date should apply only 

to orders and referrals for DMEPOS and 

home health services, as those are the 

only ordered or referred items or 

services specifically named in the 

Affordable Care Act, and that those who 

order or refer imaging, laboratory and 

specialist services (which are not named 

in the law but CMS names in the IFC) 

should have been given until January 3, 

2011 to enroll/re-enroll. Similarly, 

another commenter stated that 

laboratory services were not subject to 

the provisions of the Affordable Care 

Act; therefore, if CMS exercises its 

statutorily-given discretion and 

determines that they must meet the 

requirements of the IFC, CMS should 

have given laboratories until January 3, 

2011 to be in compliance. 

Response: Extending the ordering and 

referring enrollment requirements to 

other providers and suppliers is 

permitted by statutory provisions in 

6405(c) of the Affordable Care Act, 

including laboratory and imaging 

services. However, as noted in the 

responses to comments, we have 

eliminated from the final rule the 

requirements related to referrals to 

physician specialists. The statutory 

effective date is binding for all 

applicable provisions of this rule, 

including those specifically mandated 

in the Affordable Care Act provisions, as 

well as those added at the discretion of 

the Secretary. Therefore, we are not able 

to make the suggested change. 

Comment: Several commenters stated 

that CMS should flag claims with a date 

of service after July 6, 2010 that have 

been rejected due to the ordering or 

referring provider not having an 

enrollment record in PECOS and that 

CMS should then communicate this 

information to the billing provider and 

CMS should use this information to 

target outreach to non-PECOS ordering 

or referring providers. Some 

commenters stated that physicians do 

not understand why other providers/ 

suppliers, instead of CMS, are notifying 

them of the need to have records in 

PECOS. 

Response: As stated previously, 

Medicare contractors have 

communicated in writing with enrolled 

physicians and nonphysician 

practitioners who do not have 

enrollment records in PECOS and have 

urged them to establish those records 

through revalidation. Suppliers who 

have submitted claims for items and 

services ordered and referred by nonenrolled physicians have been receiving 

informational messages that these 

claims are not in compliance with the 

enrollment requirements but are not 

being denied at this time. We are aware 

that some suppliers have been 

communicating with those individuals 

who ordered and referred items and 

services about the requirement to enroll 

in Medicare and we encourage all 

suppliers to do so. We believe that our 

outreach documents and messages 

provided at our provider open door 

forums are clear, comprehensive, and 

continue to stress the importance of 

having an enrollment record in PECOS. 

We will continue our direct outreach 

with these communities as we 

implement this final rule. 

Comment: Due to the short timeframe 

for complying with the new provisions, 

several commenters questioned that we 

allow the effective date for ordering 

home health services by newly enrolling 

physicians be the date the physician 

mails the signed CMS–855 Certification 

Statement to the Medicare contractor. 

Response: The statute requires that 

enrollment must be valid based on the 

date of the order or referral. As noted in 

the preamble of this final rule, the final 

rule requires enrollment based on the 

date of service, not the mailing date of 

the CMS–855 Certification Statement. In 

order for a physician or non physician 

practitioner to be enrolled in Medicare, 

the Medicare contractor must process 

the enrollment application to a final 

approved status. This process could take 

approximately 45 days or more, 

depending upon various factors. To 

allow physicians and eligible 

professionals sufficient time to enroll to 

order and certify, we will provide ample 

notice of our plans to activate the 

automated edits that will cause a claim 

not to be paid due to the lack of an 

approved enrollment record in Medicare 

to order and certify. 

Comment: A commenter stated that 

because CMS recently implemented the 

Outcome and Assessment Information 

Set (Oasis C) for home health agencies, 

making the effective date of July 6, 2010 

in the IFC would be even more onerous 

and difficult to implement due to such 

short notice. 

Response: The effective date for the 

enrollment requirements for physicians 

and eligible professionals who order 

and certify covered items and services 

was mandated by statute. Consequently, 

we are not able to change the effective 

date. 

e. Enrollment Records, PECOS, FISS, 

NPPES, and the Ordering Referring 

Report 

Comment: A few commenters 

questioned why CMS needs PECOS 

when there is already an NPI database. 

Response: PECOS is a Medicare 

enrollment repository and the ‘‘NPI 

database’’ (NPPES) is the repository of 

information about health care providers 

who have been assigned NPIs and their 

assigned NPIs. Any health care provider 

who has an NPI has a record in NPPES. 

Not all health care providers in NPPES 

are in PECOS, because not all health 

care providers with NPIs are enrolled in 

the Medicare program. Please see the 

CMS NPI Web page for more 

information about NPIs and NPPES 

www.cms.gov/NationalProvIdentStand/. 

Comment: A commenter did not 

understand why an ordering physician 

had to have an enrollment record in 

PECOS when the physician already has 

an NPI. 

Response: Having an NPI does not 

mean that a physician is enrolled in the 

Medicare program or that the physician 

has an enrollment record in PECOS or 

in Medicare. The Affordable Care Act 

requires that physicians who order 

certain items or services must be 

enrolled in Medicare. We have changed 

the enrollment requirement language 

from one requiring enrollment in 

PECOS to one requiring enrollment in 

Medicare—including PECOS or other 

legacy Medicare enrollment systems. 

This final rule requires that physicians 

report an NPI on new enrollment 

records and on submitted claims for 

payment. We will use our existing 

authority to revalidate enrolled 

providers, which will require the 

reporting of the NPI on an enrollment 

application. 

Comment: A commenter 

recommended that CMS consider a bidirectional interface between PECOS 

and NPPES to permit both systems to 

contain the information necessary for a 

provider to verify that the ordering or 

referring physician is a qualified 

provider of Medicare services. 

Response: While we appreciate the 

commenter’s point of view, NPPES is an 

entirely separate entity from Medicare 

and PECOS. NPPES simply assigns NPIs 

and collects the corresponding 

information for those numbers. NPPES 

does not collect Medicare enrollment 

information. PECOS collects Medicare 

enrollment information, as do CMS’s 

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legacy systems. Medicare verifies the 

credentials of its enrolling providers 

and suppliers as part of the provider 

and supplier enrollment process that 

occurs when Medicare contractors 

process Medicare enrollment 

applications. This verification does not 

occur when health care providers apply 

for and are assigned NPIs by NPPES. 

Comment: A commenter stated that 

providers and suppliers, including 

practitioners, may not know whether 

they have NPIs in their enrollment 

records in PECOS, or what they need to 

do in order to comply with the NPI 

requirement to submit the NPIs to CMS 

by July 6, 2010. 

Response: We have established a 

number of ways for providers and 

suppliers to inquire about their status 

with Medicare. 

• Providers and suppliers may start 

by referring to the NPI Registry online 

to search for their NPI. Those eligible for 

an NPI, who are enrolled in Medicare, 

must establish an NPI and update their 

enrollment records with Medicare. 

• Providers and suppliers may also 

refer to the Ordering Referring Report to 

verify their enrollment records. The 

Ordering Referring Report is a report 

published by CMS that reflects the 

approval status of all physician and non 

physician practitioners who have 

applied to order and refer. The report 

will show all practitioners who have an 

approved record in PECOS to order and 

refer and practitioners who have an 

application that has been received and 

is pending approval. The report is 

available via the following link: http:// 

www.cms.gov/MedicareProviderSup

Enroll/06_MedicareOrderingand

Referring.asp#TopOfPage. 

• Providers and suppliers may also 

use Internet-based PECOS to view their 

enrollment records. This will also 

enable the user to determine whether 

their NPI is included in their enrollment 

record in PECOS. 

Comment: Several commenters, 

noting that not all Medicare providers 

and suppliers who have enrollment 

records in PECOS have NPIs in those 

records, believed that the requirement 

for such providers and suppliers to 

submit, by July 6, 2010, enrollment 

applications that contain the NPI would 

overwhelm the Medicare contractors, as 

this would be an additional burden on 

the contractors that already have 

backlogs of enrollment applications to 

process. They recommended that CMS 

issue guidance to its contractors for 

establishing a process for those who 

need to establish enrollment records in 

PECOS, as well as those who need to 

add their NPIs to their enrollment 

records, and to hold such providers and 

suppliers harmless for failure to submit 

the required enrollment applications or 

add their NPIs to their enrollment 

records prior to having been notified to 

do so by their designated Medicare 

contractors. 

Response: The Medicare provider/ 

supplier enrollment Web site assists 

providers and suppliers in determining 

whether they have enrollment records 

in PECOS and also provides information 

on how to enroll. We will continue to 

convey these messages, as appropriate, 

via our provider/supplier open door 

forums, in CMS provider listserv 

messages, in Medicare Learning 

Network products, and in our 

conversations and discussions with 

national provider and supplier 

organizations. 

As stated previously, we will provide 

ample notice of our plans to activate the 

automated edits that will cause a claim 

not to be paid due to the lack of an 

approved enrollment record in Medicare 

to order and certify. Therefore, there is 

no reason for us to hold providers 

harmless for failing to be compliant 

with this requirement. 

Comment: Many commenters stated 

that physicians’ practices do not 

understand the PECOS system and that 

CMS help is difficult to obtain. The 

commenter stated that the help number 

is only available 4 hours per day and 

providers cannot get through. Another 

commenter believed the PECOS process 

to be quite difficult and time 

consuming. 

Response: We have provided PECOS 

instructional guides for physicians, 

nonphysicians and DMEPOS suppliers 

available at: http://www.cms.gov/ 

MedicareProviderSupEnroll/ 

04_InternetbasedPECOS.asp. 

The CMS End User Services (EUS) 

Help Desk operates under our direction 

and is equipped to respond to 

operational systems issues related to 

Internet-based PECOS that are reported 

by providers and suppliers. Examples of 

issues that should be reported to the 

CMS EUS Help Desk include access 

problems (for example, user ID and 

password do not work, forgotten User ID 

or password, help in setting set up User 

ID or password), difficulty in 

understanding how to follow the 

screens in the application process, error 

messages, and system performance 

issues. The telephone number of the 

CMS EUS Help Desk is 1–866–484–8049 

(TTY/TDD 1–866–523–4759); the email 

address is EUSSupport@cgi.com. The 

CMS EUS Help Desk days and hours of 

operation are Monday through Friday, 

7 a.m. to 7 p.m. Eastern Time. The CMS 

EUS Help Desk is unable to answer 

enrollment policy questions; those 

questions must be directed to the 

Medicare contractors. Medicare 

provider enrollment contact information 

for each State can be found in the 

download section of http:// 

www.cms.gov/ 

MedicareProviderSupEnroll/. We will 

investigate all reports of slowness or 

similar systems problems that Internetbased PECOS users may experience and 

report to the CMS EUS Help Desk. 

Providers and suppliers with 

questions regarding the use of PECOS 

for the enrollment process should 

contact their jurisdiction’s MAC. 

Although each MAC’s hours of 

operation may vary, their normal 

business hours are generally established 

at 8 hours daily. Each MAC is required 

to comply with certain training 

exercises; therefore, there may be times 

when the hours of operation are 

shortened to 4 hours. The MACs may 

also be closed on Federal holidays. We 

do not believe that these limited 

interruptions significantly impact the 

MAC’s ability to provide assistance 

related to PECOS due to these limited 

periods of interruption. 

Comment: A commenter stated that 

CMS has confused physicians 

unnecessarily by referring to PECOS 

interchangeably as both an enrollment 

repository and as a Web site. They think 

that when they ‘‘sign up’’ to use the 

Web site, they have enrolled, only to 

find out that they still need to submit an 

application, a much more cumbersome 

process. 

Response: Internet-based PECOS is a 

secure Web site providers can log into 

and then submit an application to 

enroll. In order to use Internet-based 

PECOS, a provider or supplier must log 

in by entering his or her User ID and 

password or register to obtain log in 

information in the PECOS Identity and 

Access (I&A) System. Logging on or 

registering is not enrolling or updating 

an enrollment record. After access to 

Internet-based PECOS is granted, the 

user must complete and then submit the 

enrollment application electronically; 

then the user must print the 

Certification Statement and have it 

signed and dated by the appropriate 

individual, gather any required 

supporting paper documentation, and 

send this material to the designated 

Medicare contractor. After the 

designated contractor receives the 

signed and dated Certification 

Statement and any additional paper 

documentation, it begins to process the 

enrollment application to an approved 

(approved or opt-out) or disapproved 

status. Once the application is 

approved, the provider or supplier will 

have an approved enrollment record or 

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a valid opt-out record in PECOS. We 

have revised some of the material on the 

Medicare provider/supplier enrollment 

Web site in an attempt to clarify 

requirements and processes to address 

the concerns expressed by the 

commenter. PECOS can be accessed 

here: https://pecos.cms.hhs.gov/pecos/ 

login.do. 

We offer additional information on 

internet-based PECOS on our Web site. 

This information includes several 

Medicare Learning Network (MLN) 

articles that provide providers and 

suppliers with in-depth information to 

assist them in navigating the enrollment 

process. 

Comment: A commenter stated that 

the ‘‘find a doctor’’ link on the 

Medicare.gov Web site does not inform 

beneficiaries of the PECOS requirements 

or indicate whether the physicians it 

suggests to patients are PECOS enrolled. 

Another commenter noted that it will be 

difficult for Medicare beneficiaries to 

know if their physician has an 

enrollment record in PECOS. The 

commenter also stated that if the 

physician does not have an approved 

record in PECOS, and he/she orders or 

refers, and the provider or supplier 

refuses to furnish the item or service, 

the beneficiary will develop further 

health problems, causing more problems 

for the beneficiary as well as the 

taxpayer and the provider. Another 

commenter stated that beneficiaries 

should be made aware of the impact of 

these requirements on their ability to 

access subsequent care. 

Response: We use a number of 

communication vehicles to 

communicate with beneficiaries about 

Medicare including the annual 

Medicare and You Handbook describing 

the program, which refers to the 

requirements that physicians and 

eligible professionals, were applicable, 

who order and certify Medicare services 

for beneficiaries must be enrolled in 

Medicare. The Medicare.gov Web site 

uses PECOS as the source of the 

information it displays about 

physicians. We are continually updating 

the information in PECOS to be sure 

that it is complete and accurate. The 

Affordable Care Act requires that 

physicians who order certain items or 

services must be enrolled in Medicare. 

We recognize that this requirement may 

pose issues for beneficiaries who need 

care and who are unsure whether their 

physician is enrolled in Medicare. As 

mentioned earlier in this preamble, 

there are a number of ways a beneficiary 

can determine whether a physician is 

actually enrolled in Medicare, including 

to ask the physician whether he or she 

is enrolled. In addition, for ease of 

access, we have created the Ordering 

Referring Report that provides the 

public, including beneficiaries, 

information on who is enrolled in 

Medicare to order and certify (available 

at http://www.cms.gov/ 

MedicareProviderSupEnroll/ 

06_MedicareOrderingandReferring.asp). 

To ensure that Medicare beneficiaries 

are aware of the need for the providers 

and suppliers from whom they receive 

items and services to be enrolled in 

Medicare (even if only to order and 

certify, when permitted) or to have 

validly opted-out of Medicare, we will 

continue to share information with 

senior citizens’ organizations and create 

special messages for Medicare 

beneficiaries about these issues and 

processes. We believe all of these 

changes reduce the risk that 

beneficiaries will be disadvantaged by 

implementation of the statutory 

requirements. 

Comment: Many commenters stated 

that the Affordable Care Act requires 

physicians who order or refer DMEPOS 

and home health services to be enrolled 

in Medicare but does not require them 

to have enrollment records in PECOS, 

whereas the IFC requires the latter. The 

commenters suggested that CMS should 

focus on ensuring that those who order 

and refer DMEPOS and home health 

services and who have never enrolled in 

Medicare, must enroll in Medicare, and 

CMS should have let those who are 

enrolled and not yet in PECOS have 

until January 2011 to get their 

enrollment information into PECOS. 

This could help reduce the strain on the 

enrollment contractors. 

Response: The Affordable Care Act 

requires that physicians who order 

certain items or services must be 

enrolled in Medicare. In response to 

comments, we have changed the 

enrollment requirement language from 

one requiring enrollment in PECOS to 

one requiring enrollment in Medicare— 

including PECOS or other legacy 

Medicare enrollment systems. However, 

as we explained in this preamble, we 

will be transitioning all legacy system 

enrollees to PECOS via our revalidation 

process and will delay the activation of 

the automated edits. Once implemented, 

these edits will cause a claim, for the 

lack of an approved enrollment record 

in Medicare for the ordering or 

certifying physician or other eligible 

professional, not to be paid. These edits 

will not be activated until the 

revalidation process is completed for 

the relevant supplier groups that order 

and certify. The Affordable Care Act 

does not authorize the Secretary to 

arbitrarily implement this rule for 

certain providers and suppliers who 

enroll to order and certify. We believe 

that the delay of the automated edits 

alleviates the commenters’ concerns. We 

require that providers and suppliers be 

enrolled in the Medicare program or 

that they have validly opted out of the 

Medicare program as of the date of 

service, beginning with dates of service 

of July 6, 2010. However, as already 

stated, we will provide advance notice 

of the activation of the automated edits 

that pertain to these claims. 

Comment: A commenter stated that 

physicians who have attempted to 

enroll in order to get their enrollment 

data into PECOS have had their 

applications returned to them with 

instructions that there is no need for 

their applications to be updated at this 

time. 

Response: We understand that there 

has been some confusion in the past and 

have instructed our Medicare 

contractors to process these 

applications. Our instructions to the 

enrollment contractors also state 

specifically that physicians who are 

currently enrolled in PECOS and have 

an NPI in their records need not 

resubmit an application to enroll to 

meet the statutory requirements 

addressed in this final rule. Our 

enrollment contractors receive on-going 

training to address these types of issues 

and we do not expect any confusion in 

the future. 

Comment: Several commenters stated 

that physicians have used Internetbased PECOS to enroll but their names 

are not in the Ordering Referring Report 

available on the CMS Web site at 

www.cms.gov/ 

MedicareProviderSupEnroll. 

Response: We are evaluating the 

reasons why physicians or other eligible 

professionals do not appear on the 

Ordering Referring Report. If a 

physician or other eligible professional 

believes that he or she has been omitted 

from this report in error, we encourage 

them to contact their respective 

Medicare contractor for assistance. 

Comment: A commenter asked CMS 

to define what is meant by an 

‘‘approved enrollment record in 

PECOS.’’ Further, the commenter 

thought that Medicare contractors 

should retroactively approve each 

enrollment application found in PECOS 

to the date the application was initially 

submitted to CMS. The commenter 

believed this would be consistent with 

the effective date of enrollment in 

Medicare for physicians, non physician 

practitioners, and physician and non 

physician practitioner organizations, 

which is defined at § 424.520(d) as the 

latter of the first date the individual 

began furnishing services at a new 

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practice location or the date of filing of 

the application that is subsequently 

approved. 

Response: For purposes of this final 

rule, an ordering or certifying provider 

must be enrolled in Medicare in an 

approved or a valid opt-out status as of 

the date of service on the claim. As the 

commenter stated, under § 424.520(d), 

the effective date of Medicare billing 

privileges for physicians and 

practitioners is the date of filing of a 

Medicare enrollment application that is 

subsequently approved or the date an 

enrolled physician or non physician 

practitioner first began furnishing 

services at a new location, whichever is 

later. The provider may begin ordering 

or certifying items and services as of the 

effective date of his/her Medicare billing 

privileges. 

Comment: Some commenters 

suggested that CMS provide more 

information about the Medicare legacy 

claims system and how providers can 

access it, as the legacy claims system is 

another way that ordering or referring 

providers can be in compliance with 

existing ordering or referring provider 

requirements. 

Response: Providers are not permitted 

to access the Medicare legacy claims 

systems and there is no need for them 

to do so. In earlier responses, we have 

explained numerous ways for providers 

to access the records that provide the 

information sought by the commenters. 

Comment: Several commenters noted 

that the Ordering Referring Report that 

is available on the CMS provider/ 

supplier enrollment Web page is 

difficult to use effectively. 

Response: We revised this report so 

that it is more user-friendly. The 

Ordering Referring Report is now 

available on the Medicare provider/ 

supplier enrollment Web site in two 

formats: PDF and CSV. The PDF format 

enables a person to search for a 

particular physician or other eligible 

professional, either by NPI or by name. 

We believe these changes have 

alleviated the problems associated with 

conducting searches and we will 

continue working to improve the quality 

of search capabilities. 

Comment: Some commenters 

requested that the report be made 

available more frequently, such as daily. 

Response: The Ordering Referring 

Report is replaced at a minimum of once 

per week. We do not believe that more 

frequent availability (daily, real-time) is 

necessary or practical. As mentioned in 

a previous response, a report of 

physicians and other eligible 

professionals whose enrollment 

applications are in process is also 

available on the same Web site. 

Comment: A commenter stated it has 

no way of knowing when an enrolled 

physician establishes an enrollment 

record in PECOS in order to resubmit a 

claim that had been submitted but had 

failed the ordering or referring provider 

edit. 

Response: The Ordering Referring 

Report is updated at a minimum of once 

per week and is available in two 

formats, as noted earlier. By comparing 

information in a provider’s or supplier’s 

previously submitted claims to the 

information in this file, it is possible to 

determine if the ordering or certifying 

providers identified in previously 

submitted claims are enrolled in 

Medicare in an approved status or have 

validly opted-out. 

Comment: A commenter stated that 

PECOS must be updated daily or 

patients will be incorrectly denied 

services. 

Response: PECOS, the national 

Medicare FFS provider and supplier 

enrollment system, is updated daily, 

and an extract of PECOS enrollment 

data is transmitted electronically each 

night to the Medicare claims systems. 

Comment: A commenter stated that a 

physician who received an enrollment 

letter from CMS could not be found on 

the Ordering Referring Report. 

Response: There were some errors in 

the generation of the Ordering Referring 

Reports that were produced in the late 

spring of 2010 that resulted in the 

omission of some physicians and other 

eligible professionals from the Ordering 

Referring Report. We have corrected the 

errors. 

Comment: Several commenters stated 

that home health agencies should be 

given the capability to access the Fiscal 

Intermediary Standard System (FISS) to 

research the enrollment status of 

enrolled and opt-out physicians, as FISS 

is updated daily. 

Response: As stated in an earlier 

response, providers and suppliers may 

not access the claims systems. 

Information regarding a provider or 

supplier’s enrollment status is available 

by checking the files we post on the 

Medicare provider/supplier enrollment 

Web site, or by inquiring with the 

ordering or certifying providers. 

f. Enrollment Applications and 

Processing 

Comment: Commenters stated that 

Medicare enrollment contractors are not 

processing enrollment applications in a 

timely manner, are not providing 

accurate information to inquiring 

physicians and others, are not 

responding timely to questions, and that 

this made it impossible for those 

physicians and other practitioners to 

have enrollment records in PECOS by 

July 6, 2010. A commenter asserted that 

it has taken a total of 90 days or more 

for contractors to process enrollment 

applications and for CMS to include the 

physician in the Ordering Referring 

Report, making the July 6, 2010 date 

unacceptable. The commenter also 

suggested that the new future deadline 

will put even more of a strain on the 

Medicare enrollment contractors, who 

are already behind in processing 

enrollment applications. 

Response: Additional resources have 

been allocated to Medicare contractors 

to enable the processing of increased 

numbers of enrollment applications. 

Furthermore, we have undertaken many 

activities to streamline the process and 

assist the provider and supplier 

communities in complying with this 

rule. These include: (1) Modifying the 

enrollment requirement language from 

one requiring enrollment in PECOS to 

one requiring enrollment in Medicare— 

including PECOS or other Medicare 

enrollment systems; (2) not immediately 

activating the automated edits that 

would cause claims for items or services 

not to be paid for lack of an approved 

enrollment record in Medicare; and (3) 

providing a streamlined application for 

those providers and suppliers who wish 

to enroll to order and certify (CMS– 

855O). We have worked with the 

provider and supplier community to be 

responsive to application processing 

concerns and are continuously working 

to make the enrollment process faster 

and easier for the provider and supplier 

communities. 

Comment: Many commenters 

suggested that CMS increase resources 

to contractors to ensure that customer 

service lines are answered promptly 

including the Internet-based PECOS call 

center and the NPI Enumerator call 

center. The commenter also noted that 

customer service training should be 

improved, and that information 

submitted by physicians should not be 

lost. 

Response: We agree with the 

commenter. We have taken a number of 

steps to address the commenter’s first 

concern. The CMS EUS Help Desk (the 

Internet-based PECOS call center) is 

hiring more staff and is more thoroughly 

educating its employees on how to 

properly handle issues and problems 

related to Internet-based PECOS. We 

have made improvements in the 

language used on the screens in 

Internet-based PECOS to help eliminate 

confusion. We have also taken steps to 

ensure the system operates more 

smoothly and consistently. The NPI 

Enumerator call center remains fully 

staffed and funded to assist those 

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physicians and other eligible 

professionals who need to obtain or 

establish NPIs, as well as those who 

have lost or forgotten their NPPES User 

IDs and passwords to enable them to use 

Internet-based PECOS. In addition, we 

are continuing to make major revisions 

to the enrollment process that will 

significantly reduce delays and other 

problems associated with PECOS 

enrollment. 

Comment: A commenter stated that a 

Medicare contractor requires physicians 

to submit multiple CMS–855I and 855R 

forms, one for each Medicare-assigned 

Provider Transaction Access Number 

(PTAN). The commenter was concerned 

that this is resource-intensive on the 

physician and the contractor. 

Response: We do not require 

physicians or other eligible 

professionals to submit multiple 

enrollment applications (CMS–855I 

forms) in situations where they have 

more than one PTAN unless the PTANs 

represent practice locations that exist in 

more than one Medicare contractor 

jurisdiction. In that situation, a 

physician or other eligible professional 

would need to submit an enrollment 

application to each Medicare contractor; 

a Medicare contractor has access only to 

the PECOS enrollment records with 

practice locations within that 

contractor’s jurisdiction. The 855R form 

is not an enrollment application, as 

such. This form is used to reassign 

benefits to another provider or supplier, 

such as a physician group practice. This 

has a very different function than the 

standard enrollment forms. 

Additionally, in an effort to streamline 

our enrollment for this final rule, we 

have developed the new CMS–855O 

form. This form will be available to 

those physician and nonphysician 

practitioners who wish to submit an 

enrollment application just for the 

purposes of ordering and certifying. 

Comment: A commenter stated that 

the enrollment processing time should 

be more reasonable, such as 7 to 14 

days. 

Response: Many of the applications 

submitted to the Medicare contractors 

are processed in as little as 14 days. 

However, Medicare contractors must 

verify information reported in the Webbased and paper enrollment 

applications, and sometimes need to 

obtain additional information or 

clarification from enrolling providers 

and suppliers. Providers and suppliers 

are not always timely in furnishing the 

requested clarifications or additional 

information, which may add 

substantially to the processing time and, 

if the requested information is not 

furnished within the timeframe required 

by the Medicare contractor, it may cause 

an enrollment application to be rejected. 

Paper enrollment applications take 

longer to arrive at the Medicare 

contractors and take longer to process 

than those submitted via Internet-based 

PECOS for several possible reasons 

related to paper applications that may 

be missing required data; may contain 

illogical dates or incorrect, incomplete, 

missing addresses or telephone 

numbers; or may be missing required 

supporting documentation. The 

increased volume of enrollment 

applications has resulted in slightly 

longer processing times. However, since 

we changed the enrollment requirement 

from one requiring enrollment in 

PECOS to one requiring enrollment in 

Medicare—including PECOS or other 

Medicare enrollment systems, we 

believe we have eliminated some of 

those possible problems and delays in 

processing during the revalidation 

process. This change has ensured that 

claims of existing approved Medicare 

providers have not been disrupted. 

Comment: A commenter stated that 

CMS should make available data 

regarding enrollment applications 

submitted due to these new 

requirements and detail the success of 

the Medicare contractors in processing 

the applications within the required 

timeframes. 

Response: We make available on the 

Medicare provider/supplier enrollment 

Web site a report showing the legal 

names and NPIs of physicians and other 

eligible professionals who have 

enrollment applications being processed 

by the Medicare contractors. For 

purposes of this final rule, we do not 

believe it appropriate to include the 

enrollment application processing times 

of the Medicare contractors. Many 

factors influence the time it takes to 

process an enrollment application, 

including the method (Web or paper) by 

which the enrollment application was 

submitted and the completeness of the 

application. Medicare contractors have 

several methods available to them for 

managing their workloads successfully. 

However, we do monitor application 

processing activities for timeliness and 

other performance variables. 

Comment: A commenter stated that 

the IFC expanded the scope of the 

statute by including radiology and 

pathology services as ordered or referred 

items and services. The commenter 

asserted that many more physicians 

order these services than order 

DMEPOS, and that CMS has not 

permitted adequate time for physicians 

to become aware of this expansion and, 

if necessary, establish enrollment 

records in PECOS. The commenter 

asked that CMS determine the number 

of physicians who must establish 

enrollment records in PECOS and then 

establish manageable timeframes for 

processing the revalidations. The 

commenter suggested that CMS also 

consider having the Medicare 

contractors create special processing 

units to process only voluntary 

revalidation applications. 

Response: Section 6405(c) of the 

Affordable Care Act permits the 

Secretary to extend the requirement to 

all other categories of items or services, 

including imaging services and clinical 

laboratory services. We have a general 

sense of the pool of affected physicians 

and other eligible professionals who 

must establish enrollment records in 

Medicare and have established 

manageable timeframes for processing 

the revalidations. Additionally, we have 

engaged in outreach efforts with the 

impacted medical communities. As a 

result, those who order imaging services 

and clinical laboratory services should 

be fully aware that they need to be 

enrolled in Medicare or have validly 

opted- out of Medicare to continue to 

order those services. We do not believe 

there is a need to provide additional 

time for those who order imaging 

services and clinical laboratory services 

to enroll in Medicare. 

By ‘‘voluntary revalidation 

applications,’’ we believe the 

commenter is referring to enrollment 

applications submitted by enrolled 

physicians and other eligible 

professionals absent the receipt of a 

revalidation letter from a Medicare 

contractor. Revalidation requests are 

generated by Medicare contractors, and 

providers and suppliers are given a 

specific period of time in which to 

submit their enrollment applications. 

Medicare contractors give priority to 

processing all initial enrollment 

applications and to those who are 

enrolling just to order and certify. We 

do not accept voluntary revalidation 

applications and we do not intend to in 

the future. 

g. CMS Outreach Activities and 

Education 

Comment: Commenters stated that 

home health agencies, who learned of 

these requirements when reading the 

IFC, need time to educate physician and 

hospital communities on the dual issues 

of the physician status in PECOS and 

potential adverse impact on access to 

post-acute care services for their 

patients. A commenter requested that if 

the July 6, 2010 date for the ordering or 

referring supplier requirement for 

physicians is not moved to January 3, 

2011, CMS should—(1) Fund 

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enrollment contractors for physician 

outreach and enrollment application 

processing; (2) direct contractors to set 

up dedicated lines to expedite inquiries 

and resolve problems related to 

enrollment and PECOS; and (3) send out 

messages through electronic means, set 

up open door meetings, and utilize 

other DHHS communications tools to 

ensure physicians are aware of the 

accelerated deadline and have the 

ability to meet it. 

Response: We agree that provider 

communication and information is 

central to the success of the 

requirements mandated by this final 

rule. We have implemented a 

communications plan for the 

requirements. Furthermore, the delay in 

the activation of the automated edits 

and the changes made in this final rule 

will assist the provider and supplier 

communities in complying with this 

rule. We will continue to convey these 

messages via open door forums, 

Medicare Learning Network articles, 

and other venues. 

Comment: Many commenters stated 

that CMS should develop an aggressive 

outreach enrollment campaign for 

physicians, as they may be unaware of 

the need to establish enrollment records 

in PECOS if they are enrolled and do 

not have records in PECOS, and they 

may be unaware of the requirement to 

report their NPI on a Medicare 

enrollment application if they were 

enrolled and later obtained their NPI 

and have not yet reported it to Medicare 

on a Medicare enrollment application. 

Response: As previously stated, we 

have changed the enrollment 

requirements on mandating enrollment 

in PECOS to one requiring enrollment in 

Medicare—including PECOS or other 

legacy Medicare enrollment systems. 

We have pursued an aggressive outreach 

initiative to educate the provider and 

supplier communities on the ordering 

and referring requirements even before 

the IFC was published on May 5, 2010. 

Upon publication of this final rule, we 

plan to disseminate guidance on 

specific provisions of the final rule by 

producing a Medicare Learning Network 

product, placing additional or revised 

information on the Medicare provider/ 

supplier enrollment Web site, making 

announcements at CMS provider/ 

supplier open door forums, and 

releasing messages via CMS provider/ 

supplier listservs and to national senior 

citizens’ organizations. 

Comment: A commenter stated that 

CMS should engage in special outreach 

efforts to hospital clinics that may not 

understand that the physician, as well 

as the clinic, must have an enrollment 

record in PECOS. 

Response: Enrollment has been a 

longstanding requirement. However, we 

will be sure to address this in an 

upcoming update of the applicable 

informational documents that are 

available on the Medicare provider/ 

supplier enrollment Web site and we 

will also continue our outreach efforts 

to educate the provider and supplier 

communities. 

Comment: A commenter suggested 

that CMS prepare a model letter and 

make it available to the supplier 

community so that the suppliers can 

forward the letter to those who order 

items and services who do not have 

approved enrollment records or valid 

opt-out records in PECOS. 

Response: We have and will continue 

to reach out to the provider and supplier 

community by providing educational 

material using a number of different 

media. On June 28, 2010, we announced 

through a Medicare Learning Network 

article that Medicare contractors would 

be mailing letters to physicians and non 

physician practitioners who are enrolled 

in Medicare but who do not have 

enrollment records in PECOS. Our 

numerous announcements at our 

provider/supplier open door forums 

continue to remind physicians and 

other eligible professionals of our goal 

of ultimately having all FFS providers 

and suppliers in PECOS. We believe 

that these, and other outreach efforts, 

make it unnecessary to generate a model 

letter at this time. 

Comment: Many commenters 

suggested that CMS work 

collaboratively with the medical 

community to ensure physicians clearly 

understand their enrollment 

responsibilities. 

Response: We have frequent 

communications with national medical 

associations and other groups and 

organizations. We also deliver provider/ 

supplier enrollment information and 

messages at the regularly scheduled 

CMS provider/supplier open door 

forums. In addition, we have sponsored 

several open door forums dedicated to 

Medicare provider/supplier enrollment 

and will continue to do so as the need 

arises. We have created, and continue to 

create, special documents to inform the 

provider/supplier community of the 

Medicare enrollment requirements and 

to assist them in complying with those 

requirements. 

h. Patient Care Implications and Access 

Comment: A commenter suggested 

that the new deadline could potentially 

cause serious disruption in payments 

and claim resolution and could 

adversely affect millions of patients 

across the United States. Another 

commenter stated that CMS is placing 

an enrollment requirement above the 

interests of Medicare beneficiaries, and 

the effective date should remain January 

2011. 

Response: We have taken action to 

address the commenter’s concern by not 

activating the automated edits that 

would cause a claim to not be paid due 

to the lack of an approved enrollment 

record in Medicare. In addition, we 

have made other changes in this final 

rule to reduce the risk that Medicare 

beneficiaries will not have access to 

quality care. Also, our enrollment 

requirements are an essential program 

integrity function that permits us to 

screen providers and suppliers to ensure 

that beneficiaries are receiving care from 

licensed, legitimate providers and 

suppliers. The effective date is 

mandated by the Affordable Care Act. 

i. Impact on Individual Medical 

Communities 

Comment: Commenters suggested that 

with the July 6, 2010 date, suppliers 

will be compelled to either furnish the 

ordered or referred items and services at 

their own cost or that of the beneficiary 

or to hold their claims until the ordering 

or referring supplier has an approved 

enrollment record or valid opt-out 

record in PECOS. Both scenarios are 

unfair to suppliers and beneficiaries 

because neither have control over 

physician enrollments in PECOS. 

Response: In response to public 

comment, we changed the enrollment 

requirement language from one 

requiring enrollment in PECOS to one 

requiring enrollment in Medicare, 

including PECOS or other legacy 

Medicare enrollment systems, so that 

those suppliers enrolled in a legacy 

system can continue to order and certify 

during the revalidation process. This 

will alleviate much of the commenters’ 

concern. In addition, we will provide 

notice well in advance of activation of 

the automated edits that would cause 

claims for services or supplies not to be 

paid for lack of an approved enrollment 

record in Medicare. At the time we 

activate the edits, all eligible suppliers 

will have been given the opportunity to 

enroll or revalidate enrollment for the 

purpose of meeting the ordering and 

certifying requirement. Billing providers 

and suppliers should continue to assess 

their business practices of taking orders 

and certifications from non-Medicare 

enrolled providers and proceed 

accordingly. In addition, as stated 

earlier in this preamble, we have 

provided alternative approaches for 

providers and suppliers to verify the 

enrollment status of individuals who 

order and certify Medicare services. We 

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will continue with our extensive 

outreach efforts so that physicians and 

eligible professionals have the 

opportunity to educate themselves on 

these requirements. 

Comment: Several commenters noted 

that there is no direct incentive to have 

an enrollment record in PECOS because 

those who are enrolled, but who do not 

have records in PECOS, continue to be 

paid. Some commenters stated that 

some enrolled physicians told them 

they will take no action to establish 

enrollment records in PECOS. 

Commenters complained that the 

burden lies on the billing provider or 

supplier who furnished the ordered or 

referred items and services to confirm 

the ordering or referring provider’s 

PECOS status and educate them if they 

do not have enrollment records in 

PECOS. Many commenters added that 

DMEPOS suppliers ultimately have no 

control over what referring physicians 

do, yet the DMEPOS suppliers find their 

livelihoods and businesses, not those of 

the physicians, to be at risk by this IFC. 

Another commenter stated that CMS 

should, in a first phase, only reject the 

claims from physicians who do not have 

enrollment records in PECOS and then, 

once they establish their records in 

PECOS, in a second phase, reject claims 

from providers who furnish ordered or 

referred items or services whose claims 

identify ordering or referring providers 

who do not have enrollment records in 

PECOS. 

Response: Section 6405 of the 

Affordable Care Act, which this final 

rule implements, does not address 

payment or nonpayment of claims from 

physicians or eligible professionals who 

are not enrolled in Medicare. However, 

we understand the concerns that the 

commenters raised about physicians 

being enrolled only in PECOS. 

Consequently, we modified the PECOS 

requirement and now will permit 

enrollment in Medicare. We believe that 

the modification of the PECOS 

requirement will reduce the likelihood 

that providers and suppliers will have 

claims denied that were ordered or 

certified by a physician without a valid 

record in PECOS. Generally, physicians 

who are not enrolled in Medicare would 

not have their claims paid. However, 

this final rule deals only with the 

requirement that services or supplies 

provided by rendering/billing providers 

and suppliers must have been ordered 

or referred by a provider or supplier 

with an approved enrollment record in 

Medicare or the provider or supplier 

must have validly opted-out of 

Medicare. Therefore, the commenter’s 

phased-in approach would not work 

within the context of this rule. However, 

Medicare has developed a simplified 

enrollment process (form CMS–855O) 

for those who want to enroll in 

Medicare solely for the purpose of 

ordering and certifying. 

Comment: A commenter stated that 

the inability of a provider or supplier to 

identify the correct teaching physician 

could cause that provider or supplier to 

choose not to submit a claim for a 

medically necessary item or service that 

is already furnished, meaning the 

provider or supplier would not receive 

payment to which it is entitled. 

Response: We understand that the 

implementation of new policy requires 

providers and suppliers to adapt their 

processes. To assist in this effort, we 

have modified the provision in this final 

rule to permit individuals who are 

enrolled in an accredited graduate 

medical education program in a State 

that licenses or otherwise enables such 

individuals to practice or order and 

certify services, to enroll in Medicare to 

order and certify. In situations where 

States do not license or otherwise 

permit such individuals to practice or 

order and certify services, the teaching 

physician’s full legal name and NPI 

must be included on the claim for 

services. In this last circumstance, the 

claim will not be paid unless the 

ordering and certifying physician, in 

this case, the teaching physician, is 

listed on the claim as the ordering or 

certifying physician. 

Comment: Some commenters stated 

that CMS should sanction or otherwise 

penalize physicians who do not comply 

with the request to establish enrollment 

records in PECOS but who order or refer 

and cause the claims of other suppliers 

and providers to fail the ordering or 

referring provider edits and be rejected 

by Medicare. Another commenter asked 

that CMS modify this regulation by 

stating that beneficiaries and/or 

DMEPOS suppliers who were adversely 

affected by a physician’s noncompliance should be able to initiate a 

complaint against the physician and 

submit evidence in support of the 

complaint. 

Response: As stated previously, in 

light of our decision to modify the 

requirement that the ordering or 

referring providers must have 

enrollment records in PECOS, we 

believe the likelihood of claims being 

denied is greatly reduced because those 

physicians and eligible professionals in 

our legacy systems have been able to 

order and refer during the revalidation 

process. Further, we will not turn on the 

ordering and certifying automated edits 

that will cause a claim not to be paid for 

the lack of an enrollment record until 

those entitled to order and certify have 

been notified of their need to revalidate. 

We have been working with suppliers, 

providers, and beneficiaries to educate 

them about the requirements of 

enrollment for ordering and certifying. 

The provider or supplier can avoid a 

situation like the one described by the 

commenters by ensuring—prior to 

furnishing the service or item in 

question—that the physician is enrolled. 

The relationship that the commenters 

describe is between the physician and 

the provider or supplier whose claims 

were denied. We cannot serve as an 

intermediary in whatever dispute may 

arise between these parties concerning 

the physician’s failure to be enrolled. 

The matter must be resolved between 

the parties themselves. 

Comment: A commenter stated that it 

could potentially lose referral sources if 

it does not provide the services referred 

by physicians who do not have 

enrollment records in PECOS. 

Response: As stated previously, we 

have changed the enrollment 

requirement from one mandating 

enrollment in PECOS to one requiring 

enrollment in Medicare—including 

PECOS or other Medicare systems. We 

believe this modification will largely 

alleviate the problem raised by the 

commenter. We will continue to engage 

in provider and supplier outreach and 

education on this issue. The Affordable 

Care Act imposed the ordering and 

referring requirement in section 6405 

and we hope that physicians and 

eligible professionals will enroll in the 

interest of being able to order and certify 

items and services for their Medicare 

patients. As previously stated, we 

encourage rendering providers and 

suppliers to verify the ordering or 

certifying practitioners’ enrollment 

status prior to rendering services. 

Comment: A commenter noted that all 

of the services furnished by hospitalbased radiologists are referred and that 

they have no way, within the short time 

frame between publication of the IFC 

and July 6, 2010, to inform and verify 

that referring providers have records in 

PECOS. Commenters also stated that 

because the billing provider will not be 

paid if the referring provider is not in 

PECOS, there will be a huge reduction 

in payments, resulting in the possibility 

of missing filing deadlines with 

insurance plans, and the patient will not 

be protected, and hospital-based 

radiology medical groups will have no 

income, no payroll, and no ability to 

maintain services for patients. 

Response: Due to the comments 

received, we are removing the ordering 

or referring provider requirements on 

claims for physician specialists’ 

services. In-hospital services that are 

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covered by the hospital inpatient 

prospective payment system (IPPS) 

payments will also not be subject to the 

requirements of this rule. However, inhospital diagnostic testing services that 

are not paid as part of PPS (for example, 

imaging services furnished by an IDTF 

or another entity) must be ordered by 

Medicare enrolled providers. We have 

further clarified that we will provide 

ample notice to these providers when 

we decide to activate the edits that will 

cause a claim not to be paid for the lack 

of an approved enrollment record in 

Medicare or valid opt-out record in 

Medicare. 

Comment: Commenters were 

concerned because pharmacies are 

required by law to include the name of 

the prescriber in prescriptions. 

Commenters described the 

administrative difficulties that would be 

present in trying to link a resident to 

his/her teaching physician in order to 

comply with the stated requirements in 

the IFC and the issues with respect to 

pharmacies that need to record, by law, 

the actual prescriber, who could be a 

resident. A commenter stated that not 

all pharmacy systems may allow the use 

of more than one identifier in a claim 

which would be necessary if a resident 

or intern ordered the item and the 

teaching physician needs to be 

identified as the ordering or referring 

provider. The commenter asked that 

CMS clarify the logistics and processes 

for pharmacists and pharmacy systems 

to identify, verify, and submit claims for 

intern/resident-generated orders and to 

identify teaching physician information. 

A commenter stated that because interns 

and residents move frequently among 

rotations, it will be difficult if not 

impossible for the pharmacies to contact 

the interns and residents in order to 

obtain the identity of the teaching 

physician. 

Response: Neither the IFC, nor this 

final rule places requirements on 

prescribers identified in claims for 

drugs. As noted in the IFC, the ordering 

requirement in this final rule does not 

apply to Part B or D drugs. 

Comment: A commenter stated that 

CMS should thoroughly consider the 

implications of new policies such as the 

ordering or referring provider edits 

before public release in order to 

thoroughly identify potential pitfalls 

beforehand. 

Response: We agree with the 

commenter and have been sharing 

information with the public about these 

issues since 2009. In addition, the IFC 

published May 2010 offered an 

opportunity to comment on all aspects 

of the Affordable Care Act requirements. 

We believe it is important to continue 

this kind of communication with the 

public and will continue to do so. 

Moreover, we will provide advance 

notice of the activation of the automated 

edits pertaining to these claims. 

Comment: Commenters stated that 

nonprofit home health providers will be 

financially vulnerable because their core 

mission is to serve all patients 

regardless of their ability to pay. These 

commenters stated that nonprofit home 

health agencies have limited budgets 

and limited information technology (IT) 

support and personnel resources; thus, 

they are unable to quickly compare 

individuals in the Ordering Referring 

Report with their own list of ordering 

physicians or quickly disseminate the 

PECOS requirement to the physicians 

who order home health services from 

them. The commenters further stated 

that there is inadequate time for 

nonprofit home health agencies to learn 

about and efficiently use the ‘‘complex 

PECOS.’’ 

Response: In order to do business 

with Medicare, all home health 

agencies, whether or not they are 

nonprofit, must submit claims that 

comply with our regulations in order to 

be paid for the home health services 

they provide. We believe the commenter 

is referring to Internet-based PECOS in 

using the term ‘‘the complex PECOS.’’ 

We make available at no charge the 

names and NPIs of those who are 

permitted to order and certify, who have 

approved enrollment records in PECOS, 

and who have validly opted out of the 

Medicare program. Also, a home health 

agency can and should ask the ordering/ 

certifying physicians if they are enrolled 

in Medicare or have opted out of 

Medicare prior to accepting the order 

and/or certification. 

Comment: Some commenters stated 

that home health agencies stand to 

suffer severe financial hardships 

because of reduced patient admissions 

and the costs associated with issuing 

Advanced Beneficiary Notices of 

Noncoverage (ABNs), causing patient 

dissatisfaction, which is long-lasting 

and rebuilding the relationship can take 

years. 

Response: We understand these 

concerns. However, after consideration 

of our program integrity needs and the 

statutory mandate to implement this 

provision, we are moving forward with 

this final rule. 

Comment: A commenter asked that 

CMS share the impact of this regulation 

on all areas of practice—the physicians 

who order home health, the HHAs, and 

the patients. 

Response: We have interpreted this 

comment to suggest that we should 

educate these distinct communities on 

how this rule will impact them 

individually. As stated previously, we 

will continue to provide additional 

information, education, resources, and 

guidance on this final rule across the 

spectrum of affected parties. 

j. Claims Submission and Edits 

Comment: Several commenters 

requested an explanation of potential 

future claim edits for over-ordering and 

over-referring items of home health and 

DMEPOS. The commenters were 

unaware of any statutory basis for such 

edits except to identify violations of the 

Stark law. Another commenter stated 

CMS should be required to state how it 

determines whether services are being 

‘‘over-ordered.’’ 

Response: The commenters are 

referring to a statement on the middle of 

page 24444 of the IFC which stated that 

based on the new NPI requirements, ’’ 

* * * if appropriate, we could establish 

edits to check for over-ordering specific 

items or services * * *’’ We have 

removed all references to these edits in 

the final rule. However, we will 

continue to utilize our oversight 

functions that do not involve edits, to 

monitor statistically anomalous 

ordering, certifying, and/or billing 

patterns and investigate when 

appropriate. 

Comment: A commenter asked what 

is meant by the date of the written order 

or certification. The commenter asked if 

it is the date the referral or order was 

verbally received from the physician, or 

the date the physician signed the order. 

Response: The language in the IFC 

used the term ‘‘date of written order or 

certification.’’ We intended that term to 

mean the date the physician signed the 

order or certification. Public comment 

indicated that often times written orders 

are signed well after the service is 

provided. We intended to mandate that 

the ordering and/or certifying 

practitioner be enrolled at the time the 

service is performed. Therefore, in 

response to public comment and for the 

purposes of this final rule, we have 

changed our terminology and will use 

the ‘‘date of service’’, not the date of 

written orders or certifications. This 

change fully captures the purpose of 

this rule. Additionally, the date of 

service is much more accurate for 

claims and record retention purposes. 

Comment: A commenter asked if the 

ordering and referring requirements for 

the Part B services mentioned in the IFC 

apply to such services when furnished 

in hospitals and billed using the 

Uniform Bill (UB–04). Another 

commenter asked if the IFC applied to 

Part A providers, such as hospitals or 

other entities, such as IDTFs and 

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freestanding imaging centers which 

provide services paid under Part B 

(submitted on the UB–04 claim form). 

Response: The requirements in this 

final rule are applicable to the following 

ordered or certified items and services 

billed to Medicare by Part B suppliers 

of DMEPOS, clinical laboratory and 

imaging services, and for Part A and 

Part B home health claims: 

• Part A and Part B home health 

services, submitted in claims from home 

health agencies to the Part A claims 

system at fiscal intermediaries and A/B 

MACs in ANSI X12N 837I or UB–94 

formats. 

• Part B clinical laboratory services, 

submitted in claims from independent 

clinical laboratories to the Part B claims 

system at carriers and A/B MACs in 

ANSI X12N 837P or CMS–1500 formats. 

• Part B imaging services, submitted 

in claims from independent diagnostic 

testing facilities, portable X-ray 

suppliers, mammography centers, and 

radiation therapy centers to the Part B 

claims system at carriers and A/B MACs 

in ANSI X12N 837P or CMS–1500 

formats. 

• Part B items of DMEPOS, submitted 

by DMEPOS suppliers to DME MACs in 

ANSI X12N 837P, or CMS–1500 

formats. 

The requirements of this final rule are 

applicable to the following ordered 

items billed to Medicare by Medicare 

beneficiaries: 

• Part B clinical laboratory services. 

• Part B imaging services. 

• Part B items of DMEPOS. 

With the exception of claims for home 

health services that are submitted by 

home health agencies, this final rule 

does not affect the following: 

• Claims submitted to the Part A 

claims system at fiscal intermediaries 

and A/B MACs. 

• Claims for drugs. 

• Part B claims from physician 

specialists. 

• Claims from beneficiaries for home 

health services (beneficiaries are not 

permitted to submit claims for those 

services). 

Comment: Two commenters were 

concerned that the ordering and 

referring provider edits on Medicare 

DMEPOS claims are not item-specific 

and that there are limitations in the 

claims processing system which may 

result in Medicare claims for Part B 

drugs being denied if the prescribers do 

not have approved enrollment records 

or valid opt-out records in PECOS. 

Specifically, the commenters stated that 

claims that are submitted in the 

National Council for the Prescription 

Drug Programs (NCPDP) 1.1 batch 

format are not subject to the ordering 

and referring provider edits, whereas 

claims submitted using the allowable 

ANSI X12N 837P format are subject to 

the ordering and referring provider 

edits. The commenter also stated that 

because the claims are not edited based 

on the items in the claim, Medicare will 

reject claims for Part B DMEPOS drugs 

if the physician who prescribed the Part 

B DMEPOS drugs does not have an 

enrollment record in PECOS. The 

commenter is asking that Medicare not 

edit the ordering and referring provider 

(the prescriber) of Part B drugs 

regardless of which claim format is 

used. 

Response: This final rule does not 

change the allowances permitted under 

HIPAA that allow retail pharmacies to 

submit claims on either the NCPDP 

format or the 837P format. However, as 

the commenter correctly points out, 

claims submitted in the NCPDP 

standard formats are not subject to the 

ordering and referring provider edits at 

this time. If an ANSI X12N 837P claim 

format is used to report drugs and 

DMEPOS and there is no EY modifier on 

the claim or if the claim reports only 

drugs and no EY modifier on the claim, 

the claim will be subject to the ordering 

and referring requirements of this rule. 

An EY modifier is a specific designation 

in the 837P format when, for example, 

the pharmacy knows the claim will be 

denied so that it may then use the 

Medicare denial for filing with 

secondary insurances that may allow for 

the payment of the item or service. We 

acknowledge that we will need to adjust 

claims payment processing to 

accommodate this rule. We are working 

towards making these necessary 

changes. However, in the interim, retail 

pharmacy claims that combine Part B 

drugs and DMEPOS supplies may be 

submitted using the NCPDP format to 

avoid this situation. 

Comment: A commenter indicated 

that pharmacies that are also DMEPOS 

suppliers may submit and be 

reimbursed for claims for ordered or 

referred items after receiving an 

indication from the ordering physician 

that he/she has an enrollment record in 

PECOS. If it is later determined that the 

physician did not have an enrollment 

record in PECOS, will the pharmacy be 

liable or at risk? 

Response: As noted in earlier 

responses, the Affordable Care Act 

requires that physicians who order 

certain items or services must be 

enrolled in Medicare. It is the billing 

provider or supplier’s responsibility to 

ensure that the ordering or certifying 

physician or eligible professional has a 

valid enrollment record or has validly 

opted out. We have mentioned 

numerous ways billing providers and 

suppliers can ensure compliance with 

this rule. 

Comment: A commenter asked that 

pharmacies be provided with the 

normal Part B timely filing period in 

order to re-submit claims that fail the 

requirements of this regulation. The 

commenter then asks that pharmacies 

have 1 year in which to re-bill if the 

failure of the claim to pass the edits was 

beyond the control of a pharmacy. 

Another commenter asked that CMS 

permit suppliers to re-bill claims that 

were denied for PECOS edits for up to 

1 year, and not apply the truncated 120 

days normally provided for denied 

claims. Another commenter stated that 

when a DMEPOS supplier claim would 

be rejected for failing to meet the edit 

that the ordering or referring provider 

have an enrollment record in PECOS, it 

would fail a ‘‘front end’’ edit. Failing a 

front end edit means that the claim does 

not go to a DME Medicare 

Administrative Contractor (MAC) for 

adjudication. As a result, neither a 

remittance advice nor a Medicare 

Summary Notice would be produced, 

and appeal rights are not offered with 

proof that the ordering or referring 

provider is currently a Medicare 

provider. The commenter requested that 

the regulation be changed to allow (1) 

beneficiary liability using a proper ABN 

taking into consideration certain factors; 

(2) the claim to be processed beyond the 

‘‘front end’’ so that the claim can be 

returned as unprocessable, which could 

enable the beneficiary community to 

prompt their physicians or other eligible 

professionals to establish their 

enrollment records in PECOS; or (3) 

deny (not reject) the claim using 

Adjustment Reason Code 52: ‘‘The 

referring/prescribing/rendering provider 

is not eligible to refer/prescribe/order/ 

perform the service billed.’’ 

Response: Unless specified otherwise, 

in addressing these comments we are 

assuming that the commenters are 

referring to DMEPOS claims. This rule 

does not change any of the existing 

requirements for the resubmission of 

claims for payment. Although the IFC 

stated that we would reject, not deny, 

claims from providers and suppliers 

that do not comply with the 

requirements that those who order and 

refer services or supplies must be 

enrolled in Medicare or validly opt out, 

we have determined in this final rule 

that we will deny such claims. As stated 

in previous responses, we have not yet 

activated the automated edits that 

would cause a claim not to be paid 

because a physician or, where 

applicable, eligible professional who 

ordered or certified the service does not 

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have an approved enrollment record in 

Medicare, and we will provide ample 

notice prior to activating the edits. 

However, the resubmission and 

payment of a claim by pharmacies 

would not be possible under the 

commenter’s scenario because the 

physician or eligible professional was 

not enrolled in Medicare or did not have 

a valid opt-out record on the date of 

service. 

Comment: Many commenters 

requested that CMS generate more 

meaningful explanations as to why 

claims failed the ordering and referring 

provider edits. For example, they want 

to know if the rejection codes will be 

different for claims that fail the ordering 

and referring supplier edits because the 

ordering or referring supplier is a 

physician or other eligible professional 

but does not have an enrollment record 

in PECOS and claims that fail the 

ordering or referring supplier edits 

because the ordering or referring 

supplier is not a physician or other 

eligible professional. 

Response: We agree with these 

comments and we are in the process of 

developing more descriptive 

informational messages. We will 

provide new informational messages 

that provide these details and will 

describe these new messages to the 

provider and supplier communities in a 

Medicare Learning Network article 

shortly after publication of this final 

rule. 

Comment: A commenter stated that 

Medicare beneficiaries are limited to the 

submission of one DMEPOS claim per 

lifetime. The commenter, therefore, 

requests that a beneficiary-submitted 

claim for DMEPOS items be rejected, 

not denied, if it fails the edits, in order 

to avoid ‘‘wasting’’ the once-per-lifetime 

claim benefit. 

Response: The permissive, once-in-abeneficiary’s-lifetime, payment of a 

beneficiary-submitted claim for an item 

of DME, or of a Medicare-covered 

supply, is intended to apply only to 

incidental items that a beneficiary might 

obtain from an entity that a beneficiary 

might reasonably assume was enrolled 

in Medicare but was, in fact, not so 

enrolled. This limited exception to the 

general rule furnishes notice to the 

beneficiary of the supplier enrollment 

requirement (and the beneficiary’s duty 

to inquire of the supplier’s Medicare 

enrollment status in the future), while 

holding the beneficiary harmless for his 

or her ignorance of the rule, this single 

time. Beneficiaries are able to submit 

claims from enrolled Medicare suppliers 

as is necessary, and are not in danger of 

‘‘wasting’’ the once in a lifetime benefit 

under this final rule. 

Regardless of the applicability of the 

comment, claims from beneficiaries will 

be denied, not rejected, to afford them 

appeals rights. Under Medicare, a claim 

is rejected when the claim filing has a 

defect or impropriety such that it cannot 

be processed. A claim that was ordered 

by a non-enrolled physician or eligible 

professional is a claim where a required 

element of the furnishing of the item to 

the beneficiary does not meet Medicare 

requirements, and it must be denied, not 

rejected. 

Comment: Many commenters stated 

that home health agency providers 

would have to discharge many home 

health patients because the IFC 

requirement that certifying physicians 

have enrollment records in PECOS by 

July 6, 2010 could not be met. The 

commenter stated that home health 

patients would then end up in hospitals 

or other acute facilities. The 

commenters wanted such home health 

agencies to be held harmless from claim 

denials if they submitted claims for 

their services in order to avoid putting 

beneficiaries into this situation. 

Response: While efforts were 

underway to enroll physicians and 

eligible professionals who order and 

refer prior to the passage of the 

Affordable Care Act, the 

implementation date is statutorily 

mandated. We conducted significant 

outreach on this effort and will continue 

to do so when implementing this final 

rule. As already stated, we have taken 

steps to help mitigate these 

circumstances; for instance, we have not 

yet activated the automated edits that 

would cause claims for services or 

supplies not to be paid for lack of an 

approved enrollment record in 

Medicare. Consequently, we do not 

believe it is necessary to hold home 

health agencies harmless if the ordering/ 

certifying provider reported in their 

claims is not enrolled in Medicare in an 

approved status or has not validly opted 

out of Medicare. 

Comment: Several commenters 

wanted assurance that home health 

agencies would not face a retroactive 

recovery based on the application of the 

‘‘without fault’’ provision if they 

submitted claims in good faith, 

believing that the physician had an 

approved enrollment record in PECOS 

or had attempted to enroll in the 

Medicare program before submitting the 

claim. They did not want the provision 

of home health services to patients 

whose physicians do not have 

enrollment records in PECOS to be 

considered a violation of any Medicare 

rule if the home health agency has 

documented its efforts to determine if 

the physician has an enrollment record 

in PECOS. 

Response: The ‘‘without fault’’ 

provision under section 1870 of the Act 

is not applicable in this scenario, as that 

provision refers to the collection of 

overpayments. The billing provider has 

an affirmative responsibility under this 

final rule to ensure that the physician 

has a valid enrollment record or has 

validly opted-out. Additionally, records 

for the orders and certification of home 

health must be maintained by the 

ordering/certifying physician(s) and the 

home health agency that bills for these 

services. Submitting a claim in good 

faith does not meet our requirements 

and will be denied if the ordering/ 

certifying physicians do not have a valid 

enrollment or opt-out record. We note 

that home health payment is always 

contingent on whether eligibility 

requirements, including the requirement 

that a patient be under the care of a 

physician, continue to be met. 

Typically, ‘‘under the care of a 

physician’’ would require active 

physician involvement with updating 

orders. It is difficult to envision a 

scenario where the patient could be 

under the care of physician unless that 

physician is able to order services. As 

such, as part of our eligibility 

requirements, the patient must be under 

the care of a Medicare enrolled 

physician, because only an enrolled 

physician can order home health 

services. HHAs are responsible for 

coordinating patient care, as defined in 

Conditions of Participation defined in 

42 CFR Part 484. They are also 

responsible for ensuring that all 

eligibility criteria, such as the need for 

a patient being under the care of a 

physician, are met. 

Additionally, we have modified the 

definition of ‘‘enrolled in Medicare’’ to 

include PECOS and existing legacy 

Medicare claims payment systems. We 

have also delayed the automated edits 

that will cause a claim not to be paid for 

the lack of an approved enrollment 

record in Medicare or a valid opt-out 

status. Of course, such claims are 

subject to all other Medicare 

requirements, such as, coverage and 

medical necessity. These changes will 

reduce the risk to home health suppliers 

of having claims denied on the basis of 

enrollment of the ordering or certifying 

physician. We have made the Ordering 

Referring Report, containing the NPIs 

and legal names of physicians and other 

eligible professionals who have 

approved enrollment or valid opt-out 

records in PECOS, available and are 

encouraging suppliers to view this 

report. However, documentation that a 

home health agency has done so does 

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not fulfill the requirements of this final 

rule. We also make available four 

reports within the Ordering Referring 

Report that include the following: 

• Physicians who are approved to 

order and refer. 

• Other eligible professionals who are 

approved to order and refer. 

• Physicians who have pending 

Medicare enrollment applications. 

• Other eligible professionals who 

have pending Medicare enrollment 

applications. 

These reports, collectively referred to 

as the Ordering Referring Report, are 

available on the Medicare provider/ 

supplier enrollment Web page at 

(www.cms.gov/ 

MedicareProviderSupEnroll). This 

information makes it easier for home 

health agencies to determine the 

enrollment or opt-out status of 

physicians who have ordered home 

health services prior to submitting their 

claims. 

Comment: A commenter indicated 

that while home health agencies would 

attempt to secure the NPI of the ordering 

or referring provider and report that NPI 

in claims, the information needed to do 

so is not fully available and will not be 

provided by CMS in a manner that 

assures providers and suppliers access 

to the most up-to-date information when 

they are determining whether or not to 

accept a referral from a physician. Other 

commenters expressed concern that the 

requirement to report the NPIs of 

ordering and referring providers and 

suppliers in claims may penalize billing 

providers if the ordering or referring 

provider has not obtained an NPI or 

does not furnish the NPI to the billing 

provider, and that such a penalty would 

disadvantage otherwise compliant 

billing providers. 

Response: If a home health agency 

provider or a supplier receives an order 

or a certification from a physician or 

other eligible professional and the NPI 

is not on the order or certification, the 

provider or supplier can ask the 

physician or other eligible professional 

to disclose his or her NPI. If that is not 

feasible, the provider or supplier can 

use the NPI Registry (https:// 

nppes.cms.hhs.gov/NPPES/ 

NPIRegistryHome.do) to obtain the NPI. 

High-volume providers and suppliers 

may wish to download the NPPES file 

each month (http://nppes.viva-it.com/ 

NPI_Files.html) and import it into its 

claims and/or business processes to pull 

the NPIs from it and use them in 

electronic processes. Ultimately, if a 

billing provider or supplier who 

furnishes items or services based on 

orders or certifications is unable to 

obtain this information from the 

ordering and certifying provider, the 

billing provider should carefully 

consider, as part of its business policy, 

whether or not it will accept an order or 

a certification from a physician or other 

eligible professional who does not have, 

or who refuses to obtain, an NPI. 

Comment: A few commenters 

questioned if a full episode of home 

health care would be paid if a physician 

terminates enrollment before the end of 

a 60-day home health episode. 

Response: Yes, this regulation 

requires enrollment in Medicare or a 

valid opt-out status that would be 

assessed based upon the date of the 

order and the date of the certification, 

for dates of service beginning July 6, 

2010. In the situation described by the 

commenter, Medicare would not deny 

payment (for the lack of an approved 

enrollment or opt-out record) for any 

portion of the full 60 days if the 

ordering physician were to terminate 

enrollment or otherwise become not 

enrolled in Medicare. However, 

Medicare may deny these claims based 

upon other factors unrelated to 

enrollment status of the ordering or 

certifying supplier. 

Comment: A few commenters 

questioned if Medicare would pay a 

home health claim if the certifying 

physician does not have an approved 

enrollment record or a valid opt-out 

record in PECOS at the start of care, but 

does establish such a record during the 

course of the episode of care and prior 

to the submission of the claim from the 

home health agency. 

Response: Consistent with the 

provisions of this final rule, the 

ordering/certifying physician(s) would 

have to be enrolled in Medicare in an 

approved status or have validly optedout of the Medicare program as of the 

date of service in order for the home 

health agency’s claim to be paid. 

Comment: A few commenters 

questioned if the ordering and referring 

provider edit will be on the home health 

request for anticipated payment (RAP), 

final claim, or both. A few commenters 

questioned if a corrected RAP, final 

claim, or both could be submitted if a 

provider or supplier submitted an 

incorrect ordering or referring provider 

name and NPI in a claim but later 

learned the correct information. 

Response: Home health episodes are 

paid in two pieces: A anticipated 

payment amount at the beginning of the 

60-day episode, and the balance in the 

final claim at the end of the 60-day 

episode. The RAP is the first submission 

of the claim. Therefore, the ordering/ 

certifying physician(s) must be in 

compliance with our regulations on the 

date of service (that is, the date of the 

order or certification). A RAP cannot be 

adjusted once it has been processed, but 

it can be cancelled and resubmitted 

with corrected information including 

provider name or NPI. If a home health 

agency learned that data on a RAP was 

in error, the home health agency could 

cancel the RAP and resubmit it. This is 

also the case for the home health final 

claim. Therefore, the edit will apply to 

both the RAP and the final claim. 

Comment: A commenter expressed 

concern that it is not always possible for 

a home health agency to know for 

certain at the start of care which 

physician will certify home care 

services. This commenter questions 

whether only PECOS enrolled 

physicians will be able to make referrals 

and certify home health episodes of 

care. 

Response: In most cases the same 

physician would refer the patient to 

home health, order the home health 

services, certify the beneficiary’s 

eligibility to receive Medicare home 

health services, and sign the Plan of 

Care. It is the NPI of the ordering/ 

certifying physician that is required on 

the claim and in the medical record. 

However, we recognize that in certain 

scenarios one physician may not 

perform all of these functions. An 

example of such a scenario would be a 

patient who is admitted to home health 

upon hospital discharge. While we 

would still expect that in most cases, a 

patient’s primary care physician would 

be the physician who refers and orders 

home health services, certifies 

eligibility, and signs the plan of care, 

there are valid circumstances when this 

is not feasible for the post-acute patient. 

For example, some post-acute home 

health patients have no primary care 

physician. In other cases, the inpatient 

physician assumes primary 

responsibility for the patient’s care 

during the acute stay, and may (or may 

not) follow the patient for a period of 

time post-acute. In circumstances such 

as these, it is not uncommon for the 

inpatient physician to refer a patient to 

home health, initiate orders and a Plan 

of Care, and certify the patient’s 

eligibility for home health services. In 

the patient’s hospital discharge plan, if 

the inpatient physician would not be 

the one to follow up for the duration of 

the home health service, he or she 

would identify the community 

physician who would be assuming 

primary care responsibility for the 

patient upon discharge. It would be 

appropriate for the physician who 

assumes responsibility for the patient to 

sign the plan of care. The patient would 

thus be considered ‘‘under the care’’ of 

that community/personal physician 

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throughout the time the patient is 

receiving home health services. 

In a scenario such as this, if the 

inpatient physician certifies the 

patient’s home health eligibility and 

initiates the orders for services, that 

physician would need to be a Medicare 

enrolled physician, and that physician’s 

NPI would be in the medical record and 

on the first home health claim. To be 

compliant with all Medicare home 

health coverage and payment rules, the 

community physician who assumes 

responsibility for the patient during the 

home health episode (updating orders, 

signing the plan of care, etc.) would also 

need to be a Medicare enrolled provider, 

and this NPI would also be documented 

in the medical record and on the 

appropriate home health claim. 

Comment: Given that the process by 

which home health care services are 

ordered and because the process used 

for such referrals (electronic, fax, 

telephone) almost never includes direct 

communication from a physician to a 

home health agency, a commenter 

suggested that Medicare require only 

that physicians who certify home health 

services be required to be enrolled in 

PECOS. This commenter also asked that 

claims that lack a PECOS-enrolled 

physician’s NPI be rejected rather than 

denied. 

Response: The statute specifically 

references orders and certifications for 

home health services. Therefore, we 

disagree that only the physician who 

certifies the home health services be 

required to be identified in the claim for 

home health services and meet the 

requirement to be enrolled in Medicare 

in an approved status or have validly 

opted out of Medicare. Claims from 

home health agencies that do not meet 

the requirement that the ordering/ 

certifying physician be identified by 

legal name and NPI will be denied, not 

rejected, as noted earlier in this final 

rule. 

Comment: Several commenters stated 

that beneficiary notification of 

nonpayment for home health services 

was not addressed in the IFC. The 

commenter noted that home health 

agencies are required to notify Medicare 

beneficiaries of noncoverage of all 

services through a Notice of Medicare 

Noncoverage (Expedited Determination 

Notice), and that home health agencies 

are required to notify patients of their 

right to appeal a noncoverage 

determination while continuing services 

if orders are in place from a physician 

through a Home Health Advance 

Beneficiary Notice (HHABN). The 

commenters believe that beneficiaries 

will be prevented from continuing to 

receive medically necessary services 

under self-payment or other payment 

sources that are secondary to Medicare 

in cases where expedited appeal 

decisions are delayed or are not in the 

beneficiaries’ favor. The commenters 

recommended that CMS permit the 

HHABN to be used when home health 

services are not covered because the 

order was written by a physician who 

does not have an enrollment record in 

PECOS. 

Response: As the commenter stated, 

HHABNs are for notification of 

noncovered services. The home health 

services themselves are still considered 

‘‘covered services’’ if they meet the 

Medicare medical necessity and benefit 

requirements, even if the ordering/ 

certifying physician is not enrolled in, 

or opted out of, Medicare. However, the 

claim will be denied due to 

noncompliance with this regulation if 

the ordering/certifying physician is not 

enrolled in Medicare or does not have 

a valid opt-out status. The denial of a 

claim for lack of an approved 

enrollment records in Medicare is not a 

coverage determination; hence the 

HHABN is not applicable. 

k. NPI Data and Requirements 

Comment: A commenter asked how 

CMS would know that an NPI on a 

claim was put there by a physician who 

meant to order the test and not by 

someone who simply downloaded the 

NPI from the open file. 

Response: Our systems are equipped 

to check for these types of compromised 

numbers and initiate an investigation 

based upon the data. While we 

understand the concerns of the 

commenter, verification of the NPI is 

just one tool we use to validate a claim. 

Access to NPIs and the associated 

names are crucial pieces of information 

to individuals providing services and 

supplies. Penalties for this type of 

activity can range from false claims 

liability to other criminal and civil 

sanctions. CMS and law enforcement 

actively monitor this type of activity 

and regularly engage in investigation 

and follow-up activities, as appropriate. 

Comment: A commenter believed that 

the widespread dissemination of 

physicians’ and other eligible 

professionals’ NPIs could increase the 

risk of fraudulent use of NPIs and urged 

CMS to implement procedures to 

protect practitioners from any 

unreasonable additional compliance 

burden that may be incident to the 

misuse of their NPIs by others. 

Response: Providers and suppliers 

must determine if the ordering and 

certifying physician or eligible 

professional is enrolled in Medicare at 

least to order and certify. Inclusion of 

this information on the claim is 

necessary for the payment of claims. We 

must provide this information publicly 

so that service providers can ensure that 

physicians and eligible professionals are 

enrolled in Medicare to order and 

certify. If a health care provider suspects 

misuse of an NPI, that health care 

provider should report the issue to law 

enforcement authorities including, 

when appropriate, to the DHHS Office 

of Inspector General (OIG). The OIG 

Hotline is 1–800–HHS–TIPS (1–800– 

447–8477). Providers and suppliers can 

also report suspected misuse of an NPI 

to 1–800–Medicare. 

Comment: Several commenters noted 

the following: 

• There is no required OMB approved 

form for ordering home health services. 

• The plan of care content 

requirements are based on the Home 

Health Content of Plan of Care. 

• We have removed from our online 

manual the detailed guidance on the 

required Content of the Plan of Care. 

• Inclusion of the physician’s NPI on 

a Home Health Plan of Care and interim 

orders has never been a requirement. 

Response: The Secretary has adopted 

a standard electronic referral 

transaction. However, most health plans 

have not implemented the adopted 

electronic referral standard and 

continue to use their own paper formats 

and issue their own instructions for the 

use of the paper referral formats. The 

absence of the Plan of Care guidance in 

the online manual does not impact the 

requirements of this final rule. 

Regulation text at § 424.516 currently 

requires that the NPI of the physician 

who orders/certifies the home health 

services be part of the documentation of 

the service in the medical record. It does 

not stipulate that the NPI be included 

on the Plan of Care or certification. 

Content requirements for the Home 

Health Plan of Care are detailed in 

§ 484.18(a). So long as the NPI is part of 

the medical record, and can be provided 

to CMS or a Medicare contractor upon 

request, the home health agency will 

have met this requirement. 

l. Legal Name Requirements 

Comment: A commenter sought 

clarification as to whether the IFC 

required that the provider of the service 

must also provide its legal name and 

NPI on the claim. 

Response: We are interpreting this 

question as asking whether the IFC 

required the billing provider to list its 

NPI and legal name on the claim. The 

requirement for the billing or rendering 

provider to list its NPI was effective 

March 1, 2008. There is no requirement 

that the legal business name of the 

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billing provider be explicitly listed on 

the CMS–1500 claim form. Note that the 

IFC established a requirement that the 

eligible ordering and/or referring 

supplier’s legal name be listed on the 

claim. Those requirements are now 

incorporated in § 424.506 (rendering or 

billing provider NPI on claims) and 

§ 424.507 (ordering and certifying 

supplier NPI). 

Comment: A commenter stated that 

ordering or referring suppliers do not 

always write their legal names on their 

prescriptions or orders, and thus it is a 

burden on the billing provider to do the 

research to determine the legal name so 

that it can be included on the claim. 

Response: Providers and suppliers 

who furnish items and services based on 

orders or certifications should have 

business operations in place to ensure 

that they collect the information 

necessary to submit a proper claim for 

payment for those items and services. 

This would include collecting the legal 

name of the individual who ordered or 

certified these items or services. 

Comment: A commenter stated that 

several medical practices have 

contacted CMS about the name of the 

ordering or referring supplier reported 

in their claim not matching CMS 

records, and were told that the name on 

the claim had to match the name in 

NPPES. Several other commenters 

stated that the NPI of the ordering or 

referring provider should be sufficient 

to match PECOS records and that the 

legal name is unnecessary. 

Response: The only name that should 

be used for an enrollment application or 

on a claim form should be the 

individual practitioner’s legal name that 

matches the name and NPI of record 

from NPPES. Those records match the 

practitioner’s legal name from the Social 

Security Administration (SSA). The use 

of this name will ensure there is no 

confusion at the time of enrollment and 

claims processing. 

Existing regulations and policies 

require the reporting of the legal name 

if the NPI is required to be reported. 

Requiring the name that corresponds to 

the NPI further ensures the validity of 

the ordering or certifying provider and 

eliminates the indiscriminate and 

repeated use of any valid NPI simply to 

enable a claim to pass an edit. The 

health care claim standard and the 

Medicare paper claims forms capture 

three fields for a name: last name, first 

name, and middle initial. The Medicare 

provider/supplier enrollment 

application also captures those same 

three name fields. For the purposes of 

this rule only, these three name fields 

(last name, first name, and middle 

initial) constitute an individual’s legal 

name. 

Comment: Some commenters stated 

that CMS should eliminate the first 

name match because many systems 

reference a physician by a nickname; 

and only use the surname and NPI to 

match. 

Response: As previously described, 

our rules require the full legal name 

(that is, first name, middle initial, and 

last name). Reporting a nickname in a 

Medicare enrollment application will 

likely cause that enrollment application 

to fail the social security number 

verification, which would delay the 

processing of the enrollment application 

or cause it to be rejected. Similarly, use 

of a nickname on claims will likely 

cause the claim to be denied. 

Comment: Another commenter was 

concerned about name changes, 

resulting from marriage, in which a 

physician’s surname in PECOS is no 

longer consistent with the married name 

being used in orders and referrals. 

Response: Any enrolled Medicare 

provider and supplier whose name 

changes is required to report that change 

to the designated Medicare contractor 

within 90 days of the effective date of 

the change. Other appropriate files and 

systems are also updated with any new 

information. 

m. Enrolling in Medicare Just to Order 

and Refer 

Comment: A commenter stated that 

the PECOS enrollment system does not 

have flexibility to permit Department of 

Veterans Affairs (DVA) employed 

physicians to enroll. Another 

commenter stated that a representative 

of a Veterans Affairs hospital stated that 

their physicians who order and refer 

items and services for Medicare 

beneficiaries will not be enrolling in 

Medicare because they do not send 

claims to Medicare. Another commenter 

stated that CMS should develop a 

simplified enrollment process for 

dentists and others who do not submit 

claims to Medicare. Another commenter 

stated that physicians who care for 

patients in institutional settings will 

refer for home care and DMEPOS, as do 

physicians in training (residents and 

fellows) who are not eligible to enroll in 

Medicare. Several commenters 

suggested that CMS simplify the 

enrollment process for those who must 

enroll just to order and refer. Another 

commenter asked that DVA providers be 

excluded from the requirement to enroll 

in PECOS in order to continue to order 

and refer items and services for 

Medicare beneficiaries. 

Response: We agree with the previous 

commenters regarding the development 

of a simplified process for individuals 

who enroll just to order and certify. 

DVA and other professionals cannot be 

excluded from the enrollment 

requirement because the statute requires 

that those who order DMEPOS and who 

order/certify home health services be 

enrolled in Medicare. We have had 

numerous detailed discussions with 

DVA officials, as well as officials at the 

Department of Defense (DoD), the 

United States Public Health Service 

(PHS), Indian Health Service (IHS), and 

other Federal agencies whose physician 

employees order and certify Medicare 

services or supplies but do not bill 

Medicare directly. 

We have developed the CMS–855O 

enrollment form for eligible providers 

and suppliers who wish to enroll only 

to order and certify. The ordering and 

certifying suppliers who use the CMS– 

855O form may not bill Medicare and 

submit claims. Those suppliers who 

wish to bill Medicare for services and 

submit claims must fill out the CMS– 

855I form. Internet-based PECOS has the 

capability to handle enrollment 

applications from these physicians and 

other eligible professionals who wish to 

enroll in Medicare just to order and 

certify. The CMS–855O form has been 

approved by Office of Management and 

Budget (OMB) and has been available 

for use since July 1, 2011. Additionally, 

information about enrolling only to 

order and certify is available on the 

Medicare provider/supplier enrollment 

Web site (http://www.cms.gov/ 

MedicareProviderSupEnroll). 

Examples of physicians and other 

eligible professionals who may wish to 

enroll in Medicare only to order and 

certify, and not to submit claims to 

Medicare for payment, include those 

who are one of the following: 

• Employed by the PHS, DOD, DVA. 

• Employed by Medicare-enrolled 

Federally qualified health centers 

(FQHCs), rural health clinics (RHCs), 

and critical access hospitals (CAHs). 

• Pediatricians who traditionally 

have very few Medicare patients and, 

therefore, only order or certify items for 

Medicare beneficiaries. 

• Doctors of dental medicine or 

dental surgery whose services are 

generally not covered by Medicare. 

• Residents, as defined in § 413.75 (to 

include interns and fellows), who are 

appointed by teaching hospitals and 

academic medical centers who generally 

do not enroll in Medicare because their 

services are not directly billed to 

Medicare. (Please see the information 

under the ‘‘residents’’ section of this 

final rule.) 

Comment: A few commenters stated 

that officials at DVA facilities stated 

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they were unaware that their physicians 

needed to enroll in Medicare. Some 

commenters stated that DVA physicians 

have told them that they cannot enroll 

in Medicare until ordered to do so by 

the DVA. 

Response: We have communicated 

with the DVA and expect that their 

physicians and other eligible 

professionals will enroll in Medicare 

just to order and certify if they wish to 

continue to order or certify items or 

services for Medicare beneficiaries. 

Comment: Several commenters stated 

that CMS should consider how best to 

communicate with physician practices, 

including those in the PHS, DoD, and 

DVA, as well as dental and pediatric 

practice settings and teaching 

physicians and those who have opted 

out of Medicare to ensure they 

understand the new requirements. 

Response: We have been in 

communication with the PHS, DoD, 

DVA, and the American Dental 

Association (ADA) about the 

requirements of the Affordable Care Act 

that we are implementing with this final 

rule. We anticipate additional 

communication in CMS provider/ 

supplier open door forums and in our 

regular conference calls with national 

provider/supplier associations and 

organizations. We will be creating 

additional outreach documents when 

we publish this final rule. Largely based 

on provider and supplier concerns and 

in an effort to accommodate these 

concerns we have created a new 

enrollment form, the CMS–855O. This 

form is specifically designed for those 

providers and suppliers who want to 

enroll in Medicare for the purpose of 

ordering and certifying only. We believe 

this shortened form will streamline the 

enrollment process, especially for this 

segment of the supplier communities. 

Comment: A commenter suggested 

that there should be a longer phase-in 

time for dentists and other eligible 

professionals who rarely refer or order 

under Medicare. 

Response: We have created a 

streamlined application process that 

reduces the time it will take for dentists 

and other professionals to enroll, since 

they generally do not bill Medicare but 

who need to enroll in Medicare just to 

order and certify. The CMS–855O may 

be used by providers and suppliers who 

simply wish to order and certify and 

who do not wish to submit claims to 

Medicare. These changes, including the 

new CMS–855O enrollment form, the 

change from the requirement to be 

enrolled in PECOS to a requirement to 

be enrolled in Medicare, and the delay 

in the activation of the automated edits 

that would cause a claim to not be paid 

due to lack of an approved enrollment 

record in Medicare, have simplified 

compliance for these types of 

professionals. 

n. Interns, Residents, Fellows, and 

Teaching Physicians 

Comment: A commenter supported 

the requirement that interns who are not 

licensed, and therefore unable to enroll 

in Medicare should order or refer 

through the teaching physician. The 

same commenter also asked that CMS 

allow licensed residents to order or refer 

under their own name (not the name of 

the teaching physician) to avoid 

artificially increasing the ordering or 

referring patterns of teaching 

physicians. The commenter did not 

believe this would have a negative 

impact on the Medicare program and 

would still enable CMS to track ordered 

and referred items and services. Another 

commenter stated that many residents 

are licensed physicians who are 

qualified to practice independently and 

who are undergoing specialty training. 

The commenter believed that these 

residents should not be limited in their 

ability to order and refer because of 

perceived shortcomings with PECOS’s 

ability to accommodate them. 

Response: Physicians and eligible 

professionals must have an appropriate 

State license in order to enroll in 

Medicare, and licensure is determined 

by State laws. Based on provisions 

included in this final rule, physicians 

and other eligible professionals who 

order/certify DMEPOS, home health 

services, clinical laboratory, and 

imaging services for Medicare 

beneficiaries must be enrolled in 

Medicare or have validly opted out. The 

term ‘‘resident’’ is defined in § 413.75 as 

‘‘ * * * an intern, resident, or fellow 

who participates in an approved 

medical residency program, including 

programs in osteopathy, dentistry, and 

podiatry, as required in order to become 

certified by the appropriate specialty 

board.’’ Licensed residents, as defined 

in § 413.75, usually do not enroll in 

Medicare because they do not bill the 

Medicare program; their services are 

included in the hospitals’ PPS claims 

and Medicare reimburses the hospitals. 

We agree with the concerns expressed 

by commenters and have modified the 

requirements of this final rule so that if 

States allow residents who have a 

provisional license, or are otherwise 

permitted by State law to practice or 

order and certify services, we will 

permit them to enroll in Medicare to 

order and certify, at the direction of 

their teaching institution. In situations 

where States do not offer licensure or 

otherwise permit such individuals to 

practice or order and certify services, 

the teaching physician’s legal name and 

NPI must be included on the claim for 

services. In this latter circumstance, the 

claims will not be paid unless the 

ordering and certifying physician, in 

this case, the teaching physician, is 

listed on the claim as the ordering or 

certifying physician. 

Comment: Some commenters 

expressed concern about the amount of 

resources that would be required by 

hospitals and academic medical centers 

to enroll licensed residents and fellows 

so that they may continue to order and 

certify. A commenter stated that a 

hospital-wide process must be 

developed for residents to note their 

supervising physician on orders, which 

adds a significant layer of complexity to 

hospital operations. Another commenter 

believed that reporting the teaching 

physician’s name and NPI as the 

ordering or referring supplier when a 

resident or intern orders or refers 

sounds like a practical solution, but the 

administrative burden placed on 

teaching hospitals to ensure a proper 

link between a resident and a teaching 

physician in order to submit these 

claims is a huge cultural and 

administrative paradigm switch that 

will take time to develop, communicate, 

and put into operation. 

Response: As stated previously, in 

order to comply with the requirements 

of section 6405 of the Affordable Care 

Act, a Medicare-enrolled physician 

must be identified for orders or 

certifications for items and services that 

will be billed to Medicare. As stated in 

the previous response, we have 

modified the final rule to accommodate 

teaching hospitals by providing them 

the option of either enrolling 

individuals enrolled in an accredited 

graduate medical education program 

(when State law permits) or by 

identifying the teaching physician in the 

claim. We have developed these options 

in an effort to avoid disruption of 

existing practices in teaching 

institutions as much as possible. 

Comment: A commenter stated that 

physicians in training work in a costefficient fashion under the supervision 

of attending physicians and that to 

require that every order in a large 

teaching service be written by an 

enrolled physician (an attending 

physician) or a mid-level practitioner 

will place a considerable financial 

burden on teaching hospitals and 

medical schools, many of which are 

struggling financially. The commenter 

stated that these facilities would need to 

have a large cadre of Medicare-enrolled 

physicians or mid-level providers 

available at all hours, and that this 

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requirement will dilute the training 

experience of resident physicians 

because they will be unable to 

independently order even the simplest 

diagnostic test. 

Another commenter believed that the 

requirements will make it virtually 

impossible for resident physicians and 

fellows to order diagnostic procedures, 

testing, and consults for Medicare 

beneficiaries. Residents and fellows 

who are reasonably well supervised will 

deliver less costly care than poorly 

trained residents. The commenter 

contended that those who have never 

had to think independently will become 

very costly suppliers because they will 

try to compensate for their lack of 

clinical judgment with over-testing. 

Response: We believe that the 

modifications we made to the final rule 

should diminish the concerns of the 

commenter. As stated previously, we 

have provided options for the teaching 

hospitals to enroll individuals in an 

accredited graduate medical education 

program in Medicare if permitted by 

State law or regulation. 

Comment: Several commenters stated 

that residents who are licensed 

physicians should be allowed to enroll 

in Medicare and order home health 

services. 

Response: Licensed residents are 

physicians and, as such, are eligible to 

enroll in Medicare. Medicare 

regulations state that only physicians 

who are doctors of medicine, 

osteopathy, or podiatry may certify 

home health services. 

Comment: Several commenters stated 

that CMS should consider categorizing 

fellows who do not bill Medicare to be 

‘‘residents’’ so that the teaching 

physicians would be reported in the 

claim as the ordering or referring 

provider. By doing so, the Medicare 

contractors would have fewer 

enrollment applications to have to 

process, which could help reduce their 

workload. 

Response: We agree with the 

commenters’ suggestion and have 

modified this final rule to permit 

individuals who are enrolled in an 

accredited graduate medical education 

program in a State that licenses or 

otherwise enables such individuals to 

practice or order and certify services to 

enroll in Medicare to order and certify. 

In situations where States do not license 

or otherwise permit such individuals to 

practice or order and certify services, 

the teaching physician’s full legal name 

and NPI must be included on the claim 

for services. In this latter circumstance, 

the claims will not be paid unless the 

ordering and certifying physician, in 

this case, the teaching physician, is 

listed on the claim as the ordering or 

certifying physician. Therefore, 

recategorizing fellows is unnecessary 

and we defer to State scope of practice 

laws and regulations on who may order 

and certify. 

Comment: A commenter suggested 

that CMS allow residents to enroll and 

to be identified in PECOS as residents. 

Teaching hospitals could enroll their 

residents using a new code to reflect 

this status. Because this would take 

some time to implement, the commenter 

suggested that CMS further delay 

(beyond the commenter’s suggested 

implementation date of January 3, 2011) 

the requirement that ordering or 

referring providers have enrollment 

records in PECOS. 

Response: The applicable statutory 

and regulatory provisions do not permit 

Medicare to enroll an unlicensed 

physician. However, if States provide 

provisional licenses or otherwise permit 

residents to practice or order and certify 

services, we are allowing them to enroll 

to order and certify, consistent with 

State law. Further, the timing of 

licensure of a resident is determined by 

States and because we are now 

permitting licensed residents to enroll 

in Medicare, it is not necessary and may 

be duplicative, to develop an additional 

code in the enrollment systems. 

Comment: Commenters stated that it 

would be extremely difficult for 

teaching hospitals to comply with the 

July 6, 2010 date because of its timing 

with the start of the new academic year. 

Teaching hospitals are focused on 

activities regarding the turnover of what 

is often 25 percent of their residents and 

there is no time to suddenly add a new 

and disruptive component to those 

ongoing activities. They express concern 

about ensuring that their graduates are 

prepared to practice or continue with 

additional training and that the new 

residents are appropriately credentialed 

so they can begin their training on July 

1, 2010. 

Response: We have been working 

closely with these institutions to ensure 

effective compliance with our 

regulations by the statutorily mandated 

effective date. We clarified in this final 

rule the circumstances under which 

individuals enrolled in accredited 

graduate medical education programs 

can enroll in Medicare to order or 

certify Medicare services. Those 

residents, as defined in § 413.75, who 

are licensed may enroll in Medicare to 

order and certify in the same way other 

as physicians and other eligible 

professionals. This final rule states that 

if State law provides residents, as 

defined in § 413.75, a provisional 

license, or otherwise permits them to 

practice or order and certify services, we 

will enroll them to order and certify. If 

State law does not provide licensure for 

residents, or otherwise permit them to 

practice or order and certify services, 

claims for services provided must 

identify the teaching physician as the 

ordering or certifying physician by his 

or her legal name and NPI. This 

modification from the IFC will provide 

these teaching institutions with options 

to accommodate the policies mandated 

by the Affordable Care Act and this final 

rule. 

o. Deactivation 

Comment: Many commenters noted 

that physicians and other eligible 

professionals who will enroll just to 

order and refer and not to submit claims 

to Medicare will be deactivated if they 

fail to send claims to Medicare for 12 

consecutive months, and that after 

deactivation, they would then need to 

re-enroll in order to continue to order 

and refer. Some of the commenters 

indicated that § 424.540 states that CMS 

‘‘may’’ deactivate the enrollment of a 

provider or supplier if no claim is 

submitted for a year. They suggest that 

the use of ‘‘may,’’ gives CMS discretion. 

These commenters suggested that CMS 

use this discretion and exempt from this 

deactivation process dentists and others 

who would be enrolling just to order 

and refer. 

Response: Deactivation for non-billing 

does not apply to those physicians and 

eligible professionals who have enrolled 

just to order and certify. 

Comment: A commenter asked that 

CMS terminate NPIs, not Medicareassigned PTANs, when a physician’s 

billing privileges are deactivated. The 

commenter pointed out that a physician 

may have multiple PTANs in his/her 

PECOS enrollment record, and that if 

one PTAN is deactivated voluntarily or 

due to non-billing, that physician is no 

longer eligible to order and refer 

although the physician is still enrolled 

in Medicare and is still sending claims 

with, or being identified in claims as the 

rendering provider by his/her NPI. The 

commenter suggested that the NPI, not 

the PTAN, should be the driver of 

ordering and referring eligibility. 

Response: The commenter is correct 

that a physician can have multiple 

PTANs and currently deactivation for 

non-billing is driven by PTAN rather 

than NPI. More than one PTAN may be 

assigned to a physician if the physician 

reassigns his Medicare benefits to more 

than one medical group (a PTAN for 

each reassignment), or works at 

multiple/different practice locations (a 

PTAN for each practice location). Any 

provider or supplier, including a 

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physician, whose billing privileges are 

deactivated for 12 consecutive months 

of non-billing is deactivated by his or 

her PTAN. However, the deactivation of 

one PTAN does not deactivate all 

PTANs. If the physician or other eligible 

professional has more than one PTAN, 

and not all PTANs were deactivated due 

to non-billing, he or she will remain 

enrolled in Medicare to bill using the 

active PTANs and will also remain on 

the Ordering Referring Report. In this 

situation, claims in which he or she is 

identified as the ordering and referring 

provider would not be denied because 

of one deactivated PTAN. 

p. Validly Opting Out 

Comment: A few commenters stated 

that Medicare contractors do not enter 

opt-out physicians in PECOS. Another 

commenter stated that opt-out 

physicians have records in PECOS only 

in situations where they were first 

enrolled in Medicare and then opted 

out. 

Response: Based on the Affordable 

Care Act provisions requiring that 

ordering and referring physicians must 

be enrolled in Medicare, we have 

instituted a consistent process for 

entering physicians who opt out into 

PECOS. When processing an opt-out 

affidavit, Medicare contractors may 

require, and the opting out physician or 

other practitioner must provide, the NPI 

as well as other information that may be 

requested by the Medicare contractor. 

Physicians and other practitioners do 

not have to enroll in Medicare before 

opting out. Those who opt out must 

submit opt-out affidavits every 2 years 

and all who have opted out of Medicare 

will have opt-out records in PECOS. 

Beneficiaries and other providers and 

suppliers may visit the Physician 

Compare Web site at http:// 

www.medicare.gov/find-a-doctor/ 

provider-search.aspx to see if their 

physicians or other practitioners are 

enrolled in Medicare. If the beneficiary’s 

physician or other practitioner is not 

enrolled in Medicare and has not opted 

out, the beneficiary may wish to find 

another physician or practitioner. For 

more information on opting out of 

Medicare, the public may refer to our 

applicable regulations at § 405.425, 

titled ‘‘Effects of opting-out of 

Medicare.’’ 

Comment: Some commenters 

requested that CMS make available a list 

of physicians and other eligible 

professionals who have opted out of 

Medicare. 

Response: Physicians and other 

practitioners who have validly opted 

out of the Medicare program have optout records in PECOS. Physicians and 

non physician practitioners who have 

validly opted out of the Medicare 

program, and elect to order and certify, 

will be on the Ordering Referring 

Report. The Ordering Referring Report 

does not distinguish those who have 

opted out from those who have 

approved enrollment records because 

both, if listed in the Ordering Referring 

Report, may order and certify items and 

services for Medicare beneficiaries. 

q. Public Comments Outside the Scope 

of the IFC Provisions Regarding 

Ordering and Referring Covered Items 

and Services 

Comment: A commenter noted that 

the preamble in the IFC states that CMS 

believes its enrollment requirements 

will promote quality health care 

services for Medicare beneficiaries 

because their credentials will have been 

verified as part of the Medicare 

enrollment process. The commenter 

states that physicians’ credentials have 

already been verified by State licensure 

boards. The commenter believes that 

additional verification by Medicare is 

redundant and a waste of taxpayers’ 

money and professionals’ time. 

Response: While we believe that 

additional verification is necessary to 

ensure quality care is provided to 

Medicare beneficiaries, this comment is 

outside of the scope of this final rule. 

This rule does not modify or impose 

additional screening requirements 

needed for enrollment in Medicare. 

Comment: A commenter stated that 

dentists, who merely order and refer, 

may be further burdened if they will be 

required, as a condition of enrollment, 

to establish a compliance plan. 

Response: Neither the IFC nor this 

final rule addresses the issue of 

‘‘compliance plans.’’ This comment is 

out of scope of this regulation. We 

solicited comments related to 

compliance plans in the September 23, 

2010 proposed rule (75 FR 58204) titled 

‘‘Additional Screening Requirements, 

Application Fees, Temporary 

Enrollment Moratoria, Payment 

Suspensions and Compliance Plans for 

Providers and Suppliers.’’ 

Comment: A commenter who 

supports the new requirement to be 

enrolled in Medicare to order and refer 

suggested that CMS develop a program 

that rewards physicians for making 

appropriate referrals to the lowest cost 

providers as a good second step in cost 

containment. The commenter noted that 

there is no incentive for a physician to 

consider costs in the referral process. 

Response: This comment is outside 

the scope of this regulation and, as such, 

is not addressed in this final rule. 

Comment: A commenter referenced 

the professionals listed in the IFC who 

are permitted to order and refer covered 

Part B DMEPOS, imaging, laboratory, 

and specialist items/services and stated 

that certified registered nurse 

anesthetists (CRNAs) should be eligible 

to order and refer some of those items 

and services. The commenter stated that 

CRNAs order blood work and 

electrocardiograms as part of the preanesthetic assessment, order 

medications for the purpose of 

administering them perioperatively, and 

also have occasion to order chest X-rays 

for patients in the recovery room prior 

to the removal of the patient’s breathing 

tube. The commenter further stated that 

the November 27, 2006 final rule (71 FR 

68683) titled ‘‘Hospital Conditions of 

Participation’’ acknowledged CRNAs as 

ordering providers. 

Response: This regulation does not 

change eligibility to order and certify for 

any provider type and only addresses 

enrollment for those professionals 

eligible to order and certify under 

existing law. Therefore, this suggestion 

is outside the scope of this final rule. 

Comment: A few commenters 

questioned if enforcement of the 

enrolled physician requirement would 

be limited to payment prohibitions for 

ordered and referred items and services 

only, or if there would be survey and 

certification implications for a home 

health agency that is furnishing home 

health services based on a certification 

from a physician who is licensed but 

who does not have an approved 

enrollment record or a valid opt-out 

record in PECOS. 

Response: Nothing in the IFC or this 

final rule changes our current survey 

and certification policies. 

r. Summation and Final Decisions 

After reviewing the public comments 

summarized in this section (section 

II.B.4. a. through q. of this final rule), we 

are finalizing the provisions regarding 

ordering and certifying of covered items 

and services for Medicare beneficiaries 

with several modifications. We want to 

start by clarifying two major 

modifications to this final rule from the 

IFC. First, we stated in the IFC that we 

would reject, not deny, claims from 

providers and suppliers that do not 

comply with these ordering and 

certifying requirements. After reviewing 

the comments, we have determined that 

we will deny such claims to provide the 

suppliers, providers, and beneficiaries 

with appeal rights. However, until 

further notice, we will not activate the 

automated edits that would cause a 

claim not to be paid for lack of an 

approved enrollment record in Medicare 

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or a valid opt-out status. We want to 

assure the beneficiary, provider, and 

supplier communities that we will 

provide advance notice before activating 

the edits by conducting appropriate 

outreach through our established 

channels including listservs, Medicare 

Learning Network (MLN) articles, and 

open door forums. 

Second, we modified this final rule to 

permit residents, as defined in § 413.75, 

who are enrolled in an accredited 

graduate medical education program in 

a State that licenses or otherwise 

enables such individuals to practice or 

order these items or services to enroll in 

Medicare to order and certify. In 

situations where States do not license or 

otherwise permit such individuals to 

practice or order and certify services, 

the teaching physician’s full legal name 

and NPI must be included on the claim 

as the person who ordered or certified 

the service. In this latter circumstance, 

the claims will not be paid unless the 

ordering and certifying physician, in 

this case, the teaching physician, is 

listed on the claim as the ordering or 

certifying physician. We made this 

change to assist teaching hospitals, as 

well as the providers and suppliers who 

render the items and services in 

complying with this rule. 

Among the other changes to this 

section and in response to numerous 

comments received, we have changed 

the enrollment requirement language 

from one requiring enrollment in 

PECOS to one requiring enrollment in 

Medicare—including PECOS or other 

Medicare enrollment systems. We 

believe that this will reduce the number 

of claims that are denied or rejected and 

enable more currently enrolled 

physicians and practitioners to order or 

certify services. 

We clarified our language in this 

provision to refer to the specific items 

and services the rule covers. After 

review of the public comments we 

received, we removed the language 

referring to ‘‘ordered or referred covered 

Part B items and services (excluding 

home health services described in 

§ 424.507(b) and Part B drugs).’’ In this 

final rule, we specifically designate the 

covered items and services as follows: 

DMEPOS items, clinical laboratory, 

imaging, and home health services. Note 

that we have removed specialist services 

from the requirements of this rule. 

We have also clarified our language 

with respect to the home health 

provision of this final rule. The IFC 

stated that physicians who order home 

health services must be listed on the 

claim for payment. However, to be 

technically correct, we have clarified 

our language in this final rule to state 

that those who order/certify must be 

listed on the claim for payment. A 

commenter noted that these physicians 

may be one single physician or separate 

physicians. To that end, we have 

clarified our regulatory language to 

accommodate this public comment. 

Further, the statutory language at 

section 6405 of the Affordable Care Act 

specifically mentions application to the 

ordering and certifying physician. 

Therefore, we have clarified this 

language to be precise and more in 

conformity with the statutory language. 

Finally, as more of a technical 

correction, we have removed all 

references to beneficiary-submitted 

home health claims. After considering 

comments received on this topic, we 

now agree that home health claims 

cannot be submitted by beneficiaries 

and thus, should not be included in this 

final rule. 

C. Requirement for Physicians, Other 

Suppliers, and Providers to Maintain 

and Provide Access to Documentation 

on Referrals to Programs at High Risk of 

Waste and Abuse 

1. Background 

We believe it is imperative to 

establish accountability measures to 

ensure compliance with the ordering 

and referring provisions. To this end, 

the IFC implemented an Affordable Care 

Act provision by adding a new 

provision at § 424.516(f) that required 

providers and suppliers to maintain 

ordering and referring documentation, 

including the NPI, received from a 

physician or eligible non physician 

practitioner for 7 years from the date of 

service. The IFC also established in 

§ 424.535(a)(10) that failure to comply 

with the documentation requirements 

specified in § 424.516(f) is a reason for 

revocation. 

2. Provisions of the Affordable Care Act 

Section 6406 of the Affordable Care 

Act amended section 1842(h) of the Act 

by adding a new paragraph which 

states, ‘‘The Secretary may revoke 

enrollment, for a period of not more 

than one year for each act, for a 

physician or supplier under section 

1866(j) if such physician or supplier 

fails to maintain and, upon request of 

the Secretary, provide access to 

documentation relating to written orders 

or requests for payment for durable 

medical equipment, certifications for 

home health services, or referrals for 

other items or services written or 

ordered by such physician or supplier 

under this title, as specified by the 

Secretary.’’ 

Section 6406(b)(3) of the Affordable 

Care Act amends section 1866(a)(1) of 

the Act to require that providers and 

suppliers maintain and, upon request, 

provide to the Secretary, access to 

written or electronic documentation 

relating to written orders or requests for 

payment for durable medical 

equipment, certifications for home 

health services, or referrals for other 

items or services written or ordered by 

the provider as specified by the 

Secretary. Section 6406(b)(3) does not 

limit the authority of the Office of 

Inspector General to fulfill the Inspector 

General’s responsibilities in accordance 

with applicable Federal law. 

3. Requirements Established by the IFC 

The IFC amended paragraph (f) of 

§ 424.516 to require the following: 

• A provider or supplier that 

furnishes covered ordered items of 

DMEPOS or home health, laboratory, 

imaging, or specialist services, to 

maintain written and electronic 

documentation (to include the NPI of 

the ordering or referring physician or 

eligible professional) relating to written 

orders and requests for payments for 

those items or services for 7 years from 

the date of service, and provide CMS or 

a Medicare contractor access to that 

documentation. 

• A physician who ordered home 

health services and a physician or an 

eligible professional who ordered or 

referred DMEPOS, laboratory, imaging, 

and specialist services to maintain 

documentation relating to the written 

orders and requests for payments for 

those items or services for 7 years from 

the date of the order, certification, or 

referral and, upon request of CMS or a 

Medicare contractor, provide access to 

that documentation. 

The IFC added paragraph (10) to 

§ 424.535(a) to state that the Secretary 

may revoke Medicare enrollment and 

billing privileges for a period of not 

more than 1 year for each act of 

noncompliance for failure of a provider 

or supplier, including physicians and 

other eligible professionals, to comply 

with the document retention and access 

to documentation requirements at 

§ 424.516(f). 

4. Summary of and Responses to Public 

Comments on the Medicare 

Requirement for Physicians, Other 

Suppliers, and Providers to Maintain 

and Provide Access to Documentation 

on Referrals to Programs at High Risk of 

Waste and Abuse 

a. Document Retention 

Comment: A commenter asked if a 

home health agency would be 

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considered to have forged 

documentation if the documentation to 

be required could not be produced by 

the physician but could be found in the 

home health agency’s documentation. 

Response: This final rule places the 

responsibility for the maintenance of 

records on both the ordering and 

certifying physician and the provider 

and supplier. We require that a good 

faith effort is made to comply with this 

rule. However, we understand that from 

time to time situations arise that are 

outside of the control of these 

custodians. In such a case, we may 

conduct an analysis based on the 

specific facts and circumstances 

involved in a particular case. 

Comment: A commenter noted that it 

will take some time for eligible 

professionals who will be enrolling in 

Medicare only to order and refer to fully 

understand their compliance 

obligations. In addition, dentists with 

practice management software and/or 

electronic records may be required to 

consult with their vendors and 

reconfigure their systems in order to 

comply with the documentation and 

disclosure requirements. 

Response: Dentists and others who 

will be enrolling only to order should be 

fully aware of the documentation 

retention and disclosure requirements 

beforehand. We have already published 

considerable information about these 

requirements and have communicated 

directly and in numerous open door 

forums about these requirements. We 

will publish additional guidance, as 

appropriate, via a Medicare Learning 

Network product, messages in our 

provider/supplier listservs, and 

presentations at our provider/supplier 

open door forums. We will also 

continue to provide information directly 

to the ADA, DoD, DVA, PHS, and other 

affected employers of physicians and 

other eligible professionals who enroll 

in Medicare just to order and certify. 

Comment: A commenter requested 

that CMS create exceptions to the 

penalty for non-compliance with the 

documentation retention and disclosure 

requirements. The commenter stated 

that there could be situations where 

documentation is destroyed or lost prior 

to the end of the 7-year required 

retention period, despite a provider’s 

good faith efforts, due to circumstances 

beyond the provider’s control, such as a 

systems malfunction or a natural 

disaster. The commenters stated that 

such providers or suppliers should not 

be penalized in the same manner as a 

provider or supplier who intentionally 

or carelessly disregards the 

documentation requirements. The 

commenter noted that the Act gives the 

Secretary the authority to modify the 

penalties, as it states that ‘‘* * * the 

Secretary may revoke enrollment, for a 

period of not more than one year for 

each act.’’ (Italics added for emphasis.) 

The commenter believed that blanket 

penalties may be inequitable in practice 

and may create a potential disincentive 

to participate in Medicare. 

Response: Medical documentation 

must be stored in a manner consistent 

with applicable security and privacy 

rules. However, we recognize that there 

could be circumstances in which an 

event could occur as indicated by the 

commenter. Therefore, as provided in 

§ 424.535(a), a revocation action is 

discretionary and we would base a 

revocation decision on a complete 

analysis of the facts and circumstances 

prior to making a determination. 

Comment: A commenter stated that a 

referral to home health care or for 

DMEPOS at a hospital or nursing home 

discharge would typically be retained in 

that hospital’s or nursing home’s 

records, not by the physician in his/her 

records. 

Response: The physician or other 

eligible professional who signed the 

order or certification is responsible for 

maintaining and disclosing the 

documentation. We will provide further 

guidance on this after the publication of 

this final rule. 

Comment: A commenter suggested 

that CMS only require document 

retention related to billable services for 

home health services by physicians (that 

is, the certification documents and, 

when care plan oversight 

reimbursement is sought, supporting 

documentation of time spent on such 

activities). The commenter stated that 

the documentation retained by 

physicians who are employed by 

providers or suppliers is governed by 

the requirements of the provider or 

supplier, not the physician. The 

commenter also stated that while 

revocation in Medicare of the physician 

may be appropriate for evidence of 

fraud or abuse, it would not be 

appropriate if a physician’s employer 

lost or misfiled records. Several 

commenters stated that the added 

documentation requirements for 

DMEPOS and home health services are 

not clear and do not specify the specific 

kinds of documents that must be 

retained. Another commenter asked for 

specifics concerning the preferred 

format of retained information. 

Response: This rule does not address 

the content or format of documentation 

that must be maintained and disclosed. 

However, for purposes of clarification, 

we suggest that a reasonable approach is 

for providers and suppliers to retain 

documentation that supports the 

payment of the claim. This could 

include laboratory or other test results 

or findings and office visit notes in 

addition to copies of signed orders and 

certifications. We note that this 

documentation requirement applies to 

paper and electronic documents, as 

indicated in the statute and this final 

rule. 

Comment: A commenter questioned 

whether the documentation 

requirements require that a supplier use 

electronic medical records. The 

commenter states that if a supplier is 

going to be required to use electronic 

medical records, the financial burden 

would put many small suppliers out of 

business. 

Response: The requirements at 

§ 424.516 does not require providers 

and suppliers to use electronic medical 

records. 

Comment: A commenter questioned if 

the failure of a physician to retain a 

copy of the CMS–485 could lead to 

denial of claims and recoupment of 

prior payments from home health 

agencies. 

Response: As stated earlier, this rule 

does not modify or address the content 

requirements for documents to be 

retained. Therefore, this comment is 

outside of the scope of this final rule. 

Comment: Some commenters 

requested that CMS to specifically 

identify the entities or individuals to 

whom such documentation must be 

disclosed (for example, CMS or its 

contractors, an Administrative Law 

Judge, a DMEPOS supplier, and a 

beneficiary). 

Response: Disclosure is required to be 

made, upon request, to CMS or CMS 

contractors. Disclosure may also be 

requested by DHHS OIG for fulfillment 

of the Inspector General’s 

responsibilities and under its 

independent authority. However, this 

list is not exhaustive and other agencies 

such as the Department of Justice (DOJ) 

and the Internal Revenue Service (IRS) 

have separate authority to request 

documentation. 

Comment: A commenter stated that 

interns and residents may be 

responsible for creating, and the dental 

school clinic may be responsible for 

retaining, the records required to 

comply with section § 424.516(f)(2); and 

that other dentists, such as locum 

tenens dentists and those who are 

employed by a government agency or a 

group practice, may not be capable of 

maintaining independent 

documentation of orders and referrals 

and may not be able to grant CMS or a 

Medicare contractor access to those 

records. This commenter asked CMS to 

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clarify how the requirements in this 

section would apply to dentists. This 

commenter also urged that a dentist 

who is unable to comply with a 

disclosure request because another 

person or entity has control over the 

documentation not be subject to 

revocation of enrollment and billing 

privileges in Medicare under 

§ 424.535(a)(10). 

Response: The requirements of 

§ 424.516(f)(2) apply to interns, 

residents, and dentists in the same way 

they apply to enrolled physicians and to 

other eligible professionals. We will 

provide further guidance on this during 

the implementation of the provisions 

contained in this final rule. 

Comment: Several commenters stated 

that the document retention 

requirements vary considerably 

depending on different parts of the 

Medicare program. Physicians do not 

know how long they need to retain 

certain records. We should provide 

education to physicians on document 

retention requirements for various parts 

of the Medicare program. 

Response: This final rule does not 

address documentation requirements 

(for example, those found in § 420.300 

through § 420.304) for other parts of the 

Medicare program other than 

documentation retention and provision 

requirements related to particular items 

and services that are ordered and 

certified. Some aspects of this comment 

are outside the scope of this final rule. 

We are requiring that documentation 

pertaining to ordered and certified 

services and supplies be retained for 7 

years, as specified in § 424.516(f). We 

will continue to provide educational 

material to the public as we implement 

the specific provisions in this final rule. 

Comment: Several commenters stated 

that the documentation requirements 

should apply only to the imaging 

facility (the technical component 

provider) and not the ordering or 

referring provider or the interpreting 

physician. To require the ordering or 

referring provider or the interpreting 

physician to maintain documentation is 

unnecessary and is a duplication of 

effort and expense, and many such 

providers are currently ill-equipped to 

do this. Ordering physicians do not 

differentiate between the technical and 

professional components of their order; 

they assume both will occur. 

Response: We are not placing 

documentation requirements on 

physicians who interpret imaging tests. 

Section 1866(a)(1)(W) of the Act 

authorizes the Secretary to extend these 

requirements to other items and 

services. Section 424.516(f)(1) and at 

§ 424.535(a)(10) apply to home health 

agencies, DMEPOS suppliers, clinical 

laboratories, imaging centers, and those 

physicians and other eligible 

professionals who ordered or certified 

home health, DMEPOS, clinical 

laboratory, and imaging services. 

Comment: Many commenters stated 

that § 424.516 should not require 

maintenance of documentation related 

to requests by a physician that the 

patient see another physician. Section 

424.516 should apply only to items and 

services for which Medicare requires a 

written order or referral (such as 

DMEPOS, home health, laboratory, and 

diagnostic tests). 

Response: As stated earlier in this 

preamble, we have removed 

requirements for specialist services in 

§ 424.507 and § 424.516 from this final 

rule. 

Comment: Several commenters 

recommended that § 424.535 be revised 

to reflect less severe penalties for failure 

to retain and/or disclose documentation 

of orders and referrals. They suggested 

that allowing the recovery of applicable 

Medicare payments and the 

establishment of and compliance with a 

corrective action plan be the required 

penalties for noncompliance. 

Response: This regulation implements 

section 6406 of the Affordable Care Act 

which amended section 1843(h) of the 

Act. Section 1842(h)(9) of the Act states, 

The Secretary may revoke enrollment, for 

a period of not more than one year for each 

act, for a physician or supplier under section 

1866(j) if such physician or supplier fails to 

maintain and, upon request of the Secretary, 

provide access to documentation relating to 

written orders or requests for payment for 

durable medical equipment, certifications for 

home health services, or referrals for other 

items or services written or ordered by such 

physician or supplier under this title, as 

specified by the Secretary. 

We believe that the penalties to be 

imposed are appropriate and in 

accordance with the statute. 

Comment: A commenter 

recommended that the stated 

documentation requirements at 

§ 424.516(f) be revised to limit 

physician documentation requirements 

to a copy of the home health Plan of 

Care and the certification/recertification 

forms, and not to require retention of 

interim orders except when they are for 

added billable services and not to 

require a physician’s NPI on the 

certification/recertification form or 

interim orders for added billable 

services until CMS issues detailed 

guidance for the content of the Plan of 

Care, including specific physician’s NPI 

requirements. 

Response: As noted in earlier 

responses, this final rule does not 

provide an exhaustive list of the 

documentation to be retained and 

produced if requested. However, any 

documentation that supports the 

payment of the claim should be retained 

and must be made available upon 

request. The NPI of the ordering or 

certifying provider must be included in 

the retained documentation. 

b. Technical, Administrative, and 

Procedural Modifications and 

Corrections 

Comment: Several commenters noted 

that the requirements added at § 424.507 

apply to Part B items and services 

(excluding Part B drugs) and Part A and 

Part B home health services, whereas 

the documentation requirements added 

at § 424.516 apply to a narrower set of 

services (that is, § 424.516 specifically 

states DMEPOS, home health, 

laboratory, imaging, and specialist 

services). The commenters stated that 

CMS should apply the document 

retention requirements and the ordering 

or referring provider enrollment 

requirements to the same types of orders 

and referrals. 

Response: We have revised the 

regulatory text for consistency. The 

ordering and certifying requirements 

and the documentation requirements 

apply to the same items and services, 

specifically: DMEPOS, imaging and 

clinical laboratory services, and home 

health services. 

c. Public Comments Outside the Scope 

of the Requirement To Maintain and 

Provide Access to Documentation of 

Referrals 

Comment: A commenter stated that 

the documentation requirement could 

have a significant impact on patients 

who present for services or supplies 

with an order that is not signed. The 

patient may be delayed in receiving 

medically necessary care while the 

provider or supplier who would furnish 

the item or service requests a signed 

order. Obtaining the signature places a 

burden on the provider or supplier who 

would furnish the service. 

Response: We believe this comment is 

outside of the scope of this final rule 

because we are not modifying 

requirements for orders to be signed. 

Comment: A commenter stated that 

the need to produce I–9 forms for 

foreign born suppliers is 

administratively burdensome on large 

provider groups. 

Response: Production of an I–9 form 

for foreign born suppliers is not a 

requirement of this final rule and 

therefore outside of the scope of issues 

to be addressed. 

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d. Summation and Final Decisions 

After review of the all of public 

comments presented this section 

(section II.C.4. a. through c. of this final 

rule), we are finalizing the document 

retention requirements with several 

modifications. We are revising the 

provisions to follow the ordering and 

certifying provisions’ covered items and 

services to include DMEPOS, laboratory, 

and imaging services, and home health 

services. We have also clarified that 

document maintenance and affording 

access to documentation, with regard to 

the home health provision, applies to 

orders and certifications. This provision 

has been clarified for the same reasons 

we clarified § 424.507, as described 

herein. 

We have clarified that documents 

must be retained from the date of 

service, rather than the date of the order 

or certification- as specified in the IFC. 

Specialist services are no longer 

included in either the ordering and 

referring provision of § 424.507 or the 

document retention provision in 

§ 424.516. 

Section 424.535 remains unchanged 

in the fact that a provider or supplier 

that does not meet the requirements of 

§ 424.516 is subject to revocation for not 

more than 1 year for each act of 

noncompliance. Finally, as a technical 

correction, we removed a provision in 

§ 424.535 that references section 1866(j) 

of the Act. 

III. Provisions of the Final Rule 

In this section of the final rule, we 

discuss the changes made from the IFC. 

We are finalizing the provisions of the 

IFC with the modifications based on our 

response to comments and other 

statutory and technical changes stated 

in this section of the final rule. 

In section II.A. of this final rule, we 

discuss the inclusion of the NPI on all 

Medicare enrollment applications, 

pursuant to Medicaid provider 

agreements, and on Medicare and 

Medicaid claims. We note that the main 

objectives of that section remain 

constant from the IFC to this final rule 

in that providers and suppliers must 

provide their NPIs as a part of their 

enrollment record. Furthermore, this 

NPI must be reported on any claims for 

payment, along with the NPI of any 

other provider or supplier listed on the 

claim form. We made a few 

modifications to the NPI provisions 

included in the IFC. In § 424.506, we 

made the following changes: 

• Revised paragraph (b)(1) to include 

the text of paragraph (b)(2). 

• Removed the existing paragraph 

(b)(2) and redesignated paragraph (b)(3) 

and paragraph (b)(2). 

• Paragraph (c)(1) was revised to 

insert the word ‘‘must’’ between the 

words ‘‘Medicare’’ and ‘‘include’’ 

because the word was inadvertently 

omitted in this requirement in the IFC. 

In section II.B. of this final rule, we 

discuss our provisions regarding 

ordering and certifying covered items 

and services for Medicare beneficiaries. 

In that section of this final rule, set forth 

are specific provider and supplier 

mandates for enrolling in Medicare to 

order and certify certain, specified items 

or services including DMEPOS, 

laboratory and imaging services, and 

home health services. We stress that this 

rule finalizes conditions of payment for 

ordered items and services, and it does 

not address broader payment policy 

questions. It neither changes eligibility 

requirements that permit certain 

provider types to order or certify, nor 

does it detail which items or services 

they are permitted to order or certify. 

This rule, in its applicable sections, 

only addresses the enrollment 

requirements for those eligible 

professionals who are permitted to order 

and certify under existing rules. We are 

making the following modifications 

regarding ordering and certifying 

covered items and services for Medicare 

beneficiaries: 

• In § 424.507, we made the following 

changes: 

++ Revised the introductory text for 

paragraph (a) to clarify the items and 

services to which this paragraph applies 

(covered Part B DMEPOS items and 

clinical laboratory and imaging 

services). We also deleted the reference 

to specialist services. 

++ Revised paragraph (a)(1) by 

inserting the word ‘‘claim’’ between the 

words ‘‘supplier’s’’ and ‘‘must.’’ 

++ Revised paragraph (a)(1)(iii) to 

state that the physician or other eligible 

professional, when permitted, must be 

enrolled in Medicare in an approved 

status or have validly opted- out of the 

Medicare program. 

++ Revised paragraph (a)(1)(iv) to 

require that claims identify the teaching 

physician as the ordering or certifying 

provider when an unlicensed resident 

or a non-enrolled licensed resident 

orders or certifications. We are also 

providing the option of enrollment if 

residents possess a provisional license 

or are otherwise permitted by their State 

to practice or order and certify. 

++ Revised paragraph (a)(2)(iii) to be 

consistent with paragraph (a)(1)(iii). 

++ Revised paragraph (a)(2)(iv) to be 

consistent with paragraph (a)(1)(iv) by 

requiring that claims identify the 

teaching physician as the ordering or 

certifying provider when an unlicensed 

resident or a non-enrolled licensed 

resident orders or certifications. We are 

also providing the option of enrollment 

if residents possess a provisional license 

or are otherwise permitted by their State 

to practice or order and certify. 

++ Revised paragraph (b)(3) (formerly 

paragraph (b)(1)(iii)) to be consistent 

with paragraph (a)(1)(iii) by requiring 

that home health claims identify the 

teaching physician as the ordering/ 

certifying provider when an unlicensed 

resident or a non-enrolled licensed 

resident certifies. We are also providing 

the option of enrollment if residents 

possess a provisional license or are 

otherwise permitted by their State to 

order/certify or practice. 

++ Removed the requirements for 

home health claims submitted by 

Medicare beneficiaries in paragraph 

(b)(2). This change resulted in the 

rewording of the title of paragraph (b) to 

read: ‘‘Conditions for payment of claims 

from home health providers for covered 

home health services’’ and the 

renumbering of the requirements in 

paragraph (b). 

++ Revised paragraph (b) by 

removing the word ‘‘ordered’’ from the 

provision. This change will result in the 

wording as follows: ‘‘To receive 

payment for covered Part A or Part B 

home health services, a provider’s home 

health services claim must meet all of 

the following requirements:’’ 

++ Revised paragraph (b)(1) and 

(b)(2) (formerly paragraph (b)(1)) to 

include certifications, not simply orders 

for home health. 

++ Revised paragraph (c) to state that 

we will deny a claim from a provider or 

supplier for covered services described 

in § 424.507(a) and § 424.507(b) if the 

claim does not meet the requirements of 

§ 424.507(a)(1) and § 424.507(b), 

respectively. We also changed the 

reference from § 424.507(b)(1) to 

§ 424.507(b). 

++ Revised paragraph (d) to remove 

the references to sections that relate to 

home health services and home health 

claims, as Medicare beneficiaries do not 

submit claims for home health services. 

In section II.C. of this final rule, we 

discuss the IFC provisions regarding 

document retention requirements. We 

are finalizing these requirements with 

the following modifications: 

• In § 424.516, we made the following 

changes: 

++ Removed the words ‘‘specialist 

services’’ in paragraph (f)(1) and we 

more specifically described the items 

and services to which the final rule 

applies. 

++ Revised paragraph (f)(2) to more 

specifically describe the items and 

services to which this final rule applies. 

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++ Revised paragraphs (f)(1) and 

(f)(2) to more explicitly describe the 

home health events to which this final 

rule applies by specifically referring to 

orders and certifications. 

• In § 424.535(a)(10)(i), we removed 

the reference to section 1866(j) of the 

Act. 

IV. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 30- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the Paperwork 

Reduction Act of 1995 requires that we 

solicit comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

A. ICRs Regarding National Provider 

Identifier (NPI) on All Medicare 

Enrollment Applications and Claims 

(§ 424.506) 

Section 424.506(b)(1) states that 

providers and suppliers who are eligible 

for NPIs be required to report their NPIs 

on their enrollment applications for 

Medicare. Similarly, § 424.506 (b)(2) 

states that if providers or suppliers 

enrolled in Medicare prior to obtaining 

NPIs and their NPIs are not in their 

enrollment records, they must submit 

enrollment applications containing their 

NPIs. 

The burden associated with the 

requirements in § 424.506(b) is the time 

and effort necessary for a provider or a 

supplier to apply for an NPI and the 

time and effort necessary to report the 

NPIs on their enrollment applications 

for Medicare. 

Sections § 424.510 and § 424.515 state 

that providers and suppliers must 

submit enrollment information on the 

applicable enrollment application and 

update, resubmit, and recertify the 

accuracy of their enrollment 

information every 5 years. In addition, 

§ 424.516 lists reporting requirements 

for providers and suppliers. To submit 

enrollment information for an initial 

application (even if enrolling just to 

order and certify), a change of 

information, or to respond to a 

revalidation request, a provider or 

supplier must complete and submit the 

applicable CMS–855 form or complete 

and submit the form over the Internet 

using Internet-based PECOS. Although 

we are unable to quantify the number, 

we do not believe that a significant 

number of physicians and eligible 

professionals will enroll in Medicare 

just to order and certify. The burden 

associated with the enrollment 

requirements found in § 424.510, 

§ 424.515, and § 424.516 is the time and 

effort necessary to complete and submit 

applicable Medicare form. While this 

burden is subject to the PRA, it is 

currently approved under existing OMB 

control numbers (OCN). Specifically, 

the burden associated with obtaining an 

NPI is currently approved under OCN 

0938–0931. The burden associated with 

submitting initial Medicare enrollment 

applications and updating Medicare 

enrollment information to include NPI 

is approved under OCN 0938–0685 

(Applications CMS–855 A, B, I, and R) 

0938–1056 (Application CMS–855 S). 

Section 424.506(b)(1) states that 

providers and suppliers who are 

enrolled in Medicare must report their 

NPIs and the NPIs of any other 

providers or suppliers who are required 

to be identified in their claims on all 

paper and electronic claims that they 

send to Medicare. The burden 

associated with this requirement is the 

time and effort necessary to complete 

and submit a claim form. The burden 

associated with this collection is 

accounted for under OCN 0938–0999. 

We are currently seeking reinstatement 

of the control number. 

B. ICRs Regarding Ordering and 

Referring Covered Items and Services for 

Medicare Beneficiaries (§ 424.507) 

Section 424.507 states that to receive 

payment for covered Part A or Part B 

home health services, the claim must 

contain the legal name and the NPI of 

the ordering physician; and to receive 

payment for covered items of DMEPOS, 

and certain other covered Part B items 

or services (excluding Part B drugs), the 

claim must contain the legal name and 

the NPI of the ordering or certifying 

physician or eligible professional. The 

burden associated with these 

requirements is the time and effort 

necessary to submit a claim with the 

required information. The burden 

associated with this collection is 

accounted for under OCN 0938–0999. 

We are currently seeking reinstatement 

of the control number. 

C. ICRs Regarding Additional Provider 

and Supplier Requirements for Enrolling 

and Maintaining Active Enrollment 

Status in the Medicare Program 

(§ 424.516) 

Section 424.516(f)(1) discusses the 

documentation requirements for 

providers and suppliers. A provider or 

supplier is required for 7 years from the 

date of service to maintain and upon 

request of CMS or a Medicare 

contractor, provide access to 

documentation, including the NPI of the 

physician or the eligible professional 

who ordered or certified the item or 

service, relating to written orders or 

requests for payments for items of 

DMEPOS, home health, laboratory, and 

imaging services. Similarly, § 424.516(f) 

discusses the documentation 

requirements for providers and 

suppliers. At § 424.516(f)(1), providers 

and suppliers are required for 7 years 

from the date of service to maintain and, 

upon request of CMS or a Medicare 

contractor, provide access to 

documentation, including the NPI of the 

physician or the eligible professional 

who ordered or certified the item or 

service, relating to written orders or 

requests for payments for items of 

DMEPOS, home health, laboratory, and 

imaging services. At § 424.516(f)(2), 

physicians and eligible professionals are 

required for 7 years from the date of 

service to maintain and, upon request of 

CMS or a Medicare contractor, provide 

access to written and electronic 

documentation relating to written orders 

or certifications for items of DMEPOS, 

home health, laboratory, and imaging 

services. 

The burden associated with the 

requirements in § 424.516(f) is the time 

and effort necessary to both maintain 

documentation on file and to furnish the 

information upon request to CMS or a 

Medicare contractor. While the 

requirement is subject to the PRA, we 

believe the associated burden is exempt. 

As discussed in the November 19, 2008 

final rule (73 FR 69726), we believe the 

burden associated with maintaining 

documentation and furnishing it upon 

request is a usual and customary 

business practice and thereby exempt 

from the PRA under 5 CFR 1320.3(b)(2). 

D. ICRs Regarding the Reporting of 

National Provider Identifier by Medicaid 

Providers (§ 431.107(b)(5)) 

Section 431.107(b)(5) states that a 

Medicaid provider has to furnish its NPI 

(if eligible for an NPI) to its State agency 

and include its NPI on all claims 

submitted under the Medicaid program. 

The burden associated with the 

Medicaid requirements in 

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25314 Federal Register / Vol. 77, No. 82 / Friday, April 27, 2012 / Rules and Regulations 

§ 431.107(b)(5) is the time and effort 

necessary for a provider to report the 

NPIs to the State agency and on claims 

submitted to the Medicaid program. 

1. Enrollment Applications 

We have considered the burden 

associated with enrollment applications 

for Medicaid by estimating the number 

of providers. Specifically— 

• There will be 56,250 Medicaid and 

CHIP providers in a given 12-month 

period that seek to enroll in Medicaid; 

and 

• According to State Program 

Integrity Assessment data for FFYs 2007 

and 2008, there has been an average of 

1,855,070 existing Medicaid and CHIP 

providers nationally over the 2-year 

period of FFYs 2007 and 2008. Of these 

1,855,070 providers, approximately onefifth of them, or 371,014 (1,855,070 × 

.20), would be required to revalidate 

their enrollment each year under 

§ 431.107(b). 

For purposes of this paperwork 

burden assessment only, we assumed 

that 427,264 providers (56,250 + 

371,014) will either initially enroll in or 

be required to revalidate their 

enrollment in Medicaid and, as part of 

this, be required to report their NPI. 

We recognize that not all of these 

providers will have NPIs to report; a 

very small percentage of them may be 

exempt from having to obtain an NPI. 

We further understand that: (1) Some 

States may choose to allow (or even 

require) providers to submit their NPIs 

via mechanisms that are potentially less 

burdensome than submitting an initial 

enrollment or revalidation application; 

and (2) the previous figures include 

CHIP providers, who are not subject to 

the requirements of § 431.107(b). 

However, we chose to utilize the 

427,264 figure and the application 

reporting mechanism for this paperwork 

burden assessment, so as not to 

underestimate the potential burden of 

this particular requirement. We 

estimated that it will take an average of 

less than 1 minute (or 0.01666 hours) for 

a medical technician to report a 

Medicaid provider’s NPI to the State 

agency on an enrollment or 

reenrollment application. However, we 

assumed 1 minute for purposes of this 

burden. This results in an annual hour 

burden of 7,118 hours (or 427,264 × 

0.01666). At a per hour cost of $14.51, 

according to the Bureau of Labor 

Statistics (BLS) for May 2011 for the 

mean hourly wage of a medical 

assistant, we projected a total annual 

cost of $103,282. 

2. Claims 

In FY 2008, approximately 2.5 billion 

Medicaid claims were submitted. This 

number has remained relatively 

constant since then. 

As of May 23, 2008, and consistent 

with 45 CFR 162.410, the NPI has been 

required for all HIPAA-standard 

transactions. This means that Medicaid 

providers have been required since that 

date to disclose their NPI on all HIPAAstandard transactions, which we 

estimate to represent about 95 percent of 

all Medicaid claim submissions. We 

arrived at this percentage because we 

polled 10 States and using their 

individual percentage of electronic 

claims submission compiled an average 

of 95 percent. We then applied that 

percentage to the nation since 10 States 

we polled represent a sample of small 

and large States as well as States with 

a low and high Medicaid population 

and therefore we believe can be 

considered an adequate sample. 

We will not be furnishing an 

estimated burden for the requirement 

that a provider furnish its NPI on claims 

because this requirement already 

applies to the vast majority of Medicaid 

claims under § 431.107(b)(5), and 45 

CFR 162.410. The burden we estimate 

here will be for those claims—in 

general, paper claims—that are not 

HIPAA-standard transactions but that 

now must contain the NPI per 

§ 431.107(b)(5). It is true that some 

States have been requiring the 

submission of the NPI on all Medicaid 

claims, even those that are not subject 

to § 431.107(b)(5). However, no burden 

has been prepared for this. We do so in 

this final rule. 

We projected that 5 percent of the 2.5 

billion claims previously referenced—or 

125 million—will not qualify as HIPAAstandard transactions. These claims will 

need to contain the provider’s NPI. We 

estimate that it will take the provider/ 

medical assistant less than 1 minute to 

add the NPI to the claim but for 

purposes of the burden we estimated 1 

minute—or 0.01666 hours—to furnish 

its NPI on the claim. This results in an 

annual burden of 2,082,500 hours. At a 

per hour cost of $14.51, we project the 

annual cost of this requirement to add 

the NPI to paper or non-HIPAA standard 

transactions to be $30,317,075. We wish 

to point out that as a result of this final 

rule, all claims will be required to have 

an NPI so as States implement these 

requirements, the burden will continue 

to decrease. Of note, while we received 

no comments on the burden for 

appending the NPI to the Medicaid 

provider agreement and/or the Medicaid 

claims for payment, we have updated 

these estimates to account for a medical 

assistant rather than a medical 

technician, since we believe a medical 

assistant is more likely to provide 

administrative support to the provider 

and to account for the May 2011 BLS 

mean hourly wage of a medical assistant 

rather than the 2008 mean hourly wage 

of the medical technician. 

Table 1 indicates the paperwork 

burden associated with the 

requirements of this final rule. The only 

two requirements listed are those 

involving the Medicaid NPI provisions 

described in § 431.107(b)(5). The 

remaining requirements, as explained 

above, are either exempt from the PRA 

requirement or the burden for them has 

been addressed in other PRA packages/ 

assessments. 

TABLE 1—ESTIMATED AVERAGE ANNUAL REPORTING/RECORDKEEPING BURDEN

Regulation 

section 

OMB 

Control 

No. 

Respondents Responses 

Burden 

per 

response 

(hours) 

Total 

annual 

burden 

(hours) 

Hourly 

labor 

cost of 

reporting 

($) 

Total 

labor 

cost of 

reporting 

($) 

Total 

capital/ 

maintenance 

costs 

($) 

Total 

cost 

($) 

431.107(b)(5)—Enrollment ......... 0938–New .. 427,264 427,264 0.01666 7118 14.51 103,282 0 103,282 

431.107(b)(5)—Claims ............... 0938–New .. 2,500,000,000 125,000,000 0.01666 2,082,500 14.51 30,217,075 0 30,217,075 

Total ..................................... .................... 2,500,427,264 125,427,264 ................ 2,089,618 .................. .................... .................... 30,320,357 

If you comment on these information 

collection and recordkeeping 

requirements, please submit your 

comments to the Office of Information 

and Regulatory Affairs, Office of 

Management and Budget, 

Attention: CMS Desk Officer, CMS– 

6010–F. 

Fax: (202) 395–6974; or 

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Federal Register / Vol. 77, No. 82 / Friday, April 27, 2012 / Rules and Regulations 25315 

Email: 

OIRA_submission@omb.eop.gov. 

In response to our solicitation of 

comments on these issues, we received 

the following comments: 

Comment: A commenter believed that 

CMS should re-estimate the actual 

burden of completing the CMS–855I 

enrollment applications with respect to 

the burden required by this final rule, 

including contractor processing time 

and the interruption of Medicare 

reimbursement for the physician. 

Response: With respect to the 

completion of CMS–855 form pursuant 

to the final rule, we believe that the 

overall burden will, in general, be 

increased only by the number of 

individuals who are enrolling just to 

order and certify via the new CMS– 

855O form, as most other physicians 

and eligible professionals who order 

and certify have already enrolled in 

Medicare via the CMS–855I. In other 

words, the new burden relates to the 

CMS–855O, not the CMS–855I. As 

explained later in this section, the 

burden associated with completing the 

new CMS–855O form was addressed in 

the Paperwork Reduction Act (PRA) 

package for that form. 

Comment: A commenter stated that 

the costs of preparing and filing 

correspondence and records (paper, or 

scanned from paper and put into an 

electronic record) would be 

astronomical, with no evidence of 

benefit in fraud prevention or detection. 

Response: This final rule does not 

address the format, context, or mode of 

documentation. However, for purposes 

of clarification, we do not require that 

paper documentation be converted into 

electronic format in order to meet the 

documentation and disclosure 

requirements of this final rule. 

Moreover, we believe that such 

document retention is a normal and 

customary business practice. As such, 

we do not foresee additional costs 

associate with a practice that is already 

in existence for many providers. 

Comment: Several commenters 

questioned what is meant by the phrase 

‘‘providing access to that 

documentation.’’ If this means that 

physician specialty practices will have 

to allow CMS or its contractor access to 

their patient records, it would be 

burdensome and disruptive to the 

practices and could create potential 

patient privacy problems. This would be 

even more difficult for electronically 

maintained records. 

Response: CMS, its contractors, and/ 

or the DHHS OIG may request access to 

required documentation. It is the 

responsibility of the provider and 

supplier, and of the physician or other 

eligible professional, or their provider/ 

supplier employers, where appropriate 

and as discussed earlier, to determine 

the method of storage of the required 

documentation, the location of the 

stored required documentation, and the 

means by which it will disclose the 

required documentation to CMS, its 

contractors, and/or the DHHS OIG in 

order to comply with this final rule. 

Medical practices and other employers 

that are responsible for the 

documentation and disclosure 

requirements must ensure that they can 

meet these requirements in order to 

remain active in the Medicare program. 

Comment: Several commenters stated 

that the IFC does not include an 

adequate analysis of the impact of the 

expanded documentation requirement 

for physicians. Repeated audits over a 

7-year period of time is not part of a 

regular administrative work flow and 

will cause considerable financial 

burden, absorb staff time, and require 

investment in the maintenance of 

documentation. Small medical practices 

do not have the necessary resources to 

do this. 

Response: We do not foresee 

providers, suppliers, physicians, etc., 

being subjected to ‘‘repeated’’ audits. To 

the contrary, such audits will, in 

general: (1) Be performed only as an ‘‘as 

needed’’ basis, and (2) merely involve 

requests for limited numbers of 

documents. Moreover, we believe that 

such infrequent audits are, like 

documentation retention, normal 

business practices. It is not altogether 

uncommon, for example, for a private 

health insurance plan—as part of an 

investigation—to request certain 

documentation from a supplier in order 

to support the need for a particular 

service that was provided. 

V. Regulatory Impact Analysis 

A. Statement of Need 

This final rule is necessary to finalize 

provisions of the May 5, 2010 IFC. As 

discussed earlier, the IFC implemented 

several provisions of the Affordable 

Care Act: 

• Section 6402(a), which requires all 

Medicare and Medicaid providers of 

medical or other items or services and 

suppliers that qualify for a National 

Provider Identifier (NPI) to include the 

NPI on all Medicaid provider 

agreements, Medicare enrollment 

records, and Medicare and Medicaid 

claims for payment. 

• Section 6405, which requires 

physicians or eligible professionals who 

order and/or certify Medicare services to 

be enrolled in Medicare. 

• Section 6406, which requires 

physicians and suppliers to maintain 

and provide access to documentation 

relating to written orders or requests for 

payment for DMEPOS, HHA, and other 

services as specified by the Secretary. 

We also believe that this final rule is 

needed to help ensure that (1) accurate 

claims are submitted; (2) the Medicare 

items and services being ordered and/or 

certified are valid and necessary; and (3) 

appropriate records of orders and 

certifications for Medicare items and 

services are maintained. 

B. Overall Impact 

We have examined the impact of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulations 

and Regulatory review (January 18, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Act, section 

202 of the Unfunded Mandates Reform 

Act of 1995 (March 22, 1995; Pub. L. 

104–4), Executive Order 13132 on 

Federalism (August 4, 1999), and the 

Congressional Review Act (5 U.S.C. 

804(2)). 

Executive Orders 12866 and 13563 

directs agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). A regulatory impact analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

($100 million or more in any single 

year). As discussed in more detail later 

in this section, we believe that the 

savings resulting from this final rule 

will exceed $100 million in each of the 

next 10 fiscal years, beginning in fiscal 

year (FY) 2013. Therefore, this is an 

economically significant rule based 

upon section 3(f)(1) of Executive Order 

12866. 

The Regulatory Flexibility Act (RFA) 

requires agencies to analyze options for 

regulatory relief for small entities, if a 

rule has a significant impact on a 

substantial number of small entities. For 

purposes of the RFA, we estimate that 

small entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. The great 

majority of hospitals and most other 

health care providers and suppliers are 

small entities, either by being nonprofit 

organizations or by meeting the SBA 

definition of a small business (having 

revenues of less than $7.0 million to 

$34.5 million in any one year. 

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25316 Federal Register / Vol. 77, No. 82 / Friday, April 27, 2012 / Rules and Regulations 

Individuals and States are not included 

in the definition of a small entity. As we 

stated in the IFC, we do not believe that 

this rule will have a significant 

economic impact on a substantial 

number of small entities. Nonetheless, 

we recognize that the potential effects of 

this final rule could impact some 

providers of covered imaging, clinical 

laboratory, DMEPOS, and home health 

items and services. We have therefore, 

elected to prepare a voluntary RFA 

analysis. As many of the requirements 

of the RFA are contained in our RIA, 

this RIA section also constitutes the 

RFA. Section 1102(b) of the Act requires 

us to prepare a regulatory impact 

analysis if a rule may have a significant 

impact on the operations of a substantial 

number of small rural hospitals. This 

analysis must conform to the provisions 

of section 604 of the RFA. For purposes 

of section 1102(b) of the Act, we define 

a small rural hospital as a hospital that 

is located outside of a Metropolitan 

Statistical Area and has fewer than 100 

beds. We are not preparing an analysis 

for section 1102(b) of the Act. The 

Secretary has determined that this final 

rule will not have a significant impact 

on the operations of a substantial 

number of small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

also requires that agencies assess 

anticipated costs and benefits before 

issuing any rule whose mandates 

require spending in any 1 year of $100 

million in 1995 dollars, updated 

annually for inflation. In 2011, that 

threshold is approximately $136 

million. This final rule does not 

mandate expenditures by either the 

governments mentioned or the private 

sector; therefore, no analysis is required. 

Executive Order (EO) 13132 

establishes certain requirements that an 

agency must meet when it promulgates 

a proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

Since this regulation does not impose 

significant costs on State or local 

governments, the requirements of E.O. 

13132 are not applicable. 

C. Anticipated Effects 

As previously stated, we project, 

based on internal CMS data, that the 

total savings to the Federal government 

resulting from this final rule will exceed 

$100 million in each of the next 10 

fiscal years. The total savings at the end 

of this 10-year period is estimated to be 

$1.59 billion. This figure accounts for 

our estimates that: (1) Approximately 5 

percent of physicians will not be 

enrolled; (2) such physicians have only 

50 percent as many Medicare enrollees 

as other physicians; and (3) 10 percent 

of patients of those physicians will not 

seek out enrolled physicians. The 

product of these is inflated by 25 

percent to account for other providers 

who could potentially order services. 

The net result is roughly a 0.3 percent— 

or $1.59 billion—reduction in DMEPOS, 

imaging and clinical laboratory services, 

and Part A and Part B home health costs 

over the next 10 years attributable to 

patients who will choose not to seek out 

an enrolled physician to obtain such 

services. In addition, some claims 

without proper documentation will be 

denied, including some fraudulent 

claims, but we do not have a basis for 

quantifying the value of such claims. 

Table 2 outlines the year-by-year 

projected savings to the Federal 

government over the next decade. 

TABLE 2—PROJECTED SAVINGS

Fiscal year Savings * 

(in $millions) 

2013 ................................ 110 

2014 ................................ 120 

2015 ................................ 130 

2016 ................................ 140 

2017 ................................ 150 

2018 ................................ 160 

2019 ................................ 180 

2020 ................................ 190 

2021 ................................ 200 

2022 ................................ 210 

Total ......................... 1,590 

* In actual dollars for the years presented. 

We believe that the rule’s other effects 

will be minimal. With respect to 

§ 424.506, practically all providers and 

suppliers that wish to enroll in 

Medicare and Medicaid programs have 

already obtained NPIs and are currently 

meeting requirements regarding the 

need to report their NPIs on, as 

applicable, enrollment applications and 

claims. Regarding § 424.516(f), we 

believe that most providers and 

suppliers already retain such 

documentation as a usual and 

customary business practice. 

D. Alternatives Considered 

Since this final rule is a codification 

of statutory provisions found in the 

Affordable Care Act, we did not 

consider alternatives to the overall 

processes described in the IFC. We did 

consider the possibility of including 

additional items and services on the list 

of those affected by this final rule. 

However, while we have the authority 

under section 6405(c) of the Affordable 

Care Act to expand the requirements of 

section 6405(a) and (b) of the Affordable 

Care Act to all other categories of items 

or services under Title XVIII of the Act, 

we chose to expand these requirements 

only to clinical laboratory and imaging 

services, rather than to many other types 

of services. (Specialist services, 

moreover, are no longer covered by the 

requirements of this final rule.) We 

believe that the application of these 

requirements to limited categories of 

items and services will ease the overall 

burden on the provider and supplier 

communities. Moreover, in response to 

comments on the IFC, we considered 

and adopted the following alternatives 

that we believe will further the impact 

of these provisions. 

First, we state in § 424.507 that in 

order for a claim to be paid, the ordering 

physician/practitioner must be enrolled 

in Medicare in an approved status or 

must have validly opted-out of the 

Medicare program. The IFC required 

that the ordering physician/practitioner 

have an approved enrollment record in 

PECOS. However, we have changed the 

enrollment requirement language from 

one requiring enrollment in PECOS to 

one requiring enrollment in Medicare— 

including PECOS or other Medicare 

enrollment systems. We believe that this 

will reduce the number of claims that 

are denied or rejected and enable more 

currently enrolled physicians and 

practitioners to order or certify for 

services. 

Second, we will provide ample 

advanced notice of our intention to 

activate the automated edits that would 

cause a claim to not be paid for the lack 

of a valid: (1) Enrollment record to order 

and certify; or (2) a valid opt-out record 

in Medicare. 

For Medicaid, again, we codified the 

statutory provisions found in the 

Affordable Care Act. However, we 

considered alternatives to the statute, 

since the provision requires all 

providers of medical or other items or 

services and supplies to include their 

NPI on all applications. Medicaid, until 

recently, had no Federally required 

process for provider enrollment outside 

of the requirement to enter into a 

provider agreement with the State. 

Further, Medicaid has no Federal 

process for applications to enroll in the 

Medicaid program. Thus, in order to 

comply with the statutory requirement 

outlined in 6402 of the Affordable Care 

Act to append the NPI to the application 

for enrollment, Medicaid considered 

codifying additional regulatory 

requirements outlining a Federal 

process for the application to enroll in 

Medicaid. Because of the 

Administration’s goal to provide for 

greater administration simplification, 

we determined that Medicaid would not 

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Federal Register / Vol. 77, No. 82 / Friday, April 27, 2012 / Rules and Regulations 25317 

prepare additional regulatory 

requirements but would provide that the 

NPI must be appended to the provider 

agreement. Since entering into a 

provider agreement with the State is 

currently a requirement in the Medicaid 

program, we believe this option 

provides States and providers with an 

alternative that is less burdensome. 

Again, the main purpose of this final 

rule is to implement the previously 

referenced provisions of the Affordable 

Care Act. However, we also believe that 

these requirements will help to ensure 

that Medicare and Medicaid payments 

are correctly and properly made. 

E. Accounting Statement 

As required by OMB Circular A–4 

(available at link http://

www.whitehouse.gov/sites/default/files/

omb/assets/regulatory_matters_pdf/a4.pdf), we have prepared an accounting 

statement. In calculating the annualized 

savings in the accounting statement, we 

applied the 7 and 3 percent discount 

rates to the full 10-year period assessed. 

TABLE 3—ACCOUNTING STATEMENT

[In $millions] 

Category Primary 

estimate 

Year 

dollars 

Discount rate 

(percent) Period covered 

Transfers from Providers to the Federal government ............................. $136.8 2012 7 FYs 2013–2022. 

139.1 2012 3 FYs 2013–2022. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

List of Subjects 

42 CFR Part 424 

Emergency medical services, Health 

facilities, Health professions, Medicare, 

Reporting and recordkeeping 

requirements. 

42 CFR Part 431 

Grant programs—health, Health 

facilities, Medicaid, Privacy, Reporting 

and recordkeeping requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services is confirming as final 

the interim final rule amending 42 CFR 

parts 424 and 431 that published on 

May 5, 2010 (75 FR 24437) with the 

following changes: 

PART 424—CONDITIONS FOR 

MEDICARE PAYMENT 

■ 1. The authority citation for part 424 

continues to read as follows: 

Authority: Sec. 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395hh). 

■ 2. Section 424.506 is amended by 

revising paragraphs (b) and (c)(1) to read 

as follows: 

§ 424.506 National Provider Identifier (NPI) 

on all enrollment applications and claims. 

* * * * * 

(b) Enrollment requirements. (1) A 

provider or a supplier that is eligible for 

an NPI must do the following: 

(i) Report its NPI on its Medicare 

enrollment application. 

(ii) If the provider or supplier was in 

the Medicare program before obtaining 

an NPI and the provider’s or the 

supplier’s NPI is not in the provider’s or 

supplier’s Medicare enrollment record, 

the provider or supplier must update its 

Medicare enrollment record by 

submitting its NPI using either of the 

following: 

(A) The applicable paper CMS–855 

form. 

(B) Internet-based PECOS. 

(2) A physician or eligible 

professional who has validly opted-out 

of the Medicare program is not required 

to submit a Medicare enrollment 

application for any reason, including to 

order or certify. 

(c) * * * 

(1) A provider or supplier that is 

enrolled in Medicare and submits a 

paper or an electronic claim must 

include its NPI and the NPI(s) of any 

other provider(s) or supplier(s) 

identified on the claim. 

* * * * * 

■ 3. Section 424.507 is revised to read 

as follows: 

§ 424.507 Ordering covered items and 

services for Medicare beneficiaries. 

(a) Conditions for payment of claims 

for ordered covered imaging and clinical 

laboratory services and items of durable 

medical equipment, prosthetics, 

orthotics, and supplies (DMEPOS). 

(1) Ordered covered imaging, clinical 

laboratory services, and DMEPOS item 

claims. To receive payment for ordered 

imaging, clinical laboratory services, 

and DMEPOS items (excluding home 

health services described in 

§ 424.507(b), and Part B drugs), a 

provider or supplier must meet all of the 

following requirements: 

(i) The ordered covered imaging, 

clinical laboratory services, and 

DMEPOS items (excluding home health 

services described in paragraph (b) of 

this section, and Part B drugs) must 

have been ordered by a physician or, 

when permitted, an eligible professional 

(as defined in § 424.506(a) of this part). 

(ii) The claim from the provider or 

supplier must contain the legal name 

and the National Provider Identifier 

(NPI) of the physician or the eligible 

professional (as defined in § 424.506(a) 

of this part) who ordered the item or 

service. 

(iii) The physician or, when 

permitted, other eligible professional, as 

defined in § 424.506(a), who ordered the 

item or service must— 

(A) Be identified by his or her legal 

name; 

(B) Be identified by his or her NPI; 

and 

(C)(1) Be enrolled in Medicare in an 

approved status; or 

(2) Have validly opted-out of the 

Medicare program. 

(iv) If the item or service is ordered 

by— 

(A) An unlicensed resident (as 

defined in § 413.75), or by a nonenrolled licensed resident (as defined in 

§ 413.75), the claim must identify a 

teaching physician, who must be 

enrolled in Medicare in an approved 

status, as follows: 

(1) As the ordering supplier. 

(2) By his or her legal name. 

(3) By his/her NPI. 

(B) A licensed resident (as defined in 

§ 413.75), he or she must have a 

provisional license or be otherwise 

permitted by State law, where the 

resident is enrolled in an approved 

graduate medical education program, to 

practice or order such items and 

services, the claim must identify by 

legal name and NPI the— 

(1) Resident, who is enrolled in 

Medicare in an approved status to order; 

or 

(2) Teaching physician, who is 

enrolled in Medicare in an approved 

status. 

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25318 Federal Register / Vol. 77, No. 82 / Friday, April 27, 2012 / Rules and Regulations 

(2) Part B beneficiary claims. To 

receive payment for ordered covered 

items and services listed at § 424.507(a), 

a beneficiary’s claim must meet all of 

the following requirements: 

(i) The physician or, when permitted, 

other eligible professional (as defined 

§ 424.506(a)) who ordered the item or 

service must— 

(A) Be identified by his or her legal 

name; and 

(B)(1) Be enrolled in Medicare in an 

approved status; or 

(2) Have validly opted out of the 

Medicare program. 

(ii) If the item or service is ordered 

by— 

(A) An unlicensed resident (as 

defined in § 413.75) or a non-enrolled 

licensed resident, (as defined in 

§ 413.75) the claim must identify a 

teaching physician, who must be 

enrolled in Medicare in an approved 

status as follows: 

(1) As the ordering supplier. 

(2) By his or her legal name. 

(B) A licensed resident (as defined in 

§ 413.75), he or she must have a 

provisional license or are otherwise 

permitted by State law, where the 

resident is enrolled in an approved 

graduate medical education program, to 

practice or to order such items and 

services, the claim must identify by 

legal name the— 

(1) Resident, who is enrolled in 

Medicare in an approved status to order; 

or 

(2) Teaching physician, who is 

enrolled in Medicare in an approved 

status. 

(b) Conditions for payment of claims 

for covered home health services. To 

receive payment for covered Part A or 

Part B home health services, a 

provider’s home health services claim 

must meet all of the following 

requirements: 

(1) The ordering/certifying physician 

must meet all of the following 

requirements: 

(i) Be identified by his or her legal 

name. 

(ii) Be identified by his or her NPI. 

(iii)(A) Be enrolled in Medicare in an 

approved status; or 

(B) Have validly opted-out of the 

Medicare program. 

(2) If the services were ordered/ 

certified by— 

(i) An unlicensed resident, as defined 

in § 413.75, or by a non-enrolled 

licensed resident, as defined in § 413.75, 

the claim must identify a teaching 

physician who must be enrolled in 

Medicare in an approved status— 

(A) As the ordering/certifying 

supplier; 

(B) By his or her legal name; and 

(C) By his or her NPI. 

(ii) A licensed resident (as defined in 

§ 413.75), he or she must have a 

provisional license or are otherwise 

permitted by State law, where the 

resident is enrolled in an approved 

graduate medical education program, to 

practice or to order/certify such items 

and services, the claim must identify by 

legal name and NPI the— 

(A) Resident, who is enrolled in 

Medicare in an approved status to order; 

or 

(B) Teaching physician, who is 

enrolled in Medicare in an approved 

status. 

(c) Denial of provider- or suppliersubmitted claims. Notwithstanding 

§ 424.506(c)(3), a Medicare contractor 

denies a claim from a provider or a 

supplier for covered items and services 

described in paragraph (a) or (b) of this 

section if the claim does not meet the 

requirements of paragraphs (a)(1) and 

(b) of this section, respectively. 

(d) Denial of beneficiary-submitted 

claims. A Medicare contractor denies a 

claim from a Medicare beneficiary for 

covered items or services described in 

paragraphs (a) and (b) of this section if 

the claim does not meet the 

requirements of paragraph (a)(2) of this 

section. 

■ 4. Section 424.516 is amended by 

revising paragraphs (f)(1) and (2) to read 

as follows: 

§ 424.516 Additional provider and supplier 

requirements for enrolling and maintaining 

active enrollment status in the Medicare 

program. 

* * * * * 

(f) * * * 

(1)(i) A provider or a supplier that 

furnishes covered ordered items of 

DMEPOS, clinical laboratory, imaging 

services, or covered ordered/certified 

home health services is required to— 

(A) Maintain documentation (as 

described in paragraph (f)(1)(ii) of this 

section) for 7 years from the date of 

service; and 

(B) Upon the request of CMS or a 

Medicare contractor, to provide access 

to that documentation (as described in 

paragraph (f)(1)(ii) of this section). 

(ii) The documentation includes 

written and electronic documents 

(including the NPI of the physician who 

ordered/certified the home health 

services and the NPI of the physician or, 

when permitted, other eligible 

professional who ordered items of 

DMEPOS or clinical laboratory or 

imaging services) relating to written 

orders and certifications and requests 

for payments for items of DMEPOS and 

clinical laboratory, imaging, and home 

health services. 

(2)(i) A physician who orders/certifies 

home health services and the physician 

or, when permitted, other eligible 

professional who orders items of 

DMEPOS or clinical laboratory or 

imaging services is required to— 

(A) Maintain documentation (as 

described in paragraph (f)(2)(ii) of this 

section) for 7 years from the date of the 

service; and 

(B) Upon request of CMS or a 

Medicare contractor, to provide access 

to that documentation (as described in 

paragraph (f)(2)(ii) of this section). 

(ii) The documentation includes 

written and electronic documents 

(including the NPI of the physician who 

ordered/certified the home health 

services and the NPI of the physician or, 

when permitted, other eligible 

professional who ordered the items of 

DMEPOS or the clinical laboratory or 

imaging services) relating to written 

orders or certifications or requests for 

payments for items of DMEPOS and 

clinical laboratory, imaging, and home 

health services. 

§ 424.535 [Amended] 

■ 5. In § 424.535, paragraph (a)(10)(i) is 

amended by removing the parenthetical 

phrase ‘‘(as described in section 1866(j) 

of the Act)’’. 

Authority: (Catalog of Federal Domestic 

Assistance Program No. 93.773, Medicare— 

Hospital Insurance; Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program; and Program No. 93.778, 

Medical Assistance Program) 

Dated: January 18, 2012. 

Marilyn Tavenner, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Approved: March 29, 2012. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2012–9994 Filed 4–24–12; 8:45 am] 

BILLING CODE 4120–01–P 

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