Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Rules and Regulations 24437 

CHAPTER 302—RELOCATION 

ALLOWANCES 

PART 302–6—ALLOWANCE FOR 

TEMPORARY QUARTERS 

SUBSISTENCE EXPENSES 

■ 28. The authority citation for 41 CFR 

part 302–6 is revised to read as follows: 

Authority: 5 U.S.C. 5738; 20 U.S.C. 905(a); 

E.O. 11609, as amended, 3 CFR, 1971–1973 

Comp., p. 586. 

§ 302–6.2 [Amended] 

■ 29. Amend § 302–6.2 by removing the 

word ‘‘local’’. 

■ 30. Revise § 302–6.18 to read as 

follows: 

§ 302–6.18 May I be reimbursed for 

transportation expenses incurred while I am 

occupying temporary quarters? 

Transportation expenses incurred in 

the vicinity of the temporary quarters 

are not TQSE, and therefore, there is no 

authority to pay such expenses under 

TQSE. 

PART 302–9—ALLOWANCES FOR 

TRANSPORTATION AND EMERGENCY 

STORAGE OF A PRIVATELY OWNED 

VEHICLE 

■ 31. The authority citation for 41 CFR 

part 302–9 is revised to read as follows: 

Authority: 5 U.S.C. 5738; 20 U.S.C. 905(a); 

E.O. 11609, as amended, 3 CFR, 1971–1973 

Comp., p. 586. 

§ 302–9.10 [Amended] 

■ 32. Amend § 302–9.10, by removing 

the word ‘‘local’’ wherever it appears. 

[FR Doc. 2010–10235 Filed 5–4–10; 8:45 am] 

BILLING CODE 6820–14–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 424 and 431 

[CMS–6010–IFC] 

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: Interim final rule with comment 

period. 

SUMMARY: This interim final rule with 

comment period implements several 

provisions set forth in the Patient 

Protection and Affordable Care Act 

(Affordable Care Act). It implements the 

provision which 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. This interim final rule with 

comment period also requires 

physicians and eligible professionals to 

order and refer covered items and 

services for Medicare beneficiaries to be 

enrolled in Medicare. In addition, it 

adds requirements for providers, 

physicians, and other suppliers 

participating in the Medicare program to 

provide documentation on referrals to 

programs at high risk of waste and 

abuse, to include durable medical 

equipment, prosthetics, orthotics and 

supplies (DMEPOS), home health 

services, and other items or services 

specified by the Secretary. 

DATES: Effective date: These regulations 

are effective on July 6, 2010. Comment 

date: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on July 6, 2010. 

ADDRESSES: In commenting, please refer 

to file code CMS–6010–IFC. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed). 

• Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the instructions for submitting 

comments on the home page. 

• By regular mail. You may mail 

written comments to the following 

address only: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–6010–IFC, P.O. Box 8013, 

Baltimore, MD 21244–8013. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

• By express or overnight mail. You 

may send written comments to the 

following address only: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–6010–IFC, 

Mail Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

• By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments before the close 

of the comment period to either of the 

following addresses: 

a. For delivery in Washington, DC— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Room 445–G, Hubert 

H. Humphrey Building, 200 

Independence Avenue, SW., 

Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the CMS drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786– 

7195 in advance to schedule your 

arrival with one of our staff members. 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

Submission of comments on 

paperwork requirements. You may 

submit comments on this document’s 

paperwork requirements by following 

the instructions at the end of the 

‘‘Collection of Information 

Requirements’’ section in this document. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Patricia Peyton, (410) 786–1812 for 

Medicare issues. Rick Friedman, (410) 

786–4451 for Medicaid issues. 

SUPPLEMENTARY INFORMATION: Inspection 

of Public Comments: All comments 

received before the close of the 

comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http://regulations.gov. 

Follow the search instructions on that 

Web site to view public comments. 

Comments received timely will be 

also available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 


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24438 Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Rules and Regulations 

through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

I. Background 

The Medicare program, title XVIII of 

the Social Security Act (the Act), is the 

primary payer of health care for 42 

million enrolled beneficiaries. Under 

section 1802 of the Act, a beneficiary 

may obtain health services from an 

individual or an organization qualified 

to participate in the Medicare program. 

Qualifications to participate are 

specified in statute and in regulations 

(see, for example, sections 1814, 1815, 

1819, 1833, 1834, 1842, 1861, 1866, and 

1891 of the Act); and 42 CFR chapter IV, 

subchapter E, which concerns standards 

and certification requirements). 

Providers and suppliers furnishing 

services must comply with the Medicare 

requirements stipulated in the Act and 

in our regulations. These requirements 

are meant to ensure compliance with 

applicable statutes, as well as to 

promote the furnishing of high quality 

care. As Medicare program expenditures 

have grown, we have increased our 

efforts to ensure that only qualified 

individuals and organizations are 

allowed to enroll or maintain their 

Medicare billing privileges. 

Medicaid is a joint Federal and State 

health care program for eligible lowincome individuals. States have 

considerable flexibility in how they 

administer their Medicaid programs 

within a broad Federal framework and 

programs vary from State to State. 

The Patient Protection and Affordable 

Care Act (the Affordable Care Act) (Pub. 

L. 111–148) makes a number of changes 

to the Medicaid program, strengthening 

tools for quality and integrity, adding 

new benefits, and expanding coverage. 

To maintain program integrity and 

assure quality, it is consistent with these 

changes to assure that only qualified 

providers participate in the program and 

that these providers bill accurately for 

their services. Although our regulations 

provide States with considerable 

flexibility, the Federal framework 

includes some key requirements to 

ensure program integrity and 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, 

our regulations require timely filing of 

claims by providers. 

Including the NPI on claims and 

enrollment applications is an important 

step in controlling fraud and abuse, 

ensuring a unique identifier so that 

States can assure that only qualified 

Medicaid providers have provider 

agreements and maintain their Medicaid 

billing privileges. This practice 

implements the requirement in section 

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

6402(a) of the Affordable Care Act and 

will also help in implementing other 

important protections under the 

Affordable Care Act that ensure quality 

health care services for program 

beneficiaries. 

A. Statutory Authority 

The following is an overview of the 

sections that grant this authority. 

• Sections 1102 and 1871 of the Act 

provide general authority for the 

Secretary of Health and Human Services 

(the Secretary) to prescribe regulations 

for the efficient administration of the 

Medicare program. 

• Section 1128J(e) of the Act, added 

by section 6402(a) of the Affordable 

Care Act, requires that the Secretary 

require by regulation that all providers 

of medical or other items or services and 

suppliers under titles XVIII and XIX that 

are eligible for a national provider 

identifier (NPI) include the NPI on all 

applications to enroll in such programs 

and on all claims for payment under 

such programs. 

• Sections 1814(a), 1815(a), and 

1833(e) of the Act require the 

submission of information necessary to 

determine the amounts due a provider 

or other person. 

• Section 1834(j)(1)(A) of the Act 

states that no payment may be made for 

items furnished by a supplier of medical 

equipment and supplies unless such 

supplier obtains (and renews at such 

intervals as the Secretary may require) 

a supplier number. In order to obtain a 

supplier number, a supplier must 

comply with certain supplier standards 

as identified by the Secretary. 

• Section 1842(r) of the Act requires 

the Centers for Medicare and Medicaid 

Services (CMS) to establish a system for 

furnishing a unique identifier for each 

physician who furnishes services for 

which payment may be made. 

• Section 1862(e)(1) of the Act states 

that no payment may be made when an 

item or service was at the medical 

direction of an individual or entity that 

is excluded in accordance with sections 

1128, 1128A, 1156, or 1842(j)(2) of the 

Act. 

• Section 4313 of the Balanced 

Budget Act of 1997 (BBA) (Pub. L. 105– 

33) amended sections 1124(a)(1) and 

1124A of the Act to require disclosure 

of both the Employer Identification 

Number (EIN) and Social Security 

Number (SSN) of each provider or 

supplier, each person with ownership or 

control interest in the provider or 

supplier, any subcontractor in which 

the provider or supplier directly or 

indirectly has a 5 percent or more 

ownership interest, and any managing 

employees including Directors and 

Board Members of corporations and 

non-profit organizations and charities. 

The ‘‘Report to Congress on Steps Taken 

to Assure Confidentiality of Social 

Security Account Numbers as Required 

by the Balanced Budget Act’’ was signed 

by the Secretary and sent to the 

Congress on January 26, 1999. This 

report outlines the provisions of a 

mandatory collection of SSNs and EINs 

effective on or after April 26, 1999. 

• Section 4312(a) of the Balanced 

Budget Act of 1997 amended section 

1834(a)(16) of the Act by requiring 

certain Medicare suppliers of durable 

medical equipment, prosthetics, 

orthotics and supplies (DMEPOS) to 

furnish CMS with a surety bond. 

Section 4312(b) requires that a surety 

bond be in an amount of not less than 

$50,000. 

• Section 31001(i)(1) of the Debt 

Collection Improvement Act of 1996 

(DCIA) (Pub. L. 104–134) amended 

section 7701 of 31 U.S.C. by adding 

paragraph (c) to require that any person 

or entity doing business with the 

Federal Government must provide their 

Taxpayer Identification Number (TIN). 

• Section 936(j)(1)(A) of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) (Pub. 

L. 108–173) amended the Act to require 

the Secretary to establish a process for 

the enrollment of providers of services 

and suppliers. 

We are authorized to collect 

information on the Medicare enrollment 

application (that is, the CMS–855, 

(Office of Management and Budget 

(OMB) approval number 0938–0685)) to 

ensure that correct payments are made 

to providers and suppliers under the 

Medicare program as established by title 

XVIII of the Act. 

• Section 1902(a)(27) of the Act 

provides general authority for the 

Secretary to require provider agreements 

under the Medicaid State Plans with 

every person or institution providing 

services under the State Plan. Under 

these agreements, the Secretary may 

require information regarding any 

payments claimed by such person or 

institution for providing services under 

the State plan. 

B. Historical Enrollment Initiatives 

Historically, Medicare has permitted 

the enrollment of providers and 

suppliers whose qualifications for 

meeting all of our enrollment standards 

were sometimes questionable. This has 

raised concern that providers and 


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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 supplier entry into the 

Medicare program. The following is a 

summary of the regulations that we have 

published over the past 10 years to 

ensure that only qualified providers and 

suppliers are participating in the 

Medicare program. 

In the October 11, 2000 Federal 

Register, we published the Additional 

Supplier Standards final rule with 

comment period where we established 

additional standards with which a 

DMEPOS supplier must comply in order 

to receive and maintain Medicare billing 

privileges. This final rule with comment 

period outlined the supplier 

requirements to ensure that suppliers of 

DMEPOS are qualified to furnish 

DMEPOS and to help safeguard the 

Medicare program and its beneficiaries 

from fraudulent or abusive billing 

practices. 

In the April 21, 2006, Federal 

Register, we published the 

Requirements for Providers and 

Suppliers to Establish and Maintain 

Medicare Enrollment final rule that 

implemented section 1866(j)(1)(A) of the 

Act. In this final rule, we required that 

all providers and suppliers (other than 

those who have elected to ‘‘opt-out’’ of 

the Medicare program) complete an 

enrollment application and submit 

specific information to CMS in order to 

obtain Medicare billing privileges. This 

final rule also required that all providers 

and suppliers must periodically update 

and certify the accuracy of their 

enrollment information to receive and 

maintain billing privileges in the 

Medicare program. These regulatory 

provisions include requirements to 

protect beneficiaries and the Medicare 

Trust Fund by preventing unqualified, 

fraudulent, or excluded providers and 

suppliers from providing items or 

services to Medicare beneficiaries or 

from billing the Medicare program or its 

beneficiaries. 

In the December 1, 2006, Federal 

Register (71 FR 69624), we published a 

final rule titled, ‘‘Medicare Program; 

Revisions to Payment Policies, FiveYear 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.’’ In 

part, this final rule with comment 

established performance standards for 

independent diagnostic testing facilities. 

In the April 10, 2007, Federal 

Register (72 FR 17992), we published a 

final rule titled, ‘‘Competitive 

Acquisition for Certain Durable Medical 

Equipment, Prosthetics, Orthotics, and 

Supplies (DMEPOS).’’ This final rule 

implemented section 302 of the MMA 

requiring that DMEPOS suppliers meet 

certain quality standards and 

established DME competitive bidding. 

In the November 27, 2007 Federal 

Register (72 FR 66222), we published 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 

E–Prescribing Exemption for Computer 

Generated Facsimile Transmissions; 

Final Rule.’’ In this final rule, we 

clarified our interpretation of several of 

the existing independent diagnostic 

testing facility (IDTF) performance 

standards found at § 410.33(b) and 

§ 410.33(g), proposed a new IDTF 

performance standard at § 410.33(g)(15), 

and a new proposed IDTF provision at 

§ 410.33(i). 

In the June 27, 2008, Federal Register 

(73 FR 36448), we published 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.’’ This final rule implemented 

section 936 of the MMA and extended 

appeal rights to all providers and 

suppliers, including DMEPOS suppliers, 

whose enrollment applications for 

Medicare billing privileges are denied or 

revoked by CMS or a Medicare 

contractor (that is, carrier, fiscal 

intermediary, National Supplier 

Clearinghouse Medicare Administrative 

Contractor (MAC), or Part A/Part B 

MAC). This final rule also allowed 

providers and suppliers to seek judicial 

review after they have exhausted the 

administrative appeals process. In 

addition, this final rule also 

implemented provider enrollment 

provisions that apply to all provider and 

supplier types. 

In the November 19, 2008, Federal 

Register (73 FR 69726), we published 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).’’ In part, this final rule with 

comment period established a number 

of provider enrollment provisions 

affecting physicians, non-physician 

practitioners, and other providers and 

suppliers, such as the re-enrollment bar 

of 1 to 3 years on revoked providers and 

suppliers, as well as the limitation on 

retroactive billing by providers and 

suppliers. 

In the January 2, 2009, Federal 

Register (74 FR 166), we published a 

final rule titled, ‘‘Medicare Program; 

Surety Bond Requirement for Suppliers 

of Durable Medical Equipment, 

Prosthetics, Orthotics, and Supplies 

(DMEPOS); Final Rule.’’ Consistent with 

section 4312(a) of the BBA, this final 

rule implemented section 1834(a)(16) of 

the Act by requiring certain Medicare 

suppliers of DMEPOS to furnish CMS 

with a surety bond of no less than 

$50,000. 

Historically, the States in operating 

the Medicaid program have permitted 

the enrollment of providers and 

suppliers who meet the State 

requirements for Medicaid enrollment. 

Due to the increased risk of fraud and 

abuse in public health care programs of 

all types, the NPI requirement will 

strengthen cross-program integrity 

efforts. 

II. Provisions of the Interim Final Rule 

With Comment Period 

A. Inclusion of the National Provider 

Identifier (NPI) on all Medicare and 

Medicaid Enrollment Applications and 

Claims 

1. Background 

Section 1128J(e) of the Act builds on 

the past Congressional mandate to 

require the adoption of a unique 

identifier for health care providers and 

codifies the NPI requirements that 

Medicare is already requiring for its feefor-service (FFS) providers and 

suppliers. 

‘‘Health care provider’’ is defined in 

the Health Insurance Portability and 

Accountability Act (HIPAA) definitions 

found at 45 CFR 160.103. With the 

exception of organ procurement 

organizations and Part B CAP drug 

vendors, the term ‘‘health care provider’’ 

includes all of the providers and 

suppliers who are eligible to enroll in 

the Medicare program and most who are 

eligible to enroll in the Medicaid 

program. In this discussion, we use the 

term ‘‘health care provider’’ when 

referring to HIPAA and HIPAA 

regulations, and we use ‘‘providers and 

suppliers’’ when referring to those 

health care providers who are eligible to 

enroll in the Medicare program. 

In the January 23, 2004, NPI final rule 

(69 FR 3434), we adopted the NPI as the 

standard unique health identifier for 

health care providers. This fulfilled the 


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24440 Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Rules and Regulations 

requirement of section 1173(b) of the 

Act, which was added by HIPAA. The 

final rule stated that HIPAA does not 

prohibit health plans from requiring 

their enrolled health care providers to 

obtain NPIs. Accordingly, the Medicare 

program required enrolling fee-forservice (FFS) providers and suppliers 

(and their subparts, in accordance with 

the NPI Final Rule) to report their NPIs 

on their Medicare enrollment 

applications beginning in May 2006. 

When FFS providers and suppliers who 

had enrolled prior to May 2006 

submitted enrollment applications to 

update their enrollment information, 

they were required to report their NPIs 

on those enrollment applications. These 

requirements ensured that the Medicare 

provider and supplier enrollment 

records included the NPIs and, in effect, 

already implemented one of the 

provisions of section 1128J(e) of the Act. 

In accordance with the NPI final rule 

and the subsequent guidance from the 

Secretary, beginning May 23, 2008, 

Medicare required its enrolled FFS 

providers and suppliers to use NPIs in 

their electronic claims to identify not 

only themselves as the billing providers, 

but any other providers or suppliers 

who, according to the Implementation 

Guides for the adopted standard claims 

transactions, were also required to be 

identified in those claims. These other 

health care providers include rendering 

providers, supervising providers, and 

ordering and referring providers. The 

regulations that adopted the HIPAA 

standard transactions are found at (65 

FR 50312, 68 FR 8381, and 74 FR 3296). 

In addition, at that same time, Medicare 

required its enrolled FFS providers and 

suppliers to make this same use of NPIs 

in their paper claims. 

The Provider Enrollment, Chain, and 

Ownership System (PECOS), 

implemented in 2003, is the national 

repository of enrolled Medicare FFS 

providers and suppliers (except 

DMEPOS suppliers, who will be added 

to PECOS later in 2010). PECOS 

contains the information furnished by 

providers and suppliers in their 

Medicare FFS enrollment applications 

and additional information added as 

required to keep the information current 

and to protect the integrity of the 

Medicare program (for example, fact and 

date of death, Office of Inspector 

General exclusions). In 2007, PECOS 

began sending the NPIs in the daily 

provider and supplier enrollment data 

extract going to the Part A and Part B 

FFS claims systems. In 2009, Medicare 

added the NPIs to the enrollment 

records of the DMEPOS suppliers, 

which are currently housed in the 

DMEPOS supplier enrollment repository 

at the National Supplier Clearinghouse 

MAC. After the DMEPOS supplier 

enrollment records are added to PECOS, 

PECOS will send a daily DMEPOS 

supplier enrollment data extract, which 

will include the NPIs, to the DMEPOS 

FFS claims system. Medicare FFS 

claims systems link the NPIs that are 

reported in claims with the appropriate 

enrollment records in order to properly 

price and pay the claims. 

In summary, Medicare has been 

requiring its providers and suppliers to 

report their NPIs on their Medicare 

enrollment applications; its enrolled 

providers and suppliers to report their 

NPIs, and the NPIs of other providers 

and suppliers (as required and as 

explained previously) in their electronic 

and paper Medicare claims; and 

suppliers who order or refer covered 

items or services for Medicare 

beneficiaries to have NPIs so that they 

can be identified, as required, in the 

claims for the covered items and 

services that they have ordered and 

referred. Similarly, consistent with 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. This IFC now requires 

their NPIs be submitted for Medicaid 

provider agreements. 

2. Provisions of the Affordable Care Act 

Section 6402(a) of the Affordable Care 

Act added a new section 1128J of the 

Act, entitled ‘‘Medicare and Medicaid 

Program Integrity Provisions.’’ Section 

1128J(e), as added by section 6402(a) of 

the Affordable Care 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 a 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 

process for provider enrollment except 

that 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 

IFC are thus applicable to the reporting 

of NPIs—(1) Pursuant to Medicaid 

provider agreements; (2) on Medicare 

provider and supplier enrollment 

applications; and (3) on Medicare and 

Medicaid claims. 

3. Requirements Established by This IFC 

For the Medicare program, we are 

establishing, 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. 

We are also establishing, at 

§ 424.506(b)(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. We are also establishing, at 

§ 424.506(b)(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.hhs.gov/NPPES/ 

NPIRegistryHome.do. 

Furthermore, we are establishing, at 

§ 424.506(c)(3), that a Medicare claim 

from a provider or a supplier will be 

rejected if it does not contain the 

required NPI(s). 

For the Medicaid program, we are 

establishing, at § 431.107(b)(5), a 

requirement that the agreement between 

a State agency and each provider 

furnishing services under the State plan 

include a requirement that any 

Medicaid provider eligible for an NPI 

furnish its NPI to the State agency under 

that agreement and on all Medicaid 

claims. 

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 


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Federal Register / Vol. 75, No. 86 / Wednesday, May 5, 2010 / Rules and Regulations 24441 

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. Referring physicians are 

those who order covered items or 

services for Medicare beneficiaries from 

Medicare providers and suppliers as 

well as those who refer Medicare 

beneficiaries to Medicare providers and 

suppliers for covered services. We 

consider those who ‘‘refer’’ to also be 

authorized to ‘‘order.’’ In this IFC, we 

refer to physicians who both order and 

refer as ‘‘ordering and referring 

suppliers’’ and the act of ordering items 

or services for Medicare beneficiaries or 

referring Medicare beneficiaries to other 

providers or suppliers for services as 

‘‘ordering and referring.’’ 

The Implementation Guides for the 

adopted HIPAA standard transactions 

do not use the word ‘‘supplier’’ in their 

descriptions of the health care providers 

who must be identified in those 

transactions. For example, and as stated 

earlier in this preamble, the 

Implementation Guides use the terms 

‘‘billing provider, ordering provider, 

referring provider’’ and others. Because 

this section of this IFC relates only to 

the Medicare program, and because the 

statute and regulations use the term 

‘‘supplier’’ (not ‘‘provider’’) when 

referring to physicians and nonphysician practitioners, we are using the 

term ‘‘ordering and referring suppliers’’ 

in this IFC. This term corresponds to 

‘‘ordering provider’’ and ‘‘referring 

provider’’ described in the 

Implementation Guides. 

The Medicare providers and suppliers 

who furnish the covered ordered or 

referred items and services send claims 

to Medicare for reimbursement for those 

covered items and services. 

With the establishment and 

implementation of surrogate Unique 

Physician Identification Numbers 

(UPINs) in 1992, suppliers could be 

identified, but not uniquely identified, 

in claims as ordering and referring 

suppliers. These suppliers included 

physicians, physician assistants, clinical 

nurse specialists, nurse practitioners, 

clinical psychologists, certified nurse 

midwives, and clinical social workers. 

Sections 6405(a) and (c) of the 

Affordable Care Act indicate that orders 

and referrals for DMEPOS and for other 

categories of items and services may be 

made by a physician or an ‘‘eligible 

professional under section 

1848(k)(3)(B).’’ Section 1848(k)(3)(B) of 

the Act discusses covered professional 

services for which payment may be 

made under, or is based on, the fee 

schedule, and which are furnished by: 

(1) A physician; (2) a practitioner 

described in section 1842(b)(18)(C) of 

Act; (3) a physical or occupational 

therapist or a qualified speech-language 

pathologist; and (4) a qualified 

audiologist. Section 1842(b)(18)(C) of 

the Act discusses billing and payment 

for Medicare services furnished by 

physician assistants, nurse practitioners, 

clinical nurse specialists, certified 

registered nurse anesthetists, certified 

nurse-midwives, clinical social workers, 

clinical psychologists, and registered 

dietitians or nutrition professionals. 

Neither section 1848(k)(3)(B) of the Act 

nor section 1842(b)(18)(C) of the Act 

discuss the issue of ordering or referring 

covered items or services for Medicare 

beneficiaries. Although section 6405(a) 

of the Affordable Care Act indicates that 

DMEPOS may be ordered by enrolled 

physicians or enrolled eligible 

professionals under section 

1848(k)(3)(B) of the Act, our policy has 

not been to permit all of the eligible 

professionals listed in that section or in 

section 1842(b)(18)(C) of the Act to 

order and refer. Section 6405(c) of the 

Affordable Care Act gives the Secretary 

the discretion to determine the 

professions that can order and refer for 

all covered items and services under 

title XVIII that are not mentioned in 

sections 6405(a) and (b) of the 

Affordable Care Act (DMEPOS and 

home health, respectively). In addition, 

the claims processing edits that we 

established in 2009 require that the 

ordering and referring suppliers for 

DMEPOS and for laboratory, imaging, 

and specialist services be those 

physicians and professionals who were 

eligible for UPINs: Physicians, 

physician assistants, clinical nurse 

specialists, nurse practitioners, clinical 

psychologists, certified nurse midwives, 

and clinical social workers. In this IFC, 

the term eligible professional means any 

of the professionals listed in section 

1848(k)(3)(B) of the Act. In this 

preamble, we distinguish physicians 

from eligible professionals (even though 

physicians are included in section 

1848(k)(3)(B) as eligible professionals) 

because sections 6405(a) and (b) of the 

Affordable Care Act reference 

physicians separately from eligible 

professionals. Section 6405(c) of the 

Affordable Care Act gives the Secretary 

the discretion to determine the health 

professions that can order and refer 

items and services other than DMEPOS 

and home health. 

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 UPINs. 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. 

Surrogate UPINs were established to 

be used in claims to temporarily 

identify certain ordering and referring 

suppliers who had not yet completed 

the Medicare enrollment process and, 

therefore, had not yet been assigned 

UPINs. Surrogate UPINs were used to 

collectively identify the following: (1) 

Physicians who were serving in the 

military or with the Department of 

Veterans Affairs or the Public Health 

Service (including the Indian Health 

Service); (2) interns, residents, and 

fellows; and (3) retired physicians. 

There was also a surrogate UPIN 

(OTH000) that could be used for any 

other supplier who ordered or referred 

who could not be identified by any of 

the other surrogate UPINs. 

Over time, providers and suppliers 

began using surrogate UPINs in their 

claims to identify ordering and referring 

suppliers who had been assigned their 

own UPINs, as well as individuals who 

had never been assigned UPINs. In 

addition, they also used UPINs that had 

been assigned to physicians other than 

the physicians who they were 

identifying in their claims as the 

ordering or referring suppliers. We 

believe that many providers and 

suppliers became aware that the use of 

any UPIN would get their claims 

processed and paid. They learned, over 

time, that Medicare claims edits on the 

ordering and referring suppliers were 

based on the format of the UPIN, and all 

UPINs had the same format. The claims 

process did not verify the UPINs of 

ordering or referring suppliers. These 

practices negated the intent of the UPIN, 

which was to uniquely identify the 

ordering or referring supplier. 

Analysis of Medicare claims data 

prior to 2008 (UPINs were not permitted 

to be used in Medicare claims after May 

23, 2008) revealed that these practices 

were 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 


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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. Medicare required 

providers and suppliers who were 

sending claims to Medicare for covered 

ordered and referred items and services 

to use the NPI, rather than the UPIN, to 

identify the ordering and referring 

suppliers in their claims. Because the 

NPI Final Rule did not discuss the 

concept of ‘‘surrogate NPIs’’ nor did it 

contain a provision for the 

establishment of ‘‘surrogate NPIs,’’ 

surrogate NPIs do not and cannot exist. 

Because physicians and non-physician 

practitioners are eligible for NPIs, only 

the NPI may be used in Medicare claims 

to identify ordering and referring 

suppliers. 

We believe that the new requirements 

discussed below will address concerns 

expressed by the Department of Health 

and Human Services’ (DHHS) Office of 

Inspector General (OIG) report titled, 

‘‘Durable Medical Equipment Ordered 

with Surrogate Physician Identification 

Numbers, OEI–03–01–00270, September 

2002,’’ which found that the use of 

surrogate UPINs on Medicare claims 

poses a vulnerability to the Medicare 

program. The HHS OIG found a 

substantial number of documentation 

problems in the supporting evidence 

submitted by suppliers for claims 

processed with surrogate UPINs. The 

DHHS OIG estimated that, in 1999, 

Medicare paid $61 million for services 

ordered with a surrogate UPIN that had 

missing or incomplete supporting 

documentation. Finally, the DHHS OIG 

stated that the findings in its report also 

revealed misuse of surrogate UPINs on 

Medicare claims. The HHS OIG found 

that surrogate UPINs were incorrectly 

used for many services since the 

ordering physician had already been 

issued a permanent UPIN. The HHS OIG 

believed this to be a significant problem 

given that the use of a surrogate UPIN 

on medical equipment claims allows 

them to be processed automatically 

whether the equipment has been 

ordered by a physician or not. The HHS 

OIG stated that the inappropriate use of 

surrogate UPINs by suppliers goes 

unchecked, the Medicare program 

becomes vulnerable to fraudulent 

billings and inappropriate payments. 

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. Claims edits are under 

development to ensure that claims for 

Part A and Part B home health services 

identify the physicians who ordered the 

home health services by their legal 

names and their NPIs and that those 

physicians have enrollment records in 

PECOS. 

2. Provisions of the Affordable Care Act 

Section 6405(a) 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) 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 10604 of the Affordable Care 

Act, amended section 6405(b) of the 

Affordable Care Act as follows: (1) 

Section 1814(a)(2) of the Act to specify, 

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 to specify, 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) 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) 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. Requirements of This IFC 

To ensure that ordering suppliers 

(physicians and eligible professionals) 

are uniquely identified in Medicare 

claims for covered items of DMEPOS as 

required by section 6405(a) of the 

Affordable Care Act, and to ensure that 

those DMEPOS items are ordered by 

qualified physicians or eligible 

professionals, we are requiring at a new 

§ 424.507(a), the following: 

• In Part B claims for covered items 

of DMEPOS that require the 

identification of the ordering supplier, 

and with the exception noted below, the 

ordering supplier be a physician or an 

eligible professional with an approved 

enrollment record in PECOS (see the 

exception below), and be identified in 

the claim by his or her legal name and 

by his or her own NPI (that is, by the 

NPI that was assigned to him or her by 

the National Plan and Provider 

Enumeration System [NPPES] as an 

Entity type 1 [an individual]). 

To ensure that ordering suppliers are 

uniquely identified in Medicare Part A 

claims for covered Part A or Part B 

home health services as required by 

section 6405(b), as amended by section 

10604 of the Affordable Care Act, and to 

ensure that those home health services 

are ordered by qualified physicians, we 

are requiring at a new § 424.507, the 

following: 

• In Part A claims for covered Part A 

and Part B home health items or 

services that require the identification of 

the ordering supplier, and with the 

exception noted below, the ordering 

supplier be a physician with an 

approved enrollment record in PECOS 


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(see the exception below), and be 

identified in the claim by his or her 

legal name and by his or her own NPI 

(that is, by the NPI that was assigned to 

him or her by the National Plan and 

Provider Enumeration System [NPPES] 

as an Entity type 1 [an individual]). 

To ensure that ordering or referring 

suppliers are uniquely identified in Part 

B claims for covered services of 

laboratories, imaging suppliers, and 

specialists, under the discretion 

afforded the Secretary in section 

6405(c), and to ensure that those items 

or services are ordered or referred by 

qualified physicians or eligible 

professionals, we are requiring at a new 

§ 424.507(b), the following: 

• In Part B claims for covered services 

of laboratories, imaging suppliers, and 

specialists that require the identification 

of the ordering or referring supplier, and 

with the exception noted below, the 

ordering or referring supplier be a 

physician or an eligible professional 

with an approved enrollment record in 

PECOS (see the exception below), and 

be identified in the claim by his or her 

legal name and by his or her own NPI 

(that is, by the NPI that was assigned to 

him or her by the National Plan and 

Provider Enumeration System (NPPES) 

as an Entity Type 1 (an individual). 

We are requiring at a new § 424.507(c) 

that Medicare contractors will reject 

claims from providers and suppliers for 

the above-described covered ordered or 

referred items or services if the legal 

names and the NPIs are not reported in 

the claims or, with the exception noted 

below, if the ordering or referring 

supplier does not have an approved 

enrollment record in PECOS. 

We are requiring at a new § 424.507(d) 

that Medicare contractors may deny a 

claim submitted by a Medicare 

beneficiary for the above-described 

ordered or referred covered items and 

services if the ordering or referring 

supplier is not identified by his or her 

legal name or, with the exception noted 

below, if the ordering or referring 

supplier does not have an approved 

enrollment record in PECOS. 

Our continuing outreach efforts stress 

the need for those who order and refer 

to have approved enrollment records in 

PECOS. 

While we are not including additional 

categories of ordered or referred covered 

items or services in this IFC (such as 

Part B drugs), we reserve the right to 

apply these requirements to additional 

categories through future rulemaking 

once the policies have been developed. 

We are considering proposing the 

requirements for covered prescribed 

Part B drugs within the next year. 

A physician or eligible professional 

who orders or refers must be enrolled in 

the Medicare program by having an 

enrollment record in an approved status 

in PECOS, even if he or she is enrolled 

only for the purposes of ordering and 

referring. To ensure that orders and 

referrals for Medicare beneficiaries are 

written by qualified physicians and 

eligible professionals, it is necessary 

that their credentials be verified; such 

verification can occur only as part of the 

Medicare provider/supplier enrollment 

process. PECOS, as described earlier in 

this preamble, is the national Medicare 

FFS provider and supplier enrollment 

repository. All providers and suppliers 

who enrolled in Medicare within the 

past 6 years, as well as those who 

enrolled more than 6 years ago and who 

have submitted updates to their 

enrollment information within the past 

6 years, have enrollment records in 

PECOS that contain verified credentials. 

Those who enrolled more than 6 years 

ago and who have not updated their 

enrollment information in the past 6 (or 

more) years will need to submit 

enrollment applications to Medicare to 

establish enrollment records in PECOS. 

They may do this by filling out the 

paper Medicare provider enrollment 

applications (using the appropriate 

form(s) from the CMS–855 series of 

forms) and mailing the completed 

application(s) to the appropriate 

Medicare enrollment contractor or by 

using Internet-based PECOS to submit 

their enrollment application to the 

Medicare enrollment contractor over the 

Internet. With the implementation in 

2009 of the claims processing edits to 

ensure the NPI and the name reported 

in claims to identify the ordering or 

referring suppliers matched information 

in PECOS for physicians and 

professionals of a profession eligible to 

order and refer, many enrolled 

physicians and eligible professionals 

who do not have enrollment records in 

PECOS are submitting enrollment 

applications in order to establish those 

enrollment records. We expect that 

most, if not all, of them will have 

submitted enrollment applications 

before the end of 2010, including those 

who are enrolling solely to continue to 

order and refer. A physician or eligible 

professional who is deceased, retired, or 

excluded from the Medicare program, or 

who otherwise would not have an 

approved enrollment record in PECOS, 

would not be eligible to order or refer 

items or services for Medicare 

beneficiaries. Please note the following 

exception for physicians and eligible 

professionals who do not have an 

approved enrollment record in PECOS: 

Under section 1802(b) of the Act and 

the implementing regulations at 42 CFR 

405.400 et seq., physicians and nonphysician practitioners can opt out of 

the Medicare program and enter into 

private contracts with Medicare 

beneficiaries. By entering into these 

types of contracts, these suppliers do 

not bill the Medicare program for 

services that they furnish to Medicare 

beneficiaries. We require that 

physicians and eligible professionals 

who have properly filed an appropriate 

affidavit with a Medicare contractor in 

order to opt out of the Medicare 

program be required to be identified in 

claims by their names and their NPIs if 

they order or refer covered items or 

services for Medicare beneficiaries. We 

are creating an exception to the 

requirement that ordering and referring 

suppliers be required to have an 

approved enrollment record in PECOS 

for those physicians and non-physician 

practitioners who have validly opted 

out of the Medicare program. Therefore, 

physicians and non-physician 

practitioners who have validly opted 

out of Medicare are eligible to order and 

refer covered items and services for 

Medicare beneficiaries. If they have 

properly completed the appropriate 

affidavit in order to opt out of Medicare, 

they will have records in PECOS that 

contain their NPIs and that indicate that 

they have validly opted out of the 

Medicare program. In January 2009, 

there were approximately 10,000 

physicians and eligible professionals 

who had opted out of the Medicare 

program. Compared to the more than 

800,000 enrolled physicians and eligible 

professionals, there are relatively few 

physicians and eligible professionals 

who have opted out of Medicare. 

Accordingly, the physicians or 

eligible professional that opted out must 

meet the following: 

• A currently enrolled physician or 

eligible professional who does not have 

an enrollment record in PECOS is 

required to establish an enrollment 

record in PECOS so that he or she can 

order and refer covered items or services 

for Medicare beneficiaries. A physician 

or eligible professional who has validly 

opted out of the Medicare program will 

have a valid opt-out record in PECOS 

and is not required to submit an 

enrollment application. 

• A physician or eligible professional 

who is employed by the Public Health 

Service, the Department of Defense, or 

the Department of Veterans Affairs is 

required to have an approved 

enrollment record in PECOS in order to 

order and refer covered items and 

services for Medicare beneficiaries, even 

though he or she would not be 


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submitting claims to Medicare for 

services furnished to Medicare 

beneficiaries. We require, therefore, that 

these physicians and eligible 

professionals enroll in Medicare solely 

to order and refer (and not to be paid for 

services furnished to Medicare 

beneficiaries). 

• A dentist furnishes many services 

that are not covered by Medicare and, as 

a result, most dentists are not enrolled 

in Medicare. However, a dentist may 

order services for patients who are 

Medicare beneficiaries, such as sending 

oral specimens to laboratories for 

testing. Doctors of dental medicine or 

dental surgery are considered 

physicians and we require that they 

have approved enrollment records in 

PECOS if they order or refer covered 

items or services for patients who are 

Medicare beneficiaries. 

• A pediatrician may treat Medicare 

beneficiaries (for example, those of any 

age who are enrolled in the Medicare 

end-stage renal disease (ESRD) program 

or those who are entitled to Medicare 

benefits under other Federal programs), 

although the volume of such patients is 

generally so low that most pediatricians 

are not enrolled in Medicare. We require 

that a pediatrician have an approved 

enrollment record in PECOS if he or she 

orders or refers covered items or 

services for patients who are Medicare 

beneficiaries. 

• Residents and interns order and 

refer covered items and services for 

Medicare beneficiaries. Prior to the 

implementation of the NPI, residents 

and interns were identified in claims as 

the ordering or referring providers by 

surrogate UPINs. Interns are not issued 

medical licenses by States; therefore, 

they are not eligible to enroll in 

Medicare. Residents have medical 

licenses if they practice in States that 

issue medical licenses to residents; as a 

result, some residents are eligible to 

enroll in Medicare. Due to the variances 

in licensure and the necessity for 

interns and residents to be able to 

continue to order and refer covered 

items and services for Medicare 

beneficiaries, we require that the 

teaching physician—not the resident or 

intern—be identified in the claim as the 

ordering or referring provider whenever 

a resident or intern orders or refers. 

These ordering and referring 

requirements, when implemented, will 

allow us to uniquely identify the 

ordering and referring supplier in 

claims (except when the teaching 

physician is identified as the ordering or 

referring supplier in situations where an 

intern or a resident ordered or referred) 

and assure, because of the requirement 

to have an approved enrollment or valid 

opt out record in PECOS, that the 

ordering and referring supplier is 

qualified to order and refer items and 

services for Medicare beneficiaries. This 

will enable us to edit claims for ordering 

and referring suppliers who do not have 

approved enrollment records in PECOS 

(that is, those who are excluded, 

deceased, or retired, and those whose 

Medicare billing privileges have been 

terminated through exclusion, 

revocation, or otherwise), and those 

who have voluntarily terminated their 

relationship with Medicare or who have 

validly opted out of Medicare. 

Further, we are requiring that Part A 

claims for covered ordered Part A and 

Part B home health services must 

include the legal name and the NPI of 

the ordering supplier, who must be a 

physician. We are requiring that Part B 

claims for covered, ordered, and 

referred Part B items and services 

(excluding Part B drugs) must include 

the legal name and the NPI of the 

ordering or referring supplier. We place 

these same requirements (except for the 

NPI) on claims submitted by Medicare 

beneficiaries for these same ordered or 

referred items and services. Although 

suppliers are required to submit claims 

on behalf of beneficiaries under the 

mandatory claim submission policy at 

section 1848(g)(4)(A) of the Act, we 

recognize that beneficiaries may submit 

claims to Medicare for payment. In 

order to fully enforce the ordering and 

referring requirement established by 

section 6405 of the Affordable Care Act, 

we plan to deny a beneficiary claim for 

a service when the legal name of the 

ordering or referring supplier is not 

included on the claim. 

We believe that these requirements 

will promote quality health care 

services for Medicare beneficiaries 

because orders and referrals would be 

written by qualified physicians and 

eligible professionals, as their 

credentials would have been verified as 

part of the Medicare provider/supplier 

enrollment process. 

Additionally, we believe these 

requirements will eliminate the abusive 

practice of reporting identifiers in 

claims as being assigned to specific 

ordering or referring suppliers when, in 

fact, those identifiers had not been 

assigned to those specific ordering or 

referring suppliers. As a result, our 

requirements should eliminate these 

types of problematic claims and ensure 

the qualifications of the ordering and 

referring suppliers. 

Our requirements will enable us to 

know the identity of the individual who 

ordered or referred and, if appropriate, 

we could establish edits to check for 

over-ordering specific items or services, 

over-referring specific services, and/or 

over-ordering or over-referring to 

specific providers of services and 

suppliers. 

Furthermore, these requirements 

support our existing authority, at 

§ 424.516(f), under which the ordering 

and referring suppliers, and those 

providers of services and suppliers who 

furnish covered items or services based 

on orders or referrals, are required to 

maintain documentation (to include the 

NPI) that supports the orders and 

referrals for 7 years in order to maintain 

an active enrollment status in the 

Medicare program. 

Lastly, these requirements may lead to 

a reduction in inappropriate Medicare 

payments. 

We are aware that, in some cases, 

Medicare beneficiaries may be patients 

of physicians or eligible professionals 

who do not have approved enrollment 

records in PECOS, or may be patients of 

professionals who are not of a 

profession that is eligible to order or 

refer, and that these physicians and 

professionals may be ordering and 

referring covered items and services for 

these Medicare beneficiaries at this 

time. We expect to conduct outreach 

activities to educate Medicare 

beneficiaries, as well as Medicare 

providers of services and suppliers who 

furnish covered items and services 

based on orders and referrals, so that we 

can eliminate situations where those 

providers of services and suppliers who 

would be furnishing covered ordered 

and referred items and services would 

not be paid for those covered items or 

services because their claims failed the 

edits. 

Finally, we believe that the 

requirements will address the 

recommendations offered by the DHHS 

OIG report titled, ‘‘Medicare Payments 

in 2007 for Medical Equipment and 

Supply Claims with Invalid or Inactive 

Referring Physician Identifiers, OEI–04– 

08–00470, February 2009.’’ Specifically, 

the OIG recommended that CMS: 

(1) Determine why Medicare claims 

with identifiers associated with 

deceased referring physicians continue 

to be paid; 

(2) Implement claims-processing 

system changes to ensure that NPIs for 

both referring physicians and suppliers 

be listed on medical equipment and 

supply claims are valid and active. 

(3) Emphasize to suppliers the 

importance of using accurate NPIs for 

both referring physicians and suppliers 

when submitting Medicare claims; and 

(4) Determine the earliest date to end 

the provision that allows suppliers to 

submit claims without referring 


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physician NPIs while maintaining 

beneficiary access to services. 

With respect to recommendation (4), 

we began requiring Medicare claims to 

identify ordering and referring providers 

by NPIs beginning May 23, 2008. If the 

provider of services or the supplier 

submitting the claim for the covered 

ordered or referred items or services 

could not determine the NPI of the 

ordering or referring supplier, we 

permitted the provider of services or the 

supplier submitting the claim to use its 

own NPI in place of the NPI of the 

ordering or referring provider. These 

types of claims for DMEPOS items now 

fail the claims processing edits that 

were implemented in 2009. Medicareenrolled physicians and professionals 

are required to have NPIs. The NPI 

Registry (available at https:// 

nppes.cms.hhs.gov/NPPES/ 

NPIRegistryHome.do) enables anyone 

with a computer with Internet access to 

look up a health care provider’s NPI by 

name or NPI, and the NPPES 

downloadable file (downloadable from 

http://nppesdata.cms.hhs.gov/ 

CMS_NPI_files.html) contains the NPIs 

of all health care providers who have 

active NPIs, as well as identifying 

information about the health care 

providers that is publicly disclosable 

under the Freedom of Information Act. 

(The National Plan and Provider 

Enumeration System Data 

Dissemination Notice, published in the 

May 30, 2007 Federal Register, further 

describes the NPI Registry and the 

NPPES downloadable file.) The existing 

claims processing edits described earlier 

in this preamble check to ensure that 

the NPI reported on a Part B claim for 

ordered or referred covered items or 

services (excluding Part B home health 

services and Part B drug claims) belongs 

to the ordering or referring supplier 

whose name is also reported in those 

claims, and not to the supplier who 

submitted the claim. As stated 

previously, the provisions of section 

6405 of the Affordable Care Act are 

effective July 1, 2010. 

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 

On November 19, 2008, we published 

a final rule with comment titled, 

‘‘Revisions to Payment Policies Under 

the Physician Fee Schedule and Other 

Revisions to Part B for CY 2009; 

Revisions to the Amendment of the E– 

Prescribing Exemption for Computer 

Generated Facsimile Transmissions; and 

the Competitive Acquisition for Certain 

Durable Medical Equipment, 

Prosthetics, Orthotics, and Supplies 

(DMEPOS)’’ in the Federal Register. In 

this IFC, we established § 424.516(f) to 

require providers and suppliers to 

maintain ordering and referring 

documentation, including the NPI, 

received from a physician or eligible 

non-physician practitioner. We also 

established in § 424.516(f) that 

physicians and eligible professionals are 

required to maintain written ordering 

and referring documentation for 7 years 

from the date of service. Finally, we 

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

and added a new subparagraph (W) 

which requires providers to agree 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 the provider under this title, 

as specified by the Secretary.’’ 

In addition, 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 of This IFC 

In our requirements, in our revision of 

§ 424.516(f), we are replacing the term 

‘‘eligible non-physician practitioner’’ 

with ‘‘eligible professional.’’ This change 

is consistent with our definition of 

‘‘eligible professional’’ and correctly 

identifies the professionals who, in 

addition to physicians, are eligible to 

order and refer. 

At this time, we are expanding 

§ 424.516(f) to include requirements for 

documentation and access to 

documentation related to orders and 

referrals for covered home health, 

laboratory, imaging, and specialist 

services. Section 424.516(f) currently 

includes requirements for 

documentation and access to 

documentation for orders for DMEPOS. 

We reserve the right to, at a future date, 

publish proposed requirements for 

documentation and access to 

documentation for additional items and 

services that may be ordered or referred 

under title XVIII and that are programs 

of high risk of waste and abuse. 

We are revising the existing 

§ 424.516(f) to now read ‘‘Maintaining 

and providing access to 

documentation.’’ A provider or a 

supplier who furnishes covered ordered 

DMEPOS or referred home health, 

laboratory, imaging, or specialist 

services is required to maintain 

documentation for 7 years from the date 

of service and, upon the request of CMS 

or a Medicare contractor, to provide 

access to that documentation. The 

documentation includes written and 

electronic documents (including the NPI 

of the physician who ordered the home 

health services and the NPI of the 

physician or the eligible professional 

who ordered or referred the DMEPOS, 

laboratory, imaging, or specialist 

services) relating to written orders and 

requests for payments for items of 

DMEPOS and home health, laboratory, 

imaging, and specialist services. A 

physician who ordered home health 

services and a physician and an eligible 

professional who ordered or referred 

items of DMEPOS or laboratory, 

imaging, and specialist services is 

required to maintain documentation for 

7 years from the date of the order, 

certification, or referral and, upon 

request of CMS or a Medicare 

contractor, to provide access to that 

documentation. The documentation 

includes written and electronic 

documents (including the NPI of the 

physician who ordered the home health 

services and the NPI of the physician or 

the eligible professional who ordered or 

referred the DMEPOS, laboratory, 

imaging, or specialist services) relating 


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to written orders or requests for 

payments for items of DMEPOS and 

home health, laboratory, imaging, and 

specialist services. Note that we are 

clarifying that the documentation 

includes both written and electronic 

documentation. 

We are revising § 424.535(a)(10) to 

read, ‘‘The Centers for Medicare & 

Medicaid Services’’ (CMS) may revoke 

enrollment, for a period of not more 

than one year for each act, for a provider 

or a supplier under section 1866(j) of 

the Act if such provider or supplier fails 

to meet the requirements of § 424.516(f). 

Providers and suppliers will continue to 

have appeal rights afforded to them in 

accordance with part 498. 

III. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

IV. Waiver of Proposed Rulemaking 

We ordinarily publish a notice of 

proposed rulemaking in the Federal 

Register and invite public comment on 

the proposed rule. The notice of 

proposed rulemaking includes a 

reference to the legal authority under 

which the rule is proposed, and the 

terms and substances of the proposed 

rule or a description of the subjects and 

issues involved. This procedure can be 

waived, however, if an agency finds 

good cause that a notice-and-comment 

procedure is impracticable, 

unnecessary, or contrary to the public 

interest and incorporates a statement of 

the finding and its reasons in the rule 

issued. The NPI requirements set forth 

in this IFC are necessary to implement 

the data reporting requirements in 

section 1128J(e) of the Act, as amended 

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 requirements specified in 

section 6405 of the Affordable Care Act 

that are effective July 1, 2010. Section 

6406 of the Affordable Care Act was 

effective January 1, 2010. It is 

imperative that the regulatory 

provisions be set forth as soon as 

possible to deliver the guidance 

necessary to enact the provisions. 

In addition, several of these 

provisions may be issued as an IFC 

because they fall under the exception in 

Medicare to the section 1871(b)(1)(B) of 

the Act rulemaking requirements. 

Section 1871 of the Act generally 

requires that we issue a notice of 

proposed rulemaking prior to issuing a 

final rule under the Medicare program. 

However, section 1871(b)(1)(b) 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 

for the implementation of a provision 

and the deadline is less than 150 days 

after the date of the enactment of the 

statute in which the deadline is 

contained.’’ Section 6405 establishes an 

effective date of July 1, 2010, which is 

less than 150 days from the date of 

enactment of this statute. Moreover, 

section 6406 establishes an effective 

date of January 1, 2010, which has 

already passed. 

We do not believe that the portions of 

this rule not exempted from notice and 

comment rulemaking pursuant to 

section 1871(b)(1)(B) of the Act add any 

new burdens for Medicare or Medicaid 

providers and suppliers. Both Medicare 

and Medicaid programs generally 

require unique provider identifiers, and 

thus delaying this rule is unnecessary. 

Finally, a delay in implementing these 

provisions would be contrary to the 

public interest and to CMS’ efforts to 

reduce and eliminate fraud and abuse in 

the Medicare and Medicaid programs. 

For these reasons, we find good cause to 

waive the notice of proposed 

rulemaking and to issue this final rule 

on an interim basis. We are providing a 

60-day comment period. 

V. Collection of Information 

Requirements 

In accordance with section 3507(j) of 

the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the information 

collection included in this interim final 

rule with comment period will be 

submitted for emergency approval to the 

Office of Management and Budget 

(OMB). The revised information 

collection requirements associated with 

0938–0685, 0938–0931, and 0938–0999 

(see sections V.A. and V.D. of this IFC) 

will not be effective until approved by 

OMB. 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 60- 

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. 

We are soliciting public comment on 

each of these issues for the following 

sections of this document that contain 

information collection requirements 

(ICRs): 

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 solely to 

order and refer), a change of 

information, or to respond to a 

revalidation request, a provider or 

supplier must complete and submit the 

applicable CMS–855 enrollment 

application or complete and submit the 

enrollment application 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 

solely to order and refer. The burden 

associated with the enrollment 

requirements found in § 424.510, 


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§ 424.515, and§ 424.516 is the time and 

effort necessary to complete and submit 

applicable Medicare enrollment 

applications. 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 

National Provider Identifiers (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. While this requirement is 

subject to the PRA, the associated 

burden is currently approved under 

OCN 0938–0999. 

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 referring 

physician or eligible professional. The 

burden associated with these 

requirements is the time and effort 

necessary to submit a claim with the 

required information. While these 

requirements are subject to the PRA, the 

associated burden is currently approved 

under OCN 0938–0999. 

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 referred the item or 

service, relating to written orders or 

requests for payments for items of 

DMEPOS and referrals for home health, 

laboratory, imaging, and specialist. 

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 referred the 

item or service, relating to written 

orders or requests for payments for 

items of DMEPOS and referrals for home 

health, laboratory, imaging, and 

specialist. 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 and 

home health, laboratory, imaging, and 

specialist services, written, ordered, 

referred by such physician or nonphysician practitioner. 

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 final rule that was 

published November 19, 2008 (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 (§ 431.507(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 

§ 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. 

We are in the process of revising the 

information collection requirements 

contained in OCNs 0938–0685, 0938– 

0931, and 0938–0999 in accordance 

with the provisions of this rulemaking. 

These information collection 

requirements will be sent to OMB for 

review and approval in accordance with 

the emergency procedures of the PRA 

and will not go into effect until 

approved by OMB. 

If you comment on these information 

collection and recordkeeping 

requirements, please do either of the 

following: 

1. Submit your comments 

electronically as specified in the 

ADDRESSES section of this proposed rule; 

or 

2. Submit your comments to the 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Attention: CMS Desk Officer, 

[CMS–6010–IFC] 

Fax: (202) 395–6974; or E-mail: 

OIRA_submission@omb.eop.gov 

VI. Regulatory Impact Analysis 

We have examined the impact of this 

rule as required by Executive Order 

12866 (September 1993, Regulatory 

Planning and Review), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Act, the Unfunded Mandates Reform 

Act of 1995 (Pub. L. 104–4), and 

Executive Order 13132 on Federalism, 

and the Congressional Review Act (5 

U.S.C. 804 et seq.). Executive Order 

12866 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 1 year). 

Virtually all providers and suppliers 

who wish to enroll in Medicare and 

Medicaid programs have already 

obtained NPIs. Most enrolled Medicare 

and Medicaid providers and suppliers 

who will be affected by the statutory 

and regulatory requirements are already 

meeting those requirements. For 

example, Medicare providers and 

suppliers have been reporting their NPIs 

on their enrollment applications for 4 

years and have been using NPIs in their 

paper and electronic Medicare claims as 

well as electronic Medicaid claims for 2 

years. The majority of suppliers who 

submit claims for ordered or referred 

DMEPOS and laboratory, imaging, and 

specialist services are ensuring that 

their claims meet the requirements of 

this IFC. In addition, the majority of 

Medicare physicians and eligible 

professionals who order and refer but 

who do not have approved enrollment 

records in PECOS are aware of the need 

to establish those records and many 

have already submitted their enrollment 


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applications to Medicare in order to do 

so. Medicare DMEPOS suppliers and 

those physicians and eligible 

professionals who order DMEPOS are 

already maintaining documentation in 

accordance with the requirements of 

this IFC. Other Medicare providers and 

suppliers who will be required to do so 

by this IFC are likely already in full or 

partial compliance as part of their 

routine business operations. Therefore, 

we do not believe this rule reaches the 

economic threshold and thus is not 

considered a major rule. 

The RFA requires agencies to analyze 

options for regulatory relief for small 

businesses. For purposes of the RFA, 

small entities include small businesses, 

nonprofit organizations, and 

government agencies. Most hospitals 

and most other providers and suppliers 

are small entities, either by nonprofit 

status or by having revenues of $6.5 to 

$31.5 million in any one year. 

Individuals and States are not included 

in the definition of a small entity. We 

are not preparing an analysis for the 

RFA because we have determined that 

this rule will not have a significant 

economic impact on a substantial 

number of small entities. We maintain 

that this final rule would not have an 

adverse impact on small entities. 

In addition, 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 because we have 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 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule that may result in expenditure in 

any 1 year by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $135 million. This rule 

does not mandate expenditures by 

either the governments mentioned or 

the private sector; therefore, no analysis 

is required. Executive Order 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. In accordance 

with the provisions of Executive Order 

12866, this regulation was reviewed by 

the Office of Management and Budget. 

B. Alternatives Considered 

Since this final rule is a codification 

of statutory provisions found in the 

Affordable Care Act, we did not 

consider alternatives to this process. 

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 amends 42 CFR 

chapter IV as set forth below: 

PART 424—CONDITIONS FOR 

MEDICARE PAYMENT 

■ 1. The authority citation for part 424 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

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

1395hh). 

■ 2. Section 424.506 is added to read as 

follows: 

§ 424.506 National Provider Identifier (NPI) 

on all enrollment applications and claims. 

(a) Definition. Eligible professional 

means any of the professionals specified 

in section 1848(k)(3)(B) of the Act. 

(b) Enrollment requirements. (1) A 

provider or a supplier who is eligible for 

an NPI must report its National Provider 

Identifier (NPI) on its Medicare 

enrollment application. 

(2) If a provider or a supplier who is 

eligible for an NPI enrolled in the 

Medicare program prior to obtaining an 

NPI and the provider’s or the supplier’s 

NPI is not in the provider’s or the 

supplier’s Medicare enrollment record, 

the provider or the supplier must 

submit a Medicare enrollment 

application that contains the NPI. 

(3) A physician or an eligible 

professional who has validly opted out 

of the Medicare program does not need 

to submit an enrollment application. 

(c) Claims reporting requirements. (1) 

A provider or a supplier who is enrolled 

in Medicare and who submits a paper or 

an electronic claim to Medicare include 

its National Provider Identifier (NPI) 

and the NPI(s) of any other provider(s) 

or suppliers(s) who is required to be 

identified. 

(2) A Medicare beneficiary who 

submits a claim for service to 

Medicare— 

(i) Must include the legal name of any 

provider or supplier who is required to 

be identified in that claim; and 

(ii) May, if known to the beneficiary, 

include the National Provider Identifier 

(NPI) of any provider or supplier who is 

required to be identified in that claim. 

(3) A Medicare contractor will reject 

a claim from a provider or a supplier if 

the required NPI(s) is not reported. 

■ 3. Section 424.507 is added to read as 

follows: 

§ 424.507 Ordering and referring covered 

items and services for Medicare 

beneficiaries. 

(a) Conditions for payment of claims 

for ordered or referred covered Part B 

items and services (excluding home 

health services described in § 424.507(b) 

and Part B drugs). (1) Part B provider 

and supplier claims. To receive 

payment for ordered or referred covered 

Part B items and services (excluding 

home health services described in 

§ 424.507(b), and Part B drugs), a 

provider’s or supplier’s must meet all of 

the following requirements: 

(i) The Part B items and services must 

have been ordered or referred by a 

physician or, when permitted, an 

eligible professional (as defined in 

§ 424.506(a) of this part). 

(ii) The claim from the Part B 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 or referred. 

(iii) The physician or the eligible 

professional who ordered or referred 

must have an approved enrollment 

record or a valid opt-out record in the 

Provider Enrollment, Chain and 

Ownership System (PECOS). 

(iv) If the 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. The claim must 

identify the teaching physician 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. 

(2) Part B beneficiary claims. To 

receive payment for ordered or referred 

covered Part B items and services 

(excluding home health services 

described in § 424.507(b), and Part B 


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drugs), a beneficiary’s claim must meet 

all of the following requirements: 

(i) The Part B items and services must 

have been ordered or referred by a 

physician or, when permitted, an 

eligible professional (as defined in 

§ 424.506(a) of this part). 

(ii) The claim must contain the legal 

name of the physician or the eligible 

professional (as defined in § 424.506(a) 

of this part) who ordered or referred. 

(iii) The physician or the eligible 

professional who ordered or referred 

must have an approved enrollment 

record or a valid opt-out record in the 

Provider Enrollment, Chain and 

Ownership System (PECOS). 

(iv) If the 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. The claim must 

identify the teaching physician by his or 

her legal name and he or she must have 

an approved enrollment record or a 

valid opt-out record in PECOS. 

(b) Conditions for payment of claims 

for ordered covered home health 

services. (1) Home health provider 

claims. To receive payment for ordered, 

covered Part A or Part B home health 

services, a provider’s home health 

services claim must meet all of the 

following requirements: 

(i) The Part A or Part B home health 

services must have been ordered by a 

physician; 

(ii) The claim from the provider of 

home health services must contain the 

legal name and the National Provider 

Identifier (NPI) of the ordering 

physician; 

(iii) The ordering physician must have 

an approved enrollment record or a 

valid opt-out record in the Provider 

Enrollment, Chain, and Ownership 

System (PECOS); and 

(iv) If the services were ordered by a 

resident or an intern, the claim must 

identify the teaching physician as the 

ordering or referring physician. The 

claim must identify the teaching 

physician 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. 

(2) Home health beneficiary claims. 

To receive payment for ordered covered 

Part A or Part B home health services, 

a beneficiary’s home health services 

claim must meet all of the following 

requirements: 

(i) The Part A or Part B home health 

services must have been ordered by a 

physician. 

(ii) The claim from the provider of 

home health services must contain the 

legal name of the ordering physician. 

(iii) The ordering physician must have 

an approved enrollment record or a 

valid opt-out record in the Provider 

Enrollment, Chain, and Ownership 

System (PECOS). 

(iv) If the services were ordered by a 

resident or an intern, the claim must 

identify the teaching physician as the 

ordering or referring physician. The 

claim must identify the teaching 

physician 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) A Medicare contractor will reject 

a claim from a provider or a supplier for 

covered services described in 

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

the claim does not meet the 

requirements of paragraph (a)(1) and 

(b)(1) of this section, respectively. 

(d) A Medicare contractor may deny 

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 paragraphs (a)(2) and 

(b)(2) of this section, respectively. 

■ 4. Section 424.516 is amended by 

revising paragraph (f) to read as follows: 

§ 424.516 Additional provider and supplier 

requirements for enrolling and maintaining 

active enrollment status in the Medicare 

program. 

* * * * * 

(f) Maintaining and providing access 

to documentation. (1) A provider or a 

supplier who furnishes covered ordered 

DMEPOS or referred home health, 

laboratory, imaging, or specialist 

services is required to maintain 

documentation for 7 years from the date 

of service and, upon the request of CMS 

or a Medicare contractor, to provide 

access to that documentation. The 

documentation includes written and 

electronic documents (including the NPI 

of the physician who ordered the home 

health services and the NPI of the 

physician or the eligible professional 

who ordered or referred the DMEPOS, 

laboratory, imaging, or specialist 

services) relating to written orders and 

requests for payments for items of 

DMEPOS and home health, laboratory, 

imaging, and specialist services. 

(2) A physician who ordered home 

health services and a physician and an 

eligible professional who ordered or 

referred items of DMEPOS or laboratory, 

imaging, and specialist services is 

required to maintain documentation for 

7 years from the date of the order, 

certification, or referral and, upon 

request of CMS or a Medicare 

contractor, to provide access to that 

documentation. The documentation 

includes written and electronic 

documents (including the NPI of the 

physician who ordered the home health 

services and the NPI of the physician or 

the eligible professional who ordered or 

referred the DMEPOS, laboratory, 

imaging, or specialist services) relating 

to written orders or requests for 

payments for items of DMEPOS and 

home health, laboratory, imaging, and 

specialist services. 

■ 5. Section 424.535 is amended by 

revising (a)(10) to read as follows: 

§ 424.535 Revocation of enrollment and 

billing privileges in the Medicare program. 

(a) * * * 

(10) Failure to document or provide 

CMS access to documentation. (i) The 

provider or supplier (as described in 

section 1866(j) of the Act) did not 

comply with the documentation or CMS 

access requirements specified in 

§ 424.516(f) of this subpart. 

(ii) A provider or supplier that meets 

the revocation criteria specified in 

paragraph (a)(10)(i) of this section, is 

subject to revocation for a period of not 

more than 1 year for each act of 

noncompliance. 

* * * * * 

PART 431—STATE ORGANIZATION 

AND GENERAL ADMINISTRATION 

■ 6. The authority citation for part 431 

continues to read as follows: 

Authority: Sec. 1102 of the Social Security 

Act, (42 U.S.C. 1302). 

■ 7. Section 431.107 is amended by 

adding a new paragraph (b)(5) to read as 

follows: 

§ 431.107 Required provider agreement. 

* * * * * 

(b) * * * 

(5)(i) Furnish to the State agency its 

National Provider Identifier (NPI) (if 

eligible for an NPI); and 

(ii) Include its NPI on all claims 

submitted under the Medicaid program. 

Dated: April 28, 2010. 

Marilyn Tavenner, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Approved: April 29, 2010. 

Kathleen Sebelius, 

Secretary. 

Authority: Catalog of Federal Domestic 

Assistance Program No. 93.773, Medicare— 

Hospital Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program, and Program No. 93.778, 

Medical Assistance Program. 

[FR Doc. 2010–10505 Filed 4–30–10; 4:15 pm] 

BILLING CODE P 


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